**Before the**

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | WC Docket No. 08-190         |
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| Service Quality, Customer        | ) | WC Docket No. 07-139         |
| Satisfaction, Infrastructure and | * |                              |
| Operating Data Gathering         | * | WC Docket No. 07-204         |
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| Petition of AT&T Inc. for        | * | WC Docket No. 07-273         |
| Forbearance                      | * |                              |
|                                  | ) | WC Docket No. 07-21          |
| Under 47 U.S.C. § 160(c) From    | * |                              |
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| Enforcement of Certain of the    |   |                              |
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| ARMIS Reporting Requirements     | ) |                              |
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| Petition of Qwest Corporation    | * |                              |
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| Reporting Requirements Pursuant  | * |                              |
| to 47                            | * |                              |
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| U.S.C. § 160(c)                  | * |                              |
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| 47 U.S.C. § 160(c) From          | * |                              |
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| Petition of Frontier and         |   |                              |
| Citizens ILECs                   | * |                              |
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| for Forbearance Under 47 U.S.C.  | ) |                              |
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| Under 47 U.S.C. § 160(c) From    | * |                              |
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| Under 47 U.S.C. § 160 From       | ) |                              |
| Enforcement                      | * |                              |
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| of Certain of the Commission's   |   |                              |
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+----------------------------------+---+------------------------------+

**MEMORANDUM OPINION AND ORDER AND NOTICE OF PROPOSED RULEMAKING**

**Adopted: September 6, 2008 Released: September 6, 2008**

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

**Reply Comment Date: (60 days after publication in the Federal
Register)**

**By the Commission: ** Chairman Martin and Commissioners Tate and
McDowell issuing separate statements; Commissioners Copps and Adelstein
approving in part, concurring in part, dissenting in part, and issuing
separate statements.

Table of Contents

Para.

I. Introduction 1

II\. Background 2

III\. Memorandum opinion and order 7

A. Charges, Practices, Classifications and Regulations 8

B. Protection of Consumers 10

C. Public Interest 16

D. Class of Carriers 22

E. Cost Assignment Forbearance 23

IV\. NOTICE OF PROPOSED RULEMAKING 33

V. procedural matters 37

A. Initial Regulatory Flexibility Analysis 37

B. Ex Parte Presentations 38

C. Comment Filing Procedures 39

D. Paperwork Reduction Act 44

E. Congressional Review Act 45

F. Accessible Formats 46

G. Contact Persons 47

VI\. EFFECTIVE DATE 48

VI\. ORDERING
CLAUSES..........................................................................................49

APPENDIX A -- Summary of Relevant ARMIS Reports

APPENDIX B -- List of Commenters

APPENDIX C -- Initial Regulatory Flexibility Analysis

# Introduction

1.  In this Order, we grant significant forbearance from carriers'
    obligation to file Automated Reporting Management Information System
    (ARMIS) Reports 43-05, 43-06, 43-07, and 43-08 (collectively, the
    "ARMIS service quality and infrastructure reports"). In particular,
    with certain limited exceptions, we find that the section 10
    criteria are met for the ARMIS service quality and infrastructure
    reports, subject to certain conditions. Therefore, we grant certain
    conditional forbearance with respect to all carriers currently
    subject to those reporting requirements. We also recognize, however,
    that the Commission has continually sought to ensure that it has
    access to the data necessary for its public safety and broadband
    policymaking, and that certain infrastructure and operating data
    might be useful, but only if collected on an industry-wide basis. We
    therefore seek comment on whether such data should be collected from
    all relevant providers in furtherance of those goals. In addition,
    certain service quality and customer satisfaction data might be
    useful, but only if collected on an industry-wide basis. Therefore,
    we seek comment on whether the Commission should collect such data
    on an industry-wide basis. Finally, we extend to Verizon and Qwest
    the conditional forbearance granted to AT&T in the *AT&T Cost
    Assignment Forbearance Order*.

# Background

2.  In 1990, the Commission shifted to a price cap regulation system for
    the larger incumbent LECs.[^1] Price caps is a form of incentive
    regulation that seeks to "harness the profit-making incentives
    common to all businesses to produce a set of outcomes that advance
    the public interest goals of just, reasonable, and nondiscriminatory
    rates, as well as a communications system that offers innovative,
    high quality services."[^2] In the *Price Cap Order*, the Commission
    established certain ARMIS reports[^3] in order to monitor two
    potential concerns raised by price cap regulation: first, that
    carriers might lower quality of service, instead of being more
    productive, in order to increase short term profits;[^4] and second,
    that carriers might not spend money on infrastructure
    development.[^5] In response to these possibilities, the Commission
    created ARMIS reports that would serve as "safety nets" and provide
    the Commission and the states with information to determine whether
    the Commission's and the states' regulatory goals concerning quality
    of service were being met.[^6] The Commission adopted ARMIS Reports
    43-05 and 43-06 to collect service quality and customer satisfaction
    information. Although the Commission found that it had authority to
    impose service quality standards, it declined to do so because it
    "might impinge upon state efforts in that area."[^7] In addition,
    ARMIS Reports 43-07 and 43-08 were established to collect
    infrastructure and operating data. In adopting those new ARMIS
    infrastructure reports, the Commission found that information on
    plant in service is a good indicator of investment in service
    quality.[^8]

3.  In its *2000 Biennial Service Quality NPRM*, the Commission proposed
    to eliminate the bulk of ARMIS Report 43-05, reducing more than 30
    categories of information collected through that report down to
    six.[^9] The *2000 Biennial Service Quality NPRM* also invited
    comment on eliminating ARMIS Report 43-06 completely. The Commission
    stated that "\[a\]ctual complaint information may be a better
    indicator of trends in service quality than" the surveys reported
    through ARMIS Report 43-06.[^10]

4.  In 2001, as part of another series of decisions revising and
    streamlining ARMIS reporting requirements, the Commission's *Phase 2
    Order* removed ARMIS Report 43-07 reporting requirements that were
    "redundant or that have clearly outlived their usefulness."[^11] The
    *Phase 2 Order* also reduced the scope of ARMIS Report 43-08 by
    removing reporting requirements that were no longer relevant to any
    policy analysis.[^12] In the accompanying *Phase 3 FNPRM*, the
    Commission sought comment on whether to retain the ARMIS reporting
    requirements, including alternatives to current reporting
    requirements.[^13] The Commission also "encourage\[d\] our state
    colleagues to consider alternative sources of such information at
    the state level."[^14] The Commission observed that "\[t\]here may
    well come a time in the relatively near future when we conclude that
    there is no ongoing federal need to maintain these requirements at
    the federal level."[^15]

5.  On June 8, 2007, AT&T filed a petition[^16] for forbearance from
    Commission rules that require carriers to file four ARMIS
    Reports: (1) ARMIS Report 43-05 Service Quality; (2) ARMIS Report
    43-06 Customer Satisfaction; (3) ARMIS Report 43-07 Infrastructure;
    and (4) ARMIS Report 43-08 Operating Data.[^17] AT&T contends that
    these ARMIS reports no longer fulfill their original purpose, nor is
    there otherwise any current federal need for those ARMIS data.[^18]
    In particular, AT&T observes that these ARMIS reports are collected
    from only a discrete subset of the industry.[^19] Thus, AT&T asserts
    that, to the extent that there is a possible federal need for
    certain data, they should be collected on an industry‑wide basis,
    rather than through the current ARMIS service quality and
    infrastructure reports.[^20]

6.  In addition, on April 24, 2008, we conditionally granted AT&T's
    petitions for forbearance[^21] from the Cost Assignment Rules.[^22]
    The grant was expressly conditioned on, among other things, the
    Wireline Competition Bureau's (Bureau) approval of a compliance plan
    to be filed by AT&T describing in detail how it will continue to
    fulfill its statutory and regulatory obligations.[^23] On May 23,
    2008, Verizon, on behalf of itself and Qwest, requested that the
    Commission grant the same forbearance to Verizon and Qwest.[^24]
    Those parties have raised the issue of the overlap between the ARMIS
    requirements at issue in AT&T's ARMIS forbearance petition and the
    cost assignment relief previously granted to AT&T.[^25]

# memorandum opinion and order

7.  In this Order, we grant in significant part AT&T's petition for
    forbearance from the ARMIS service quality and infrastructure
    reporting requirements, subject to certain conditions. In addition,
    we find that the conclusions underlying our forbearance decision for
    AT&T also hold true for the other carriers required to file ARMIS
    Reports 43-05, 43-06, 43-07, and 43-08. Therefore, consistent with
    section 10, we extend the conditional forbearance from those ARMIS
    reports to all carriers required to file them under our rules.
    Further, we take this opportunity to extend to Verizon and Qwest the
    conditional forbearance granted to AT&T in the *AT&T Cost Assignment
    Forbearance Order*.

## Charges, Practices, Classifications and Regulations

8.  We find that the ARMIS service quality and infrastructure reporting
    requirements are not "necessary to ensure that the charges,
    practices, classifications or regulations by, for, or in connection
    with that telecommunications carrier . . . are just and reasonable
    and are not unjustly or unreasonably discriminatory" under section
    10(a)(1).[^26] We agree with the petitioners that ARMIS Reports
    43-05, 43‑06, 43-07, and 43-08 were not originally designed to
    ensure that carriers' rates, terms, and conditions were just and
    reasonable or not unjustly or unreasonably discriminatory.[^27]
    These ARMIS reports were adopted to monitor the "theoretical
    concern" that price cap carriers might reduce service quality or
    network investment to increase short-term profits, rather than being
    designed to address the rates, terms, and conditions under which
    carriers offered their services.[^28] Moreover, these incumbent
    LECs' rates, terms, and conditions remain generally subject to
    dominant carrier pricing and tariffing regulation, which will be
    unaffected by any forbearance here.[^29] Thus, we do not find these
    ARMIS reports necessary today to ensure that carriers' charges,
    practices, classifications or regulations are just and reasonable
    and are not unjustly or unreasonably discriminatory.[^30]

9.  We reject the generalized assertion that forbearance is not
    warranted because the service quality reports are necessary for
    states to ensure just and reasonably‑priced services.[^31] For
    example, the California Commission states that it eliminated
    California-specific monitoring reports on the basis that it would
    largely rely on ARMIS reports instead.[^32] It asserts that it
    intended to rely on the ARMIS reports "as part of its monitoring
    program to ensure that the competitive market is functioning well
    and customers will receive good quality at just and
    reasonably-priced services."[^33] However, the California Commission
    does not explain how the specific ARMIS reports at issue here could
    be used to ensure just and reasonable rates. Moreover, the
    Commission recently concluded that it "\[does\] not have authority
    under sections 2(a) and 10 of the Act to maintain federal regulatory
    requirements that meet the three-prong forbearance test with regard
    to interstate services in order to maintain regulatory burdens that
    may produce information helpful to state commissions for intrastate
    regulatory purposes solely."[^34] We emphasize that nothing we do
    today preempts the ability of any state commission to exercise its
    own state authority as permitted under state law,[^35] and the
    record indicates that numerous states continue to take action to
    address service quality as they deem appropriate.[^36] Indeed, in
    2001 the Commission "encourage\[d\] our state colleagues to consider
    alternative sources of such information at the state level" because
    "\[t\]here may well come a time in the relatively near future when
    we conclude that there is no ongoing federal need to maintain these
    requirements at the federal level."[^37]

## Protection of Consumers

10. Section 10(a)(2) of the Act requires the Commission to determine
    whether continued enforcement of these filing requirements is
    necessary to protect consumers.[^38] We recognize that consumer
    protection was behind much of the original intent for requiring
    disclosure of service quality and infrastructure investment
    information through these ARMIS reports.[^39]

11. With respect to all the ARMIS reports at issue here, we recognize
    that the current partial and uneven data collection hinder their
    usefulness as a federal consumer protection tool as the data
    collections are structured today.[^40] As an initial matter, the
    Commission does not use the data to enforce federal service quality
    rules, declining to "impinge upon state efforts in that area."[^41]
    Nor do the data enable comparison among competitors or allow
    evaluation of the industry as a whole.[^42] Only certain large
    incumbent LECs file the ARMIS service quality and infrastructure
    reports at issue here. As the petitioners observe, the Commission
    does not impose such requirements on cable companies, wireless
    providers, or other competitive telecommunications carriers, nor
    even on other incumbent LECs.[^43] In addition, the current
    reporting requirements may exclude the activities of parent
    companies or non-telecommunications affiliates of those entities
    that do file ARMIS reports.[^44] Reporting of that information thus
    is a function of how the particular company has chosen to structure
    its operations, and does not necessarily provide a complete picture
    of the activities of the reporting company.

12. With respect to service quality and customer satisfaction data of
    the sort collected through ARMIS Reports 43-05 and 43-06, we
    recognize the potential for such information to help consumers make
    informed choices in a competitive market. We find, however, that to
    make truly informed choices, consumers would need to have the
    relevant service quality information from all of the relevant
    providers. Consequently, we seek comment in the Notice of Proposed
    Rulemaking below regarding whether to initiate such an industry-wide
    data collection. We note that the reporting carriers have committed
    to continue collecting service quality and customer satisfaction
    data, and to filing those data publicly through ARMIS Report 43-05
    and 43-06 filings for twenty four months from the effective date of
    this order.[^45] This will ensure continuity with regard to the
    service quality and customer satisfaction data that the Commission
    has collected up to this point, and afford the Commission a
    reasonable period of time to consider whether to adopt such
    industry-wide reporting requirements. We therefore adopt that as a
    condition of our forbearance here. We grant the same forbearance
    relief to any similarly situated carriers who make that same
    commitment, and make clear that the relief we grant today is not
    otherwise conditional. We recognize that the reporting carriers'
    commitments here are time limited, and that we cannot extend such
    commitments or impose any further conditions on the relief granted
    today. Any future changes to these reporting requirements will be
    made in the context of the NPRM herein or some other appropriate
    Commission proceeding.

13. We also recognize the presence of other safeguards and sources of
    information that help protect consumers.[^46] For example, the
    Commission requires all communications providers (not just a subset
    of incumbent LECs) to file outage reports.[^47] Additionally, the
    Commission recently adopted significant refinements to its
    industry-wide broadband and local competition data collections.[^48]
    In addition, when the Commission last sought comment on ARMIS Report
    43-06 under the biennial review standard,[^49] it observed that
    "\[a\]ctual complaint information may be a better indicator of
    trends in service quality than" the surveys reported through ARMIS
    Report 43-06.[^50] We note that the Commission will continue to
    collect such complaint information notwithstanding the forbearance
    granted here.[^51] Moreover, the three regional Bell Operating
    Companies (BOCs) are subject to quarterly special access performance
    reporting.[^52] Also, as noted above, states remain free to adopt
    their own reporting requirements and service quality standards, as
    many already have done today.

14. We reject the argument that the ARMIS service quality and
    infrastructure reports are necessary because states may rely on them
    for state consumer protection activities.[^53] As the Commission
    held in the *Cost Assignment Forbearance Order* and as noted above,
    the Commission "\[does\] not have authority under sections 2(a) and
    10 of the Act to maintain federal regulatory requirements that meet
    the three-prong forbearance test with regard to interstate services
    in order to maintain regulatory burdens that may produce information
    helpful to state commissions for intrastate regulatory purposes
    solely."[^54] Any interest by state commissions or other groups in
    comparing intrastate service quality between states, or within a
    state between carriers, does not create a federal need, and nothing
    we do today prevents state commissions from exercising their state
    authority to seek any relevant information, or from standardizing
    their data collections with each other.[^55]

15. We also reject the assertions of some commenters that the
    Commission's reliance on ARMIS data for the compilation of certain
    reports demonstrates that the continued collection of these data is
    necessary to protect consumers.[^56] Commenters do not identify any
    statutory or other regulatory mandate to include the data at issue
    in these Commission's reports.[^57] Nor do they provide evidence
    demonstrating why the inclusion of ARMIS data in these reports is
    necessary to protect consumers, particularly given the limitations
    of these ARMIS data, as well as the alternative data discussed
    above. Under these circumstances, we do not find that the optional
    inclusion of these data in Commission reports makes them necessary
    for the protection of consumers under section 10(a)(2).

## Public Interest

16. Under the public interest analysis of section 10(a)(3), we again
    reach different conclusions for the service quality and customer
    satisfaction reports (ARMIS Reports 43-05 and 43-06) than we do for
    the infrastructure and operating data reports (ARMIS Reports 43-07
    and 43-08).

17. *ARMIS Reports 43-05 and 43-06.* With respect to the service quality
    and customer satisfaction reports, we conclude that forbearance is
    in the public interest pursuant to section 10(a)(3).[^58] As
    discussed above, subject to certain conditions, we find that the
    criteria of section 10(a)(1) and (a)(2) are satisfied. Given the
    burdens associated with the data reporting, and in light of the
    commitments of the reporting carriers, and other continuing
    regulatory requirements, we find forbearance to be in the public
    interest.

18. *ARMIS Reports 43-07 and 43-08.* We find that the ARMIS Report 43-07
    and 43-08 data do not currently advance the consumer protection
    goals for which they originally were adopted.

19. However, we also identify certain discrete components of ARMIS
    Report 43-08 that are currently used in the furtherance of ongoing
    federal regulatory requirements. First, we note that the data in
    ARMIS Report 43-08, Table III, columns FC, FD, and FE collect
    business line count information used in the non-impairment
    thresholds for the Commission's unbundling rules.[^59] We deny
    forbearance with respect to these data in light of this continuing
    federal need. Indeed, in apparent recognition of this federal need,
    we note that Qwest expressly excludes those reporting requirements
    from the scope of its forbearance request.[^60]

20. Second, certain other ARMIS Report 43-08 data currently are needed
    under the Commission's universal service rules. Sections 54.807(b)
    and (c) of the Commission's rules require the Universal Service
    Administration Corporation (USAC) to use switched access lines
    derived ultimately from ARMIS Report 43-08 to calculate growth in
    access lines as part of the formula for determining interstate
    access support (IAS).[^61] Specifically, the data come from ARMIS
    Report 43-08, Table III, column FI. Thus, we likewise find that
    forbearance from reporting these data would not be in the public
    interest, and we deny such relief.[^62]

21. We find conditional forbearance with respect to the remaining ARMIS
    Report 43-07 and 43-08 reporting requirements warranted under the
    criteria of section 10. For the same reasons described above in the
    context of ARMIS Reports 43-05 and 43-06, it is generally not in the
    public interest to continue to impose the remaining ARMIS Report
    43-07 and 43-08 reporting obligations on a subset of providers. We
    recognize, however, that the remaining ARMIS Report 43-07 and 43-08
    data could be useful to the Commission's policymaking and oversight
    efforts relating to public safety[^63] and broadband
    deployment,[^64] but only if collected on an industry-wide basis.
    Consequently, we seek comment on whether to adopt industry-wide data
    collection requirements in the Notice of Proposed Rulemaking below.
    We also recognize the loss of continuity in the data that could
    result upon a grant of forbearance, if the Commission subsequently
    imposes the reporting obligations on the entire industry. We note
    that the reporting carriers have committed to collect and retain
    these data internally for twenty four months from the effective date
    of this order.[^65] That gives the Commission a reasonable period of
    time to consider whether to adopt such industry-wide reporting
    requirements. We therefore adopt that as a condition of our
    forbearance here. We grant the same forbearance relief to any
    similarly situated carriers who make that same commitment, and make
    clear that the relief we grant today is not otherwise conditional.
    We recognize that the reporting carriers' commitments here are time
    limited, and that we cannot extend such commitments or impose any
    further conditions on the relief granted today. Any future changes
    to these reporting requirements will be made in the context of the
    NPRM herein or some other appropriate Commission proceeding.

## Class of Carriers

22. Section 10 provides for forbearance from "applying any regulation or
    any provision of the Act to a telecommunications carrier or
    telecommunications service, or *class of telecommunications carriers
    or telecommunications services*" if the Commission determines that
    the regulation at issue satisfies section 10's three-prong
    test.[^66] The Commission's reasoning, described above, is not
    specific to the characteristics of individual reporting carriers or
    to particular geographic areas. We thus conclude that the relevant
    "class" here, for purposes of section 10, includes all carriers
    required to file ARMIS Reports 43-05, 43-06, 43-07, and 43-08. Thus,
    consistent with the Commission's approach in the past, and subject
    to the conditions set forth herein, we extend our forbearance to all
    such carriers.[^67]

## Cost Assignment Forbearance

23. In this proceeding, parties have raised the issue of the overlap
    between the ARMIS requirements at issue here and certain cost
    assignment relief previously granted to AT&T.[^68] Because we find
    that the reasoning of the *AT&T Cost Assignment Forbearance Order*
    applies equally to Verizon and Qwest, we therefore take the
    opportunity, on our own motion, to extend to them the conditional
    forbearance granted in the *AT&T Cost Assignment Forbearance Order*.

