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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of 2000 Biennial Regulatory Review of Part 68 of the Commission's Rules and Regulations ) ) ) ) CC Docket No. 99-216 REPORT AND ORDER Adopted: November 9, 2000 Released: December 21, 2000 By the Commission: Table of Contents Heading Paragraph # I. Introduction . . . . . .1 II. background . . . . . . .7 III. Regulatory Paradigm for Establishing Technical Criteria. . . . . . .13 A. Need for Technical Criteria to Protect Against Harms to the Public Switched Telephone Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1. Background. . . . . . .14 2. Discussion. . . . . . .15 B. Development of Technical Criteria . . . . .18 1. Background. . . . . . .18 2. Discussion. . . . . . .20 C. Structure for Industry Development of Technical Criteria. . . . . . 25 1. Sponsoring Organization for the Administrative Council for Terminal Attachments . . . . . . .36 a. Purpose and Responsibilities of Sponsoring Organization. . . . . . .36 b. Selection of the Sponsoring Organization of the Administrative Council . . . . . . 42 2. Administrative Council for Terminal Attachments . . . . . 49 a. Purpose of the Administrative Council. . . . . .49 b. Criteria for the Administrative Council. . . . . . . 50 c. Functions of the Administrative Council. . . . . . . 52 3. Standards Development Organizations . . . . . . 58 a. Submission of Technical Criteria to the Administrative Council . . . . . 58 b. Necessary Certifications to the Administrative Council . . . . . . .60 4. The Commission. . . . . . . 62 a. Retention of Certain Rules Designed to Prevent Harms to the Network and Rules Pertaining to Technical Criteria for Hearing Aid Compatibility and Volume Control. . . . . . 63 b. Commission de novo Review of Administrative Council Technical Criteria . . . . . . 68 5. Appeals Procedures for Development of Technical Criteria. . . . . . 70 a. Background . . . . . . 70 b. Discussion . . . . . . 71 6. Modification of Part 68 Terminology . . . . . . 74 D. Transition of Commission Responsibilities to Administrative Council Technical Criteria. . . . . . 77 1. Respective Roles of the Commission and Industry During Transition . . . . . . 77 2. Schedule for Transition . . . . .78 IV. Regulatory Paradigm for Equipment Approval . . . . . 80 A. Streamlining the Equipment Approval Process . . . . .80 1. Background. . . . . . .80 2. Discussion. . . . . . .82 B. Equipment Approval Methods. . . . . . 85 1. Approval by Telecommunications Certification Bodies (TCBs). . . . . 88 a. Background . . . . . . 88 b. Discussion . . . . . . 90 2. Other Types of Conformity Assessment and Equipment Approval DoC, verification, and SDoC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 a. Background . . . . . . 94 b. Discussion . . . . . . 98 C. Database of Approved Equipment. . . . . . 107 1. Background. . . . . . 107 2. Discussion. . . . . . 108 D. Numbering and Labeling. . . . . 112 1. Background. . . . . . 112 2. Discussion. . . . . . 114 E. Enforcement of Equipment Compliance . . . . . .116 1. Background. . . . . . 116 2. Discussion. . . . . . 119 F. Complaint Procedures for Hearing Aid Compatibility and Volume Control Rules . . . . . .122 1. Background. . . . . . 122 2. Discussion. . . . . . 123 G. ADAA Certification Requirements . . . . . 128 1. Background. . . . . . 128 2. Discussion. . . . . . 129 V. Procedural matters. . . . . . . . . . . . . . . . . . . . . . 131 A. Final Regulatory Flexibility Analysis . . . . .131 B. Paperwork Reduction Act . . . . . . .132 VI. ordering clauses . . . . . 133 I. Introduction 1. In the Telecommunications Act of 1996 (1996 Act), Congress directed the Commission to review its rules every even-numbered year and repeal or modify those found to be no longer in the public interest. Consistent with the directive of Congress, in the year 2000, the Commission undertook its second comprehensive biennial review of the Commission's rules to eliminate regulations that are no longer necessary because the public interest can be better served through reliance on market forces. In this Order, we completely eliminate significant portions of Part 68 of our rules governing the connection of customer premises equipment (terminal equipment) to the public switched telephone network and privatize the standards development and terminal equipment approval processes. By these actions, we minimize or eliminate the role of the government in these processes. 2. Specifically, in this Order we eliminate the detailed regulations currently in our rules establishing technical criteria for terminal equipment and requiring registration of terminal equipment with the Commission. Given the maturity of the terminal equipment manufacturing market, we find that Standards Development Organizations (SDOs) that are accredited by the American National Standards Institute (ANSI), and that incorporate a balance of industry representatives including both the terminal equipment manufacturing industry and the telecommunications carrier industry, should be responsible for establishing technical criteria to ensure that terminal equipment does not harm the public switched telephone network. We find, moreover, that a private industry committee ("Administrative Council for Terminal Attachments" (Administrative Council)) shall be responsible for compiling and publishing all standards ultimately adopted as technical criteria for terminal equipment. 3. With regard to equipment approval, we find that manufacturers may show compliance with the technical criteria through one of two means. First, manufacturers may seek approval of terminal equipment's compliance with the relevant technical criteria from private Telecommunications Certification Bodies (TCBs). In the alternative, manufacturers may show compliance through the Supplier's Declaration of Conformity (SDoC) method of equipment approval. 4. The streamlined approach outlined in this Order will allow the Commission to replace approximately 130 pages of technical criteria currently in our rules with only a few pages of simple principles that terminal equipment shall not cause any of the prescribed harms to the public switched telephone network, that providers of telecommunications must allow the connection of compliant terminal equipment to their networks, and that the Commission diligently will enforce compliance with these rules. This streamlined approach relies on the common vested interest of terminal equipment manufacturers and providers of telecommunications in safeguarding the public switched telephone network to eliminate the need for direct government involvement in establishing technical criteria for terminal equipment and in registering or approving terminal equipment that meets those technical criteria. In addition, we retain in our rules the technical criteria relating to inside wiring, hearing aid compatibility and volume control, and consumer protection provisions. We also maintain enforcement procedures for terminal equipment compliance and an appeal procedure for the Administrative Council's decisions. Finally, we update the complaint procedures for our hearing aid compatibility and volume control rules. 5. The new regulatory paradigm that we adopt in this Order for terminal equipment interconnection shall function as follows. We will maintain our rules' broad principles, including a proscription against causing any of four harms to the public switched telephone network by the direct connection of terminal equipment. A single committee, the Administrative Council, sponsored by an ANSI-accredited entity, shall adopt, compile and publish specific technical criteria for terminal equipment in furtherance of the Commission's broad principles. Any ANSI- accredited standards-development organization may submit technical criteria for terminal equipment. Once the Administrative Council publishes such criteria, the Commission shall presume the criteria to be valid for the prevention of the harms to the public switched telephone network by terminal equipment interconnection, subject to de novo review by petition to this Commission. 6. Conformance with the technical criteria will be considered a demonstration of compliance with the Commission's rules prohibiting terminal equipment from harming the public switched telephone network. Terminal equipment manufacturers either will submit their products to TCBs for certification of conformity with the technical criteria (instead of submitting them for registration with the Commission), or they will use the Supplier's Declaration of Conformity process to show conformity with the technical criteria. The Administrative Council will work with the TCBs to develop labeling and other non-technical requirements. We believe that this process will be more efficient and responsive to the needs of all segments of the industry, and remove the Commission from a role where governmental involvement is no longer necessary or in the public interest. VII. background 8. Before the Commission established its rules in Part 68, terminal equipment was manufactured almost exclusively by Western Electric, which was part of the Bell System of companies that included the monopoly local exchange and long distance providers in most parts of the country. This ensured that no harmful terminal equipment was connected to the public switched telephone network, but also created a monopoly in the development and manufacture of terminal equipment. The Part 68 rules are premised on a compromise whereby providers are required to allow terminal equipment manufactured by anyone to be connected to their networks, provided that the terminal equipment has been shown to meet the technical criteria for preventing network harm that are established in the Part 68 rules. Thus, although our Part 68 rules appear to establish elaborate requirements for terminal equipment manufacturers, the fundamental obligation that the rules impose is on the local exchange carriers -- they must allow Part 68-compliant terminal equipment to be connected freely to their networks. Terminal equipment manufacturers are not required to comply with Part 68, but equipment that is not Part 68-registered is not freely connectable to the public switched telephone network and thus has limited marketability. Our rules have facilitated a vibrant, competitive market for terminal equipment, reducing prices and resulting in a proliferation of new equipment and capabilities available to consumers. 9. At the time the Commission established its Part 68 rules, AT&T controlled the terminal equipment market as well as the public switched telephone network itself. Few entities outside of the telephone company had extensive knowledge about the interaction of terminal equipment and the public switched telephone network, and there appeared to be no private standard-setting bodies or testing laboratories with expertise in terminal equipment. The adoption of standards by individual state regulatory commissions was not a viable option at the time. Given this market condition, the Commission took upon itself the obligations of both establishing technical criteria to ensure that terminal equipment would not harm the network and verifying that specific terminal equipment complied with the technical criteria. 10. Taking account of AT&T's near monopoly on technical expertise in the 1970s, the Commission included in its Part 68 rules detailed technical information, including drawings and schematics of terminal equipment circuitry and interconnection devices. The initial Part 68 rules were based, in large measure, on the existing internal carrier technical standards at that time. Although they contain detailed technical criteria, the Part 68 rules do not generally seek to ensure the quality, performance, or interoperability of interconnected networks. 11. Part 68 of the Commission's rules establishes technical criteria designed to ensure that terminal equipment does not harm the public switched telephone network or telephone company personnel, and a registration process to verify whether terminal equipment complies with these criteria. Part 68 requires carriers to allow terminal equipment that is registered as Part 68 compliant to be connected to their networks. Thus, our Part 68 rules establish requirements for terminal equipment manufacturers and impose on carriers the requirement that they allow Part-68 compliant terminal equipment to be connected freely to their networks. 12. In the years since Part 68 was established, however, the marketplaces for both terminal equipment and local exchange service have changed dramatically. Vibrant competition has emerged in the terminal equipment marketplace. Basic voice telephones and new types of terminal equipment, including advanced telephones, computer modems, and equipment for individuals with disabilities, have become widely and competitively available. Private standards-setting bodies and testing laboratories for telecommunications equipment have also become well established, and the terminal equipment-manufacturing industry has matured and plays a strong and active role in them. In more recent years, this Commission has relied on the work of these industry bodies to update the technical criteria in Part 68. For example, TIA Committee TR41 undertook to develop harmonized network protection rules between the U.S. and Canada, and proposed them for a rulemaking proceeding. The rapid pace of change in both network and terminal equipment technologies, however, has made it increasingly difficult for the regulatory process to keep pace. 13. Because of these market changes, as well as our overall mandate to eliminate regulations wherever possible, consistent with the public interest, this Commission's approach to regulation of Part 68 equipment has also changed significantly. To this end we have recently enacted rules that allow manufactures to have their equipment certified as compliant with Part 68 not only by the Commission, but also, as an alternative, by any of a multitude of TCBs as well. We have also adopted uniform, or "harmonized," technical criteria for protection of the wireline network consistent with the protections used in Canada. In the Notice, we proposed alternative approaches to reducing the Commission's role in regulating the interconnection of terminal equipment to the public switched telephone network by relying to a greater extent on industry standards-setting bodies. We first discussed ways to allow industry standards-setting organizations to take over the establishment of the Commission's technical criteria for terminal equipment currently set forth in the Commission's Part 68 rules. We then discussed alternatives for removing the Commission from the role of verifying terminal equipment's compliance with the relevant technical criteria, which occurs currently through the Part 68 registration process. XIV. Regulatory Paradigm for Establishing Technical Criteria 15. There are two basic questions before us with respect to technical criteria for terminal equipment. First, we must determine whether, in light of the competitive maturity of the terminal equipment market and the concomitant ability, interest, and motivation of terminal equipment manufacturers to ensure their products do not harm the public switched telephone network, there is a continued need for technical criteria in order to protect the public switched telephone network from specific types of harm. Second, if there is a continued need for technical criteria, we must consider whether it is necessary for the Commission to continue to establish and maintain such criteria as opposed to having industry self-establish the criteria. A. Need for Technical Criteria to Protect Against Harms to the Public Switched Telephone Network 1. Background 16. Our proposals in the Notice were based on positions that emerged from a series of industry fora we held in July 1999 to explore the extent to which regulations in Part 68, other than our hearing aid compatibility and volume control (HAC/VC) rules, may no longer be necessary. In the Notice, we tentatively concluded that it remains necessary to retain in our rules proscriptions against certain harms to the public switched telephone network that can be caused by terminal equipment that does not meet technical criteria for network protection. We also proposed that our rules continue to require that telecommunications carriers allow compliant terminal equipment to be connected freely to their networks. 