**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the Matter of                 | )  | CC Docket No. 96-146         |
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| Policies and Rules Governing     | )  | CG Docket No**.** 04-244     |
| Interstate Pay-Per-Call and      |    |                              |
| Other Information Services       | )  | CC Docket No. 98-170         |
| Pursuant to the                  |    |                              |
| Telecommunications Act of 1996   | )  | RM-8783                      |
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| Policies and Rules Governing     | )  | ENF-95-20                    |
| Interstate Pay-Per-Call and      |    |                              |
| Other Information Services, and  | )  |                              |
| Toll-free Number Usage           |    |                              |
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| Truth-in-Billing and Billing     |    |                              |
| Format                           | )  |                              |
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| Policies and Rules Implementing  | )  |                              |
| the Telephone Disclosure and     |    |                              |
| Dispute Resolution Act, Florida  | )  |                              |
| Public Service Commission        |    |                              |
| Petition to Initiate Rulemaking  | )  |                              |
| to Adopt Additional Safeguards   |    |                              |
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| Application for Review of        |    |                              |
| Advisory Ruling Regarding        | )  |                              |
| Directly Dialed Calls to         |    |                              |
| International Information        | )  |                              |
| Services                         |    |                              |
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**NOTICE OF PROPOSED RULEMAKING\
AND MEMORANDUM OPINION AND ORDER**

**Adopted: July 1, 2004 Released: July 16, 2004**

**Comment Date: 30 days after publication in the Federal Register.**

**Reply Comment Date: 45 days after publication in the Federal
Register.**

**By the Commission**:

Table of Contents

Paragraph

I. INTRODUCTION 1

II\. BACKGROUND 4

> A. Telephone Disclosure and Dispute Resolution Act (TDDRA) 4
>
> B. Telecommunications Act of 1996 6
>
> C. FCC Rules and Rulemakings 7

III\. NOTICE OF PROPOSED RULEMAKING 8

> A. Background 8
>
> B. Discussion 10
>
> 1\. Toll-free numbers 10
>
> 2\. Audiotext Information Services, Including Pay-Per-Call Services 15
>
> 3\. Billing 25
>
> 4\. Revenue-sharing Arrangements 28
>
> 5\. New and Evolving Services 32

IV\. MEMORANDUM OPINION AND ORDER IN CC DOCKET NO. 96-146 36

> A. WKP Application for Review 36
>
> B. Florida Public Service Petition for Rulemaking 37
>
> C. Closing CC Docket 96-146 38
>
> D. Correction of Word Error 41

V. PROCEDURAL ISSUES 42

> A. Ex Parte Presentations 42
>
> B. Paperwork Reduction Act 43
>
> C. Initial Regulatory Flexibility Analysis 44
>
> D. Filing Instructions 45
>
> E. Materials in Accessible Formats 48

VI\. ORDERING CLAUSES 49

Appendix A: Amended Rule

Appendix B: Initial Regulatory Flexibility Analysis

Appendix C: Commenters

# INTRODUCTION  {#introduction .Style-Heading-1-+-12-pt}

1.  In this Notice of Proposed Rulemaking and Memorandum Opinion and
    Order (NPRM), we initiate a new proceeding to review the
    effectiveness of our rules governing pay-per-call services, related
    audiotext information services, and toll-free numbers.[^1]
    Specifically, we seek comment on the state of the 900-number regime
    regulating pay-per-call services. We also seek comment on the
    effectiveness of consumer protections relating to toll-free numbers,
    and to those audiotext information services accessed through dialing
    methods other than 900 numbers. We are interested in learning
    whether we need to take additional steps to protect consumers. In
    addition, we seek comment on changes in technology that warrant
    re-examination and clarification of these rules.

2.  We also close CC Docket No. 96-146, a rulemaking initiated in 1996
    to implement portions of the Telecommunications Act of 1996 (1996
    Act) governing pay-per-call and related information services. This
    docket was opened specifically for the purpose of implementing
    section 228 as amended by the 1996 Act.[^2] In the Order and Notice
    of Proposed Rulemaking (*1996 Order & NPRM*), the Commission adopted
    new rules, incorporating much of the statute verbatim, and completed
    implementation of the new provisions of section 228. In addition,
    the Commission sought comment on several measures intended to curb
    the potential for evasions of the amended law.[^3] In the years
    since the rules took effect, the shape of the pay-per-call industry,
    technology in general, and regulatory perspectives have changed
    considerably. For reasons of administrative efficiency, detailed
    below, we now close that docket. Furthermore, we deny a related
    application for review.

3.  We believe that our rules covering the pay-per-call services through
    900 numbers, and those rules covering toll-free calls, provide
    important consumer protections. However, we are concerned that the
    use of other dialing mechanisms, and abuse of exceptions and
    exemptions, might also circumvent the consumer protections our
    regulations were designed to address. With this NPRM, we move to
    review the current situation, and take whatever actions are
    necessary to foster the flow of audiotext information services and
    the use of toll-free numbers, while ensuring consumers have adequate
    protections.

# BACKGROUND {#background .Style-Heading-1-+-12-pt-Black}

## Telephone Disclosure and Dispute Resolution Act (TDDRA) {#telephone-disclosure-and-dispute-resolution-act-tddra .Style-Heading-2-+-12-pt}

4.  The Commission first adopted regulations governing interstate
    pay-per-call services in 1991 to address complaints of widespread
    abuse involving 900 number services.[^4] At that time, the
    Commission required pay-per-call programs to have preambles
    disclosing costs, required local exchange carriers (LECs) to offer
    consumers the option of blocking 900 numbers where technically
    possible, and prohibited common carriers from disconnecting basic
    telephone service for failure to pay pay-per-call charges.[^5] A
    year later, Congress enacted the TDDRA in an attempt to curtail
    abuses in pay-per-call, related services and toll-free numbers.[^6]
    The TDDRA charged both this Commission and the Federal Trade
    Commission (FTC) with adopting rules to expand consumer protections
    and promote the development of legitimate pay-per-call services.[^7]
    In response to burgeoning consumer complaints, the TDDRA also
    mandated explicit restrictions on the use of 800 and other toll-free
    numbers.[^8]

5.  In 1993, the Commission initiated a pay-per-call proceeding to
    implement TDDRA.[^9] The Commission adopted new regulations, and
    clarified that while all interstate services within the definition
    of pay-per-call must be provided through 900 numbers and any numbers
    it reserved for such services, audiotext information services
    outside the pay-per-call definition could be offered through other
    numbers.[^10] TDDRA specifically exempted several services from the
    pay-per-call definition, and therefore from the limitation of which
    prefixes they could be offered over: 1) certain directory
    services, 2) tariffed services, and 3) services for which users are
    assessed charges only after entering into a "presubscription or
    comparable arrangement."[^11] The Commission defined presubscription
    and comparable arrangements in a way intended to prevent instant
    agreements which would circumvent consumer protections.[^12] TDDRA
    also included restrictions on the use of toll-free numbers to charge
    callers, and similarly had an exception for preexisting agreements
    and the use of credit or charge cards. In 1996, when Congress
    revised the governing statute, section 228, the Commission closed
    the TDDRA proceeding and opened a new proceeding to implement the
    revisions.[^13]

## Telecommunications Act of 1996  {#telecommunications-act-of-1996 .Style-Heading-2-+-12-pt}

6.  The exceptions and exclusions of TDDRA created incentives for
    audiotext information providers to tailor services to avoid the
    pay-per-call regulation.[^14] In response, Congress revised section
    228 in the 1996 Act to strengthen consumer protections. Among its
    revisions, Congress removed the exemption for tariffed
    services.[^15] It expanded restrictions on the use of toll-free
    numbers to charge callers[^16] and gave common carriers authority to
    terminate such service for audiotext information service providers
    who violated provisions of the statute.[^17] The 1996 Act also noted
    that the remedies specified in section 228 are in addition to any
    other remedies available under the Commission's forfeiture
    authority.[^18]

## FCC Rules and Rulemakings {#fcc-rules-and-rulemakings .Style-Heading-2-+-12-pt}

7.  The Commission revised its rules to implement the amended section
    228 in its *1996 Order & NPRM*.[^19] In doing so, the Commission
    incorporated many parts of section 228 directly. In addition, the
    Commission proposed new rules at that time intended to address
    potential circumvention of the regulations. The proposals targeted
    the use of non-900 numbers to provide what appear to be, in all
    other respects, pay-per-call services; the use of "instant"
    agreements and credit cards to take advantage of exemptions; and the
    effectiveness of toll-free protections.[^20] The comments and reply
    comments in response to the *1996 Order & NPRM* were due in August
    and September 1996, before the revised rules themselves took effect
    in December 1996.[^21] On March 17, 2003, the Consumer &
    Governmental Affairs Bureau (CGB) issued a Public Notice seeking to
    refresh the record in this proceeding.[^22]

# Notice of Proposed Rulemaking {#notice-of-proposed-rulemaking .Style-Heading-1-+-12-pt}

## Background {#background-1 .Style-Heading-2-+-12-pt}

8.  Section 228 establishes a system of oversight and regulation of
    pay-per-call services and also related audiotext information
    services to protect consumers.[^23] Pay-per-call service is defined
    in section 228 as:

    any service (A) in which any person provides or purports to
    provide---(i) audio information or audio entertainment produced or
    packaged by such person; (ii) access to simultaneous voice
    conversation services; or (iii) any service, including the provision
    of a product, the charges for which are assessed on the basis of
    completion of the call; (B) for which the caller pays a per-call or
    per-time-interval charge that is greater than, or in addition to,
    the charge for transmission of the call; and (C) which is accessed
    through use of a 900 telephone number or other prefix or area code
    designated by the Commission in accordance with \[another section
    228 provision\].[^24]

9.  Currently, the Commission has not designated any other telephone
    number, prefix or area code beyond 900 numbers as pay-per-call
    services.[^25] As previously stated, section 228 addresses broader
    issues than the terms "900-number services" and "pay-per-call
    services." For example, the statute has criteria, implemented by
    Commission rules, which govern the manner in which information
    outside the pay-per-call definition can be provided via toll-free
    numbers for a fee.[^26] Therefore, we use the term "audiotext
    information services" to refer to the broader umbrella of services
    related to pay-per-call. We note that the term pay-per-call is a
    subset of audiotext information services as we now use that
    term.[^27]

## Discussion {#discussion .Style-Heading-2-+-12-pt}

### Toll-free Numbers  {#toll-free-numbers .Style-Heading-3-+-12-pt}

10. The Commission's rules, which implement the statute virtually
    verbatim, have detailed criteria that must be met in the limited
    circumstances under which calls involving toll-free numbers can be
    used for purchases of goods and services, including audiotext
    information services. Our rules and the statute already require
    common carriers, including small carriers, to use contracts or
    tariffs to prohibit their customers from using 800 numbers in ways
    that are thought to leave consumers without the benefit of
    protections against fraud. For example, carriers must prohibit the
    use of 800 numbers, or any other numbers advertised or widely
    understood to be toll-free, in a way that the calling party is
    charged for information, with limited exception.[^28] There are
    exceptions for charges where there are presubscription agreements or
    use of certain credit and charge cards.[^29] The only way to have
    information charges that appear on a consumer's phone bill is
    through a presubscription agreement which in most cases must be in
    writing, include specific disclosures, and use personal
    identification numbers for access to the service.[^30]

11. However, despite these protections, the Commission continues to
    receive complaints in this area. In the first six months of 2004,
    the Commission received close to 5,000 complaints that referenced
    toll-free numbers.[^31] We are interested in finding out why, with
    these protections, there are still complaints in this area. For
    example, are there many problems for consumers when charge cards are
    used for payment?[^32] Do more problems occur, for example, when the
    written agreement does not require the use of a personal
    identification number?[^33] We seek comment on possible solutions.

#### Protection for Line Subscribers as well as Callers

12. Section 228 and our rules governing toll-free calls explicitly
    protect "the calling party" from being charged for information
    conveyed during the call unless meeting the criteria discussed
    above.[^34] In the *1996 Order & NPRM*, the Commission discussed the
    possibility of extending the toll-free number protections that apply
    to the "calling party," so that they also apply to the "subscriber
    to the originating line."[^35] We believe this proposal is still
    valid today. For directly-dialed toll calls placed without a calling
    card, it is the subscriber -- not necessarily the calling party --
    who is assessed charges for calls placed over that line. It would
    not seem appropriate for an individual calling a toll-free number to
    be protected from incurring charges without extending the same
    protection to the individual or entity billed for the calls. We seek
    comment on whether we should amend section 64.1504 of our rules
    explicitly to protect the subscriber as well from the practices that
    Congress has chosen to prohibit. Would such an amendment help to
    protect small businesses from calls made by employees?

