Second Computer Inquiry/Final Decision/8

F. Conclusion
282. In reaching a final decision in this proceeding, we have considered our broad statutory mandate as set forth in Section 1 of the Act and our regulatory responsibilities under Title II. We find that adoption of the regulatory scheme which we have delineated is well within our statutory authority and would best serve the public interest by providing greater regulatory certainty to the marketplace, creating an environment conducive to the provision of CPE and enhanced services on a competitive basis, and by removing artificial restrictions on services that may be offered consumers through the use of

computer technology where such restrictions are not necessary for meeting our statutory purpose.

283. In the Tentative Decision we offered numerous options for consideration in reaching a final decision. See paras. 32 and 35, supra. With respect to network services, Option 1 entailed adoption of the proposal set forth in the Tentative Decision. This approach would have necessitated making distinctions as to the communications or data processing nature of enhanced services. It also would have required the application of the resale structure to all carriers owning transmission facilities. We have rejected this option because it would unnecessarily expand the scope of regulation, fail to provide regulatory certainty to the marketplace by attempting to delineate communications and data processing services at the enhanced level, subject services to Title II regulation that are not necessarily subject to, nor even susceptible to a common carrier scheme of regulation, and maintain the maximum separation policy for all underlying carriers.

284. Option 2 is deficient for the same reasons as Option 1, except that it would distinguish between carriers that should be subject to maximum separation. While Option 3 is better than Options 1 and 2 in that enhanced services would not be subject to regulation under Title II, it is also lacking because no distinction is made between carriers in terms of applying the maximum separation requirement. Finally, we reject Option 5, the "optional tariffing" proposal, because it does not provide sufficient certainty in the marketplace and would result in disparate regulatory treatment with respect to services that would be regulated under Title II. This option would also result in subjecting to Title II regulation enhanced services, as to which common carrier regulation might well prove to be counter productive.

285. In view of the foregoing, and upon consideration of the entire record in this proceeding, we have concluded that adoption of option 4 is warranted in the public interest. Moreover, with respect to CPE we have concluded that all CPE should be removed from Title II regulation and separated from the provision of basic services.

G. Ordering Clauses
286. Accordingly, IT IS ORDERED, pursuant to Sections 4(i), 4(j), 201-205, 403, 404, and 410 of the Communications Act of 1934, as amended, that the policies and rules set forth herein ARE ADOPTED as a final decision in Docket No. 20828.

287. IT IS FURTHER ORDERED THAT Section 64.702 of the Commission's Rules IS HEREBY AMENDED, EFFECTIVE June 13, 1980, as reflected in the Appendix.

288. IT IS FURTHER ORDERED THAT carrier-provided CPE shall be unbundled in accordance with this decision, and all carrier-provided customer-premises equipment shall be detariffed and removed from the jurisdictional separations process and the rate base of all carriers no later than March 1, 1982.

289. IT IS FURTHER ORDERED THAT, in accordance with paragraph 163, the Chief, Common Carrier Bureau is hereby directed to prepare an order convening a Joint Board to explore what revisions, if any, to the separation process are warranted as a result of our action with respect to carrier-provided CPE.

290. IT IS FURTHER ORDERED THAT the time period set forth herein for the structural separation and provision of enhanced services and CPE shall be adhered to by AT&T and GTE.

291. IT IS FURTHER ORDERED THAT Docket No. 20828 is HEREBY TERMINATED.

292. IT IS FURTHER ORDERED THAT THE Secretary shall cause a copy of the decision to be published in the Federal Register.

Federal Communications Commission

William J. Tricarico, Secretary