1. Discussion 17. Based on unanimous record support, we conclude that the four types of harm currently embodied in the Part 68 rules continue to represent a valid enunciation of the types of harm to the public switched telephone network against which the Commission must continue to protect. Part 68 was originally devised to ensure that terminal equipment intended for connection to the public switched telephone network meets the engineering parameters that the Commission has concluded will prevent harms to the network. The four harms that Part 68 is designed to prevent are: (1) electrical hazards to telephone company personnel; (2) damage to telephone company equipment; (3) malfunction of telephone company billing equipment; and (4) degradation of service to persons other than the users of the subject terminal equipment, their calling or called parties. Although the record reflects that actual harm to the network caused by noncompliant terminal equipment is rare, we agree with many commenters that with the advent of advanced technologies that push the limits of twisted copper pair capabilities, it is imperative that the Commission continue to maintain and enforce rules designed to prevent harms to the network. We conclude, therefore, that we should retain in our rules these broad proscriptions against harms to the public switched telephone network. 18. We further conclude, as discussed in detail below, that technical criteria are effective in preventing these harms to the network, and are, therefore, necessary. Nortel, Bell Atlantic, Lucent, and other commenters persuade us that the rapid deployment of new technologies, such as xDSL, requires continued Commission enforcement of compliance with technical criteria. Moreover, the existence of rules identifying the technical criteria as valid protections against harm to the network gives telecommunications providers the ability to remove harmful equipment, as well as the responsibility to allow the connection of compliant, approved equipment. Finally, as argued by Lucent and Nortel, presumptively valid technical criteria will ensure uniformity and a level playing field that will assure continued robust competition in the market for terminal equipment. These technical criteria for terminal equipment will ensure that manufacturers are able to develop terminal equipment that can operate throughout the country and over all carriers' networks, and that the public switched telephone network which is owned by telecommunications providers, is not harmed by such terminal equipment. Accordingly, we conclude that carriers are only required to permit connection to the public switched telephone network of equipment that is shown to comply with technical criteria designed to prevent the four enunciated harms. 19. One of the purposes of technical criteria is to permit competitive access to the network, and the Commission has succeeded in this goal. We believe compliance with these technical criteria remains necessary because the public switched telephone network is privately-owned by telecommunications carriers, and consumers connect to the public switched telephone network only with consent of the telecommunications provider. Moreover, we agree with commenters that emphasize that we must retain in Part 68 legal authority to permit the disconnection of harmful equipment or, if necessary, the discontinuance of service to customers using harmful terminal equipment, because such a requirement protects the public switched telephone network and other customers. As argued by Bell Atlantic (now Verizon), carriers retain the ultimate responsibility to maintain the quality and integrity of their services to the public, and they must be in a position to take immediate action if that quality or integrity is being compromised. A. Development of Technical Criteria 1. Background 20. In the Notice, we tentatively concluded that the public interest would be better served if private industry, rather than the Commission, developed the technical criteria that are necessary to protect the public switched telephone network from harms. We therefore proposed in the Notice to use one of several potential industry standards-setting processes. To ensure that the public interest is adequately protected, we proposed to provide for de novo Commission review and enforcement, where necessary, of the industry-established technical criteria in the event of an appeal regarding the criteria. We noted our expectation, however, that such Commission involvement would be extremely limited. 21. In our July fora, commenters raised the issue of the extent to which we can legally give the force of law to privately developed technical criteria. As we stated in the Notice, the Commission's authority to establish technical criteria to prevent harms to the public switched telephone network and to approve terminal equipment prior to attachment of such terminal equipment to the public switched telephone network arises out of section 151 of the Communications Act. Section 151 charges the Commission with the mission to "to make available . . . a rapid, efficient, Nation-wide, and world-wide wire and radio communications service with adequate facilities . . ." In addition, the Commission relied upon several other provisions of the Communications Act of 1934 when it originally implemented Part 68. Finally, as we stated above, in the Telecommunications Act of 1996 (1996 Act), Congress directed the Commission to examine its rules every two years and repeal or modify those found to be no longer in the public interest. 1. Discussion 22. We conclude that the statutory authority upon which the Commission relied to implement Part 68 in the first instance does not require that the Commission establish the technical criteria with which terminal equipment must comply in order to prevent harms to the network. Instead, this statutory authority permits the Commission to adopt reasonable regulations to ensure that terminal equipment does not cause harms to the public switched telephone network, consistent with the public interest. Moreover, the 1996 Act mandates that we repeal or modify rules where market forces make the rules no longer necessary. Accordingly, we adopt our tentative conclusion that consumers and the industry are better served by industry rather than Commission development of technical criteria for terminal equipment. Although we find that technical criteria remain necessary, we find that it is in the public interest to privatize development of the specific technical criteria for preventing harms to the public switched telephone network. While we have concluded in the foregoing section of this Order that our rules should continue to identify and prohibit specific harms to the public switched telephone network by terminal equipment, we are convinced that it is not necessary for the Commission to be responsible for developing and maintaining these technical criteria. In light of these legal parameters, we adopt our tentative conclusion that we have the legal authority to give presumptive validity to the technical criteria adopted by the industry standards body, as discussed below. 23. In determining whether the Commission or private industry is best suited for maintenance and development of technical criteria, we weigh the potential harms to the network when Commission oversight is removed from the development process against the fact that the industry possesses the necessary expertise and incentive for development of new technical criteria and the speed in which the industry, as opposed to the Commission, can establish required technical criteria especially for advanced technologies. We recognize, as argued by ITI, that in today's telecommunications networks, harm to the network does not occur with any significant frequency. There is little record evidence of harm to the network caused by terminal equipment other than inside wire. The fact that such harms rarely occur is, we believe, a testament to several factors. First, manufacturers and test laboratories, as well as telecommunications carriers, possess relevant expertise in the criteria needed to prevent harms to the public switched telephone network. In fact, industry standards setting organizations are often the primary source for updates to the Commission's Part 68 rules. Telecommunications providers, manufacturers, and test laboratories have worked together to identify technical criteria, and the Commission has mandated these technical criteria through its rulemaking process and enforced the criteria through testing and registration procedures. For instance, in the technical criteria for hearing aid compatibility requirements, Commission rule 68.316, the Commission refers to a specific technical standard for hearing aid compatibility published by TIA. Second, responsible manufacturers have a vested interest in producing equipment that does not harm the network. Manufacturers have persuasively argued that their customers would not tolerate equipment that did not perform well, and that if their terminal equipment were identified as harmful to the public switched telephone network the manufacturers would quickly lose their standing with customers. Third, industry has every incentive to establish criteria for new technology on an expedited basis. We are convinced that industry rather than Commission development of technical criteria will decrease development time and allow manufacturers to bring innovative consumer products, especially for the provision of advanced services, to the market on an expedited basis. This expedited process should benefit consumers by lowering the costs of terminal equipment and by ensuring that new technologies are widely available. 24. Accordingly, we conclude that any standards development organization (SDO), accredited under the ANSI Organization Method or the Standards Committee Method, can establish technical criteria for terminal equipment pursuant to ANSI consensus decision-making procedures, and, as discussed in detail below, submit such criteria to the Administrative Council for Terminal Attachments established by industry. As discussed in detail in Section III.B.2.C of this Order, the Administrative Council would review the criteria only for supporting documentation from the SDO certifying that the submitted technical criteria are not duplicative or in conflict with any other existing technical criteria required for terminal equipment. The Administrative Council must publish the submitted criteria as technical criteria for terminal equipment. Upon publication, the Commission would consider the technical criteria to be presumptively valid such that they comply with the rules for proscribing harm to the network, subject to de novo review on appeal. 25. We are convinced that allowing any ANSI-accredited standards development organization to submit technical criteria for terminal equipment will permit the industry to continue with the cooperative nature of the procedures for development of technical criteria and voluntary standards that they have now. We emphasize that today, as in the past, standards development organizations have been primarily responsible for the technical criteria for terminal equipment that exist today. Standards organizations generally specialize in subject areas and cooperate with each other and, as stated in the Notice, we have no intention of disrupting the ongoing processes. At the same time, this structure will place responsibility on a single gatekeeper Administrative Council to ensure uniformity and to refer conflicts in technical criteria back to the originating SDO for resolution. 26. Legal Status of Technical Criteria. We adopt our tentative conclusion that Commission reliance on private industry for the adoption and publication of technical criteria that would be enforceable by this Commission, to the extent that they comply with the rules proscribing harm to the public switched telephone network, does not raise issues with the applicability of the Administrative Procedure Act (APA) or other Federal statutes pertaining to rulemaking proceedings. We agree with TIA that although private industry would be developing presumptively valid technical criteria pursuant to our rules and subject to our de novo review, the Commission is not itself establishing technical criteria, nor is industry acting as the agent of the Commission. This conclusion is consistent with the Commission's decision in the Third Advanced Services Report and Order where we determined that we would rely on the ANSI accredited standards development organization, T1E1.4, to develop spectrum compatibility standards pertaining to the network side of the demarcation point. We determined that because T1E1.4 has broad- based industry representation and years of experience developing these standards, the Commission would rely on that organization for spectrum compatibility standards and for fair and open practices in the deployment of advanced services technology. In that proceeding, we reiterated our general belief that industry standards bodies, rather than the Commission, should create acceptable standards for deployment of advanced services. We established broad principles for Committee T1E1.4 to follow, but did not adopt any specific technical standards developed by the committee for inclusion in our rules. Accordingly, we conclude that the APA and other federal statutes pertaining to rulemaking procedures are not applicable to industry adoption of technical criteria for terminal equipment. This is so because, when the industry adopts technical criteria for terminal equipment, it will not be adopting a rule. Rather, it will be making a private interpretation of a Commission rule prohibiting harms caused by terminal equipment to the public switched telephone network. In effect, conformity with the technical criteria establishes a rebuttable presumption that the equipment complies with our rules proscribing harm to the public switched telephone network. Any final interpretation with respect to compliance would remain with the Commission through a de novo review and enforcement procedure, should a party file a valid complaint with the Commission, or should the Commission act upon its own motion. A. Structure for Industry Development of Technical Criteria 27. Background. In the Notice, we proposed three options for relying on private development of technical criteria to ensure that terminal equipment connected to the public switched telephone network does not cause any of the four prescribed harms. The three proposals were: (A) Commission identification of a "gatekeeper" Standards Development Organization (SDO) that will establish and publish binding technical criteria for terminal equipment developed pursuant to American National Standards Institute (ANSI) procedures for consensus bodies; (B) adoption of a presumption that terminal equipment that complies with technical specifications established by any national standards-setting organization will not cause harms and that any terminal equipment meeting any such standard could be connected to the public switched telephone network; or (C) incorporation into this Commission's rules by reference, through the APA rulemaking process, to specific standards developed by national standards organizations. 28. In the Notice, we requested parties to submit their proposals for the manner in which the gatekeeper SDO should be structured. We stated that we would not specify any particular format for the gatekeeper. In their comments, and more thoroughly in ex parte communications provided at the request of the Commission's staff, TIA and ATIS explained that some of the functions outlined for the gatekeeper SDO in the Notice are inconsistent with functions of an ANSI-accredited standards development organization. Each party suggested that the gatekeeper should be a committee separate from standards development organizations. 29. In the Notice we tentatively concluded that ANSI accreditation of the organizations involved in establishing technical criteria for terminal equipment is essential because the ANSI procedures are a benchmark for consensus decision-making, and include both appeal and auditing procedures. ANSI accredited organizations are obliged to have balanced representation on the committees that develop standards. ANSI procedures for due process are applicable to all standards developers that ANSI accredits. ANSI procedural criteria include the requirement that "participation shall be open to all persons who are directly and materially affected by the activity in question." We stated in the Notice that we intend for the gatekeeper to make its consensus processes open to all interested parties. We sought comment on whether it is necessary for us to impose additional requirements on the gatekeeper other than the standard ANSI requirements to ensure these goals. 30. Pursuant to ANSI procedures, an entity that develops standards may be accredited under one or more of three methods for developing evidence of consensus: (1) the Organization Method, (2) the Standards Committee Method, and (3) the Canvass Method. The Organization Method is most often used by associations that have, among their other activities, an interest in developing standards. The Standards Committee Method is most often used when a standard affects a broad range of diverse interests or where multiple associations or societies with similar interests exist. The primary operational difference between the Organization Method and the Standards Committee Method is that, in the latter, ANSI generally requires the entity to be divided into a consensus body and a secretariat. The functions of the secretariat include overseeing the consensus body's compliance with ANSI criteria and administrative functions in connection with the development and approval of standards. The Canvass Method provides that due process be used to determine consensus only after the draft standard has been developed. Thus, development of the draft standard for which consensus is sought under the Canvass Method does not necessarily include broad and open participation as does the other two accreditation methods. 31. ANSI due process procedures include: · The right of any person (organization, company, government agency, individual, etc.) with a direct and material interest to participate by expressing an opinion and its basis, having that position considered, and appealing if adversely affected. · No undue financial barriers to participation, no conditions upon participation based on organization membership, and no unreasonable requirements for technical qualifications, etc. · A requirement that the standards development process includes a balance of interests and that it not be dominated by any single interest category. · A requirement to actively seek and fully consider appropriate, representative user views including individuals and organizations. · A requirement that written procedures shall govern the methods used for standards development and shall be available to any interested person. · A requirement that the written procedures shall contain an identifiable, realistic, and readily available appeals mechanism for the impartial handling of substantive and procedural complaints regarding any action or inaction. · Notification of standards activity shall be announced in suitable media; comment periods are specified. · A requirement that prompt consideration shall be given to the written views and objections of all participants; an effort shall be made to resolve objections; each objector shall be informed of the appeals process. · International standards shall be taken into consideration. · The principle that it is generally not acceptable to include proper names or trademarks of specific companies in a standard, but a patented item may be used in a term if technical reasons justify this approach. 2. Discussion. We find the arguments presented by nearly all commenters regarding the advantages of having a single source for technical criteria to be persuasive. As commenters argue, using a single organization eliminates the potential for conflicting technical criteria and reduces the possibility of confusion, thereby ensuring uniform national criteria. Uniformity of the technical criteria is essential for equipment manufacturers and their customers, because the presence of conflicting, multiple criteria adds complexity, confusion, and cost to the design and development of products, particularly where terminal equipment components or devices are integrated with other terminal equipment to create different stand-alone devices. In addition, under the structure outlined in this Order, all terminal equipment technical criteria will be developed under the fair and open processes required for ANSI accreditation. Finally, the process for establishing technical criteria for terminal equipment would be accomplished with due process comparable to a Commission rulemaking proceeding, but in a manner faster and more responsive to industry innovation. 3. We adopt TIA's proposal that we require industry to establish an Administrative Council for Terminal Attachment (Administrative Council). We find merit in TIA's and ATIS's arguments that the entity responsible for publishing the technical criteria should be a committee or some other organization rather than a standards development body. According to the structure outlined in this Order, the entity should not be a standards development organization because it will not be developing standards. Its functions will be administrative in nature. It will be a committee of interested industry experts that will, subject to our guidelines and procedures adopted herein, perform the functions of publishing technical criteria proposed by ANSI-accredited SDOs and, as discussed in Section IV.C of this Order, maintain a database of approved terminal equipment. 4. We further conclude that the Administrative Council should be convened by a suitable private industry sponsor or sponsors and that it should operate under the auspices of such sponsor. We disagree with TIA's suggestion that this Commission should be the de facto sponsor of the Administrative Council. As discussed supra, private industry is well equipped to take over all functions except enforcement and final appeal processes. Accordingly, we choose a sponsor for the Administrative Council based upon the principles outlined in the Notice for the gatekeeper itself. The qualities of the gatekeeper outlined in the Notice are equally applicable to the sponsor function. 5. We find that the industry Administrative Council model is the one best able to ensure continuity in the development of technical criteria for terminal equipment while, at the same time, enabling the industry to develop rapidly equipment for the provision of advanced services. We are confident that this model also enables the Commission to ensure the continued protection of the public switched telephone network. We agree with those commenters suggesting that permitting industry to develop technical criteria for terminal equipment benefits all segments of the industry and consumers alike and therefore it is in the public interest. 6. For all of these reasons, we adopt the industry Administrative Council model for overall administration of technical criteria for terminal equipment. First, the Commission bears ultimate responsibility for dispute resolution of the model detailed herein and sets, in this Order, broad objectives and policies governing the prevention of harms to the public switched telephone network by terminal equipment that will remain embodied in the Commission's rules. As supported in this record, this model calls for a structure that has a single administrative body that, in many respects, assumes the role that the Commission has served with regard to Part 68. Although the Administrative Council does not, itself, establish technical criteria, the Administrative Council publishes technical criteria for terminal equipment submitted to it by ANSI-accredited standards development organizations. As discussed herein, upon publication the criteria become the presumptively valid technical criteria for terminal equipment. The Administrative Council is also responsible for operation and maintenance of a database of approved equipment. Initially, the Administrative Council shall have a sponsoring organization that may be responsible for the administrative functions of the Administrative Council. The Administrative Council, does not, however, report to the sponsoring organization. Instead, the Administrative Council is subject only to the control of industry. Finally, in the following sections, we describe in more detail the structure of and role to be played by the various entities. 7. We conclude, however, that this committee is not a Federal Advisory Committee (FAC). USTA's proposal for a FAC does not meet our regulatory goals in this proceeding. Establishing a FAC would not achieve our goals of reduced governmental involvement in the standards process and expedited development of technical criteria for new technology. A FAC would require direct Commission participation in the process of developing standards. Our goal is to minimize our participation where it is no longer necessary in the public interest, continuing only to enforce and review technical criteria de novo if market forces and the industry's consensus process do not satisfactorily address the concerns of a segment of the industry. 1. Sponsoring Organization for the Administrative Council for Terminal Attachments a. Purpose and Responsibilities of Sponsoring Organization 8. Background. Although in the Notice we did not propose a specific structure for the Administrative Council, we stated that no matter what structure we ultimately decided was in the public interest, it is not our intention to modify the existing industry standards setting process. As stated above, the record in this proceeding makes clear that not only should industry standards development functions remain separate from the functions of a gatekeeper committee or organization, in most instances, organizations that function in a manner similar to that we proposed for the gatekeeper are often sponsored by industry associations such as the Telecommunications Industry Association (TIA) or Alliance for Telecommunications Industry Solutions (ATIS). These sponsoring associations often perform administrative or secretarial functions on behalf of industry committees and fora similar to the gatekeeper proposed in the Notice. For these reasons, as described in detail below, we recognize the sponsor and the gatekeeper as two distinct entities. Although in the Notice we set out specific criteria for the gatekeeper, we now apply many of these criteria to our selection of a sponsoring organization for the Administrative Council. 9. Under the gatekeeper option discussed in the Notice, we proposed to choose the gatekeeper to serve subject to Commission oversight. We tentatively concluded that the designated gatekeeper: (a) must be ANSI- accredited; (b) must be professionally and administratively prepared to take responsibility for administration of technical criteria; (c) should be experienced with technical criteria development; and (d) must follow, and be capable of following, any Commission rules and guidelines for standards development. We also requested that ideally, commenters would develop a consensus proposal to submit to the Commission. 10. In the Notice, we asked for comment on whether the gatekeeper should serve for a specified term, or simply be subject to our right to review our decision should circumstances warrant in the future. We suggested that, on the one hand, by not establishing a term limit, we may be permitting the gatekeeper to be a more stable entity, and thus it may better serve the industry and the public interest by bringing certainty to the process of administration of technical criteria and by attracting participants with a deep commitment, but on the other hand, by establishing a term limit, we pointed out that we would be requiring a regular review of the gatekeeper's performance. The gatekeeper would, therefore, have an ongoing incentive to remain responsive, efficient, and effective. 11. Discussion. Although the first responsibility of the sponsor is to send out a call to the industry to convene an organizational meeting for the purpose of establishing the Administrative Council for Terminal Attachments discussed below, the primary ongoing purpose of the sponsoring organization will be to provide administrative and secretarial support to the Administrative Council. The sponsor's administrative functions may be as broad or as narrow as the Administrative Council determines. For instance, the sponsor may merely organize and facilitate the Administrative Council's meetings. If the Administrative Council chooses, the sponsor may also operate and maintain the database of approved equipment. As discussed below, the Administrative Council will delineate clearly and publicly the arrangement it enters into with the sponsor. Under no circumstances, however, will the sponsoring organization make substantive decisions regarding technical criteria for terminal equipment, nor will it in any other way attempt to influence the decision-making process of the Administrative Council or any standards development organization submitting standards to the Administrative Council for adoption as technical criteria for terminal equipment. 