PUBLIC NOTICE FEDERAL COMMUNICATIONS COMMISSION 445 12th Street, S.W. WASHINGTON, D.C. 20554 DA 99-740 News media information 202/418-0500 Fax-On-Demand 202/418-2830 TTY 202/418-0484 202/418-0485 Internet: http://www.fcc.gov ftp.fcc.gov Released: April 16, 1999 Minburn Telecommunications, Inc. Petitions for Waiver of Sections 61.41(c) and (d) of the Commission's Rules Pleading Cycle Established CCB/CPD NO. 99-16 COMMENTS: May 17, 1999 REPLY COMMENTS: June 1, 1999 On April 8, 1999, Minburn Telecommunications, Inc. (Minburn) filed a petition requesting that the Commission waive sections 61.41(c) and (d) of the Commission's rules, 47 C.F.R.  61.41(c) and (d). Minburn requests that the Commission waive these rules in order to allow Minburn to operate the Woodward, Iowa telephone exchange as a cost carrier under rate of return regulation following Minburn's acquisition of the exchange from Frontier Communications-Schuyler, Inc. (Frontier-Schuyler), a carrier operating under price cap regulation. In its Petition, Minburn states that it is an Iowa corporation wholly owned by Minburn Telephone Company (MTC), an independent local exchange carrier that also owns and operates the Minburn, Iowa telephone exchange (approximately 450 access lines). Minburn states that it was formed in order to acquire and operate the Woodward, Iowa telephone exchange (Woodward exchange) (approximately 980 access lines) previously operated by Frontier-Schuyler. Minburn states that the Woodward exchange is the only Iowa exchange currently operated by Frontier-Schuyler and that the exchange constitutes all of Frontier-Schuyler's existing Iowa study area. The petition indicates that on December 24, 1998, MTC entered into an agreement with Frontier-Schuyler, an affiliate of Frontier Telephone of Rochester, Inc. (Frontier), to purchase the assets of the Woodward exchange. Minburn states that while Frontier and its affiliates have elected to operate the Woodward exchange under price cap regulation, Minburn wants to operate the exchange as a cost carrier. Specifically, Minburn states that it wants to become both an issuing carrier in the interstate access tariffs of the National Exchange Carrier Association (NECA), and a participant in NECA's common line and traffic sensitive pools. According to Minburn, neither Minburn nor MTC have common stock ownership or any other corporate affiliation with Frontier and its affiliates. Minburn further states that the boards of directors and officers of Minburn and MTC, do not overlap with the boards of directors and officers of Frontier and its affiliates. Minburn asserts that Section 61.41(c) of the Commission's rules should be waived in order to allow Minburn to operate the Woodward exchange subject to rate of return regulation in spite of its previous operation by Frontier-Schuyler under price cap regulation. Minburn also argues that Section 61.41(d) should be waived in order to allow Minburn and MTC to continue operating under rate of return regulation following acquisition of the Woodward exchange. Minburn claims that, in this situation, there is no danger of cost-shifting between price cap and rate of return affiliates because neither Minburn nor MTC will operate under price cap regulation if the requested waivers are granted. Minburn also claims that there is no danger that Frontier-Schuyler and its affiliates will be able to "game" the system by transferring the Woodward exchange back and forth between rate of return and price cap regulation, because the proposed transaction is an arms-length sale involving separate and unrelated companies. Minburn states that the proposed transaction will bring enhanced and more responsive service to Woodward residents and businesses. Minburn also argues that the Commission has traditionally been sensitive to the administrative burdens imposed on small telephone companies, and that its petition should therefore be granted because MTC and Minburn are small telephone companies that do not want to operate under price cap regulation. This matter shall be treated as a "permit-but-disclose" proceeding in accordance with the Commission's ex parte rules. See 47 C.F.R.  1.1200, 1.1206. Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentations and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented is generally required. See 47 C.F.R.  1.1206(b). Other rules pertaining to oral and written ex parte presentations in permit-but-disclose proceedings are set forth in section 1.1206(b) of the Commission's rules, 47 C.F.R.  1.1206(b). Interested parties may file comments no later than May 17, 1999. Reply comments may be filed no later than June 1, 1999. When filing comments, please reference the internal file number: CCB/CPD 99-16. An original and four copies of all comments and reply comments must be filed with the Commission's Secretary, Magalie Roman Salas, Office of the Secretary, Federal Communications Commission, 445 - 12th Street, S.W., TW-A325, Washington, D.C. 20554. In addition, one copy of each pleading must be filed with International Transcription Services (ITS), the Commission's duplicating contractor, at its office at 1231 - 20th Street, N.W., Washington, D.C. 20036, and one copy with the Chief, Competitive Pricing Division, 445 12th Street, S.W., T.W A225, Washington, D.C. 20554. For further information, contact Rodney McDonald, Competitive Pricing Division, Common Carrier Bureau, (202) 418-1520. - FCC -