§274 Electronic Publishing by Bell Operating Companies

Summary

Bell operating companies (BOCs) may not offer or sell “electronic publishing” over their basic phone service. A separate company or joint venture that is not the BOC can do electronic publishing if it is run independently. That separate group must keep separate books and records, not let its creditors use the BOC’s assets, use written contracts or tariffs that are filed with and available to the FCC, value and record any assets moved from the BOC under rules to prevent cross-subsidies, and be auditable under normal auditing standards. The separate group and the BOC may not share officers, directors, employees, or property. The BOC may not use its name or trademarks to market the separate group, or hire, train, buy, install, maintain equipment for, or do research for the separate group (with a narrow exception for basic telephone service the BOC provides). Each year an independent review must check compliance, the results must be kept for 5 years, and any problems must be reported to the FCC within 90 days. BOCs generally cannot do joint marketing or sales for separated affiliates or for electronic publishing affiliates. Limited joint activities are allowed: inbound telemarketing must be offered on fair terms to all publishers; nondiscriminatory teaming is allowed if the BOC only supplies facilities, services, and basic phone information and does not own the team; and BOCs may join nonexclusive publishing joint ventures only if they hold no more than 50% ownership, revenue share, or voting control (the FCC may allow up to 80% for small local publishers). BOCs must give network access and interconnection for basic phone service at fair, tariffed rates that are no higher per unit than those charged to others. Anyone who believes these rules were broken can complain to the FCC or sue, and may seek stop orders. Separated affiliates must file yearly reports like an SEC Form 10–K. Services offered to the public on February 8, 1996, had one year to comply, and these rules stop applying 4 years after February 8, 1996. “Electronic publishing” means selling or providing news, entertainment (not interactive games), ads, photos, legal, business, educational, scientific, or similar information. The law also lists many excluded network or support services (like data transmission, voicemail, directory assistance, caller ID, 911 databases, and certain video services). Key defined terms: affiliate (company related by ownership), basic telephone service (wireline local phone service), basic telephone service information (network and customer data), electronic publishing joint venture (a joint venture that provides electronic publishing over the BOC’s service), inbound telemarketing (calls the customer starts), “own” (more than 10% equity or revenue share), and separated affiliate (a related company that does not control the BOC and offers electronic publishing over its network).