12. The sponsoring organization is responsible for ensuring that the industry populates the Administrative Council in a manner consistent with ANSI criteria for a balanced and open membership. We require the sponsor to notify the industry that it intends to establish a Administrative Council with membership that is balanced in terms of the points of view represented. As discussed below, the specific membership will be determined when the Administrative Council establishes its "charter." 13. After the Administrative Council is populated, the sponsor is responsible for fulfilling secretariat functions for the Administrative Council. After the Administrative Council is in being, then its relationship with the sponsor becomes contractual. The Administrative Council may contract with the sponsor to provide the appropriate public notice for its actions and for appeals to it. The Administrative Council may also contract with the sponsor to coordinate the industry's assignment of standards-development projects, and take other actions that will support the Administrative Council's functions and coordination of industry standards-setting processes. a. Selection of the Sponsoring Organization of the Administrative Council 14. Background. In an ex parte letter jointly filed by ATIS and TIA, these organizations proposed a cooperative arrangement for sponsoring the Administrative Council. TIA and ATIS propose that they would initially share the responsibility for creating the Administrative Council. The two organizations proposed that they coordinate the manner in which the initial organizational meeting is convened, host the first meeting, assign an initial chair, and put secretariat support in place. 15. Discussion. We conclude that joint TIA-ATIS sponsorship of the Administrative Council will best serve our goal of ensuring broad-based industry participation in the Administrative Council's activities and responsibilities detailed in the following section. We commend the parties for reaching an agreement that is responsive to our request in the NPRM that commenters propose a consensus arrangement for the entity that will ensure uniformity of technical criteria in this streamlined process. 16. Both TIA and ATIS are well suited to sponsor the Administrative Council. Both organizations have a great deal of experience sponsoring standards organizations and thus have the staff experience and competency to support the activities of the Council detailed herein. We note, moreover, that both parties have agreed to eliminate influence from organizations, including TIA and ATIS themselves, from the Administrative Council. TIA sponsors standards development committees that have participated in developing Part 68 technical criteria since its inception. For example, TIA Committee TR41 has subcommittees dedicated to all aspects of Part 68 issues. TIA is ANSI- accredited and its Committees and subcommittees for Part 68 matters have broad-based industry representation. It has been our observation, as Nortel states, that TIA's standards development operations are conducted in an open, consensus-based manner, consistent with ANSI requirements. 17. Likewise, ATIS sponsors and/or provides secretariat services for sixteen technical or standards committees, including Committee T1E1, the standards development organization that addresses standards for advanced technologies. We note that T1E1 has taken the lead in developing standards for the latest generation of terminal equipment based on digital subscriber line (DSL) technology. In the Advanced Services Third Report and Order, the Commission determined that ATIS Committee T1E1.4 would be the best forum for developing spectrum compatibility standards pertaining to the network side of the demarcation point. As stated in that Order, T1E1.4 maintains a broad participation list with representatives from all segments of the industry with technical expertise and experience on xDSL access standards. 18. We find no merit in Verizon's argument that the Commission did not properly provide notice that we would select a gatekeeper if we determine it is in the public interest to implement this model of technical criteria development. In the Notice we proposed, under the gatekeeper option, to choose a gatekeeper to compile and publish technical criteria for terminal equipment. We stated that the gatekeeper would be able to act as a central committee and adopt technical criteria for terminal equipment. We requested comment on which entity, or combination of entities, would best be able to carry out the functions we proposed for the gatekeeper. In fact, the Commission devoted an entire section of the Notice to the identity of the proposed gatekeeper. As discussed below, we indeed received comments from many entities on the identity of the gatekeeper. Moreover, no other parties to this proceeding appear to be unaware that we intended to identify the gatekeeper in this proceeding. 19. Term Limit for the Administrative Council's Sponsor. We conclude that it is not necessary to establish a term limit for the Administrative Council sponsor. We agree with Bell Atlantic (now Verizon) that there is value in maintaining continuity in the standards-setting process, and that re-bidding the gatekeeper function at regular intervals could disrupt that process. We do, however, believe that it would be in the public interest to permit the Administrative Council, after it is well-established and operational, to vote on a regular basis for which sponsoring organization and/or secretariat it will use. Accordingly, beginning four years from the date the Administrative Council begins operations, it has the option to vote to change its sponsoring organization and/or secretariat organization. 20. We are mindful, however, of the need for the Commission to monitor the Administrative Council operations to ensure that no anti-competitive or other discriminatory practices hinder the prompt and fair development of technical criteria. Accordingly, we will accept substantiated complaints regarding the sponsoring organization's compliance with our rules and policies for review under our complaint procedures adopted herein, and we retain the right to review our determination regarding the identity of the Administrative Council's sponsor at any time. 1. Administrative Council for Terminal Attachments a. Purpose of the Administrative Council 21. The purpose of the Administrative Council is to act as the clearing-house publishing technical criteria for terminal equipment developed by ANSI-accredited standards development organizations. As stated above, by adopting this approach we ensure that all manufacturers know which terminal equipment technologies can be connected to the public switched telephone network and all providers of telecommunications can deploy services and design their networks to permit connection consistent with these technical criteria. We conclude that the Administrative Council will not make substantive decisions regarding the development of technical criteria. This conclusion is based in large part on comments we received from TIA and ATIS regarding the industry's suggestions for its process of developing technical criteria. We agree with these parties that the gatekeeper should be a separate entity from existing standards development organizations. a. Criteria for the Administrative Council. 22. We conclude that the Administrative Council should be a non-governmental entity that is not controlled or dominated by any particular telecommunications industry segment. The Administrative Council must be fair and impartial. We believe that the separation of the sponsoring organization, the Administrative Council, and standards development functions eliminates any concerns regarding even the appearance of bias on the part of the Administrative Council. 23. The Administrative Council must have a membership fairly balanced in terms of the points of view represented. In meeting this requirement, we anticipate the Administrative Council membership will represent all segments of the industry including local exchange carriers, interexchange carriers, terminal and network equipment manufacturers, test laboratories, and other interested parties. We agree with ATIS that the individual member's industry segment, rather than the office held in industry organizations, such as Committees T1 or TR41, should be counted to ascertain the balance of membership. We require that the Administrative Council limit the number of Administrative Council members to a workable number. This requirement, however, shall not be used to limit arbitrarily participation by any one segment of the industry. In addition, to the extent there is interest among industry members, the Administrative Council is required to rotate the Administrative Council membership to give all interested individuals an opportunity to participate, and to avoid placing undue burden on specific individuals. a. Functions of the Administrative Council 24. We conclude that the Administrative Council will adopt technical criteria for terminal equipment through the act of publishing criteria developed by ANSI-accredited standards development organizations. This process will operate as follows: Immediately upon receipt of submitted technical criteria, the Administrative Council will publish a public notice detailing the technical criteria and the standards development organization responsible for its submission. Interested parties will have 30 days to appeal any aspects of the proposed technical criteria to the standards development organization, to the American National Standards (ANS) Board, or to the Commission. Simultaneously with the appeal, the party appealing the proposed technical criteria must provide notice of this appeal to the Administrative Council. If no appeals are filed within 30 days after the Administrative Council's public notice, then the Administrative Council will publish the technical criteria, and the Commission will consider the criteria presumptively valid. 25. The Administrative Council will also be responsible for establishing and maintaining a database of equipment approved as compliant with the technical criteria. The Administrative Council may perform this database function on its own, or may make arrangements with one of the sponsoring organizations to be the administrator of the database. The Administrative Council will assume many of the Commission's current Part 68 functions, including responding to inquiries from the public regarding the technical criteria it has published, including the technical criteria that are currently in the Part 68 rules, and approved equipment. It is within the Administrative Council's discretion to determine the most appropriate way to perform many of these functions. For instance, the Commission receives approximately 60 inquiries per month regarding the proper interpretation and application of the Part 68 technical criteria. We require the Administrative Council to refer such inquiries to an appropriate standards development organization or TCB. 26. The Administrative Council will accomplish these responsibilities by: · Accepting submissions of proposed technical criteria from ANSI-accredited standards development organizations or committees; · Ascertaining that the SDO's have made certifications regarding no conflict with existing criteria and applicability to the four harms, as discussed infra; · Providing a public notice to inform industry as thoroughly as practicable of the identity of the proposing SDO and of the proposed technical criteria; · Publishing the SDO submitted criteria thirty days after public notice, thereby making the technical criteria presumptively valid under the Commission's rules. 2. The Administrative Council may undertake any other administrative functions that it deems necessary to coordinate industry's development and review of potential technical criteria. We agree with TIA that these functions, currently performed on an ad hoc basis by individuals coordinating among interested standards development organizations, may find a locus in the Administrative Council. For example, the Administrative Council may provide notice to interested parties of new standards being developed for publication as technical criteria. It may also coordinate, if necessary, which industry SDOs will take on a particular development project, and ensure that all interested parties have notice of the undertaking. We note, however, that the Administrative Council must not engage in standards development, policymaking, or dispute resolution. In order to ensure that the Administrative Council is functioning according to the requirements and principles set out in this Order, the Administrative Council must establish a "charter" that will set forth its functions, its operations, and its standards for providing balanced membership. We require the Administrative Council to make its charter detailing these operations and procedures available to the public and this Commission for review within 60 days after the first official meeting of the Administrative Council. 3. Finally, we conclude that it is not necessary for us to establish specific funding mechanisms for the Administrative Council. We believe that the Administrative Council and the joint sponsoring organizations, TIA and ATIS, are in the best position to determine financing arrangements. We are also confident that they will ensure successfully that small businesses and individuals are able to participate in the standards-setting and to purchase the Council's published standards. We note that TIA and ATIS, in their proposal for a joint Administrative Council sponsorship are considering issues pertaining to funding of the Administrative Council. Because the relationship between the sponsoring organizations and the Administrative Council will be a contractual one, subject to our overarching policies of accessibility and openness, we leave these matters within the Administrative Council's purview. 4. Interim, Trial Use, or Exceptions to Criteria. In the Notice, we proposed that to the extent manufacturers or importers request exceptions or interim criteria for their terminal equipment that does not meet the technical criteria published by the gatekeeper, we would require the gatekeeper to establish an expedited interim standard process. We proposed that this process would require resolution of the requested exception within 60 days. Commenters have pointed out that ANSI procedures include establishment of trial standards for an interim period. We conclude that the Administrative Council should make use of these procedures. We do not, however, establish a time limit of 60 days as suggested in the Notice. The record indicates that this may not be sufficient time to analyze the technical issues under the ANSI due process procedures. Accordingly, so long as ANSI procedures are followed in a manner consistent with the deadlines established therein, we will not establish a shorter time frame in which the Administrative Council must act. 1. Standards Development Organizations a. Submission of Technical Criteria to the Administrative Council 5. ANSI-accredited Process. We conclude that only standards development organizations that meet the due process requirements for ANSI accreditation for either Organizations or Standards Committees may develop technical criteria for submission to the Administrative Council as valid technical criteria for terminal equipment. We agree with TIA that this requirement will ensure a broad representation among the individuals working to develop the criteria. We believe that the representation and careful consideration of comments and exceptions required by ANSI accreditation will be a safeguard similar to our rulemaking processes. While we have concluded that the standards development organizations that develop technical criteria are in no way making rules, because the Commission will give presumptive validity to the technical criteria to the extent that they comply with the rules proscribing harm to the public switched telephone network, subject only to our de novo review, we believe the public interest requires these safeguards. 6. The two standards development organizations most involved in Part 68 and related matters, T1E1 and TR41, are ANSI accredited. In addition, our rules do not preclude other ANSI-accredited standards development organizations from developing technical criteria for submission to the Administrative Council for publication. Thus, we conclude that we are not adopting a new process for industry, but instead we are adding new authority to existing industry procedures and functions. a. Necessary Certifications to the Administrative Council 7. Certification that New Technical Criteria Do Not Conflict with Established Technical Criteria. We conclude that the technical criteria presented to the Administrative Council need not have achieved the status of an American National Standard. Some technical criteria, especially those developed for new technology, may not rise to the level of a national standard prior to being appropriate for inclusion in the Administrative Council's technical criteria. However, in order to satisfy the concerns of commenters that new technical criteria not be in conflict with established technical criteria, we require all standards development organizations submitting technical criteria for publication to the Administrative Council to certify that the submitted technical criteria do not conflict with any existing technical criteria. This certification will be the least burdensome and most effective way to ensure uniformity of technical criteria without conflict. 8. Certification that Technical Criteria are Limited to Four Harms. The technical criteria that are presumptively valid subject to our de novo review must be limited to preventing the four types of harm that are currently represented in our rules. We agree with commenters that it is still necessary to protect the public switched telephone network from these harms, but on the other hand, the record does not suggest any justification for expanding on these parameters. Accordingly, we require that all standards development organizations submitting criteria for publication to the Administrative Council must certify that the technical criteria are limited to preventing harms to the public switched telephone network. 1. The Commission 9. Although the Commission will no longer be responsible for establishing technical criteria for terminal equipment, with the exception, as discussed below, of those criteria addressing hearing aid compatibility and volume control requirements as well as inside wiring, we do retain certain responsibilities regarding review of the industry established technical criteria and enforcement of the proscription against causing harms to the network. a. Retention of Certain Rules Designed to Prevent Harms to the Network and Rules Pertaining to Technical Criteria for Hearing Aid Compatibility and Volume Control 10. Background. In the Notice, we specified that our proposals to privatize and streamline the approval of terminal equipment affect technical criteria in Part 68, Subparts B, C, D, and F. The proposals also affected the technical definitions contained in Section 68.3. Although we tentatively concluded that it was no longer in the public interest for the Commission to continue its direct involvement in terminal equipment approval, we proposed retaining several definitions in Part 68 that are related to other Commission policies outside of terminal equipment interconnection. Accordingly, we proposed to keep in Part 68 the present definitions of: (a) "demarcation point" and the related terms "single-unit installations" and "multiunit installations," (b) "essential telephones," (c) "harm," (d) "hearing aid compatible," (e) "Private Radio Services," (f) "Public Mobile Services," and (g) "secure telephones." In addition, we proposed to maintain our direct oversight of, and rules concerning, hearing aid compatibility (HAC), volume control, consumer protection, and inside wiring. SBC and BellSouth contend that the Commission should also maintain its Type B power surge requirements. 11. Discussion. We are convinced that we should retain the technical definitions contained in Section 68.3. Accordingly, we shall retain in Part 68 the present definitions of: (a) "demarcation point" and the related terms "single-unit installations" and "multiunit installations," (b) "essential telephones," (c) "harm," (d) "hearing aid compatible," (e) "Private Radio Services," (f) "Public Mobile Services," and (g) "secure telephones." In addition, as discussed below, we maintain our enforcement mechanisms and rules concerning, hearing aid compatibility, volume control, consumer protection, and inside wiring. These terms and requirements will continue to serve important Commission policies after the privatization of Part 68. 12. Maintaining the term "harm" enables the Commission to monitor terminal equipment approval and ensure that the requirements enumerated in this Order will be satisfied in an expeditious and nondiscriminatory manner. We believe that maintaining this term in Part 68 will not limit the authority of the Administrative Council, TCBs, standards development bodies, or other private entities that we charge with responsibilities in this Order. In addition, the terms "demarcation point," "single-unit installations," and "multiunit installations" are essential to ensure the validity and effectiveness of our inside wiring rules. In January 2000, we released an order adopting inside wiring requirements designed to protect consumers from the degradation of basic telephony service that can be caused by the installation of substandard wiring. At the time we adopted the rules, we found that the action was necessary to protect against demonstrated problems in the market as it now operates. We believe that it is necessary for the Commission to retain the rules intended to encourage builders to install quality inside wiring, thereby ensuring that customers will continue to have access to all available communications services, including advanced services that are more demanding on inside wire than traditional voice. 13. As we explain above, we will continue to maintain our hearing aid compatibility and volume control rules. These rules are a critical component of the Commission's requirements intended to ensure that individuals with hearing and speech disabilities have access to telecommunications services in a manner functionally equivalent to someone without such disabilities. By retaining these rules in Part 68, we also ensure that the Commission is able to continue monitoring and enforcing compliance with these requirements as directed by Congress in Section 255 of the Act. Maintaining the term "hearing aid compatible" is essential to ensure that our requirements are as clear and effective as possible. Finally, the terms "essential telephones," "Private Radio Services," "Public Mobile Services," and "secure telephones" provide necessary clarity and precision to our rules. 14. We are not, however, persuaded by SBC's and BellSouth's argument that we should retain our Type B power surge requirements. This Commission amended the Part 68 rules to add Type B surge requirements as part of the effort to harmonize U.S. and Canadian requirements governing connection of terminal equipment to the public switched telephone network. As with all the Part 68 rules that we privatize herein, we are confident that the Administrative Council will maintain our Type B surge requirements as long as is necessary to protect the public switched telephone network from harms. Thus, we conclude that there is no basis to create an exception for these requirements in light of our determination in this Order that privatizing Part 68 is in the public interest. a. Commission de novo Review of Administrative Council Technical Criteria 15. Background. In the Notice, we proposed to retain ultimate responsibility to enforce compliance with our rules designed to prevent harms that may be caused by terminal equipment to the public switched telephone network. We proposed, moreover, that upon appeal we would conduct a de novo review of industry-developed technical criteria. We proposed that any final interpretation with respect to compliance would remain with the Commission through this de novo review procedure. 16. Discussion. We establish that an aggrieved party may appeal to the Commission for a de novo review of the technical criteria. We anticipate that a complainant may not have a separate procedure, other than those established herein, to appeal an SDO's proposed technical criteria before they go into effect. We leave open the possibility, however, that there may be some circumstances in which such a separate procedure might be appropriate. In the unlikely event that a technical criterion goes into effect that will harm the public switched telephone network, carriers retain the right to disconnect harmful terminal equipment, as discussed infra. 1. Appeals Procedures for Development of Technical Criteria a. Background 17. ANSI procedures provide that an SDO must evaluate and respond to public comment on standards under development. Anyone alleging that the SDO has not respected due process principles during the standards development process has a right to appeal in accordance with the ANSI-accredited procedures for the standards developer. a. Discussion 18. Appeals of Technical Criteria Before Publication by the Administrative Council. We adopt our proposal to require a party, aggrieved by an SDO's decision to submit technical criteria to the Administrative Council for publication, to appeal this decision through the SDO's ANSI-accredited appeal procedures. As explained supra in Section C.2.c, interested parties will have 30 days to appeal any aspects of the proposed technical criteria to the standards development organization, to the American National Standards (ANS) Board, or to the Commission. Simultaneously with the appeal, the party appealing the proposed technical criteria must provide notice of this appeal to the Administrative Council. If no appeals are filed within 30 days after the Administrative Council's public notice, then the Administrative Council will publish the technical criteria, and the Commission will consider the criteria presumptively valid. These procedures should address the needs of a party that has a direct and material interest in the criteria at issue, as well as a commenter in the standard development proceedings whose interest may not rise to the level of "direct and material." We conclude that this appeal process alleviates local exchange carrier commenters' concerns that they may be required to permit connection of terminal equipment that is the subject of appealed criteria. 19. Appeals of Technical Criteria After Publication by the Administrative Council. If the Administrative Council receives an appeal regarding published technical criteria, the Administrative Council shall refer the proposed technical criteria and the comments back to the submitting SDO. The SDO shall first try to satisfy the objecting party's concerns, subject to a time limitation imposed by the Administrative Council; if that process is unsuccessful the party filing an objection must exhaust its appeal process through ANSI. If the SDO appeal procedures are completed but are unsuccessful in resolving the objection, the objecting party may file a request for de novo review by this Commission, as explained supra in Section C.4.b. Regardless of whether an appeal is initiated before or after the Administrative Council publishes technical criteria, the Commission will not recognize technical criteria as presumptively valid until the appeal has been resolved by the SDO, and, if review is sought here, by the Commission. 20. Appeals of Technical Criteria That Are Former Commission Rules. If a party files an objection with the Administrative Council to original technical criteria (i.e. a former Part 68 rule), the Administrative Council shall coordinate with interested parties to have an ANSI-accredited SDO address the objections under ANSI procedures. 1. Modification of Part 68 Terminology 21. Background. In the Notice we requested comment on whether the Commission should continue to include in Part 68 the term "telephone company" rather than the term "local exchange carrier." We tentatively concluded that Part 68 should be amended throughout to change this terminology, including the rule sections that we propose to turn over to the private industry. We noted that the use of the discontinued term "telephone company" has resulted in some confusion as to whether Part 68 applies to competing local exchange carriers (LECs) as well as incumbent LECs. 22. Discussion. Although the Commission is privatizing as technical criteria large portions of the scope of the Part 68 rules currently found at Rule 68.2, the fundamental purpose of Part 68 remains the same, i.e., that "the rules and regulations [including the Administrative Council's technical criteria] apply to direct connection of all terminal equipment to the public switched telephone network, for use in conjunction with all services other than party line services." Against this background of the scope of Part 68, we conclude that we should change the terminology in Part 68 and in the technical criteria published by the Administrative Council from "telephone company" to "provider of wireline telecommunications." The term "telephone company" is not defined in the Act and we believe that it is not sufficiently precise. Although we proposed changing the terminology to "local exchange carrier," upon further consideration, we agree with USTA and Sprint that "local exchange carrier" is not the most appropriate term because it does not capture interexchange carriers (IXCs) and other providers of telecommunications that could be subject to Part 68 obligations if they own that portion of the public switched network to which terminal equipment is attached directly. Accordingly, we replace the language "telephone company" with the phrase "providers of wireline telecommunications" to clarify that all wireline carriers, including incumbent LECs, competitive LECs, IXCs, and other entities that offer wireline telecommunications and whose network may be affected by direct connection of terminal equipment are subject to our rules under Part 68. 