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[**Office of Advocacy**](http://www.sba.gov/advo)

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> August 27, 2002
>
> Honorable Michael K. Powell\
> Chairman\
> Federal Communications Commission\
> 445 12th Street, S.W.\
> Room 8-B201\
> Washington, DC 20554
>
> [**RE: Ex Parte Presentation in a Non-Restricted Proceeding [\
> ]{.underline}Initial Regulatory Flexibility Analysis for Appropriate
> Framework for Broadband Access to the Internet over Wireline
> Facilities (CC Dkt. No.
> 02-33)**](http://www.sba.gov/advo/laws/comments/dfcc02_0827.pdf)
>
> Dear Mr. Chairman:
>
> As part of its statutory duty to monitor and report on an agency's
> compliance with the Regulatory Flexibility Act of 1980 (\"RFA\"), as
> amended by the Small Business Regulatory Enforcement Fairness Act of
> 1996 (\"SBREFA\"),[**(1)**](http://www.sba.gov/advo/laws/comments/#1)
> the Office of Advocacy of the U.S. Small Business Administration
> (\"Advocacy\"), has reviewed the Federal Communications Commission's
> (\"FCC\" or \"Commission\") compliance with the RFA's requirements for
> the Notice of Proposed Rulemaking (\"NPRM\") in the above-captioned
> proceeding.[**(2)**](http://www.sba.gov/advo/laws/comments/#2)
>
> In the NPRM, the Commission seeks to classify the provision of
> wireline broadband Internet access service and identify the
> ramifications of such
> classification.[**(3)**](http://www.sba.gov/advo/laws/comments/#3.)
> The Commission tentatively concludes that wireline broadband Internet
> access service is an information service.
> [**(4)**](http://www.sba.gov/advo/laws/comments/#4)While the
> Commission conducted an Initial Regulatory Flexibility Analysis
> (\"IRFA\"), the Commission did not analyze the impact of this
> classification on small Internet Service Providers (\"ISPs\").
> According to commenters, classifying broadband Internet access as an
> information service would affect more than 7,000 small businesses and
> could cost those businesses an estimated \$8 billion in revenue.
>
> To comply with the RFA, Advocacy recommends that the Commission revise
> its IRFA to include an analysis of what impact that classification of
> wireline broadband Internet access service would have on small ISPs.
> If the Commission declines to take this step, we encourage the
> Commission to address the impact in the Final Regulatory Flexibility
> Analysis (\"FRFA\") when it adopts the final rule.
>
> Furthermore, Advocacy urges the Commission to adopt the alternative
> proposed by commenters and classify wireline broadband Internet access
> service as composed of two separate services -- the transmission of
> broadband signals as a telecommunications service, and the the
> provision of Internet access service as an information service. This
> alternative will accomplish the Commission's regulatory goal of
> encouraging broadband deployment, while minimizing the
> disproportionate impact on small businesses.
>
> **1. Advocacy Background.**
>
> Congress established the Office of Advocacy in 1976 by Pub. L. No.
> 94-305[**(5)**](http://www.sba.gov/advo/laws/comments/#5.) to
> represent the views and interests of small business within the Federal
> government. Advocacy's statutory duties include serving as a focal
> point for the receipt of complaints concerning the government's
> policies as they affect small business, developing proposals for
> changes in Federal agencies' policies, and communicating these
> proposals to the
> agencies.[**(6)**](http://www.sba.gov/advo/laws/comments/#6) Advocacy
> also has a statutory duty to monitor and report to Congress on the
> Commission's compliance with the RFA.
>
> The RFA was designed to ensure that, while accomplishing their
> intended purposes, regulations did not unduly inhibit the ability of
> small entities to compete, innovate, or to comply with the
> regulation.[**(7)**](http://www.sba.gov/advo/laws/comments/#7) The
> major objectives of the RFA are: (1) to increase agency awareness and
> understanding of the potential disproportionate impact of regulations
> on small business; (2) to require that agencies communicate and
> explain their findings to the public and make these explanations
> transparent; and (3) to encourage agencies to use flexibility and
> provide regulatory relief to small entities where feasible and
> appropriate to its public policy objectives.
> [**(8)**](http://www.sba.gov/advo/laws/comments/#8.)The RFA does not
> seek preferential treatment for small businesses. Rather, it
> establishes an analytical requirement for determining how public
> issues can best be resolved without erecting barriers to competition.
> To this end, the RFA requires the agencies to analyze the economic
> impact of proposed regulations on different-sized entities, estimate
> each rule's effectiveness in addressing the agency's purpose for the
> rule, and consider alternatives that will achieve the rule's
> objectives while minimizing any disproportionate burden on small
> entities.[(9)](http://www.sba.gov/advo/laws/comments/#9)
>
> On August 14, 2002, President George W. Bush signed Executive Order
> 13272 that requires federal agencies to implement policies protecting
> small businesses when writing new rules and
> regulations.[**(10)**](http://www.sba.gov/advo/laws/comments/#10.)
> This Executive Order authorizes Advocacy to provide comment on draft
> rules to the agency that has proposed or intends to propose the rules
> and to the Office of Information and Regulatory Affairs of the Office
> of Management and
> Budget.[**(11)**](http://www.sba.gov/advo/laws/comments/#11) It also
> requires agencies to give every appropriate consideration to any
> comments provided by Advocacy regarding a draft rule. The agency shall
> include, in any explanation or discussion accompanying publication in
> the *Federal Register* of a final rule, the agency\'s response to any
> written comments submitted by Advocacy on the proposed rule, unless
> the agency certifies that the public interest is not served by doing
> so.[**(12)**](http://www.sba.gov/advo/laws/comments/#12.)
>
> **2. Defining Wireline Broadband Internet Access Services as
> Information Services Will Heavily Burden Small ISPs.**
>
> After reviewing the Commission\'s proposed rule, the IRFA and
> comments, Advocacy is concerned the Commission has understated the
> impact on small ISPs of its tentative conclusion classifying broadband
> access service as an information service. Classifying broadband access
> service as an information service would remove the requirements set
> forth in the Commission\'s Computer
> II[**(13)**](http://www.sba.gov/advo/laws/comments/#13) and Computer
> III[**(14)**](http://www.sba.gov/advo/laws/comments/#14.) rulemakings
> that provide carriage to
> ISPs[**.(15)**](http://www.sba.gov/advo/laws/comments/#15.) Such an
> action will severely hamper the ability of small ISPs to provide
> broadband service, stifling competition and slowing down deployment.
> Although Advocacy shares the Commission's commitment to deregulation
> to bolster competition and spur economic growth, in this instance,
> complete deregulation will create impenetrable barriers to entry,
> eliminating competition from small businesses and removing consumer
> choice.
>
> **a. Small ISPs Provide a Substantial Number of Competitors and Bring
> Competition to Rural Areas.**
>
> In the IRFA, using 1997 data, the Commission identifies small ISPs as
> an affected class of entities and estimates there are between 2,829 to
> 2,940 small ISPs.[**(16)**](http://www.sba.gov/advo/laws/comments/#16)
> One commenter noted that industry sources estimate the number of ISPs
> at more than
> 7,200.[**(17)**](http://www.sba.gov/advo/laws/comments/#17) The latest
> numbers available to Advocacy support this claim. Based on 1999 North
> American Industry Classification System (\"NAICS\") data broken down
> by firm size,[**(18)**](http://www.sba.gov/advo/laws/comments/#18)
> there are a total of 7,099 ISP firms, of which 6,975 have less than
> 500 employees.[**(19)**](http://www.sba.gov/advo/laws/comments/#19)
> While this number is based on data that is three years old in a
> rapidly changing industry, it supports the commenters' assertion that
> there are approximately 7,000 small ISPs.
>
> Small ISPs have a substantial share of the Internet service market and
> are crucial to competition. Together, small ISPs serve 77 million
> customers, which represent 55 percent of the
> market.[**(20)**](http://www.sba.gov/advo/laws/comments/#20) In
> addition, small ISPs have been instrumental in bringing service to
> rural areas where costs are high and returns on investment
> low.[**(21)**](http://www.sba.gov/advo/laws/comments/#21)
>
> **b. Small ISPs Are Disproportionately Burdened by the Proposed
> Rule.**
>
> Out of all the entities identified as affected classes in the IRFA,
> small ISPs are the most significantly affected. Small ISPs, which
> constitute the majority of ISPs nationally, are dependent upon
> transport over wireline carriers\' facilities. An overwhelming number
> of ISPs have access arrangements with wireline carriers rather than
> cable providers,[**(22)**](http://www.sba.gov/advo/laws/comments/#22.)