#### Use of Number Identification for Billing through Toll-Free Numbers

13. Section 228(c)(7)(A) of the 1996 Act prohibits "the calling party
    being assessed, by virtue of completing the call \[to a toll-free
    number\], a charge for the call."[^36] In the *1996 Order & NPRM*,
    the Commission adopted a rule that mirrors that portion of section
    228 and also prohibits such conduct.[^37] In order to assess charges
    for directly dialed toll calls, common carriers identify the
    telephone line used to originate a toll call and assess charges to
    the subscriber to that line. The Commission generally has held
    telephone subscribers responsible for toll charges resulting from
    unauthorized use of their telephone lines.[^38] However, in the
    past, the Commission has received complaints that parties were using
    such information to bill callers for services from calls made to
    toll-free numbers.[^39]

14. In the *1996 Order & NPRM*, the Commission also tentatively
    concluded that a carrier's billing of calls dialed to 800 or other
    toll-free numbers on the basis of one such technology, Automatic
    Number Identification (ANI), amounted to assessing charges on the
    basis of completion of the call, and therefore violated section
    228(c)(7)(A) of the Act, unless the call involved use of
    telecommunications devices for the deaf.[^40] At that time,
    commenters generally agreed that a carrier's billing of toll-free
    calls on the basis of ANI violated the statute.[^41] In the
    interests of collecting a more complete record to include newer
    technology, we now seek comment on whether we should specifically
    prohibit billing calls dialed to 800 or other toll-free numbers on
    the basis of not just ANI, but equivalent information, automatically
    provided calling number identification.[^42]

### Audiotext Information Services, Including Pay-Per-Call Services {#audiotext-information-services-including-pay-per-call-services .Style-Heading-3-+-12-pt}

#### Consumer Protection in General

15. The Commission's rules governing pay-per-call services are meant to
    be a framework of consumer protections for these audiotext
    information services. The rules require, first, that consumers are
    given appropriate information, such as pricing, so they can make
    informed decisions about services.[^43] Second, consumers are meant
    to be able to choose to block unwanted access to the pay-per-call
    services, for free or at a reasonable cost.[^44] And third,
    consumers are supposed to be protected from losing local or
    long-distance services for nonpayment of charges for pay-per-call
    services.[^45] However, we are concerned that as audiotext
    information services have migrated increasingly outside the
    pay-per-call setting, consumers, including small business consumers,
    have lost some of these basic protections.[^46]

16. Consumer disclosure requirements for audiotext information services
    only apply to services over 900 numbers, and, as above, some calls
    over toll-free numbers.[^47] Similarly, alternative dialing routes
    circumvent subscriber blocking, allowing even children to obtain
    access to audiotext information services.[^48] Additionally,
    consumers' calls are sometimes rerouted without their authorization
    through specialized long-distance carriers designed to accumulate
    high rates for what are advertised as free information services.
    Under those conditions, consumers can end up being disconnected for
    what are essentially services that arguably should be covered by
    pay-per-call protections. In this rulemaking we explore several of
    these areas, and seek comment on the best way to address concerns of
    consumers, without hindering legitimate businesses, including small
    and new businesses.

17. One such example of an item outside the standard pay-per-call
    application is a phenomena known informally as "modem hijacking."
    The Commission has received complaints about local calls which are
    redirected without the caller's authorization through software
    programs, which disconnects Internet users' calls and dial
    international numbers often through carriers other than those chosen
    by subscribers for their long-distance calls.[^49] Sometimes there
    is no way to disconnect the call other than to unplug the telephone
    line. Furthermore, the placement of a call to an international
    telephone number in situations like this does not necessarily mean
    it connects through the country to which it is assigned.[^50]

18. Although the FTC has addressed some cases in this area,[^51] we seek
    comment on whether additional actions are needed from the FCC. We
    invite commenters to offer specific proposals consistent with our
    section 228 authority. We have on a case-by-case basis looked at
    some parameters of using 201(b) to review certain relationships
    between carriers and information providers in chat-line cases.[^52]
    We seek comment on the broader policy of what factors and concerns
    we should take into account in making decisions regarding the broad
    practices and conduct in this general area, including whether we
    should consider revoking carriers' section 214 certification for
    such conduct.[^53] We seek comment on whether consumers should be
    given protections to allow call disconnection.

#### The 900 Number Regime

19. Section 228 also requires the Commission to identify procedures that
    common carriers and pay-per-call providers, including small carriers
    and providers, can use to protect against nonpayment of legitimate
    charges.[^54] Pay-per-call providers have recently commented that
    audiotext information service providers have moved outside the 900
    number regime because it has become a difficult environment in which
    to operate.[^55] In addition, AT&T Corp. noted that pay-per-call
    providers may avoid federal regulation by using revenue sharing
    agreements and instant credit to mask services that otherwise would
    be regulated as pay-per-call.[^56]

20. The use of 900 numbers has dropped dramatically in the past five
    years. For example, the number of assigned 900 numbers, which peaked
    in 1999 with 447 distinct 900 NXX codes,[^57] had dropped to 206 by
    the end of 2002.[^58] Many of those numbers are not actually used by
    end users.[^59] Many carriers decline to provide transport or bill
    for 900 numbers.[^60] Further, some pay-per-call providers claimed
    that carriers forgive disputed pay-per-call charges repeatedly for
    the same subscribers without instituting 900 number blocking in
    those cases.[^61] One participant expressed concern that the health
    of the 900 number rules, if applicable, is crucial to market and
    consumer confidence.[^62] Clearly the Commission does not want to
    direct pay-per-call providers to a system that does not function. We
    seek comment on what steps can be taken to ensure the 900 number
    regime functions properly.

21. One commenter noted that a practice used in the United Kingdom
    requiring pay-per-call providers to record the customer's voice
    greatly reduced disputes over charges.[^63] We seek comment on
    whether it would be appropriate to allow carriers to accept
    recordings of customer's oral verification that they understand and
    agree to the charges as evidence that charges should not be
    forgiven. We seek comment from pay-per-call providers on whether
    such items would be necessary.

#### Presubscription or Comparable Arrangement

22. As noted previously, the Commission requires services meeting the
    pay-per-call definition to be accessed only through 900 numbers, and
    the only ways that audiotext information services fall outside the
    pay-per-call definition, and therefore the requirement that they be
    offered only over 900 numbers, are 1) by being directory services as
    described in the statute, or 2) to have charges assessed only after
    there is a "presubscription or comparable agreement."[^64] In the
    1996 Order & NPRM, the Commission sought comment on refining the
    definition of presubscription and comparable agreement so that it is
    clear what criteria must be met for all audiotext information
    services other than directory services to be offered over numbers
    outside of the 900 prefixes, including those services using
    toll-free numbers.[^65] Rather than having the Commission designate
    all prefixes as pay-per-call prefixes to ensure protection for
    consumers, the Commission proposed to make clear that to operate
    outside of 900 numbers, all audiotext information services (other
    than directory services) must either have presubscription agreements
    executed in writing or, alternatively, require that payments be made
    through direct remittance, prepaid account, or debit, credit, charge
    or calling card. For example, this proposal would apply such
    protections to 500 numbers, 700 numbers, plain old telephone service
    and international numbers when used to provide audiotext information
    services.

23. We again seek comment on the usefulness and practicality of such a
    proposal. In particular, we ask whether this proposal would be
    adequate to balance the need to protect consumers, but allow
    businesses to develop. In particular, how would this proposal effect
    small businesses? Are small businesses already keeping such records?
    In addition, we seek comment on whether there is still a need for
    such changes in this area given developments in electronic commerce
    and related laws, and the now-common use of third-party
    verifications in telephone transactions.

24. We also seek comment on whether we need to modify our existing and
    proposed rules given our obligations under the Electronic Signatures
    in Global and National Commerce Act (E-Sign Act).[^66] Under the
    E-Sign Act, a contract or business transaction cannot be denied
    validity or enforceability solely because the contract or
    transaction is not in writing, so long as the contract or
    transaction is a properly authenticated electronic record or has
    been affirmed by an electronic signature.[^67] The E-Sign Act
    provides a specific framework for the use of electronic records and
    signatures and places limits on the interpretation authority of
    federal and state regulatory agencies with regard to this framework.
    We seek comment on how we might best adjust our current and proposed
    requirements for presubscription or comparable agreements to best
    comply with the E-Sign Act.

### Billing {#billing .Style-Heading-3-+-12-pt}

25. Section 228 and our rules already mandate certain billing practices
    for pay-per-call services and 800 numbers billed via the telephone
    bill.[^68] Telephone billing of subscribers for any pay-per-call
    services must already display any such charges "in a part of the
    subscriber's bill that is identified as not being related to local
    and long distance telephone charges," and, at a minimum, describe
    the type of service, the amount of the charge, and the date, time,
    and duration of the call. There must also be a clearly-identified
    toll-free number established for customers to call with any
    questions.[^69] For toll-free numbers used to bill items on a
    telephone bill, the number called must be listed clearly with a
    disclaimer in prominent type that neither local nor long distance
    service could be disconnected for "failure to pay disputed charges
    for information services."[^70]

26. In addition, the Commission has developed rules and guidelines in
    the *Truth-in-Billing* proceeding to ensure that all telephone
    billing is readily discernable to consumers.[^71] In general,
    charges must be accompanied by "a brief, clear, non-misleading,
    plain language description of the service or services rendered" that
    allows consumers to "accurately assess that the services for which
    they are billed correspond to those that they requested and
    received," and that the costs "conform to their understanding of the
    prices charged."[^72] The *Truth-in-Billing Order* requires that
    telephone bills highlight changes in or additions of new providers,
    but non-recurring pay-per-call services are specifically exempt from
    that requirement.[^73]

27. We seek comment on whether our existing rules governing billing
    specifically for pay-per-call services and those for charges billed
    through toll-free numbers, in combination with our
    *Truth-in-Billing* rules and guidelines, are sufficient to address
    any current billing concerns.[^74] We seek comment specifically on
    whether we should adopt a rule stating that charges for
    presubscribed audiotext information services accessed through
    toll-free numbers must be displayed separately from local and
    long-distance telephone service.[^75] How would such a rule affect
    small carriers?

### Revenue-sharing Arrangements {#revenue-sharing-arrangements .Style-Heading-3-+-12-pt}

28. The definition of pay-per-call services found in section 228 rests
    on the requirement that such calls are only those calls to audiotext
    information services for which the caller pays a per-call or
    per-time-interval charge greater than or in addition to the "charge
    for transmission of the call."[^76] Some businesses have used
    revenue-sharing arrangements to offer for-profit audiotext
    information services without pay-per-call regulation. The classic
    scenario is when an audiotext information service provider does not
    charge callers for the service outright, but instead receives a
    commission from a common carrier for the telephone traffic, which
    might be charged at a high rate.

29. In the *1996 Order & NPRM*, the Commission sought to address these
    types of evasions of consumer protections. The Commission
    tentatively concluded that certain revenue-sharing arrangements were
    in reality charging for more than just transmission of the call,
    even if the caller was not billed separately for the audiotext
    information service.[^77] Specifically, the Commission tentatively
    concluded that any form of remuneration between a carrier and
    audiotext information services provider constituted [per
    se]{.underline} evidence that the charge levied actually exceeds the
    charge for the transmission.

30. Accordingly, under this tentative conclusion, interstate services
    provided through such an arrangement would fit within the
    pay-per-call definition and, thus, be required to be offered
    exclusively through 900 numbers.[^78] The *1996 Order & NPRM* also
    notes a staff letter which discussed several hypothetical scenarios
    in which revenue-sharing arrangements were used essentially to mask
    audiotext information services from pay-per-call regulation.[^79] In
    the Marlowe Letter, the staff's opinion was that such scenarios
    would violate both section 228 and section 201(b).[^80]

31. In 2001, the Commission determined that the existence of a
    revenue-sharing arrangement between a common carrier and a chat-line
    service alone did not demonstrate that a carrier's conduct was
    unjust and unreasonable under section 201(b).[^81] Although the
    Commission noted in *Jefferson* that it was not addressing the
    application of section 228 to such a situation, the decision calls
    into question our basis for our prior tentative conclusion in the
    *1996 Order & NPRM*.[^82] Thus, we no longer reach that tentative
    conclusion here. Instead, we invite commenters, including small
    carriers and small audiotext information service providers, to
    address the issue of revenue-sharing arrangements in light of the
    *Jefferson* decision. Parties should discuss whether it is possible
    or appropriate to find that any revenue-sharing arrangements do not
    comply with sections 228 even if such arrangements would not violate
    201(b).[^83]

### New and Evolving Services 

#### Definition of Exempted Directory Services 

32. Section 228 exempts "directory services" from the definition of
    pay-per-call.[^84] In the *TDDRA R&O* implementing section 228,
    commenters asked the Commission to interpret the definition of
    "directory services" to include only "basic" directory
    services.[^85] The Commission noted that a common carrier also
    operating as a provider of audiotext information services "cannot
    shield its information services from pay-per-call regulation by
    offering them through a directory services number."[^86] In 2003,
    some commenters stated that ambiguities in this area persist.[^87]
    They asked that the Commission "clarify" that enhanced directory
    services were exempt from pay-per-call.[^88]

33. Examples of such services mentioned in the comments to CC Docket No.
    96-146 include such things as a service that allows subscribers to
    access directory listings by category, and then obtain additional
    information about the listing, upload personal contacts into a
    private database, and use a live operator to access their own
    personal data. Another service allows wireless subscribers to store
    personal address books on a network server and have voice-activated
    access to data with news, receive wake-up calls and get travel
    information "at no additional charge." Another proposed service
    would add more content such as information about the weather, and
    have partnerships with businesses to allow for such connections as
    transferring customers to places for ticket purchases.

