FCC Filings #96-42

Before the Federal Communications Commission
Washington, D.C. 20554

The Telecommunications Industry Association ("TIA") hereby submits the following reply to initial comments submitted in response to the Notice of Proposed Rulemaking ("NPRM") adopted by the Commission in the above-captioned proceeding.

The Commission’s task in fashioning a default or alternative dispute resolution process pursuant to Section 273 (d)(5) of the Telecommunications Act of 1996 ("1996 Act") must be viewed in the context of the other provisions of Section 273 (d). This new subsection of the Communications Act is not an academic exercise or codification of "business as usual"; rather, it is intended to resolve real problems faced by telecommunications equipment manufacturers in dealing with entities which exercise market power, e.g., exclusive control, over the development of "industry-wide" standards and generic requirements ("GRs") and the certification of products. This issue is especially important because the entity which currently has such market power, Bell Communications Research ("Bellcore"), may soon be able to engage in the manufacture of telecommunications equipment in direct competition with many of the companies for which it now provides certification services and guidance regarding compliance with "industry-wide" standards and GRs. In crafting the 1996 Act, the Congress recognized the potential problems associated an absence of competition in the provision of certification, "industry-wide" standards, and GRs, and with permitting such an entity to engage in competitive activities without any safeguards.

One of the safeguards that the Congress imposed is the default or alternative dispute resolution process, which is intended to protect the interests of parties with an interest in "industry-wide" standards and GRs issued by Bellcore or any other non-accredited standards development organization ("NASDO"). By using the term "all" in Section 273 (d)(5), Congress clearly intended to protect the right any party to seek review of disputes with Bellcore or any other NASDO with market power through the alternative dispute resolution process. It is against this backdrop that the proposals submitted in this matter should be evaluated by the Commission, and for this reason that the Commission should reject any alternative dispute resolution proposal which does not provide by review by a neutral decision-maker or protect the rights of any single funding party.

With this in mind, TIA, in its initial comments, expressed general support for the proposed "default" dispute resolution procedure advanced by Corning, Incorporated ("Corning"), which would utilize the technical expertise and resources of TIA and other standards development organizations ("SDOs") accredited by the American National Standards Institute ("ANSI") in resolving standards-related disputes arising under Section 273(d)(4) of the Communications Act. TIA continues to believe that the "accelerated consensus" approach reflected in the Corning proposal provides the correct model for resolving disputes in cases where the participants cannot agree on the procedure to be followed in resolving controversies relating to proposed "industry-wide" standards and GRs developed by NASDOs. Comments submitted on behalf of Bellcore purport to identify certain "flaws" in the Corning proposal. TIA believes that many, if not all, of the criticisms advanced by Bellcore reflect an inaccurate characterization of TIA's existing standards development activities and the role that TIA might be called upon to play in resolving disputes under the Corning proposal. In order to ensure that the Commission has a complete and accurate record on which to base its decision in this proceeding, TIA offers the following brief reply.

In its comments, Bellcore suggests that adoption of Corning's proposal would result in referral of disputes over proposed Bellcore "generic requirements" to a "manufacturer-oriented" standards body, implying that TIA is such a body. Bellcore further asserts that the "likely effect" of Corning's proposal would be to leave "critical" issues "unresolved and prey to incompatible and proprietary solutions offered by dominant suppliers." In addition, Bellcore argues that referral of disputes arising under Section 273(d)(4) to an accredited SDO such as TIA is inappropriate, suggesting that the organization may not have resources and procedures that would allow a decision to be reached within the 30-day period specified in Section 273(d)(5). Bellcore also questions the ability of TIA and other accredited SDO's to render an unbiased decision. Each of these contentions is inaccurate and/or misleading and should not be adopted by the Commission as a basis for evaluating the Corning proposal.

To assist the Commission in developing an accurate understanding of TIA's activities, copies of TIA's ANSI-approved Engineering Manual and the 1995 TIA Standards and Technology Annual Report ("STAR") are appended hereto. As the TIA Engineering Manual indicates, in order to satisfy ANSI accreditation criteria, the standards development work undertaken through TIA's engineering committees ("ECs") and subcommittees is open to all U.S. companies that have a "direct and material interest within the respective jurisdiction of the Formulating Groups." Both TIA member companies and a significant number of non-members participate in TIA's standards development activities. The 1995 STAR includes lists of TIA member and non-member companies that participate in the association's engineering committee activities. It should be noted that Bellcore itself participates in such activities as a TIA member, while six of the seven Regional Bell Operating Companies participate as non-members.

Contrary to Bellcore's suggestion, TIA's engineering committees and subcommittees are not dominated by large vendors. Indeed, 89% of the association's membership is comprised of small and mid-size companies. The procedure followed by TIA's engineering committees and subcommittees gives all firms, large or small, a single vote. Moreover, consistent with ANSI requirements, the chairs of all TIA engineering committees must "make an affirmative effort to obtain full representation of all interest categories in Formulating Groups within their jurisdiction and to avoid domination by any one group."

With regard to Bellcore's arguments regarding the feasibility of Corning's proposed ANSI-based dispute resolution procedure, TIA believes that the "accelerated consensus" process described by Corning is workable and can be accommodated within TIA's existing standards development infrastructure. As the attached materials indicate, TIA's engineering committees daily debate technical issues in an effort to develop industry consensus on telecommunications standards in a wide range of areas. As part of this effort, TIA utilizes both formal and informal processes to address and resolve disputes as they arise. TIA's standards and technology staff and the Chair of the TIA Technical Committee are available to address informal questions and complaints raised in the context of specific engineering committee and subcommittee activities. In addition, ANSI requires accredited SDO's to establish a formal appeals process, which is set forth in Annex A of TIA's Engineering Manual. However, formal appeals are rare; indeed, none has been filed in the period since January 1992, when TIA's Engineering Manual received initial ANSI approval. TIA believes that this record demonstrates that the ANSI-approved, consensus-based process which it utilizes is generally effective in resolving technical standards-related disputes without the need to invoke more formal dispute resolution processes.

