FOR IMMEDIATE RELEASE:             NEWS MEDIA CONTACT: 
  December 23, 1999                       Mike Balmoris at (202) 418-0253
                                     Email:    mbalmori@fcc.gov
  
                   COMMON CARRIER ACTION
  
    FEDERAL COMMUNICATIONS COMMISSION ISSUES RULINGS TO
       SAFEGUARD LOCAL TELECOMMUNICATIONS COMPETITION
                              
In Two Separate Orders, the Commission Denies a Petition of Minnesota and 
Preempts Provisions of Arkansas Telecommunications Legislation 
                              
       Washington, D.C.   Today, the Federal Communications Commission (FCC) issued
  two separate Orders concerning local telecommunications competition in Minnesota and
  Arkansas.  The Commission denied Minnesota's petition regarding an agreement with a
  private party that would provide nearly exclusive rights-of-way in the state, but stated it
  would consider any future petitions if they address the Commission's anti-competitive
  concerns.  In a separate Order, the Commission preempted provisions of the Arkansas
  Telecommunications Regulatory Reform Act of 1997.   
               
  Minnesota Petition 
  
  Minnesota's petition asked the Commission to find that the state's agreement with a
  private wholesale provider (Developer) of fiber optic capacity concerning rights-of-way is
  consistent with section 253 of the Telecommunications Act of 1996.  Section 253 generally
  deals with removal of barriers to entry by competing carriers.  The agreement provided the
  Developer with exclusive physical access to certain rights-of-way along Minnesota's
  interstate freeway system.  In exchange, the Developer committed to construct 1900 miles
  of fiber optic transport throughout the State and provide the State with a portion of that
  capacity.
  
  The Commission declined to grant Minnesota's petition because the agreement
  effectively grants an exclusive license, which has the potential to adversely affect other
  facilities-based providers of telecommunications services.  It stated, however, depending on
  how an agreement is implemented, the potential competitive effects that fuel its concerns
  may be largely or wholly ameliorated.  The Commission's concern may also be mitigated
  depending on how the Developer implements provisions in the agreement that it make
  excess capacity available for lease or purchase to others at nondiscriminatory rates. 
  Although the Commission did not grant this petition, it will closely examine any future
  petitions if an agreement is implemented in a competitively non-discriminatory manner.
  
  Arkansas Preemption
  
  The Commission preempted three provisions of the Arkansas Telecommunications
  Regulatory Reform Act of 1997, concluding that they unlawfully erect barriers to entry into
  local telephone service markets in Arkansas.  The Commission preempted the following
  sections of the Arkansas Act:
  
       1.             The provision that concerns the extent to which an incumbent local telephone
       company may restrict the resale of its services.  The Arkansas Act permits an
       incumbent company to make bundled retail service offerings unavailable to
       competing carriers at wholesale rates.  This provision conflicts with the rules
       governing resale in the 1996 Telecommunications Act.
       2.             The provision that concerns the standards that the Arkansas Public Service
       Commission must use when it reviews local telephone companies' interconnection
       arrangements with competitive carriers.  The Arkansas Act does not require a local
       telephone company's statement of generally available terms to comply with as many
       provisions of federal law as the 1996 Telecommunications Act requires.  The
       Arkansas Act also omits two federal statutory requirements for the approval of
       negotiated agreements.  
       3.             The provision that concerns the "Rural Exemption."  The 1996 Telecommunications
       Act temporarily exempts rural carriers from some of the interconnection
       responsibilities that apply to other carriers, but also provides rules for bringing this
       temporary exemption to an end.  The Commission has interpreted the Act to protect
       rural incumbents only from "economic burdens beyond the economic burdens
       typically associated with efficient competitive entry." The Arkansas Act, by contrast,
       appears designed to shield rural telephone companies from competitive entry when it
       imposes any economic cost whatever.  
  
                           -FCC-
  
  Action by the Commission December 20, 1999, by Memorandum Opinion and
  Order - Minnesota (FCC 99-402).  Chairman Kennard and Commissioners Ness,
  Furchtgott-Roth, Powell and Tristani.
  
  Action by the Commission December 9, 1999, by Memorandum Opinion and Order
    Arkansas (FCC 99-386).  Chairman Kennard and Commissioners Ness, Furchtgott-Roth,
  Powell and Tristani.
  
  
  Report No.  CC-99-61
  CC Docket Nos 98-1 and 97-100
  
  Common Carrier Bureau contacts for Minnesota Order: 
  David Kirschner and Margaret Egler at (202) 418-1580; TTY (202) 418-0484.  
  
  Common Carrier Bureau contact for Arkansas Order: 
  Jon Reel, 418-0637; TTY (202) 418-0484