34. In other proceedings, the Commission has already been presented with
    questions about the offering of directory services that are more
    than "traditional" operator provision of local telephone numbering.
    In the N11 numbering proceeding, some commenters had argued that
    Local Exchange Carrier (LEC) use of the 411 number should be
    restricted to the provision of "traditional" directory services,
    meaning operator provision of local telephone numbers.[^89] The
    Commission declined to do so at that time, and instead concluded
    that a LEC could offer enhanced services using a 411 code, or any
    other N11 code, only if that LEC offered access to the code on a
    reasonable, nondiscriminatory basis to competing enhanced services
    providers.[^90] In January 2002, the Commission released a Notice of
    Proposed Rulemaking in a related proceeding specifically asking
    whether allowing enhanced directory assistance to be available
    through presubscribed 411 would be consistent with Commission rules
    regarding pay-per-call and related services.[^91] We seek comment on
    the narrow question of how to further define "directory services"
    that are specifically exempt from the consumer protections of
    pay-per-call, regardless of whether any presubscription or
    comparable agreement exists.

#### Data Services 

35. At least two commenters in 2003 claimed that data services are
    exempt from regulation under section 228 and another has suggested
    that uncertainty in this area might fluster development of nascent
    industries.[^92] However, section 228 has several provisions that
    allude to data services being pay-per-call services. First, section
    228(f)(3) required the Commission to review the "extension of
    regulation under \[section 228\] with respect to persons that
    provide, for a per-call charge, data services that are not
    pay-per-call services."[^93] In the *First TDDRA Order*, the
    Commission noted that the statutory definition of pay-per-call
    includes "data information services," but it did not find a need to
    warrant extension of regulation of section 228 outside pay-per-call
    data services.[^94] In addition, section 228(c)(8) provides an
    exception to the criteria for written agreements for "any purchase
    of goods or of services that are not information services."[^95] We
    seek comment on whether further clarification is needed on this
    topic of what data services fit within the pay-per-call definition.
    We seek specific comments on items that might be of significant
    concern for consumers and for developing businesses, including small
    businesses.

# Memorandum Opinion and Order in CC Docket No. 96-146 {#memorandum-opinion-and-order-in-cc-docket-no.-96-146 .Style-Heading-1-+-12-pt}

## WKP Application for Review {#wkp-application-for-review .Style-Heading-2-+-12-pt}

36. In 1995, WKP Communications, Inc. (WKP) filed an application for
    review of a staff interpretation given in the Marlowe Letter.[^96]
    The letter gave an opinion of how, among other things, section
    201(b) and 228 would apply to several hypothetical scenarios where
    international long distance service providers would be used to
    transmit information and entertainment services.[^97] The scenarios
    described involved the transmission of calls by an authorized
    carrier at a tariffed rate through 10XXX dialing sequence, a 500
    number, and a 700 number. Both the Marlowe Letter and WKP's
    Application for Review were drafted before the 1996 Act had gone
    into effect, and there was still an exemption for tariffed services
    under section 228.[^98] In addition to Congress' removal of the
    tariffed exemption, the Commission has spoken twice on the issue of
    revenue sharing in general, first in the *1996 Order & NPRM* and
    more recently in the chat-line orders discussed above.[^99] Since
    filing its initial Application for Review, WKP has done nothing to
    update its Application for Review. Further, WKP has apparently
    ceased acting as a common carrier and Commission staff has been
    unsuccessful in reaching WKP to determine whether it wanted to
    pursue the Application for Review.[^100] The Commission, therefore,
    dismisses this application as moot. We note that some of the general
    topics raised in the application for review, which went well beyond
    the scope of the letter, are raised in this NPRM.[^101]

## Florida Public Service Petition for Rulemaking {#florida-public-service-petition-for-rulemaking .Style-Heading-2-+-12-pt}

37. In 1995, the Florida Public Service Commission (FPSC) filed a
    Petition for Rulemaking with the Commission proposing, among other
    things, the establishment of a service to allow subscribers to have
    bill blocking, which would not be dependant upon the use of 900
    numbers.[^102] In January 2004, the FPSC filed a notice withdrawing
    their petition.[^103] Therefore, we dismiss the Petition for
    Rulemaking.

## Closing CC Docket 96-146

38. Since the Commission released the *1996 Order & NPRM* in CC Docket
    No. 96-146, the audiotext information services market, as well as
    related regulatory environment and technology have undergone
    significant changes. As noted earlier, the number of assigned 900
    numbers, dropped from a peak of 447 in 1999 to 206 by the end of
    2002 and many are no longer used by end users.[^104] As noted above,
    many carriers decline to provide transport or bill for 900
    numbers.[^105] Consumers complain about different problems, as
    discussed above.[^106] Regulatory changes included
    detariffing,[^107] slamming verification,[^108] and adjudication of
    formal complaints by the FCC[^109] and outside agencies.[^110]
    Instant credit and electronic transactions are now common in
    e-commerce transactions.

39. As the comment cycle for the *1996 Order & NPRM* was completed
    before the rules actually took effect, the comments from 1996
    provided no evidence of the impact of those rules. CGB's effort to
    refresh the record in this docket in 2003 was not met with extensive
    comment, nor a full range of views. Only 15 parties, most in the
    pay-per-call industry, submitted comments, replies, or *ex parte*
    filings, contrasting to the more varied 38 parties that had filed
    comments in response to the *1996 Order & NPRM*. Several of the
    parties argued that the record was too stale to reflect accurately
    the current market and regulatory environment.[^111]

40. It is clear that the subject of this proceeding has changed
    significantly from when the *1996 Order & NPRM* was released and
    when most comments were filed. While there are items in the comments
    and proposals that are still relevant, it would be impossible
    without further comment and review to ascertain which material is
    dated and which material is still viable. In the interest of
    administrative efficiency, therefore, we now close and terminate CC
    Docket No. 96-146. To the extent that parties believe portions of
    their 1996 comments are still relevant, parties should resubmit the
    relevant parts of such comments, if any, in this new docket. Parties
    refiling portions of comments are asked to do so with
    particularity.[^112] Comments filed in 2003 in response to the
    *Notice* need not be filed again, as they will be included in this
    new rulemaking.

## Correction of Word Error {#correction-of-word-error .Style-Heading-2-+-12-pt}

41. The rules as adopted in 1996 contain a minor error in wording which
    is being corrected by this Order. In section 64.154(c)(2)(vi), the
    word "up" was omitted. We correct this sentence to read: "Clearly
    states that the caller can hang up at or before the end of the
    introductory message without incurring any charge whatsoever."

#  Procedural issues {#procedural-issues .Style-Heading-1-+-12-pt}

## Ex Parte Presentations {#ex-parte-presentations .Style-Heading-2-+-12-pt}

42. This is a non-restricted notice and comment rulemaking proceeding.
    *Ex parte* presentations are permitted, except during the Sunshine
    Agenda period, provided they are disclosed as provided in the
    Commission\'s rules.

## Paperwork Reduction Act {#paperwork-reduction-act .Style-Heading-2-+-12-pt}

43. This NPRM contain proposed and/or modified information collection(s)
    subject to the Paperwork Reduction Act of 1995 (PRA). These proposed
    and/or modified information collection(s) will be submitted to the
    Office of Management and Budget (OMB) for review under section 3507
    of the PRA. OMB, the general public, and other Federal agencies are
    invited to comment on the proposed information collection(s)
    contained in this proceeding.

## Initial Regulatory Flexibility Analysis {#initial-regulatory-flexibility-analysis .Style-Heading-2-+-12-pt}

44. The Commission's Initial Regulatory Flexibility Analysis in this
    NPRM is attached as Appendix B**.**

## Filing Instructions {#filing-instructions .Style-Heading-2-+-12-pt}

45. We invite comment on the issues and questions set forth above.
    Pursuant to sections 1.415 and 1.419 of the Commission\'s rules, 47
    C.F.R. §§ 1.415, 1.419, interested parties may file comments on or
    before 30 days after publication in the Federal Register, and reply
    comments on or before 45 days after publication in the Federal
    Register. Comments may be filed using the Commission\'s Electronic
    Comment Filing System (ECFS) or by filing paper copies. See
    *Electronic Filing of Documents in Rulemaking Proceedings*, 63 Fed.
    Reg. 24121 (1998).

46. Comments filed through the ECFS can be sent as an electronic file
    via the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>.
    Generally, only one copy of an electronic submission must be filed.
    If multiple docket or rulemaking numbers appear in the caption of
    this proceeding, however, commenters must transmit one electronic
    copy of the comments to each docket or rulemaking number referenced
    in the caption. In completing the transmittal screen, commenters
    should include their full name, U.S. Postal Service mailing address,
    and the applicable docket or rulemaking number. Parties may also
    submit an electronic comment by Internet e-mail. To get filing
    instructions for e-mail comments, commenters should send an e-mail
    to ecfs@fcc.gov, and should include the following words in the body
    of the message, "get form \<your e-mail address\>." A sample form
    and directions will be sent in reply.

47. Parties who choose to file by paper must file an original and four
    copies of each filing. If more than one docket or rulemaking number
    appear in the caption of this proceeding, commenters must submit two
    additional copies for each additional docket or rulemaking number.
    Filings can be sent by hand or messenger delivery, by electronic
    media, by commercial overnight courier, or by first-class or
    overnight U.S. Postal Service mail (although we continue to
    experience delays in receiving U.S. Postal Service mail).

48. The Commission\'s mail contractor, Natek, Inc., will receive
    hand-delivered or messenger-delivered paper filings or electronic
    media for the Commission's Secretary at 236 Massachusetts Avenue,
    N.E., Suite 110, Washington, D.C. 20002. The filing hours at this
    location are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held
    together with rubber bands or fasteners. Any envelopes must be
    disposed of before entering the building. Commercial and electronic
    media sent by overnight mail (other than U.S. Postal Service Express
    Mail and Priority Mail) must be sent to 9300 East Hampton Drive,
    Capitol Heights, MD 20743. U.S. Postal Service first-class mail,
    Express Mail, and Priority Mail should be addressed to 445 12th
    Street, S.W., Washington, D.C. 20554. All filings must be addressed
    to the Commission\'s Secretary, Office of the Secretary, Federal
    Communications Commission. Parties who choose to file paper comments
    also should send four paper copies of their filings to Kelli Farmer,
    Federal Communications Commission, Room 4-C734, 445 12^th^ Street,
    S.W., Washington, D.C. 20554

49. If a party chooses to file by paper, one copy of each filing must be
    sent to the Commission\'s copy contractor, Best Copy and Printing,
    Inc. (BCPI), by mail at Portals II, 445 12^th^ Street, S.W., Room
    CY-B402, Washington, D.C. 20554; by e-mail at <FCC@bcpiweb.com>; by
    facsimile at (202) 488-5563; or by telephone at (202) 488-5300.

## Materials in Accessible Formats {#materials-in-accessible-formats .Style-Heading-2-+-12-pt}

50. To request materials in accessible formats for people with
    disabilities (Braille, large print, electronic files, audio format),
    send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental
    Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432 (TTY).
    This NPRM can also be downloaded in Word and Portable Document
    Format (PDF) at <http://www.fcc.gov/cgb/policy/paypercall.html>.

# Ordering clauses {#ordering-clauses .Style-Heading-1-+-12-pt}

51. Accordingly, IT IS ORDERED that, pursuant to the authority contained
    in sections 1-4, 201(b), 228 and 303(r) of the Communications Act of
    1934, as amended, 47 U.S.C. §§ 151-154, 201(b), 228 and 303(r); and
    47 C.F.R. § 64.1501-1515 of the Commission's rules, this Notice of
    Proposed Rulemaking, and Memorandum Opinion and Order is ADOPTED.

52. IT IS FURTHER ORDERED that the proceedings in CC Docket No. 96-146
    ARE TERMINATED, and the docket is closed.

53. IT IS FURTHER ORDERED that the Petition for Rulemaking filed by the
    Florida Public Service Commission on December 8, 1995; and the
    Application for Review filed by WKP Communications, Inc., on October
    5, 1995, are DISMISSED.

54. IT IS FURTHER ORDERED that 47 C.F.R. § 64.1504(c) is amended as set
    forth in Appendix A.

55. IT IS FUTHER ORDERED that the Commission\'s Consumer & Governmental
    Affairs Bureau, Reference Information Center, SHALL SEND a copy of
    this Notice of Proposed Rulemaking, and Memorandum Opinion and
    Order, including the Initial Regulatory Flexibility Analysis, to the
    Chief Counsel for Advocacy of the Small Business Administration.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Marlene H. Dortch
>
> Secretary

**APPENDIX A**

**FINAL RULE**

For the reasons discussed in the preamble, Part 64 of Title 47 of the
Code of Federal Regulations is amended as follows:

**Part 64 -- MISCELLANEOUS RULES RELATING TO COMMON CARRIERS**

1\. The authority citation for part 64 continues to read as follows:

> Authority: Sec. 4, 48 Stat. 1066, as amended; 47 U.S.C. 154, unless
> otherwise noted. Interpret or apply secs. 201, 218, 226, 228, 48 Stat
> 1070, as amended, 1077; 47 U.S.C. 201, 218, 226, 228 unless otherwise
> noted.