> and 93 percent of all digital subscriber lines are provided by
> incumbent local
> carriers.[**(23)**](http://www.sba.gov/advo/laws/comments/#23.) As an
> ISP organization noted, a small ISP's options other than carriage on a
> wireline carrier\'s lines are virtually
> non-existent.[**(24)**](http://www.sba.gov/advo/laws/comments/#24.)
> Therefore, small ISPs are dependent on the incumbent wireline carriers
> to carry their
> signals.[**(25)**](http://www.sba.gov/advo/laws/comments/#25.) Even
> for small ISPs dealing mainly with the provision of broadband, the
> total reliance upon carriage over wireline carriers' facilities is
> undisputed.
>
> This dependence is born from 80 years of government-sanctioned
> monopoly that enabled incumbent wireline carriers to construct a
> pervasive network to almost every home and business in the nation.
> Such a network will take decades to replicate, if it is possible to
> replicate at all, considering changes in the regulatory environment
> and the reluctance of local communities to installing new wires. The
> \"last mile\" of the network, which extends from a home or business to
> the central office of the incumbent wireline carrier, is particularly
> difficult for small alternative carriers to replicate or bypass, which
> grants the incumbent carrier a near monopoly in residential areas and
> a substantial economic advantage in business districts.
>
> In the NPRM, the Commission appears to operate under the assumption
> that broadband is a completely separate service from voice telephone.
> Several commenters question this assumption, and claim that broadband
> is an extension of existing wireline telephony systems. One commenter
> states that no separate broadband network exists. Instead, wireline
> carriers are using the same copper structure that is used to carry
> voice telephony.[**(26)**](http://www.sba.gov/advo/laws/comments/#26)
> Another commenter states that the voice telephony market and the
> broadband market are inextricably joined and that recent broadband
> investments are just on-going upgrades to existing
> networks.[**(27)**](http://www.sba.gov/advo/laws/comments/#27)
>
> There is merit to both of these comments because wireline broadband is
> currently using last-mile physical structure. Small ISPs do not have
> an alternative when it comes to reaching their wireline broadband
> customers; they rely upon carriage over wireline carriers facilities,
> as detailed in Computer II and Computer III. If the Commission removes
> the requirements for local carriers to carry the broadband traffic of
> small ISPs, incumbent wireline carriers have significant economic
> reasons to stop doing so. Without that carriage, small ISPs will face
> a harsh economic future, as Internet service migrates from dial-up to
> broadband.
>
> Without the carriage requirement of Computer II and Computer III,
> control over the last mile gives wireline carriers an enormous
> bargaining advantage when dealing with ISPs, and the potential for
> discrimination by wireline carriers is a real concern. Small ISPs have
> no leverage and no alternatives but to take whatever deal is offered
> to them by the wireline carriers. As commenters noted, the potential
> for discrimination by the wireline carriers in the absence of the
> Computer II and Computer III safeguards is
> real,[**(28)**](http://www.sba.gov/advo/laws/comments/#28) and a
> different regulatory treatment for broadband would encourage wireline
> carriers to close their networks or engage in anti-competitive and
> supra-competitive
> pricing.[**(29)**](http://www.sba.gov/advo/laws/comments/#29)
>
> If the incumbent wireline carriers refuse to provide broadband access
> services to small ISPs, one commenter estimates the cost to small ISPs
> at \$8 billion in lost
> revenue.[**(30)**](http://www.sba.gov/advo/laws/comments/#30) Such a
> blow would cripple the ISP industry and force hundreds of small
> businesses into bankruptcy, further endangering the prospect of sound
> economic recovery. Furthermore, competition would be thwarted, as
> these small ISPs and other alternative providers are driven out of the
> marketplace.[**(31)**](http://www.sba.gov/advo/laws/comments/#31)
> Should small ISPs cease operating, the Internet access market will be
> controlled by a duopoly -- a wireline carrier monopolist that
> dominates in the provision of Internet services to businesses, and the
> cable monopolist that dominates in the provision of Internet services
> to residences.
>
> **c. Commission Should Analyze Impact of Reclassification on Small
> ISPs in a Revised IRFA and in the FRFA.**
>
> The IRFA did not address these issues described above nor analyze what
> the impact will be on 7,000 small ISPs. The Commission is proposing
> changes to the regulatory foundation for an entire industry, which
> will have a sweeping and dramatic impact on all small ISPs. The Office
> of Advocacy recommends that the Commission revise its IRFA to include
> an analysis of the impact that classifying wireline broadband Internet
> access service as an information service would have on small ISPs.
>
> If the FCC does not take the step of issuing a revised IRFA, Advocacy
> urges the Commission to analyze the issues raised by commenters in a
> FRFA when the final rule is
> adopted[**(32)**](http://www.sba.gov/advo/laws/comments/#32) and
> describe the steps that the agency has taken to minimize the costs on
> small businesses.[**(33)**](http://www.sba.gov/advo/laws/comments/#33)
> Specifically, the Commission should address the issues discussed above
> and explain what steps the FCC has taken to minimize the impact of a
> rule that could remove 7,000 small businesses from the broadband
> marketplace. If the Commission adopts the rule as proposed, it should
> explain how the rule serves the public interest, defined by the
> Commission in the NPRM as encouraging competition and broadband
> deployment, by removing small business from the marketplace.
>
> **3. Commission Should Consider Alternatives Less Burdensome to Small
> Businesses.**
>
> The RFA requires carriers to propose alternatives in the IRFA and to
> consider alternatives proposed by commenters in the
> FRFA.[**(34)**](http://www.sba.gov/advo/laws/comments/#34) After
> reviewing the comments, Advocacy recommends that the Commission
> consider and adopt the alternative proposed by commenters to encourage
> deployment of broadband by facilitating competition. The Commission
> can do this by classifying the transmission portion of broadband
> Internet service as a telecommunications service while the Internet
> service should be classified as an information service.
>
> **a. Facilitating Competition Will Encourage the Deployment of
> Broadband.**
>
> As stated by commenters, competition drives innovation, and it is
> competition that will drive the deployment of
> broadband.[**(35)**](http://www.sba.gov/advo/laws/comments/#35) This
> has been borne out time and again in the telecommunications field.
> Long distance service was revolutionized by the advent of competition.
> The costs of wireless telecommunications dropped and a myriad of
> services proliferated as more competitors entered the field. In the
> Internet field, it was the competitive forces of thousands of ISPs,
> many of them small, who brought the World Wide Web and e-mail to
> consumers. Many parts of rural America would still be without Internet
> access but for competitive forces that forced small ISPs to find niche
> markets.
>
> When there is a lack of competition, innovation stagnates, and so will
> the deployment of broadband. One commenter noted that wireline
> carriers delayed introduction of broadband until competition forced
> them to enter the
> market,[**(36)**](http://www.sba.gov/advo/laws/comments/#36) while
> another states that carriers will always choose to deploy broadband in
> areas where there is competition
> first.[**(37)**](http://www.sba.gov/advo/laws/comments/#37) Another
> commenter states that maintining the diversity of ISPs is the best way
> to ensure that there are broadband choices, as small ISPs will cater
> to the needs of niche broadband consumers, which will encourage
> deployment.[**(38)**](http://www.sba.gov/advo/laws/comments/#38)
>
> To maximize broadband deployment, there must be competition within the
> type of carriages as well as between types of transport. The
> Commission should not rely upon cable as the sole source of
> competition to wireline broadband, because cable is not a perfect
> substitute for wireline broadband. The physical plants do not
> generally overlap; cable dominates the residential broadband market,
> while wireline carriers dominate the business market and have a
> presence in every single home in the United
> States.[**(39)**](http://www.sba.gov/advo/laws/comments/#39)
>
> If the incumbent wireline carrier is the sole source for wireline
> broadband communications, large numbers of small business consumers
> will have a single choice for broadband Internet service and will
> likely face higher rates, more restricted service, and delays on
> deployment of broadband service. Because of the incentive structure
> faced by the incumbent wireline carrier, rural consumers, and
> consumers in low-density areas would have little chance of receiving
> broadband services. Deployment, then, becomes a classic case of
> \"cherry picking\" and is not consistent with the Commission's goals.
>
> **b. Broadband Internet Service Should Be Classified as Two Distinct
> Services.**
>
> Consistent with comments received by the FCC, Advocacy recommends that
> the Commission revisit its conclusion that broadband Internet access
> service is an information service.
> [**(40)**](http://www.sba.gov/advo/laws/comments/#40)In fact, we urge
> the Commission to classify the transmission of broadband signals as a
> telecommunications service, and the provision of Internet access
> service as an information service, as originally determined in
> Computer II and Computer III. By deciding that broadband Internet
> service consists of two distinct services, the Commission will
> minimize the disproportionate impact on small ISPs and will encourage
> competition in the broadband market, which will in turn encourage
> deployment of broadband as discussed above.
>
> Computer II and Computer III created a regulatory environment that
> allowed a new sector of business to grow and thrive. In those two
> rulemakings, the Commission declared that the provision of Internet
> service was an information service and that incumbent wireline
> carriers were required to provide carriage of signals to and from
> ISPs.[**(41)**](http://www.sba.gov/advo/laws/comments/#41) This
> allowed the ISP industry to blossom and thrive, because it did not
> burden them with unnecessary regulations, while at the same time
> allowing them to interconnect with the telephone network and access
> customers. If the carriage requirement was not there, it is unlikely
> that ISPs would have been able to interconnect and reach their
> customers. As one commenter warned, premature elimination of Computer
> II and Computer III carriage requirements will diminish the
> competition that currently
> exists.[**(42)**](http://www.sba.gov/advo/laws/comments/#42.)
>
> In addition, if the Commission finds that broadband Internet access is
> an information service, it raises the specter of regulatory
> gaming[**(43)**](http://www.sba.gov/advo/laws/comments/#43) by
> incumbent wireline carriers. Broadband networks do not distinguish
> between data or voice, and wireline carriers will have enormous
> incentive to avoid regulation by transmitting voice communications as
> broadband transmissions. This regulatory gaming would undermine many
> of the FCC's public interest goals, such as local competition and
> Universal Service. By categorizing the transmission component of
> broadband Internet service as a telecommunications service, the FCC
> can minimize regulatory gaming and promote greater
> competition.[**(44)**](http://www.sba.gov/advo/laws/comments/#44)
>
> **c. Swift and Proper Enforcement of Current Rules Will Encourage
> Broadband Deployment.**
>
> Several commenters raised the alternative that the Commission more
> stringently enforce the rules requiring carriage of Internet
> signals.[**(45)**](http://www.sba.gov/advo/laws/comments/#45) Because
> small ISPs are completely dependent upon wireline carriers to carry
> their signals due to difficulties in circumventing the last mile,
> these carriers have a tremendous economic advantage. Advocacy agrees
> with these commenters and recommends that the Commission consider
> alternatives proposed by the commenters. In order to ensure that
> competition thrives and the wireline carrier does not leverage its
> position, the Commission should mandate availability of broadband
> unbundled network elements and enforce its unbundling
> requirements.[**(46)**](http://www.sba.gov/advo/laws/comments/#46.) In
> addition, the Commission should ensure that ISPs are afforded just,
> reasonable, and non-discriminatory access to wireline transmission
> services as required by Computer II and Computer
> III.[**(47)**](http://www.sba.gov/advo/laws/comments/#47) Finally, the
> Commission should consider establishing an enforcement process for
> resolving ISP-related
> issues.[**(48)**](http://www.sba.gov/advo/laws/comments/#48)
>
> **4. Conclusion.**
>
> Deployment of broadband is squarely in the public interest. Broadband
> holds the promise of technological innovation, better communications,
> and bridging vast distances within our nation. Congress has recognized
> this and has mandated that the Commission should do all in its power
> to encourage broadband deployment.
>
> Regrettably, the rapid and universal deployment of broadband has been
> elusive. The recent economic slowdown in the technology sector has
> frustrated efforts to deploy service. In addition, the Internet has
> not yet reached the point where consumer demand for broadband drives
> deployment as rapidly and as universally as lawmakers and regulators
> would hope. It is coming, but it is coming slowly.
>
> When crafting regulation to encourage broadband deployment, the
> Commission should not overlook the impact that its actions will have
> on small businesses, particularly the thousands of small ISPs. The
> small ISPs have played a crucial role in bringing the Internet to the
> American public and are poised to play an equally crucial role in the
> deployment of broadband. The proposed rule's IRFA did not analyze the
> severe and disproportionate impact on small ISPs that classifying
> wireline broadband Internet access service as an information service
> would have. Advocacy urges the Commission to revise its IRFA to
> include an analysis of this impact.
>
> If the Commission declines to take this step, we encourage the
> Commission to analyze the issues raised by commenters in a FRFA. In
> particular, the Commission should consider the alternatives proposed
> by commenters. Advocacy particularly recommends that the Commission
> adopt the alternative proposed by commenters that would classify
> wireline broadband Internet access service as composed of two separate
> services -- the transmission of broadband signals as a
> telecommunications service, while the provision of Internet access
> service as an information service. This alternative will accomplish
> the Commission's regulatory goal of encouraging broadband deployment,
> while minimizing the disproportionate impact on small businesses.
>
> Thank you for your consideration of these matters, and please do not
> hesitate to contact me or Eric Menge of my staff at (202) 205-6933 or
> eric.menge@sba.gov if you have questions, comments, or concerns.
>
> Sincerely,
>
> Thomas M. Sullivan\
> Chief Counsel for Advocacy
>
> Eric E. Menge\
> Assistant Chief Counsel for Telecommunications
>
> Radwan Saade, Ph. D.\
> Regulatory Economist
>
> cc:Commissioner Kathleen Q. Abernathy\
> Commissioner Michael J. Copps\
> Commissioner Kevin J. Martin\
> William Maher, Chief, Wireline Competition Bureau\
> Carolyn Fleming Williams, Director, Office of Communications Business
> Opportunities\
> John D. Graham, Administrator, Office of Information and Regulatory
> Affairs, Office of\
> Management and Budget.
>
> ENDNOTES
>
> 1\. Pub. L. No. 96-354, 94 Stat. 1164 (1980) (codified at 5 U.S.C. §
> 601 et seq.) amended by Subtitle II of the Contract with America
> Advancement Act, Pub. L. No. 104-121, 110 Stat. 857 (1996). 5 U.S.C. §
> 612(a).
>
> 2\. *In the Matter of* Implementation of Subscriber Carrier Selection
> Changes Provisions of the Telecommunications Act of 1996 and Policies
> and Rules Concerning Unauthorized Changes of Consumers Long Distance
> Carriers, *Third Report and Order and Second Order on
> Reconsideration,* CC Dkt. No. 94-129, FCC 00-255 (rel. Aug. 15, 2000).
>
> 3\. NPRM at para. 9.
>
> 4\. *Id*. at para. 17.
>
> 5\. Pub. L. No. 94-305 (codified as amended at 15 U.S.C. §§ 634 a-g,
> 637).
>
> 6\. 15 U.S.C. § 634(c)(1)-(4).
>
> 7\. 5 U.S.C. § 601(4)-(5).
>
> 8\. *See generally*, Office of Advocacy, U.S. Small Business
> Administration, *The Regulatory Flexibility Act: An Implementation
> Guide for Federal Agencies*, 1998 (\"*Advocacy 1998 RFA Implementation
> Guide*\").
>
> 9\. 5 U.S.C. § 604.
>
> 10\. Exec. Order. No. 13272 § 1, 67 Fed. Reg. 53,461 (2002).
>
> 11\. *Id*. at § 2(c).
>
> 12\. *Id*. at § 3(c).
>
> 13\. Amendment of Section 64.702 of the Commissions Rules and
> Regulations, 77 FCC 2d 384 (1980)(\"Computer II\").
