By the Commission:

1. INTRODUCTION

1. On June 28, 1999, the Tennessee Regulatory Authority (Tennessee Authority) and TDS Telecommunications Corporation (TDS Telecom) filed petitions for reconsideration of the Hyperion Preemption Order. In that Order, the Commission granted in part a petition for preemption filed by AVR, L.P. d/b/a Hyperion of Tennessee, L.P. (Hyperion) in May 1998. In this order we deny those petitions for reconsideration along with a related motion filed by the Tennessee Authority for a stay of enforcement of the Hyperion Preemption Order.

2. DISCUSSION

1. Hyperion originally sought preemption of Tennessee Code section 65-4-201(d), which barred the entry of competitive carriers into the service areas of incumbent local exchange carriers in Tennessee that serve fewer than 100,000 access lines. In addition, Hyperion asked that this Commission preempt enforcement of an April 1998 order of the Tennessee Authority to the extent that it denied Hyperion’s application to provide service in the service area of the Tennessee Telephone Company. The Tennessee Authority and TDS Telecom now seek reconsideration of the Commission’s determination that the Tennessee Authority’s Denial Order and Tennessee Code section 65-4-201(d) do not fall within the protection of section 253(b) of the Communications Act of 1934, as amended. In addition, on July 9, 1999, the Tennessee Authority filed a motion for stay of enforcement of our Hyperion Preemption Order until appropriate universal service mechanisms are implemented by the Commission and the Tennessee Regulatory Authority. Hyperion filed an opposition to the Tennessee Regulatory Authority’s motion for stay of enforcement, dated July 20, 1999, arguing that the Tennessee Regulatory Authority failed to establish any of the four conditions necessary to justify a stay of the Commission’s Order.
2. We deny TDS’s and the Tennessee Authority’s petitions for the following reasons. TDS’s petition essentially repeats the same arguments it relied upon in the comments and reply comments it filed in opposition to the Hyperion preemption petition. First, TDS argues that, because the incumbent LEC is regulated differently from competitive LECs, the "competitive neutrality" requirement under section 253(b) of the Communications Act is satisfied even if the incumbent has special protections as long as all competitive carriers are treated alike. In a related argument, TDS argues that competitive imbalances will result from preemption of the statute. The Commission rejected these arguments in the Hyperion Preemption Order.
3. TDS also argues that, because the Hyperion Preemption Order did not allow the Tennessee Authority to implement section 65-4-201(d) "to the extent permissible by law," the Commission’s blanket preemption of section 65-4-201(d) was needlessly broad. The Commission previously considered and rejected this argument, concluding that the Tennessee Authority’s own interpretation of Tennessee Code section 65-4-201(d), which the Commission regards as dispositive, made section 65-4-201(d) inconsistent with federal law in every circumstance. TDS has failed to identify any redeemable portion of the preempted law. Accordingly, we conclude that the Commission’s preemption was in fact limited to the extent necessary to correct the violation of federal law in accordance with section 253(d) of the Communications Act. TDS’s petition fails to raise new arguments or facts that would warrant reconsideration of that order.
4. The Tennessee Authority also repeats in its petition for reconsideration the arguments it made regarding the Hyperion preemption petition. Those arguments include: (1) that preemption of Tennessee Code section 65-4-201(d) is not competitively neutral to Tennessee rural incumbent carriers because these carriers have obligations under state and federal laws that are not imposed on new entrants; (2) that Tennessee Code section 65-4-201(d) is necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services and safeguard the rights of consumers within the state of Tennessee; and (3) that the Commission did not fully consider the unity of purpose behind the 1996 Act and Tennessee Code section 65-4-201(d). That both the 1996 Act and section 65-4-201(d) address similar concerns about the effect of competitive entry on rural incumbent carriers does not insulate the Tennessee statute from section 253 preemption. Instead, Congress appears to have entirely occupied the field of regulating rural competitive entry when it addressed the issue comprehensively in sections 251(f) and 153(37). Just as TDS Telecom and the Tennessee Authority raise no new arguments or facts that warrant reconsideration of the Hyperion Preemption Order, the Tennessee Authority raises no new arguments or facts that warrant a stay of enforcement.
5. Accordingly, IT IS ORDERED, pursuant to section 1.106 of the Commission's rules, 47 C.F.R. § 1.106, that the petition for reconsideration filed by TDS Telecommunications Corporation and the petition for reconsideration filed by the Tennessee Regulatory Authority, both dated June 28, 1999, ARE DENIED.
6. IT IS FURTHER ORDERED, that the Tennessee Regulatory Authority’s motion for stay of enforcement, filed on July 9, 1999, IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary