*Pages 1--97 from  Microsoft Word - IP-ES NPRM.FINALTEST.doc*
 Federal  Communications  Commission  FCC  04-  28 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 

 In  the  Matter  of 
 IP-  Enabled  Services 
 )  ) 
 )  )  WC  Docket  No.  04-  36 

 NOTICE  OF  PROPOSED  RULEMAKING 
 Adopted:  February  12,  2004  Released:  March  10,  2004 
 Comment  date:  [60  Days  After  Federal  Register  Publication  of  this  Notice]  Reply  Comment  date:  [90  Days  After  Federal  Register  Publication  of  this  Notice] 

 By  the  Commission:  Chairman  Powell,  Commissioners  Abernathy  and  Martin  issuing  separate  statements;  Commissioner  Copps  concurring  and  issuing  a  statement;  Commissioner  Adelstein 
 approving  in  part,  concurring  in  part  and  issuing  a  separate  statement. 
 TABLE  OF  CONTENTS  Paragraph  No. 

 I.  INTRODUCTION.............................................................................................................  1 
 II.  BACKGROUND...............................................................................................................  7  A.  TECHNOLOGICAL  AND  MARKET  EVOLUTION  OF  IP-  ENABLED  SERVICES  .............................  8 

 1.  Internet  Voice  ...............................................................................................................  10  2.  Other  New  and  Future  IP-  Enabled  Services  .................................................................  16 
 B.  LEGAL  BACKGROUND........................................................................................................  23  1.  Statutory  Definitions  and  Commission  Precedent........................................................  24 
 2.  Commission  Consideration  of  VoIP  .............................................................................  28 
 III.  CATEGORIZING  IP-  ENABLED  SERVICES............................................................  35 
 IV.  JURISDICTIONAL  CONSIDERATIONS  ..................................................................  38 
 V.  APPROPRIATE  LEGAL  AND  REGULATORY  FRAMEWORK...........................  42  A.  STATUTORY  CLASSIFICATIONS  ..........................................................................................  43 

 B.  SPECIFIC  REGULATORY  REQUIREMENTS  AND  BENEFITS  ....................................................  45  1.  Public  Safety  and  Disability  Access  .............................................................................  50 
 2.  Carrier  Compensation  ...................................................................................................  61  3.  Universal  Service..........................................................................................................  63 
 4.  Title  III  ..........................................................................................................................  67  5.  Title  VI..........................................................................................................................  70 
1
 Federal  Communications  Commission  FCC  04-  28 
 2 
 VI.  OTHER  REGULATORY  REQUIREMENTS.............................................................  71  A.  CONSUMER  PROTECTION  ...................................................................................................  71 
 B.  ECONOMIC  REGULATION  ...................................................................................................  73  C.  RURAL  CONSIDERATIONS  ..................................................................................................  75 
 D.  OTHER  CONSIDERATIONS...................................................................................................  76 
 VII.  PROCEDURAL  MATTERS..........................................................................................  79 
 VIII.  ORDERING  CLAUSES.................................................................................................  91 
 APPENDIX  A:  INITIAL  REGULATORY  FLEXIBILITY  ANALYSIS 

 I.  INTRODUCTION 
 1.  In  this  Notice  of  Proposed  Rulemaking  (Notice),  we  examine  issues  relating  to  services  and  applications  making  use  of  Internet  Protocol  (IP),  including  but  not  limited  to  voice 

 over  IP  (VoIP)  services  (collectively,  IP-  enabled  services).  1  We  seek  comment  on  the  impact  that  IP-  enabled  services,  many  of  which  are  accessed  over  the  Internet,  have  had  and  will 
 continue  to  have  on  the  United  States  communications  landscape.  As  a  truly  global  network  providing  instantaneous  connectivity  to  individuals  and  services,  the  Internet  has  transcended 
 historical  jurisdictional  boundaries  to  become  one  of  the  greatest  drivers  of  consumer  choice  and  benefit,  technical  innovation,  and  economic  development  in  the  United  States  in  the  last  ten 
 years.  We  acknowledge  that  it  has  done  so  in  an  environment  that  is  free  of  many  of  the  regulatory  obligations  applied  to  traditional  telecommunications  services  and  networks.  Carriers 
 have  begun  to  realize  efficiencies  associated  with  utilization  of  IP  in  both  the  backbone  and  the  last  mile  of  their  networks.  Customers  are  beginning  to  substitute  IP-  enabled  services  for 
 traditional  telecommunications  services  and  networks,  and  we  seek  comment  on  the  rate  and  extent  of  that  substitution.  Increasingly,  these  customers  will  speak  with  each  other  using  VoIP-based 
 services  instead  of  circuit-  switched  telephony  and  view  content  over  streaming  Internet  media  instead  of  broadcast  or  cable  platforms.  By  doing  so,  they  will  change,  fundamentally, 
 their  use  of  these  applications  and  services    consumers  will  become  increasingly  empowered  to  customize  the  services  they  use,  and  will  choose  these  services  from  an  unprecedented  range  of 
 service  providers  and  platforms. 
 1  Specifically,  the  scope  of  this  proceeding    and  the  term  IP-  enabled  services,  as  it  is  used  here    includes 
 services  and  applications  relying  on  the  Internet  Protocol  family.  IP-  enabled  services  could  include  the  digital  communications  capabilities  of  increasingly  higher  speeds,  which  use  a  number  of  transmission  network 

 technologies,  and  which  generally  have  in  common  the  use  of  the  Internet  Protocol.  Some  of  these  may  be  highly  managed  to  support  specific  communications  functions.  IP-  enabled  applications  could  include  capabilities  based 
 in  higher-  level  software  that  can  be  invoked  by  the  customer  or  on  the  customers  behalf  to  provide  functions  that  make  use  of  communications  services.  Because  both  of  these  uses  of  IP  are  contributing  to  important 
 transformations  in  the  communications  environment,  this  Notice  seeks  commentary  on  both,  and  uses  the  term  IP-enabled  services  to  refer  to  applications  as  well  as  services.  Recognizing  the  broad  scope  entailed  by  this 
 definition,  we  invite  comment  below  on  how  we  might  more  rigorously  distinguish  those  specific  classes  of  IP-enabled  services,  if  any,  on  which  we  should  focus  our  attention.  We  emphasize,  however,  that  this  Notice  does  not 
 address  standard-  setting  issues  for  the  Internet  Protocol  language  itself,  which  are  more  appropriately  addressed  in  other  fora,  or  other  items  outside  this  Commissions  jurisdiction,  such  as  Internet  governance. 
2
 Federal  Communications  Commission  FCC  04-  28 
 3 
 2.  This  Commission  must  necessarily  examine  what  its  role  should  be  in  this  new  environment  of  increased  consumer  choice  and  power,  and  ask  whether  it  can  best  meet  its  role 
 of  safeguarding  the  public  interest  by  continuing  its  established  policy  of  minimal  regulation  of  the  Internet  and  the  services  provided  over  it.  2  To  that  end,  we  invite  comment  on  IP-  enabled 
 services  available  today  and  those  expected  to  become  available  in  the  future.  We  seek  comment  on  how  we  might  distinguish  among  such  services,  and  on  whether  any  regulatory  treatment 
 would  be  appropriate  for  any  class  of  services. 
 3.  In  other  proceedings,  we  have  recognized  the  paramount  importance  of  encouraging  deployment  of  broadband  3  infrastructure  to  the  American  people.  4  As  broadband 

 facilities  have  proliferated,  communications  services  and  networks  have  increasingly  taken  advantage  of  the  efficiencies  associated  with  translating  data  into  IP  packets  running  over  the 
 same  network  infrastructures.  5  As  discussed  below,  enterprises  are  already  relying  heavily  on  IP-  based  applications  to  facilitate  both  internal  and  external  communications.  6  Moreover, 

 2  We  note  that  IP-  enabled  services,  as  we  define  this  term,  are  typically  provided  over  broadband  facilities,  but 
 could  ride  on  narrowband  facilities.  It  appears  that  as  IP-  enabled  services  become  more  sophisticated  and  high-speed  facilities  proliferate,  these  services  will  predominantly  be  provided  on  broadband  platforms,  including 

 wireline,  cable,  wireless,  and  satellite  facilities,  and  perhaps  new  platforms  not  widely  used  at  present.  See,  e.  g.,  Inquiry  Regarding  Carrier  Current  Systems,  Including  Broadband  over  Power  Line  Systems,  ET  Docket  No.  03- 
 104,  Notice  of  Inquiry,  18  FCC  Rcd  8498  (2003)  (seeking  comment  on  technical  issues  relating  to  provision  of  broadband  over  power  line  facilities). 

 3  We  use  the  term  broadband  to  signify  advanced  telecommunications  capability  and  advanced  services, 
 which  we  have  defined,  for  the  purposes  of  our  section  706  Reports,  as  those  services  having  the  capability  to  support  both  upstream  and  downstream  speeds  in  excess  of  200  Kbps  in  the  last  mile.  Inquiry  Concerning  the 

 Deployment  of  Advanced  Telecommunications  Capability  to  All  Americans  in  a  Reasonable  and  Timely  Fashion,  and  Possible  Steps  to  Accelerate  Such  Deployment  Pursuant  to  Section  706  of  the  Telecommunications  Act  of  1996, 
 Third  Report,  17  FCC  Rcd  2844,  2850-  51,  para.  9  (2002)  (internal  quotations  omitted)  (Third  Section  706  Report);  accord  Inquiry  Concerning  the  Deployment  of  Advanced  Telecommunications  Capability  to  All  Americans  in  a 
 Reasonable  and  Timely  Fashion,  and  Possible  Steps  to  Accelerate  Such  Deployment  Pursuant  to  Section  706  of  the  Telecommunications  Act  of  1996,  Second  Report,  15  FCC  Rcd  20913,  20919-  20,  para.  10  (2000)  (Second  Section 
 706  Report).  The  Commission  also  has  denominate[  d]  as  high-  speed  those  services  with  over  200  kbps  capability  in  at  least  one  direction.  Second  Section  706  Report,  15  FCC  Rcd  at  20920,  para.  11;  accord  Third 
 Section  706  Report,  17  FCC  Rcd  at  2850-  51,  para.  9. 
 4  See,  e.  g.,  Appropriate  Framework  for  Broadband  Access  to  the  Internet  over  Wireline  Facilities,  Universal 
 Service  Obligations  of  Broadband  Providers,  CC  Docket  Nos.  02-  33,  95-  20,  98-  10,  Notice  of  Proposed  Rulemaking,  17  FCC  Rcd  3019,  3020-  21,  para.  1  (2002)  (Wireline  Broadband  NPRM  ). 

 5  See  infra  Part  II.  A. 
 6  See  infra  Part  II.  A.  For,  example,  more  and  more  businesses  are  moving  to  VoIP  solutions  in  lieu  of  PBXs  and 
 other  traditional  facilities  to  manage  their  communications.  See,  e.  g.,  Nortel  Networks  &  Verizon  Communications,  Verizon  Selects  Nortel  Networks  to  Accelerate  Building  of  Nations  Largest  Converged,  Packet-  Switched  Wireline 

 Network  Using  Voice-  Over-  IP  Technology,  Press  Release  at  3  (Jan.  7,  2004)  (stating  that  Verizon  and  Nortel  intend  to  market  VoIP  upgrades  to  Verizons  existing  PBX  customers  and  to  migrate  them  away  from  existing  legacy 
 PBXs  to  Verizons  converged  IP  network). 
3
 Federal  Communications  Commission  FCC  04-  28 
 4 
 providers  offering  VoIP  services  7  are  beginning  to  challenge  traditional  telecommunications  carriers  in  residential  markets    and  even  today  use  IP  to  transport  residential  interexchange 
 calls,  often  unbeknownst  to  end  users.  8  The  increasing  deployment  of  broadband  facilities  therefore  has  prompted  the  development  of  services  and  applications  that  provide  broader 
 functionality  and  greater  consumer  choice  at  prices  competitive  to  those  of  analogous  services  provided  over  the  public  switched  telephone  network  (PSTN).  Many  observers  predict  that, 
 before  long,  providers  will  be  able  to  integrate  voice  and  real-  time  video  to  provide  new  capabilities  and  service  offerings.  9  The  development  of  such  services  is  likely  to  prompt 
 increased  deployment  of  wireline,  cable,  wireless,  and  other  broadband  facilities  10  capable  of  bringing  IP-  enabled  services  to  the  public,  which  in  turn,  we  expect,  will  prompt  further 
 development  and  deployment  of  such  services.  This  process  may  challenge  the  central  role  that  legacy  technologies  have  played  in  American  communications  for  over  100  years.  11 

 4.  But  VoIP  services  are  not  necessarily  mere  substitutes  for  traditional  telephony  services,  because  the  new  networks  based  on  the  Internet  Protocol  are,  both  technically  and 
 administratively,  different  from  the  PSTN.  Whereas  the  PSTN  is  designed  to  meet  the  analog  communications  requirements  of  two-  way  voice  conversations,  IP  networks  are  designed  to  meet 
 the  short-  burst  digital  data  communications  requirements  of  computing  networks.  Whereas  the  PSTNs  design  is  logically  and  physically  hierarchical,  utilizing  highly  centralized  signaling 
 intelligence  to  connect  parties  to  a  communication,  IP  network  design  is  flat,  distributing  network  intelligence  and  permitting  highly  dynamic  and  flexible  routing  that  takes  into  account 
 network  delays,  changes  in  loads,  and  changes  in  topology.  12  And  whereas  enhanced  functionalities  delivered  via  the  PSTN  typically  must  be  created  internally  by  the  network 

 7  While  we  adopt  no  formal  definition  of  VoIP,  we  use  the  term  generally  to  include  any  IP-  enabled  services 
 offering  real-  time,  multidirectional  voice  functionality,  including,  but  not  limited  to,  services  that  mimic  traditional  telephony. 

 8  See  infra  Part  II.  A. 
 9  See  infra  Part  II.  A. 
 10  See,  e.  g.,  supra  note  2. 
 11  According  to  industry  data  compiled  by  the  Commission,  interstate  access  minutes  have  declined  significantly 
 in  recent  years;  industry  watchers  expect  VoIP  to  hasten  the  decline.  See  Universal  Service  Monitoring  Report,  CC  Docket  No.  98-  202,  Table  8.2  (Dec.  22,  2003)  (interstate  switched  access  minutes  declined  to  486.0  billion  minutes 

 in  2002  from  538.3  billion  interstate  minutes  in  2001,  and  interstate  switched  minutes  declined  to  113.8  billion  in  the  first  quarter  2003  from  124.8  billion  in  the  first  quarter  of  2002);  see  also  Peter  Grant  &  Almar  Latour,  Circuit 
 Breaker:  Battered  Telecoms  Face  New  Challenge:  Internet  Calling    The  Pac-  Man  of  Protocols,  Wall  St.  J.,  Oct.  9,  2003,  at  A1  (stating  that  VoIP  poses  a  credible  threat  to  established  telecommunications  carriers)  (Grant  & 
 Latour);  Dan  Richman,  Internet  Phone  Calls  Entice  Consumers,  Industry,  Seattle  Post  Intelligencer  (last  modified  Dec.  12,  2003)  <http://  msnbc.  msn.  com/  id/  3690595/>  (given  the  low  cost  of  VoIP,  business  of  land-  line  carriers  is 
 threatened). 
 12  Applications  requiring  segmented  data  to  arrive  in  sequence  and  without  error  generally  rely  on  a  higher-  level 
 end-  to-  end  protocol  such  as  the  Transmission  Control  Protocol  (TCP). 
4
 Federal  Communications  Commission  FCC  04-  28 
 5 
 operator  and  are  often  tied  to  a  physical  termination  point,  IP-  enabled  services  can  be  created  by  users  or  third  parties,  providing  innumerable  opportunities  for  innovative  offerings  competing 
 with  one  another  over  multiple  platforms  and  accessible  wherever  the  user  might  have  access  to  the  IP  network.  13  The  rise  of  IP  thus  challenges  the  key  assumptions  on  which  communications 
 networks,  and  regulation  of  those  networks,  are  predicated:  Packets  routed  across  a  global  network  with  multiple  access  points  defy  jurisdictional  boundaries.  Networks  capable  of 
 facilitating  any  sort  of  application  that  programmers  can  devise  have  empowered  consumers  to  choose  services  they  desire  rather  than  merely  accepting  a  providers  one-  size-  fits-  all  offering. 
 In  this  Notice,  we  seek  comment  on  whether  the  proliferation  of  services  and  applications  utilizing  a  common  protocol  may  permit  competitive  developments  in  the  marketplace  to  play 
 the  key  role  once  played  by  regulation. 
 5.  For  all  these  reasons,  the  changes  wrought  by  the  rise  of  IP-  enabled  communications  promise  to  be  revolutionary.  These  developments  are  expected  to  reduce  the 

 cost  of  communication  and  to  spur  innovation  and  individualization,  giving  rise  to  a  communications  environment  in  which  offerings  are  designed  not  to  fit  within  the  limitations  of 
 a  legacy  network  but  rather  to  provide  each  end  user  a  highly  customized,  low-  cost  suite  of  services  delivered  in  the  manner  of  his  or  her  choosing.  IP-  enabled  services  generally    and 
 VoIP  in  particular    will  encourage  consumers  to  demand  more  broadband  connections,  which  will  foster  the  development  of  more  IP-  enabled  services.  IP-  enabled  services,  moreover,  have 
 increased  economic  productivity  and  growth,  and  bolstered  network  redundancy  and  resiliency.  Our  aim  in  this  proceeding  is  to  facilitate  this  transition,  relying  wherever  possible  on 
 competition  and  applying  discrete  regulatory  requirements  only  where  such  requirements  are  necessary  to  fulfill  important  policy  objectives.  We  expressly  recognize  the  possibility  that  we 
 ultimately  will  need  to  differentiate  among  various  IP-  enabled  services.  For  example,  much  of  the  telecommunications  regulation  implemented  by  the  Commission  had  its  roots  in  seeking  to 
 control  monopoly  ownership  of  the  PSTN.  To  the  extent  the  market  for  IP-  enabled  services  is  not  characterized  by  such  monopoly  conditions,  we  seek  comment  on  whether  there  is  a 
 compelling  rationale  for  applying  traditional  economic  regulation  to  providers  of  IP-  enabled  services.  As  discussed  below,  14  other  aspects  of  the  existing  regulatory  framework    including 
 those  provisions  designed  to  ensure  disability  access,  consumer  protection,  emergency  911  service,  law  enforcement  access  for  authorized  wiretapping  purposes,  consumer  privacy,  and 
 others    should  continue  to  have  relevance  as  communications  migrate  to  IP-  enabled  services.  Because  we  do  not  prejudge  these  issues,  however,  this  Notice  asks  broad  questions  covering  a 
 wide  range  of  services  and  applications,  and  a  wide  assortment  of  regulatory  requirements  and  benefits,  to  ensure  the  development  of  a  full  and  complete  record  upon  which  we  can  arrive  at 
 sound  legal  and  policy  conclusions  regarding  whether  and  how  to  differentiate  between  IP- 
 13  Indeed,  while  a  century  of  PSTN  development  has  given  rise  to  relatively  few  opportunities  for  user 
 customization,  a  mere  decade  of  widespread  commercial  use  has  produced  a  dizzying  array  of  IP-  enabled  services,  ranging  from  presence  management  to  multimedia  conferencing  to  unified  messaging,  as  discussed  in  greater  detail 