2\. Section 64.1504 paragraph (c)(2)(vi) is amended to read as follows:

\(vi\) Clearly states that the caller can hang up at or before the end
of the introductory message without incurring any charge whatsoever.

**APPENDIX B**

**Initial Regulatory Flexibility Analysis**

1.  As required by the Regulatory Flexibility Act of 1980, as amended
    (RFA),[^113] the Commission has prepared this present Initial
    Regulatory Flexibility Analysis (IRFA) of the possible significant
    economic impact on a substantial number of small entities by the
    policies and rules proposed in this Notice of Proposed Rulemaking
    and Memorandum Opinion and Order (NPRM). Written public comments are
    requested on this IRFA. Comments must be identified as responses to
    the IRFA and must be filed by the deadline for comments on the NPRM
    provided above in the Comment Filing Procedures section
    paragraph 45. The Commission will send a copy of the NPRM, including
    this IRFA, to the Chief Counsel for Advocacy of the Small Business
    Administration (SBA).[^114] In addition, the NPRM and IRFA (or
    summaries thereof) will be published in the Federal Register.[^115]

##  Need for, and Objectives of, the Proposed Rules

56. The Commission has rules to afford consumers protection from
    deceptive practices associated with the provision of audiotext
    information services, and the use of toll-free numbers. In 1996, the
    Commission issued a Notice of Proposed Rule Making proposing rules
    which were intended to address potential circumvention of the
    regulations.[^116] Later, in March of 2003, the Commission issued a
    Public Notice seeking to refresh the record in the proceeding.[^117]
    In this NPRM, the Commission initiates a new proceeding to review
    the effectiveness of our rules governing pay-per-call services,
    related audiotext information services, and toll-free numbers. The
    Commission seeks comment on the state of the 900-number regime
    regulating pay-per-call services, the effectiveness of consumer
    protections relating to toll-free numbers, and to those audiotext
    information services accessed through dialing methods other than 900
    numbers. We are interested in learning the extent to which consumer
    protections have been circumvented, and what steps we might take to
    protect consumers, including small business consumers, from such
    practices. In addition, we seek comment on changes in technology
    that warrant re-examination and clarification of these rules.

## Legal Basis

57. The legal basis for any action that may be taken pursuant to this
    NPRM is contained in sections 1-4, 201(b), 228, and 303(r) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154,
    201(b), 228, and 303(r).

## Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply

58. The RFA directs agencies to provide a description of, and where
    feasible, an estimate of the number of small entities that may be
    affected by the proposed rules and policies, if adopted.[^118] The
    RFA generally defines the term "small entity" as having the same
    meaning as the terms "small business," "small organization," and
    "small governmental jurisdiction."[^119] In addition, the term
    "small business" has the same meaning as the term "small business
    concern" under the Small Business Act.[^120] A "small business
    concern" is one which: (1) is independently owned and operated; (2)
    is not dominant in its field of operation; and (3) satisfies any
    additional criteria established by the SBA.[^121]

59. Small entities potentially affected by the policies and rules
    proposed herein include organizations, governmental jurisdictions,
    providers of audiotext information services, and providers of
    telecommunications and other services, including both wired and
    wireless services, such as operator service providers, prepaid
    calling card providers, and other toll carriers.

60. **Small Businesses.** Nationwide, there are approximately 22.4
    million small businesses, according to SBA data.[^122]

61. **Small Organizations.** A small organization is generally "any
    not-for-profit enterprise which is independently owned and operated
    and is not dominant in its field."[^123] Nationwide, there are
    approximately 1.6 million small organizations.[^124]

62. **Small Governmental Jurisdictions.** The term "small governmental
    jurisdiction" is defined as "governments of cities, counties, towns,
    townships, villages, school districts, or special districts, with a
    population of less than fifty thousand."[^125] As of 1997, there
    were approximately 87,453 government jurisdictions in the United
    States.[^126] This number includes 39,044 county governments,
    municipalities, and townships, of which 37,546 have populations of
    fewer than 50,000 and 1,498 have populations of 50,000 or more.
    Thus, we estimate the number of small governmental jurisdictions
    overall to be up to 85,955.

### Providers of audiotext information services

63. While the Commission's rules directly apply to common carriers that
    transmit and bill subscribers for information services, other
    companies actually providing the information services might be
    indirectly affected. For example, audiotext information service
    providers that have used toll-free numbers to provide information
    services will be affected by the proposed limitations involving the
    use of toll-free numbers and mandatory written presubscription.
    These companies may experience an adverse economic impact in that
    they will have to change the manner in which they provide services
    to secure billing.

64. The Commission has only limited unverifiable information to predict
    either the total number of audiotext information service providers,
    or the percentage of providers that qualify as small entities.
    Audiotext Information Service providers are not subject to federal
    licensing or reporting requirements. In 1996, staff had been able to
    obtain from industry sources only an informal estimate that the
    total number of these entities operating, which at that time was
    noted as probably somewhere between 10,000 and 20,000 total
    operating entities.[^127] Although the Commission asked for comment
    as to the number of small businesses that would have been affected
    by regulations proposed in this area in 1996, the Commission
    received no data in comments. Even assuming that this rough estimate
    is correct, we cannot, with certainty identity what portion of such
    providers might be providing services in a manner that would subject
    them to the proposed regulations governing toll-free numbers and
    presubscription agreements, or predict what portion of all such
    providers are small businesses. We invite parties commenting on this
    IRFA to provide information as to the number of small businesses
    that would be affected by our proposed regulations and to identify
    alternatives that would reduce the burden on these entities while
    still ensuring that consumers are protected adequately.

65. **All Other Information Services.** "This industry comprises
    establishments primarily engaged in providing other information
    services (except new syndicates and libraries and archives)."[^128]
    We note that, in our Notice, we have described activities such as
    email, online gaming, web browsing, video conferencing, instant
    messaging, and other, similar Internet Protocol-enabled services.
    The SBA has developed a small business size standard for this
    category; that size standard is \$6 million or less in average
    annual receipts.[^129] According to United States Bureau of the
    Census (the Census Bureau) data for 1997, there were 195 firms in
    this category that operated for the entire year.[^130] Of these, 172
    had annual receipts of under \$5 million, and an additional nine
    firms had receipts of between \$5 million and \$9,999,999.
    Consequently, we estimate that the majority of these firms are small
    entities that may be affected by our action.

### Providers of Telecommunications and Other Services

66. We have included small incumbent local exchange carriers (LECs) in
    this present RFA analysis. As noted above, a "small business" under
    the RFA is one that, inter alia, meets the pertinent small business
    size standard (e.g., a telephone communications business having
    1,500 or fewer employees), and "is not dominant in its field of
    operation."[^131] The SBA's Office of Advocacy contends that, for
    RFA purposes, small incumbent LECs are not dominant in their field
    of operation because any such dominance is not "national" in
    scope.[^132] We have therefore included small incumbent LECs in this
    RFA analysis, although we emphasize that this RFA action has no
    effect on Commission analyses and determinations in other, non-RFA
    contexts.

67. **Total Number of Telephone Companies Affected**. The Census Bureau
    reports that, at the end of 1997, there were 6,239 firms engaged in
    providing telephone services, as defined therein.[^133] This number
    contains a variety of different categories of carriers, including
    local exchange carriers, interexchange carriers, competitive access
    providers, mobile service carriers, operator service providers, pay
    telephone operators, personal communications service (PCS)
    providers, covered small mobile radio (SMR) providers, and
    resellers. It seems certain that some of those 6,239 telephone
    service firms may not qualify as small entities because they are not
    "independently owned and operated."[^134] For example, a PCS
    provider that is affiliated with an interexchange carrier having
    more than 1,500 employees would not meet the definition of a small
    business. It seems reasonable to conclude, therefore, that 6,239 or
    fewer telephone service firms are small entity telephone service
    firms that may be affected by the policies and rules proposed in
    this NPRM.

68. **Wired Telecommunications Carriers**. The SBA has developed a small
    business size standard for Wired Telecommunications Carriers, which
    consists of all such companies having 1,500 or fewer
    employees.[^135] According to Census Bureau data for 1997, there
    were 2,225 firms in this category, total, that operated for the
    entire year.[^136] Of this total, 2,201 firms had employment of 999
    or fewer employees, and an additional 24 firms had employment of
    1,000 employees or more.[^137] Thus, under this size standard, the
    great majority of firms can be considered small.

69. **Incumbent LECs**. Neither the Commission nor the SBA has developed
    a small business size standard specifically for incumbent LECs. The
    appropriate size standard under SBA rules is for the category Wired
    Telecommunications Carriers. Under that size standard, such a
    business is small if it has 1,500 or fewer employees.[^138]
    According to Commission data,[^139] 1,337 carriers have reported
    that they are engaged in the provision of incumbent local exchange
    services. Of these 1,337 carriers, an estimated 1,032 have 1,500 or
    fewer employees and 305 have more than 1,500 employees.
    Consequently, the Commission estimates that most providers of
    incumbent local exchange service are small businesses that may be
    affected by our proposed policies and actions.

70. **Competitive LECs, Competitive Access Providers (CAPs), and "Other
    Local Service Providers."** Neither the Commission nor the SBA has
    developed a small business size standard specifically for these
    service providers. The appropriate size standard under SBA rules is
    for the category Wired Telecommunications Carriers. Under that size
    standard, such a business is small if it has 1,500 or fewer
    employees.[^140] According to Commission data,[^141] 609 carriers
    have reported that they are engaged in the provision of either
    competitive access provider services or competitive local exchange
    carrier services. Of these 609 carriers, an estimated 458 have 1,500
    or fewer employees and 151 have more than 1,500 employees. In
    addition, 35 carriers have reported that they are "Other Local
    Service Providers." Of the 35, an estimated 34 have 1,500 or fewer
    employees and one has more than 1,500 employees. Consequently, the
    Commission estimates that most providers of competitive local
    exchange service, competitive access providers, and "Other Local
    Service Providers" are small entities that may be affected by our
    proposed policies and actions.

71. **Local Resellers.** The SBA has developed a small business size
    standard for the category of Telecommunications Resellers. Under
    that size standard, such a business is small if it has 1,500 or
    fewer employees.[^142] According to Commission data,[^143] 133
    carriers have reported that they are engaged in the provision of
    local resale services. Of these, an estimated 127 have 1,500 or
    fewer employees and six have more than 1,500 employees.
    Consequently, the Commission estimates that the majority of local
    resellers are small entities that may be affected by our proposed
    policies and actions.

72. **Interexchange Carriers.** Neither the Commission nor the SBA has
    developed a small business size standard specifically for providers
    of interexchange services. The appropriate size standard under SBA
    rules is for the category Wired Telecommunications Carriers. Under
    that size standard, such a business is small if it has 1,500 or
    fewer employees.[^144] According to Commission data,[^145] 261
    carriers have reported that they are engaged in the provision of
    interexchange service. Of these, an estimated 223 have 1,500 or
    fewer employees and 38 have more than 1,500 employees. Consequently,
    the Commission estimates that the majority of interexchange carriers
    are small entities that may be affected by our proposed policies and
    actions.

73. Operator Service Provider (OSP). Neither the Commission nor the SBA
    has developed a small business size standard specifically for
    operator service providers. The appropriate size standard under SBA
    rules is for the category Wired Telecommunications Carriers. Under
    that size standard, such a business is small if it has 1,500 or
    fewer employees.[^146] According to Commission data,[^147] 23
    carriers have reported that they are engaged in the provision of
    operator services. Of these, an estimated 22 have 1,500 or fewer
    employees and one has more than 1,500 employees. Consequently, the
    Commission estimates that the majority of OSPs are small entities
    that may be affected by our proposed policies and actions.

74. Prepaid Calling Card Providers. Neither the Commission nor the SBA
    has developed a small business size standard specifically for
    prepaid calling card providers. The appropriate size standard under
    SBA rules is for the category Telecommunications Resellers. Under
    that size standard, such a business is small if it has 1,500 or
    fewer employees.[^148] According to Commission data,[^149] 37
    carriers have reported that they are engaged in the provision of
    prepaid calling cards. Of these, an estimated 36 have 1,500 or fewer
    employees and one has more than 1,500 employees. Consequently, the
    Commission estimates that the majority of prepaid calling card
    providers are small entities that may be affected by our proposed
    policies and actions.

