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Enforcement Bureau - Section 271 Enforcement

Overview of Enforcement Authority

Section 271(d) of the Communications Act of 1934, as amended ("the Act"), grants the Commission enforcement authority to ensure that a Bell Operating Company (“BOC”) continues to comply with the market opening requirements of section 271 after the Commission has approved its application to provide long distance service in its home region. The Commission can take enforcement action if, at any time after approval of the application, it determines that a BOC "has ceased to meet any of the conditions required for such approval." After “notice and an opportunity for hearing,” which may be only a paper proceeding, the Commission may: (i) issue an order to the BOC to correct the deficiency; (ii) impose a forfeiture penalty on the BOC pursuant to title V; or (iii) suspend or revoke the BOC's section 271 authority.

Section 271(d) provides the Commission with different enforcement avenues. First, section 271(d)(6)(A)(iii) allows the Commission to issue a “stand-still” order which could prohibit the BOC from enrolling additional subscribers for its long distance service and from marketing and promoting its long distance service. In extreme cases, section 271 authorizes the Commission to revoke the BOC's authority to provide long distance service altogether. Additionally, in accordance with section 271(d)(6)(A)(ii), the Commission may assess monetary forfeitures against non-compliant BOCs pursuant to section 503(b) of the Act by issuing a notice of apparent liability. Finally, the Commission may issue an order requiring a non-compliant BOC to correct any deficiencies pursuant to section 271(d)(6)(A)(i).

The Commission also maintains its pre-existing enforcement powers, including its authority under sections 206-209 of the Act, which allow it to resolve formal complaints filed by competitors affected by the non-compliant BOC's actions and, if warranted, award damages. Pursuant to section 271(d)(6)(B), the Commission is required to review formal complaints properly alleging section 271 violations within 90 days.

Section 271 Compliance Review Program

The Enforcement Bureau has a Section 271 Compliance Review Program. As Bell Operating Companies ("BOCs") receive authority to provide long distance service within their regions, the staff of the Section 271 Compliance Review Team will monitor on a structured and systematic basis the companies' compliance with the market opening conditions of section 271 of the Telecommunications Act of 1996. This Program augments the Enforcement Bureau's existing section 271 oversight and enhances the Bureau's ability to identify and act upon non-compliant conduct in a timely and appropriate manner.

Attorneys, auditors, and other professionals in the Enforcement Bureau's Investigations and Hearings Division ("IHD") staff the Compliance Review Team. It will implement the Compliance Review Program for each newly filed section 271 application and will continue to monitor the BOCs' ongoing performance in those states where the Commission has already granted section 271 authority. The Team oversight responsibilities are divided according to BOC region, with a dedicated group maintaining responsibility for each region.

Following Commission approval of a section 271 application, the Team scrutinizes BOC performance data and other pertinent information to determine whether such documentation indicates that a BOC is continuing to meet its section 271 obligations. This process includes regular compliance reviews six and 12 months after approval, with specific focus on any particular concerns raised by the Commission in the order granting a BOC section 271 authority. The Team members also serve as a point of contact for state commissions, competitive carriers, and other interested persons who may wish to report informally any perceived instances of noncompliance with section 271. Finally, if the Team determines a BOC may not be in compliance, it will initiate an investigation and, if warranted, take or recommend appropriate enforcement action.

At the outset of each of the currently pending Compliance Reviews, the Teams sent engagement letters to the BOCs explaining the 271 Compliance Review process and highlighting the specific areas of checklist compliance the Teams will monitor. The Teams directed the BOCs to submit information pertaining to these areas to the Bureau approximately six and twelve months after the Commission's grant. These BOC submissions will assist the Teams in evaluating the BOC's ongoing compliance with the conditions of section 271 approval. The engagement letters, however, do not initiate or purport to initiate any investigation or other formal enforcement proceeding into the BOC's behavior. Rather, they describe the general Compliance Review Program processes, detail the areas on which the Reviews will likely focus, and inform the BOC of its obligations under the Compliance Review Program. Although the engagement letters specify a number of areas subject to review, the Teams may identify other aspects or areas of the BOC's compliance efforts to review based on the Teams' own observations and/or discussions with state regulators, competitive carriers, and others. The Section 271 Compliance Review Teams will make these letters available to the public. Links to those letters are provided below.

Any person with information indicating that a BOC may no longer be in compliance with section 271 may contact Hillary DeNigro, Chief, Investigations and Hearings Division, or Theresa Z. Cavanaugh, Deputy Chief, Investigations and Hearings Division. They may be reached at (202) 418-1420.

FCC-Bell Atlantic Consent Decree

On December 22, 1999, the Commission authorized Bell Atlantic to provide long distance service in New York pursuant to section 271. On February 7, 2000, the Commission began investigating allegations that Bell Atlantic was failing to notify competitors about the status of competitors' orders for local service in a timely manner and therefore not providing nondiscriminatory, unbundled access to network elements as required under Section 271. Evidence submitted by Bell Atlantic during the investigation made clear that its performance in timely providing these notifications deteriorated following its entry into the New York long distance market.

On March 9, 2000, the Commission and Bell Atlantic entered into a Consent Decree. In accordance with the terms of the Decree, Bell Atlantic implemented a new software system for processing competitors' orders, given that its then existing system was thought to be the cause of many of the problems. Bell Atlantic also agreed to make a $3 million voluntary contribution to the United States Treasury, and to submit weekly reports to the Commission concerning various aspects of its performance until it met certain performance thresholds. The Decree also required Bell Atlantic to make significant voluntary payments or suspend its enrollment of new customers if its performance failed to meet specified standards. Finally, the Commission's monitoring of Bell Atlantic's performance would terminate if its performance met those standards. Importantly, the Commission adopted the Consent Decree in concert with enforcement action taken by the New York Public Service Commission, which required Bell Atlantic to make $10 million in compensatory payments to those competitors affected by the ordering problems.

On June 20, 2000, the Enforcement Bureau announced that Bell Atlantic has satisfied the requirements of the Consent Decree and that, absent evidence that the reports are materially inaccurate, Bell Atlantic has no further obligations under the Consent Decree. The Bureau stated that there have been substantial improvements in the performance of Bell Atlantic's operations support systems since the adoption of the Consent Decree, and that Bell Atlantic's systems are performing within the standards set forth in the Consent Decree.

Engagement Letters to BOCs Explaining 271 Compliance review Process

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