23. The term "telecommunications" is defined in the Act as "the transmission, between or among points specified by the user, of information of the user's choosing without change in the form or content of the information as sent and received." Thus, the phrase "providers of wireline telecommunications" clearly encompasses incumbent LECs, competing LECs, IXCs, and all other entities that may own the portion of the public switched telephone network to which terminal equipment may be connected directly. The phrase "providers of wireline telecommunications" provides more clarity than the term "telephone company" and will protect the rights of consumers by ensuring that all providers of wireline telecommunications permit connection of approved terminal equipment to their networks. A. Transition of Commission Responsibilities to Administrative Council Technical Criteria 1. Respective Roles of the Commission and Industry During Transition 24. In the Notice, we sought comment on the best means to transition from the traditional governmental Part 68 functions to private industry responsibility. As proposed in the Notice, and as supported by the record, our rules containing Part 68 technical criteria will remain applicable until the Administrative Council publishes the technical criteria codified in Part 68 as its technical criteria for direct attachment of terminal equipment. Thus, the Administrative Council's initial technical criteria shall be identical to our existing Part 68 technical criteria. Thereafter, our new rules that do not include the detailed technical criteria will go into effect. Our new Part 68 rules will identify the Administrative Council's technical criteria as presumptively valid and, if complied with, trigger the responsibility of providers of telecommunications to permit terminal equipment connection to the public switched telephone network. We note that during the 180-day transition period set out below, until the Administrative Council publishes the Part 68 rules we transfer to it, the Commission will continue to maintain and enforce all of the current Part 68 rules. As part of this responsibility, the Commission will accept and consider petitions for waiver of Commission rules 68.3212(i) and 68.308(e)(1) as part of the streamlined waiver process for stutter dial tone and ADSL terminal equipment, respectively. Thus, there will be no lapse of protection to the public switched telephone network provided by technical criteria. There is no objection period for these technical criteria, nor do they need to be sponsored by an ANSI-accredited SDO, since they have been developed pursuant to Commission rulemaking proceedings. Our new Part 68 rules will provide that the Administrative Council, thereafter, has the responsibility to maintain, change, or if appropriate, eliminate the criteria, subject to the Commission's guiding principles and procedural requirements that we establish herein. 1. Schedule for Transition 25. We believe that the transition to the industry Administrative Council model for adoption of technical criteria for terminal equipment, transfer of the Commission's current Part 68 functions to the new Administrative Council, and as discussed infra, the transfer of the current Commission Part 68 equipment registration functions to industry should occur as rapidly as possible, in a manner consistent with the public interest. To this end, we suggest the following transition schedule that sets time periods as outside limits for the completion of each phase of the transition. The transition steps are: · No later than 30 days after publication of this Order in the Federal Register, TIA and ATIS, as the joint sponsoring organizations for the Administrative Council for Terminal Attachment, shall notify the industry of its intent to establish and populate an Administrative Council. · The Administrative Council shall be populated within 60 days after notice to the industry. · No later than 30 days after the Administrative Council is populated, the Administrative Council shall convene its first official meeting. · No later than 60 days after the first official meeting of the Administrative Council, the Administrative Council shall establish, publish, and submit to the Commission a "charter" detailing its functions, operations, and standards for providing balanced membership. · No later than 180 days after the date of publication of this Order in the Federal Register, the Administrative Council shall publish the Part 68 rules we transfer to it by operation of the rules we adopt herein. · As explained infra, no later than 180 days after publication of this Order in the Federal Register, the Commission shall cease accepting applications for registration of Part 68 equipment and transfer responsibility for establishing and maintaining the database of approved equipment to the Administrative Council. · As explained infra, no later than 180 days after publication of this Order in the Federal Register, the Administrative Council shall report to the Commission its progress in resolving outstanding numbering and labeling requirements. 2. Once the Administrative Council conducts its first meeting, we require it to establish a schedule for regular meetings and additional procedures for meetings necessary to adopt proposed technical criteria for terminal equipment. The initial Administrative Council meeting is essential to an orderly and prompt transfer of responsibilities from the Commission to the industry. We believe that the combined expertise of members of the industry will enable industry to populate an Administrative Council promptly and efficiently. We require TIA and ATIS, as the joint sponsoring organizations, to report to the Common Carrier Bureau the progress of populating the Administrative Council and establishing a "charter" detailing the operating rules of the Administrative Council. This report will enable the Bureau to monitor the progress of the transition and ensure that industry is prepared to assume responsibility for the Commission's current Part 68 responsibilities as detailed in this Order. III. Regulatory Paradigm for Equipment Approval A. Streamlining the Equipment Approval Process 1. Background 4. In addition to seeking comment on streamlining the process for establishing technical criteria for terminal equipment interconnection, we sought comment in the Notice on revisions to the Commission's equipment registration procedures. Currently, under Commission rule 68.102, manufacturers must register terminal equipment. Manufacturers may satisfy this requirement by seeking approval of terminal equipment conformity to Part 68 technical criteria from either telecommunications certification bodies (TCBs) or the Commission. Consistent with our efforts to privatize much of the Part 68 process, we tentatively concluded in the Notice that, although some type of equipment approval process continues to be necessary, the Commission should not perform the function of direct approval of terminal equipment. In furtherance of our mandate in the Telecommunications Act of 1996 to privatize or streamline Commission processes that are no longer in the public interest, we proposed, in the Notice, three methods of requiring proof of equipment compliance with technical criteria: (1) continuing to rely, either entirely or in part, upon on TCBs for equipment approval; (2) allowing manufacturers to use a declaration of conformity (DoC) process, as defined in Part 2 of the Commission's rules; or (3) allowing manufacturers to use a verification process, as defined in Part 2 of the Commission's rules. Each of these equipment approval methods, discussed in detail below, would eliminate the Commission's direct involvement in the terminal equipment approval process while providing various safeguards to ensure that the equipment meets technical criteria designed to prevent any or all of the harms detailed in Part 68. In lieu of continuing our current role in this process, we proposed that the Commission should reallocate its resources to enforcing industry- established technical criteria for terminal equipment. 5. We also requested in the Notice that parties believing we should implement more than one approval process comment on whether we should leave the choice of approval processes up to the equipment manufacturer or importer, or whether we should implement a hierarchy of approval methods, i.e. regulatory requirements specifying which approval process shall apply to each type of terminal equipment. For example, we requested comment on whether we should require TCB certification or a DoC for all terminal equipment subject to the hearing aid compatibility and volume control (HAC/VC) provisions of sections 68.316 and 68.317, while permitting less stringent review for other types of equipment such as modems. 1. Discussion 6. As we concluded with regard to the development of technical criteria, Section 151 of the Communications Act and the statutory authority relied upon by the Commission to implement Part 68 in the first instance do not require that the Commission register directly every type of terminal equipment before it can be interconnected with the public switched telephone network. Rather, this statutory authority permits the Commission to adopt reasonable regulations to ensure that terminal equipment does not cause harm to the PSTN, consistent with the public interest. Furthermore, as we stated above, under the 1996 Act, Congress directed the Commission to examine its rules applying to the operation or activities of any provider of telecommunications service every two years and determine whether "any such regulation is no longer in the public interest as the result of meaningful economic competition between providers of such service." Congress directed the Commission to repeal or modify those regulations it determines, based upon the statutory standard, to be no longer necessary in the public interest. The record overwhelmingly demonstrates that, based upon the maturity and competitiveness of the terminal equipment manufacturing market and the telecommunications services industry, it is in the public interest for private industry to self-regulate conformance of terminal equipment to the Administrative Council's technical criteria. Our decision in this Order to privatize the terminal equipment registration process will reduce unnecessary costs and delays currently imposed upon manufacturers and the Commission without measurably increasing the possibility of harm to the network. Thus, upon weighing the substantial benefits of accelerating the terminal equipment approval process against the unlikely possibility of any cost increases associated with harm to the PSTN that may result from a decreased presence of the Commission in the approval process, we conclude that it is no longer in the public interest for the Commission to continue its Part 68 registration functions. Accordingly, the Commission shall cease accepting applications for Part 68 registration 180 days after publication of this Order in the Federal Register and the Administrative Council shall begin to assume all the responsibilities assigned herein. 7. We conclude that privatization of the terminal equipment approval process will continue to provide the same degree of protection to the PSTN as the current Commission Part 68 registration and approval process, while significantly increasing the efficiency of the approval process. We agree with the majority of commenters, including equipment manufacturers, testing laboratories, carriers, and other providers of telecommunications, that the Commission should privatize the equipment approval process for several reasons. First, privatization will reduce product approval times and enable manufacturers to bring their products to market at an accelerated pace. Thomson estimates that in this era of intense terminal equipment competition, the cost to consumers and manufacturers of the Commission's current registration process can amount to millions of dollars per year industry- wide. We agree with Thomson and other commenters that relieving the industry and consumers of any unnecessary delay will further enhance the competitive robustness of the terminal equipment market. Second, we are persuaded by Nortel and ITI that the competitive nature of terminal equipment market, which demands quality products, gives rise to strong economic incentives for manufacturers to ensure compliance with relevant technical criteria, thereby protecting the network from harm. As evidence of these incentives, Nortel and ITI point out that there is an absence of non-compliance with the Commission's requirements. Finally, we are persuaded that the new privatized equipment approval process will bring newer technologies to end user customers more expeditiously than the current Commission approval process. 8. Privatizing the equipment registration process will permit the Commission to focus on enforcement of the industry-established technical criteria for terminal equipment. In order to maintain a sufficient level of accountability for suppliers, we conclude that an organized system of equipment approval procedures that require appropriate documentation remains necessary. This documentation will identify the party responsible for compliance with the technical criteria, provide accountability, and enable sufficient enforcement of the technical standards to satisfy the public's interest in protecting the PSTN. As we explain below, we defer to the industry to compile and maintain a database of all necessary approval information. We note however, that we will continue to monitor the effectiveness of the terminal equipment approval process. Furthermore, the Commission shall maintain its role as the forum of last resort for disputes regarding terminal equipment standards and approval procedures. A. Equipment Approval Methods 9. As stated above, in the Notice, we proposed three methods of requiring proof of equipment compliance with required technical criteria: continuing to rely, either entirely or in part, on TCBs for equipment approval; allowing manufacturers to use a DoC process as defined in Part 2 of the Commission's rules; or allowing manufacturers to use a verification process, as defined in Part 2 of the Commission's rules. In addition, several parties asked that the Commission clarify its use of terminology and permit suppliers to use the Supplier's Declaration of Conformity (SDoC) process, as defined in the International Organization for Standardization and the International Electrotechnical Commission (ISO/IEC) Guide 22, and described in detail below. 10. We agree with several commenters, including manufacturers and test laboratories that, while TCB approval is and will continue to be an effective means of assessing the conformity of new products with the technical criteria, permitting an additional method of equipment approval would ensure the most expeditious means of bringing innovative equipment to the market, without increasing the risk of harm to the network. Accordingly, as discussed in detail below, we conclude that a terminal equipment supplier must either submit its equipment to a TCB for approval, or utilize the SDoC procedure to assure conformity with the required technical specifications. In addition to greater efficiency, TCB approval and SDoC approval offer sufficient protection to the network because TCB approval requires independent, third party approval, while SDoC requires the supplier to declare that its equipment conforms with all applicable standards, which, as ITI and Nortel explain, places strong market incentive upon the supplier to test thoroughly its products. 