>
> 14\. *Amendment of the Section 64.702 of the Commission's Rules and
> Regulations (Computer III Phase I Order*), 104 FCC 2d 958 (1986)
> (\"Computer III\").
>
> 15\. NPRM at paras. 42-44.
>
> 16\. *Id*. at para 98.
>
> 17\. Comments of TeleTruth to the *Notice of Proposed Rulemaking* in
> CC Dkt. No. 02-33, p. 34, (May 3, 2002) (\"TeleTruth Comments\").
>
> 18\. NAICS #514191 (Online Information Services).
>
> 19\. \"Employer Firms and Employment by Employment Size of Firm by
> NAICS (1999) (last visited August 19, 2002)
> \<http://www.sba.gov/advo/stats/us99_n6.pdf\>. The SBA defines small
> \"Online Information Services\" as those businesses having \$18
> million or less in revenue in a year. The U.S. Census data is listed
> by number of employees. The only data based on revenue dates back to
> 1997, which will not capture the growth during the technological boom
> of the late 1990s. Therefore, we are utilizing the most recent data
> (1999) which is broken down by employment size.
>
> 20\. TeleTruth Comments at 35.
>
> 21\. *Id*. at 45; Comments of TDS, Telecommunications Corporation,
> Madison River Communications, and North Pittsburgh Systems, Inc. to
> the *Notice of Proposed Rulemaking* in CC Dkt. No. 02-33, at 15, (May
> 3, 2002) (\"TDS Comments\").
>
> 22\. Reply Comments of the High Tech Broadband Coalition to the
> *Notice of Proposed Rulemaking* in CC Dkt. No. 02-33, at 7 (May 3,
> 2002) (\"HTBC Reply Comments\").
>
> 23\. Reply Comments of the Ad Hoc Telecommunications Users Committee
> to the *Notice of Proposed Rulemaking* in CC Dkt. No. 02-33, at 17
> (May 3, 2002) (\"Ad Hoc Reply Comments\").
>
> 24\. Reply Comments of California Internet Service Providers Assoc. to
> the *Notice of Proposed Rulemaking* in CC Dkt. No. 02-33, at 23 (May
> 3, 2002) (\"Calif. ISPA Reply Comments\").
>
> 25\. TeleTruth Comments at 43.
>
> 26\. TDS Comments at 10.
>
> 27\. Calif. ISPA Reply Comments at 29.
>
> 28\. Calif. ISPA Reply Comments at 16; HTBC Reply Comments at i.
>
> 29\. TDS Comments at 12; Ad Hoc Reply Comments at ii.
>
> 30\. TeleTruth Comments at 46.
>
> 31\. TDS Comments at 2.
>
> 32\. 5 U.S.C. §. 604(a)(2).
>
> 33\. *Id*. at § 604(a)(5).
>
> 34\. 5 U.S.C. § 603(c); 5 U.S.C. § 604 (a)(5).
>
> 35\. TDS Comments at 7; Comments of AOL Time Warner, Inc. to the
> *Notice of Proposed Rulemaking* in CC Dkt. No. 02-33, at 23 (May 3,
> 2002) (\"AOL Comments\").
>
> 36\. Calif. ISPA Reply Comments at 7.
>
> 37\. TDS Comments at 7.
>
> 38\. AOL Comments at 23.
>
> 39\. Calif. ISPA Reply Comments at 25-6; Ad Hoc Reply Comments at 7.
>
> 40\. New York Dept. of Public Service, p. 3 Comments of New York State
> Dept. of Public Service to the *Notice of Proposed Rulemaking* in CC
> Dkt. No. 02-33, at 3 (May 3, 2002); TDS Comments at 14; AOL Comments
> at 3.
>
> 41\. *See* Computer II and Computer III, *supra* notes 13 and 14.
>
> 42\. Ad Hoc Reply Comments at 9.
>
> 43\. Regulatory gaming is defined as using regulations in a manner in
> which they were not intended to gain a competitive advantage.
>
> 44\. TDS Comments at 14.
>
> 45\. TDS Comments at 8; HTBC Reply Comments at 12; AOL Comments at 21.
>
> 46\. TDS Comments at 8.
>
> 47\. AOL Comments at 14.
>
> 48\. *Id*. at 31.