 below. 
 14  See  infra  Part  V.  B;  Part  VI.  A. 
5
 Federal  Communications  Commission  FCC  04-  28 
 6 
 enabled  services  and  traditional  voice  legacy  services,  and  how  to  differentiate  among  IP-enabled  services  themselves.  As  discussed  above,  fencing  off  IP  platforms  from  economic 
 regulation  traditionally  applied  to  legacy  telecommunications  services  would  not  put  them  beyond  the  reach  of  regulations  designed  to  promote  public  safety  and  consumer  protection 
 (such  as  E911)  or  other  important  public  policy  concerns.  Instead,  this  proceeding  is  designed  to  seek  public  comment  on  future  decisions  that  would  start  from  the  premise  that  IP-  enabled 
 services  are  minimally  regulated. 
 6.  The  remainder  of  this  Notice  is  organized  as  follows.  In  Part  II,  we  describe  the  evolution  of  the  IP-  enabled  services  falling  within  the  ambit  of  this  proceeding,  15  and  set  forth 

 the  legal  framework  against  which  we  consider  the  appropriate  regulatory  treatment,  if  any,  for  these  services.  16  In  Part  III,  we  seek  comment  on  whether  it  would  be  appropriate  to  establish 
 categories  of  IP-  enabled  services,  based  on  important  distinguishing  characteristics,  and  ask  commenters  to  propose  specific  grounds  on  which  such  categorization,  if  appropriate,  should  be 
 pursued.  17  Part  IV  examines  the  jurisdictional  issues  associated  with  VoIP  and  other  IP-  enabled  services  and  seeks  comment  on  whether  to  extend  the  application  of  the  Commissions  ruling 
 that  a  certain  type  of  VoIP  offering  is  an  unregulated  information  service  subject  to  federal  jurisdiction.  18  Part  V  seeks  comment  on  the  appropriate  legal  and  regulatory  framework  for 
 categories  of  IP-  enabled  services  identified  by  commenters.  19  Specifically,  we  seek  comment  on  the  appropriate  legal  classification  of  each  type  of  IP-  enabled  service,  20  and  then  on  the  necessity 
 of  applying  specific  regulatory  requirements  or  benefits  to  those  specific  categories.  21  Part  VI  of  this  Notice  addresses  the  applicability  of  several  other  regulatory  requirements  and  the 
 implications  that  our  decisions  here  might  have  for  rural  carriers  as  well  as  for  international  and  numbering  issues.  22 

 II.  BACKGROUND 
 7.  Our  consideration  of  the  critical  legal  and  regulatory  questions  posed  in  this  Notice  is  necessarily  informed  by  the  specific  technological  evolution  of  the  services  at  issue  and 

 15  See  infra  Part  II.  A. 
 16  See  infra  Part  II.  B. 
 17  See  infra  Part  III. 
 18  See  infra  Part  IV;  Petition  for  Declaratory  Ruling  that  pulver.  coms  Free  World  Dialup  is  Neither 
 Telecommunications  Nor  a  Telecommunications  Service,  WC  Docket  No.  03-  45,  Memorandum  Opinion  and  Order,  FCC  04-  27  (rel.  Feb.  19,  2004)  (Pulver  Declaratory  Ruling). 

 19  See  infra  Part  V. 
 20  See  infra  Part  V.  A. 
 21  See  infra  Part  V.  B. 
 22  See  infra  Part  VI. 
6
 Federal  Communications  Commission  FCC  04-  28 
 7 
 the  specific  legal  framework  under  which  we  exercise  our  jurisdiction  over  interstate  and  international  communications.  In  this  section,  we  first  briefly  describe  the  history  of  IP-  enabled 
 services    a  history  characterized  by  explosive  growth  and,  recently,  the  advent  of  offerings  that  promise  to  transform  the  communications  environment    and  then  discuss  the  legal  context  in 
 which  we  consider  the  questions  posed  by  those  offerings. 
 A.  Technological  and  Market  Evolution  of  IP-  Enabled  Services 
 8.  The  rise  of  the  Internet  has  fundamentally  changed  the  ways  in  which  we  communicate  by  increasing  the  speed  of  communication,  the  range  of  communicating  devices, 

 and  the  platforms  over  which  they  can  send  and  receive.  This  growth  has  been  possible  because  the  Internet  employs  an  open  network  architecture  using  a  common  protocol    the  Internet 
 Protocol,  or  IP    to  transmit  data  across  the  network  in  a  manner  fundamentally  different  than  the  way  in  which  signals  transit  a  circuit-  switched  service.  23  Whereas  circuit-  switched  networks 
 generally  reserve  dedicated  resources  along  a  path  through  the  network,  IP  networks  route  traffic  without  requiring  the  establishment  of  an  end-  to-  end  path.  A  telephone  call  placed  over  a 
 circuit-  switched  network  typically  requires  resources  to  be  reserved  along  the  path  between  both  parties  for  the  entire  duration  of  the  call,  even  if  the  amount  of  information  being  transferred 
 does  not  require  the  full  bandwidth  of  the  facilities.  24  In  contrast,  in  Internet  Protocol  networking,  data  is  segmented  into  packets  which  are  individually  addressed  and  then 
 transmitted  over  a  series  of  physical  networks  which  may  be  comprised  of  copper,  fiber,  coaxial  cable,  or  wireless  facilities.  25  When  packets  are  transmitted  via  IP  between  two  points,  the 

 23  In  essence,  the  Internet  is  a  global,  packet-  switched  network  of  networks  that  are  interconnected  through  the 
 use  of  the  common  network  protocol    IP.  The  Supreme  Court  has  described  the  Internet  as  an  international  network  of  interconnected  computers.  Reno  v.  ACLU,  521  U.  S.  844,  849-  50  (1997).  No  single  entity  controls  the 

 Internet,  for  it  is  a  worldwide  mesh  or  matrix  of  hundreds  of  thousands  of  networks,  owned  and  operated  by  hundreds  of  thousands  of  people.  John  S.  Quarterman  &  Peter  H.  Salus,  How  the  Internet  Works  (visited  Dec.  17, 
 2003)  <http://  www.  mids.  org/  works.  html>. 
 24  See  Presentation  by  Christopher  Rice,  SBC  Senior  Vice-  President,  to  FCC  Staff,  VoIP  Telephony  Discussion  at 
 4  (Nov.  19,  2003)  (SBC  Nov.  19  Presentation)  (  Trunk  circuit  held  up  between  Phone  A  and  Phone  B  for  length  of  call).  This  presentation,  and  all  other  cited  presentations  to  Commission  staff,  have  been  filed  in  this  docket  (WC 

 Docket  No.  04-  36)  for  public  inspection. 
 25  See  Living  Internet:  Routing  (visited  Dec.  17,  2003)  <http://  livinginternet.  com/  i/  iw_  route.  htm>  (IP  is  used  to 
 transfer  packets  between  networks);  Living  Internet:  How  Packets  Work  (visited  Dec.  17,  2003)  <http://  livinginternet.  com/  i/  iw_  packet_  packet.  htm>  (How  Packets  Work)  (explaining  how  IP  creates  data  packets 

 and  addresses  them).  The  routers,  which  are  computers  connected  to  the  IP  network,  examine  the  address  on  each  IP  packet,  and,  using  a  routing  configuration  table,  decide  to  which  other  router  in  the  network  the  IP  packet  should 
 be  sent.  Each  router  in  the  network  constantly  communicates  with  the  other  routers,  permitting  each  router  to  know  whether  the  other  router  is  active  and  the  amount  of  traffic  the  other  router  is  carrying.  See  Curt  Franklin,  How 
 Routers  Work  (visited  Dec.  17,  2003)  <http://  computer.  howstuffworks.  com/  router6.  htm>  (How  Routers  Work).  This  information  permits  the  routers  to  decide  which  route  to  use  to  send  an  IP  packet  toward  its  ultimate 
 destination.  See  Living  Internet:  How  Switching  Works  (visited  Dec.  17,  2003)  <http://  livinginternet.  com/  i/  iw_  packet_  switch.  htm>.  When  the  packet  reaches  this  final  destination  it  is  unwrapped 
 and  the  data  inside  is  used  for  an  application. 
7
 Federal  Communications  Commission  FCC  04-  28 
 8 
 network  does  not  establish  a  permanent  or  exclusive  path  between  the  points.  26  Instead,  routers  read  packet  addresses  individually,  and  decide    sometimes  on  a  packet-  by-  packet  basis    which 
 route  to  use  for  each  packet.  27  Thus,  the  routes  that  packets  will  take  to  the  same  destination  may  vary,  depending  on  the  best  routing  information  available  to  the  routers.  28  Indeed,  packets 
 traveling  in  the  opposite  direction  on  the  return  communications  between  the  same  sending  and  receiving  pair  may  follow  an  entirely  different  path.  Moreover,  these  packets  may  carry  any 
 type  of  information  for  applications  offering  widely  disparate  functions,  including  those  facilitating  voice  communications.  29 

 9.  The  growth  of  the  Internet  has  been  accompanied  by  an  explosion  in  consumer  access  to  a  growing  universe  of  websites,  all  relying  on  IP.  Many  websites  have  evolved  into 
 content-  rich  information  portals  configured  to  serve  the  broad  commercial,  educational,  political  and  entertainment  interests  of  Internet  users.  In  its  initial  stages,  the  Internet  was  primarily 
 utilized  for  e-  mail,  file  transfer,  and    more  recently    access  to  the  world  wide  web.  Increasingly,  the  Internet  is  being  utilized  for  more  sophisticated  uses,  such  as  peer-  to-  peer  file 
 sharing,  30  instant  messaging,  streaming  media,  online  gaming,  and  virtual  private  networks  (VPNs).  31  In  turn,  as  applications  proliferate  and  demand  for  Internet  access  services  grows, 
 service  providers  continue  to  augment  network  capacity  to  offer  faster  Internet  access  services.  32 
 26  See  Living  Internet:  Packet  Switching  History  (visited  on  Dec.  17,  2003) 
 <http://  livinginternet.  com/  i/  iw_  packet_  inv.  htm>  (IP  communications  do  not  require  an  always-  on,  continuous  connection). 

 27  See  How  Routers  Work. 
 28  See  id.;  Living  Internet:  Interior  Gateway  Protocols  (visited  Dec.  17,  2003) 
 <http://  livinginternet.  com/  i/  iw_  route_  igp.  htm>  (describing  the  algorithms  that  routers  use  in  deciding  where  to  forward  a  packet). 

 29  See  How  Packets  Work. 
 30  In  the  peer-  to-  peer  (P2P)  model,  each  party  to  a  communication  has  the  same  capabilities  and  either  party  can 
 initiate  a  communication  session.  Applications  residing  on  the  users  PC  (or  other  hardware)  permit  the  user  to  connect  directly  to  another  users  hardware  without  the  assistance  of  an  Internet  Service  Provider.  Now  that  some 

 in  industry  believe  that  most  of  the  voice  quality  issues  have  been  addressed,  P2P  voice  service  offerings  are  on  the  rise.  See  Victor  Schnee,  Free  Voice?  Skypes  Peer-  To-  Peer  Is  To  Be  Watched!,  Probe  Financial  Services  (Oct.  27, 
 2003);  Skype  Limited,  What  is  Skype?  (visited  Jan.  14,  2004)  <http://  www.  skype.  com/  skype.  html>. 
 31  See  infra  Part  II.  A.  2. 

 32  Dial-  up,  or  narrowband,  Internet  access  utilizes  the  same  PSTN  infrastructure  that  telephone  subscribers  use  to 
 place  traditional  circuit-  switched  voice  calls.  As  mentioned  above,  see  supra  note  3,  the  Commission  has  defined  high-  speed  to  describe  transmission  capacity  capable  of  achieving  over  200  kbps  in  at  least  one  direction,  and 

 advanced  services  as  having  over  200  kbps  capability  in  both  directions.  The  Commission  has  more  generally  defined  high-  speed  Internet  as  a  service  that  enables  consumers  to  communicate  over  the  Internet  at  speeds  that 
 are  many  times  faster  than  the  speeds  offered  through  dial-  up  telephone  connections  and  that  enables  subscribers  to  send  and  view  content  with  little  or  no  transmission  delay,  utilize  sophisticated  real-  time  applications,  and  take 
 advantage  of  other  high-  bandwidth  services.  See  Applications  for  Consent  to  the  Transfer  of  Control  of  Licenses  and  Section  214  Authorizations  by  Time  Warner  Inc.  and  America  Online,  Inc.,  Transferors,  to  AOL  Time  Warner 
 (continued.) 
8
 Federal  Communications  Commission  FCC  04-  28 
 9 
 These  broadband  services  have  been  deployed  across  multiple  platforms,  including  those  of  local  exchange  carriers  (LECs),  cable  operators,  direct  broadcast  satellite  (DBS),  video  programming 
 providers  and,  increasingly,  wireless  (including  WiFi)  providers  and  electric  companies  using  power  lines.  33  In  the  following  sections,  we  briefly  describe  a  cross-  section  of  the  numerous 
 offerings    including  not  only  various  sorts  of  IP  telephony,  but  also  new  and  unique  forms  of  IP-  based  communication    made  possible  by  these  developments. 

 1.  Internet  Voice 
 10.  Although  several  providers  carry  voice  calls  over  their  backbone  IP  networks,  until  recently,  use  of  the  Internet  for  the  purpose  of  transmitting  voice  communications  has  been 

 limited.  34  Early  ventures  in  peer-  to-  peer  IP  telephony  were  largely  unsuccessful  in  part  due  to  the  nature  of  early  IP  networks,  which  offered  limited  reliability  and  voice  quality.  Today, 
 however,  as  a  result  of  improvements  in  technology,  IP  networks  are  increasingly  being  used  to  carry  voice  communications.  For  example,  private  IP  networks  are  used  to  provide  an  array  of 
 communications  services  to  enterprise  customers.  35  Residential  users  can  access  VoIP  services 
 (Continued  from  previous  page)  Inc.,  Transferee,  CS  Docket  No.  00-  30,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  6547,  6572,  para.  63  (2001) 

 (FCC  AOL  Time  Warner  Merger  Order);  see  also  id.  at  6572,  6574-  77,  paras.  64,  69-  73.  Researchers  at  Telcordia  predict  that,  in  one  decade,  residential  subscribers  may  possibly  have  Internet  access  speeds  as  high  as  one  gigabit-per- 
 second,  and  commercial  systems  may  feasibly  achieve  approximately  20  terabits-  per-  second  on  a  single  optical  fiber.  See  Presentation  by  Matthew  S.  Goodman,  Ph.  D.,  Chief  Scientist  and  Telcordia  Fellow,  and  Robert  J. 
 Runser,  Ph.  D.,  Senior  Research  Scientist,  Telcordia  Technologies,  to  FCC  Staff,  Broadband  Networking:  What  is  Broadband?  5  (Nov.  5,  2003).  Providers  are  also  increasing  the  speeds  at  which  users  can  access  the  Internet  over 
 narrowband  facilities.  See,  e.  g.,  ISPs  Use  Retail  Chains  To  Drive  Subscription  Growth  In  2004,  Electronic  Information  Report  (Jan.  12,  2004)  (describing  EarthLink  Accelerator,  which  enables  dial-  up  subscribers  to 
 access  the  Web  at  speed  up  to  five  times  faster  than  standard  56K  connections). 
 33  CMRS  providers  are  also  offering  broadband  access.  See,  e.  g.,  Verizon  Wireless,  Verizon  Wireless  Announces 
 Roll  Out  of  National  3G  Network,  Press  Release  (Jan.  8,  2004)  (Verizon  Jan.  8,  2004  Press  Release)  (describing  service  providing  speeds  of  300  to  500  kbps);  Monet  Mobile  Networks,  monet  broadband,  at  3  (visited  Jan.  14, 

 2004)  <http://  www.  monetmobile.  com/  Assets/  Audiovoxuser.  pdf>  (describing  wireless  broadband  service  introduced  in  the  fall  of  2002,  offering  average  speeds  of  700  kbps). 

 34  The  increase  in  the  number  of  voice  calls  transmitted  over  at  least  a  portion  of  an  IP  network  over  the  past  few 
 years  has  been  dramatic.  In  2002,  international  VoIP  traffic  increased  by  80%  to  18.7  billion  minutes,  and  comprised  approximately  10.  8%  of  all  international  call  traffic.  See  Telegeography  2004,  Primetrica,  Inc.  12,  26 

 (Dec.  2004)  (Telegeography  2004)  (these  numbers  include  all  cross-  border  calls  carried  on  an  IP  network  and  terminated  on  a  PSTN;  PC-  to-  PC  communications  and  PVN  traffic  were  excluded  from  Telegeographys  survey). 
 Another  source  estimates  that,  in  2002,  the  total  world  retail  (residential  and  enterprise)  IP  voice  traffic  volume  was  approximately  47.  5  billion  minutes,  while  approximately  8  trillion  minutes  were  carried  using  the  PSTN.  See  VoIP 
 Services  Assessment:  Communications  Service  Strategies  &  Opportunities,  Stratecast  Partners  19  (Feb.  2003)  (Stratecast  Report). 

 35  Enterprises  may  utilize  intra-  office  or  interoffice  private  IP  networks  that  handle  voice  calls  and  data 
 transmission.  Some  of  these  IP  networks  are  Virtual  Private  Networks  (VPNs)  that  traverse  the  open  Internet.  See  presentation  by  Christopher  Rice,  SBC  Senior  Vice-  President,  to  FCC  Staff,  VoIP  Telephony  Discussion  (Nov.  19, 

 2003)  (SBC  Nov.  19  Presentation). 
9
 Federal  Communications  Commission  FCC  04-  28 
 10 
 using  phones,  laptops,  and  personal  digital  assistants.  Even  many  gaming  systems  now  feature  VoIP  functionality.  36  Also,  wireless  communications  standards  have  evolved  to  include  IP  as  a 
 key  component.  37  Many  manufacturers  are  concentrating  most,  if  not  all,  new  development  and  marketing  on  IP-  capable  alternatives  while  merely  providing  maintenance  support  for  legacy 
 circuit-  switched  equipment  currently  in  place.  38  Similarly,  a  recent  flood  of  press  announcements  reflects  that  a  number  of  service  providers,  from  residential  telephony  companies 

 36  See  infra  para.  19. 
 37  For  example,  Code  Division  Multiple  Access  2000  (cdma2000),  one  of  the  main  third  generation  (3G)  systems, 
 uses  enhanced  Mobile  IP  in  its  core  network  architecture.  See  A.  Jamalipour  &  P.  Lorenz,  Merging  IP  and  Wireless  Networks,  IEEE  Wireless  Communications,  October  2003,  Vol.  10  No.  5,  at  6.  The  high-  speed  version 

 of  this  standard,  cdma2000  1xEV-  DV  (evolution    data,  voice)  supports  an  all  IP-  integrated  voice,  data,  and  video  communications  capability.  See  Y.  Yoon  et  al.,  Tutorial  on  CDMA  2000  1xEV-  DV,  IEEE  Wireless 
 Communications  and  Networking  Conference  2003  Ericsson  Wireless  Communications,  USA,  March  17,  2003,  at  9.  Currently  in  the  U.  S.,  both  Sprint  PCS  and  Verizon  Wireless  support  the  2.5G  CDMA  standard  referred  to  as 
 cdma2000  1X,  which  supports  both  circuit-  switched  voice  and  packet-  switched  data  using  Mobile  IP.  A  3G  CDMA  data-  optimized  standard  is  the  cdma2000  1x  EV-  DO  (evolution    data  optimized)  standard.  See  CDMA2000  1x  EV-DO 
 is  fast  enough  to  be  3G  (visited  Feb.  7,  2004)  <http://  www.  3g.  co.  uk/  PR/  April2002/  3273.  htm>.  To  allow  roaming  users  access  to  integrated  data,  voice,  and  multimedia  services,  standards  bodies,  such  as  the  Internet 
 Engineering  Task  Force  (IETF)  and  Third-  Generation  Partnership  Project  (3GPP),  are  working  on  the  specifications  of  an  all  IP  wireless  network.  See  N.  Banerjee  et  al.,  The  University  of  Texas  at  Arlington,  Mobility  Support  in 
 Wireless  Internet,  IEEE  Wireless  Communications,  October  2003,  Vol.  10  No.  5,  at  54.  Another  European  3G  wireless  network  approved  standard  is  the  Universal  Mobile  Telecommunications  System  (UMTS).  See  UMTS 
 Forum,  Network  Evolution:  Radio  Access  &  Core  Network  Evolution  GSM  (visited  Feb.  7,  2004)  <http://  www.  umts-  forum.  org/  servlet/  dycon/  ztumts/  umts/  Live/  en/  umts/  3G_  Network_  gsm>.  UMTS  core  network  is 
 comprised  of  an  IP  Multimedia  Subsystem  (IMS),  which  supports  VoIP  in  addition  to  other  multimedia  services.  UMTS  also  supports  circuit-  switched  voice  communications  that  are  interconnected  with  the  legacy  PSTN.  UMTS 
 is  an  evolution  of  2.5G  GSM  networks,  including  both  the  circuit-  switched  voice  system  and  general  packet  radio  service,  GSM/  GPRS,  supporting  IP  services.  See  A.  Jamalipour,  Tutorial  on  Wireless  Mobile  Internet   
 Architectures,  Protocols  and  Services,  IEEE  Wireless  Communications  and  Networking  Conference  2003,  Ericsson  Wireless  Communications,  USA,  March  16,  2003,  at  50,  67;  see  also  A.  Jamalipour  &  P.  Lorenz,  Merging 
 IP  and  Wireless  Networks,  IEEE  Wireless  Communications,  October  2003,  Vol.  10  No.  5,  at  6. 
 38  See  Nortel  Networks,  Voice  over  IP  (visited  Feb.  12,  2004) 
 <http://  www.  nortelnetworks.  com/  corporate/  technology/  voip/  index.  html>  (  Service  providers  and  enterprises  agree  that  the  network  of  the  future  must  offer  combined  voice  and  data  communications  over  a  single  integrated  platform 

 built  on  packet  technology.);  Cisco  Systems,  Cisco  IP  Communications  Solutions  (visited  Feb.  12,  2004)  (  Cisco  IP  telephony  solutions  provide  a  flexible  foundation  for  powerful  new  applications  that  extend  the  limits  of 
 traditional  telephony.)  <http://  www.  cisco.  com/  en/  US/  netsol/  ns340/  ns394/  ns165/  ns268/  net_  value_  proposition09186a00800d756c.  html>. 
 Nortel  is  deploying  VoIP-  capable  equipment  that  wireline  carriers  can  use  with  their  existing  circuit-  switched  networks.  See  Netphones  Start  Ringing  Up  Customers,  BusinessWeek  online  (Dec.  29,  2003) 
 <http://  www.  businessweek.  com/  magazine/  content/  03_  52/  b3864039.  htm>  (estimating  that  spending  on  VoIP  telephony  equipment  increased  by  10%  in  2003  from  2002).  By  some  estimates,  worldwide  spending  by  businesses 
 on  IP  telephony  systems  in  2003  was  nearly  double  that  of  the  previous  year.  See  Grant  and  Latour  (citing  a  research  firm  that  estimates  that  spending  on  IP  telephony  systems  would  exceed  $1  billion  in  2003,  constituting 
 approximately  20%  of  world-  wide  business  spending  on  phone  systems). 
10
 Federal  Communications  Commission  FCC  04-  28 
 11 
 to  cable  providers,  have  begun  to  use  or  will  soon  use  IP  to  provide  voice  services  to  residential  customers.  39 
 11.  These  recent  developments,  however,  must  be  understood  within  the  context  of  the  development  of  the  technology  in  recent  years,  and  the  myriad  services  in  which  it  is  now 
 used.  IP  telephony  has  been  offered  in  various  forms  since  at  least  1995.  40  Early  experience  with  the  technology,  however,  appears  to  have  deterred  investors  and  consumers  from  adopting 
 it  because,  analysts  argue,  its  reliability  and  voice  quality  were  below  standards  that  most  consumers  would  tolerate.  41  According  to  many  industry  watchers,  technology  has  now 
 overcome  prior  quality  and  reliability  concerns.  42  These  improvements,  the  creation  of  new  IP 
 39  See,  e.  g.,  Ben  Charny,  Cox  Communications  Dives  into  VoIP,  CNET  News.  com  (Dec.  15,  2003) 
 <http://  news.  com.  com/  2100-  7352-  5124440.  html>  (describing  Coxs  offering  of  VoIP  service  to  cable  customers  in  Roanoke,  Virginia);  Ben  Charny,  Qwest  Taps  into  Net  Telephony,  CNET  News.  com  (Dec.  10,  2003) 

 <http://  news.  com.  com/  2100-  7352-  5119020.  html>  (describing  Qwest  VoIP  service  offered  to  customers  using  its  broadband  facilities);  Ben  Charny  &  Jim  Hu,  Time  Warner  Cable  Reaches  VoIP  Deals,  CNET  News.  com  (Dec.  8, 
 2003)  <http://  news.  com.  com/  2100-  7352-  5116936.  html>  (describing  VoIP  services  to  be  offered  using  Time  Warners  cable  facilities);  Ben  Charny,  Verizon  Details  Internet  Phone  Plans,  CNET  News.  com  (Nov.  18,  2003) 
 <http://  news.  com.  com/  2100-  7352-  5108908.  html>  (describing  Verizons  plans  to  offer  VoIP  services  to  customers  using  its  broadband  facilities). 

 40  See  Grant  and  Zuckerman,  Redialing  the  Internet  Frenzy?  Wall  St.  J.,  Nov.  13,  2003,  at  C1  (Grant  and 
 Zuckerman). 
 41  See  id.  at  C1  (noting  that  many  customers,  especially  enterprise  customers,  found  the  sound  quality  associated 
 with  early  IP  telephony  to  be  unacceptable);  see  also  Presentation  by  Michael  Kende,  Principal  Consultant,  Analysys  Consulting,  to  FCC  Staff,  Voice  over  IP  Business  Models  3  (Jan.  29,  2004). 

 42  Cable  operators  and  wireline  carriers  have  developed  and  deployed  technology  that  overcomes  prior  voice 
 quality  issues.  CableLabs,  the  cable  industrys  research  and  development  group,  has  developed  so-  called  PacketCable  specifications  that  are  designed  to  provide  quality  of  service  (QoS)  to  a  variety  of  IP-  enabled  services. 

 PacketCable  is  built  on  top  of  the  DOCSIS  1.1  cable  modem  infrastructure  that  uses  IP  technology  to  enable  a  wide  range  of  multimedia  services,  such  as  IP  telephony,  multimedia  conferencing,  interactive  gaming,  and  general 
 multimedia  applications.  Among  these  services,  VoIP  is  the  first  service  delivered  over  the  PacketCable  architecture.  Because  PacketCable  mandates  the  use  of  a  managed  IP  network,  in  that  services  are  not  delivered 
 over  the  Internet,  PacketCable  compliant  systems  are  able  to  guarantee  priority  delivery  of  voice  IP  packets  over  other  data  packets  on  the  DOCSIS  access  network.  CableLabs  has  already  certified  products  that  meet  the 
 PacketCable  specifications,  such  as  DOCSIS  1.  1  modems  that  incorporate  multimedia  terminal  adaptors  (MTA)  that  permit  a  customer  to  connect  a  telephone  directly  to  a  cable  modem.  See  David  McIntosh  &  Maria  Stachelek,  VoIP 
 Services:  PacketCable  Delivers  a  Comprehensive  System  (visited  Jan.  7,  2004)  <http://  www.  packetcable.  com/  downloads/  NCTA02_  VOIP_  Services.  pdf>. 

 Wireline  carriers  and  their  partners,  such  as  Telcordia,  have  also  developed  solutions  for  voice  quality  issues.  Some  wireline  carriers  intend  to  use  protocols  such  as  multiprotocol  label  switching  (MPLS),  which  is  an  application  that 
 runs  on  an  IP  networks  routers,  provides  switching  capability,  and  gives  priority  QoS  to  certain  IP  packets.  When  an  IP  packet  enters  the  IP  network,  the  MPLS  places  labels  on  that  packet  which  determine  whether  it  will  receive 
 priority  treatment  over  other  packets  that  transit  the  network.  When  an  MPLS-  labeled  priority  packet  arrives  at  a  router,  once  that  router  determines  that  the  MPLS  has  granted  that  IP  packet  priority,  it  will  send  the  packet  through 
 the  router  before  non-  priority  packets,  and  it  will  send  the  packet  on  a  route  through  the  IP  network  that  has  the  least  congestion.  The  carrier  solution  also  uses  SIP  for  signaling  purposes.  See  SBC  Nov.  19  Presentation  at  16-  17. 
11
 Federal  Communications  Commission  FCC  04-  28 
 12 
 services  that  traditional  telephony  providers  may  offer  alongside  voice  service,  43  and  increasing  penetration  of  broadband  into  the  residential  market  44  have  become  important  market  drivers 
 promoting  deployment  of  IP  telephony  technologies.  In  addition,  market  entry  by  IP  service  providers  such  as  Vonage  appears  to  have  spurred  deployment  of  IP-  enabled  voice  services  by 
 established  telephony  providers.  45 
 a.  IP  Telephony  Offerings  by  Owners  of  Transmission  Facilities 
 12.  As  noted  above,  an  IP  network  transmits  IP  packets,  which  may  contain  data  that,  when  unpacked,  forms  voice  communication.  Cable  operators,  wireline  carriers,  and  wireless 

 providers  have  announced  that  they  have  begun  to  deploy,  or  intend  to  deploy,  IP  networks  to  transmit  IP  telephony  services  to  their  subscribers.  Cable  operators  have  begun  to  offer  video, 
 broadband  Internet,  and  IP  telephony  over  their  hybrid  fiber-  coaxial  cable  plant.  Time  Warner  Cable  predicts  that  it  will  offer  IP  telephony  to  all  of  its  subscribers  by  the  end  of  2004.  46  To 
 achieve  this  goal,  Time  Warner  recently  entered  into  an  agreement  with  MCI  and  Sprint  to  use  those  companies  networks  to  provide  IP  telephony  to  its  cable  subscribers  and  to  interconnect 
 their  calls  with  the  PSTN.  47 
 13.  AT&  T  states  that  it  will  provide  VoIP  service  in  100  markets  by  the  first  quarter  of  2004  and  expects  to  enroll  over  one  million  customers  in  the  next  two  years.  48  Other  wireline 

 carriers  have  announced  plans  to  launch  IP  telephony  services  in  2004.  49  SBC  currently  offers  IP  telephony  to  small  and  medium  size  enterprises  (SMEs)  in  13  states,  and  BellSouth  plans  to 

 43  See  Douglas  Sicker,  Delocalization  in  Telecommunications  Networks,  The  Progress  &  Freedom  Foundation  at 
 19  (Jan.  2004)  <  http://  pff.  org/  publications/  communications/  pop11.2delocalization.  pdf>  (  In  the  long  run,  VoIPs  true  advantages  (e.  g.,  integrated  networks  and  flexible  service  platforms)  will  be  what  drives  its  success.). 

 44  See  Grant  &  Latour  (noting  that  the  spread  of  broadband  connections  makes  VoIP  much  easier  to  use). 
 45  See  id.  (noting  that  some  top  telecommunications  carriers  are  testing  their  own  IP  telephony  offerings  in 
 response  to  the  newfound  success  of  VoIP  companies). 
 46  See  Presentation  by  John  Billock,  Vice  Chairman  &  Chief  Operating  Officer,  Time  Warner  Cable,  to  FCC  VoIP 
 Forum,  at  5  (Dec.  1,  2003)  <http://  www.  fcc.  gov/  voip>  (Time  Warner  VoIP  Forum  Presentation).  Time  Warner  recently  introduced  IP  telephony  to  a  small  community  in  Maine,  where  it  has  an  agreement  with  a  competitive  LEC 

 to  facilitate  outgoing  and  incoming  calls  to  and  from  the  PSTN.  See  id. 
 47  See  MCI,  MCI  and  Time  Warner  Cable  Partner  to  Deliver  Next  Generation,  IP-  Enabled  Communications, 
 Press  Release  (Dec.  8,  2003);  Ben  Charny  and  Jim  Hu,  Time  Warner  Cable  Reaches  VoIP  Deals,  CNET  News.  com  (visited  Jan.  14,  2004)  <http://  news.  com.  com/  2100-  7352-  5116936.  html>. 

 48  See  Shawn  Young,  AT&  T  to  Launch  Internet-  Based  Telephone  Service,  Wall  St.  J.  B6  (Dec.  11,  2003). 
 AT&  Ts  CEO  David  Dorman  states,  Unlike  many  of  our  competitors,  who  are  constrained  by  geographic  reach  or  broadband  access  technologies,  our  voice  over  IP  will  be  available  in  cities  across  America  to  customers  with 

 different  kinds  of  broadband  access.  Margaret  Kane  &  Scott  Ard,  AT&  T  to  Offer  Internet  Calling,  CNET  News.  com  (Dec.  11,  2003)  <http://  news.  com.  com/  2100-  7352-  5119779.  html>. 

 49  See  Jo  Maitland,  RBOC  VOIP  Coming  in  2004  Boardwatch  (Nov.  11,  2003). 
12
 Federal  Communications  Commission  FCC  04-  28 
 13 
 rollout  service  to  SMEs  in  9  states  throughout  2004.  Qwest  announced  that  it  would  offer  IP  telephony  to  residential  subscribers  and  SMEs  in  Minnesota  in  December  2003.  Finally, 
 Verizon  intends  to  offer  IP  telephony  to  its  DSL  subscribers  nationwide  in  the  second  quarter  of  2004,  and  to  businesses  in  the  fourth  quarter  of  2004.  50 

 14.  Wireless  service  providers  have  also  begun  providing  IP  telephony  services.  Second  generation  (2G)  mobile  communications  systems  solely  using  circuit-  switched  networks 
 to  provide  voice  service  are  now  being  supplemented  by  2.5G  and  3G  systems  providing  enhanced  multimedia  services  built  on  packet  switching  and  IP  routing.  51  For  example,  Verizon 
 Wireless  and  Sprint  PCS  have  recently  launched  push-  to-  talk  service,  52  using  VoIP  technology,  and  additional  carriers  are  expected  to  launch  push-  to-  talk  service  this  year.  53  Voice  services 
 will  also  be  provided  by  service  providers  using  WiFi  technology.  54 
 b.  IP  Telephony  Offerings  By  Other  Providers 
 15.  Providers  not  owning  extensive  facilities    or  any  facilities  at  all    have  also  begun  to  offer  IP  telephony  services  to  residential  end  users.  For  example,  pulver.  com  (Pulver) 

 operates  Free  World  Dialup  (FWD),  an  Internet  application  that  facilitates  FWD  members  engaging  in  free  peer-  to-  peer  communications,  exchanging  voice,  video,  or  text.  FWD 
 subscribers  use  a  Session  Initiation  Protocol  (SIP)  phone  or  personal  computer  55  to  make  calls  to  other  FWD  members  that  do  not  utilize  the  PSTN.  Pulver  states  that  the  members  end-  user 
 devices  establish  the  actual  connection  and  manage  the  call,  and  that  the  calls  are  carried  by  the  members  preexisting  broadband  connection  rather  than  over  Pulver-  owned  facilities.  56  Vonage 
 offers  an  IP  telephony  service  that  permits  a  subscriber  with  a  broadband  connection  to  place  telephone  calls  to,  and  to  receive  calls  from,  other  Vonage  broadband  subscribers  and  end  users 

 50  See  id. 
 51  For  example,  Verizon  Wireless  recently  announced  plans  to  rollout  its  3G  broadband  network  nationwide.  See 
 Verizon  Wireless,  Verizon  Wireless  Announces  Roll  Out  of  National  3G  Network,  Press  Release  (Jan.  8,  2004). 
 52  Push-  to-  talk  services  allow  CMRS  subscribers  to  use  their  mobile  phones  to  send  instant  voice 
 communications  to  an  individual  or  group  of  users. 
 53  See  Verizon  Wireless,  Verizon  Wireless  Launches  National  Push  to  Talk  Service,  Press  Release  (Aug.  14, 
 2003);  Sprint,  Sprint  Launches  Nationwide  Two-  Way  Walkie-  Talkie  Style  Service  to  Customers  with  a  Quick  Way  to  Communicate  One-  on-  One  or  in  Groups,  Press  Release  (Nov.  17,  2003). 

 54  See  Sue  Marek,  Wi-  Fi  Winds  Its  Way  Into  Phones,  WirelessWeek  (visited  Jan.  15,  2004) 
 <http://  www.  wirelessweek.  com/  article/  CA326389?  text=  wi%  2Dfi+  winds+  its+  way+  into+  phones&  stt=  001>. 
 55  See  Petition  for  Declaratory  Ruling  that  pulver.  coms  Free  World  Dialup  is  Neither  Telecommunications  Nor  a 
 Telecommunications  Service,  WC  Docket  No.  03-  45  at  3-  4  (filed  Feb.  5,  2003)  (Pulver  Petition). 
 56  See  id.  at  2-  3. 
13
 Federal  Communications  Commission  FCC  04-  28 
 14 
 relying  on  traditional  PSTN  facilities  alike.  57  Vonage  does  not  provide  its  customers  with  Internet  access  or  a  personal  computer.  Rather,  Vonage  supplies  software  and  a  multimedia 
 terminal  adapter  (MTA)  that  permits  its  customers  to  use  analog  phones  to  place  calls  via  their  broadband  Internet  connections.  58  Vonage  provides  each  of  its  customers  with  traditional 
 telephone  numbers  so  that  Vonage  customers  may  be  called  by  PSTN  telephone  subscribers.  59  When  a  Vonage  customer  communicates  with  a  subscriber  of  ordinary  telephone  service, 
 Vonage  converts  its  customers  IP  packets  into  the  digital  TDM  (time  division  multiplexed)  format  for  transfer  through  a  media  gateway  to  the  PSTN,  and  vice  versa.  60  If  a  Vonage 
 customer  communicates  with  another  Vonage  customer,  this  transmission  does  not  utilize  the  PSTN  and  Vonage  servers  use  SIP  to  direct  the  call  to  the  other  customers  personal  computer  or 
 MTA.  61 
 2.  Other  New  and  Future  IP-  Enabled  Services 
 16.  As  discussed  above,  software  developers  expect  to  introduce  IP-  enabled  data  applications  that  take  advantage  of  broadband  speeds.  In  addition,  as  telephone  service  is 

 migrated  to  an  IP  network,  telephony  providers  plan  to  provide  new  IP-  enabled  data  features  that  will  enhance  the  telephony  experience.  Software  developers  are  also  upgrading  traditional  IP-enabled 
 data  services,  such  as  instant  messaging,  e-  mail,  web  surfing,  gaming,  and  virtual  private  networks,  to  provide  new  features  and  capabilities  that  capitalize  on  the  availability  of  higher 
 speeds.  As  these  services    which  may  integrate  voice,  video,  and  data  capabilities  while  maintaining  high  quality  of  service    are  introduced,  it  may  become  increasingly  difficult,  if  not 
 impossible,  to  distinguish  voice  service  from  data  service,  and  users  may  increasingly  rely  on  integrated  services  using  broadband  facilities  delivered  using  IP  rather  than  the  traditional 
 PSTN.  Analysts  predict  the  increasing  integration  of  IP-  enabled  services  with  devices  other  than  telephones  and  computers. 

 17.  These  new  services  will  likely  come  in  many  varieties.  For  example,  analysts  predict  that  high-  speed  broadband  connections  will  fuel  the  use  of  video-  conferencing,  on-demand 
 conferencing,  and  collaboration  on  documents  while  conferencing.  62  These  video  calls 
 57  See  Vonage  Petition  for  Declaratory  Ruling,  WC  Docket  No.  03-  211,  at  iii,  9  (filed  Sept.  22,  2003)  (Vonage 
 Petition).  Vonage  customers  cannot  access  the  Vonage  service  with  dial-  up  connections.  See  id.  at  4. 
 58  See  id.  at  5.  Some  of  Vonages  customers  use  native  IP  phones,  which  produce  digital  signals  and  can  only 
 be  used  with  an  Internet  connection  and  are  incompatible  with  the  PSTN.  Id. 
 59  See  id.  at  8  (  The  telephone  number  associated  with  the  Vonage  customer  is  not  tied  to  the  customers  physical 
 location.  Rather,  the  telephone  number  is  mapped  to  the  digital  signal  processor  contained  in  the  customers  computer,  enabling  Vonage  to  identify  and  serve  that  customer  over  any  Internet  connection.). 

 60  See  id.  at  6-  7. 
 61  See  id.  at  iii,  6-  7. 
 62  Sprint  Nov.  17  Presentation. 
14
 Federal  Communications  Commission  FCC  04-  28 
 15 
 and  conferences  may  be  accompanied  by  the  transmission  of  data.  63  Some  applications  that  are  currently  used  by  enterprise  customers,  or  that  may  in  the  future  be  used  by  such  customers, 
 include  distance  training,  Internet  classrooms,  IP  customer  support  centers,  voice-  enabled  transactions  and  content  services,  subscription  video,  and  telemedicine.  64 

 18.  With  regard  to  telephone  calls,  IP-  enabled  data  services  might  include  virtual  telephone  numbers,  directory  dialing,  automated  voicemail  attendants,  call  pre-  screening,  and 
 call  forwarding  of  pre-  screened  calls  to  other  IP  enabled  devices,  such  as  a  computer  or  wireless  phone.  65  Industry  analysts  also  contemplate  a  unified  messaging  or  a  unified  mailbox  that 
 collects  a  users  e-  mail,  voicemail,  and  faxes,  which  may  be  accessed  through  the  web,  a  telephone  or  any  other  IP-  enabled  device.  66  These  services  permit  users  to  decide  which  media 
 they  would  like  to  use  to  respond  to  a  given  message.  67  For  example,  software  might  read  a  users  e-  mail  messages  or  faxes  to  him  or  her  over  the  telephone,  allowing  the  user  to  respond 
 via  e-  mail,  voicemail,  facsimile,  or  voice  telephony.  68 
 19.  Software  developers  are  embedding  traditional  IP-  enabled  data  services  with  voice  features.  For  example,  both  America  Onlines  and  Microsoft  Windows  XPs  instant 

 messaging  (IM)  clients  include  a  voice  feature,  as  do  many  chat  applications.  69  Click  to  talk  services  offered  by  Web-  or  E-  mail-  based  applications  permit  customers  to  click  on  a  web  button 
 in  order  to  speak  with  a  service  operator  or  to  enter  into  an  instant  messaging  session  with  the  service  operator.  70  Map  and  navigation  services  and  online  gaming  services  also  contain  voice 

 63  See  Presentation  by  Ming  Lai,  Telcordia  Technologies,  to  FCC  Staff,  Voice  Over  IP  Overview:  Services, 
 Architectures,  Ordering,  and  Billing  at  6  (May  19,  2003)  (Telcordia  May  19  Presentation). 
 64  See  id.  at  6. 

 65  See  AT&  T,  Services  over  Internet  Protocol:  Voice  is  Just  the  Beginning  at  3  (Dec.  2003) 
 <http://  www.  fcc.  gov/  voip>  (AT&  T  FCC  VoIP  Forum  Submission)  (discussing  desktop  multimedia  tools  to  provide  these  IP-  enabled  data  services  for  voice  communications);  Telcordia  May19  Presentation  at  6;  Grant  &  Latour 

 ([  U]  sers  will  be  able  to  redirect  calls  to  other  numbers,  take  messages  only  during  certain  hours,  [and]  give  messages  only  to  certain  callers.) 

 66  See  AT&  T  FCC  VoIP  Forum  Submission  at  3  (universal  messaging);  Telcordia  May  19  Presentation  at  6; 
 Michael  Rogers,  Will  Telephone  Calls  Be  Free?,  Newsweek  (last  modified  Dec.  16,  2003)  <http://  msnbc.  msn.  com/  id/  3730179>  (discussing  an  integrated  communications  package  that  also  includes 

 voicemail,  email,  fax,  instant  messaging  and  video-  conferencing). 
 67  See  Sprint  Nov.  17  Presentation;  Rogers  ([  C]  lever  Web  interfaces  will  let  your  convert  your  voicemail 
 messages  to  email,  or  your  emails  to  voice.). 
 68  Sprint  Nov.  17  Presentation;  Rogers  (discussing  myriad  of  ways  that  a  user  may  respond  to  a  voicemail 
 message  or  email). 
 69  Telcordia  May  19  Presentation  at  6;  Rogers  (Web  portals  may  offer  telephone  service  as  part  of  email  and 
 instant  message  packages). 
 70  Telcordia  May  19  Presentation  at  6. 
15
 Federal  Communications  Commission  FCC  04-  28 
 16 
 components.  71  Many  PC  and  console  games,  such  as  Microsofts  Xbox,  permit  their  owners  to  play  against  other  players  via  peer-  to-  peer  Internet  connections.  72  Many  of  these  games  permit 
 the  gamers  to  speak  with  each  other  via  the  Internet  as  they  play.  73 
 20.  Applications  providers  are  preparing  to  provide  IP-  enabled  services  over  devices  other  than  phones  and  computers.  74  Microsoft  is  currently  testing  its  Internet  Protocol  television 

 (IPTV)  product,  which  it  hopes  will  offer  television  subscribers  more  advanced  services,  such  as  HDTV,  VOD,  interactive  television,  instant  channel  changing,  multiple  pictures-  in-  picture,  and  a 
 richer  multimedia  program  guide,  via  their  broadband  connections.  75  In  addition,  Microsoft  has  already  enabled  VoIP  capability  in  Windows  CE  devices  by  incorporating  SIP  into  that  operating 
 system.  76  Personal  digital  assistants  (PDAs)  are  currently  capable  of  transmitting  voice  and  other  data  using  IP  technology;  additional  IP  applications  are  expected  to  be  developed  for  PDAs  and 
 other  mobile  devices  in  the  future.  77  Moreover,  IP-  enabled  services  are  now  or  may  soon  be  accessed  through,  or  facilitate  use  of,  cameras,  home  appliances,  digital  video  recorders,  medical 
 devices,  and  other  equipment. 
 21.  Mobile  services  have  also  benefited  from  technological  advances.  Second-generation  (2G)  cellular  and  PCS  systems,  mainly  using  voice  circuit-  switched  networks  and  low 

 data  rates,  are  now  being  supplemented  or  replaced  by  2.5G  networks  78  supporting  both  circuit-  switched  and  packet-  switched  services.  Both  Sprint  and  Verizon  Wireless  operate 
 cdma2000  1x  networks.  Verizon  Wireless,  for  example,  currently  operates  a  data-  only  overlay 
 71  Telcordia  May  19  Presentation  at  6. 
 72  See  XBOX,  Xbox  Live  (visited  Dec.  18,  2003)  <http://  www.  xbox.  com/  en-  us/  live/  games/  default.  htm>  (Xbox 
 Live);  GameSpy  Industries,  gamespy  arcade  (visited  Dec.  18,  2003)  <http://  www.  gamespyarcade.  com>  (Gamespy)  (a  web  site  for  PC  gamers  to  meet  and  play  against  each  other  online). 

 73  See  Xbox  Live;  Gamespy;  Presentation  by  Kevin  Werbach,  Supernova  Group  LLC,  to  FCC  VoIP  Forum,  at  5 
 (Dec.  1,  2003)  <http://  www.  fcc.  gov/  voip>  (Werbach  VoIP  Forum  Presentation)  (asking  whether  game  chat  devices  count  as  phones). 

 74  See  Werbach  VoIP  Forum  Presentation  at  4-  5  (discussing  the  convergence  of  IP-  enabled  services  and  devices, 
 including  personal  digital  assistants  (PDAs));  AT&  T  FCC  VoIP  Forum  Submission  at  4  (protocol  conversion  is  occurring  in  many  consumer  devices,  including  cell  phones  that  are  also  PDAs,  SIP  telephones  that  are  also  Java 

 computing  devices,  and  WiFi  handsets  that  are  SIP  endpoints). 
 75  See  Alan  Breznick,  Microsoft  Pitches  IPTV  Initiative  to  MSOs  and  Telcos:  Software  Giant  Aims  to  Make 
 Commercial  Product  Available  by  End  of  2004,  Cable  Datacom  News  (Nov.  1,  2003)  <http://  www.  cabledatacomnews.  com/  nov03/  nov03-  6.  html>. 

 76  See  Microsoft,  Device  Platforms  (visited  Feb.  12,  2004) 
 <http://  msdn.  microsoft.  com/  embedded/  devplat/  default.  aspx>  (describing  Windows  CE). 
 77  See  Werbach  VoIP  Forum  Presentation  at  4-  5  (PDAs,  wireless  phones  and  push-  to-  talk  devices  that  use  an  IP 
 network  for  voice  transmission);  AT&  T  FCC  VoIP  Forum  Submission  at  3  (push-  to-  talk  cellular  services). 
 78  See  supra  para.  14. 
16
 Federal  Communications  Commission  FCC  04-  28 
 17 
 network  based  on  the  1x  EV-  DO  (evolution    data  optimized)  standard  in  Washington  DC  and  San  Diego,  allowing  up  to  300  kbps  to  500  kbps  data  rates.  79  Cingular  and  AT&  T  Wireless 
 operate  GSM/  GPRS  networks  which  allow  voice  circuit  switched  as  well  multi-  media  services. 
 22.  Thus,  as  use  of  IP  expands,  the  technologys  transformative  effect  on  the  communications  landscape  will  likely  become  only  more  prominent,  giving  rise  to  a  virtuous 

 circle  in  which  competition  begets  innovation,  which  in  turn  begets  more  competition.  End  users  are  likely  to  enjoy  greater  and  greater  flexibility  in  designing  or  selecting  communications 
 packages  that  suit  their  individual  needs,  and  can  be  expected  to  access  those  packages  over  networks  of  their  choosing,  on  devices  of  their  choosing.  Many  parties  contend  that,  in  all 
 probability,  cross-  platform  competition  will  sharpen  as  distinctions  between  voice,  video,  and  data  services  blur.  This  competition  will  likely  force  more  innovation  and  lower  prices, 
 resulting  in  more  individual  choice  and  hence  even  greater  competition. 
 B.  Legal  Background 
 23.  Our  consideration  of  issues  surrounding  IP-  enabled  services  and  applications  takes  place  within  a  legal  framework  comprised  of  statutory  provisions  and  judicial  precedent, 

 prior  Commission  orders,  ongoing  Commission  proceedings,  and  state  actions  relating  to  IP-enabled  services.  An  understanding  of  this  legal  context  is  important  to  ensuring  full 
 consideration  of  the  issues  raised  in  this  Notice. 
 1.  Statutory  Definitions  and  Commission  Precedent 
 24.  The  Communications  Act  and  prior  Commission  orders  set  forth  several  definitions  relevant  to  our  consideration  of  VoIP  and  other  IP-  enabled  services.  First,  the  Act 

 defines  the  terms  common  carrier  and  carrier  to  include  any  person  engaged  as  a  common  carrier  for  hire,  in  interstate  or  foreign  communication  by  wire  or  radio.  The  Act  specifically 
 excludes  persons  engaged  in  radio  broadcasting  from  this  definition.  80  Various  regulatory  obligations  and  entitlements  set  forth  in  the  Act    including  a  prohibition  on  unjust  or 
 unreasonable  discrimination  among  similarly  situated  customers  and  the  requirement  that  all  charges,  practices,  classifications,  and  regulations  applied  to  common  carrier  service  be  just  and 
 reasonable  81    attach  only  to  entities  meeting  this  definition. 
 25.  Second,  the  Commission  has  long  distinguished  between  basic  and  enhanced  service  offerings.  In  the  Computer  Inquiry  line  of  decisions,  82  the  Commission  specified  that  a 

 79  See  Verizon  Jan.  8,  2004  Press  Release. 
 80  47  U.  S.  C.    153(  10). 
 81  See  47  U.  S.  C.    201-  02. 
 82  See  Regulatory  and  Policy  Problems  Presented  by  the  Interdependence  of  Computer  and  Communication 
 Services  and  Facilities,  Docket  No.  16979,  Notice  of  Inquiry,  7  FCC  2d  11  (1966)  (Computer  I  NOI);  Regulatory  and  Policy  Problems  Presented  by  the  Interdependence  of  Computer  and  Communication  Services  and  Facilities, 

 (continued.) 
17
 Federal  Communications  Commission  FCC  04-  28 
 18 
 basic  service  is  a  service  offering  transmission  capacity  for  the  delivery  of  information  without  net  change  in  form  or  content.  83  Providers  of  basic  services  were  subjected  to  common  carrier 
 regulation  under  Title  II  of  the  Act.  84  By  contrast,  an  enhanced  service  contains  a  basic  service  component  but  also  employ[  s]  computer  processing  applications  that  act  on  the  format,  content, 
 code,  protocol  or  similar  aspects  of  the  subscribers  transmitted  information;  provide  the  subscriber  additional,  different,  or  restructured  information;  or  involve  subscriber  interaction 
 with  stored  information.  85  The  Commission  concluded  that  enhanced  services  were  subject  to  the  Commissions  jurisdiction.  86  It  further  found,  however,  that  the  enhanced  service  market  was 
 highly  competitive  with  low  barriers  to  entry;  therefore,  the  Commission  declined  to  treat  providers  of  enhanced  services  as  common  carriers  subject  to  regulation  under  Title  II  of  the 
 Act.  87  In  separate  orders,  the  Commission  also  determined  that  exempted  enhanced  service  providers  (ESPs)  should  not  be  subjected  to  originating  access  charges  for  ESP-  bound  traffic.  88 

 26.  In  1996,  the  Telecommunications  Act  codified,  with  minor  modifications,  the  Commissions  distinction  between  regulated  basic  and  largely  unregulated  enhanced 
 services.  The  1996  Act  defined  telecommunications  to  mean  the  transmission,  between  or  among  points  specified  by  the  user,  of  information  of  the  users  choosing,  without  change  in  the 
 form  or  content  of  the  information  as  sent  and  received.  89  The  Act  then  defined  telecommunications  service  to  mean  the  offering  of  telecommunications  for  a  fee  directly  to 
 the  public,  or  to  such  classes  of  users  as  to  be  effectively  available  to  the  public,  regardless  of  facilities  used.  90  The  Commission  has  concluded,  and  courts  have  agreed,  that  the 

 (Continued  from  previous  page)  Docket  No.  16979,  Final  Decision  and  Order,  28  FCC  2d  267  (1971)  (Computer  I  Final  Decision);  Amendment  of 
 Section  64.702  of  the  Commission's  Rules  and  Regulations  (Second  Computer  Inquiry),  Docket  No.  20828,  Tentative  Decision  and  Further  Notice  of  Inquiry  and  Rulemaking,  72  FCC  2d  358  (1979)  (Computer  II  Tentative 
 Decision);  Amendment  of  Section  64.702  of  the  Commission's  Rules  and  Regulations  (Second  Computer  Inquiry),  Docket  No.  20828,  Final  Decision,  77  FCC  2d  384  (1980)  (Computer  II  Final  Decision);  Amendment  of  Section 
 64.702  of  the  Commission's  Rules  and  Regulations  (Third  Computer  Inquiry),  CC  Docket  No.  85-  229,  Report  and  Order,  104  FCC  2d  958  (1986)  (Computer  III)  (subsequent  cites  omitted)  (collectively  the  Computer  Inquiries). 

 83  Computer  II  Final  Decision,  77  FCC  2d  at  419-  22,  paras.  93-  99. 
 84  Id.  at  428,  para.  114. 
 85  47  C.  F.  R.    64.702;  see  also  Computer  II  Final  Decision,  77  FCC  2d  at  420-  21,  para.  97. 
 86  Computer  II  Final  Decision,  77  FCC  2d  at  432,  para.  125. 
 87  Id.  at  432-  35,  paras.  126-  132. 
 88  MTS  and  WATS  Market  Structure,  CC  Docket  No.  78-  72  Phase  I,  Memorandum  Opinion  and  Order,  97  FCC  2d 
 682,  715,  para.  83  (1983)  (MTS/  WATS  Market  Structure  Order);  Amendments  of  Part  69  of  the  Commissions  Rules  Relating  to  Enhanced  Service  Providers,  CC  Docket  No.  87-  215,  Order,  3  FCC  Rcd  2631,  2633,  para.  17  (1988) 

 (ESP  Exemption  Order). 
 89  47  U.  S.  C.    153(  43). 

 90  47  U.  S.  C.    153(  46). 
18
 Federal  Communications  Commission  FCC  04-  28 
 19 
 telecommunications  service  definition  was  intended  to  clarify  that  telecommunications  services  are  common  carrier  services.  91  Various  entitlements  and  obligations  set  forth  in  the  Act 
   including,  for  example,  the  entitlement  to  access  an  incumbents  unbundled  network  elements  for  local  service  92  and  the  obligation  to  render  a  network  accessible  to  people  with  disabilities  93   
 attach  only  to  entities  providing  telecommunications  service. 
 27.  By  contrast,  the  1996  Act  defined  information  service  to  mean  the  offering  of  a  capability  for  generating,  acquiring,  storing,  transforming,  processing,  retrieving,  utilizing,  or 

 making  available  information  via  telecommunications,  and  includes  electronic  publishing,  but  does  not  include  any  use  of  any  such  capability  for  the  management,  control,  or  operation  of  a 
 telecommunications  network  or  the  management  of  a  telecommunications  service.  94  The  Act  did  not  establish  any  particular  entitlements  or  requirements  with  regard  to  providers  of 
 information  services,  but  the  Commission  has  exercised  its  ancillary  authority  under  Title  I  of  the  Act  to  apply  requirements  to  information  services.  95 

 91  Cable  &  Wireless,  PLC,  Order,  12  FCC  Rcd  8516,  8521,  para.  13  (1997);  see  also  Virgin  Islands  Tel.  Corp.  v. 
 FCC,  198  F.  3d  921,  926-  27  (D.  C.  Cir.  1999). 
 92  See  47  U.  S.  C.    251(  c)(  3). 

 93  See  47  U.  S.  C.    255(  c). 
 94  47  U.  S.  C.    153(  20).  We  note  that  the  information  service  category  includes  all  services  that  the 
 Commission  previously  considered  to  be  enhanced  services.  See  Implementation  of  the  Non-  Accounting  Safeguards  of  Sections  271  and  272  of  the  Communications  Act  of  1934,  as  Amended,  CC  Docket  No.  96-  149,  First 

 Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd  21905,  21956-  57,  para.  102  (1996)  (subsequent  history  omitted).  Specifically,  enhanced  services  are  defined  in  section  64.702(  a)  of  the  Commissions 
 rules  as  services,  offered  over  common  carrier  transmission  facilities  used  in  interstate  communications,  which  employ  computer  processing  applications  that  act  on  the  format,  content,  code,  protocol  or  similar  aspects  of  the 
 subscriber's  transmitted  information;  provide  the  subscriber  additional,  different,  or  restructured  information;  or  involve  subscriber  interaction  with  stored  information,  and  include,  among  other  things,  such  services  as 
 voicemail,  electronic  mail,  facsimile  store-  and-  forward,  interactive  voice  response,  protocol  processing,  gateway,  and  audiotext  information  services.  47  C.  F.  R.    64.702(  a). 

 95  See,  e.  g.,  Implementation  of  Section  255  and  251(  a)(  2)  of  the  Communications  Act  of  1934,  as  Enacted  by  the 
 Telecommunications  Act  of  1996,  WT  Docket  No.  96-  198,  Report  and  Order  and  Further  Notice  of  Inquiry,  16  FCC  Rcd  6417,  6455-  62,  paras.  93-  108  (1999)  (Disability  Access  Order)  (invoking  ancillary  authority  to  impose  section 

 255-  like  obligations  on  providers  of  voicemail  and  interactive  menu  services);  see  also  Computer  II  Final  Decision;  Amendment  of  Section  64.702  of  the  Commission's  Rules  and  Regulations  (Second  Computer  Inquiry), 
 Memorandum  Opinion  and  Order,  84  FCC  2d  50  (1980)  (Computer  II  Reconsideration  Decision);  Amendment  of  Section  64.702  of  the  Commission's  Rules  and  Regulations  (Second  Computer  Inquiry),  Memorandum  Opinion  and 
 Order  on  Further  Reconsideration,  88  FCC  2d  512  (1981)  (Computer  II  Further  Reconsideration  Decision)  (asserting  ancillary  jurisdiction  over  enhanced  services,  including  voicemail  and  interactive  menus,  as  well  as  over 
 CPE). 
19
 Federal  Communications  Commission  FCC  04-  28 
 20 
 2.  Commission  Consideration  of  VoIP 
 28.  While  the  Commission  has  not  addressed  IP-  enabled  services  in  a  comprehensive  and  definitive  manner,  the  Commission  has  discussed  issues  relating  to  VoIP.  Moreover,  there 

 are  several  petitions  relating  to  this  issue  currently  pending  before  the  Commission.  These  items  are  briefly  described  below. 

 a.  Stevens  Report 
 29.  In  a  1998  Report  to  Congress  known  as  the  Stevens  Report,  96  the  Commission  considered  the  proper  classification  of  IP  telephony  services  under  the  1996  Act.  97  In  that 

 Report,  the  Commission  declined  to  render  any  conclusions  regarding  the  proper  legal  and  regulatory  framework  for  addressing  these  services,  stating  that  definitive  pronouncements 
 would  be  inappropriate  in  the  absence  of  a  more  complete  record  focused  on  individual  service  offerings.  98  The  Commission  did,  however,  observe  that  in  the  case  of  computer-  to-  computer 
 IP  telephony,  where  individuals  use  software  and  hardware  at  their  premises  to  place  calls  between  two  computers  connected  to  the  Internet,  the  Internet  service  provider  did  not  appear  to 
 be  providing  telecommunications,  and  the  service  therefore  appeared  not  to  constitute  telecommunications  service  under  the  Acts  definition  of  that  term.  99  In  contrast,  a  phone-  to-phone 
 IP  telephony  service  relying  on  dial-  up  or  dedicated  circuits    to  originate  or  terminate  Internet-  based  calls  appeared  to  bear  the  characteristics  of  telecommunications  services,    100 
 so  long  as  the  particular  service  met  four  criteria: 
 (1)  it  holds  itself  out  as  providing  voice  telephony  or  facsimile  transmission  service;  (2)  it  does  not  require  the  customer  to  use 

 CPE  different  from  that  CPE  necessary  to  place  an  ordinary  touch-tone  call  (or  facsimile  transmission)  over  the  public  switched 
 telephone  network;  (3)  it  allows  the  customer  to  call  telephone  numbers  assigned  in  accordance  with  the  North  American 
 Numbering  Plan,  and  associated  international  agreements;  and  (4)  it  transmits  customer  information  without  net  change  in  form  or 
 content.  101 

 96  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  Report  to  Congress,  13  FCC  Rcd 
 11501  (1998)  (Stevens  Report). 
 97  See  id.  at  11541-  45,  paras.  83-  93. 

 98  See  id.  at  11541,  para.  83. 
 99  Id.  at  11543,  para.  87. 
 100  Id.  at  11544,  para.  89. 
 101  Id.  at  11543-  44,  para.  88. 
20
 Federal  Communications  Commission  FCC  04-  28 
 21 
 30.  With  respect  to  protocol  conversion  and  phone-  to-  phone  services,  the  Commission  noted  that  its  Non-  Accounting  Safeguards  Order  determined  that  certain  protocol 
 processing  services  that  result  in  no  net  protocol  conversion  to  the  end  user  are  classified  as  basic  services;  those  services  are  deemed  telecommunications  services.  102  The  Commission 
 further  stated  that  [  t]  he  protocol  processing  that  takes  place  incident  to  phone-  to-  phone  IP  telephony  does  not  affect  the  service's  classification,  under  the  Commission's  current  approach, 
 because  it  results  in  no  net  protocol  conversion  to  the  end  user.  103  Moreover,  the  Commission  observed  that  [  t]  he  Act  and  the  Commissions  rules  impose  various  requirements  on  providers 
 of  telecommunications,  including  contributing  to  universal  service  mechanisms,  paying  interstate  access  charges,  and  filing  interstate  tariffs.  104  The  Commission  also  predicted  that  future 
 proceedings  would  require  it  to  consider  the  regulatory  status  of  various  specific  forms  of  IP  telephony,  including  the  regulatory  requirements  to  which  phone-  to-  phone  providers  may  be 
 subject  if  we  were  to  conclude  that  they  are  telecommunications  carriers.    Specifically,  the  Commission  noted  that  to  the  extent  it  concluded  that  phone-  to-  phone  IP  telephony  services 
 constituted  telecommunications  service[  s]  and  obtain  the  same  circuit-  switched  access  as  obtained  by  other  interexchange  carriers,  the  Commission  may  find  it  reasonable  that  [providers 
 of  such  services]  pay  similar  access  charges.  105  However,  the  Commission  has  also  stated  in  its  Intercarrier  Compensation  NPRM  that  IP  telephony  threatens  to  erode  access  revenues  for 
 LECs  because  it  is  exempt  from  the  access  charges  that  traditional  long-  distance  carriers  must  pay.  106 

 b.  Disability  Access  NOI 
 31.  In  1999,  the  Commission  issued  an  order  implementing  the  disability  accessibility  provisions  found  in  sections  251(  a)(  2)  and  255  of  the  Act.  107  The  Commission  attached  to  that 

 Order  a  Notice  of  Inquiry  raising  specific  questions  regarding  the  application  of  these  sections  and  the  Commissions  implementing  regulations  in  the  context  of  IP  telephony  and  computer-based 
 equipment  that  replicates  telecommunications  functionality.  108  That  Notice  sought  comment  on  the  extent  to  which  Internet  telephony  was  impairing  access  to  communications 
 services  among  people  with  disabilities,  the  efforts  that  manufacturers  were  taking  to  render  new 

 102  Id.  at  11526,  para.  50  (citing  Non-  Accounting  Safeguards  Order,  11  FCC  Rcd  at  21958,  para.  107). 
 103  Id.  at  11527,  para.  52. 
 104  Id.  at  11544,  para.  91. 
 105  Id.  at  11544-  45,  para.  91;  see  also  Developing  a  Unified  Intercarrier  Compensation  Regime,  CC  Docket  No. 
 01-  92,  Notice  of  Proposed  Rulemaking,  16  FCC  Rcd  9610  (2001)  (Intercarrier  Compensation  NPRM). 
 106  Intercarrier  Compensation  NPRM,  16  FCC  Rcd  at  9657  para.  133. 

 107  See  generally  Disability  Access  Order,  16  FCC  Rcd  6417;  infra  paras.  58-  60. 
 108  Disability  Access  Order,  16  FCC  Rcd  at  6483-  84,  para.  175;  see  generally  id.  at  6483-  6486,  paras.  173-  85. 
21
 Federal  Communications  Commission  FCC  04-  28 
 22 
 technologies  accessible,  and  the  degree  to  which  these  technologies  should  be  subjected  to  the  same  disability  access  requirements  as  traditional  telephony  facilities.  109 
 c.  Pending  Petitions 
 32.  Several  parties  have  filed  petitions  asking  the  Commission  to  rule  on  the  proper  legal  classification  and  regulatory  treatment  of  various  IP-  enabled  services.  The  services  at  issue 

 in  these  petitions  differ  markedly,  ranging  from  (1)  a  phone-  to-  phone  service  using  IP  to  transport  interexchange  traffic  to  (2)  an  Internet  application  that  facilitates  peer-  to-  peer 
 communications  or  to  (3)  services  permitting  IP  telephony  subscribers  to  communicate  with  subscribers  of  traditional  circuit-  switched  telephone  service  to  (4)  a  broad  range  of  IP  platform 
 services.  110  Today,  in  a  separate  order,  we  resolve  one  of  these  petitions,  finding  that  Pulvers  Free  World  Dialup  is  an  unregulated  information  service    that  does  not  use  the  PSTN    subject 
 to  federal  jurisdiction.  111  We  hereby  incorporate  the  records  of  the  pending  AT&  T,  Vonage  and  Level  3  petitions  and  note  that  the  record  developed  here  could  influence  disposition  of  those 
 proceedings.  112  We  note,  however,  that  by  seeking  comment  on  whether  access  charges  should  apply  to  the  various  categories  of  service  identified  by  the  commenters,  we  are  not  addressing 

 109  See  id.  at  6484-  86,  paras.  179-  85. 
 110  See  Petition  for  Declaratory  Ruling  that  AT&  Ts  Phone-  to-  Phone  IP  Telephony  Services  are  Exempt  from 
 Access  Charges,  WC  Docket  No.  02-  361  (filed  Oct.  18,  2002);  Pulver  Petition;  Vonage  Petition;  Level  3  Petition  for  Forbearance  Under  47  U.  S.  C.    160(  c)  from  Enforcement  of  47  U.  S.  C.    251(  g),  Rule  51.701(  b)(  1),  and  Rule 

 69.5(  b),  WC  Docket  No.  03-  266  (filed  Dec.  23,  2003);  Petition  of  SBC  Communications  Inc.  for  Declaratory  Ruling  (filed  Feb.  5,  2004)  (defining  IP  platform  services  to  include  networks  relying  on  IP,  the  capabilities  and 
 functionalities  of  those  networks,  and  services  and  applications  utilizing  those  networks  to  facilitate  communications).  SBC  has  also  filed  a  petition  seeking  forbearance  from  application  of  Title  II  regulations  in  the 
 context  of  IP  platform  services.  See  Petition  of  SBC  Communications  Inc.  for  Forbearance,  WC  Docket  No.  04-29  (filed  Feb.  5,  2004).  The  Commission  has  solicited  public  comment  on  that  petition.  See  Pleading  Cycle 
 Established  for  Comments  on  Petition  of  SBC  Communications  Inc.  for  Forbearance  Under  Section  10  of  the  Communications  Act  from  Application  of  Title  II  Common  Carrier  Regulation  to  IP  Platform  Services,  WC 
 Docket  No.  04-  29,  Public  Notice,  DA  04-  360  (rel.  Feb.  12,  2004). 
 111  See  Pulver  Declaratory  Ruling. 