### Background

24. On April 24, 2008, we conditionally granted AT&T's petitions for
    forbearance[^69] from the Cost Assignment Rules[^70] because we
    concluded that there is no current, federal need for the Cost
    Assignment Rules, as they apply to AT&T, to ensure that charges and
    practices are just, reasonable, and not unjustly or unreasonably
    discriminatory; to protect consumers; and to ensure the public
    interest.[^71] The grant was expressly conditioned on, among other
    things, the Wireline Competition Bureau's (Bureau) approval of a
    compliance plan to be filed by AT&T describing in detail how it will
    continue to fulfill its statutory and regulatory obligations.[^72]

25. On May 23, 2008, Verizon, on behalf of itself and Qwest, requested
    that the Commission grant the same forbearance to Verizon and
    Qwest.[^73] On June 6, 2008, the Commission released a Public Notice
    seeking comment on the issues raised in the Verizon/Qwest
    Request.[^74] That Public Notice was published in the Federal
    Register on June 12, 2008.[^75] Comments on the Verizon/Qwest
    Request were due June 26, 2008, and reply comments were due July 7,
    2008.[^76]

### Discussion

26. In this Order, we forbear, on our own motion, pursuant to section 10
    of the Act, from the application of the Cost Assignment Rules to
    Verizon and Qwest, subject to conditions. As discussed above, we
    previously granted AT&T's petitions for forbearance from the Cost
    Assignment Rules, subject to conditions, because we found that AT&T,
    as a price cap carrier generally not subject to rate-of-return
    regulation, had demonstrated that forbearance from enforcing the
    Cost Assignment Rules satisfies the standard for forbearance under
    section 10 of the Act.[^77] An integral part of the
    "pro-competitive, de-regulatory national policy framework"[^78]
    established in the Act is the requirement, set forth in section 10,
    that the Commission forbear from applying any provision of the Act,
    or any of the Commission's regulations, if the Commission makes
    certain findings with respect to such provisions or
    regulations.[^79] Specifically, the Commission shall forbear from
    any statutory provision or regulation if it determines that
    (1) enforcement of the regulation is not necessary to ensure that
    charges and practices are just, reasonable, and not unjustly or
    unreasonably discriminatory; (2) enforcement of the regulation is
    not necessary to protect consumers; and (3) forbearance is
    consistent with the public interest.[^80] In making such
    determinations, the Commission also must consider pursuant to
    section 10(b) "whether forbearance from enforcing the provision or
    regulation will promote competitive market conditions."[^81]

27. We now find that the reasoning of the *AT&T Cost Assignment
    Forbearance Order* applies equally to Verizon and Qwest and
    therefore, pursuant to section 10, we forbear from application of
    the Cost Assignment Rules to these carriers. In this Order, we
    extend to Verizon and Qwest forbearance from the Cost Assignment
    Rules to the same extent granted AT&T in the *AT&T Cost Assignment
    Forbearance Order* and subject to the same conditions.[^82] Like
    AT&T, Verizon and Qwest are price cap carriers currently subject to
    the Cost Assignment Rules, which were developed at a time when the
    LECs' interstate rates and many of their intrastate rates were set
    under rate-based, cost-of-service regulation. We find that the three
    forbearance criteria are satisfied with regard to the Cost
    Assignment Rules to the extent that Verizon and Qwest comply with
    the conditions we set forth. Specifically, we conclude that there is
    no current, federal need for the Cost Assignment Rules, as they
    apply to Verizon and Qwest, to ensure that charges and practices are
    just, reasonable, and not unjustly or unreasonably discriminatory;
    to protect consumers; and to ensure the public interest.[^83]

28. Although we find in this Order that forbearance from the Cost
    Assignment Rules as they apply to Verizon and Qwest likewise
    satisfies the three-prong test under section 10, just as with AT&T,
    we conclude that this test is only satisfied to the extent that they
    comply with conditions we impose here. Because we cannot conclude
    here that the Commission will never have any need for accounting
    data from Verizon and Qwest in the future, we condition this
    forbearance on, among other things, the provision by Verizon or
    Qwest of accounting data on request by the Commission for regulatory
    purposes, consistent with the Commission's statutory authority.[^84]
    These conditions mitigate factors that would otherwise lead us to
    conclude that these rules remain necessary to ensure that charges
    and practices are just, reasonable, and not unjustly or unreasonably
    discriminatory; to protect consumers; and to ensure the public
    interest.[^85]

29. We note that opponents of the forbearance we grant here to Verizon
    and Qwest largely raise the same arguments that we have already
    addressed in the context of the *AT&T Cost Assignment Forbearance
    Order*.[^86] For the reasons discussed in detail in that order, we
    affirm our reasoning and analysis in the *AT&T Cost Assignment
    Forbearance Order* with regard to those issues.

30. We acknowledge that Verizon and Qwest, unlike AT&T, receive some
    rural high-cost support funding.[^87] Unlike the non-rural support
    mechanism, rural high-cost support is cost-based so the Commission
    would need cost-assignment data for those regions in which Verizon
    and Qwest receive rural high-cost support. We conclude, however,
    that any cost allocation or cost assignment issues relating to
    Verizon's and Qwest's support can be resolved in the compliance
    plans that must be filed by each carrier and approved by the Bureau
    as a condition of forbearance.[^88]

31. We also recognize that Verizon and Qwest, unlike AT&T, have
    operating companies regulated on a rate-of-return basis on the state
    level.[^89] Under the analysis of the *AT&T Cost Assignment
    Forbearance Order*, however, state rate-of-return regulation does
    not preclude forbearance from the federal Cost Assignment Rules. As
    we held in that order, and reaffirmed above, the Commission does not
    have authority under sections 2(a) and 10 of the Act to maintain
    federal regulatory requirements that meet the three-prong
    forbearance test with regard to interstate services in order to
    maintain regulatory burdens that may produce information helpful to
    state commissions solely for intrastate regulatory purposes, such as
    for use in state rate-of-return regulation.[^90] We further conclude
    that these rules as applied to Verizon and Qwest, price cap carriers
    generally not subject to interstate rate-of-return regulation, are
    not routinely needed to ensure that interstate charges and practices
    are just, reasonable, and not unjustly or unreasonably
    discriminatory. Thus, as we held in the *AT&T Cost Assignment
    Forbearance Order*, because there is no current, federal need for
    the Cost Assignment Rules in these circumstances and because the
    section 10 criteria otherwise are met, we find that it would be
    beyond the Commission's authority to maintain these onerous
    regulatory requirements for Verizon and Qwest.[^91] As in the *AT&T
    Cost Assignment Forbearance Order*, we recognize that state
    commissions may exercise their own state authority to conduct their
    rate and other regulation as permitted under state law.[^92] We
    emphasize that we do not in this Order preempt any state accounting
    requirements adopted under state authority.

32. For the reasons discussed above, we extend the forbearance relief
    granted to AT&T in the *AT&T Cost Assignment Forbearance Order* to
    Verizon and Qwest, subject to the conditions described herein.

# notice of proposed rulemaking

33. As discussed above, we find that significant forbearance from the
    existing ARMIS service quality and infrastructure reporting
    requirements is warranted pursuant to section 10 of the Act, subject
    to certain conditions. However, we recognize that collection of
    certain of that information might be warranted, if tailored in scope
    to be consistent with Commission objectives, and if obtained from
    the entire relevant industry of providers of broadband and
    telecommunications. Therefore, we seek comment on whether and how
    the Commission should collect such data on an industry-wide
    basis.[^93]

34. *Scope of Information Collected.* First, we seek comment on what
    information the Commission should collect on an industry-wide basis.
    Specifically, as discussed above, the Commission denied forbearance
    with respect to certain ARMIS Report 43-08 information. In addition,
    the Commission conditioned its grant of forbearance for ARMIS Report
    43-07 and 43-08 on the reporting carriers maintaining their data for
    twenty four months from the effective date of this order. We
    tentatively conclude that collection of information of this type
    would be useful to the Commission's public safety and broadband
    policymaking, and seek comment on the specific information that we
    should collect. We seek comment on this tentative conclusion. We
    find, moreover, that these data would be useful only if they are
    collected from the entire relevant industry. Therefore, any such
    data collection would gather this information from all
    facilities-based providers of broadband and/or telecommunications.

35. We also recognize the possibility that service quality and customer
    satisfaction data contained in ARMIS Reports 43-05 and 43-06 might
    be useful to consumers to help them make informed choices in a
    competitive market, but only if available from the entire relevant
    industry. We thus tentatively conclude that we should collect this
    type of information, and seek comment on the specific information
    that we should collect. We seek comment on this tentative
    conclusion. Again, we find that these data would be useful only if
    they are collected from the entire relevant industry. Thus, any such
    data collection would gather this information from all
    facilities-based providers of broadband and/or telecommunications.

36. *Mechanism for Collecting Information.* To the extent that the
    Commission collects any of the types of information described above,
    we also seek comment on the appropriate mechanism for such data
    collection. We tentatively conclude that the Commission should
    collect the infrastructure and operating data through Form 477, and
    seek comment on that tentative conclusion. In addition, we note that
    while ARMIS information generally has been publicly available,
    carrier-specific Form 477 data is treated as confidential. What
    confidentiality protections, if any, are appropriate for the
    information here? To the extent that commenters support Commission
    collection of service quality and customer satisfaction data, we
    also seek comment on the appropriate mechanisms for such
    collections. Finally, we seek comment on possible methods for
    reporting information, as well as suggestions of methods to maintain
    and report the information, that achieve the purposes of the
    information collection while minimizing the burden on reporting
    entities, including small entities.

# Procedural matters

## Initial Regulatory Flexibility Analysis

37. Pursuant to the Regulatory Flexibility Act ("RFA"),[^94] the
    Commission has prepared an Initial Regulatory Flexibility Analysis
    ("IRFA") for the Notice of Proposed Rulemaking for the possible
    significant economic impact on small entities by the policies and
    actions considered in this Notice. The text of the IRFA is set forth
    in Appendix C.

## Ex Parte Presentations

38. This proceeding shall be treated as a "permit-but-disclose"
    proceeding in accordance with the Commission\'s ex parte rules.[^95]
    Persons making oral ex parte presentations are reminded that
    memoranda summarizing the presentations must contain summaries of
    the substance of the presentations and not merely a listing of the
    subjects discussed. More than a one or two sentence description of
    the views and arguments presented is generally required.[^96] Other
    rules pertaining to oral and written presentations are set forth in
    section 1.1206(b) of the Commission\'s rules as well.

## Comment Filing Procedures

39. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47
    CFR §§ 1.415, 1.419, interested parties may file comments and reply
    comments on or before the dates indicated on the first page of this
    document. Comments may be filed using: (1) the Commission's
    Electronic Comment Filing System (ECFS), (2) the Federal
    Government's eRulemaking Portal, or (3) by filing paper copies. *See
    Electronic Filing of Documents in Rulemaking Proceedings*, 63 FR
    24121 (1998).

-   Electronic Filers: Comments may be filed electronically using the
    Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ or the
    Federal eRulemaking Portal: http://www.regulations.gov. Filers
    should follow the instructions provided on the website for
    submitting comments.

    -   For ECFS filers, if multiple docket or rulemaking numbers appear
        in the caption of this proceeding, filers must transmit one
        electronic copy of the comments for each docket or rulemaking
        number referenced in the caption. In completing the transmittal
        screen, filers 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, filers should send
        an e-mail to ecfs@fcc.gov, and include the following words in
        the body of the message, "get form." A sample form and
        directions will be sent in response.

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-   Paper Filers: 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 appears in the caption of this proceeding, filers
    must submit two additional copies for each additional docket or
    rulemaking number referenced. Filings can be sent by hand or
    messenger delivery, 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). All filings must be addressed to the Commission's Secretary,
    Office of the Secretary, Federal Communications Commission.

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-   The Commission's contractor will receive hand-delivered or
    messenger-delivered paper filings for the Commission's Secretary at
    236 Massachusetts Avenue, NE, Suite 110, Washington, DC 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]{.underline} entering the
    building.

-   Commercial 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, Express, and Priority mail must be
    addressed to 445 12^th^ Street, SW, Washington DC 20554.

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-   People with Disabilities: 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),
    202-418-0432 (tty).

40. Comments and reply comments and any other filed documents in this
    matter may be obtained from Best Copy and Printing, Inc., in person
    at 445 12th Street, S.W., Room CY-B402, Washington, D.C. 20554, via
    telephone at (202) 488-5300, via facsimile (202) 488-5563, or via
    e-mail at FCC@BCPIWEB.COM. The pleadings also will be available for
    public inspection and copying during regular business hours in the
    FCC Reference Information Center, Room CY-A257, 445 Twelfth Street,
    S.W., Washington, D.C. 20554 and through the ECFS, accessible on the
    Commission\'s World Wide Website, http://www.fcc.gov/cgb/ecfs.

41. In addition to filing comments with the Secretary, a copy of any
    Paperwork Reduction Act (PRA) comments on the information
    collection(s) contained herein should be submitted to Judith B.
    Herman, Federal Communications Commission, Room 1-C804, 445 12th
    Street, S.W., Washington, D.C. 20554, or via the Internet to
    Judith-B.Herman@fcc.gov, and to Kristy L. LaLonde, OMB Desk Officer,
    Room 10234 NEOB, 725 17th Street, N.W., Washington, D.C. 20503 via
    the Internet to Kristy_L.\_LaLonde@omb.eop.gov or by fax to (202)
    395-5167.

42. Comments and reply comments must include a short and concise summary
    of the substantive arguments raised in the pleading. Comments and
    reply comments also must comply with section 1.49 and all other
    applicable sections of the Commission\'s rules.[^97] All parties are
    encouraged to utilize a table of contents, and to include the name
    of the filing party and the date of the filing on each page of their
    submission. We also strongly encourage that parties track the
    organization set forth in this Notice in order to facilitate our
    internal review process.

43. Commenters who file information that they believe is proprietary may
    request confidential treatment pursuant to section 0.459 of the
    Commission\'s rules. Commenters should file both their original
    comments for which they request confidentiality and redacted
    comments, along with their request for confidential treatment.
    Commenters should not file proprietary information electronically.
    *See* *Examination of Current Policy Concerning the Treatment of
    Confidential Information Submitted to the Commission,* Report and
    Order, 13 FCC Rcd 24816 (1998), Order on Reconsideration, FCC
    99-262, 14 FCC Rcd 20128 (1999). Even if the Commission grants
    confidential treatment, information that does not fall within a
    specific exemption pursuant to the Freedom of Information Act
    ("FOIA") must be publicly disclosed pursuant to an appropriate
    request. *See* 47 C.F.R. § 0.461; 5 U.S.C. § 552. We note that the
    Commission may grant requests for confidential treatment either
    conditionally or unconditionally. As such, we note that the
    Commission has the discretion to release information on public
    interest grounds that does fall within the scope of a FOIA
    exemption.

## Paperwork Reduction Act

44. The Notice of Proposed Rulemaking contains proposed new and modified
    information collection requirements. The Commission, as part of its
    continuing effort to reduce paperwork burdens, invites the general
    public and the Office of Management and Budget to comment on the
    information collection requirements contained in this document, as
    required by the Paperwork Reduction Act of 1995, Public Law 104-13.
    In addition, pursuant to the Small Business Paperwork Relief Act of
    2002, Public Law No. 107-198, *see* 44 U.S.C. § 3506(c)(4), we seek
    specific comment on how we might "further reduce the information
    collection burden for small business concerns with fewer than 25
    employees."

## Congressional Review Act

45. The Commission will include a copy of this Notice in a report to be
    sent to Congress and the Government Accountability Office pursuant
    to the Congressional Review Act. *See* 5 U.S.C. § 801(a)(1)(A).

## Accessible Formats

46. 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).
    Contact the FCC to request reasonable accommodations for filing
    comments (accessible format documents, sign language interpreters,
    CART, etc.) by e‑mail: FCC504@fcc.gov; phone: 202-418-0530 or TTY:
    202-418-0432.

## Contact Persons

47. For further information about this rulemaking proceeding, please
    contact Jeremy Miller, Industry Analysis and Technology Division,
    Wireline Competition Bureau at (202) 418-0940.

# EFFECTIVE DATE

48. Consistent with section 10 of the Act and our rules, this Order
    shall be effective on September 6, 2008.[^98] The time for appeal
    shall run from the release date of this Order.

# ORDERING CLAUSES

49. Accordingly, IT IS ORDERED that, pursuant to sections 1-5, 10, 11,
    201-205, 211, 215, 218-220, 251-271, 303(r), 332, 403, 502, and 503
    of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-155,
    160, 161, 201-205, 211, 215, 218-220, 251-271, 303(r), 332, 403,
    502, and 503, and section 706 of the Telecommunications Act of 1996,
    47 U.S.C. § 157 nt, this Memorandum Opinion and Order and Notice of
    Proposed Rulemaking IS ADOPTED.

50. IT IS FURTHER ORDERED that, pursuant to sections 10(c) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 160(c), the
    Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160 (c) From
    Enforcement of Certain of the Commission's ARMIS Reporting
    Requirements IS GRANTED, subject to conditions, to the extent
    described herein, and otherwise IS DENIED.

51. IT IS FURTHER ORDERED that, pursuant to sections 10(c) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 160(c), the
    Petition of Qwest Corporation for Forbearance from Enforcement of
    the Commission's ARMIS and 492A Reporting Requirements Pursuant to
    47 U.S.C. § 160(c), IS GRANTED, subject to conditions, to the extent
    described herein.

52. IT IS FURTHER ORDERED that, pursuant to sections 10(c) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 160(c), the
    Petition of the Embarq Local Operating Companies for Forbearance
    Under 47 U.S.C. § 160(c) From Enforcement of Certain of ARMIS
    Reporting Requirements IS GRANTED, subject to conditions, to the
    extent described herein, and otherwise IS DENIED.

53. IT IS FURTHER ORDERED that, pursuant to sections 10(c) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 160(c), the
    Petition of Frontier and Citizens ILECs For Forbearance Under 47
    U.S.C. § 160(c) From Enforcement of Certain of the Commission's
    ARMIS Reporting Requirements IS GRANTED, subject to conditions, to
    the extent described herein, and otherwise IS DENIED.

54. IT IS FURTHER ORDERED that, pursuant to sections 10(c) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 160(c), the
    Petition of Verizon For Forbearance Under 47 U.S.C. § 160(c) From
    Enforcement of Certain of the Commission's Recordkeeping and
    Reporting Requirements, IS GRANTED, subject to conditions, to the
    extent described herein.

55. IT IS FURTHER ORDERED that, pursuant to sections 10(c) and 220 of
    the Communications Act of 1934, as amended, 47 U.S.C. §§ 160(c),
    220, forbearance from applying or enforcing the Cost Assignment
    Rules for Verizon and Qwest IS GRANTED, on the Commission's own
    motion, subject to conditions, to the extent described herein.

56. IT IS FURTHER ORDERED that, pursuant to section 10 of the
    Communications Act of 1934, as amended, 47 U.S.C. § 160, and section
    1.103(a) of the Commission's rules, 47 C.F.R. § 1.103(a), that the
    Commission's Memorandum Opinion and Order SHALL BE EFFECTIVE on
    September 6, 2008. Pursuant to sections 1.4 and 1.13 of the
    Commission's rules, 47 C.F.R. §§ 1.4, 1.13, the time for appeal
    SHALL RUN from the release date of this Memorandum Opinion and
    Order.

57. IT IS FURTHER ORDERED, pursuant to sections 1.103(a) and 1.427(b) of
    the Commission's rules, 47 C.F.R. §§ 1.103(a), 1.427(b), that this
    Notice of Proposed Rulemaking SHALL BE EFFECTIVE 30 days after
    publication of notice of the Notice in the FEDERAL REGISTER.

58. IT IS FURTHER ORDERED that the Commission's Consumer and
    Governmental Affairs Bureau, Reference Information Center, SHALL
    SEND a copy of this Memorandum Opinion and Order and Notice of
    Proposed Rulemaking, 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**

    **Summary of Relevant ARMIS Reports**

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1.  *ARMIS Report No. 43-05 (Service Quality).* ARMIS Report No. 43-05
    provides information on the quality of service of the network,
    pursuant to section 43-21(g) of the Commission's rules. Report 43‑05
    is filed by all price cap incumbent LECS (both mandatory[^99] and
    elective) at the study area and holding company levels.[^100] The
    report contains the following tables:

-   Table I Installation and Repair Intervals for access customers
    (*e.g.*, switched access, high‑speed access and other special
    access)

-   Table II Installation and Repair Intervals for business and
    residential local service

-   Table III Common Trunk Blocking Statistics

-   Table IV Total Switch Downtime covering number of switches, switches
    with downtime, scheduled and unscheduled downtime for occurrences
    under two minutes

-   Table IV-A Occurrences of Two or More Minutes Duration

-   Table IV Service Quality Complaints by MSA and non-MSA

59. *ARMIS Report No. 43-06 (Customer Satisfaction).* ARMIS Report No.
    43-06 provides the results of customer satisfaction surveys on
    residential, small business and large business customers' service
    experience under price-cap regulations, pursuant to section 43-21(h)
    of the Commission's rules. Specifically, this report contains the
    number of customers surveyed and the percentage that are
    dissatisfied with various aspects of the reporting carrier's
    service. Report 43-06 is filed by all mandatory price cap ILECs at
    study area and holding company levels.[^101]

60. *ARMIS Report No. 43-07 (Infrastructure).* ARMIS Report No. 43-07
    provides data regarding the switching and transmission
    infrastructure of the reporting carrier, pursuant to section
    43-21(i) of the Commission's rules. Report 43-07 is filed by all
    mandatory price cap ILECs at the study area and holding company
    levels.[^102] The report contains the following two tables:

-   Table I Switching Equipment provides quantities of local switches
    according to type, *e.g*., electromechanical or digital stored
    program control, and by capability, *e.g*., equal access and ISDN.
    Table I also provides counts of access lines served by the various
    switch types and capabilities.

-   Table II Transmission Facilities contains information on interoffice
    facilities and loop plant, with categories for copper, fiber, analog
    and digital carrier, and radio technologies.

61. *ARMIS Report No. 43-08 (Operating Data).* ARMIS Report No. 43-08
    provides operating data about the public network, pursuant to
    section 43-21(j) of the Commission's rules. Report 43-08 is filed by
    all Class A ILECs (large and mid-sized)[^103] at the operating
    company level.[^104] The report contains the following tables:

-   Table I.A - Outside Plant Statistics - Cable and Wire Facilities
    contains various cable and wire facility statistics by state.

-   Table I.B - Outside Plant Statistics - Other contains various
    outside plant statistics.

-   Table II - Switched Access Lines in Service contains counts of
    central office switches and switched access line statistics by
    state.

-   Table III - Switched Access Lines in Service by Customer contains
    switched and special access line statistics by state.

-   Table IV - Telephone Calls contains telephone call statistics by
    state.

    **APPENDIX B**

**List of Commenters**

**[WC Docket No. 07-139 (AT&T Inc. Petition)]{.underline}**

**[Commenter]{.underline} [Abbreviation]{.underline}**

AT&T Corp. AT&T

California Public Utilities Commission and California

People of the State of California

Communications Workers of America CWA

Cincinnati Bell Telephone Company LLC Cincinnati Bell

Embarq Local Operating Companies Embarq

Michigan Public Service Commission Michigan PSC

National Association of State Utility Consumer Advocates NASUCA

New Jersey Division of Rate Counsel New Jersey Rate Counsel

Public Utility Commission of Texas Texas PUC

United States Telecom Association USTA

**[WC Docket No. 07-204 (Petitions filed by Embarq, Frontier, and
Qwest)]{.underline}**

**[Commenter]{.underline} [Abbreviation]{.underline}**

AT&T Corp. AT&T

BT Americas Inc. BT Americas

California Public Utilities Commission and California

People of the State of California

CenturyTel, Inc. CenturyTel

Colorado Office of Consumer Counsel Colorado Consumer

Colorado Public Utilities Commission Colorado PUC

CompTel CompTel

Embarq Local Operating Companies Embarq

Frontier and Citizens ILECs Frontier

Integra Telecommunications, Inc.

New Jersey Division of Rate Counsel New Jersey of Rate Counsel

Pennsylvania Public Utility Commission Pennsylvania PUC

Qwest Corporation Qwest

Sprint Nextel Corporation Sprint Nextel

Time Warner Telecom Inc. Time Warner

Telecom

Verizon Communications Inc. Verizon

Washington Utilities and Transportation Commission Washington

**[WC Docket No. 07-273 (Verizon Communications Inc.
Petition)]{.underline}**

**[Commenter]{.underline} [Abbreviation]{.underline}**

AT&T Corp. AT&T

AdHoc Telecommunications Users Committee AdHoc

California Public Utilities Commission and California

People of the State of California

Michigan Public Service Commission Michigan PSC

New Jersey Division of Rate Counsel New Jersey Rate Counsel

New York Department of Public Service New York

Pennsylvania Public Utility Commission Pennsylvania PUC

Sprint Nextel Corporation Sprint Nextel

Time Warner Telecom Inc. Time Warner

Telecom

Verizon Communications Inc. Verizon

Washington Utilities and Transportation Commission Washington

Wisconsin Public Utilities Commission Wisconsin PUC

**[WC Docket No. 07-21 (Request of Verizon and Qwest to Extend
Forbearance Relief from Cost Assignment Rules)]{.underline}**

**[Commenter]{.underline}                                                                                        
[Abbreviation]{.underline}**

Ad Hoc Telecommunications Users Committee              
                        Ad Hoc

Embarq Corporation
                                                                            
Embarq

Frontier Communications

National Association of State Utility Consumer Advocates
                      NASUCA

New Jersey Division of Rate Counsel
                                                    New Jersey Rate
Counsel

New York State Public Service Commission
                                          New York Commission

Qwest Corporation
                                                                              
Qwest

Sprint Nextel Corporation, COMPTEL, T-Mobile USA, Inc.,                 
Sprint Nextel *et al.*

> tw telecom inc.,[^105]^1\]^ and One Communications Corp.

Verizon Communications Inc. Verizon
                                                                                               

^\[1\]^ Time Warner Telecom Inc. amended its Certificate of
Incorporation effective March 12, 2008 to change its name to tw telecom
inc. in preparation for a broader name change that will be effective
July 1, 2008.  The company continued to use and be known as Time Warner
Telecom Inc., its trade name, until July 1, 2008.  *See* Sprint Nextel
*et al.* Petition for Reconsideration.

**APPENDIX C**

**Initial Regulatory Flexibility Analysis**

1.  As required by the Regulatory Flexibility Act of 1980, as amended
    (RFA),[^106] the Commission has prepared the present Initial
    Regulatory Flexibility Analysis (IRFA) of the possible significant
    economic impact on small entities that might result from today's
    Notice of Proposed Rulemaking (Notice). Written public comments are
    requested on this IRFA. Comments must be identified as responses to
    the IRFA and must be filed by the deadlines for comments on the
    Notice provided above. The Commission will send a copy of the
    Notice, including this IRFA, to the Chief Counsel for Advocacy of
    the Small Business Administration.[^107] In addition, the Notice and
    IRFA (or summaries thereof) will be published in the Federal
    Register.[^108]

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

In the Notice, the Commission considers whether to implement reporting
requirements relating to service quality and infrastructure information.
Specifically, the Commission seeks comment on whether to impose
reporting requirements previously required through ARMIS Reports 43-05,
43-06, 43-07 and 43-08, or similar requirements. The Commission also
seeks comment on the scope of entities that should be required to report
such information, if it is collected, and the mechanism for collecting
that information. In addition, the Notice seeks comment on the
appropriate confidentiality protections for such information. For each
of these issues, the Commission also seeks comment on the burdens,
including those placed on small entities, associated with possible
Commission data collection and whether there are alternative rules that
might lessen any burden.

## Legal Basis

The legal basis for any action that may be taken pursuant to the Notice
is contained in sections 1-5, 10, 11, 201-205, 215, 218-220, 251-271,
303(r), 332, 403, 502, and 503 of the Communications Act of 1934, as
amended, 47 U.S.C. §§ 151-155, 160, 161, 201-205, 215, 218-220, 251-271,
303(r), 332, 403, 502, and 503, and section 706 of the
Telecommunications Act of 1996, 47 U.S.C. § 157 nt.

> **C. Description and Estimate of the Number of Small Entities to Which
> the Rules Will Apply**

62. 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 rules adopted herein.[^109] The RFA generally
    defines the term "small entity" as having the same meaning as the
    terms "small business," "small organization," and "small
    governmental jurisdiction."[^110] In addition, the term "small
    business" has the same meaning as the term "small business concern"
    under the Small Business Act.[^111] 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 Small Business Administration
    (SBA).[^112]

63. *Incumbent Local Exchange Carriers (ILECs)*. Neither the Commission
    nor the SBA has developed a size standard for small businesses
    specifically applicable to incumbent local exchange services. 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.[^113]
    According to Commission data,[^114] 1,307 carriers reported that
    they were engaged in the provision of local exchange services. Of
    these 1,307 carriers, an estimated 1,019 have 1,500 or fewer
    employees and 288 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 action.

64. Competitive Local Exchange Carriers (CLECs), Competitive Access
    Providers (CAPs), "Shared-Tenant Service Providers," 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.[^115] According to Commission data,[^116] 859 carriers
    reported that they were engaged in the provision of either
    competitive local exchange carrier or competitive access provider
    services. Of these 859 carriers, an estimated 741 have 1,500 or
    fewer employees and 118 have more than 1,500 employees.[^117] In
    addition, 16 carriers have reported that they are "Shared-Tenant
    Service Providers," and all 16 are estimated to have 1,500 or fewer
    employees. In addition, 44 carriers have reported that they are
    "Other Local Service Providers." Of the 44, an estimated 43 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,
    "Shared-Tenant Service Providers," and "Other Local Service
    Providers" are small entities that may be affected by our action.

65. 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."[^118] 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.[^119] 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.

66. *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.[^120] According to Commission data,[^121] 184
    carriers have reported that they are engaged in the provision of
    local resale services. Of these, an estimated 181 have 1,500 or
    fewer employees and three 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 action.

67. *Toll 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.[^122] According to Commission data,[^123] 881
    carriers have reported that they are engaged in the provision of
    toll resale services. Of these, an estimated 853 have 1,500 or fewer
    employees and 28 have more than 1,500 employees. Consequently, the
    Commission estimates that the majority of toll resellers are small
    entities that may be affected by our action.

68. *Payphone Service Providers (PSPs)*. Neither the Commission nor the
    SBA has developed a small business size standard specifically for
    payphone services 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.[^124] According to Commission data,[^125] 657
    carriers have reported that they are engaged in the provision of
    payphone services. Of these, an estimated 653 have 1,500 or fewer
    employees and four have more than 1,500 employees. Consequently, the
    Commission estimates that the majority of payphone service providers
    are small entities that may be affected by our action.

69. *Interexchange Carriers (IXCs)*. Neither the Commission nor the SBA
    has developed a size standard for small businesses specifically
    applicable to interexchange services. 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.[^126] According to Commission data,[^127] 330
    companies reported that their primary telecommunications service
    activity was the provision of interexchange services. Of these 330
    companies, an estimated 309 have 1,500 or fewer employees and 21
    have more than 1,500 employees.[^128] Consequently, the Commission
    estimates that the majority of interexchange service providers are
    small entities that may be affected by our action.

70. *Operator Service Providers (OSPs)*. 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.[^129] According to Commission data,[^130] 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 action.

71. *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.[^131] According to Commission data,[^132] 104
    carriers have reported that they are engaged in the provision of
    prepaid calling cards. Of these, an estimated 102 have 1,500 or
    fewer employees and two have 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 action.

72. *800 and 800-Like Service Subscribers*.[^133] Neither the Commission
    nor the SBA has developed a small business size standard
    specifically for 800 and 800-like service ("toll free") subscribers.
    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.[^134] The most
    reliable source of information regarding the number of these service
    subscribers appears to be data the Commission collects on the 800,
    888, 877, and 866 numbers in use.[^135] According to our data, at
    the beginning of July 2006, the number of 800 numbers assigned was
    7,647,941; the number of 888 numbers assigned was 5,318,667; the
    number of 877 numbers assigned was 4,431,162; and the number of 866
    numbers assigned was 6,008,976. We do not have data specifying the
    number of these subscribers that are not independently owned and
    operated or have more than 1,500 employees, and thus are unable at
    this time to estimate with greater precision the number of toll free
    subscribers that would qualify as small businesses under the SBA
    size standard. Consequently, we estimate that there are 7,647,941 or
    fewer small entity 800 subscribers; 5,318,667 or fewer small entity
    888 subscribers; 4,431,162 or fewer small entity 877 subscribers;
    and 5,318,667 or fewer small entity 866 subscribers.

### Wireless Carriers and Service Providers

Below, for those services subject to auctions, we note that, as a
general matter, the number of winning bidders that qualify as small
businesses at the close of an auction does not necessarily represent the
number of small businesses currently in service. Also, the Commission
does not generally track subsequent business size unless, in the context
of assignments or transfers, unjust enrichment issues are implicated.

*Wireless Telecommunications Carriers (except Satellite*). Since 2007,
the SBA has recognized wireless firms within this new, broad, economic
census category.[^136] Because there is not, as yet, much if any data to
establish small business size standards for the different categories of
wireless firms that fall under this broad, new census category, we will
use data gathered under superseded census categories to estimate the
relevant size standards. Prior to 2007, the SBA had developed a small
business size standard for wireless firms within the now-superseded
census categories of "Paging" and "Cellular and Other Wireless
Telecommunications."[^137] Under the present and prior categories, the
SBA has deemed a wireless business to be small if it has 1,500 or fewer
employees. Because Census Bureau data are not yet available for the new
category, we will estimate small business prevalence using the prior
categories and associated data. For the first category of Paging, data
for 2002 show that there were 807 firms that operated for the entire
year.[^138] Of this total, 804 firms had employment of 999 or fewer
employees, and three firms had employment of 1,000 employees or
more.[^139] For the second category of Cellular and Other Wireless
Telecommunications, data for 2002 show that there were 1,397 firms that
operated for the entire year.[^140] Of this total, 1,378 firms had
employment of 999 or fewer employees, and 19 firms had employment of
1,000 employees or more.[^141] Thus, using the prior categories and the
available data, we estimate that the majority of wireless firms can be
considered small. According to Commission data, 432 carriers reported
that they were engaged in the provision of cellular service, Personal
Communications Service (PCS), or Specialized Mobile Radio (SMR)
Telephony services, which are placed together in the data.[^142] We have
estimated that 221 of these are small, under the SBA small business size
standard.[^143] Thus, under this category and size standard, about half
of firms can be considered small. This information is also included in
paragraph 23.

*Common Carrier Paging.* The SBA has developed a small business size
standard for the superseded category of "Paging," under which a business
is small if it has 1,500 or fewer employees.[^144] According to
Commission data,[^145] 365 carriers have reported that they are engaged
in Paging or Messaging Service. Of these, an estimated 360 have 1,500 or
fewer employees, and 5 have more than 1,500 employees. Consequently, the
Commission estimates that the majority of paging providers are small
entities that may be affected by our action. In addition, in the Paging
*Third Report and Order*, we developed a small business size standard
for "small businesses" and "very small businesses" for purposes of
determining their eligibility for special provisions such as bidding
credits and installment payments.[^146] 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. Additionally, a "very small business" is an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than \$3 million for the preceding
three years.[^147] The SBA has approved these small business size
standards.[^148] An auction of Metropolitan Economic Area licenses
commenced on February 24, 2000, and closed on March 2, 2000.[^149] Of
the 985 licenses auctioned, 440 were sold. Fifty-seven companies
claiming small business status won.

*Wireless Communications Services*. This service can be used for fixed,
mobile, radiolocation, and digital audio broadcasting satellite uses.
The Commission established small business size standards for the
wireless communications services (WCS) auction. A "small business" is an
entity with average gross revenues of \$40 million for each of the three
preceding years, and a "very small business" is an entity with average
gross revenues of \$15 million for each of the three preceding years.
The SBA has approved these small business size standards.[^150] The
Commission auctioned geographic area licenses in the WCS service. In the
auction, held in April 1997, there were seven winning bidders that
qualified as "very small business" entities, and one that qualified as a
"small business" entity.

*Wireless Telephony*. Wireless telephony includes cellular, personal
communications services (PCS), and specialized mobile radio (SMR)
telephony carriers. As noted earlier, the SBA has developed a small
business size standard for the superseded census category of "Cellular
and Other Wireless Telecommunications" services.[^151] Under that SBA
small business size standard, a business is small if it has 1,500 or
fewer employees.[^152] According to Commission data, 432 carriers
reported that they were engaged in the provision of wireless
telephony.[^153] We have estimated that 221 of these are small under the
SBA small business size standard.

*Broadband Personal Communications Service.* The broadband Personal
Communications Service (PCS) spectrum is divided into six frequency
blocks designated A through F, and the Commission has held auctions for
each block. The Commission defined "small entity" for Blocks C and F as
an entity that has average gross revenues of \$40 million or less in the
three previous calendar years.[^154] For Block F, an additional
classification for "very small business" was added and is defined as an
entity that, together with its affiliates, has average gross revenues of
not more than \$15 million for the preceding three calendar
years."[^155] These standards defining "small entity" in the context of
broadband PCS auctions have been approved by the SBA.[^156] No small
businesses, within the SBA-approved small business size standards bid
successfully for licenses in Blocks A and B. There were 90 winning
bidders that qualified as small entities in the Block C auctions. A
total of 93 small and very small business bidders won approximately 40
percent of the 1,479 licenses for Blocks D, E, and F.[^157] On March 23,
1999, the Commission re-auctioned 347 C, D, E, and F Block licenses.
There were 48 small business winning bidders. On January 26, 2001, the
Commission completed the auction of 422 C and F Broadband PCS licenses
in Auction No. 35. Of the 35 winning bidders in this auction, 29
qualified as "small" or "very small" businesses. Subsequent events,
concerning Auction 35, including judicial and agency determinations,
resulted in a total of 163 C and F Block licenses being available for
grant.

*Narrowband Personal Communications Services.* To date, two auctions of
narrowband personal communications services (PCS) licenses have been
conducted. For purposes of the two auctions that have already been held,
"small businesses" were entities with average gross revenues for the
prior three calendar years of \$40 million or less. Through these
auctions, the Commission has awarded a total of 41 licenses, out of
which 11 were obtained by small businesses. To ensure meaningful
participation of small business entities in future auctions, the
Commission has adopted a two-tiered small business size standard in the
*Narrowband PCS Second Report and Order*.[^158] 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. 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. The SBA has
approved these small business size standards.[^159] In the future, the
Commission will auction 459 licenses to serve Metropolitan Trading Areas
(MTAs) and 408 response channel licenses. There is also one megahertz of
narrowband PCS spectrum that has been held in reserve and that the
Commission has not yet decided to release for licensing. The Commission
cannot predict accurately the number of licenses that will be awarded to
small entities in future actions. However, four of the 16 winning
bidders in the two previous narrowband PCS auctions were small
businesses, as that term was defined under the Commission's Rules. The
Commission assumes, for purposes of this analysis, that a large portion
of the remaining narrowband PCS licenses will be awarded to small
entities. The Commission also assumes that at least some small
businesses will acquire narrowband PCS licenses by means of the
Commission's partitioning and disaggregation rules.

*220 MHz Radio Service -- Phase I Licensees.* The 220 MHz service has
both Phase I and Phase II licenses. Phase I licensing was conducted by
lotteries in 1992 and 1993. There are approximately 1,515 such
non-nationwide licensees and four nationwide licensees currently
authorized to operate in the 220 MHz band. The Commission has not
developed a small business size standard for small entities specifically
applicable to such incumbent 220 MHz Phase I licensees. To estimate the
number of such licensees that are small businesses, we apply the small
business size standard under the SBA rules applicable to "Cellular and
Other Wireless Telecommunications" companies. Under this category, the
SBA deems a wireless business to be small if it has 1,500 or fewer
employees. [^160] The Commission estimates that nearly all such
licensees are small businesses under the SBA's small business size
standard.

*220 MHz Radio Service -- Phase II Licensees.* The 220 MHz service has
both Phase I and Phase II licenses. The Phase II 220 MHz service is a
new service, and is subject to spectrum auctions. In the *220 MHz Third
Report and Order*, we adopted a small business size standard for "small"
and "very small" businesses for purposes of determining their
eligibility for special provisions such as bidding credits and
installment payments.[^161] This small business size standard indicates
that 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.[^162] A "very small
business" is an entity that, together with its affiliates and
controlling principals, has average gross revenues that do not exceed
\$3 million for the preceding three years. The SBA has approved these
small business size standards.[^163] Auctions of Phase II licenses
commenced on September 15, 1998, and closed on October 22, 1998.[^164]
In the first auction, 908 licenses were auctioned in three
different-sized geographic areas: three nationwide licenses, 30 Regional
Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) Licenses.
Of the 908 licenses auctioned, 693 were sold. Thirty-nine small
businesses won licenses in the first 220 MHz auction. The second auction
included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen
companies claiming small business status won 158 licenses.[^165]

*800 MHz and 900 MHz Specialized Mobile Radio Licenses.* The Commission
awards "small entity" and "very small entity" bidding credits in
auctions for Specialized Mobile Radio (SMR) geographic area licenses in
the 800 MHz and 900 MHz bands to firms that had revenues of no more than
\$15 million in each of the three previous calendar years, or that had
revenues of no more than \$3 million in each of the previous calendar
years, respectively.[^166] These bidding credits apply to SMR providers
in the 800 MHz and 900 MHz bands that either hold geographic area
licenses or have obtained extended implementation authorizations. The
Commission does not know how many firms provide 800 MHz or 900 MHz
geographic area SMR service pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of
no more than \$15 million. One firm has over \$15 million in revenues.
The Commission assumes, for purposes here, that all of the remaining
existing extended implementation authorizations are held by small
entities, as that term is defined by the SBA. The Commission has held
auctions for geographic area licenses in the 800 MHz and 900 MHz SMR
bands. There were 60 winning bidders that qualified as small or very
small entities in the 900 MHz SMR auctions. Of the 1,020 licenses won in
the 900 MHz auction, bidders qualifying as small or very small entities
won 263 licenses. In the 800 MHz auction, 38 of the 524 licenses won
were won by small and very small entities.

*700 MHz Guard Band Licensees.* In the *700 MHz Guard Band Order*, we
adopted a small business size standard for "small businesses" and "very
small businesses" for purposes of determining their eligibility for
special provisions such as bidding credits and installment
payments.[^167] A "small business" as an entity that, together with its
affiliates and controlling principals, has average gross revenues not
exceeding \$15 million for the preceding three years. Additionally, a
"very small business" is an entity that, together with its affiliates
and controlling principals, has average gross revenues that are not more
than \$3 million for the preceding three years. An auction of 52 Major
Economic Area (MEA) licenses commenced on September 6, 2000, and closed
on September 21, 2000.[^168] Of the 104 licenses auctioned, 96 licenses
were sold to nine bidders. Five of these bidders were small businesses
that won a total of 26 licenses. A second auction of 700 MHz Guard Band
licenses commenced on February 13, 2001 and closed on February 21, 2001.
All eight of the licenses auctioned were sold to three bidders. One of
these bidders was a small business that won a total of two
licenses.[^169]

*Rural Radiotelephone Service.* The Commission has not adopted a size
standard for small businesses specific to the Rural Radiotelephone
Service.[^170] A significant subset of the Rural Radiotelephone Service
is the Basic Exchange Telephone Radio System (BETRS).[^171] The
Commission uses the SBA's small business size standard applicable to
"Cellular and Other Wireless Telecommunications," *i.e.*, an entity
employing no more than 1,500 persons.[^172] There are approximately
1,000 licensees in the Rural Radiotelephone Service, and the Commission
estimates that there are 1,000 or fewer small entity licensees in the
Rural Radiotelephone Service that may be affected by the rules and
policies adopted herein.

*Air-Ground Radiotelephone Service.* The Commission has not adopted a
small business size standard specific to the Air-Ground Radiotelephone
Service.[^173] We will use SBA's small business size standard applicable
to "Cellular and Other Wireless Telecommunications," *i.e.*, an entity
employing no more than 1,500 persons.[^174] There are approximately 100
licensees in the Air-Ground Radiotelephone Service, and we estimate that
almost all of them qualify as small under the SBA small business size
standard.

*Aviation and Marine Radio Services.* Small businesses in the aviation
and marine radio services use a very high frequency (VHF) marine or
aircraft radio and, as appropriate, an emergency position-indicating
radio beacon (and/or radar) or an emergency locator transmitter. The
Commission has not developed a small business size standard specifically
applicable to these small businesses. For purposes of this analysis, the
Commission uses the SBA small business size standard for the category
"Cellular and Other Telecommunications," which is 1,500 or fewer
employees.[^175] Most applicants for recreational licenses are
individuals. Approximately 581,000 ship station licensees and 131,000
aircraft station licensees operate domestically and are not subject to
the radio carriage requirements of any statute or treaty. For purposes
of our evaluations in this analysis, we estimate that there are up to
approximately 712,000 licensees that are small businesses (or
individuals) under the SBA standard. In addition, between December 3,
1998 and December 14, 1998, the Commission held an auction of 42 VHF
Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and
161.775-162.0125 MHz (coast transmit) bands. For purposes of the
auction, the Commission defined a "small" business as an entity that,
together with controlling interests and affiliates, has average gross
revenues for the preceding three years not to exceed \$15 million
dollars. In addition, a "very small" business is one that, together with
controlling interests and affiliates, has average gross revenues for the
preceding three years not to exceed \$3 million dollars.[^176] There are
approximately 10,672 licensees in the Marine Coast Service, and the
Commission estimates that almost all of them qualify as "small"
businesses under the above special small business size standards.

*Fixed Microwave Services.* Fixed microwave services include common
carrier,[^177] private operational-fixed,[^178] and broadcast auxiliary
radio services.[^179] At present, there are approximately 22,015 common
carrier fixed licensees and 61,670 private operational-fixed licensees
and broadcast auxiliary radio licensees in the microwave services. The
Commission has not created a size standard for a small business
specifically with respect to fixed microwave services. For purposes of
this analysis, the Commission uses the SBA small business size standard
for the category "Cellular and Other Telecommunications," which is 1,500
or fewer employees.[^180] The Commission does not have data specifying
the number of these licensees that have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of fixed microwave service licensees that would qualify as small
business concerns under the SBA's small business size standard.
Consequently, the Commission estimates that there are up to 22,015
common carrier fixed licensees and up to 61,670 private
operational-fixed licensees and broadcast auxiliary radio licensees in
the microwave services that may be small and may be affected by the
rules and policies adopted herein. We noted, however, that the common
carrier microwave fixed licensee category includes some large entities.

*Offshore Radiotelephone Service.* This service operates on several UHF
television broadcast channels that are not used for television
broadcasting in the coastal areas of states bordering the Gulf of
Mexico.[^181] There are presently approximately 55 licensees in this
service. We are unable to estimate at this time the number of licensees
that would qualify as small under the SBA's small business size standard
for "Cellular and Other Wireless Telecommunications" services.[^182]
Under that SBA small business size standard, a business is small if it
has 1,500 or fewer employees.[^183]

*39 GHz Service.* The Commission created a special small business size
standard for 39 GHz licenses -- an entity that has average gross
revenues of \$40 million or less in the three previous calendar
years.[^184] An additional size standard for "very small business" is:
an entity that, together with affiliates, has average gross revenues of
not more than \$15 million for the preceding three calendar years.[^185]
The SBA has approved these small business size standards.[^186] The
auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed
on May 8, 2000. The 18 bidders who claimed small business status won 849
licenses. Consequently, the Commission estimates that 18 or fewer 39 GHz
licensees are small entities that may be affected by our action.

*Wireless Cable Systems.* Wireless cable systems use 2 GHz band
frequencies of the Broadband Radio Service ("BRS"), formerly Multipoint
Distribution Service ("MDS"),[^187] and the Educational Broadband
Service ("EBS"), formerly Instructional Television Fixed Service
("ITFS"),[^188] to transmit video programming and provide broadband
services to residential subscribers.[^189] These services were
originally designed for the delivery of multichannel video programming,
similar to that of traditional cable systems, but over the past several
years licensees have focused their operations instead on providing
two-way high-speed Internet access services.[^190] We estimate that the
number of wireless cable subscribers is approximately 100,000, as of
March 2005. Local Multipoint Distribution Service ("LMDS") is a fixed
broadband point-to-multipoint microwave service that provides for
two-way video telecommunications.[^191] As described below, the SBA
small business size standard for the broad census category of Cable and
Other Program Distribution, which consists of such entities generating
\$13.5 million or less in annual receipts, appears applicable to MDS,
ITFS and LMDS.[^192] Although this census category has been superseded
by the new census category of Cable and Other Subscription
Programming,[^193] we use the size standards under the superseded census
category because no standards have been established for the new
category. Other standards also apply, as described.

The Commission has defined small MDS (now BRS) and LMDS entities in the
context of Commission license auctions. In the 1996 MDS auction,[^194]
the Commission defined a small business as an entity that had annual
average gross revenues of less than \$40 million in the previous three
calendar years.[^195] This definition of a small entity in the context
of MDS auctions has been approved by the SBA.[^196] In the MDS auction,
67 bidders won 493 licenses. Of the 67 auction winners, 61 claimed
status as a small business. At this time, the Commission estimates that
of the 61 small business MDS auction winners, 48 remain small business
licensees. In addition to the 48 small businesses that hold BTA
authorizations, there are approximately 392 incumbent MDS licensees that
have gross revenues that are not more than \$40 million and are thus
considered small entities.[^197] MDS licensees and wireless cable
operators that did not receive their licenses as a result of the MDS
auction fall under the SBA small business size standard for Cable and
Other Program Distribution. Information available to us indicates that
there are approximately 850 of these licensees and operators that do not
generate revenue in excess of \$13.5 million annually. Therefore, we
estimate that there are approximately 850 small entity MDS (or BRS)
providers, as defined by the SBA and the Commission's auction rules.

Educational institutions are included in this analysis as small
entities; however, the Commission has not created a specific small
business size standard for ITFS (now EBS).[^198] We estimate that there
are currently 2,032 ITFS (or EBS) licensees, and all but 100 of the
licenses are held by educational institutions. Thus, we estimate that at
least 1,932 ITFS licensees are small entities.

In the 1998 and 1999 LMDS auctions,[^199] the Commission defined a small
business as an entity that has annual average gross revenues of less
than \$40 million in the previous three calendar years.[^200] Moreover,
the Commission added an additional classification for a "very small
business," which was defined as an entity that had annual average gross
revenues of less than \$15 million in the previous three calendar
years.[^201] These definitions of "small business" and "very small
business" in the context of the LMDS auctions have been approved by the
SBA.[^202] In the first LMDS auction, 104 bidders won 864 licenses. Of
the 104 auction winners, 93 claimed status as small or very small
businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based
on this information, we believe that the number of small LMDS licenses
will include the 93 winning bidders in the first auction and the 40
winning bidders in the re-auction, for a total of 133 small entity LMDS
providers as defined by the SBA and the Commission's auction rules.

*218-219 MHz Service.* The first auction of 218-219 MHz spectrum
resulted in 170 entities winning licenses for 594 Metropolitan
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by
entities qualifying as a small business. For that auction, the small
business size standard was an entity that, together with its affiliates,
has no more than a \$6 million net worth and, after federal income taxes
(excluding any carry over losses), has no more than \$2 million in
annual profits each year for the previous two years.[^203] In the
*218-219 MHz Report and Order and Memorandum Opinion and Order*, we
established a small business size standard for a "small business" as an
entity that, together with its affiliates and persons or entities that
hold interests in such an entity and their affiliates, has average
annual gross revenues not to exceed \$15 million for the preceding three
years.[^204] A "very small business" is defined as an entity that,
together with its affiliates and persons or entities that hold interests
in such an entity and its affiliates, has average annual gross revenues
not to exceed \$3 million for the preceding three years.[^205] These
size standards will be used in future auctions of 218-219 MHz spectrum.

*24 GHz -- Incumbent Licensees.* This analysis may affect incumbent
licensees who were relocated to the 24 GHz band from the 18 GHz band,
and applicants who wish to provide services in the 24 GHz band. The
applicable SBA small business size standard is that of "Cellular and
Other Wireless Telecommunications" companies. This category provides
that such a company is small if it employs no more than 1,500
persons.[^206] We believe that there are only two licensees in the 24
GHz band that were relocated from the 18 GHz band, Teligent[^207] and
TRW, Inc. It is our understanding that Teligent and its related
companies have less than 1,500 employees, though this may change in the
future. TRW is not a small entity. Thus, only one incumbent licensee in
the 24 GHz band is a small business entity.

*24 GHz -- Future Licensees.* With respect to new applicants in the 24
GHz band, the small business size standard for "small business" is an
entity that, together with controlling interests and affiliates, has
average annual gross revenues for the three preceding years not in
excess of \$15 million.[^208] "Very small business" in the 24 GHz band
is an entity that, together with controlling interests and affiliates,
has average gross revenues not exceeding \$3 million for the preceding
three years.[^209] The SBA has approved these small business size
standards.[^210] These size standards will apply to the future auction,
if held.

### Satellite Service Providers

*Satellite Telecommunications.* Since 2007, the SBA has recognized
satellite firms within this revised category, with a small business size
standard of \$15 million.[^211] The most current Census Bureau data,
however, are from the (last) economic census of 2002, and we will use
those figures to gauge the prevalence of small businesses in this
category. Those size standards are for the two census categories of
"Satellite Telecommunications" and "Other Telecommunications."[^212]

The first category of Satellite Telecommunications "comprises
establishments primarily engaged in providing point-to-point
telecommunications services to other establishments in the
telecommunications and broadcasting industries by forwarding and
receiving communications signals via a system of satellites or reselling
satellite telecommunications."[^213] For this category, Census Bureau
data for 2002 show that there were a total of 371 firms that operated
for the entire year.[^214] Of this total, 307 firms had annual receipts
of under \$10 million, and 26 firms had receipts of \$10 million to
\$24,999,999.[^215] Consequently, we estimate that the majority of
Satellite Telecommunications firms are small entities that might be
affected by our action.

The second category of Other Telecommunications "comprises
establishments primarily engaged in (1) providing specialized
telecommunications applications, such as satellite tracking,
communications telemetry, and radar station operations; or (2) providing
satellite terminal stations and associated facilities operationally
connected with one or more terrestrial communications systems and
capable of transmitting telecommunications to or receiving
telecommunications from satellite systems."[^216] For this category,
Census Bureau data for 2002 show that there were a total of 332 firms
that operated for the entire year.[^217] Of this total, 303 firms had
annual receipts of under \$10 million and 15 firms had annual receipts
of \$10 million to \$24,999,999.[^218] Consequently, we estimate that
the majority of Other Telecommunications firms are small entities that
might be affected by our action.

### Cable and OVS Operators

In 2007, the SBA recognized new census categories for small cable
entities.[^219] However, there is no census data yet in existence that
may be used to calculate the number of small entities that fit these
definitions. Therefore, we will use prior definitions of these types of
entities in order to estimate numbers of potentially-affected small
business entities. In addition to the estimates provided above, we
consider certain additional entities that may be affected by the data
collection from broadband service providers. Because section 706
requires us to monitor the deployment of broadband regardless of
technology or transmission media employed, we anticipate that some
broadband service providers will not provide telephone service.
Accordingly, we describe below other types of firms that may provide
broadband services, including cable companies, MDS providers, and
utilities, among others.

*Cable and Other Program Distribution.* The Census Bureau defines this
category as follows: "This industry comprises establishments primarily
engaged as third-party distribution systems for broadcast programming.
The establishments of this industry deliver visual, aural, or textual
programming received from cable networks, local television stations, or
radio networks to consumers via cable or direct-to-home satellite
systems on a subscription or fee basis. These establishments do not
generally originate programming material."[^220] The SBA has developed a
small business size standard for Cable and Other Program Distribution,
which is: all such firms having \$13.5 million or less in annual
receipts.[^221] According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year.[^222] Of this total, 1,087 firms had annual receipts of under \$10
million, and 43 firms had receipts of \$10 million or more but less than
\$25 million.[^223] Thus, under this size standard, the majority of
firms can be considered small.

*Cable Companies and Systems.* The Commission has also developed its own
small business size standards, for the purpose of cable rate regulation.
Under the Commission's rules, a "small cable company" is one serving
400,000 or fewer subscribers, nationwide.[^224] Industry data indicate
that, of 1,076 cable operators nationwide, all but eleven are small
under this size standard.[^225] In addition, under the Commission's
rules, a "small system" is a cable system serving 15,000 or fewer
subscribers.[^226] Industry data indicate that, of 7,208 systems
nationwide, 6,139 systems have under 10,000 subscribers, and an
additional 379 systems have 10,000-19,999 subscribers.[^227] Thus, under
this second size standard, most cable systems are small.

*Cable System Operators*. The Communications Act of 1934, as amended,
also contains a size standard for small cable system operators, which is
"a cable operator that, directly or through an affiliate, serves in the
aggregate fewer than 1 percent of all subscribers in the United States
and is not affiliated with any entity or entities whose gross annual
revenues in the aggregate exceed \$250,000,000."[^228] The Commission
has determined that an operator serving fewer than 677,000 subscribers
shall be deemed a small operator, if its annual revenues, when combined
with the total annual revenues of all its affiliates, do not exceed
\$250 million in the aggregate.[^229] Industry data indicate that, of
1,076 cable operators nationwide, all but ten are small under this size
standard.[^230] We note that the Commission neither requests nor
collects information on whether cable system operators are affiliated
with entities whose gross annual revenues exceed \$250 million,[^231]
and therefore we are unable to estimate more accurately the number of
cable system operators that would qualify as small under this size
standard.

*Open Video Services.* Open Video Service (OVS) systems provide
subscription services.[^232] As noted above, the SBA has created a small
business size standard for Cable and Other Program Distribution.[^233]
This standard provides that a small entity is one with \$13.5 million or
less in annual receipts. The Commission has certified approximately 45
OVS operators to serve 75 areas, and some of these are currently
providing service.[^234] Affiliates of Residential Communications
Network, Inc. (RCN) received approval to operate OVS systems in New York
City, Boston, Washington, D.C., and other areas. RCN has sufficient
revenues to assure that they do not qualify as a small business entity.
Little financial information is available for the other entities that
are authorized to provide OVS and are not yet operational. Given that
some entities authorized to provide OVS service have not yet begun to
generate revenues, the Commission concludes that up to 44 OVS operators
(those remaining) might qualify as small businesses that may be affected
by the rules and policies adopted herein.

### Electric Power Generation, Transmission and Distribution

*Electric Power Generation, Transmission and Distribution.* The Census
Bureau defines this category as follows: "This industry group comprises
establishments primarily engaged in generating, transmitting, and/or
distributing electric power. Establishments in this industry group may
perform one or more of the following activities: (1) operate generation
facilities that produce electric energy; (2) operate transmission
systems that convey the electricity from the generation facility to the
distribution system; and (3) operate distribution systems that convey
electric power received from the generation facility or the transmission
system to the final consumer."[^235] The SBA has developed a small
business size standard for firms in this category: "A firm is small if,
including its affiliates, it is primarily engaged in the generation,
transmission, and/or distribution of electric energy for sale and its
total electric output for the preceding fiscal year did not exceed 4
million megawatt hours."[^236] According to Census Bureau data for 2002,
there were 1,644 firms in this category that operated for the entire
year.[^237] Census data do not track electric output and we have not
determined how many of these firms fit the SBA size standard for small,
with no more than 4 million megawatt hours of electric output.
Consequently, we estimate that 1,644 or fewer firms may be considered
small under the SBA small business size standard.

### Internet Service Providers, Web Portals and Other Information Services

In 2007, the SBA recognized two new small business, economic census
categories. They are (1) Internet Publishing and Broadcasting and Web
Search Portals,[^238] and (2) All Other Information Services.[^239]
However, there is no census data yet in existence that may be used to
calculate the number of small entities that fit these definitions.
Therefore, we will use prior definitions of these types of entities in
order to estimate numbers of potentially-affected small business
entities.

*Internet Service Providers*. The SBA has developed a small business
size standard for Internet Service Providers (ISPs). ISPs "provide
clients access to the Internet and generally provide related services
such as web hosting, web page designing, and hardware or software
consulting related to Internet connectivity."[^240] Under the SBA size
standard, such a business is small if it has average annual receipts of
\$23 million or less.[^241] According to Census Bureau data for 2002,
there were 2,529 firms in this category that operated for the entire
year. [^242] Of these, 2,437 firms had annual receipts of under \$10
million, and an additional 47 firms had receipts of between \$10 million
and \$24,999,999. Consequently, we estimate that the majority of these
firms are small entities that may be affected by our action.

*Web Search Portals*. Our action pertains to interconnected VoIP
services, which could be provided by entities that provide other
services such as email, online gaming, web browsing, video conferencing,
instant messaging, and other, similar IP-enabled services. The
Commission has not adopted a size standard for entities that create or
provide these types of services or applications. However, the Census
Bureau has identified firms that "operate web sites that use a search
engine to generate and maintain extensive databases of Internet
addresses and content in an easily searchable format. Web search portals
often provide additional Internet services, such as e-mail, connections
to other web sites, auctions, news, and other limited content, and serve
as a home base for Internet users."[^243] The SBA has developed a small
business size standard for this category; that size standard is \$6.5
million or less in average annual receipts.[^244] According to Census
Bureau data for 2002, there were 342 firms in this category that
operated for the entire year.[^245] Of these, 303 had annual receipts of
under \$5 million, and an additional 15 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.

*Data Processing, Hosting, and Related Services.* Entities in this
category "primarily ... provid\[e\] infrastructure for hosting or data
processing services."[^246] The SBA has developed a small business size
standard for this category; that size standard is \$23 million or less
in average annual receipts.[^247] According to Census Bureau data for
2002, there were 6,877 firms in this category that operated for the
entire year.[^248] Of these, 6,418 had annual receipts of under \$10
million, and an additional 251 firms had receipts of between \$10
million and \$24,999,999. Consequently, we estimate that the majority of
these firms are small entities that may be affected by our action.

*All Other Information Services*. "This industry comprises
establishments primarily engaged in providing other information services
(except new syndicates and libraries and archives)."[^249] Our action
pertains to interconnected VoIP services, which could be provided by
entities that provide other services such as email, online gaming, web
browsing, video conferencing, instant messaging, and other, similar
IP-enabled services. The SBA has developed a small business size
standard for this category; that size standard is \$7 million or less in
average annual receipts.[^250] According to Census Bureau data for 2002,
there were 155 firms in this category that operated for the entire
year.[^251] Of these, 138 had annual receipts of under \$5 million, and
an additional four 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.

*Internet Publishing and Broadcasting*. "This industry comprises
establishments engaged in publishing and/or broadcasting content on the
Internet exclusively. These establishments do not provide traditional
(non-Internet) versions of the content that they publish or
broadcast."[^252] The SBA has developed a small business size standard
for this census category; that size standard is 500 or fewer
employees.[^253] According to Census Bureau data for 2002, there were
1,362 firms in this category that operated for the entire year.[^254] Of
these, 1,351 had employment of 499 or fewer employees, and six firms had
employment of between 500 and 999. Consequently, we estimate that the
majority of these firms small entities that may be affected by our
action.

## D. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities {#d.-description-of-projected-reporting-recordkeeping-and-other-compliance-requirements-for-small-entities .unnumbered}

73. In the Notice, the Commission considers whether to implement certain
    reporting requirements relating to service quality and
    infrastructure information. Specifically, the Commission seeks
    comment on whether to impose certain reporting requirements
    previously required through ARMIS Reports 43-05, 43-06, 43-07 and
    43-08, or similar requirements. In addition, the Notice seeks
    comment on the appropriate confidentiality protections for such
    information. The Commission also seeks comment on the scope of
    entities that should be required to report such information, if it
    is collected, and the mechanism for collecting that information.

## E. Steps Taken to Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered {#e.-steps-taken-to-minimize-the-significant-economic-impact-on-small-entities-and-significant-alternatives-considered .unnumbered}

The RFA requires an agency to describe any significant alternatives that
it has considered in reaching its proposed approach, which may include
(among others) the following four alternatives: (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 or
reporting requirements under the rule for 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 small entities.[^255]

As noted above, the Notice seeks comment on possible methods for
reporting the proposed information collections, as well as suggestions
of methods to maintain and report the information that achieve the
purposes of the Notice while minimizing the burden on reporting
entities, including small entities. This information will assist the
Commission in determining whether these various proposed information
collections would impose a significant economic impact on small
entities. Based on these questions, we anticipate that the record will
be developed concerning alternative ways in which the Commission could
lessen the burden on small entities.

## F. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules {#f.-federal-rules-that-may-duplicate-overlap-or-conflict-with-the-proposed-rules .unnumbered}

None.

**STATEMENT OF\
CHAIRMAN KEVIN J. MARTIN**

Re: *Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160(c) From
Enforcement of Certain of the Commission's ARMIS Reporting
Requirements*; *Petition of Qwest Corporation for Forbearance from
Enforcement of the Commission's ARMIS and 492A Reporting Requirements
Pursuant to 47 U.S.C. § 160(c)*, WC Docket No. 07-139; *Petition of the
Embarq Local Operating Companies for Forbearance Under 47 U.S.C. §
160(c) From Enforcement of Certain of ARMIS Reporting Requirements*, WC
Docket No. 07-204; *Petition of Frontier and Citizens ILECs For
Forbearance Under 47 U.S.C. § 160(c) From Enforcement of Certain of the
Commission's ARMIS Reporting Requirements*, WC Docket No. 07-204;
*Petition of Verizon For Forbearance Under 47 U.S.C. § 160(c) From
Enforcement of Certain of the Commission's Recordkeeping and Reporting
Requirements*, WC Docket No. 07-273;*Petition of AT&T Inc. For
Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the
Commission's Cost Assignment Rules*, WC Docket No. 07-21;*Service
Quality, Customer Satisfaction,* *Infrastructure and Operating Data
Gathering*, WC Docket No. 08-190

Today, we take another step to remove unnecessary regulatory burdens and
ensure a regulatory level playing field. We eliminate outdated reporting
requirements that applied to a small class of carriers, retaining only
those requirements that still serve a useful regulatory purpose.

And if the Commission does believe specific information is needed in
today's competitive marketplace, then we should collect that information
from all industry players rather than a handful of carriers. Therefore,
we initiate a proceeding to determine whether and how to collect such
information across all platforms.

The ARMIS service quality and infrastructure reports adopted almost two
decades ago are remnants of legacy regulation on monopoly providers. As
competition increased, the need for these safeguards and the utility of
these reports diminished. Moreover, their competitors are not required
to file the reports. Therefore, even if some information is important to
disclose publicly to help inform consumers and ensure an open market, it
needs to be provided by all the competitors. Indeed, failure to require
all competitive platforms to file the same information would not paint
an accurate picture of the industry today. Such information is not
useful or reliable unless we obtain it in a uniform manner from
providers across all platforms.

I am pleased that we also extend to Verizon and Qwest the cost
allocation forbearance relief that we provided AT&T earlier this year.
Like the ARMIS service quality and infrastructure reports, these rules
have been in effect in one form or another for decades and no longer
serve the purpose for which they were imposed. Verizon and Qwest will
continue to file price, revenue, and total cost information necessary to
achieve the goals of price cap regulation. But we relieve them of the
burden of this legacy regulation from a much different era.

**STATEMENT OF COMMISSIONER MICHAEL J. COPPS,**

**APPROVING IN PART, CONCURRING IN PART, DISSENTING IN PART**

** **

Re:       *Petition of AT&T Inc. for Forbearance Under 47 U.S.C. §
160(c) From Enforcement of Certain of the Commission's ARMIS Reporting
Requirements*; *Petition of Qwest Corporation for Forbearance from
Enforcement of the Commission's ARMIS and 492A Reporting Requirements
Pursuant to 47 U.S.C. § 160(c)*, WC Docket No. 07-139; *Petition of the
Embarq Local Operating Companies for Forbearance Under 47 U.S.C. §
160(c) From Enforcement of Certain of ARMIS Reporting Requirements*, WC
Docket No. 07-204; *Petition of Frontier and Citizens ILECs For
Forbearance Under 47 U.S.C. § 160(c) From Enforcement of Certain of the
Commission's ARMIS Reporting Requirements*, WC Docket No. 07-204;
*Petition of Verizon For Forbearance Under 47 U.S.C. § 160(c) From
Enforcement of Certain of the Commission's Recordkeeping and Reporting
Requirements*, WC Docket No. 07-273;*Petition of AT&T Inc. For
Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the
Commission's Cost Assignment Rules*, WC Docket No. 07-21;*Service
Quality, Customer Satisfaction,* *Infrastructure and Operating Data
Gathering*, WC Docket No. 08-190

 

The collection and analysis of solid communications-related data is a
linchpin in the Commission's ability to make sound decisions and provide
useful guidance and assistance to consumers, states,
industry-participants and other stakeholders. That is why it has been so
troubling to see in to many instances the Commission headed down the
road of collecting less data.  Now we are confronted with forbearance
requests by carriers seeking relief from the responsibility of
collecting and reporting service quality, customer satisfaction, and
infrastructure and operating data pursuant to the Commission's ARMIS
reporting rules. Petitioners argue the current data-collection
requirements are outdated and that the Commission has failed to complete
an NPRM pending for ***eight years*** to determine what data should be
collected circa 2008. Thus, they filed forbearance petitions to obtain
relief. 

 

There is no good reason for the Commission to have ended up in today's
dilemma: incapable of determining with specificity what data collection
continues to be important, yet faced with a ticking-clock forbearance
deadline that would eliminate ***all*** of the reporting
requirements---the good, the bad, and allegedly the ugly---identified by
petitioners if the Commission fails to act. 

 

My strong preference would be to deny these petitions outright and
provide carriers, through a rulemaking, updated reporting requirements. 
However, there does not appear to be a majority of support for this
position.  Rather than having certain ARMIS data that is currently
submitted to the FCC disappear into the abyss via forbearance, we
reached a compromise with regard to the ARMIS reporting requirements
which can keep us from plunging off a cliff.  First, the Commission
grants covered carriers forbearance from certain ARMIS reporting
requirements. Second, forbearance is conditioned on carriers continuing
to collect and publicly make available their data on service quality and
customer satisfaction for two years.  They also must continue to collect
infrastructure and operating data for the next two years.  Third, we
launch a Further Notice of Proposed Rulemaking to, hopefully, accomplish
what we have avoided all these years---a reasoned, rational and relevant
approach to ensuring that the data necessary for consumers and for state
and federal regulators will be available going-forward. While this
compromise does create a risk that the aforementioned data will not be
available after two years time, it gives the Commission the opportunity
to do what it should have done a long time ago, which is to revise and
update its reporting requirements.

 

To ensure that we have at least some ability to access needed data going
forward, I approve the Order's condition that the carriers continue to
collect, and in certain cases report, the data provided today for
another two years.  I also am supportive of the Order's clear statement
that the Commission is not in any way preempting state regulatory
agencies from obtaining directly from carriers any data they need to
perform their regulatory duties. I limit my support of part of this
Order to concurrence because the analysis and reasoning relied on to
reach the forbearance decision is flawed.  In particular, its finding
that ARMIS reports in certain circumstances are no longer necessary, too
burdensome, or not useful is contrary to the views of numerous
commenters, including consumer organizations, state consumer advocates,
state public utility commissions, and the Communications Workers of
America, among others.

 

I approve the Notice of Proposed Rulemaking which gives us the
opportunity in the next two years to get the job done right.
 Importantly, the NPRM seeks comment on the type of data collection that
will best enable the FCC, and all interested parties, to obtain and
analyze the information needed in order to protect consumers and to
assure the existence of a competitive telecommunications environment. To
the extent that the Commission finds that data collected and publicly
available today should continue to be collected, there appears to be
every reason for this data to be made publicly available going forward.

Let me be clear: the Commission has a deep and ongoing obligation to
gather this type of data so informed decisions can be made when it comes
to consumer protection, competition, broadband, and public safety.  I
believe that today's NPRM sets us on a path so that the Commission can
do a better job in the not-so-distant future.  It's no slam-dunk we will
do so, but I pledge my best efforts to making it come to pass in the
months ahead. I encourage all stakeholders to treat this NPRM with the
seriousness it merits and to give us the benefit of your best and most
creative thinking.  With your input, we ***can*** get this job
done---and done right.

Finally, but just as importantly, I strongly dissent to the last minute
inclusion of cost allocation forbearance relief for Verizon and Qwest.
With the statutory deadline looming, this monumental change was first
proposed only yesterday afternoon. No Order in connection with the cost
allocation forbearance requests was previously circulated for
consideration. There is no opportunity to review the relevant records,
hear from stakeholders, or consider the merits of these forbearance
requests. I therefore must dissent on this basis alone. The inclusion of
such a far-reaching decision at this late hour badly distorts a
forbearance process that has already gone awry. Furthermore, I am deeply
concerned at this time that the grant of forbearance likely raises
similar concerns to those I raised with Commissioner Adelstein in our
dissent to cost allocation forbearance relief granted AT&T back in
April.

For these reasons, I approve in part, concur in part, and dissent in
part -- a messy vote for a truly messy item.

**SEPARATE STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN,**

**APPROVING IN PART, CONCURRING IN PART, DISSENTING IN PART**

Re: *Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160(c) From
Enforcement of Certain of the Commission's ARMIS Reporting
Requirements*; *Petition of Qwest Corporation for Forbearance from
Enforcement of the Commission's ARMIS and 492A Reporting Requirements
Pursuant to 47 U.S.C. § 160(c)*, WC Docket No. 07-139; *Petition of the
Embarq Local Operating Companies for Forbearance Under 47 U.S.C. §
160(c) From Enforcement of Certain of ARMIS Reporting Requirements*, WC
Docket No. 07-204; *Petition of Frontier and Citizens ILECs For
Forbearance Under 47 U.S.C. § 160(c) From Enforcement of Certain of the
Commission's ARMIS Reporting Requirements*, WC Docket No. 07-204;
*Petition of Verizon For Forbearance Under 47 U.S.C. § 160(c) From
Enforcement of Certain of the Commission's Recordkeeping and Reporting
Requirements*, WC Docket No. 07-273;*Petition of AT&T Inc. For
Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the
Commission's Cost Assignment Rules*, WC Docket No. 07-21;*Service
Quality, Customer Satisfaction,* *Infrastructure and Operating Data
Gathering*, WC Docket No. 08-190

I have long believed that the Commission has a responsibility to collect
accurate and reliable data in order to develop effective policies and
fulfill Congress's goals for the evolving telecommunications
marketplace. Just as an airplane pilot would not land a plane with eyes
closed and instruments off, the Commission must ensure that its
decision-making is guided by sufficient data. Particularly as
telecommunications markets move to a less regulated model, the FCC can
also play an important role by providing information directly to
consumers that will empower them to choose among competitive carriers.

With so many benefits from the Commission's efforts to collect and share
market information, we should be skeptical about proposals to
effectively jettison a host of reporting requirements that may help the
Commission perform its consumer protection, broadband, competition, and
public safety functions. It is certainly true that we must update our
rules to respond to changes in the market and technology, as we are
required to do regularly by statute. Unfortunately, today's item fails
to carefully analyze the current collection program or develop consensus
about which of these service quality, customer satisfaction,
infrastructure, and operating reporting requirements remain useful, or
could be revised, eliminated, or enhanced. Perhaps more troubling, the
majority, on the last business day of this fifteen month review process,
has taken up entirely new forbearance requests which will cast aside
long-standing financial reporting requirements.

To be clear, the prudent course would be to have addressed these
reporting requirements with a careful analysis and through an open and
inclusive rulemaking proceeding. Yet, we are presented today with a
Hobson's choice in the form of a forbearance statute that mandates a
"deemed grant" -- in this case total elimination of the reporting
requirements -- if the Commission is unable to reach compromise. Faced
with these difficult circumstances, I have attempted to work with my
colleagues to forge consensus where possible, with the result that I
will approve-in-part, concur-in-part, and dissent-in-part to portions of
this item, as described below.

*Service Quality, Customer Satisfaction, Infrastructure and Operational
Reporting Requirements.* With respect to this data, we strike a
compromise which, though imperfect, is certainly preferable to a
wholesale scrapping of these reporting requirements. State public
utility commissions, consumer advocates, providers, and representatives
of communications workers alike have stressed the utility of this data
and have urged the Commission to take a more calibrated approach. So, I
appreciate my colleagues' willingness to accommodate my desire to
explore these issues more fully. Indeed, my support for this item was
dependent on the Commission's decision to condition forbearance on the
reporting carriers' commitment to continue this data collection for two
years, while the Commission considers whether to modify these rules and
apply them to a broader class of carriers. Specifically, the Order
requires the reporting carriers continue filing this data for two
additional years and to continue to publicly report the service quality
and customer satisfaction data during this time. These conditions are
essential for my support of this item, though I can only concur to the
portions of this Order that rely on flawed analysis to conclude that
forbearance is appropriate at all.

My support for this item was also dependent on the Commission's decision
to open a Notice of Proposed Rulemaking which recognizes that this
information may be useful to the Commission and consumers, particularly
if collected from a broader range of providers. Notably, eight years
ago, the Commission proposed to do exactly that -- to revise, pare back,
and in some cases, enhance many of these same reporting requirements.
Certainly, eight years should have been sufficient time to have
addressed this in an ordered fashion. At a minimum, having had fifteen
months warning that we would have to address this by today, it is
disappointing that the Commission failed to pursue a thoughtful and
comprehensive rulemaking process.

Now, faced with this imminent deadline, the Commission pivots to this
awkward two step process -- forbearing from these reporting
requirements, while at the same time seeking comment on whether those
same requirements should be applied to all carriers. While this is
certainly putting the cart before horse, this compromise is far better
than immediate and precipitous elimination of all of the rules. It will
give the Commission another opportunity to foster a collaborative
approach, to engage State commissions, consumer advocates, carriers, and
other interested parties, to narrow the differences, and perhaps to
develop consensus. Now that we have this brief window of opportunity, I
hope and expect that the Commission and outside parties will engage
constructively and creatively in an effort to derive meaningful
reporting requirements to be filed by a broader set of industry players
that will assist policymakers and consumers. To that end, I'd like to
acknowledge the efforts of AT&T and the Communications Workers of
America to develop commitments that form the basis of this Order. That
should be an encouraging sign as we move on to the next phase of this
proceeding.

*Financial Reporting Requirements*. In a surprise conclusion to this
proceeding, the Commission also grants two additional forbearance
requests from our financial reporting requirements. Adding these new
sections of the Order on the last business day cuts short outside
parties' opportunity to make their views heard and denies all
Commissioners the opportunity to gain the benefit of this input. This
cavalier approach to the forbearance process is disappointing given the
many concerns that have already been raised by Congress.

Even setting those concerns aside, elimination of these cost assignment
and allocation rules undermines the Commission's ability to promote
competition, consumer confidence, investor security, and the public
interest, as Commissioner Copps and I detailed in our joint statement
earlier this year.[^256] It diminishes our ability to meet our statutory
obligation to ensure that telecommunications services are offered on
rates, terms and conditions that are just, reasonable and not unjustly
or unreasonably discriminatory. It renders meaningless important
competitive safeguards that the Commission unanimously adopted just a
year ago. Moreover, it will make harder the road to comprehensive
universal service and intercarrier compensation reform. For all these
reasons, I dissent from this portion of the item.

**STATEMENT OF**

**COMMISSIONER DEBORAH TAYLOR TATE**

Re: *Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160(c) From
Enforcement of Certain of the Commission's ARMIS Reporting
Requirements*; *Petition of Qwest Corporation for Forbearance from
Enforcement of the Commission's ARMIS and 492A Reporting Requirements
Pursuant to 47 U.S.C. § 160(c)*, WC Docket No. 07-139; *Petition of the
Embarq Local Operating Companies for Forbearance Under 47 U.S.C. §
160(c) From Enforcement of Certain of ARMIS Reporting Requirements*, WC
Docket No. 07-204; *Petition of Frontier and Citizens ILECs For
Forbearance Under 47 U.S.C. § 160(c) From Enforcement of Certain of the
Commission's ARMIS Reporting Requirements*, WC Docket No. 07-204;
*Petition of Verizon For Forbearance Under 47 U.S.C. § 160(c) From
Enforcement of Certain of the Commission's Recordkeeping and Reporting
Requirements*, WC Docket No. 07-273;*Petition of AT&T Inc. For
Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the
Commission's Cost Assignment Rules*, WC Docket No. 07-21;*Service
Quality, Customer Satisfaction,* *Infrastructure and Operating Data
Gathering*, WC Docket No. 08-190

An integral part of the pro-competitive, de-regulatory national policy
framework

established by Congress in the 1996 Act is the section 10 forbearance
provision. Today's increasingly competitive telecommunications
marketplace, including cross platform competitors like wireless and
cable, provide consumers with an array of choices that ensure the
consumer protection once deemed necessary through government regulation.
When the Commission finds that certain filings are no longer needed to
fulfill their consumer protection goals, we should grant relief
accordingly. That is the case today, as we grant partial forbearance
from carriers' obligation to file certain Automated Reporting Management
Information System (ARMIS) "service quality and infrastructure" reports
and extend relief from cost assignment rules previously granted to AT&T
to Verizon and Qwest.

The ARMIS reports, created in the Commission's *Price Cap Order* nearly
two decades ago, were intended to serve as "safety nets" to ensure that
incumbent local exchange carriers did not lower quality of customer
service to increase short-term profit or fail to invest in
infrastructure under the new regulatory framework. With the advent of
competition in the telecommunications marketplace the opposite has
happened, with industry offering a myriad of options to the consumer,
investing approximately \$68 billion in the marketplace just last year.
The majority of these reports, adopted to monitor whatever "theoretical
concern" there may have been, are no longer needed to fulfill their
goals of consumer protection.

As a former state commissioner, I appreciate the participation of my
state colleagues in this proceeding and have carefully considered their
concerns. I highlight the fact that we do not preempt any state
authority in this order. We clearly acknowledge and in essence bolster
the consumer protection authority of the states to obtain any
information from any of these carriers for their own regulatory
purposes. States have always taken the lead in protecting the consumer
interest and have overarching statutory authority that goes far beyond
keeping data reports.

This forbearance is a reasoned approach which both grants and denies
forbearance, based on specific circumstances. Thus, we find that there
is still a federal need for the collection of switched access line data
used by USAC to calculate growth in access lines as part of the formula
for determining interstate access support, and business line count
information in the non-impairment thresholds for the Commission's
unbundling rules.

As Federal Chairman of the Federal-State Joint Board on Advanced
Services, I commend the Chairman for recognizing the importance of
maintaining certain data that could be helpful in future policymaking
considerations regarding public safety and broadband deployment.

As we all work together toward ensuring that every person in this
country has broadband access, from the broadband mapping legislation
proposed by Chairmen Inouye and Markey to the proceedings at the FCC, to
local and state initiatives such as Connect Tennessee, it is important
to ensure that we retain data that will help us achieve those goals.
However, I find it inconsistent that in this order that we on one hand
grant forbearance relief to a specific class of carriers and on the
other hand we potentially open the door to further regulation on a
broad, industry-wide basis. Undoubtedly, broadband and public safety are
crucial public policy goals that may indeed require more information
than is currently collected. But if we are going to impose reporting
requirements on carriers involved in our public safety infrastructure
and deployment of broadband we need make sure that they are treated
fairly and equitably, with the data collection being as minimally
burdensome and least duplicative as possible, focusing on the enunciated
goals of today, not the legacy requirements of yesterday.

I agree that as competition increases in the marketplace, we should
level the playing field whenever possible whether within or across
platforms. However, the entire reasoning on which this order is based on
\-- lifting regulations that are "no longer necessary" \-- is not
consistent with the potential "expansion" to other providers and
platforms. I hope that we will continue to pursue the data necessary for
our policy goals where it makes sense, especially utilizing data which
may already be provided either to other governmental entities and
non-profits (such as Connected Nation), and to encourage industry-based
reporting parameters in keeping with our deregulatory policies to
encourage investment and deployment of services and more choice for
consumers.

In this order we also grant identical cost allocation relief to Verizon
and Qwest that we provided to AT&T earlier this year. Like AT&T, these
companies are now largely regulated under price caps, and there is no
current federal need for the specific cost assignment rules implemented
under rate of return regulation. By granting this forbearance, we are
leveling the regulatory playing field and ensuring continued competition
among these carriers. As a condition of this forbearance, we require
Verizon and Qwest to file a compliance plan, as was the case with AT&T,
to ensure that the Commission has any accounting data it needs for
policymaking purposes moving forward.

While I agree philosophically that we should treat like "classes of
carriers" in the same manner, I would have chosen another legal vehicle.
Additionally, rather than granting forbearance first and then approving
a compliance plan, perhaps it would be more logically sound if the
Commission had all the relevant information -- including the compliance
plan \-- prior to making the decision to expand relief. However, in the
interest of ensuring that we are enabling competition in the marketplace
by reducing the legacy barriers that unfairly burden some carriers and
not others, I agree with the outcome, and hope the forthcoming
compliance plan will indeed continue to protect consumers in markets and
situations where necessary. Ultimately, it is our responsibility to
ensure regulatory parity so that "similarly situated" classes of
carriers are treated equally under the law.