11. We decline to create a regulatory hierarchy specifying which type of equipment must be subject to each approval procedure. In turning over the approval process to the industry, we seek to ensure a process that will be as simplified and efficient as possible. We believe that adding new regulatory layers with additional rules to implement an equipment registration and approval process is inconsistent with our deregulatory goals in this proceeding. As discussed below, because we find that both TCBs and the SDoC approval of terminal equipment shall satisfy the public interest, suppliers are free to choose the approval process that best suits their needs. 1. Approval by Telecommunications Certification Bodies (TCBs) a. Background 12. In 1998, we established in the MRA Order an alternative procedure to direct Commission approval of terminal equipment, whereby terminal equipment suppliers may submit their products to private telecommunications certification bodies (TCBs) for terminal equipment registration. The TCB procedure requires the Commission to designate private entities as TCBs to approve equipment as complying with the Commission requirements in lieu of the Commission continuing its current Part 68-registration process. The TCB program was designed in connection with Mutual Recognition Agreements/ Arrangements (MRAs) between the United States and the European Community (EC) and the Asia-Pacific Economic Cooperative (APEC) to facilitate market access and competition in the provision of telecommunications products that require testing and/or approval. Under the MRAs, TCBs satisfying the qualification criteria specified in the relevant MRA may certify equipment for export. Similarly, suppliers seeking to import equipment into the United States may seek certification of conformance to U.S. standards from foreign entities designated in the MRAs. Thus, once fully effective, the MRAs will ensure mutual recognition of equipment approval between the United States and other countries that commit themselves to the agreements. 13. We contemplated in the MRA Order that TCBs would eventually take over our registration processes, but that, initially, suppliers could choose either Commission or TCB registration. In the Notice, we proposed completely transferring the Commission's role in terminal equipment approval to TCBs. As stated in the Notice, our endorsement of TCBs as an appropriate method to show equipment conformance with the required terminal equipment technical criteria would accelerate the use of TCBs for terminal equipment approval so that the Commission is no longer engaged in the equipment approval and registration process. a. Discussion 14. We conclude that terminal equipment must be approved in accordance with the requirements set out herein. Suppliers may seek approval of all Part 68 terminal equipment from a TCB of the supplier's choice. Our decision to complete the transfer of terminal equipment approval authority to TCBs is well supported in the record. First, we agree with several commenters who argue that the TCBs will be able to perform effectively the Commission's terminal equipment approval functions for both domestic and international purposes within a short time after they are designated by the Commission, and our own experience with the TCBs thus far reinforces this conclusion. Although the TCB program has been functional for only a short period of time, we estimate that TCBs are currently handling ten percent of domestic equipment approval applications, and it appears, as Phonex argues, that TCBs are already significantly reducing approval time. Although the current Part 68 registration process operates in an expeditious manner, as we stated in the MRA Order, the TCB system may prove to be significantly faster since suppliers can select from several different approval bodies and can choose one with a shorter processing time. Manufacturer endorsement of TCB approval of terminal equipment further strengthens our belief that TCBs will expeditiously review terminal equipment approval requests, because manufacturers have a strong interest in ensuring that their products are available in the market as quickly as possible. Thus, we are confident that, due to their greater resources and the market forces of competition, TCBs will perform the equipment approval function in an expeditious yet thorough manner. 15. Second, we find that TCBs are sufficiently qualified and capable of approving terminal equipment. Domestic TCBs, in accordance with the MRA Order, are currently providing equipment approval under the Commission's general oversight. Under existing Commission rules, TCBs must be accredited by the National Institute of Standards and Technology (NIST), thus ensuring their competence to perform these equipment approval functions. As argued by GTE, by carefully specifying the qualification criteria for TCBs, and exercising the proper oversight, the Commission will be able to ensure that the TCB system is fair and impartial. 16. Third, providers of telecommunications services recognize the TCBs' ability to register equipment in a manner that will protect the network from harm. As we stated in the Notice, the carriers that own and operate the PSTN have an interest in ensuring that terminal equipment is reviewed competently. Thus, carrier support of TCBs further persuades us of their ability to assume the responsibility for terminal equipment approval. Indeed, carriers were significant participants in the industry consensus process leading up to development of TCBs. We agree with the expectation of several commenters that TCBs will provide independent, third party scrutiny of equipment, perform on-going compliance and auditing functions, and give expert guidance to the Commission to facilitate resolution of complaints. 17. Fourth, large and small manufacturers alike agree that TCBs are an important part of the equipment approval process, because TCBs provide an internationally recognized means of assessing equipment conformity. Lucent and Phonex assert that some manufacturers may prefer TCB certification because these manufacturers may be unable to conduct thoroughly in-house testing. TCBs will provide manufacturers an equipment approval alternative that has proven to be effective and is widely recognized. Phonex, a small manufacturer, expresses concern that it will face discrimination on its self-declaration of compliance in some countries because small manufacturers lack bargaining power of large suppliers through domestic and foreign distributors. We recognize that larger manufacturers may hold an advantage over small manufacturers due to brand recognition. Because TCBs will continue to approve terminal equipment, we believe smaller manufacturers will have a competitively viable option of seeking terminal equipment approval, and thus will not be harmed by the Commission's adoption of an alternative approval method, SDoC, as discussed below. Thus, we are persuaded that when an equipment supplier chooses to seek certification from a TCB, TCBs will effectively assume the Commission's current responsibilities of terminal equipment approval in an efficient and nondiscriminatory manner. 1. Other Types of Conformity Assessment and Equipment Approval DoC, verification, and SDoC a. Background 18. In addition to TCB certification, we consider three other proposed types of equipment approval procedures described below. The first two, declaration of conformity (DoC) and verification, are defined in Part 2 of the Commission's rules and currently are used for Part 15 (Radio Frequency Devices) equipment approval. The third type, supplier's declaration of conformity (SDoC), is an equipment approval method supported by several commenters and defined in the International Organization for Standardization and International Electrotechnical Commission (ISO/IEC) Guide 22. These approval procedures are distinguishable by whether they require laboratory accreditation and whether they require the "responsible party," or supplier, to certify conformance with industry standards. In order to clarify the definition and use of these terms, we set out below a detailed explanation of each type of conformity assessment, highlighting the similarities and differences. 19. Declaration of Conformity. In the Notice, we proposed allowing suppliers to use the declaration of conformity process (DoC) for Part 68 terminal equipment, as defined in Part 2 of the Commission's rules. DoC is an equipment approval procedure under which the party responsible for the equipment's compliance with specific technical parameters, the manufacturer, importer, or assembler, causes measurements to be made of equipment performance to determine compliance with the standards. The party performing such measurements must be accredited for doing so by either the National Institute of Standards and Technology (NIST) or the American Association for Laboratory Accreditation (AALA). Unlike the TCB approval process, the DoC procedure does not require the Commission to designate which testing facilities are appropriate. This DoC procedure is generally recognized for radio frequency equipment by foreign jurisdictions through the MRAs into which the U.S. has entered into with the EC and APEC. In the Part 15 Streamlining Order, we stated that DoC provides added safeguards (over verification) that are necessary to ensure compliance for certain products that have a greater potential for causing interference or where issues about proper measurement method may arise. 20. Verification. In addition, we proposed allowing suppliers to use the verification process. Verification is a procedure whereby the manufacturer or importer certifies equipment through a testing facility that measures equipment performance with regard to specific technical parameters. Verification, in the context of Part 15 equipment, permits approval from any laboratory. Unlike DoC, verification does not require accreditation of the testing facility or a formalized declaration of compliance by the responsible party. In contrast to SDoC, under verification, the supplier would not be required to attach a formal statement identifying the party responsible for ensuring that the equipment complies with the appropriate technical standards. 21. Supplier's Declaration of Conformity. In addition to the proposals set forth by the Commission, ITI, Nortel, and Hewlett-Packard propose that the Commission implement a supplier's declaration of conformity (SDoC) procedure. In the Notice, we sought comment on this procedure. SDoC, as defined in ISO/IEC Guide 22 and currently used in the European Union, is a hybrid of the DoC and verification procedures currently in Part 2 of the Commission's rules. Unlike the Commission's DoC process, SDoC does not require testing of the equipment by an accredited laboratory. The SDoC process does, however, require responsible parties to test for and declare conformity of their own equipment with required technical criteria, or at their option, have it tested by an independent laboratory. Although the procedures are similar, SDoC differs from verification because under SDoC, equipment is accompanied by a formal SDoC statement identifying the party responsible for the product's compliance with appropriate technical standards to ensure accountability for equipment attached to the PSTN. In addition, whereas the term SDoC is internationally defined and understood, the term verification is Commission defined. a. Discussion 22. We conclude that, as an alternative to TCB certification of terminal equipment, suppliers also have the option of utilizing the SDoC procedure as defined in the ISO/IEC Guide 22 and clarified below to meet Commission requirements. We are persuaded that there are many benefits to permitting suppliers to show compliance with the Administrative Council's technical criteria by utilizing the SDoC process. We agree with several commenters that the SDoC process would significantly reduce the complexities, costs, and delays associated with pre-market approval while providing sufficient assurance that the terminal equipment complies with the technical criteria designed to prevent harm to the PSTN. 23. We are not persuaded by commenters arguing that accreditation of testing facilities, as required by DoC but not by SDoC, is essential to protecting the PSTN. Under the Commission's SDoC process, the supplier is required to test accurately the equipment and provide a written declaration that the terminal equipment conforms to applicable Administrative Council technical criteria. The declaration shall include, at the minimum, (1) the identification and a description of the supplier and the product, (2) a conformity statement and referenced standards, (3) the date and place of issue of the declaration, and (4) the signature, name and function of person making declaration. We require the supplier to notify the Administrative Council of any changes in this information. We are convinced, as several commenters argue, that in the competitive terminal equipment market, accreditation of testing laboratories is not necessary. Current equipment approval procedures, which do not require the testing laboratories to be accredited, have proven to be so successful that the Commission is able to undertake this present streamlining initiative. Moreover, we agree with Nortel and ITI that there is virtually no record of non-compliance with the Commission's technical criteria for terminal equipment. 24. Furthermore, as part of the SDoC process defined herein, requiring suppliers to seek equipment approval from an accredited test laboratory or TCB would impose additional cost and delays to the equipment approval process. Although UL and Verizon dispute this conclusion, we are persuaded by ITI's estimate that permitting suppliers to select SDoC as an alternative to TCB certification of terminal equipment would accelerate, by a matter of days or even weeks, the availability of equipment to the marketplace. In contrast, requiring the DoC procedure where suppliers would be forced to have their equipment approved by an accredited lab would force suppliers to either undergo costly accreditation procedures or to suffer additional costs and delays by seeking third party approval of their equipment from an accredited lab. In balancing the relatively low risks that testing and measurement procedures of unaccredited laboratories may permit noncompliant equipment to be connected to the PSTN against the additional costs accreditation may impose upon suppliers and consumers alike, we conclude that requiring, as opposed to permitting, suppliers to use accredited testing laboratories is not in the public interest. 