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I. Introduction
II. Background
III. Issues
The Payphone Marketplace
Compensation for Each and Every Completed Intrastate and Interstate Call Originated by Payphones
1. Payphone Calls Subject to this Rulemaking and Compensation Amount
2. Entities Required to Pay Compensation
3. Ability of Carriers to Track Calls from Payphones
4. Administration of Per-Call Compensation
5. Interim Compensation Mechanism
Reclassification of LEC-Owned Payphones
1. Classification of LEC Payphones as CPE
2. Transfer of Payphone Equipment to Unregulated Status
3. Termination of Access Charge Compensation and Other Subsidies
4. Deregulation of AT&T Payphones
Nonstructural Safeguards for BOC Provision of Payphone Service
Ability of BOCs to Negotiate with Location Providers on the Presubscribed InterLATA Carrier
Ability of Payphone Service Providers to Negotiate with Location Providers on the Presubscribed IntraLATA Carrier
Establishment of Public Interest Payphones
Other Issues
1. Dialing Parity
2. Letterless Keypads on Payphones
3. Oncor Petition
IV. Procedural Matters
1. Petitions for Reconsideration
2. Paperwork Reduction Act Analysis
3. Regulatory Flexibility Act Analysis
Conclusion
Ordering Clauses
Appendix A
Text of Section 276
Appendix B
List of Parties Filing Comments
Appendix C
List of Parties Filing Replies
Appendix D
Immediate Rules Adopted by This Order
Appendix E
Rules Adopted by This Order
Appendix F
Interim Compensation Obligations

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VI. ORDERING CLAUSES
- Accordingly, pursuant to authority contained in Sections 1, 4, 201-205, 215, 218, 219, 220, 226, and 276 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154, 201-205, 215, 218, 219, 220, 226, and 276, IT IS ORDERED that the policies, rules, and requirements set forth herein ARE ADOPTED.
- IT IS FURTHER ORDERED, that 47 C.F.R. Part 64, Subpart G and Subpart M ARE AMENDED as set forth in Appendix D, effective (30) days after publication of the text thereof in the Federal Register.
- IT IS FURTHER ORDERED, that 47 C.F.R. Part 64, Subpart M IS AMENDED as set forth in Appendix E, effective one year after publication of the text thereof in the Federal Register.
- IT IS FURTHER ORDERED, that 47 C.F.R. Part 68, Subpart A IS AMENDED as set forth in Appendix E, effective April 15, 1997.
- IT IS FURTHER ORDERED, that local exchange carriers SHALL RECLASSIFY their payphone assets and related expenses to nonregulated status on April 15, 1997.
- IT IS FURTHER ORDERED, that carriers required to file a cost allocation manual pursuant to 47 C.F.R. Section 64.903 or by Commission order SHALL FILE revisions to their manuals implementing the reclassification required herein no later than February 14, 1997.
- IT IS FURTHER ORDERED, that local exchange carriers SHALL FILE tariff revisions required by paras. 180 to 187 herein on January 15, 1997, to be effective April 15, 1997.
- IT IS FURTHER ORDERED, the Bell Operating Companies ARE GRANTED waivers of the time requirements of the Computer II and the Computer III network disclosure requirements in order to provide basic network payphone services by April 15, 1997. Pursuant to this waiver, network disclosure notification for these basic network payphone services must be filed no later than January 15, 1997.
- IT IS FURTHER ORDERED, that the Bell Operating Companies SHALL FILE CEI plans for the provision of payphone service not later than 90 days following publication of a summary of this Report and Order in the Federal Register.
- IT IS FURTHER ORDERED, that the waivers of Section 64.1301 of the Commission's Rules granted to AT&T and Sprint in the proceedings referenced in para. 119 above ARE REVOKED, effective 30 days after publication of a summary of this Report and Order in the Federal Register.
- IT IS FURTHER ORDERED, that the proceedings initiated by our Memorandum Opinion and Order on Further Reconsideration and Second Further Notice of Proposed Rulemaking in CC Docket 91-35, Policies and Rules Concerning Operator Service Access and Pay Telephone Compensation, 10 FCC Rcd 11457 (1995), ARE TERMINATED.
- IT IS FURTHER ORDERED, that the July 18, 1988 Petition of the Public Telephone Council for a declaratory ruling that BOC Payphones should be treated as CPE IS DISMISSED AS MOOT.
- IT IS FURTHER ORDERED, that the August 7, 1995 Petition of Oncor Communications, Inc. Requesting Compensation for Competitive Payphone Premises Owners and Presubscribed Operator Services Providers IS DENIED.
- IT IS FURTHER ORDERED, that the proceedings entitled Amendment of Section 69.2(m) and (ee) of the Commission's Rules to Include Independent Public Payphones Within the "Public Telephone" Exemption from End User Common Line Access Charges, RM 8723, ARE TERMINATED.
- IT IS FURTHER ORDERED, that the December 28, 1989 Petition of the California Payphone Association IS DISMISSED AS MOOT.
- IT IS FURTHER ORDERED, that the provisions set forth in Section 1.4 of the Commission's rules establishing the date of public notice for this Report and Order ARE WAIVED, and petitions for reconsideration SHALL BE FILED within 30 days of release of this document, and oppositions to the petitions must be filed within seven (7) days after the date for filing the petitions for reconsideration. For purposes of this proceeding, Section 1.106(h) of the Commission's Rules IS WAIVED, and the Commission will not accept replies to oppositions.
FEDERAL COMMUNICATIONS COMMISSION
William F. Caton
Acting Secretary
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