**STATEMENT OF**

**COMMISSIONER ROBERT M. McDOWELL**

> *Re: Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160(c)
> From Enforcement of Certain of the Commission's ARMIS Reporting
> Requirements*; *Petition of Qwest Corporation for Forbearance from
> Enforcement of the Commission's ARMIS and 492A Reporting Requirements
> Pursuant to 47 U.S.C. § 160(c)*, WC Docket No. 07-139; *Petition of
> the Embarq Local Operating Companies for Forbearance Under 47 U.S.C. §
> 160(c) From Enforcement of Certain of ARMIS Reporting Requirements*,
> WC Docket No. 07-204; *Petition of Frontier and Citizens ILECs For
> Forbearance Under 47 U.S.C. § 160(c) From Enforcement of Certain of
> the Commission's ARMIS Reporting Requirements*, WC Docket No. 07-204;
> *Petition of Verizon For Forbearance Under 47 U.S.C. § 160(c) From
> Enforcement of Certain of the Commission's Recordkeeping and Reporting
> Requirements*, WC Docket No. 07-273;*Petition of AT&T Inc. For
> Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the
> Commission's Cost Assignment Rules*, WC Docket No. 07-21;*Service
> Quality, Customer Satisfaction,* *Infrastructure and Operating Data
> Gathering*, WC Docket No. 08-190

I support AT&T\'s request for relief from the requirement to file ARMIS
service quality and infrastructure reports in this forbearance petition
and the extension of such relief to similarly situated carriers that
have also requested such relief. As set forth in the order, these
reports, which are filed by only a small group of carriers, no longer
advance the consumer protection goals for which they were originally
adopted.  With this order, we are able to maintain effective consumer
safeguards while also cleaning out unnecessary regulatory underbrush.
Accordingly, I find that granting relief meets the statutory obligations
of Section 10 and, therefore, is in the public interest.

I also am pleased that this item extends to Verizon and Qwest the relief
the Commission previously afforded to AT&T eliminating certain cost
allocation data collection and reporting requirements. As I said at that
time, it is important to grant comparable relief to similarly situated
carriers, and to do so as soon as possible.

Even after this limited forbearance order, the Commission can still
gather information necessary to build a sufficient record for a
legitimate regulatory purpose.  For example, we appropriately deny
forbearance with respect to business line count information used in the
non-impairment thresholds for the Commission's unbundling rules. 
Further, some of the data currently provided in the ARMIS reports -- if
collected from a broader set of providers -- could inform our
decision-making with respect to public safety, broadband deployment, and
perhaps other key issues. I therefore look forward to reviewing the
responses to the Notice of Proposed Rulemaking asking whether and how
the Commission should collect data from a broader cross-section of the
industry.  The fact that the relief in this order is conditioned on
carriers continuing to publicly file ARMIS report data for two years
will, to the extent we conclude that the collection of such data by the
Commission is necessary and proper, ensure continuity.

[^1]: *Policy and Rules Concerning Rates for Dominant Carriers*, Second
    Report and Order, CC Docket No. 87-313, 5 FCC Rcd 6786, para. 2
    (1990) (*Price Cap Order*).

[^2]: *Id*.

[^3]: A summary of the information currently collected through ARMIS
    Reports 43-05, 43-06, 43-07, and 43-08 is included as Appendix A.

[^4]: *Price Cap Order*, 5 FCC Rcd at 6827, para. 334.

[^5]: *Id.* at 6827, 6830, paras. 334-37, 357; *see also Policy and
    Rules Concerning Rates for Dominant Carriers*, Order on
    Reconsideration, CC Docket No. 87-313, 6 FCC Rcd 2637, para. 175
    (1991) (*Price Cap Order on Reconsideration*).

[^6]: *Price Cap Order*, 5 FCC Rcd at 6827, para. 337; *see also Price
    Cap Order on Reconsideration* at para. 179 (adopting monitoring
    reports "in an abundance of caution"); *Price Cap Order on
    Reconsideration* at para. 17 (explaining that monitoring reports
    were designed to address commenters' concerns).

[^7]: *Price Cap Order*, 5 FCC Rcd at 6830, para. 358.

[^8]: *Id*. at 6830, para. 357.

[^9]: *Biennial Regulatory Review -- Telecommunications Service Quality
    Reporting Requirements*, CC Docket No. 00-229, Notice of Proposed
    Rulemaking, 15 FCC Rcd 22113, 22114, para. 2 (2000) (*Biennial
    Service Quality* *NPRM*).

[^10]: *Biennial Service Quality* *NPRM*, 15 FCC Rcd at 22125, para. 42.

[^11]: *2000 Biennial Review -- Comprehensive Review of the Accounting
    Requirements and ARMIS Reporting Requirements for Incumbent Local
    Exchange Carriers: Phase 2*, Report and Order and Further Notice of
    Proposed Rulemaking, CC Docket No. 00-199, 16 FCC Rcd 19911, 19970,
    para. 160 (2001) (*Phase 2 Order* or *Phase 3 FNPRM*). Among other
    things, the Commission removed requirements to report numbers of
    electromechanical switches, touch tone capability and equal access,
    ISDN capabilities and information relating to the Signaling System 7
    (SS7), interoffice working facilities, DS-0 fiber terminated at the
    customer premises, and call-setup time. *Phase 2 Order* at 19970-75,
    paras. 161-176.

[^12]: The Commission removed requirements to report satellite channels
    and video circuits for carriers' radio relay and microwave systems,
    to separate categories for analog versus digital access lines, and
    to report certain categories of access lines per consumer. *Phase 2
    Order* at 19977, paras. 179-182.

[^13]: *Phase 3 FNPRM*, 16 FCC Rcd at 19985-86, para. 208.

[^14]: *Id*.

[^15]: *Id*.

[^16]: Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160(c)
    From Enforcement of Certain of the Commission's ARMIS Reporting
    Requirements, WC Docket No. 07-139 (filed June 8, 2007) (AT&T
    Petition); *see* 47 C.F.R. §§ 43.21(g)-(j). The petition seeks
    relief for the following affiliates: Illinois Bell Telephone
    Company, Indiana Bell Telephone Company, Michigan Bell Telephone
    Company, The Ohio Bell Telephone Company, Pacific Bell Telephone
    Company, Nevada Bell Telephone Company, The Southern New England
    Telephone Company, Southwestern Bell Telephone, L.P., Wisconsin
    Bell, Inc., SBC Advanced Solutions, Inc., Ameritech Advanced Data
    Services, Inc. of Illinois, Ameritech Advanced Data Services, Inc.
    of Indiana, Ameritech Advanced Data Services, Inc. of Michigan,
    Ameritech Advanced Data Services, Inc. of Ohio, Ameritech Advanced
    Data Services, Inc. of Wisconsin, and BellSouth Telecommunications,
    Inc. On June 6, 2008, the Wireline Competition Bureau (Bureau)
    extended until September 6, 2008, the date by which the AT&T
    Petition shall be deemed granted in the absence of a Commission
    decision. *Petition of AT&T Inc. For Forbearance Under 47 U.S.C. §
    160(c) From Enforcement of Certain of the Commission's ARMIS
    Reporting Requirements*, WC Docket No. 07-139, Order (WCB rel. June
    6, 2008). A list of commenters is included in Appendix B.

[^17]: We note that certain carriers other than AT&T also have pending
    petitions for forbearance seeking some or all of the relief granted
    in this Order from the ARMIS service quality and infrastructure
    reporting requirements. *See generally* Petition of Qwest
    Corporation for Forbearance from Enforcement of the Commission's
    ARMIS and 492A Reporting Requirements Pursuant to 47 U.S.C.
    § 160(c), WC Docket No. 07-204 (filed Sept. 13, 2007) (Qwest
    Petition); Petition of the Embarq Local Operating Companies for
    Forbearance Under 47 U.S.C. § 160(c) From Enforcement of Certain of
    ARMIS Reporting Requirements, WC Docket No. 07-204 (filed Oct. 19,
    2007) (Embarq Petition); Petition of Frontier and Citizens ILECs for
    Forbearance Under 47 U.S.C. § 160(c) From Enforcement of Certain of
    the Commission's ARMIS Reporting Requirements, WC Docket No. 07-204
    (filed Nov. 13, 2007) (Frontier/Citizens Petition); Petition of
    Verizon for Forbearance Under 47 U.S.C. § 160(c) From Enforcement of
    Certain of the Commission's Recordkeeping and Reporting
    Requirements, WC Docket No. 07-273 (filed Nov. 26, 2007) (Verizon
    Petition). We address the merits of those requests in this Order. To
    the extent that the petitions seek other regulatory relief, those
    requests remain pending. *See*, *e.g.*, Qwest Petition at 10-16,
    22-25 (seeking forbearance from ARMIS Reports 43-01 through 43-04
    and Forms 492A, 495A, and 495B); Verizon Petition at 11-36 (seeking
    forbearance from ARMIS Reports 43-01 through 43-04 and Forms 492A,
    495A, and 495B, as well as certain other accounting and reporting
    requirements).

[^18]: AT&T Petition at 3-7.

[^19]: *Id*. at 5-6.

[^20]: *Id*. at 7-8.

[^21]: *See generally* *Petition of AT&T Inc. For Forbearance Under 47
    U.S.C. § 160 From Enforcement of Certain of the Commission's Cost
    Assignment Rules; Petition of BellSouth Telecommunications, Inc. For
    Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the
    Commission's Cost Assignment Rules*, WC Docket Nos. 07-21, 05-342,
    Memorandum Opinion and Order, 23 FCC Rcd 7302 (2008) (*AT&T Cost
    Assignment Forbearance Order*), *pet. for recon. pending*, *pet. for
    review pending*, *NASUCA v.* *FCC,* Case No. 08-1226 (D.C. Cir.
    filed June 23, 2008).

[^22]: In the *AT&T Cost Assignment Forbearance Order*, we referred to
    the statutory provision and Commission rules from which AT&T was
    granted forbearance collectively as the "Cost Assignment Rules."
    *See AT&T Cost Assignment Forbearance Order*, 23 FCC Rcd at 7303,
    para. 1 n. 2; 7307, para. 12. Specifically, we granted AT&T
    forbearance from section 220(a)(2) of the Act (to a limited extent)
    and various rules, including the following: section 32.23
    (nonregulated activities); section 32.27 (transactions with
    affiliates); Part 64, Subpart I (allocation of costs); Part 36
    (jurisdictional separations procedures); Part 69, Subparts D and E
    (cost apportionment); and other related rules that are derivatives
    of, or dependent on, the foregoing rules. *See, e.g.*, 47 C.F.R. §§
    32.23, 32.27, Part 64 Subpart I, Part 36, Part 69 Subparts D and E.
    AT&T also received forbearance from certain ARMIS reporting
    requirements, and we extend that relief here, as well. The AT&T
    Petitions list each rule from which Legacy AT&T and Legacy BellSouth
    were granted forbearance. *See* Petition of AT&T Inc. For
    Forbearance Under 47 U.S.C. § 160(c) From Enforcement of Certain of
    the Commission's Cost Assignment Rules, WC Docket No. 07-21, Attach.
    1 (filed Jan. 25, 2007) (Legacy AT&T Petition); Petition of
    BellSouth Telecommunications, Inc. For Forbearance Under 47 U.S.C. §
    160(c) From Enforcement of Certain of the Commission's Cost
    Assignment Rules, WC Docket Nos. 07-21, 05-342, App. 1 (filed Feb.
    9, 2007) (Legacy BellSouth Petition) (collectively, "AT&T
    Petitions"). In this Order, we again use the term "Cost Assignment
    Rules" to refer to the statutory provision and Commission rules from
    which AT&T was granted forbearance in the *AT&T Cost Assignment
    Forbearance Order.*

[^23]: *See id.* at 7319-20, para. 31.

[^24]: Letter from Ann Berkowitz, Associate Director -- Federal
    Regulatory, Verizon, to Marlene H. Dortch, Secretary, FCC, WC Docket
    Nos. 07-21, 07-273, 07-204 (filed May 23, 2008) (Verizon/Qwest
    Request). This letter was subsequently put out for public comment.
    *See* Comment Sought on Request of Verizon and Qwest to Extend
    Forbearance Relief From Cost Assignment Rules, WC Docket No. 07-21,
    Public Notice, DA 08-1361 (Wireline Comp. Bur. rel. June 6, 2008).

[^25]: *See, e.g.*, Letter from Ann Berkowitz, Associate Director,
    Federal Regulatory, to Marlene H. Dortch, Secretary, FCC, WC Docket
    Nos. 07-21, 07-139, 07-204, 07-273 (filed Aug. 8, 2008); Letter from
    Lynn Starr, Vice President -- Federal Regulatory, Qwest, to Marlene
    H. Dortch, Secretary, FCC, WC Docket Nos. 07-21, 07-139, 07-204,
    07-273 (filed Sept. 2, 2008).

[^26]: 47 U.S.C. § 160(a)(1).

[^27]: *See, e.g.*, AT&T Petition at 10-11; Qwest Petition at 18, 20-21;
    Embarq Petition at 7, 11 (arguing that Report 43-08 was never used
    to ensure reasonable rates); Frontier/Citizens Petition at 12;
    Verizon Petition at 12.

[^28]: *See Price Cap Order*, 5 FCC Rcd at 6827, para. 334; *see*,
    *e.g*., AT&T Petition at 13 (arguing that original purpose of these
    reports is moot); Embarq Petition at 4 (same).

[^29]: *See*, *e.g.*, Qwest Petition at 18, 20-21. While some carriers
    have gotten relief from dominant carrier pricing and tariffing
    regulation for certain services, that relief has been based on
    findings regarding the significant extent of competition for those
    services. *See*, *e.g.*, *Qwest Petition for Forbearance Under 47
    U.S.C. § 160(c) from Title II and Computer Inquiry Rules with
    Respect to Broadband Services*, WC Docket No. 06-125, Memorandum
    Opinion and Order, FCC 08-168 (rel. Aug. 5, 2008); *Section
    272(f)(1) Sunset of the BOC Separate Affiliate and Related
    Requirements, WC Docket No. 02-112; 2000 Biennial Regulatory Review
    Separate Affiliate Requirements of Section 64.1903 of the
    Commission's Rules*, CC Docket No. 00-175; *Petition of AT&T Inc.
    for Forbearance Under 47 U.S.C. § 160(c) with Regard to Certain
    Dominant Carrier Regulations for In-Region, Interexchange Services*,
    WC Docket No. 06-120, Report and Order and Memorandum Opinion and
    Order, 22 FCC Rcd 16440 (2007) (*Section 272 Sunset Order*);
    *Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
    Communications Act of 1934, as Amended (47 U.S.C. § 160(c)), for
    Forbearance from Certain Dominant Carrier Regulation of Its
    Interstate Access Services, and for Forbearance from Title II
    Regulation of Its Broadband Services, in the Anchorage, Alaska,
    Incumbent Local Exchange Carrier Study Area*, WC Docket No. 06-109,
    Memorandum Opinion and Order, 22 FCC Rcd 16304 (2007).

[^30]: For these reasons, we reject the claims of some commenters that
    the ARMIS reports at issue here are somehow necessary to maintain
    reasonable rates. *See*, *e.g.*, New Jersey Rate Counsel Comments
    (AT&T Pet.) at 9-10 (arguing that information is essential to a
    well-functioning market "so that regulators can assess if and where
    regulatory safeguards are necessary to yield basic local service
    offered at just and reasonable rates and acceptable levels of
    quality"); CompTel Reply Comments (Qwest Pet.) at 3-4 (arguing that
    the Commission needs the data to ensure just and reasonable rates).
    Similarly, while other commenters claim that these data address the
    "terms and conditions" -- if not the rates -- of carriers'
    offerings, we find that their arguments in fact focus on consumer
    protection issues, discussed below. *See*, *e.g.*, Sprint Nextel
    Comments (Embarq and Frontier/Citizens Pets.) at 8-10.

[^31]: *E.g.*, New Jersey Rate Counsel Comments (AT&T Pet.) at 19;
    NASUCA Comments (AT&T Pet.) at 3; Michigan Comments (AT&T Pet.) at
    2; New Jersey Rate Counsel Comments (Frontier Pet.) at 22.

[^32]: California Commission Reply Comments (AT&T Pet.) at 2; *see also*
    California Commission Comments (Qwest Pet.) at 3 (same); Letter from
    Helen M. Mickiewicz, Assistant General Counsel, California
    Commission, to Marlene Dortch, Secretary, Federal Communications
    Commission, Docket Nos. 07-139, 07-204, 07-273 (filed Aug. 26,
    2008); Letter from Atif Malik, New Jersey Citizen Action, to Marlene
    Dortch, Secretary, Federal Communications Commission, Docket No.
    07-139 at 2-3 (filed Aug. 26, 2008); Letter from Kenneth R. Peres,
    Communications Workers of America, to Marlene Dortch, Secretary,
    Federal Communications Commission, Docket No. 07-139 at 2‑3 (filed
    Aug. 27, 2008).

[^33]: California Commission Reply Comments (AT&T Pet.) at 2-3.

[^34]: *Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160 From
    Enforcement of Certain of the Commission's Cost Assignment Rules;
    Petition of BellSouth Telecommunications, Inc. for Forbearance Under
    47 U.S.C. § 160 From Enforcement of Certain of the Commission's Cost
    Assignment Rules*, WC Docket No. 07-21, WC Docket No. 05-342,
    Memorandum Opinion and Order, 23 FCC Rcd 7302, 7321, para. 32 (2008)
    (*Cost Assignment Forbearance Order*) (citing 47 U.S.C. §§ 152(a),
    160).

[^35]: *Id*. at 7321, para. 33.

[^36]: *See*, *e.g.*, AT&T Petition at 13 n. 33 (asserting that a number
    of states "are involved in service quality issues" and "have service
    quality requirements"); Frontier/Citizens Petition at 7-8 & n.18
    (observing that state regulatory agencies obtain service quality and
    infrastructure data through other means than ARMIS reporting, and
    noting that 19 states where Frontier/Citizens operates require
    service quality reporting, and four other states have targeted
    processes for addressing service quality complaints); New Jersey
    Rate Counsel Comments (AT&T Pet.) at 18 (citing a history of state
    regulatory oversight of service quality in Illinois); Qwest Reply
    Comments (Qwest Pet.) at 5-10 (discussing state information
    collection and service quality requirements in various states where
    Qwest operates).

[^37]: *Phase 3 NPRM*, 16 FCC Rcd at 19985-86, para. 208.

[^38]: 47 U.S.C. § 160(a)(2).

[^39]: *See*, *e.g.*, CWA Comments (AT&T Pet.) at 2.

[^40]: *See*, *e.g*., AT&T Reply Comments (AT&T Pet.) at 2-5, 7-8
    (noting the shortcomings in the ARMIS data collections and the
    availability of other data for consumer protection needs); Frontier
    Petition at 12 (arguing that there is no strong connection between
    the filing requirement and historic speculation about customer
    service); Qwest Petition at 18 (arguing that there is no strong
    connection between the filing requirements and consumer protection);
    Qwest Reply Comments (Qwest Pet.) at 4 (arguing that there is no
    federal need for the data collection); Verizon Petition at 12
    (arguing that the reports are not necessary to protect consumers);
    Letter from James Y. Kerr, II, Commissioner, North Carolina
    Commission, to Kevin Martin, Chairman, Federal Communications
    Commission, WC Docket No. 07-139 at 1-2 (filed Aug. 26, 2008)
    (asserting that decisions based on information provided by only a
    small percentage of existing carriers will likely lead to flawed
    policy).

[^41]: *Price Cap Order*, 5 FCC Rcd at 6830, para. 358.

[^42]: For these same reasons, we reject the arguments of some parties
    that we should retain these asymmetrical reporting requirements for
    purposes of evaluating special access services or any other
    marketplace. *See*, *e.g.*, BT Americas Comment (Embarq and
    Frontier/Citizens Pet.) at 8; CWA Comments (AT&T Pet.) at 2, 6
    (arguing that consumers need access to data to compare service
    offerings).

[^43]: *See*, *e.g.*, AT&T Petition at 17-20; Qwest Petition at 20;
    Embarq Petition at 6; Frontier/Citizens Petition at 6-8; Verizon
    Petition at 16.

[^44]: For example, ARMIS Report 43-07 is not designed to capture the
    activities of parent companies or non‑telecommunications affiliates.
    Thus, AT&T does not report any information on rows 0487 - Total xDSL
    Term. at Customer Premises, and 0488 - xDSL Term. at Customer
    Premises via Hybrid Fiber/Metallic Interface Locations. *See
    Electronic ARMIS Filing System (EAFS) Data Retrieval Module*,
    http://fjallfoss.fcc.gov/eafs7/MainMenu.cfm.

[^45]: *See* Letter from Robert W. Quinn, Senior Vice President, AT&T,
    to Marlene H. Dortch, Secretary, FCC, WC Docket No. 07-139 (filed
    September 6, 2008\*); Letter from Eric Einhorn, V.P. Federal
    Government Affairs, Windstream Corporation, to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 07-139 (filed September 6, 2008\*);
    Letter from Gregg C. Sayre, Associate General Counsel -- Eastern
    Region, Frontier Communications Corporation, to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 07-139 (filed September 6, 2008\*);
    Letter from Robert D. Shannon, Attorney -- Regulatory & Government
    Relations, CenturyTel, Inc., to Marlene H. Dortch, Secretary, FCC,
    WC Docket No. 07-139 (filed September 6, 2008\*); Letter from Edward
    B. Krachmer, Director-Regulatory Affairs, Iowa Telecommunications
    Services, Inc. d/b/a Iowa Telecom, to Marlene H. Dortch, Secretary,
    FCC, WC Docket No. 07-139 (filed September 6, 2008\*); Letter from
    Christopher J. Wilson, Vice President and General Counsel,
    Cincinnati Bell Telephone Company, LLC, to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 07-139 (filed September 6, 2008\*);
    Letter from Melissa E. Newman, Vice President -- Federal Regulatory,
    Qwest Communications International, Inc., to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 07-139 (filed September 6, 2008\*);
    Letter from Suzanne A. Guyer, Senior Vice President -- Federal
    Regulatory Affairs, Verizon, to Marlene H. Dortch, Secretary, FCC,
    WC Docket No. 07-139 (filed September 6, 2008\*); Letter from David
    C. Bartlett, Embarq, to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 07-139 (filed September 6, 2008\*); Letter from Walter Arroyo,
    Regulatory Affairs Director, Puerto Rico Telephone Company, Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 07-139 (filed
    September 6, 2008\*); Letter from Laura Y. Otsuka, Senior
    Manager-Regulatory Affairs, Hawaiian Telcom, Inc., to Marlene H.
    Dortch, Secretary, FCC, WC Docket No. 07-139 (filed September 6,
    2008\*). (\* These letters were filed with the Commission on
    September 6, 2008, although the date-stamp in the Commission's
    Electronic Filing System may incorrectly list September 8, 2008, the
    following Monday, as the filing date.)

