Implementation of Section 34(a)(1) of the Public Utility Holding Company Act of 1935, as Added by the Telecommunications Act of 1996

This Report & Order (R&O) adopts regulations which implement new section 34(a)(1) of the Public Utility Holding Company Act of 1935 (PUHCA), 15 U.S.C. 79 et seq., as added by section 103 of the Telecommunications Act of 1996. Under new section 34, registered public utility holding companies may now enter the telecommunications industry without prior Securities and Exchange Commission (``SEC'') approval by acquiring or maintaining an interest in an ``exempt telecommunications company'' (``ETC''). Moreover, exempt public utility holding companies, by owning or acquiring an interest in an ETC, may now acquire a ``safe harbor'' from potential SEC regulation under PUHCA section 3(a). Section 34(a)(1) requires the Commission to promulgate rules implementing procedures for determining ETC status within one year of the date of enactment of the Telecommunications Act of 1996.