TIA further believes that to the extent the ANSI-like requirements of Section 274(d)(4) are properly implemented, the likelihood that the Commission-prescribed "default" dispute resolution procedure will need to be utilized will be significantly reduced. However, to the extent that disputes cannot be resolved through the NASDO's internal processes or whatever alternative procedure the parties may agree to use, TIA believes that its engineering committees and subcommittees are well-equipped to serve as a vehicle for resolving disputes arising within their respective areas of expertise in a timely manner, consistent with the requirements of Section 274(d)(5), utilizing the "accelerated consensus" approach embodied in Corning's proposal.

TIA takes strong exception to the notion that adoption of Corning's proposed "default" procedure would give a disagreeing party ("DP") a "de facto veto" over a NASDO's proposed generic requirements or would allow a single party to "force" all participants to use the Commission-prescribed "default" process in resolving disputes with a NASDO. As TIA understands it, the Corning proposal would allow a DP to invoke the proposed "default" procedure with respect to its dispute only, while allowing other participants to agree with the NASDO on the use of a different procedure for any disputes which they may have with respect to a proposed "industry-wide" standard or generic requirement.

Moreover, once a dispute has been referred to the SDO for resolution under the "default" procedure, the Corning proposal clearly states that the SDO engineering committee's role is to determine whether or not a consensus exists in support of the NASDO's position among the EC's members, "excluding the EC members who may be affiliated with either the NASDO or the disputing DP." Accordingly, the DP will not have a vote, much less a "veto" over issuance of a generic requirement which includes the disputed item. If the consensus of the group supports the NASDO's position, the proposed standard or generic requirement may be issued. Even where the EC decides that it cannot support the NASDO position, under the Corning proposal, the effect of this determination is merely to require that the NASDO indicate that an industry consensus currently does not exist in support of its proposed standard or generic requirement, by removing the relevant item from the list of resolved issues and including it on a new list of Industry-Reviewed Unresolved Issues.

It is TIA's understanding that in this event the NASDO remains free to maintain its position and to seek an industry consensus; it is merely barred from asserting or implying that such a consensus exists at present. In such event, while the specific dispute over the inclusion of a disputed item in a NASDO standard or GR has been resolved, the underlying technical issue may continue to be debated. However, carriers that are seeking to purchase products remain free to adopt procurement specifications that incorporate the NASDO's proposed standard or generic requirement, irrespective of whether or not an industry consensus then exists in support of the NASDO's position. Accordingly, Bellcore's assertion that adoption of the Corning proposal would allow a single party to deny carriers and their subscribers the "substantial benefits" that Bellcore's efforts to develop generic requirements may provide is at best misleading, since individual carriers retain the freedom to demand that vendors comply with Bellcore's proposed requirements even in cases where an industry consensus does not exist in support of such requirements.

For the reasons described in this submission and in its initial comments in this proceeding, TIA urges the Commission to forego the binding arbitration approach advanced in its notice and, instead, adopt Corning's proposed "accelerated consensus" procedure as the "default" procedure to be used in resolving disputes arising under Section 273(d)(4) of the Communications Act.

CERTIFICATE OF SERVICE

I, Jot D. Carpenter, Jr., do hereby certify that this 11th day of April, 1996, copies of the foregoing "Reply Comments of The Telecommunications Industry Association" were delivered by first class mail, unless otherwise indicated, to the following individuals:

• Sheldon Guttmann*
  Associate General Counsel
  Office of the General Counsel
  Federal Communications Commission
  1919 M Street, NW, Room 616A
  Washington, DC 20554
  
• Sharon B. Kelley*
  Staff Attorney
  Office of the General Counsel
  Federal Communications Commission
  1919 M Street, NW, Room 619
  Washington, DC 20554
  
• John Nakahata*
  Assistant to the Chairman
  Federal Communications Commission
  1919 M Street, NW, Room 814
  Washington, DC 20554
  
• Daniel Gonzalez*
  Legal Assistant to Commissioner Chong
  Federal Communications Commission
  1919 M Street, NW, Room 814
  Washington, DC 20554
  
• Rudolfo M. Baca*
  Legal Advisor to Commissioner Quello
  Federal Communications Commission
  1919 M Street, NW, Room 802
  Washington, DC 20554
  
• James L. Casserly*
  Senior Legal Advisor to Commissioner Ness
  Federal Communications Commission
  1919 M Street, NW, Room 832
  Washington, DC 20554
  
• Michael J. Knapp
  Director - Federal Regulatory Matters
  Bellcore
  WAS-600
  2101 L Street
  Suite 600
  Washington, DC 20037
  
• William B. Barfield
  Michael J. Schwarz
  BellSouth Corporation
  BellSouth Telecommunications
  Suite 1800
  1155 Peachtree Street, N.E.
  Atlanta, GA 30309-3610
  
• Robert B. McKenna
  U S West, Inc.
  Suite 700
  1020 19th Street, N.W.
  Washington, DC 20036
  
• Lawrence W. Katz
  The Bell Atlantic Telephone Companies
  1320 North Court House Road
  Eighth Floor
  Arlington, VA 22201
  
• Joseph A. Klein
  James D. Porter, Jr.
  Michael S. Slomin
  Bell Communications
  Research, Inc.
  445 South Street
  Morristown, NJ 07960
  
• Philip L. Verveer, Esq.
  John L. McGrew, Esq.
  Willkie Farr & Gallagher
  Suite 600
  1155 21st Street, N.W.
  Washington, DC 20036-3384
  

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