[^46]: *See*, *e.g*., AT&T Reply Comments (AT&T Pet.) at 2 (stating that
    parties may file a complaint under section 208, 47 U.S.C. § 208, if
    they believe that a carrier has violated any of the Commission's
    rules).

[^47]: *New Part 4 of the Commission's Rules Concerning Disruptions to
    Communications*, Report and Order and Further Notice of Proposed
    Rulemaking, ET Docket No. 04-35, 19 FCC Rcd 16830 (2004) (*Outage
    Reporting Order*); *see also* AT&T Petition at 13 (arguing that
    outage reports serve same purpose as service quality reports);
    Frontier Petition at 14 (same).

[^48]: *See Development of Nationwide Broadband Data to Evaluate
    Reasonable and Timely Deployment of Advanced Services to All
    Americans, Improvement of Wireless Broadband Subscribership Data,
    and Development of Data on Interconnected Voice over Internet (VoIP)
    Subscribership*, WC Docket No. 07-38, Report and Order and Further
    Notice of Proposed Rulemaking, 23 FCC Rcd 9691 (2008); *Development
    of Nationwide Broadband Data to Evaluate Reasonable and Timely
    Deployment of Advanced Services to All Americans, Improvement of
    Wireless Broadband Subscribership Data, and Development of Data on
    Interconnected Voice over Internet (VoIP) Subscribership*, WC Docket
    No. 07-38, Order on Reconsideration, 23 FCC 9800 (2008).

[^49]: In every even-numbered year, the Commission must review all
    regulations that apply to the operations and activities of any
    provider of telecommunications service and determine whether any of
    these regulations are no longer necessary in the public interest as
    the result of meaningful economic competition between providers of
    the service. 47 U.S.C. § 161.

[^50]: *Biennial Service Quality* *NPRM*, 15 FCC Rcd at 22125, para. 42.

[^51]: *See Quarterly Inquiries and Complaints Reports*, available at
    http://www.fcc.gov/cgb/quarter/welcome.html.

[^52]: *Section 272 Sunset Order*, 22 FCC Rcd 16440.

[^53]: *See*, *e.g.*, California Commission Reply (AT&T Pet.) at 5;
    Texas Commission Comments (AT&T Pet.) at 2-3; CWA Comments (AT&T
    Pet.) at 2, 12, 15-16; New York Commission Comments (Verizon Pet.)
    at 2; Washington Commission Comments (Verizon Pet.) at 2; Michigan
    Commission Comments (Verizon Pet.) at 6. *But see*, *e.g.*, Letter
    from Connie Murray, Commissioner, Missouri Public Service
    Commission, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos.
    07-139, 07-204, 07-273 at 1 (filed July 30, 2008) (supporting
    forbearance, and observing that "State Commissions have the
    authority to request specific up-to-date information from carriers
    operating in their states if they have a need.").

[^54]: *Cost Assignment Forbearance Order*, 23 FCC Rcd at 7321, para 32.

[^55]: *C.f.*, *e.g.*, *Application of Qwest International, Inc. for
    Authorization to Provide In-Region, InterLATA Services in the States
    of Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, Utah,
    Washington and Wyoming*, Memorandum Opinion and Order, 17 FCC Rcd
    26303, 26305-06, para. 3 ("In particular, the Regional Oversight
    Committee ('ROC'), a group of state regulatory commissions in the
    Qwest region, including all nine states covered by this application,
    worked together on the design and execution of regional operations
    support systems ('OSS') testing. In addition, Idaho, Iowa, Montana,
    North Dakota, Utah and Wyoming worked with a number of other states
    in the Multistate Collaborative Process ('MCP') to address other
    section 271 issues. Moreover, in a number of instances, regulators
    in these states have been able to build on the work done by their
    fellow commissioners in other states to address issues such as
    pricing, for example, in an efficient manner through individual
    state proceedings."); *see also* Letter from Hance Haney, Director,
    Discovery Institute, to Marlene Dortch, Secretary, Federal
    Communications Commission, Docket No. 07-139 at 1-2 (filed Aug. 27,
    2008) (explaining that states can collect similar data on their own
    and from other sources).

[^56]: *See*, *e.g.*, NASUCA Comments (AT&T Pet.) at 7 (citing *Trends
    in Telephone Service*, (IATD, rel. Feb. 2007), which the Commission
    staff bases on data from ARMIS reports 43-05, 43-07 and 43-08);
    California Commission Reply (AT&T Pet.) at 9-10.

[^57]: We recognize that the Universal Service Monitoring Report is
    released pursuant to section 54.702(i) of the Commission's rules. 47
    C.F.R. § 54.702(i). However, by its terms that rule requires only
    that "\[i\]nformation based on the Administrator's reports will be
    made public by the Commission at least once a year as part of a
    Monitoring Report." That rule does not require the inclusion of
    ARMIS service quality and infrastructure information data. Moreover,
    we agree with Verizon that such data are not "necessary" to the
    Commission's universal service monitoring. *See* Letter from Ann
    Berkowitz, Associate Director, Federal Regulatory, Verizon, to
    Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 07-21, 07-139,
    07-273, 07-204 at 4-5 (filed Aug. 8, 2008) (discussing other sources
    of information and oversight, and describing why ARMIS data are
    poorly suited for such monitoring).

[^58]: 47 U.S.C. § 160(a)(3).

[^59]: *Unbundled Access to Network Elements; Review of the Section 251
    Obligations of Incumbent Local Exchange Carriers*, WC Docket No.
    04-313, CC Docket No. 01-338, Order on Remand, 20 FCC Rcd 2533,
    2595, para. 105 (2005). In defining business line counts, the
    Commission emphasized that it was relying on "an objective set of
    data that incumbent LECs already have created for other regulatory
    purposes," finding that "by basing our definition in an ARMIS filing
    required of incumbent LECs, . . . we can be confident in the
    accuracy of the thresholds, and a simplified ability to obtain the
    necessary information." *Id*. In light of that determination, we are
    not persuaded in this proceeding to allow incumbent LECs to rely on
    their own business line counts developed for purposes of seeking
    regulatory relief, rather than those line counts developed for
    compliance with a broader, independent reporting obligation. *See*
    Letter from Ann Berkowitz, Associate Director, Federal Regulatory,
    Verizon, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 07-21,
    07-139, 07-204, 07-273, at 1 (filed Sept. 3, 2008) (noting that the
    relevant ARMIS data are reported at the state level, while the
    unbundling thresholds require wire center-level data, and arguing
    that there thus is no need for the ARMIS reporting).

[^60]: Qwest Petition at 8 & n.18.

[^61]: These rules refer to what is now Table 4.10 of the Statistics of
    Communications Common Carriers Report. 47 C.F.R. §§ 54.807(b), (c).

[^62]: To the extent we change our universal service rules such that we
    no longer need this data, we would revisit whether to continue to
    collect this data.

[^63]: While we agree that certain infrastructure and operating data, if
    collected on an industry-wide basis, might serve certain public
    safety goals, we disagree with CWA's assertion that ARMIS service
    quality data would advance such goals. CWA Comments (AT&T Pet.) at
    15. As an initial matter, we note that no ARMIS report provides any
    service quality standard. Rather, the Commission declined to impose
    service quality standards because it "might impinge upon state
    efforts in that area." *Price Cap Order*, 5 FCC Rcd at 6830, para.
    358. Moreover, to specifically address public safety concerns
    associated with service outages, the Commission has adopted outage
    reporting requirements that, unlike the ARMIS reports at issue here,
    extend to "all communications providers" including "cable,
    satellite, and wireless providers, in addition to wireline
    providers." *Outage Reporting Order*, 19 FCC Rcd at 16833-34, para.
    2. To the extent that additional information is needed to address
    public safety concerns, it would be more appropriate for the
    Commission to expand outage reporting or otherwise fashion public
    safety-specific measures, rather than continuing to collect ARMIS
    data that is ill-suited for that purpose.

[^64]: *See*, *e.g.*, Texas Commission Comments (AT&T Pet.) at 4
    (contending that Form 477 reporting does not collect sufficient
    information on broadband infrastructure).

[^65]: *See supra* n. Error: Reference source not found.

[^66]: 47 U.S.C. § 160(a) (emphasis added). Given this statutory
    directive, we reject certain parties' assertions that granting
    relief from reporting for all applicable incumbent LECs based on a
    petition from one (or a few) incumbent LECs is inappropriate. *See*
    New Jersey Rate Counsel Reply (AT&T Pet.) at 2; California
    Commission Reply (AT&T Pet.) at 10; Letter from Anna M. Gomez, *et
    al.*, Sprint Nextel Corp. and Karen Reidy, Vice President, CompTel,
    to Marlene Dortch, Secretary, Federal Communications Commission,
    Docket Nos. 07-139, 07-204, 07‑273 at 1-2, 4 (filed Aug. 29, 2008).
    Nor would the option of revising ARMIS reporting in the future
    through a rulemaking proceeding allow the Commission to avoid it
    statutory duty to evaluate forbearance pursuant to section 10.
    *See*, *e.g.*, *Cost Assignment Forbearance Order*, 23 FCC Rcd at
    7308, para. 13; *see also id*. (quoting *AT&T Corp. v. FCC*, 236
    F.3d 729, 738 (D.C. Cir. 2001) ("an alternative route for seeking
    \[relief\] does not diminish the Commission's responsibility to
    fully consider petitions under \[section\] 10"); *id.* (quoting
    *AT&T Corp. v. FCC*, 236 F.3d at 738) ("The Commission has no
    authority to sweep \[section 10\] away by mere reference to another,
    very different, regulatory mechanism.").

[^67]: *See* *Section 272(f)(1) Sunset of the BOC Separate Affiliate and
    Related Requirements; 2000 Biennial Regulatory Review Separate
    Affiliate Requirements of Section 64.1903 of the Commission's Rules;
    Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160(c) with
    Regard to Certain Dominant Carrier Regulations for In-Region,
    Interexchange Services*, WC Docket Nos. 02-112, 06-120, CC Docket
    No. 00-175, Report and Order and Memorandum Opinion and Order, 22
    FCC Rcd 16440, 16498-502, paras. 117-26 (2007); *Petition of Core
    Communications, Inc. for Forbearance Under 47 U.S.C. § 160(c) from
    Application of the ISP Remand Order*, Order, WC Docket No. 03-171,
    19 FCC Rcd 20179, 20182, 20189, paras. 10, 27 (2004), *petition for
    review denied*, *Core Communications, Inc.*, 455 F.3d 267 (D.C. Cir.
    2006); *see also Federal-State Joint Board on Universal Service
    Petition of TracFone Wireless, Inc. for Forbearance from 47 U.S.C. §
    214(e)(1)(A) and 47 C.F.R. § 54.201(i)*, CC Docket No. 96-45, Order,
    20 FCC Rcd 15095, 15098-99, para. 16 n.23 (2005).

[^68]: *See, e.g.*, Letter from Ann Berkowitz, Associate Director,
    Federal Regulatory, Verizon, to Marlene H. Dortch, Secretary, FCC,
    WC Docket Nos. 07-21, 07-139, 07-204, 07-273 (filed Aug. 8, 2008);
    Letter from Lynn Starr, Vice President -- Federal Regulatory, Qwest,
    to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 07-21, 07-139,
    07-204, 07-273 (filed Sept. 2, 2008).

[^69]: *See generally* *Petition of AT&T Inc. For Forbearance Under 47
    U.S.C. § 160 From Enforcement of Certain of the Commission's Cost
    Assignment Rules; Petition of BellSouth Telecommunications, Inc. For
    Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the
    Commission's Cost Assignment Rules*, WC Docket Nos. 07-21, 05-342,
    Memorandum Opinion and Order, 23 FCC Rcd 7302 (2008) (*AT&T Cost
    Assignment Forbearance Order*), *pet. for recon. pending*, *pet. for
    review pending*, *NASUCA v.* *FCC,* Case No. 08-1226 (D.C. Cir.
    filed June 23, 2008).

[^70]: *See supra* n. Error: Reference source not found.

[^71]: *See AT&T Cost Assignment Forbearance Order*, 23 FCC Rcd at 7307,
    para. 11.

[^72]: *See id.* at 7319-20, para. 31.

[^73]: Letter from Ann Berkowitz, Associate Director -- Federal
    Regulatory, Verizon, to Marlene H. Dortch, Secretary, FCC, WC Docket
    Nos. 07-21, 07-273, 07-204 (filed May 23, 2008) (Verizon/Qwest
    Request).

[^74]: *See* Comment Sought on Request of Verizon and Qwest to Extend
    Forbearance Relief From Cost Assignment Rules, WC Docket No. 07-21,
    Public Notice, DA 08-1361 (Wireline Comp. Bur. rel. June 6, 2008).

[^75]: *See* Comment Sought on Request of Verizon and Qwest to Extend
    Forbearance Relief From Cost Assignment Rules, 73 FR 33,430 (June
    12, 2008).

[^76]: *See* Comment Dates Set on Request of Verizon and Qwest to Extend
    Forbearance Relief From Cost Assignment Rules, WC Docket No. 07-21,
    Public Notice, DA 08-1402 (Wireline Comp. Bur. rel. June 12, 2008).

[^77]: *See AT&T Cost Assignment Forbearance Order*, 23 FCC Rcd at 7306,
    para. 10.

[^78]: Joint Explanatory Statement of the Committee of Conference, S.
    Conf. Rep. No. 230, 104th Cong., 2d Sess. 113 (1996).

[^79]: 47 U.S.C. § 160(a).

[^80]: *Id*.

[^81]: 47 U.S.C. § 160(b).

[^82]: We grant Verizon and Qwest forbearance, subject to conditions,
    from the statutory provision and Commission rules as requested in
    the AT&T Petitions (collectively, "Cost Assignment Rules").
    Specifically, we grant limited forbearance from section 220(a)(2) of
    the Act to the extent that this provision contemplates separate
    accounting of nonregulated costs. 47 U.S.C. § 220(a)(2). We also
    grant forbearance from various Commission rules including the
    following: section 32.23 (nonregulated activities); section 32.27
    (transactions with affiliates); Part 64 Subpart I, including the
    requirement to file Cost Allocation Manuals (CAMs) (allocation of
    costs); Part 36 (jurisdictional separations procedures); Part 69,
    Subparts D and E (cost apportionment); and other related rules that
    are derivative of or dependent on the foregoing rules. 47 C.F.R. §
    64.903; *see, e.g.*, 47 C.F.R. §§ 32.23, 32.27, Part 64 Subpart I,
    Part 36, Part 69 Subparts D and E. The AT&T Petitions list each rule
    from which Legacy AT&T and Legacy BellSouth were granted
    forbearance. *See* Legacy AT&T Petition, Attach. 1; Legacy BellSouth
    Petition, App. 1. Finally, we grant forbearance from four of the
    Commission's reporting requirements -- the Access Report (ARMIS
    43-04), the Rate of Return Monitoring Report (FCC Form 492), the
    Reg/Non-Reg Forecast Report (FCC Form 495A) and the Reg/Non-Reg
    Actual Usage Report (FCC Form 495B) -- because forbearance from the
    Cost Assignment Rules renders these reports meaningless. To be
    clear, we do not grant forbearance from the Part 32 USOA. As we did
    in the *AT&T Cost Assignment Forbearance Order*, we consider the
    Cost Assignment Rules together as a group under the statutory
    forbearance criteria because, as the Commission has concluded, the
    various accounting rules were intended to work together to help
    ensure the primary statutory goal of just and reasonable rates. *See
    Joint Cost Order*, 2 FCC Rcd at 1298, para. 1.

[^83]: *Cf. AT&T Cost Assignment Forbearance Order*, 23 FCC Rcd at 7307,
    para. 11.

[^84]: *See, e.g.*, Verizon Reply (Verizon/Qwest Request) at 6; *see
    also* Qwest Reply (Verizon/Qwest Request) at 6.

[^85]: *Cf. AT&T Cost Assignment Forbearance Order*, 23 FCC Rcd at 7307,
    para. 11.

[^86]: *See, e.g.,* Sprint Nextel *et al*. Comments (Verizon/Qwest
    Request) at 2, 12-15; Public Service Commission of Wisconsin
    Comments (Verizon Pet.) at 1--5; New York State Department of Public
    Service Comments (Verizon Pet.) at 2--3; Time Warner Telecom *et
    al*. Comments (Verizon Pet.) at 9; Sprint Nextel Comments (Verizon
    Pet.) at 7, 9-10; AdHoc Comments (Verizon Pet.) at 6-8, 18--19;
    NASUCA Comments (Qwest Pet.) at 3, 10-11.

[^87]: *See, e.g*., Sprint Nextel *et al*. Comments (Verizon/Qwest
    Request) at 10; Qwest Reply (Verizon/Qwest Request) at 8-9; Verizon
    Reply (Verizon/Qwest Request) at 6-7.

[^88]: *See, e.g.*, Verizon Reply (Verizon/Qwest Request) at 6-7; Qwest
    Reply (Verizon/Qwest Request) at 9.

[^89]: *See, e.g*., Sprint Nextel *et al*. Comments (Verizon/Qwest
    Request) at 8-9; Verizon Comments (Verizon/Qwest Request) at 3-4;
    Qwest Reply (Verizon/Qwest Request) at 6-7.

[^90]: *See* *AT&T Cost Assignment Forbearance Order*, 23 FCC Rcd at
    7320-21, para. 32.

[^91]: *Cf. id*. at 7321, para. 32.

[^92]: *See id*. at 7321, para. 33.

[^93]: We do not find it appropriate to immediately impose reporting
    obligations pursuant to our pending NPRMs on ARMIS reporting. *See*,
    *e.g.*, Letter from Linda S. Vanderloop, Director, Federal
    Regulatory, AT&T, to Marlene H. Dortch, Secretary, FCC, WC Docket
    Nos. 07-132, 00-199, 04-141 at 1 (filed July 2, 2008) (noting "AT&T
    pointed out that the Commission opened a rulemaking in 2000 to
    evaluate whether to move all reporting to the Form 477 and that
    rulemaking is still open"). That proceeding was not specifically
    targeted to the same Commission goals that are the focus our Notice
    here, and the comment cycle in that proceeding closed nearly a
    decade ago. Indeed, since that time there have been a number of
    significant developments in the Commission's public safety and
    broadband information gathering which would not be adequately
    reflected in the pending NPRMs nor the resulting record.

[^94]: *See* 5 U.S.C. § 603. The RFA, *see* U.S.C. §601 *et seq*., has
    been amended by the Contract with America Advancement Act of 1996,
    Pub. L. No. 104-121, 110 Stat. 847 (1996) ("CWAAA"). Title II of the
    CWAAA is the Small Business Regulatory Enforcement Fairness Act of
    1996 ("Small Business Act").

[^95]: 47 C.F.R. §§ 1.1200, 1.1206; *Amendment of 47 C.F.R. § 1.1200 et
    seq. Concerning Ex Parte Presentations in Commission Proceedings*,
    GC Docket No. 95-21, Report and Order, FCC 97-92, 12 FCC Rcd 7348
    (1997).

[^96]: 47 C.F.R. § 1.1206(b)(2).

[^97]: 47 C.F.R. § 1.49.

[^98]: *See* 47 U.S.C. § 160(c) (deeming the petition granted as of the
    forbearance deadline if the Commission does not deny the petition
    within the time period specified in the statute); 47 C.F.R. §
    1.03(a) ("\[T\]he Commission may, on its own motion or on motion by
    any party, designate an effective date that is either earlier or
    later in time than the date of public notice of such action.").

[^99]: AT&T, Qwest, and Verizon are mandatory price cap incumbent LECs.

[^100]: http://www.fcc.gov/wcb/armis/instructions/#4305.

[^101]: http://www.fcc.gov/wcb/armis/instructions/#4306.

[^102]: http://www.fcc.gov/wcb/armis/instructions/#4307.

[^103]: Large and mid-sized Class A ILECs earns revenues of \$138
    million or more. *See*
    http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-08-929A1.pdf.

[^104]: http://www.fcc.gov/wcb/armis/instructions/#4308.

[^105]: ^\[^

[^106]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. §§ 601-12, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA), Pub. L. No. 104-121, 110 Stat. 857 (1996).

[^107]: *See* 5 U.S.C. § 603(a).

[^108]: *See* 5 U.S.C. § 603(a).

[^109]: 5 U.S.C. § 604(a)(3).

[^110]: 5 U.S.C. § 601(6).

[^111]: 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."

[^112]: 15 U.S.C. § 632.

[^113]: 13 C.F.R. § 121.201, NAICS code 517110.

[^114]: *Trends in Telephone Service* at Table 5.3.

[^115]: 13 C.F.R. § 121.201, NAICS code 517110.

[^116]: *Trends in Telephone Service* at Table 5.3.

[^117]: *Id.*

[^118]: 5 U.S.C. § 601(3).