75. Other Toll Carriers. Neither the Commission nor the SBA has
    developed a size standard for small businesses specifically
    applicable to "Other Toll Carriers." This category includes toll
    carriers that do not fall within the categories of interexchange
    carriers, OSPs, prepaid calling card providers, satellite service
    carriers, or toll resellers. The closest applicable size standard
    under SBA rules is for Wired Telecommunications Carriers. Under that
    size standard, such a business is small if it has 1,500 or fewer
    employees.[^150] According to Commission's data, 42 companies
    reported that their primary telecommunications service activity was
    the provision of payphone services.[^151] Of these 42 companies, an
    estimated 37 have 1,500 or fewer employees and five have more than
    1,500 employees.[^152] Consequently, the Commission estimates that
    most "Other Toll Carriers" are small entities that may be affected
    by our proposed policies and actions.

76. Wireless Service Providers. The SBA has developed a small business
    size standard for wireless firms within the two broad economic
    census categories of Paging[^153] and Cellular and Other Wireless
    Telecommunications. [^154] Under both SBA categories, a wireless
    business is small if it has 1,500 or fewer employees. For the census
    category of Paging, Census Bureau data for 1997 show that there were
    1,320 firms in this category, total, that operated for the entire
    year.[^155] Of this total, 1,303 firms had employment of 999 or
    fewer employees, and an additional 17 firms had employment of 1,000
    employees or more.[^156] Thus, under this category and associated
    small business size standard, the great majority of firms can be
    considered small. For the census category Cellular and Other
    Wireless Telecommunications, Census Bureau data for 1997 show that
    there were 977 firms in this category, total, that operated for the
    entire year.[^157] Of this total, 965 firms had employment of 999 or
    fewer employees, and an additional 12 firms had employment of 1,000
    employees or more.[^158] Thus, under this second category and size
    standard, the great majority of firms can, again, be considered
    small.

77. Narrowband Personal Communications Services. The Commission held an
    auction for Narrowband PCS licenses that commenced on July 25, 1994,
    and closed on July 29, 1994. A second auction commenced on October
    26, 1994 and closed on November 8, 1994. For purposes of the first
    two Narrowband PCS auctions, "small businesses" were entities with
    average gross revenues for the prior three calendar years of \$40
    million or less.[^159] Through these auctions, the Commission
    awarded a total of 41 licenses, 11 of which were obtained by four
    small businesses.[^160] To ensure meaningful participation by small
    business entities in future auctions, the Commission adopted a
    two-tiered small business size standard in the *Narrowband PCS
    Second Report and Order*.[^161] A "small business" is an entity
    that, together with affiliates and controlling interests, has
    average gross revenues for the three preceding years of not more
    than \$40 million.[^162] A "very small business" is an entity that,
    together with affiliates and controlling interests, has average
    gross revenues for the three preceding years of not more than \$15
    million.[^163] The SBA has approved these small business size
    standards.[^164] A third auction commenced on October 3, 2001 and
    closed on October 16, 2001. Here, five bidders won 317 (Metropolitan
    Trading Areas and nationwide) licenses.[^165] Three of these claimed
    status as a small or very small entity and won 311 licenses.

78. **Common Carrier Paging.** The SBA has developed a small business
    size standard for wireless firms within the broad economic census
    categories of Cellular and Other Wireless Telecommunications.[^166]
    Under this SBA category, a wireless business is small if it has
    1,500 or fewer employees. For the census category of Paging, Census
    Bureau data for 1997 show that there were 1,320 firms in this
    category, total, that operated for the entire year.[^167] Of this
    total, 1,303 firms had employment of 999 or fewer employees, and an
    additional 17 firms had employment of 1,000 employees or more.[^168]
    Thus, under this category and associated small business size
    standard, the great majority of firms can be considered small.

79. In the *Paging* *Second Report and Order*, the Commission adopted a
    size standard for "small businesses" for purposes of determining
    their eligibility for special provisions such as bidding credits and
    installment payments.[^169] A small business is an entity that,
    together with its affiliates and controlling principals, has average
    gross revenues not exceeding \$15 million for the preceding three
    years.[^170] The SBA has approved this definition.[^171] An auction
    of Metropolitan Economic Area (MEA) licenses commenced on February
    24, 2000, and closed on March 2, 2000. Of the 2,499 licenses
    auctioned, 985 were sold.[^172] Fifty-seven companies claiming small
    business status won 440 licenses.[^173] An auction of MEA and
    Economic Area (EA) licenses commenced on October 30, 2001, and
    closed on December 5, 2001. Of the 15,514 licenses auctioned, 5,323
    were sold.[^174] One hundred thirty-two companies claiming small
    business status purchased 3,724 licenses. A third auction,
    consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses
    in all but three of the 51 MEAs commenced on May 13, 2003, and
    closed on May 28, 2003. Seventy-seven bidders claiming small or very
    small business status won 2,093 licenses. [^175] Currently, there
    are approximately 74,000 Common Carrier Paging licenses. According
    to the most recent *Trends in Telephone Service,* 608 private and
    common carriers reported that they were engaged in the provision of
    either paging or "other mobile" services.[^176] Of these, we
    estimate that 589 are small, under the SBA-approved small business
    size standard.[^177] We estimate that the majority of common carrier
    paging providers would qualify as small entities under the SBA
    definition.

## Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

80. There are several compliance requirements addressed in this item.
    One, carriers are responsible for assuring that toll-free numbers,
    when they appear on a telephone bill, must appear in a separate
    section of the bill in order to make it easier for consumers to
    understand charges that stem from calls to toll-free numbers.[^178]
    Carriers are already required to separate out a variety of calls,
    e.g. local versus long distance; therefore, we do not expect this
    compliance requirement to be particularly burdensome for carriers
    even small carriers. This is not a new requirement, just a
    clarification of an existing one.

81. Two, in order to operate outside 900 numbers, all audiotext
    information services -- not only those using toll-free numbers --
    must be provided pursuant to a written (or the electronic
    equivalent) presubscription agreement or made through payments
    involving direct remittance, prepaid account, or debit, credit,
    charge, or calling cards.[^179] These proposed policies and rules
    are designed to clarify the existing requirement that the
    presubscription or comparable agreement be in writing or make use of
    one of the payment methods discussed above. As such, any proposed
    policy or rule changes do not constitute an additional compliance
    burden.

## Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered

82. The RFA requires an agency to describe any significant, specifically
    small business, alternatives that it has considered in reaching its
    proposed approach, which may include the following four alternatives
    (among others): "(1) the establishment of differing compliance or
    reporting requirements or timetables that take into account the
    resources available to small entities; (2) the clarification,
    consolidation, or simplification of compliance and reporting
    requirements under the rule for such small entities; (3) the use of
    performance rather than design standards; and (4) an exemption from
    coverage of the rule, or any part thereof, for such small
    entities."[^180]

83. Commenters, in 2003, noted that audiotext service providers found
    the 900 number regime has become a difficult environment in which to
    operate a business.[^181] Some businesses complained that charges
    for audiotext information services were dropped from carriers'
    bills.[^182] In order to address this concern we are considering
    allowing carriers to accept recordings of customer oral
    verifications as evidence that charges through 900 numbers should
    not be removed from the telephone bill.[^183] These verifications
    would indicate that the customer understood and agreed to the 900
    number charges. We expect this alternative to assist small
    businesses, both carriers and audiotext information service
    providers, by facilitating billing on a telephone bill as opposed to
    a credit card or other such means. We note in the primary item that
    disputes over such charges were greatly reduced once oral
    verification was implemented in another country.[^184]

## Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules

84. Federal Trade Commission (FTC) regulations pursuant to the Telephone
    Disclosure and Dispute Resolution Act (TDDRA),[^185] prescribe
    federal standards governing some audiotext information service
    providers and all entities, including common carriers, which bill
    and collect for interstate information services.[^186] The FTC has
    noted that the expansion of the definition of covered services under
    its governing statutes from Titles II and III of TDDRA, does not
    have any effect upon the main definition of pay-per-call services
    under Title I of TDDRA, codified as section 228.[^187] The FTC
    initiated a proceeding in this area in 1998, but at this time it has
    not issued final conclusions.[^188]

**APPENDIX C**

**COMMENTERS**

**[96-146 Commenters of 2003]{.underline}:**

AT&T Corp.

AT&T Wireless Services AWS

Direct Marketing Association

Federal Bureau of Investigation FBI

James Fox

Marylin Fox

HFT, Inc., LO-AD Communications, T.B.I.\
and Global Charge

John P. Lawless

MicroVoice Applications, Inc.

Network for Online Commerce

Northwest Nevada Telco

Pilgrim Telephone, Inc.

Adelle Simpson Simpson

Z-tel Communications Inc.[^189]

**[96-146 Reply Commenters of 2003]{.underline}:**

AT&T Corp.

Metro One Telecommunications

Pilgrim Telephone, Inc

Adelle Simpson Simpson

**[96-146 Commenters in 1996:]{.underline}**

Alliance of Young Families Young Families

American Network, Inc.

AT&T Corp.

California Public Utilities Commission

Jacqueline K. Chockey

Direct Marketing Association DMA

Andrew Egendorf

Excel Telecommunications, Inc.

Florida Public Service Commission FPSC

Federal Trade Commission FTC

GTE Services Corp. GTE

Representative Bart Gordon

HFT, Inc., LO-AD Communications, Corp.\
and American International Communications

Interactive Services Association

International Telemedia Association

MCI Telecommunications Corp.

MOVO Media Inc.

National Association of Attorneys General, NAAG

> Telecommunications Subcommittee

Northern Mariana Islands, Commonwealth of

Ohio Public Utilities Commission

Pacific Bell and Nevada Bell

Pilgrim Telephone, Inc.

Schuyler County Economic Development Corp.

Southwestern Bell Telephone Co.

TeleServices Industry

Total Telecommunications, Inc.

University of Missouri-Columbia

United States Telephone Association

**[96-146 Reply Commenters in 1996]{.underline}:**

900 Capital Services Inc.

Alliance of Young Families

AT&T Corp.

Atlantic Tele-Network, Inc.

Bellsouth Corp

GTE Service Corp.

HFT, Inc., LO-AD Communications, Corp.\
and American International Communications

MCI Telecommunications Corp.

National Association of Regulatory Utility Commissioners NARUC

Ohio Consumer's Counsel

Pilgrim Telephone, Inc.

Starlink Communications, LLC

Southwestern Bell Telephone Co.

TeleServices Industry

Total Telecommunications, Inc.

US West Inc.

United States Telephone Association

Western Illinois University

[^1]: Pay-per-call services and other information services offer a
    variety of recorded and interactive information and entertainment
    programs. While pay-per-call services are currently confined to 900
    numbers, other audiotext information services may be provided
    through other dialing sequences. *See infra* para. 8. Thus,
    pay-per-call services are encompassed by the larger category of
    audiotext information services discussed in more detail in this
    item.

[^2]: *Policies and Rules Governing Interstate Pay-Per-Call and Other
    Information Services Pursuant to the Telecommunications Act of
    1996*, CC Docket No. 96-146*; Policies and Rules Implementing the
    Telephone Disclosure and Dispute Resolution Act*, CC Docket No.
    93-22, Order and Notice of Proposed Rule Making, 11 FCC Rcd 14738,
    14739, para. 2 (1996) (*1996 Order & NPRM*).

[^3]: *1996 Order & NPRM,* 11 FCC Rcd at 14752, para. 41 ("It is our
    belief that in analyzing the effect of the new statutory
    requirements, we must look not only to the practices that are now
    prohibited but also to the likely responses of \[information service
    providers\] and common carriers who might seek to evade the statute.
    Our consideration of possible evasions is influenced by awareness of
    past evasions that have resulted in widespread deception and abuse.
    We believe that we should act now to discourage future abuse.").

[^4]: *See Policies and Rules Concerning Interstate 900
    Telecommunications Services*, CC Docket No. 91-65, Report and Order,
    6 FCC Rcd 6166 (1991), recon., 8 FCC Rcd 2343 (1993).

[^5]: 47 C.F.R. § 64.711, regulating the preamble requirements, was
    repealed once the preamble requirement of the Federal Trade
    Commission took effect. *See* *Policies and Rules Implementing the
    Telephone Disclosure and Dispute Resolution Act*, CC Docket No.
    93-22, RM 7990, Report and Order, 8 FCC Rcd 6885, 6904, para. 108
    (1993) (*First TDDRA Order*). 47 C.F.R. § 64.713 and 714 were
    amended and renumbered as 47 C.F.R. § 64.1507 and 1508. *See First
    TDDRA Order,* 8 FCC Rcd at 6906-7 (Appendix B).

[^6]: The Telephone Disclosure and Dispute Resolution Act of 1992, which
    added section 228 to the Communications Act of 1934, Pub.L. No,
    192-556, 106 Stat. 4181 (1992) (*codified at* 47 U.S.C. § 228).
    Section 228 defines pay-per-call as, any service providing 1) a)
    audio information/entertainment, or b) access to simultaneous voice
    conversation, or c) any service -- including the provision of a
    product -- where the charges are assessed on the basis of completion
    of the call; 2) for which the caller pays a per-call or per-time
    charge greater than or in addition to the charge for transmission of
    the call; and 3) which is accessed through the use of a 900 number
    or other number designated by the Commission. 47 U.S.C. § 228(i)(1).