 112  In  so  doing,  we  also  expressly  preserve  the  Commissions  flexibility  to  address  one  or  all  of  these  petitions  by 
 issuing  a  declaratory  ruling  or  rulings  before  the  culmination  of  the  instant  proceeding.  We  also  expressly  preserve  the  Commissions  flexibility  to  address  the  Intercarrier  Compensation  and  Universal  Service  proceedings  currently 

 pending  before  the  Commission  before  the  culmination  of  the  instant  proceeding.  See  Intercarrier  Compensation  NPRM,  16  FCC  Rcd  9610  (2001);  Federal-  State  Joint  Board  on  Universal  Service,  1998  Biennial  Regulatory 
 Review    Streamlined  Contributor  Reporting  Requirements  Associated  with  Administration  of  Telecommunications  Relay  Service,  North  American  Numbering  Plan,  Local  Number  Portability,  and  Universal  Service  Support 
 Mechanisms,  Telecommunications  Services  for  Individuals  with  Hearing  and  Speech  Disabilities,  and  the  Americans  with  Disabilities  Act  of  1990,  Administration  of  the  North  American  Numbering  Plan  and  North 
 American  Numbering  Plan  Cost  Recovery  Contribution  Factor  and  Fund  Size,  Number  Resource  Optimization,  Telephone  Number  Portability,  Truth-  in-  Billing  and  Billing  Format,  CC  Docket  Nos.  96-  45,  98-  171,  90-  571,  92- 
 237,  99-  200,  95-  116,  98-  170,  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking,  17  FCC  Rcd  24952,  24984-  98,  paras.  66-  100  (2002)  (Universal  Service  Further  NPRM). 
22
 Federal  Communications  Commission  FCC  04-  28 
 23 
 whether  access  charges  apply  or  do  not  apply  under  existing  law. 
 33.  As  a  policy  matter,  we  believe  that  any  service  provider  that  sends  traffic  to  the  PSTN  should  be  subject  to  similar  compensation  obligations,  irrespective  of  whether  the  traffic 

 originates  on  the  PSTN,  on  an  IP  network,  or  on  a  cable  network.  We  maintain  that  the  cost  of  the  PSTN  should  be  borne  equitably  among  those  that  use  it  in  similar  ways. 

 d.  State  Regulation 
 34.  We  also  note  that  states  are  beginning  to  address  VoIP  issues.  Recently,  several  states  have  taken  actions  with  regard  to  VoIP  providers  that  are  rapidly  changing  the  regulatory 

 landscape  on  the  state  level.  113  Even  at  this  early  stage,  states  have  begun  to  diverge  in  their  approaches  to  the  regulation  of  VoIP  services.  For  example,  some  states  have  required  VoIP 
 providers  to  be  certified  to  provide  service  in  the  state,  114  while  others  have  not.  115 

 113  See,  e.  g.,  State  Telecom  Activities,  Communications  Daily,  Jan.  8,  2004,  at  7  (reporting  that,  after  notifying 
 VoIP  providers  that  they  must  comply  with  state  telephone  regulations,  the  California  Public  Utilities  Commission  has  now  decided  to  open  a  proceeding  to  examine  regulation  of  VoIP  providers  rather  than  taking  immediate 

 enforcement  action  against  VoIP  providers  that  did  not  comply);  State  Telecom  Activities,  Communications  Daily,  Dec.  3,  2003,  at  9  (reporting  that  the  Missouri  Public  Service  Commission  has  called  for  comments  on  Time  Warner 
 Cable  Information  Services  application  for  a  state  certificate  to  provide  VoIP  services);  State  Telecom  Activities,  Communications  Daily,  Nov.  24,  2003,  at  7  (reporting  that  the  Ohio  Public  Utilities  Commission  of  Ohio  is 
 considering  an  application  by  Time  Warner  Cable  Information  Services  for  a  state  certificate  to  provide  VoIP  services);  State  Telecom  Activities,  Communications  Daily,  Oct.  15,  2003  (reporting  that  the  New  York  Public 
 Service  Commission  has  opened  a  case  to  consider  its  jurisdiction  over  VoIP  services  in  response  to  an  incumbent  LEC  complaint  seeking  to  impose  state  telephone  regulation  on  VoIP  providers);  State  Telecom  Activities, 
 Communications  Daily,  Oct.  8,  2003  (reporting  that  the  Washington  Utilities  &  Transportation  Commission,  in  response  to  a  remand  from  a  federal  district  court,  began  considering  whether  VoIP  providers  must  register  as 
 competitive  LECs  and  what  state  regulatory  requirements  should  apply  to  VoIP  providers). 
 114  For  example,  in  September  2003,  the  Minnesota  Commission  found  that  it  had  jurisdiction  over  the  VoIP 
 services  provided  by  companies  such  as  Vonage  in  Minnesota  and  ordered  Vonage  to  comply  with  state  statutes  and  rules  regarding  the  offering  of  telephone  service.  See  Vonage  Holdings  Corp.  v.  Minnesota  Pub.  Utils.  Commn, 

 290  F.  Supp.  2d  993,  996  (D.  Minn.  2003)  (citing  In  the  Matter  of  the  Complaint  of  the  Minnesota  Department  of  Commerce  Against  Vonage  Holding  Corp  Regarding  Lack  of  Authority  to  Operate  in  Minnesota,  Docket  No. 
 P-  6214/  C-  03-  108  (Minn.  Pub.  Utils.  Commn  Sept.  11,  2003)  (order  finding  jurisdiction  and  requiring  compliance)).  Vonage  sought  review  of  this  decision  in  federal  court,  and  has  also  sought  a  ruling  from  the 
 Commission  regarding  the  issues  raised  by  the  Minnesota  Commissions  order.  In  a  decision  issued  on  October  16,  2003,  the  U.  S.  District  Court  for  the  District  of  Minnesota  concluded  that  Vonage  uses  telecommunications 
 services,  rather  than  provides  them.  Id.  at  999  (emphasis  in  original).  Further,  the  court  held  that  state  regulation  over  VoIP  services  is  not  permissible  because  of  the  recognizable  congressional  intent  to  leave  the  Internet  and 
 information  services  largely  unregulated.  Id.  at  1002.  In  the  courts  view,  Congresss  expression  of  its  intent  to  not  have  Title  II  apply  to  enhanced  services  demonstrates  its  intent  to  occupy  the  field  of  regulation  of  information 
 services.  Id.  The  Minnesota  PUC  has  appealed  this  ruling.  See  Gayle  Kansagor,  Minnesota  PUC  Appeals  VoIP  Ruling,  TR  Daily,  Feb.  13,  2004,  at  7-  8. 

 115  Florida,  for  example,  recently  enacted  legislation  excluding  VoIP  services  from  the  class  of  services  subject 
 to  regulation  by  the  Florida  Public  Service  Commission.  This  legislation,  however,  expressly  stated  that  it  did  not  (continued.) 
23
 Federal  Communications  Commission  FCC  04-  28 
 24 
 III.  CATEGORIZING  IP-  ENABLED  SERVICES 
 35.  In  this  section,  we  solicit  comment  regarding  how,  if  at  all,  we  should  differentiate  among  various  IP-  enabled  services  to  ensure  that  any  regulations  applied  to  such 

 services  are  limited  to  those  cases  in  which  they  are  appropriate.  As  noted  above,  IP-  enabled  services  are  an  increasingly  available,  sophisticated  and  attractive  alternative  to  consumers. 
 These  services  have  arisen  in  an  environment  largely  free  of  government  regulation,  and  the  great  majority,  we  expect,  should  remain  unregulated.  To  the  extent    if  any    that  application  of 
 a  particular  regulatory  requirement  is  needed  to  further  critical  national  policy  goals,  that  requirement  must  be  tailored  as  narrowly  as  possible,  to  ensure  that  it  does  not  draw  into  its 
 reach  more  services  than  necessary.  116  In  order  to  guarantee  that  even  those  regulations  deemed  essential  are  applied  only  where  needed,  we  seek  comment  as  to  whether  it  would  be  useful  to 
 divide  IP-  enabled  services  into  discrete  categories,  and,  if  so,  how  we  should  define  these  categories.  We  also  ask  commenters  to  address  whether  there  are  technical  or  other 
 characteristics  of  particular  VoIP  or  other  IP-  enabled  services  that  suggest  that  providers  use  the  underlying  network  in  different  ways  or  provide  different  functionality  to  end  users  that  warrants 
 differential  treatment.  Further,  we  seek  comment  on  how  our  regulatory  framework  should  evolve  over  time,  as  IP-  enabled  services  themselves  evolve.  In  considering  these  issues,  we  ask 
 commenters  to  address  three  central  questions:  In  which  cases  is  some  form  of  regulation  needed  to  pursue  important  national  objectives?  What  differentiates  those  services  for  which 
 some  form  of  regulation  is  required  from  those  for  which  it  is  not?  Finally,  in  what  relevant  ways  is  a  particular  service  like  or  unlike  Pulvers  Free  World  Dialup,  which  we  have  today 
 classified  as  an  information  service,  free  from  regulation  under  the  Commissions  current  rules? 

 36.  For  purposes  of  stimulating  analysis  regarding  the  proper  grounds  for  distinguishing  among  IP-  enabled  services,  we  provide  below  a  list  of  functional  and  economic 
 factors  that  might  be  used  to  divide  these  services  into  categories  calling  for  distinct  treatment,  and  ask  commenters  to  address  the  utility  of  drawing  distinctions  based  on  these  factors.  As 
 communications  migrate  from  networks  relying  on  incumbent  providers  enjoying  monopoly  ownership  of  underlying  transmission  facilities  to  an  environment  relying  on  numerous 
 competing  applications  traversing  numerous  competing  platforms,  power  over  the  prices  and  terms  of  service  necessarily  shifts  from  the  provider  to  the  end  user.  This  shift  raises  the 
 question  whether  our  existing  regulatory  framework  merits  reevaluation.  In  establishing  distinctions  among  various  IP-  enabled  services,  we  seek  ways  to  distinguish  those  regulations 
 designed  to  respond  to  the  dominance  of  centralized,  monopoly-  owned  networks  from  those  designed  to  protect  public  safety  and  other  important  consumer  interests.  We  thus  focus 
 primarily  on  ways  to  distinguish  services  that  might  be  viewed  as  replacements  for  traditional 
 (Continued  from  previous  page)  affect  the  rights  and  obligations  of  any  entity  related  to  the  payment  of  switched  network  access  rates  or  other 

 intercarrier  compensation,  if  any,  related  to  voice-  over-  Internet  protocol  service.  Fla.  Stat.  ch.  364.02(  12)  (2003). 
 116  We  believe,  for  example,  that  traditional  economic  regulation  designed  for  the  legacy  network  should  not  apply 
 outside  the  context  of  the  PSTN,  and  therefore  will  be  inapplicable  in  the  case  of  most  IP-  enabled  services. 
24
 Federal  Communications  Commission  FCC  04-  28 
 28 
 the  Internet?  Should  regulatory  treatment  depend  on  whether  the  service  is  being  used  as  a  primary  line  or  whether,  instead,  it  supplements  an  existing  telephone 
 line?  Is  there  any  utility  to  distinguishing  between  phone-  to-  phone  services,  computer-  to-  computer  services,  and  computer-  to-  phone  services,  or  to  drawing 
 other  distinctions  relating  to  the  CPE  used  to  access  a  service?  125  Should  IP-  enabled  services  be  differentiated  on  the  basis  of  the  platform  on  which  they  are  provided 
 (e.  g.,  wireline,  wireless,  cable,  satellite)?  Finally,  is  there  some  other  basis  upon  which  the  Commission  should  draw  distinctions  among  IP-  enabled  services? 

 IV.  JURISDICTIONAL  CONSIDERATIONS 
 38.  In  this  section,  we  seek  comment  on  the  jurisdictional  nature  of  IP-  enabled  services.  We  note  that  in  a  recent  declaratory  ruling,  the  Commission  determined  that  Pulvers 

 Free  World  Dialup  is  an  unregulated  information  service  subject  to  federal  jurisdiction.  FWD  is  a  peer-  to-  peer  service  that  facilitates  VoIP  calls  between  subscribers  by  informing  them  when 
 other  subscribers  are  online  or  present.  126  As  noted  above,  FWD  offers  its  members  no  transmission  services.  Subscribers  must  bring  their  own  broadband  connection.  This  high-speed 
 connection  can  be  through  cable  modem,  digital  subscriber  line,  satellite,  wireless  or  any  other  high-  speed  facility.  In  addition,  FWD  provides  subscribers  with  its  own  numbers,  not 
 North  American  Numbering  Plan  numbers.  127 
 39.  As  explained  in  the  Pulver  Declaratory  Ruling,  FWD  is  an  unregulated  information  service  subject  to  federal  jurisdiction.  In  this  ruling,  we  explained  that  courts  have 

 recognized  the  preeminence  of  federal  authority  in  the  area  of  information  services,  particularly  in  the  area  the  Internet  and  other  interactive  computer  services.  128  This  finding  is  consistent  with 
 Congresss  clear  intention,  as  expressed  in  the  1996  Act,  that  such  services  remain  unfettered  by  federal  or  state  regulation  129  and  with  our  own  hands-  off  approach  to  the  Internet.  We  also 
 determined  that  state-  by-  state  regulation  of  FWD,  an  Internet  application,  is  inconsistent  with  the  controlling  federal  role  over  interstate  commerce  required  by  the  Constitution.  Moreover, 

 125  See  Stevens  Report,  13  FCC  Rcd  at  11543-  45,  paras.  87-  90. 
 126  FWD  offers  other  features  to  its  members.  For  example,  if  the  subscriber  has  opted  in  to  FWDs  voicemail 
 service,  FWD  acts  as  a  voicemail  agent  by  accepting  a  call  if  a  member  is  not  available.  Further,  if  a  members  equipment  generates  a  private  Internet  address  that  interferes  with  the  ability  of  the  users  CPE  to  determine  Internet 

 addresses,  FWD  will  repair  the  addressing  information  and  will  relay  the  signaling  and  media  stream  via  a  protocol  conversion  solution  to  facilitate  delivery.  See  Pulver  Declaratory  Ruling  at  para.  11. 

 127  This  feature  further  emphasizes  the  fact  that  FWD  member-  to-  member  calls  are  routed  over  the  Internet,  not  the 
 PSTN. 
 128  See  Pulver  Declaratory  Ruling  at  paras.  17-  18. 

 129  See,  e.  g.,  47  U.  S.  C.    230(  b);  see  also  47  U.  S.  C.    157  &  nt  (stating  that,  in  general,  it  is  policy  of  the  United 
 States  to  encourage  the  deployment  of  new  technologies  and  services  to  the  public,  and,  in  particular,  the  Commission  is  required  to  encourage  the  deployment  of  advanced  telecommunications  capability). 
28
 Federal  Communications  Commission  FCC  04-  28 
 29 
 because  FWD  is  a  completely  portable  Internet  service  and  for  other  reasons,  the  Commission  determined  that  its  traditional  end-  to-  end  approach  to  determining  jurisdiction  was  inappropriate. 
 Even  if  this  analysis  were  applicable,  however,  we  would  still  find  that  FWD  is  an  interstate  service  based  on  the  Commissions  mixed  use  doctrine.  130 

 40.  We  seek  comment  on  the  appropriate  basis  or  bases  for  asserting  federal  jurisdiction  over  the  various  categories  of  IP-  enabled  services.  Specifically,  we  request 
 comment  on  whether  the  Commission  should  extend  the  findings  made  in  our  Pulver  Declaratory  Ruling  to  other  IP-  enabled  services.  We  also  seek  comment  on  whether  the 
 Commissions  end-  to-  end  analysis  is  similarly  inappropriate  for  other  IP-  enabled  services.  131  We  emphasize  that  our  discussion  of  the  end-  to-  end  analysis  refers  only  to  the  jurisdictional  analysis 
 (i.  e.  the  inquiry  into  whether  a  call  is  interstate  or  intrastate  based  on  its  end  points)  and  not  the  analysis  of  whether  protocol  conversion  occurs  between  the  end  points  of  a  communication.  As 
 noted  in  the  Pulver  Declaratory  Ruling,  with  Internet  communications,  the  points  of  origination  and  termination  are  not  always  known.  132  Does  the  end-  to-  end  analysis,  designed  to  assess  point-to- 
 point  communications,  have  any  relevance  in  this  new  IP  environment?  To  the  extent  we  were  to  retain  the  end-  to-  end  approach,  we  request  comment  on  whether  the  Commission  should 
 apply  its  mixed  use  standard,  described  above,  to  other  IP-  enabled  services.  We  also  request  comment  on  the  capabilities  of  existing  Internet  geo-  location  technologies  used  to  ascertain  the 
 location  of  the  source  of  a  packet.  Specifically,  are  these  technologies  sufficiently  accurate  for  purposes  of  determining  the  jurisdiction  of  some  IP-  enabled  communications  and  how  should 
 they  affect  our  jurisdictional  analysis?  In  cases  where  the  Pulver  Declaratory  Ruling  analysis  is  inapposite,  we  seek  comment  as  to  whether  there  are  other  grounds  on  which  we  may  assert 
 federal  jurisdiction  over  a  given  class  of  IP-  enabled  services.  If  we  were  to  draw  jurisdictional  distinctions  between  classes  of  IP-  enabled  services,  what  service  characteristics  (e.  g.,  ability  to 
 determine  the  geographical  location  of  the  originating  and  terminating  points  of  their  customers  calls,  use  of  the  Internet)  justify  those  distinctions? 

 41.  We  further  seek  comment  regarding  whether,  and  on  what  grounds,  one  or  more  classes  of  IP-  enabled  service  should  be  deemed  subject  to  exclusive  federal  jurisdiction  with 
 regard  to  traditional  common  carrier  regulation.  For  example,  the  Constitutions  Supremacy  Clause  prohibits  state  regulation  in  a  variety  of  circumstances,  including  where  the  federal 
 government  occupies  the  field  leaving  no  room  for  state  regulation  133  or  where  it  is  not  possible 
 130  The  Commission  has  previously  applied  the  mixed  use  standard  to  situations  where  it  was  impractical  or 
 impossible  to  separate  out  interstate  from  intrastate  traffic  carried  over  a  shared  facility.  See  Pulver  Declaratory  Ruling  at  paras.  21-  22  (citing  GTE  Telephone  Operating  Cos.,  GTE  Tariff  No.  1,  GTOC  Transmittal  No.  1148,  CC 

 Docket  No.  98-  79,  Memorandum  Opinion  and  Order,  13  FCC  Rcd  22466,  22468,  para.  5  (1998);  MTS/  WATS  Market  Structure  Order,  97  FCC  2d  682). 