25. Moreover, we implement additional requirements to ensure that the public will be able to trace suppliers that declare non-compliant equipment as conforming to Administrative Council technical criteria so that they may be held legally accountable for any resulting harm to the PSTN. First, we require suppliers to ship a copy of the formal SDoC with the terminal equipment to consumers. We also require suppliers to make a copy of the SDoC readily available to the general public, including the disabled community, at no cost on its company website. If the supplier does not have a functional and reliable website, then we require the supplier to inform the Administrative Council of such circumstances so that it may make a copy available on its website. In addition, we require the supplier to send a copy of the SDoC, along with any other information the Administrative Council requires, to the Administrative Council to ensure that consumers and wireline providers of telecommunications can readily obtain a copy. We also require the supplier to retain a copy of the SDoC, all test results, and an explanation of the testing procedures utilized for ten years after the product is no longer available on the market. Finally, as explained below, we require the Administrative Council to implement numbering and labeling requirements and maintain a database of all Commission approved, TCB certified, or supplier-declared terminal equipment that will ensure that consumers and wireline providers of telecommunications can readily obtain the supplier's identity. We believe that the combination of these requirements will protect sufficiently the PSTN by holding suppliers accountable through strong economic incentives to thoroughly test their equipment before declaring that terminal equipment conforms to all appropriate Administrative Council technical criteria. 26. Finally, permitting suppliers to use the internationally defined and recognized SDoC process, as clarified to meet Commission requirements, is consistent with international trends and thus should lower transaction costs for suppliers seeking to import or export terminal equipment into or out of the United States. We agree with Nortel that SDoC will reduce costs and delays for multinational suppliers while ensuring that small businesses seeking to export or import terminal equipment are not subjected to duplicative testing and certification requirements. As Nortel explains, the adoption of SDoC procedures will facilitate the use of the mutual recognition process with those countries, such as the member states of the EC, that have adopted or will adopt SDoC procedures. To benefit from the MRAs, exporters must conform to the standards and testing requirements of the country into which they are making their terminal equipment available. Thus, domestic suppliers seeking to export terminal equipment to countries that have not adopted SDoC procedures, or with whom the Commission has not entered into MRAs have the option of using SDoC or testing procedures that receive mutual recognition. For example, if the importing country requires testing by an accredited laboratory, in order to receive the benefits of the MRA, the supplier must comply with the relevant testing requirements and conform to stricter approval procedures than we adopt today. Suppliers seeking to export that do not have sufficient in house testing facilities to satisfy the testing requirements of foreign countries may utilize TCBs or other appropriate testing procedures. 27. We will monitor the effectiveness of the TCB and SDoC terminal equipment certification procedures. In particular, we reiterate our commitment to using the Commission's enforcement mechanisms to ensure the continued compliance with the HAC/VC requirements. Moreover, as explained below, we adopt the most recent version of the disability complaint procedures for informal complaints regarding hearing aid compatibility and volume control rule violations. These procedures will provide for a more efficient and effective complaint process. 28. Furthermore, wireline providers of telecommunications will continue to be able to require disconnection of non-compliant terminal equipment. These entities have a strong incentive to identify and disconnect noncompliant equipment causing any harms to the network. Although BellSouth argues that the ability of these entities to disconnect noncompliant equipment from the network is not effective in preventing large scale instances of noncompliance, as stated above, the record and the Commission's experiences demonstrate that there have been few instances where noncompliance of terminal equipment causes any harms. Moreover, suppliers that fail to comport with the rules established by the Commission or by the Administrative Council may face enforcement action from the Commission. We are confident that, by adopting two safe and effective methods of equipment approval, TCB approval and SDoC, our procedures will allow suppliers to develop and bring to market products incorporating new features and technology in an efficient manner that will decrease delays, encourage deployment of new technology, and lower costs to consumers. 29. We conclude that the TCB certification and SDoC procedures for terminal equipment approval we adopt in this Order preclude the need to adopt a DoC approval process. Under the SDoC process we adopt in this Order, suppliers have the option of choosing an accredited laboratory to test their terminal equipment, whereas they would be required to do so under the DoC procedure. Thus, manufactures seeking third party approval for their terminal equipment would have the same opportunity under SDoC as they would have under the DoC process to seek approval of their terminal equipment from an accredited laboratory. Although BellSouth argues that DoC would provide an efficient approval process while offering greater protection to the PSTN than SDoC or verification, we agree, as stated above, with numerous commenters that accreditation of testing facilities is not necessary to protect the public interest. We are confident that the Commission's SDoC requirements provide sufficient protection to the PSTN. 30. Finally, we conclude that establishing a verification procedure for terminal equipment approval is unnecessary at this time. While we acknowledge that there are many similarities between SDoC and verification, we believe that adopting the SDoC procedure for terminal equipment will better serve the public interest because SDoC is an internationally recognized procedure. Verification, on the other hand, is defined in Part 2 of the Commission's rules. Moreover, we continue to believe that it is in the public interest for responsible parties to formally certify that their equipment has been tested to meet the Administrative Council technical criteria. Because verification does not require the supplier to formally certify that its product conforms to the applicable technical criteria and to make that certification readily available to the public, we agree with Nortel that verification does not offer sufficient protection to satisfy the public interest. We conclude, therefore, that SDoC provides greater assurance that the party responsible for terminal equipment compliance is held accountable. We note, however, that our decision herein does not affect the Commission's equipment approval procedures defined in Part 2 for radio frequency equipment. Without this necessary supplier's declaration, Nortel persuasively argues, it may be difficult to hold suppliers accountable for compliance failures because it would be more difficult for injured parties to trace as easily the offending terminal equipment back to the party responsible for the product's compliance with the required technical criteria. A. Database of Approved Equipment 1. Background 31. In the Notice, we tentatively concluded that a database of all registered terminal equipment should be maintained, regardless of whether the equipment is approved by a TCB or some form of declaration of conformity. We proposed that a private entity assume responsibility for sponsoring and maintaining a database that would replace the Commission's current database of Part 68 registrations. The Commission's database of approximately 30,000 Part 68 registrations contains equipment identification information, applicant identity, and technical information. In order to ensure that the database has sufficient information to support re-registrations, to respond to inquiries from U.S. (and foreign) customs services as to the validity of registrations, and to respond to consumer inquiries regarding the identity of the supplier of a particular piece of terminal equipment, we currently require TCBs to use Form 730 to submit information to the Commission on approved equipment. We proposed in the Notice that, once this Commission is no longer engaged directly in registering terminal equipment, we cease our direct involvement in this area and no longer require TCBs to submit any information directly to this Commission or to use Form 730. We sought comment on what information we should require to be submitted into a national database by parties using suppliers' declaration of conformity procedures, and how that information would be submitted. In addition, we proposed that entities obtaining equipment approval be required to submit pertinent information regarding their identity and approved equipment to a database administrator. Furthermore, we proposed requiring that the database of approved terminal equipment remain accurate and readily available at a reasonable cost to users. 1. Discussion 32. In light of our efforts to privatize the equipment approval process, we agree with Nortel, ITI, and other commenters that it will no longer be necessary for this Commission to maintain a database of compliant equipment. We are convinced, however, that the continuation of a uniform, nationwide database is essential to protecting the public interest. Such a database will permit interested parties such as the Commission, providers of telecommunications, and consumers to track and identify suppliers or importers of non-compliant equipment. As such, the database should ameliorate concerns regarding the potentially adverse impact of non-compliant terminal equipment on the PSTN by ensuring that suppliers are held accountable for any damage their equipment may cause to the PSTN. Thus, we adopt our tentative conclusion that a nationwide database of all approved terminal equipment should be maintained, regardless of whether the equipment is approved by a TCB or through the SDoC process. In lieu of the Commission continuing to maintain and manage the database of all terminal equipment, we agree with the majority of commenters that the Administrative Council should assume these responsibilities. We find compelling TIA's argument that the details of the database structure, content, and maintenance are better left to the Administrative Council to establish. We believe that, after privatizing the registration process, industry will be in a better position than the Commission to assess the database requirements and to develop and implement such requirements and accompanying procedures. 33. We note that several commenters suggest that the database be maintained on, and be accessible through, the Internet. A Web-based database would serve to reduce administrative costs and ensure accessibility to the database information by all interested parties. Moreover, we agree with commenters that the accuracy of the database can be best achieved by limiting the required information and by using electronic filing procedures. Accordingly, we require the Administrative Council to devise a centralized, accurate database that is readily available and accessible to the public, including individuals with disabilities, at nominal or no costs. In addition, we believe that entities submitting information to the database, whether they obtained their approval from a TCB or utilized the SDoC process, should submit pertinent information regarding their identity and approved equipment to the database administrator. 34. We also charge the Administrative Council with the responsibility to ensure that the database is created and maintained in an equitable and nondiscriminatory manner. The manner in which the database is created and maintained must not permit any entity or segment of the industry to gain a competitive advantage. We note that GTE suggests that Form 730, which we currently require TCBs to utilize, could be expanded to develop and maintain a database. As we discuss below, while the continued use of Form 730 is permitted, we only require that the database contain sufficient information for providers of telecommunications, this Commission, and the U.S. Customs Service to carry out their functions. The database shall be available to the Commission and the U.S. Customs Service at no cost. We defer to the Administrative Council to consider ITI's proposal to integrate the terminal equipment database with a global database of compliance information in order to facilitate trade, enhance the competitiveness of US industry, and reduce the cost and burden for suppliers, customers, and regulators. 35. Finally, to ensure that the Administrative Council expeditiously adopts such a database, we require the Administrative Council to file with this Commission, within 180 days of publication of this Order in the Federal Register, a detailed report of the structure of the database, including details of how the Administrative Council will administer the database, the pertinent information to be included in the database, procedures for including compliance information in the database, and details regarding how the public will access the information. A. Numbering and Labeling 1. Background 36. Numbering. In the Notice, we sought comment on the best method, under a privatized Part 68, to assign registration numbers to equipment. Currently, we assign registration numbers to applicants when we they seek Part 68 equipment approval directly from the Commission. In addition, we provide TCBs with blocks of registration numbers to assign to applicants when they seek TCB approval of Part 68 equipment. We proposed in the Notice to combine the requirement for an FCC Registration Number under Part 68 with the FCC Identifier requirement of section 2.926 of our rules that is used for radio equipment approved by the Commission. We also proposed to use the current Part 15 coding scheme for terminal equipment currently registered under Part 68 and sought comment on how that scheme can be applied reasonably to Part 68 equipment. Under this proposal, a given equipment model will have only one number associated with it that is used to document its status. As an alternative approach, we sought comment on TIA's suggestion that a three-character grantee code, which is already assigned to existing manufacturers under the TCB approval process, would eliminate the requirement for individual product registration numbers. 37. Labeling. We tentatively concluded in the Notice that, although the Commission will no longer be responsible for terminal equipment registration, some form of unique identifying label must be applied to all terminal equipment. These labels are necessary to identify adequately terminal equipment as an approved piece of terminal equipment that customers are entitled to connect to the PSTN. We proposed a harmonized label for equipment subject to either or both Part 15 and Part 68. 1. Discussion 38. We agree with TIA that, subject to fulfilling the requirements of government and industry for information, the Administrative Council shall develop any terminal equipment numbering and labeling requirements it deems reasonable and necessary. We are persuaded by TIA that industry committees are better positioned than the Commission to assess the future need for labeling and database requirements and to develop such requirements. Accordingly, we will not promulgate specific rules for numbering and labeling as we proposed in the Notice. Instead, we defer to the Administrative Council to resolve, as it deems reasonable and necessary, specific issues regarding labeling and numbering we raised in