[^7]: The Commission's regulations imposed obligations and constraints
    on carriers that transmit or bill for such services, while the FTC's
    authorizing statute covered the activities of information providers
    that produce pay-per-call programs and other entities, including
    common carriers, that perform pay-per-call billing and collection.
    *See* 15 U.S.C. §§ 5711(c) and 5721(c) (each stating that
    "communications common carriers shall be subject to the jurisdiction
    of the Commission for the purposes of \[those subchapters\]").

[^8]: 47 U.S.C. § 228(c)(7).

[^9]: *First TDDRA Order,* 8 FCC Rcd 6885.

[^10]: *See Policies and Rules Implementing the Telephone Disclosure and
    Dispute Resolution Act*, CC Docket No. 93-22, Order on
    Reconsideration and Further Notice of Proposed Rule Making, 9 FCC
    Rcd 6891, para. 1 (1994) (*TDDRA Order & FNPRM*). In the *TDDRA
    Order & FNPRM*, the Commission also proposed to amend our
    regulations to give telephone subscribers greater protection from
    fraudulent and deceptive practices associated with the use of 800
    numbers to provide information services. *See generally id.*

[^11]: *See* 47 U.S.C. § 228(i)(2). The tariffed services exemption was
    removed when Congress revised the governing statute, section 228,
    with the enactment of the 1996 Act. *See* *1996 Order & NPRM*, 11
    FCC Rcd at 14749, para. 33.

[^12]: For example, 47 C.F.R. § 64.1501(b), at that time, included the
    provision that any such arrangement must use a credit or charge card
    subject to the dispute resolution procedures of the Truth in Lending
    Act and Fair Credit Billing Act. A similar protection was adopted by
    the FTC. *See* 16 C.F.R. § 308.2(e).

[^13]: *See* *1996 Order & NPRM*, 11 FCC Rcd at 14739, para. 2. ("We
    previously issued a Further Notice of Proposed Rule Making in CC
    Docket No. 93-22 to propose new rules to correct abuses involving
    'presubscribed' information services and the use of 800 and other
    toll free numbers to charge subscribers for information services.
    Because the requirements of the 1996 Act accomplish the same goals
    as our TDDRA FNPRM proposals, we are terminating CC Docket No.
    93-22.") (citations omitted).

[^14]: *See* *generally* *1996 Order & NPRM*, 11 FCC Rcd 14738; *see
    also id.* at 14740-43, paras. 5-12.

[^15]: 47 U.S.C. § 228(i); *see also* *1996 Order & NPRM*, 11 FCC Rcd at
    14749, para. 33.

[^16]: The 1996 Act added a new prohibition on the calling party "being
    assessed, by virtue of being asked to connect or otherwise transfer"
    to a pay-per-call service, a charge for the call to a toll-free
    number. *See* 47 U.S.C. § 228(c)(7)(E). It also prohibited charges
    without written agreements, or use of credit or charge cards. *See*
    47 U.S.C. § 228(c)(7)(C). And it added a requirement for the use of
    Personal Identification Numbers when written agreements are used. 47
    U.S.C. § 228(c)(8)(C).

[^17]: 47 U.S.C. § 228(c)(8)(E). *See also* 47 U.S.C. § 228(e) (limiting
    carrier liability for such terminations).

[^18]: 47 U.S.C. § 228(c)(8)(F).

[^19]: *1996 Order & NPRM*.

[^20]: *1996 Order & NPRM*, 11 FCC Rcd at 14751-54, paras. 39-45.

[^21]: *See* Rules and Regulations Federal Communications Commission 47
    C.F.R. Part 64 Interstate Pay-Per-Call and Other Information
    Services, Final Rule, 61 FR 39084-01 (July 26, 1996).

[^22]: *The Consumer & Governmental Affairs Bureau Seeks Comment to
    Refresh the Record on the Commission's Rules Governing Interstate
    Pay-Per-Call & Other Information Services*, CC Docket No. 96-146,
    Public Notice, DA No. 03-807 (rel. March 17, 2003) (*2003 Notice*).

[^23]: For example, there are disclosure and billing requirements
    designed to protect consumers.

[^24]: 47 U.S.C. § 228(i)(1).

[^25]: *See* 47 C.F.R. § 64.1506.

[^26]: *See, e.g.,* 47 U.S.C. § 228(c)(7)(C); 47 C.F.R. § 64.1504.

[^27]: *Contrast Telephone Publishing Corporation and Telemedia Network,
    Inc. D/B/A International Telnet,* File No. ENF-97-02, Notice of
    Apparent Liability for Forfeiture, NAL/Acct. No. 716EF0001, 12 FCC
    Rcd 21,384 at 21,385 (1997) ("Pay-per-call services, also known as
    'audiotext' or '900' services, provide telephone users with a
    variety of recorded and interactive information programs for which
    they are charged rates different from, and usually higher than, the
    normal transmission rates for ordinary telephone calls.")

[^28]: 47 U.S.C. § 228(c)(7); 47 C.F.R. § 64.1504.

[^29]: 47 U.S.C. § 228(c)(7); 47 C.F.R. § 64.1504.

[^30]: 47 U.S.C. § 228(c)(7)-(9); 47 C.F.R. § 64.1504. Excused from the
    specific criteria for the written agreement are calls using
    telecommunications devices for the deaf, certain directory services,
    and the purchase of goods or services that are not information
    services. 47 U.S.C. § 228(c)(8)(D); 47 C.F.R. § 64.1504(f)(1).

[^31]: There were 4,933 complaints received during approximately the
    first six months of calendar year 2004 that referenced toll-free
    numbers, but not all of these necessarily involved toll-free related
    issues.

[^32]: *See* 47 U.S.C. § 228(c)(9); 47 C.F.R. § 64.1504(c)(2).

[^33]: *See* 47 U.S.C. § 228(c)(8)(C) and (D); 47 C.F.R. §
    64.1504(f)(1).

[^34]: *See* 47 U.S.C. § 228(c)(7)(C) and (c)(8)-(9); *see also* 47
    C.F.R. § 64.1504.

[^35]: *1996 Order & NPRM,* 11 FCC Rcd at 14753, para. 44. The calling
    party could be someone other than the subscriber, for example, a
    visitor to the subscriber's home.

[^36]: 47 U.S.C. § 228(c)(7).

[^37]: 47 C.F.R. § 64.1504(c).

[^38]: *See, e.g., Gerri Murphy Realty, Inc. v. AT&T Corp.*, File No.
    EB-01-TC-F008, Memorandum Opinion and Order, 16 FCC Rcd 19134
    (2001).

[^39]: *See 1996 Order & NPRM,* 11 FCC Rcd at 14740-41, paras. 6-7.

[^40]: The term "ANI" refers to the delivery of the calling party's
    billing number by a local exchange carrier to any interconnecting
    carrier for billing or routing purposes, and to the subsequent
    delivery to end users. *See* 47 C.F.R. § 64.1600(b). *See also*
    *1996 Order & NPRM*, 11 FCC Rcd at 14754, para. 45.
    Telecommunications devices for the deaf utilize ANI to identify the
    telephone subscriber to be billed. The Commission also made a
    tentative conclusion that ANI-based billing also violates 201(b) in
    the *1996 Order & NPRM. See 1996 Order & NPRM*, 11 FCC Rcd at 14754,
    para. 45; *see also* 47 U.S.C. § 228(c)(7), 47 C.F.R. § 64.1504(c),
    and 47 U.S.C. § 201(b). Section 201(b) requires that all charges and
    practices for and in connection with any common carrier
    communications services be just and reasonable.

[^41]: *See, e.g.,* AT&T Corp. 1996 Comment at 3, FPSC 1996 Comment at
    5, GTE 1996 Comment at 3, MCI 1996 Comment at 5, NAAG 1996 Comment
    at 8, Pacific Bell/Nevada Bell 1996 Comment at 9, University of
    Missouri-Columbia 1996 Comment at 5, Young Families 1996 Comment at
    3. Unless otherwise noted, "Comment" refers to items filed in CC
    Docket 96-146.

[^42]: *See, e.g.,* 47 C.F.R. § 64.1600(d) (charge number -- conveying
    similar information in a System 7 environment).

[^43]: The Commission rules require carriers themselves to disclose
    information, and/or to require disclosure through contract or
    tariff. *See* 47 C.F.R. § 64.1502, 1504, and 1509. The rules require
    compliance with Titles II and III of TDDRA, and the FTC's
    implementing rules. *See* 16 C.F.R. § 308.5 (FTC's rules relating to
    pay-per-call).

[^44]: 47 U.S.C. § 228(c)(5). *See also* 47 C.F.R. § 64.1508.

[^45]: 47 U.S.C. § 228(c)(4). *See also* 47 C.F.R. § 64.1507.

[^46]: *See infra* paras*.* 22-23. During approximately the first six
    months of 2004, the Commission received at least 275 complaints
    referring to 900 numbers themselves. Because of the complex nature
    of some dial-around calls, more complaints stemming from
    unauthorized charges appearing on the telephone bills could be
    amongst the thousands of complaints the Commission receives about
    cramming or billing disputes. *See, e.g., Long Distance Direct,
    Inc., Apparent Liability for Forfeiture*, File No. ENF-99-01,
    Memorandum Opinion and Order, 15 FCC Rcd 3297 (2000) (forfeiture for
    membership to psychic hotline and other charges placed on telephone
    bills for enhanced services categorized as cramming prohibited under
    section 201(b)).

[^47]: *See* 47 C.F.R. § 64.1504 and 1509. *See also supra*, para. 10.

[^48]: While a consumer might block 900 numbers from being dialed from
    her household, the block does not prevent anyone from dialing
    non-900 numbers even if those provide access to audiotext
    information services the consumer is trying to stop. For example, in
    June 2003, the father of a 12-year-old Internet user complained to
    the FCC that he had received a bill for \$289 in long-distance calls
    despite having blocked long-distance calls and having denied his son
    the charge cards for purchases over the Internet. "I had no idea
    that while surfing the Internet, a company could trace back to our
    home telephone number and add a charge to our telephone bill. Is
    that legal? As a parent, how do I control such charges?" the Salt
    Lake City man asked.

[^49]: In 2001, the Commission began separately tracking complaints
    about international Internet dial-up problems, a growing complaint.
    During approximately the first six months of 2004, the FCC received
    265 complaints about these situations in which telephone subscribers
    suddenly found their local phone calls for Internet access
    redirected through international channels at high per-minute rates.

[^50]: *See* *FTC v. Verity Int'l, Ltd*., 124 F.Supp.2d 193, 195-196
    (S.D.N.Y. 2003) (charges on telephone bill as calls to Madagascar
    even though no calls were actually put through to Madagascar). An
    international common carrier was prosecuted by the FTC after a
    dialer computer program supplied by defendants automatically
    downloaded to the user's computer, disconnected the user's modem
    from its Internet Service Provider, and placed a call to a
    Madagascar telephone number assigned to the company. The company
    received revenue from those calls, even if terminated outside of
    Madagascar.

[^51]: *See, e.g., FTC v. BTV Industries, Rik Covell, Adam Lewis,
    National Communications Team, Inc., LO/AD Communications Corp., and
    Nicholas Loader*, CV-S-02-0437-LHR-PAL, Complaint, and Temporary
    Restraining Order (D Nev. 2002) (alleging defendant sent e-mail
    messages claiming that consumers had won a prize, and when consumers
    responded, routing the calls to an adult Internet site via a
    900-number modem connection generating high per-minute rates). In
    that case, the FTC alleged that the defendant's practices were
    deceptive and misleading by, among other things, leading consumers
    to believe that the connection to the web site was toll-free. *See,
    also,* *FTC v. Verity Int'l, Ltd*., 194 F.Supp.2d 270, 276 (S.D.N.Y.
    2002) (FCC supported the FTC action in a friend of the court brief).

[^52]: *See infra* paras*.* 29-32. *See, e.g., Beehive v. AT&T*, 17 FCC
    Rcd 11641 (2002); *AT&T Corp. v. Jefferson Telephone Co.*,
    Memorandum Opinion and Order, 16 FCC Rcd 16130 (2001) (*Jefferson*).

[^53]: *See* 47 U.S.C. § 214.

[^54]: 47 U.S.C. § 228(b)(4).

[^55]: *See, e.g.,* Network for Online Commerce 2003 Comment at 8,
    Pilgrim Telephone, Inc. 2003 Comment at 2, HFT, Inc., Lo-Ad
    Communications T.B.I. and Global Charge 2003 Joint Comment at 13-14,
    Simpson 2003 Comment at 2.

[^56]: *See* AT&T Corp. 2003 Comment at 7 (alleging abusive compensation
    sharing arrangements involving audiotext information service
    providers).

[^57]: In 2001, there were 228 assigned. In 2000 the number was 311,
    which is the 2001 number minus one new code assigned in 2001, plus
    the 84 reclaimed in 2001. The 1999 total was 445, as none were
    assigned in 2000 when another 134 were reclaimed. *See* NANPA 2001
    Annual Report at 13 (North American Numbering Plan Administration)
    (available at \<www.nanpa.com/reports/reports_annual.html\>).