 131  See  generally  Bell  Atl.  Tel.  Cos.  v.  FCC,  206  F.  3d  1,  5-  8  (D.  C.  Cir.  2000). 
 132  See  Pulver  Declaratory  Ruling  at  para.  21. 
 133  See,  e.  g.,  Fidelity  Fed.  Sav.  &  Loan  Assn  v.  Cuesta,  458  U.  S.  141,  153  (1980)  (citing  Rice  v.  Santa  Fe  Elevator 
 Corp.,  331  U.  S.  218,  230  (1947)). 
29
 Federal  Communications  Commission  FCC  04-  28 
 30 
 to  separate  the  interstate  and  intrastate  aspects  of  a  particular  matter,  and  state  regulation  would  negate  valid  Commission  regulatory  goals.  134  Does  either  of  these  grounds    or  any  other  ground 
 contemplated  by  the  Supremacy  Clause    apply  to  IP-  enabled  services?  135  Does  the  Commerce  Clause,  which  denies  states  the  power  unjustifiably  to  discriminate  against  or  burden  the 
 interstate  flow  of  articles  of  commerce,  apply  to  limit  state  regulation  of  IP-  enabled  services?  136  Alternatively,  we  note  that  section  253  preempts  state  regulations  that  prohibit  or  have  the 
 effect  of  prohibiting  the  ability  of  an  entity  to  provide  any  interstate  or  intrastate  telecommunications  service.  137  In  addition,  as  to  mobile  radio  services,  section  332  of  the  Act 
 preempts  state  or  local  governments  from  regulating  the  entry  of  or  the  rates  charged  by  any  commercial  mobile  service  or  any  private  mobile  service.  138  Do  these  provisions  apply  to  any 
 class  of  IP-  enabled  service?  Finally,  we  seek  comment  regarding  any  other  grounds  upon  which  the  Commission  might  form  jurisdictional  conclusions.  What  role  could  the  states  play  in  a 
 federal  regime?  In  addition,  are  there  categories  of  IP-  enabled  services  that  can  be  regulated  at  both  the  state  and  federal  level  without  interfering  with  valid  Commission  policy?  If  so,  how? 
 We  seek  comment  on  how  section  2(  b)  s  reservation  of  state  authority  with  respect  to  intrastate  communications  service  by  wire  or  radio  affects  our  jurisdictional  analysis.  139 

 V.  APPROPRIATE  LEGAL  AND  REGULATORY  FRAMEWORK 
 42.  We  invite  commenters  to  address  the  proper  legal  classification  and  appropriate  regulatory  treatment  of  each  specific  class  of  IP-  enabled  services  they  have  identified  in 

 response  to  the  questions  posed  above.  The  Act  distinguishes  between  telecommunications  service[  s]  and  information  service[  s],  and  applies  particular  regulatory  entitlements  and 
 obligations  to  the  former  class  but  not  the  latter.  140  Thus,  our  analysis  begins  with  an 
 134  Texas  Office  of  Pub.  Util.  Counsel  v.  FCC,  183  F.  3d  393,  422  (5th  Cir.  1999)  (citing  Pub.  Serv.  Commn  of 
 Maryland  v.  FCC,  909  F.  2d  1510,  1515  (D.  C.  Cir.  1990)). 
 135  As  summarized  by  the  Supreme  Court,  federal  law  and  policy  preempts  state  action:  (1)  when  Congress 
 expresses  a  clear  intent  to  preempt  state  law;  (2)  when  there  is  outright  or  actual  conflict  between  federal  and  state  law;  (3)  where  compliance  with  both  federal  and  state  law  is  in  effect  physically  impossible;  (4)  where  there  is 

 implicit  in  federal  law  a  barrier  to  state  regulation;  (5)  where  Congress  has  legislated  comprehensively,  thus  occupying  an  entire  field  of  regulation;  or  (6)  where  the  state  law  stands  as  an  obstacle  to  the  accomplishment  and 
 execution  of  the  full  objectives  of  Congress.  See  Louisiana  Pub.  Serv.  Commn  v.  FCC,  476  U.  S.  355,  368-  69  (1986)  (further  citations  omitted).  The  Court  also  notes  that  the  critical  question  in  any  preemption  analysis  is 
 always  whether  Congress  intended  that  federal  regulation  supersede  state  law.  Id.  at  369.  Additionally,  the  Supreme  Court  has  held  that  preemption  may  result  not  only  from  action  taken  by  Congress  but  also  from  a  federal 
 agency  action  that  is  within  the  scope  of  the  agencys  congressionally  delegated  authority.  See  id. 
 136  Oregon  Waste  Sys.  v.  Dept  of  Envtl.  Quality,  511  U.  S.  93,  98  (1994). 

 137  47  U.  S.  C.    253. 
 138  See  47  U.  S.  C.    332(  c)(  3)(  A). 
 139  Id.    152(  b). 
 140  See,  e.  g.,  supra  paras.  24-  27. 
30
 Federal  Communications  Commission  FCC  04-  28 
 31 
 examination  of  the  statutory  definitions  as  they  apply  to  particular  types  of  IP-  enabled  service.  But,  as  described  more  fully,  commenters  must  consider  what  policy  consequences  flow  from  a 
 particular  statutory  definition.  The  Act  reflects  Congress  attempt  to  balance  numerous  policy  objectives.  For  example,  Congress  stated  that  the  Internet  should  remain  free  from  regulation.  141 
 But  Congress  also  has  stated  public  policy  goals  that  would  presumably  continue  to  apply  as  communications  networks  evolve.  For  example,  it  has  stated  that  universal  service  should  be 
 maintained,  that  telecommunications  equipment  and  services  should  remain  usable  by  people  with  disabilities,  that  prompt  emergency  service  should  be  available  to  the  public  through  the 
 911  system,  and  that  communications  should  be  accessible  to  law  enforcement  officers  acting  on  the  basis  of  a  lawfully  obtained  warrant.  142  The  Commission  is  empowered  by  statute  to  weigh 
 these  various  objectives  and  craft  regulations  that  specifically  target  the  relevant  features  of  VoIP  and  other  IP-  enabled  services.  Where  the  Act  does  not  prescribe  a  particular  regulatory 
 treatment,  the  Commission  may  have  authority  to  impose  requirements  under  Title  I  of  the  Act.  Alternatively,  the  Commission  may  forbear  from  applying  specific  provisions.  Finally,  of 
 course,  the  Commission  is  entitled  to  amend  or  revoke  its  own  rules  and  regulations  when  the  underlying  circumstances  no  longer  apply.  Accordingly,  we  seek  specific,  pragmatic  proposals 
 that  account  for  the  technical,  market,  or  other  features  that  characterize  IP-  enabled  services  and  that  address  the  interrelationship  between  those  features,  the  statutory  text,  and  our  policy  goals. 

 A.  Statutory  Classifications 
 43.  In  this  section,  we  examine  the  appropriate  statutory  classification  for  each  category  of  IP-  enabled  services  identified  by  commenters  in  response  to  section  III,  above. 

 Although,  as  described  below,  we  do  not  believe  that  particular  statutory  classifications  will  lead  inexorably  to  any  particular  regulatory  treatment,  these  classifications  are  nevertheless  important 
 to  our  analysis.  We  therefore  seek  comment  regarding  the  appropriate  legal  classification  of  the  various  types  of  IP-  enabled  service  identified.  Which  classes  of  IP-  enabled  services,  if  any,  are 
 telecommunications  services  under  the  Act?  Which,  if  any,  are  information  services?  How,  if  at  all,  does  our  conclusion  today  that  Pulvers  Free  World  Dialup  is  an  information  service 
 impact  the  classification  of  other  IP-  enabled  services?  We  note  that  the  Act  specifically  excepts  from  the  information  service  category  activities  relating  to  the  management,  control  or 
 operation  of  a  telecommunications  system  or  the  management  of  a  telecommunications 
 141  47  U.  S.  C.    230  (stating  federal  policy  to  preserve  the  vibrant  and  competitive  free  market  that  presently  exists 
 for  the  Internet  and  other  interactive  computer  services,  unfettered  by  Federal  or  State  regulation). 
 142  See  47  U.  S.  C.    255  (requiring  manufacturer  of  telecommunications  equipment  and  providers  of 
 telecommunications  services  to  ensure  that  equipment  and  services  are  designed  to  be  usable  by  individuals  with  disabilities,  if  readily  achievable);  47  U.  S.  C.    615  note  (stating  federal  policy  to  encourage  and  facilitate  prompt 

 deployment  of  a  seamless,  ubiquitous,  and  reliable  end-  to-  end  public  911  system);  47  U.  S.  C.    1002(  a)  (requiring  carriers  to  ensure  that  equipment,  facilities  and  services  are  capable  of  providing  authorized  surveillance  to  law 
 enforcement  agencies);  see  also  47  U.  S.  C.  254(  c)(  1)  (declaring  importance  of  maintaining  universal  service,  defined  as  an  evolving  level  of  telecommunications  services  that  the  Commission  shall  establish  periodically    taking  into 
 account  advances  in  telecommunications  and  information  technologies  and  services). 
31
 Federal  Communications  Commission  FCC  04-  28 
 32 
 service.  143  How,  if  at  all,  does  this  exception  apply  to  IP-  enabled  services?  What  effect,  if  any,  do  judicial  decisions    including  but  not  necessarily  limited  to  those  issued  in  Brand  X  Internet 
 Services  v.  FCC  144  and  Vonage  Holdings  Corp.  v.  Minnesota  Pub.  Utils.  Commn  145    have  on  the  Commissions  discretion  to  classify  IP-  enabled  services?  More  broadly,  how  might  statutory 
 classifications  rendered  in  this  proceeding  relate  to  the  Commissions  previous  tentative  conclusion  that  DSL-  based  Internet  access  service  is  an  information  service?  146  Where  a 
 commenter  advocates  treating  a  particular  class  of  IP-  enabled  services  as  telecommunications  services  and  another  class  as  information  services,  we  ask  that  the  commenter  address 
 specifically  the  reasons  why  the  characteristics  that  differentiate  or  appear  to  make  the  two  classes  similar  are  relevant  to  the  telecommunications  service/  information  service 
 distinction.  Finally,  we  seek  comment  regarding  whether  new  and  evolving  technologies  and  services  raise  the  possibility  that  a  single  IP-  enabled  communications  might  comprise  both  an 
 information  service  component  and  a  telecommunications  service  component. 
 44.  Where  applicable,  we  also  ask  that  commenters  address  the  extent  to  which  our  previous  interpretations  of  statutory  terms  are  or  are  not  suitable  for  proper  classification  of  IP-enabled 

 services.  For  example,  Commission  rules  specify  that  the  term  enhanced  services  include  those  services  that  employ  computer  processing  applications  that  act  on  the  .  .  .  protocol 
 .  .  .  of  the  subscriber's  transmitted  information.  147  Should  we  continue  to  accord  this  specific  distinction  dispositive  weight  when  classifying  services?  Are  there  other  regulatory 
 interpretations  of  the  Acts  telecommunications  service  and  information  service  definitions    including,  for  example,  those  set  forth  in  the  Stevens  Report  148    that  should  be  revisited  at  this 
 time?  Finally,  are  there  legal  constraints  on  the  Commissions  authority  to  revise  its  interpretation  of  these  definitions,  and  if  so,  to  what  extent  do  such  constraints  preclude  such 
 revision? 

 143  47  U.  S.  C.    153(  20). 
 144  345  F.  3d  1120  (9th  Cir.  2003),  petitions  for  rehg  pending. 
 145  290  F.  Supp.  2d  993  (D.  Minn.  2003),  appeal  pending. 
 146  See  Wireline  Broadband  NPRM  at  3028,  para.  16;  id.  at  3030,  para.  20. 
 147  See,  e.  g.,  47  C.  F.  R.    64.702(  a). 
 148  See  Stevens  Report,  13  FCC  Rcd  at  11543-  44,  para.  88  (suggesting  distinctions  based  on  whether  service  (1) 
 holds  itself  out  as  providing  voice  telephony  or  facsimile  transmission  service;  (2)  does  not  require  the  customer  to  use  CPE  different  from  that  CPE  necessary  to  place  an  ordinary  touch-  tone  call  (or  facsimile  transmission)  over  the 

 public  switched  telephone  network;  (3)  allows  the  customer  to  call  telephone  numbers  assigned  in  accordance  with  the  North  American  Numbering  Plan,  and  associated  international  agreements;  and  (4)  transmits  customer 
 information  without  net  change  in  form  or  content). 
32
 Federal  Communications  Commission  FCC  04-  28 
 33 
 B.  Specific  Regulatory  Requirements  and  Benefits 
 45.  We  recognize  that  the  nature  of  IP-  enabled  services  may  well  render  the  rationales  animating  the  regulatory  regime  that  now  governs  communications  services 

 inapplicable  here,  and  that  the  disparate  regulatory  treatment  assigned  to  providers  of  telecommunications  services  and  information  services  might  well  be  inappropriate  in  the 
 context  of  IP-  enabled  services.  We  thus  ask  commenters  to  address  how  we  might  alter  the  regulatory  treatment  that  might  otherwise  accompany  the  statutory  classification  they  urge  for 
 various  classes  of  IP-  enabled  service. 
 46.  As  mentioned  above,  Congress  has  provided  the  Commission  with  a  host  of  statutory  tools  that  together  accord  the  Commission  discretion  in  structuring  an  appropriate 

 approach  to  IP-  enabled  services.  Title  II  of  the  Communications  Act  governs  the  regulation  of  telecommunications  services.  Similarly,  Title  VI  governs  the  regulation  of  cable  services.  Title 
 I  of  the  Act  confers  upon  the  Commission  ancillary  jurisdiction  over  matters  that  are  not  expressly  within  the  scope  of  a  specific  statutory  mandate  but  nevertheless  necessary  to  the 
 Commissions  execution  of  its  statutorily  prescribed  functions.  149  Section  1  of  the  Communications  Act  established  the  Commission  [  f]  or  the  purpose  of  regulating  interstate  and 
 foreign  commerce  in  communication  by  wire  and  radio,  150  and  section  4(  i)  authorized  the  Commission  to  perform  any  and  all  acts,  make  such  rules  and  regulations,  and  issue  such 
 orders,  not  inconsistent  with  this  Act,  as  may  be  necessary  in  the  execution  of  its  functions.  151  Ancillary  jurisdiction  may  be  employed,  in  the  Commissions  discretion,  where  the  Commission 
 has  subject  matter  jurisdiction  over  the  communications  at  issue  and  the  assertion  of  jurisdiction  is  reasonably  required  to  perform  an  express  statutory  obligation.  152  Because  the  Commissions 
 judgment  on  how  the  public  interest  is  best  served  is  entitled  to  substantial  deference,  the  Commissions  choice  of  regulatory  tools  when  these  conditions  are  met  will  stand  unless 
 arbitrary  or  capricious.  153 
 47.  Second,  with  regard  to  telecommunications  carriers  and  telecommunications  services,  the  Commission  is  required  to  forbear  from  applying  a  particular  regulation  or  statutory 

 provision  if  it  determines  that:  (1)  enforcement  of  the  regulation  is  not  necessary  to  ensure  that  charges  are  just  and  reasonable,  and  are  not  unjustly  or  unreasonably  discriminatory;  (2) 
 enforcement  of  the  regulation  is  not  necessary  to  protect  consumers;  and  (3)  forbearance  is 

 149  See,  e.  g.,  Computer  &  Communications  Indus.  Assn  v.  FCC,  693  F.  2d  198,  213  (D.  C.  Cir.  1982)  (declaring 
 Commission  authority  in  this  area  well  settled). 
 150  47  U.  S.  C.    151. 

 151  47  U.  S.  C.    154(  i). 
 152  See  generally  United  States  v.  Southwestern  Cable  Co.,  392  U.  S.  157  (1968). 
 153  Computer  &  Communications  Indus.  Assn,  693  F.  2d  at  213. 
33
 Federal  Communications  Commission  FCC  04-  28 
 34 
 consistent  with  the  public  interest.  154  Use  of  this  forbearance  authority  might  be  appropriate  if  the  statutory  classification  accorded  to  a  particular  class  of  IP-  enabled  services  leads  to 
 regulatory  consequences  that  are  neither  necessary  nor  appropriate  in  the  context  of  such  services. 

 48.  In  light  of  the  statutory  prerogatives  described  above,  we  ask  commenters  to  describe  which  particular  regulatory  requirements  and  entitlements,  if  any,  should  apply  to  each 
 category  of  IP-  enabled  service.  155  In  the  sections  that  follow,  we  set  forth  particular  requirements  and  benefits  that  may  or  may  not  apply  to  some  or  all  IP-  enabled  services.  How  would  the 
 particular  statutory  classifications  urged  by  the  commenter  for  various  IP-  enabled  services  impact  the  applicability  of  each  of  the  regulatory  obligations  and  benefits  described  below?  For 
 each  class  of  service  and  each  requirement  or  benefit,  is  the  result  appropriate  as  a  matter  of  public  policy?  Specifically,  are  there  reasons  why  the  purposes  of  this  requirement  or  benefit  are 
 more  or  less  relevant  in  the  context  of  IP-  enabled  services  than  they  are  in  the  context  of  traditional  telephony  services?  Would  there  be  any  technical,  economic,  or  other  impediments  to 
 carriers  compliance  with  the  requirement  or  enjoyment  of  the  benefit  that  are  not  present  in  other  contexts  in  which  it  applies?  What  consequences  might  application  of  a  particular 
 requirement  or  benefit  have  on  investment  and  other  pertinent  business  decisions?  What  public  interests  should  we  consider,  and  how  would  a  choice  to  apply,  or  not  to  apply,  the  particular 
 requirement  or  benefit  implicate  those  interests?  Assuming  arguendo  that  the  obligation  or  benefit  does  apply  to  some  or  all  IP-  enabled  services,  we  seek  comment  as  to  whether  it  should 
 be  applied  differently  in  the  context  of  those  services,  and  whether  we  are  authorized  to  apply  it  differently.  Finally,  to  what  extent,  if  any,  could  voluntary  agreements  entered  into  by  IP-enabled 
 service  serve  the  purpose  now  served  by  regulation  in  the  context  of  the  legacy  circuit-switched  network? 

 49.  To  the  extent  commenters  argue  that  the  default  regulatory  framework  associated  with  the  legal  classification  accorded  to  a  given  service  is  inappropriate,  we  seek  comment  on 
 whether  the  Commission  should  use  its  forbearance  authority  or  Title  I  ancillary  powers  to  modify  that  framework.  We  ask  commenters  who  urge  forbearance  to  address  the  specific 
 section  10  criteria  as  they  relate  to  the  application  of  particular  requirements  or  benefits  to  IP-enabled  services  generally  or  individual  IP-  enabled  services  in  particular.  Similarly,  to  the 
 extent  that  commenters  urge  that  we  apply  requirements  or  benefits  in  contexts  outside  the  express  scope  of  a  relevant  statutory  provision  pursuant  to  our  Title  I  jurisdiction,  we  seek 

 154  47  U.  S.  C.    160.  Section  10(  d)  specifies,  however,  that  [  e]  xcept  as  provided  in  section  251(  f),  the 
 Commission  may  not  forbear  from  applying  the  requirements  of  section  251(  c)  or  271  under  subsection  (a)  of  this  section  until  it  determines  that  those  requirements  have  been  fully  implemented.  See  id.    160(  d). 