[^119]: 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); 5 U.S.C. § 601(3). SBA regulations interpret "small
    business concern" to include the concept of dominance on a national
    basis. 13 C.F.R. § 121.102(b).

[^120]: 13 C.F.R. § 121.201, NAICS code 517911.

[^121]: *Trends in Telephone Service* at Table 5.3.

[^122]: 13 C.F.R. § 121.201, NAICS code 517911.

[^123]: *Trends in Telephone Service* at Table 5.3.

[^124]: 13 C.F.R. § 121.201, NAICS code 517110.

[^125]: *Trends in Telephone Service* at Table 5.3.

[^126]: 13 C.F.R. § 121.201, NAICS code 517110.

[^127]: *Trends in Telephone Service* at Table 5.3.

[^128]: *Id.*

[^129]: 13 C.F.R. § 121.201, NAICS code 517110.

[^130]: *Trends in Telephone Service* at Table 5.3.

[^131]: 13 C.F.R. § 121.201, NAICS code 517911.

[^132]: *Trends in Telephone Service* at Table 5.3.

[^133]: We include all toll-free number subscribers in this category,
    including those for 888 numbers.

[^134]: 13 C.F.R. § 121.201, NAICS code 517911.

[^135]: *Trends in Telephone Service* at Tables 18.4, 18.5, 18.6, 18.7.

[^136]: 13 C.F.R. § 121.201, NAICS code 517210.

[^137]: 13 C.F.R. § 121.201, NAICS codes 517211, 517212.

[^138]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization," Table 5, NAICS code 517211 (issued Nov. 2005).

[^139]: *Id.* 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 for firms with "1000
    employees or more."

[^140]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization," Table 5, NAICS code 517212 (issued Nov. 2005).

[^141]: *Id.* 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 for firms with "1000
    employees or more."

[^142]: *Trends in Telephone Service* at Table 5.3.

[^143]: *Id*.

[^144]: 13 C.F.R. § 121.201, NAICS code 517211 (This category was
    changed for purposes of the 2007 Census to "Wireless
    Telecommunications Carriers (except Satellite)," NAICS code
    517210.).

[^145]: *Trends in Telephone Service* at Table 5.3.

[^146]: *Amendment of Part 90 of the Commission's Rules to Provide for
    the Use of the 220-222 MHz Band by the Private Land Mobile Radio
    Service*, PR Docket No. 89-552, GN Docket No. 93-252, PP Docket No.
    93-253, Third Report and Order and Fifth Notice of Proposed
    Rulemaking, 12 FCC Rcd 10943, 11068-70, paras. 291-295 (1997) (*220
    MHz Third Report and Order*).

[^147]: *See* Letter to Amy Zoslov, Chief, Auctions and Industry
    Analysis Division, Wireless Telecommunications Bureau, FCC, from A.
    Alvarez, Administrator, SBA (Dec. 2, 1998).

[^148]: *Revision of Part 22 and Part 90 of the Commission's Rules to
    Facilitate Future Development of Paging Systems*, WT Docket No.
    96-18, PR Docket No. 93-253, Memorandum Opinion and Order on
    Reconsideration and Third Report and Order, 14 FCC Rcd 10030, paras.
    98-107 (1999).

[^149]: *Id.* at 10085, para. 98.

[^150]: *See* Letter to Amy Zoslov, Chief, Auctions and Industry
    Analysis Division, Wireless Telecommunications Bureau, FCC, from
    Aida Alvarez, Administrator, SBA (Dec. 2, 1998).

[^151]: 13 C.F.R. § 121.201, NAICS code 517212.

[^152]: *Id*.

[^153]: *Trends in Telephone Service* at Table 5.3.

[^154]: *See Amendment of Parts 20 and 24 of the Commission's Rules --
    Broadband PCS Competitive Bidding and the Commercial Mobile Radio
    Service Spectrum Cap*, WT Docket No. 96-59, GN Docket No. 90-314,
    Report and Order, 61 FR 33859 (July 1, 1996); *see also* 47 C.F.R. §
    24.720(b).

[^155]: *Id*.

[^156]: *See, e.g.*, *Implementation of Section 309(j) of the
    Communications Act -- Competitive Bidding*, PP Docket No. 93-253,
    Fifth Report and Order, 9 FCC Rcd 5532 (1994).

[^157]: FCC News, Broadband PCS, D, E and F Block Auction Closes, No.
    71744 (released January 14, 1997). *See also* *Amendment of the
    Commission's Rules Regarding Installment Payment Financing for
    Personal Communications Services (PCS) Licenses*, WT Docket No.
    97-82, Second Report and Order, 12 FCC Rcd 16436 (1997).

[^158]: *Amendment of the Commission's Rules to Establish New Personal
    Communications Services, Narrowband PCS*, GEN Docket No. 90-314, ET
    Docket No. 92-100, PP Docket No. 93-253, Second Report and Order and
    Second Further Notice of Proposed Rulemaking, 15 FCC Rcd 10456
    (2000).

[^159]: *See* Letter to Amy Zoslov, Chief, Auctions and Industry
    Analysis Division, Wireless Telecommunications Bureau, FCC, from
    Aida Alvarez, Administrator, SBA (Dec. 2, 1998).

[^160]: 13 C.F.R. § 121.201, NAICS code 517212.

[^161]: *220 MHz Third Report and Order*, 12 FCC Rcd at 11068-70, at
    paras. 291-95.

[^162]: *Id*. at 11068-70, para. 291.

[^163]: *See* letter to D. Phythyon, Chief, Wireless Telecommunications
    Bureau, FCC, from Aida Alvarez, Administrator, SBA (Jan. 6, 1998).

[^164]: *See generally* *220 MHz Service Auction Closes*, Public Notice,
    14 FCC Rcd 605 (1998).

[^165]: *Phase II 220 MHz Service Spectrum Auction Closes*, Public
    Notice, 14 FCC Rcd 11218 (1999).

[^166]: 47 C.F.R. § 90.814(b)(1).

[^167]: *See* *Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to part 27 of the Commission's Rules*, WT Docket No.
    99-168, Second Report and Order, 15 FCC Rcd 5299 (2000).

[^168]: *See generally* *220 MHz Service Auction Closes*, Public Notice,
    14 FCC Rcd 605 (1998).

[^169]: *700 MHz Guard Band Auction Closes*, Public Notice, 16 FCC Rcd
    4590 (2001).

[^170]: The service is defined in section 22.99 of the Commission's
    Rules, 47 C.F.R. § 22.99.

[^171]: BETRS is defined in sections 22.757 and 22.759 of the
    Commission's Rules, 47 C.F.R. §§ 22.757 and 22.759.

[^172]: 13 C.F.R. § 121.201, NAICS code 517210.

[^173]: The service is defined in section 22.99 of the Commission's
    Rules, 47 C.F.R. § 22.99.

[^174]: 13 C.F.R. § 121.201, NAICS code 517212 (This category will be
    changed for purposes of the 2007 Census to "Wireless
    Telecommunications Carriers (except Satellite)," NAICS code
    517210.).

[^175]: 13 C.F.R. § 121.201, NAICS code 517212 (This category will be
    changed for purposes of the 2007 Census to "Wireless
    Telecommunications Carriers (except Satellite)," NAICS code
    517210.).

[^176]: *Amendment of the Commission's Rules Concerning Maritime
    Communications*, PR Docket No. 92-257, Third Report and Order and
    Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998).

[^177]: *See* 47 C.F.R. §§ 101 *et seq*. (formerly, Part 21 of the
    Commission's Rules) for common carrier fixed microwave services
    (except Multipoint Distribution Service).

[^178]: Persons eligible under parts 80 and 90 of the Commission's Rules
    can use Private Operational-Fixed Microwave services. *See* 47
    C.F.R. Parts 80 and 90. Stations in this service are called
    operational-fixed to distinguish them from common carrier and public
    fixed stations. Only the licensee may use the operational-fixed
    station, and only for communications related to the licensee's
    commercial, industrial, or safety operations.

[^179]: Auxiliary Microwave Service is governed by Part 74 of Title 47
    of the Commission's Rules. *See* 47 C.F.R. Part 74. This service is
    available to licensees of broadcast stations and to broadcast and
    cable network entities. Broadcast auxiliary microwave stations are
    used for relaying broadcast television signals from the studio to
    the transmitter, or between two points such as a main studio and an
    auxiliary studio. The service also includes mobile television
    pickups, which relay signals from a remote location back to the
    studio.

[^180]: 13 C.F.R. § 121.201, NAICS code 517212 (This category will be
    changed for purposes of the 2007 Census to "Wireless
    Telecommunications Carriers (except Satellite)," NAICS code
    517210.).

[^181]: This service is governed by Subpart I of Part 22 of the
    Commission's Rules. *See* 47 C.F.R. §§ 22.1001-22.1037.

[^182]: 13 C.F.R. § 121.201, NAICS code 517212 (This category will be
    changed for purposes of the 2007 Census to "Wireless
    Telecommunications Carriers (except Satellite)," NAICS code
    517210.).

[^183]: *Id*.

[^184]: *See Amendment of the Commission's Rules Regarding the 37.0-38.6
    GHz and 38.6-40.0 GHz Bands*, ET Docket No. 95-183, PP Docket No.
    93-253, Report and Order, 12 FCC Rcd 18600 (1998).

[^185]: *Id.*

[^186]: *See* Letter to Kathleen O'Brien Ham, Chief, Auctions and
    Industry Analysis Division, Wireless Telecommunications Bureau, FCC,
    from Aida Alvarez, Administrator, SBA (Feb. 4, 1998).

[^187]: MDS, also known as Multichannel Multipoint Distribution Service
    ("MMDS"), is regulated by Part 21 of the Commission's rules; *see*
    47 C.F.R. Part 21, subpart K; and has been renamed the Broadband
    Radio Service (BRS); *see* Amendment of Parts 1, 21, 73, 74 and 101
    of the Commission's Rules to Facilitate the Provision of Fixed and
    Mobile Broadband Access, Educational and Other Advanced Services in
    the 2150-2162 and 2500-2690 MHz Bands; Part 1 of the Commission\'s
    Rules - Further Competitive Bidding Procedures; Amendment of Parts
    21 and 74 to Enable Multipoint Distribution Service and the
    Instructional Television Fixed Service Amendment of Parts 21 and 74
    to Engage in Fixed Two-Way Transmissions; Amendment of Parts 21 and
    74 of the Commission\'s Rules With Regard to Licensing in the
    Multipoint Distribution Service and in the Instructional Television
    Fixed Service for the Gulf of Mexico, 19 FCC Rcd 14165 (2004)
    ("*MDS/ITFS Order"*).

[^188]: ITFS systems are regulated by Part 74 of the Commission's rules;
    *see* 47 C.F.R. Part 74, subpart I. ITFS, an educational service,
    has been renamed the Educational Broadband Service (EBS); *see*
    *MDS/ITFS Order*, 19 FCC Rcd 14165. ITFS licensees, however, are
    permitted to lease spectrum for MDS operation.

[^189]: *See* *Annual Assessment of the Status of Competition in the
    Market for the Delivery of Video Programming, Eleventh Annual
    Report,* 20 FCC Rcd 2507, 2565 ¶ 131 (2006) ("*2006 Cable
    Competition Report*").

[^190]: *Id*.

[^191]: *See* Local Multipoint Distribution Service, 12 FCC Rcd 12545
    (1997).

[^192]: 13 C.F.R. § 121.201, NAICS code 517510.

[^193]: 13 C.F.R. § 121.201, NAICS code 515210.

[^194]: MDS Auction No. 6 began on November 13, 1995, and closed on
    March 28, 1996. (67 bidders won 493 licenses.)

[^195]: 47 C.F.R. § 21.961(b)(1).

[^196]: *See ITFS* *Order*, 10 FCC Rcd at 9589.

[^197]: 47 U.S.C. § 309(j). Hundreds of stations were licensed to
    incumbent MDS licensees prior to implementation of Section 309(j) of
    the Communications Act of 1934, 47 U.S.C. § 309(j). For these
    pre-auction licenses, the applicable standard is SBA's small
    business size standards for "other telecommunications" (annual
    receipts of \$13.5 million or less). *See* 13 C.F.R. § 121.201,
    NAICS code 517910.

[^198]: In addition, the term "small entity" under SBREFA applies to
    small organizations (nonprofits) and to small governmental
    jurisdictions (cities, counties, towns, townships, villages, school
    districts, and special districts with populations of less than
    50,000). 5 U.S.C. §§ 601(4)-(6). We do not collect annual revenue
    data on ITFS licensees.

[^199]: The Commission has held two LMDS auctions: Auction 17 and
    Auction 23. Auction No. 17, the first LMDS auction, began on
    February 18, 1998, and closed on March 25, 1998. (104 bidders won
    864 licenses.) Auction No. 23, the LMDS re-auction, began on April
    27, 1999, and closed on May 12, 1999. (40 bidders won 161 licenses.)

[^200]: *See LMDS* *Order,* 12 FCC Rcd at 12545.

[^201]: *Id.*

[^202]: *See* Letter to Daniel Phythyon, Chief, Wireless
    Telecommunications Bureau (FCC) from A. Alvarez, Administrator, SBA
    (January 6, 1998).

[^203]: *Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding*, PP Docket No. 93-253, Fourth Report and Order,
    9 FCC Rcd 2330 (1994).

[^204]: *Amendment of Part 95 of the Commission's Rules to Provide
    Regulatory Flexibility in the 218-219 MHz Service*, WT Docket No.
    98-169, Report and Order and Memorandum Opinion and Order, 15 FCC
    Rcd 1497 (1999).

[^205]: *Id*.

[^206]: 13 C.F.R. § 121.201, NAICS code 517212 (This category will be
    changed for purposes of the 2007 Census to "Wireless
    Telecommunications Carriers (except Satellite)," NAICS code
    517210.).

[^207]: Teligent acquired the DEMS licenses of FirstMark, the only
    licensee other than TRW in the 24 GHz band whose license has been
    modified to require relocation to the 24 GHz band.

[^208]: *Amendments to Parts 1, 2, 87 and 101 of the Commission's Rules
    to License Fixed Services at 24 GHz*, WT Docket No. 99-327, Report
    and Order, 15 FCC Rcd 16934, 16967 at para. 77 (2000); *see also* 47
    C.F.R. § 101.538(a)(2).

[^209]: *Amendments to Parts 1, 2, 87 and 101 of the Commission's Rules
    to License Fixed Services at 24 GHz*, WT Docket No. 99-327, Report
    and Order, 15 FCC Rcd 16934, 16967 at para. 77 (2000); *see also* 47
    C.F.R. § 101.538(a)(1).

[^210]: *See* Letter to Margaret W. Wiener, Deputy Chief, Auctions and
    Industry Analysis Division, Wireless Telecommunications Bureau, FCC,
    from Gary M. Jackson, Assistant Administrator, SBA (July 28, 2000).

[^211]: 13 C.F.R. § 121.201, NAICS code 517410 (2007).

[^212]: 13 C.F.R. § 121.201 , NAICS codes 517919 (size standard of \$25
    million).

[^213]: U.S. Census Bureau, 2002 NAICS Definitions, "517410 Satellite
    Telecommunications";
    http://www.census.gov/epcd/naics02/def/NDEF517.HTM.

[^214]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4, NAICS code 517410 (issued Nov. 2005).

[^215]: *Id*. An additional 38 firms had annual receipts of \$25 million
    or more.

[^216]: U.S. Census Bureau, 2002 NAICS Definitions, "517910 Other
    Telecommunications";
    http://www.census.gov/epcd/naics02/def/NDEF517.HTM.

[^217]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4, NAICS code 517910 (issued Nov. 2005).

[^218]: *Id*. An additional 14 firms had annual receipts of \$25 million
    or more.

[^219]: 13 C.F.R. § 121.201.

[^220]: U.S. Census Bureau, 2002 NAICS Definitions, "517510 Cable and
    Other Program Distribution";
    http://www.census.gov/epcd/naics02/def/NDEF517.HTM.

[^221]: 13 C.F.R. § 121.201, NAICS code 517510 (This category will be
    changed for purposes of the 2007 Census to "Wired Telecommunications
    Carriers," NAICS code 517110.).

[^222]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, Table 4, Receipts Size of Firms for the United States:
    2002, NAICS code 517510 (issued November 2005).

[^223]: *Id*. An additional 61 firms had annual receipts of \$25 million
    or more.

[^224]: 47 C.F.R. § 76.901(e). The Commission determined that this size
    standard equates approximately to a size standard of \$100 million
    or less in annual revenues. *Implementation of Sections of the 1992
    Cable Act: Rate Regulation,* Sixth Report and Order and Eleventh
    Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).

[^225]: These data are derived from R.R. Bowker, *Broadcasting & Cable
    Yearbook 2006*, "Top 25 Cable/Satellite Operators," pages A-8 & C-2
    (data current as of June 30, 2005); Warren Communications News,
    *Television & Cable Factbook 2006*, "Ownership of Cable Systems in
    the United States," pages D-1805 to D-1857.

[^226]: 47 C.F.R. § 76.901(c).

[^227]: Warren Communications News, *Television & Cable Factbook 2006*,
    "U.S. Cable Systems by Subscriber Size," page F-2 (data current as
    of Oct. 2005). The data do not include 718 systems for which
    classifying data were not available.

[^228]: 47 U.S.C. § 543(m)(2); *see* 47 C.F.R. § 76.901(f) & nn. 1-3.

[^229]: 47 C.F.R. § 76.901(f); *see FCC Announces New Subscriber Count
    for the Definition of Small Cable Operator*, Public Notice, 16 FCC
    Rcd 2225 (Cable Services Bureau 2001).

[^230]: These data are derived from: R.R. Bowker, *Broadcasting & Cable
    Yearbook 2006*, "Top 25 Cable/Satellite Operators," pages A-8 & C-2
    (data current as of June 30, 2005); Warren Communications News,
    *Television & Cable Factbook 2006*, "Ownership of Cable Systems in
    the United States," pages D-1805 to D-1857.

[^231]: The Commission does receive such information on a case-by-case
    basis if a cable operator appeals a local franchise authority's
    finding that the operator does not qualify as a small cable operator
    pursuant to § 76.901(f) of the Commission's rules. *See* 47 C.F.R. §
    76.909(b).

[^232]: *See* 47 U.S.C. § 573.

[^233]: 13 C.F.R. § 121.201, NAICS code 517110.

[^234]: *See* http://www.fcc.gov/mb/ovs/csovscer.html (current as of
    February 2007).

[^235]: U.S. Census Bureau, 2002 NAICS Definitions, "2211 Electric Power
    Generation, Transmission and Distribution";
    http://www.census.gov/epcd/naics02/def/NDEF221.HTM.

[^236]: 13 C.F.R. § 121.201, NAICS codes 221111, 221112, 221113, 221119,
    221121, 221122, footnote 1.

[^237]: U S. Census Bureau, 2002 Economic Census, Subject Series:
    Utilities, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4, NAICS codes 221111, 221112, 221113, 221119,
    221121, 221122 (issued Nov. 2005).

[^238]: 13 C.F.R. § 121.201, NAICS code 519130 (establishing 500
    employees as a size standard).

[^239]: 13 C.F.R. § 121.201, NAICS code 519190 (establishing a \$7
    million revenue ceiling).

[^240]: U.S. Census Bureau, "2002 NAICS Definitions: 518111 Internet
    Service Providers,"
    http://www.census.gov/epcd/naics02/def/NDEF518.HTM.

[^241]: 13 C.F.R. § 121.201, NAICS code 518210.

[^242]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4, NAICS code 518111 (issued Nov. 2005).

[^243]: U.S. Census Bureau, "2002 NAICS Definitions: 518112 Web Search
    Portals"; http://www.census.gov/epcd/naics02/def/NDEF518.HTM.

[^244]: 13 C.F.R. § 121.201, NAICS code 518112.

[^245]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4, NAICS code 518112 (issued Nov. 2005).

[^246]: U.S. Census Bureau, "2002 NAICS Definitions: 518210 Data
    Processing, Hosting, and Related Services";
    http://www.census.gov/epcd/naics02/def/NDEF518.HTM.

[^247]: 13 C.F.R. § 121.201, NAICS code 518210.

[^248]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4, NAICS code 518210 (issued Nov. 2005).

[^249]: U.S. Census Bureau, "2002 NAICS Definitions: 519190 All Other
    Information Services";
    http://www.census.gov/epcd/naics02/def/NDEF519.HTM.

[^250]: 13 C.F.R. § 121.201, NAICS code 519190.

[^251]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4, NAICS code 519190 (issued Nov. 2005).

[^252]: U.S. Census Bureau, "2002 NAICS Definitions: 516110 Internet
    Publishing and Broadcasting";
    http://www.census.gov/epcd/naics02/def/NDEF516.HTM.

[^253]: 13 C.F.R. § 121.201, NAICS code 516110.

[^254]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 5, NAICS code 516110 (issued Nov. 2005).

[^255]: 5 U.S.C. § 603(c).

[^256]: See Joint Statement of Commissioners Michael J. Copps and
    Jonathan S. Adelstein, Dissenting, *Petition of AT&T Inc. For
    Forbearance Under 47 U.S.C. §160 From Enforcement of Certain of the
    Commission's Cost Assignment Rules,Petition of BellSouth
    Telecommunications, Inc. For Forbearance Under 47 U.S.C. §160 From
    Enforcement of Certain of the Commission's Cost Assignment Rules*,
    WC Docket Nos. 07-21, 05-342; Memorandum Opinion and Order (April
    24, 2008).