[^58]: NANPA 2002 Annual Report at 8 (available at
    \<www.nanpa.com/reports/reports_annual.html\>).

[^59]: National carriers reported recently that for about half of the
    900 NXX codes they hold, no more than 35% of those numbers are
    actually used by end users. *See,* FCC Releases Telephone Numbering
    Resource Utilization Report, Federal Communications Commission,
    Table 9 (July 2003) (Number Utilization for Specialized
    Nongeographic Area Codes as of December 31, 2002). Canada held 62 of
    the codes, therefore, no more than 144 could be held by national
    carriers, which reported utilization information for only 65 of the
    codes. Utilization data showed that 63.5 percent of those were still
    available for use. Carriers are required to report numbering usage
    data. *See Numbering Resource Optimization, Report and Order and
    Further Notice of Proposed Rulemaking*, 15 FCC Rcd 7574 (2000).

[^60]: Commenters stated that AT&T Corp. abandoned billing for most
    services and notified customers that they will be discontinuing
    transport as of December 31, 2003. (Network for Online Commerce 2003
    Comment at 7, Pilgrim Telephone, Inc. 2003 Comment at 28).
    Commenters stated that MCI does not accept new applications for
    service, and only provides services through a few brokers. (Network
    for Online Commerce 2003 Comment at 8). Commenters stated that
    Sprint closed its 900 telemedia office almost 10 years ago (HFT,
    Inc., Lo-Ad Communications T.B.I. and Global Charge 2003 Joint
    Comment at 13-14 n.7). In 1998, Verizon asked the New York Public
    Service Commission to allow it to end services to pay-per-call
    information providers because it no longer wished to provide billing
    and collection service, and because usage had declined. *Chladek v.
    Verizon N.Y. Inc.*, No. 02 Civ 2355(RO), 2003 WL 21305347 at 1
    (S.D.N.Y. 2003) (also citing Y2K concerns).

[^61]: *See, e.g.,* Northwest Nevada Telco 2003 Comment at 1, MicroVoice
    Applications, Inc. 2003 Comment at 2; *see also* 47 C.F.R. § 64.1511
    and 1512. As noted in the *First TDDRA Order*, Congress specifically
    cited the example of a consumer who "has chronic complaints" about
    pay-per-call transactions as an example of when involuntary blocking
    could be appropriately applied. *See First TDDRA Order,* 8 FCC Rcd
    6885 at 6901 n.148.

[^62]: *See* Letter from Peter J. Brennan, Mobile Entertainment Forum,
    to Marlene Dortch, Secretary, Federal Communications Commission, CC
    Docket No. 96-145 (filed October 28, 2003) (*Ex Parte* filing,
    Mobile Entertainment Forum).

[^63]: Simpson 2003 Comment at 1-2 (stating that all pay-per-call calls
    were required to record the voice of the caller so it could be
    identified).

[^64]: 47 U.S.C. § 228(i) and (b)(5).

[^65]: *See* 47 U.S.C. § 228(i)(2).

[^66]: Electronic Signatures in Global and National Commerce Act, S.
    761, 106th Cong., 2d Sess. (signed into law June 30, 2000).

[^67]: *See also* *Implementation of the Subscriber Carrier Selection
    Changes Provisions of the Telecommunications Act of 1996, Policies
    and Rules Concerning Unauthorized Changes of Consumers Long Distance
    Carriers*, CC Docket No. 94-129, Third Report and Order, 15 FCC Rcd
    15996, at 16002-03, paras. 12-14 (2000).

[^68]: *See* 47 U.S.C. § 228(c)(8)(B) and (d)(4); *see also* 47 C.F.R. §
    64.1504, 1509 and 1510.

[^69]: 47 U.S.C. § 228(d)(4); *see also* 47 C.F. R. § 64.1509(b) and
    1510(2).

[^70]: 47 U.S.C. § 228(c)(8)(D); *see also* 47 C.F. R. § 64.1510(c).

[^71]: *See* 47 C.F.R. § 64.2400-2401; s*ee also Truth-in-Billing and
    Billing Format*, CC Docket No. 98-170, First Report and Order and
    Further Notice of Proposed Rule Making, 14 FCC Rcd 7492 (1999)
    (*Truth-in-Billing Order*).

[^72]: 47 C.F.R. § 64.2401(b). *See* *also* *Truth-in-Billing Order*.

[^73]: *Truth-in-Billing and Billing Format*, Order on Reconsideration,
    15 FCC Rcd 6023, at 6025, para. 5 (2000) (*Truth-in-Billing
    Reconsideration)*.

[^74]: We note that the Commission's billing rules specifically do not
    preempt states from adopting or enforcing their own consistent
    rules. 47 C.F.R. § 64.2400(b). For example, Florida has adopted a
    rule specifically aimed at pay-per-call problems. *See Policies and
    Rules Implementing the Telephone Disclosure and Dispute Resolution
    Act*, Florida Public Service Commission Notice of Withdrawal of
    Petition to Initiate Rulemaking, filed January 26, 2004.

[^75]: *1996 Order & NPRM*, 11 FCC Rcd at 14754-55, para. 46.

[^76]: 47 U.S.C. § 228(i)(1)(B). Section 228 defines pay-per-call as,
    any service providing 1) a) audio information/entertainment, or b)
    access to simultaneous voice conversation, or c) any service --
    including the provision of a product -- where the charges are
    assessed on the basis of completion of the call; and 2) for which
    the caller pays a per-call or per-time charge greater than or in
    addition to the charge for transmission of the call. 47 U.S.C. §
    228(i)(1).

[^77]: *1996 Order & NPRM* at 14756, para. 48. The Commission based its
    tentative conclusion on its authority under section 154(i), and
    addressed circumvention of section 228 through the language related
    to the cost of transmission.

[^78]: *1996 Order & NPRM* at 14756, para. 48.

[^79]: *1996 Order & NPRM* at 14742, para. 10.

[^80]: Letter from John Muleta, Chief of the Common Carrier Enforcement
    Bureau at that time, to Ronald Marlowe, 10 FCC Rcd 10945, DA 95-1905
    (September 1, 1995) (*Marlowe Letter*). *See* 47 U.S.C. 201(b).
    Section 201(b) requires all charges and practices for and in
    connection with any common carrier communications services be just
    and reasonable. *See also infra,* para*.* 36.

[^81]: *Jefferson.*, 16 FCC Rcd at 16136, para. 13. (2001) (overruling
    Marlowe to the extent that it was not consistent with the
    conclusions in the Order). *See also Beehive; Jefferson;* *AT&T
    Corp. v. Frontier Communications of Mt. Pulaski, Inc.,* 17 FCC Rcd
    4041 (2002) (follows *Jefferson*), *AT&T v. Atlas Telephone Co. and
    Total Telecommunications Services, Inc.*, 16 FCC Rcd 5726 (2001),
    *aff'd in part and remanded sub nom, AT&T Corp. v. F.C.C.*, 317 F.3d
    227 (D.C. Cir. 2003); *dismissed, Atlas Telephone Co. v. AT&T
    Corp.*, File No. E-97-03, Order, 18 FCC Rcd 11533.

[^82]: *Jefferson*, 16 FCC Rcd at 16133 n.18.

[^83]: We note that commenters have brought to our attention legal and
    beneficial revenue sharing arrangements that exist in the
    telecommunications industry today. *See* Pilgrim Telephone, Inc.
    2003 Comment at 10 (saying there are many examples in which carriers
    have compensation arrangements with call aggregators, universities,
    hospitals, hotels and airports); MicroVoice Application Inc. 2003
    Comment at 3 ("there is a long history in the telecommunications
    industry for providing commissions for calls generated from pay
    phones, hotels and motels, shared residences, etc."); AT&T Corp.
    2003 Further Comments at 10 n.10 (noting as legitimate arrangements
    Terminating Switched Access Arrangements (TSAAs) for high volume,
    international settlements required to be paid by U.S. carriers to
    foreign carriers, and commissions paid by carrier aggregators for
    operator traffic).

[^84]: 47 U.S.C. § 228(i)(2).

[^85]: *TDDRA R&O*, 8 FCC Rcd at 6887, para. 8.

[^86]: *TDDRA R&O*, 8 FCC Rcd at 6887, para. 9 n.23.

[^87]: Letter from Michael B. Hazzard, on behalf of Z-Tel
    Communications, Inc., to Marlene H. Dortch, Secretary, Federal
    Communications Commission, CC Docket No. 96-146, at 2 (filed May 27,
    2003) (Letter from Z-Tel Communications); AWS 2003 Comment at 6;
    Metro One Telecommunications 2003 Reply Comment.

[^88]: The Commissions rules, which mirror the statutory language, do
    not speak about which categories of services fall under the
    directory services exemption. Instead, the exemption just states
    that pay-per-call "does not include directory services provided by a
    common carrier or its affiliate or by a local exchange carrier or
    its affiliate... ." *See* 47 C.F.R. § 64.1501(a)(4); *see also* 47
    U.S.C. § 228(i)(2).

[^89]: *The Use of N11 Code and Other Abbreviated Dialing Arrangements,*
    CC Docket No. 92-105, First Report and Order and Further Notice of
    Proposed Rulemaking, 12 FCC Rcd 5572, 5600, para. 48 (*N11 First
    Report and Order*).

[^90]: *N11 First Report and Order*, 12 FCC Rcd at 5601, para. 48.

[^91]: *Provision of Directory Listing Information Under the
    Communications Act of 1934, as Amended,* CC Docket No. 99-273; *The
    Use of N11 Codes and Other Abbreviated Dialing Arrangements*, CC
    Docket No. 92-105; *Administration of the North American Numbering
    Plan*, CC Docket No. 92-237, Notice of Proposed Rulemaking, 17 FCC
    Rcd 1164, 1183, para. 37 (FCC 01-384) (*N11 NPRM*).

[^92]: *See* AWS 2003 Comment at 6 n.12; Pilgrim Telephone, Inc. Reply
    Comment at 21 (contending that wireless data-based information
    services are not subject to section 228); *see also Ex Parte*
    filing, Mobile Entertainment Forum (questioning whether section 228
    applies).

[^93]: 47 U.S.C. § 228(f)(3).

[^94]: *See* *First TDDRA Order* 8 FCC Rcd at 6892 and 6903, paras. 41,
    99-100.

[^95]: 47 U.S.C. § 228(c)(8)(D).

[^96]: *Direct Dialed Calls to International Information Services*, File
    No. ENF 95-20 (October 5, 1995) (WKP Application for Review). *See
    also WKP Communications Files Application for Review of Common
    Carrier Bureau Staff Ruling Regarding Provisions of Interstate
    Information Services at Tariffed Rates*, 10 FCC Rcd 11518 (rel.
    October 24, 1995).

[^97]: *Marlowe Letter*, 10 FCC Rcd 10945.

[^98]: The exemption for tariffed services was removed by the 1996 Act.

[^99]: *See supra,* paras*.* 29-32**.**

[^100]: Since 1998, all common carriers have been required to file 499A
    forms, but there is no record of WKP having done so. The law firm
    that filed the petition on behalf of WKP provided Commission staff
    with the last known address of WKP, and a letter sent to that
    address in September 2003 was returned as undeliverable.

[^101]: *See* *supra,* paras*.* 29-32.

[^102]: *Policies and Rules Implementing the Telephone Disclosure and
    Dispute Resolution Act*, Florida Public Service Commission Petition
    to Initiate Rulemaking to Adopt Additional Safeguards, RM-8783,
    filed December 8, 1995 (*FPSC Petition*). *See also Office of Public
    Affairs, Reference Operations Division, Petitions for Rulemaking
    File*, Report No. 2127, Public Notice, April 1, 1996; Florida Public
    Service Commission 1996 Reply, RM-8783; and Florida Public Service
    Commission 1996 Comment.

[^103]: *Policies and Rules Implementing the Telephone Disclosure and
    Dispute Resolution Act*, Florida Public Service Commission Notice of
    Withdrawal of Petition to Initiate Rulemaking, filed January 26,
    2004.

[^104]: *See* *supra,* paras*.* 19-22.

[^105]: *See supra*, para. 20 note 57.

[^106]: *See, e.g., supra* para. 17 note 49.

[^107]: The Commission mandatorily detariffed interstate, domestic,
    interexchange services, including 900 transport service, provided by
    nondominant interexchange carriers. *See Policy and Rules Concerning
    the Interstate, Interexchange Marketplace, Implementation of Section
    254(g) of the Communications Act of 1934*, Second Report and Order,
    11 FCC Rcd 20730 (1996), recon., 12 FCC Rcd 15014 (1997), stay
    granted, MCI Telecommunications Corp. v. FCC, No. 96-1459 (D.C. Cir.
    Feb. 13, 1997); Order on Reconsideration, 12 FCC Rcd 15014 (1997);
    Second Order on Reconsideration and Erratum, 14 FCC Rcd 6004 (1999);
    stay lifted and aff'd, MCI WorldCom v. FCC, 209 F.3d 760 (D.C. Cir.
    April 28, 2000), Memorandum Report and Order, 15 FCC Rcd 22321 (Com.
    Car. Bur. 2000); Common Carrier Bureau Extends Transition Period for
    Detariffing Consumer Domestic Long Distance Services, Public Notice,
    16 FCC Rcd 2906 (Com. Car. Bur. 2001).

[^108]: *See generally* *Implementation of the Subscriber Carrier
    Selection Changes Provisions of the Telecommunications Act of
    1996/Policies and Rules Concerning Unauthorized Changes of
    Consumers' Long Distance Carriers*, CC Docket No. 94-129.

[^109]: *See, e.g., Beehive v. AT&T,* 17 FCC Rcd 11641 (2002)
    (complainant failed to show revenue-sharing arrangement between
    carrier and information provider was unreasonable under section
    201(b)) (section 228 claims not reached); *AT&T Corp. v. Frontier
    Communications of Mt. Pulaski, Inc.,* 17 FCC Rcd 4041 (2002)
    (follows *Jefferson*) ; *AT&T v. Atlas Telephone Co. and Total
    Telecommunications Services, Inc.*, 16 FCC Rcd 5726 (2001), *aff'd
    in part and remanded sub nom, AT&T Corp. v. F.C.C.*, 317 F.3d 227
    (D.C. Cir. 2003)(unjust and unreasonable under section 201(b) but
    TDDRA claims dismissed), *dismissed, Atlas Telephone Co. v. AT&T
    Corp.*, File No. E-97-03, Order, 18 FCC Rcd 11533.

[^110]: For example, the FTC charged defendants with violating TDDRA
    requirements by luring kids and other consumers to collect a prize
    and then rerouting their modem connections through a 900-number to
    charge them high per-minute phone rates. *See* " 'You've Just Won a
    Playstation 2!' -- or Maybe Not, Says FTC in Complaint Filed Against
    Internet Spammers," (rel. April 24, 2002),
    \<http://www.ftc.gov/opa/2002/04/btv.htm\>. States have also been
    active in this area.

[^111]: *S**ee, e.g.,* Letter from Z-Tel Communications at 1, Pilgrim
    Telephone, Inc. 2003 Comment at 20.

[^112]: Parties should only refile the particular pages from their
    comments that they believe to still be relevant.

[^113]: *See* 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601 -- 612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^114]: *See* 5 U.S.C. § 603(a).

[^115]: *See* 5 U.S.C. § 603(a).

[^116]: *Policies and Rules Governing Interstate Pay-Per-Call and Other
    Information Services Pursuant to the Telecommunications Act of
    1996*, CC Docket No. 96-146*; Policies and Rules Implementing the
    Telephone Disclosure and Dispute Resolution Act*, CC Docket No.
    93-22, Order and Notice of Proposed Rule Making, 11 FCC Rcd 14738
    (1996).

[^117]: *The Consumer & Governmental Affairs Bureau Seeks Comment to
    Refresh the Record on the Commission's Rules Governing Interstate
    Pay-Per-Call & Other Information Services*, CC Docket No. 96-146,
    Public Notice, DA No. 03-807 (rel. March 17, 2003) (*2003 Notice*).

[^118]: 5 U.S.C. § 603(b)(3).

[^119]: 5 U.S.C. § 601(6).

[^120]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small-business concern" in the Small Business Act, 15 U.S.C. §
    632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a
    small business applies "unless an agency, after consultation with
    the Office of Advocacy of the Small Business Administration and
    after opportunity for public comment, establishes one or more
    definitions of such term which are appropriate to the activities of
    the agency and publishes such definition(s) in the Federal
    Register."

[^121]: 15 U.S.C. § 632.

[^122]: *See* SBA, Programs and Services, SBA Pamphlet No. CO-0028, at
    page 40 (July 2002).

[^123]: 5 U.S.C. § 601(4).

[^124]: Independent Sector, The New Nonprofit Almanac & Desk Reference
    (2002).

[^125]: 5 U.S.C. § 601(5).

[^126]: U.S. Census Bureau, Statistical Abstract of the United States:
    2000, Section 9, pages 299-300, Tables 490 and 492.

[^127]: *1996 Order & NPRM*, 11 FCC Rcd at 14758, para. 57.

[^128]: U.S. Census Bureau, "2002 NAICS Definitions: 519190 All Other
    Information Services" (online, February 2004, at
    [www.census.gov](http://www.census.gov/)).

[^129]: 13 C.F.R. § 121.201, NAICS code 519190 (changed from 514199 in
    October 2002).

[^130]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    Information, \"Establishment and Firm Size (Including Legal Form of
    Organization),\" Table 4, NAICS code 514199 (issued October 2000).
    This category was created for the 2002 Economic Census by taking a
    portion of the superseded 1997 category, "All Other Information
    Services," NAICS code 514199. The data cited in the text above are
    derived from the superseded category.

[^131]: 15 U.S.C. § 632.

[^132]: Letter from Jere W. Glover, Chief Counsel for Advocacy, SBA, to
    William E. Kennard, Chairman, FCC (May 27, 1999). The Small Business
    Act contains a definition of "small-business concern," which the RFA
    incorporates into its own definition of "small business." *See* 15
    U.S.C. § 632(a) (Small Business Act); 5 U.S.C. § 601(3) (RFA). SBA
    regulations interpret "small business concern" to include the
    concept of dominance on a national basis. *See* 13 C.F.R. §
    121.102(b).

[^133]: 1997 Economic Census, Establishment and Firm Size, U.S. Census
    Bureau, U.S. Department of Commerce, Economics and Statistics
    Administration, Document EC97S51S-SZ (*1997 Economic Census*), at
    67.

[^134]: 15 U.S.C. § 632(a)(1).

[^135]: 13 C.F.R. § 121.201, NAICS code 513310 (changed to 517110 in
    October 2002).

[^136]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513310 (issued October 2000).

[^137]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513310 (issued October 2000). The
    census data do not provide a more precise estimate of the number of
    firms that have employment of 1,500 or fewer employees; the largest
    category provided is "Firms with 1,000 employees or more."

[^138]: 13 C.F.R. § 121.201, NAICS code 517110 (changed from 513310 in
    October 2002).

[^139]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^140]: 13 C.F.R. § 121.201, NAICS code 517110 (changed from 513310 in
    October 2002).

[^141]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^142]: 13 CFR § 121.201, NAICS code 517310 (changed from 513330 in
    October 2002).

[^143]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^144]: 13 C.F.R. § 121.201, NAICS code 517110 (changed from 513310 in
    October 2002).

[^145]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^146]: 13 C.F.R. § 121.201, NAICS code 517110 (changed from 513310 in
    October 2002).

[^147]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^148]: 13 C.F.R. § 121.201, NAICS code 517310 (changed from 513330 in
    October 2002).

[^149]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^150]: 13 C.F.R. § 121.201, NAICS code 513310 (changed to 517110 in
    October 2002).

[^151]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^152]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (August 2003). This source uses data that are current as of
    December 31, 2001.

[^153]: 13 C.F.R. § 121.201, NAICS code 513321 (changed to 517211 in
    October 2002).

[^154]: 13 C.F.R. § 121.201, NAICS code 513322 (changed to 517212 in
    October 2002).

[^155]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513321 (issued October 2000).

[^156]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513321 (issued October 2000). The
    census data do not provide a more precise estimate of the number of
    firms that have employment of 1,500 or fewer employees; the largest
    category provided is "Firms with 1000 employees or more."

[^157]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513322 (issued October 2000).

[^158]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513322 (issued October 2000). The
    census data do not provide a more precise estimate of the number of
    firms that have employment of 1,500 or fewer employees; the largest
    category provided is "Firms with 1000 employees or more."

[^159]: Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding Narrowband PCS, *Third Memorandum Opinion and
    Order and Further Notice of Proposed Rulemaking*, 10 FCC Rcd 175,
    196, para. 46 (1994).

[^160]: *See* "Announcing the High Bidders in the Auction of ten
    Nationwide Narrowband PCS Licenses, Winning Bids Total
    \$617,006,674," *Public Notice*, PNWL 94-004 (released Aug. 2,
    1994); "Announcing the High Bidders in the Auction of 30 Regional
    Narrowband PCS Licenses; Winning Bids Total \$490,901,787," *Public
    Notice*, PNWL 94-27 (released Nov. 9, 1994).

[^161]: Amendment of the Commission's Rules to Establish New Personal
    Communications Services, Narrowband PCS, *Second Report and Order
    and Second Further Notice of Proposed Rule Making*, 15 FCC Rcd
    10456, 10476, para. 40 (2000).

[^162]: Amendment of the Commission's Rules to Establish New Personal
    Communications Services, Narrowband PCS, *Second Report and Order
    and Second Further Notice of Proposed Rule Making*, 15 FCC Rcd
    10456, 10476, para. 40 (2000).

[^163]: Amendment of the Commission's Rules to Establish New Personal
    Communications Services, Narrowband PCS, *Second Report and Order
    and Second Further Notice of Proposed Rule Making*, 15 FCC Rcd
    10456, 10476, para. 40 (2000).

[^164]: *See* Letter to Amy Zoslov, Chief, Auctions and Industry
    Analysis Division, Wireless Telecommunications Bureau, Federal
    Communications Commission, from Aida Alvarez, Administrator, Small
    Business Administration, dated December 2, 1998.

[^165]: *See* "Narrowband PCS Auction Closes," *Public Notice*, 16 FCC
    Rcd 18663 (WTB 2001).

[^166]: 13 C.F.R. § 121.201, NAICS code 513322 (changed to 517212 in
    October 2002).

[^167]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513321 (issued October 2000).

[^168]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    "Information," Table 5, Employment Size of Firms Subject to Federal
    Income Tax: 1997, NAICS code 513321 (issued October 2000). The
    census data do not provide a more precise estimate of the number of
    firms that have employment of 1,500 or fewer employees; the largest
    category provided is "Firms with 1000 employees or more."

[^169]: Revision of Part 22 and Part 90 of the Commission's Rules to
    Facilitate Future Development of Paging Systems, *Second Report and
    Order*, 12 FCC Rcd 2732, 2811-2812, paras. 178-181 (*Paging Second
    Report and Order*); *see also* Revision of Part 22 and Part 90 of
    the Commission's Rules to Facilitate Future Development of Paging
    Systems, *Memorandum Opinion and Order on Reconsideration*, 14 FCC
    Rcd 10030, 10085-10088, paras. 98-107 (1999).

[^170]: *Paging Second Report and Order*, 12 FCC Rcd at 2811, para. 179.

[^171]: *See* Letter to Amy Zoslov, Chief, Auctions and Industry
    Analysis Division, Wireless Telecommunications Bureau, from Aida
    Alvarez, Administrator, Small Business Administration, dated
    December 2, 1998.

[^172]: *See* "929 and 931 MHz Paging Auction Closes," *Public Notice*,
    15 FCC Rcd 4858 (WTB 2000).

[^173]: *See* "929 and 931 MHz Paging Auction Closes," *Public Notice*,
    15 FCC Rcd 4858 (WTB 2000).

[^174]: *See* "Lower and Upper Paging Band Auction Closes," *Public
    Notice*, 16 FCC Rcd 21821 (WTB 2002).

[^175]: *See* "Lower and Upper Paging Bands Auction Closes," *Public
    Notice*, 18 FCC Rcd 11154 (WTB 2003).

[^176]: *See Trends in Telephone Service,* Industry Analysis Division,
    Wireline Competition Bureau, Table 5.3 (Number of Telecommunications
    Service Providers that are Small Businesses) (May 2002).

[^177]: 13 C.F.R. § 121.201, NAICS code 517211.

[^178]: *See NPRM supra* paras. 25-27.

[^179]: *See NPRM supra* paras. 22-24.

[^180]: 5 U.S.C. § 603(c)(1) -- (c)(4).

[^181]: *See, e.g.,* Network for Online Commerce 2003 Comment at 8,
    Pilgrim Telephone, Inc. 2003 Comment at 2, HFT, Inc., Lo-Ad
    Communications T.B.I. and Global Charge 2003 Joint Comment at 13-14,
    Simpson 2003 Comment at 2.

[^182]: *See NPRM supra* para. 20.

[^183]: *See NPRM supra* para. 21.

[^184]: *See NPRM supra* para. 21.

[^185]: The Telephone Disclosure and Dispute Resolution Act of 1992,
    which added section 228 to the Communications Act of 1934, Pub.L.
    No, 192-556, 106 Stat. 4181 (1992) (codified at 47 U.S.C. § 228, and
    15 U.S.C. §§ 5711-14 and § 5721-24).

[^186]: 16 C.F.R. §§ 308.1 *et* *seq*.

[^187]: "Pay-per-Call Rule; Proposed Rule," Federal Trade Commission, 63
    Fed. Reg. 58524, 58525, n.18 (October 30, 1998).

[^188]: "Pay-per-Call Rule; Proposed Rule," Federal Trade Commission, 63
    Fed. Reg. 58524.

[^189]: ^\*^ Filed as letter.