 155  For  example,  one  might  question  what  it  would  mean  to  apply  E911  obligations  on  an  Internet  retailer,  or  to 
 tariff  an  online  newspaper  offering.  Similarly,  some  obligations  may  only  be  sensible  in  the  context  of  VoIP  service.  However,  to  ensure  that  whatever  distinctions  we  ultimately  draw  among  different  IP-  enabled  services  are 

 sound  as  a  matter  of  law,  technology,  and  public  policy,  we  decline  in  this  Notice  to  foreclose  any  particular  approach,  and  therefore  frame  our  questions  in  terms  of  all  IP-  enabled  services,  though  some  may  only  apply  to 
 particular  types  of  service. 
34
 Federal  Communications  Commission  FCC  04-  28 
 35 
 comment  on  whether  the  assertion  of  jurisdiction  is  reasonably  ancillary  to  the  Commissions  statutory  responsibilities.  156 
 1.  Public  Safety  and  Disability  Access 
 a.  Introduction 
 50.  The  Commission  is  charged  with  ensuring  that  radio  and  wire  communications  are  comprehensively  available  to  all  in  our  nation,  that  they  serve  the  interest  of  the  national 

 defense,  promote  the  safety  of  life  and  property,  and  provide  individuals  with  disabilities  with  equivalent  access  to  such  services  in  the  public  interest.  In  addition,  the  Wireless 
 Communications  and  Public  Safety  Act  of  1999  (911  Act)  directs  the  Commission  to  encourage  and  facilitate  the  prompt  deployment  of  a  seamless,  ubiquitous,  and  reliable  end-  to-  end 
 infrastructure  for  public  safety  communications,  and  establishes  911  as  the  national  emergency  number  to  enable  all  citizens  to  reach  emergency  services  directly  and  efficiently,  whether  they 
 use  a  wireless  or  wireline  phone.  157  In  this  section,  we  seek  comment  on  the  public  safety  and  disability  access  implications  of  IP  technology  and  services.  158 

 b.  911/  E911  and  Critical  Infrastructure  Deployment  in  IP-Enabled  Services 
 51.  Efforts  by  federal,  state,  and  local  government,  along  with  the  significant  efforts  by  wireline  and  wireless  service  providers,  have  resulted  in  the  nearly  ubiquitous  deployment  of 
 911  service.  While  911  service  for  wireline  consumers  has  been  in  existence  since  1965,  wireless  911  service  has  been  a  requirement  since  1996.  The  emergence  of  IP  as  a  means  of 
 transmitting  voice  and  data  and  providing  other  services  via  wireless,  cable,  and  wireline  communications  has  significant  implications  for  meeting  the  nations  critical  infrastructure  and 

 156  See,  e.  g.,  United  States  v.  Midwest  Video  Corp.,  406  U.  S.  649,  661  (1972)  (citing  Southwestern  Cable  Co.,  392 
 U.  S.  at  175)  (upholding  Commissions  exercise  of  its  Title  I  powers  to  regulate  community  antenna  television  (CATV)  when  the  growth  of  that  service  threatened  to  deprive  the  public  of  the  various  benefits  of  [the]  system  of 

 local  broadcasting  stations  that  the  Commission  was  charged  with  developing  and  overseeing). 
 157  47  U.  S.  C.    615  note  (e);  see  Wireless  Communications  and  Public  Safety  Act  of  1999,  Pub.  L.  No.  106-  81,  113 
 Stat.  1286  (codified  at  47  USC    222,  251(  e))  (911  Act).  In  enacting  the  911  Act,  Congress  found  that  emerging  technologies  could  be  a  critical  component  of  such  an  end-  to-  end  infrastructure. 

 158  The  Department  of  Justice  has  informed  the  Commission  that  it  plans  to  file  a  petition  for  rulemaking  asking 
 the  Commission  to  initiate  a  comprehensive  rulemaking  to  address  law  enforcement's  needs  relative  to  CALEA.  See  47  U.  S.  C.    1000  et  seq.  The  Commission  recognizes  the  importance  of  ensuring  that  law  enforcements 

 requirements  are  fully  addressed.  The  Commission  takes  seriously  the  issues  raised  by  law  enforcement  agencies  concerning  lawfully  authorized  wiretaps.  Accordingly,  the  Commission  plans  to  initiate  a  rulemaking  proceeding  in 
 the  near  future  to  address  the  matters  we  anticipate  will  be  raised  by  law  enforcement,  including  the  scope  of  services  that  are  covered,  who  bears  responsibility  for  compliance,  the  wiretap  capabilities  required  by  law 
 enforcement,  and  acceptable  compliance  standards.  This  Notice  does  not  prejudice  the  outcome  of  our  proceeding  on  CALEA,  and  we  will  closely  coordinate  our  efforts  in  these  two  dockets. 
35
 Federal  Communications  Commission  FCC  04-  28 
 36 
 911  communications  needs  and  for  that  reason  we  seek  comment  below  on  various  aspects  associated  with  determining  the  appropriate  regulatory  treatment  for  IP-  enabled  services. 
 52.  Under  the  Commissions  rules,  there  are  two  sets  of  requirements  for  911.  The  first  set,  basic  911,  requires  covered  carriers  to  deliver  all  911  calls  to  the  appropriate  public 
 safety  answering  point  (PSAP)  or  designated  statewide  default  answering  point.  159  Basic  911  service  does  not  address  what  sort  of  information  the  PSAP  should  receive  from  that  call;  rather 
 it  seeks  to  ensure  the  delivery  of  911  calls.  The  Commission,  therefore,  also  adopted  requirements  for  covered  wireless  carriers  to  be  capable  of  delivering  the  calling  partys  call-back 
 number  and  the  calling  partys  location  information.  160  These  rules,  referred  to  as  the  Commissions  enhanced  911  (E911)  rules,  are  currently  being  phased  in  across  the  country 
 and  deployment  of  E911  capability  is  ongoing.  161 
 53.  Against  this  backdrop,  we  seek  comment  in  this  proceeding  on  the  potential  applicability  of  911,  E911,  and  related  critical  infrastructure  regulation  to  VoIP  and  other  IP-enabled 

 services.  As  an  initial  matter,  we  have  previously  found  in  the  E911  Scope  Order  that  the  Commission  has  statutory  authority  under  Sections  1,  4(  i),  and  251(  e)(  3)  of  the  Act  to 
 determine  what  entities  should  be  subject  to  the  Commissions  911  and  E911  rules.  162  However,  in  deciding  whether  to  exercise  our  regulatory  authority  in  the  context  of  IP-  enabled  services,  we 
 are  mindful  that  development  and  deployment  of  these  services  is  in  its  early  stages,  that  these  services  are  fast-  changing  and  likely  to  evolve  in  ways  that  we  cannot  anticipate,  and  that 
 imposition  of  regulatory  mandates,  particularly  those  that  impose  technical  mandates,  should  be  undertaken  with  caution.  How  should  we  weigh  the  potential  public  benefits  of  requiring 

 159  See  47  C.  F.  R.    20.18(  b),  64.3001. 
 160  See  Revision  of  the  Commission's  Rules  to  Ensure  Compatibility  with  Enhanced  911  Emergency  Calling 
 Systems,  CC  Docket  No.  94-  102,  RM  8143,  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd  18676,  18689-  18722,  paras.  24-  91  (1996).  Recognizing  the  challenges  of  implementation  of  E911 

 requirements,  the  Commission  adopted  a  phased  implementation  plan  for  the  covered  carriers.  Phase  I  implementation,  which  requires  a  covered  carrier  to  transmit  a  911  callers  call-  back  number  and  cell  site  to  the 
 appropriate  PSAP,  began  on  April  1,  1998.  See  47  C.  F.  R.    20.18(  d).  Phase  II  implementation,  which  requires  a  covered  carrier  to  transmit  a  911  callers  location  information  to  the  appropriate  PSAP,  began  on  October  1,  2001. 
 See  47  C.  F.  R.    20.18  (e),  (h).  161 
 See  47  C.  F.  R.    20.18. 
 162  Revision  of  the  Commissions  Rules  to  Ensure  Compatibility  With  Enhanced  911  Emergency  Calling  Systems; 
 Amendment  of  Parts  2  and  25  to  Implement  the  Global  Mobile  Personal  Communications  by  Satellite  (GMPCS)  Memorandum  of  Understanding  and  Arrangements;  Petition  of  the  National  Telecommunications  and  Information 

 Administration  to  Amend  Part  25  of  the  Commissions  Rules  to  Establish  Emissions  Limits  for  Mobile  and  Portable  Earth  Stations  Operating  in  the  1610-  1660.5  MHz  Band,  Docket  Nos.  CC  Docket  No.  94-  102,  IB  Docket  No.  99- 
 67,  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking,  FCC  03-  290  at  paras.  13-  15  (rel.  Dec.  1,  2003)  (E911  Scope  Order).  In  the  E911  Scope  Order,  the  Commission  found  that  it  had  authority  under  sections  1, 
 4(  i),  and  251(  e)(  3)  of  the  Act,  47  U.  S.  C.    151,  154(  i),  251(  e)(  3),  to  determine  whether  the  public  interest  required  that  a  provider  of  a  particular  service  should  be  required  to  provide  911/  E911  to  its  customers,  and  if  so,  to  what 
 extent  and  in  what  time  frame  such  covered  service  should  be  subject  to  the  Commissions  911/  E911  requirements. 
36
 Federal  Communications  Commission  FCC  04-  28 
 37 
 emergency  calling  and  other  public  safety  capabilities  against  the  risk  that  regulation  could  slow  technical  and  market  development?  We  seek  comment  on  whether  the  natural  evolution  of  IP-enabled 
 services  over  the  course  of  the  next  few  years  will  lead  to  technological  improvements  and  cost  savings  in  the  transmittal  of  and  response  to  emergency  information,  interoperability 
 among  public  safety  entities,  and  other  elements  of  critical  infrastructure  needed  to  provide  for  public  safety  and  homeland  security  in  accordance  with  the  Commissions  statutory  obligations 
 and  regulatory  objectives.  We  recognize,  too,  that  IP-  enabled  services  may  enhance  the  capabilities  of  PSAPs  and  first  responders    and  thus  promote  public  safety    by  providing 
 information  that  cannot  be  conveyed  by  non-  IP-  enabled  systems.  Therefore,  before  we  make  any  decision  with  respect  to  regulation,  it  is  important  that  we  develop  a  fuller  understanding  of 
 the  ways  in  which  IP-  enabled  services  or  IP  protocols  can  facilitate  911,  E911,  and  critical  infrastructure  deployment  and  reduce  attendant  costs,  both  currently  and  in  the  future.  We  next 
 ask  commenters  to  address  the  technical  and  operational  capabilities  of  current  VoIP  and  other  IP-  enabled  services  to  work  with  911  service.  We  seek  comment  on  whether  IP-  enabled  services 
 are  technically  and  operationally  capable  of  complying  with  the  Commissions  basic  911  service  rules  to  ensure  that  calls  are  directed  to  the  appropriate  PSAP.  163  In  particular,  we  seek  comment 
 on  issues  relating  to  the  routing  of  IP-  initiated  911  calls  to  PSAPs,  and  the  potential  for  IP-enabled  services  to  provide  a  viable  and  cost-  effective  alternative  to  the  dedicated  911-  trunking 
 facilities  in  use  today.  Are  there  multiple  technical  methods  by  which  VoIP  providers  could  route  calls?  We  also  seek  comment  on  ways  in  which  current  IP-  enabled  service  providers  seek 
 to  provide  a  similar  service  to  their  customers. 
 54.  We  also  seek  comment  on  whether  VoIP  and  other  IP-  enabled  services  are  technologically  and  operationally  capable  of  delivering  call-  back  and  location  information, 

 enhanced  911  service,  or  to  provide  analogous  functionalities  that  would  meet  the  intent  of  the  911  Act  and  the  Commissions  regulations.  We  seek  comment  on  whether  there  are  multiple 
 technical  methods  by  which  VoIP  providers  could  provide  call-  back  and  location  information?  Are  minimal  technical  requirements  necessary,  and  what  solutions  can  potentially  provide  them 
 most  effectively  and  efficiently?  We  note  that  the  Hatfield  Report,  164  which  we  commissioned  in  2002  to  provide  an  independent  analysis  of  technical  issues  associated  with  the  implementation 
 of  enhanced  911  services,  examined  IP  technology  as  a  potential  solution  to  such  issues.  Moreover,  some  vendors  of  VoIP  equipment  claim  to  have  resolved  the  technical  problems 
 associated  with  transmitting  location  and  call-  back  to  the  appropriate  PSAP  through  software  upgrades.  165  To  the  extent  that  there  is  data  on  whether  these  software  solutions  meet  or  provide 
 some  functionality  useful  in  meeting  the  Commissions  E911  requirements,  we  request 

 163  See  47  C.  F.  R.    20.18(  b),  64.3001. 
 164  See  generally  Dale  N.  Hatfield,  A  Report  on  Technical  and  Operational  Issues  Impacting  the  Provision  of 
 Wireless  Enhanced  911  Services  <http://  gullfoss2.  fcc.  gov/  prod/  ecfs/  retrieve.  cgi?  native_  or_  pdf=  pdf&  id_  document=  6513296239>  (Hatfield  Report). 

 165  See  Encore  Networks,  Inc.,  Helping  LECs  Comply  with  Local  Regulations  for  E911  Services  (visited  Feb.  7, 
 2004)  <http://  www.  fastcomm.  com/  zzs_  e911.  htm>. 
37
 Federal  Communications  Commission  FCC  04-  28 
 38 
 commenters  to  provide  such  data.  In  addition  to  considering  software-  based  solutions,  are  there  other  location  solutions  that  equipment  manufacturers  could  provide  to  enable  a  PSAP  to 
 identify  the  location  of  an  IP-  based  911  caller?  Should  the  Commission  distinguish  between  classes  of  IP-  enabled  service  providers  based  on  the  method  by  which  they  provide  these 
 capabilities? 
 55.  In  the  E911  Scope  Order,  we  identified  four  criteria  as  relevant  to  determining  whether  particular  entities  should,  in  the  public  interest,  be  subject  to  some  form  of  911/  E911 

 regulation:  1)  the  entity  offers  real-  time,  two-  way  switched  voice  service,  interconnected  with  the  public  switched  network,  either  on  a  stand-  alone  basis  or  packaged  with  other 
 telecommunications  services;  2)  customers  using  the  service  or  device  have  a  reasonable  expectation  of  access  to  911  and  enhanced  911  services;  3)  the  service  competes  with  traditional 
 CMRS  or  wireline  local  exchange  service;  and  4)  it  is  technically  and  operationally  feasible  for  the  service  or  device  to  support  E911.  166  We  also  stated  that  other  factors  could  inform  our 
 decision  as  well.  167  We  seek  comment  on  whether  there  are  IP-  enabled  services,  and  VoIP  services  in  particular,  that  satisfy  these  four  criteria.  In  view  of  the  variety  of  IP-  enabled 
 services,  and  their  very  different  functionalities,  we  also  seek  comment  on  whether  these  four  criteria  provide  the  appropriate  analytical  framework  for  determining  whether  and  to  what  extent 
 IP-  enabled  services  should  fall  within  the  scope  of  our  911  and  E911  regulatory  framework.  Should  any  of  these  criteria  be  modified,  weighed  differently,  or  replaced?  Should  alternative 
 criteria  be  considered? 
 56.  Assuming  that  we  find  IP-  enabled  services  in  general  or  certain  services  in  particular  to  fall  within  our  E911  scope  criteria,  we  seek  comment  on  how  best  to  achieve  our 

 policy  objectives  for  ensuring  the  availability  of  911  and  E911  capability.  Should  the  Commission  extend  911  and  E911  requirements  to  such  services,  and  if  so,  by  what  means  and 
 to  what  extent?  We  emphasize  that  we  do  not  presume  at  this  point  that  direct  regulation  would  be  required,  and  we  specifically  seek  comment  on  the  effectiveness  of  alternatives  to  direct 
 regulation  to  achieve  our  public  policy  goals.  For  example,  in  December  2003,  the  National  Emergency  Number  Association  (NENA)  and  the  Voice  on  the  NET  (VON)  Coalition  reached  a 
 voluntary  agreement  on  approaches  to  provide  VoIP  subscribers  with  basic  911  service,  and  to  work  together  to  develop  solutions  that  may  lead  to  VoIP  subscribers  receiving  enhanced  911 
 functionality.  168  We  seek  comment  on  the  potential  for  similar  agreements  among  public  safety 
 166  See  E911  Scope  Order  at  paras.  18-  19. 
 167  Id.  at  para.  19. 
 168  See  VON  Coalition  and  NENA,  Public  Safety  and  Internet  Leaders  Connect  on  911,  Press  Release  (Dec.  1, 
 2003)  (setting  forth  agreement  for  how  two  industry  groups  will  work  together  as  VoIP  is  deployed).  Among  other  things,  NENA  and  VON  agreed  that  for  service  to  customers  using  phones  that  have  the  functionality  and 

 appearance  of  conventional  telephones,  911  access  would  be  provided  within  a  reasonable  period  of  three  to  six  months,  and  prior  to  that  time  [service  providers  would]  inform  customers  of  the  lack  of  access.  The  agreement 
 also  stated  that  VoIP  providers  would  work  with  local  officials  as  the  providers  introduced  their  services  into  those  local  areas  on  ways  to  provide  911  access. 
38
 Federal  Communications  Commission  FCC  04-  28 
 39 
 trade  associations,  commercial  IP-  stakeholders,  consumers,  and  state  and  local  E911  coordinators  and  administrators.  To  what  extent  can  voluntary  consensus,  rather  than  regulation, 
 spur  deployment  of  IP-  enabled  E911  services?  Should  the  Commission  seek  to  facilitate  voluntary,  inclusive  agreements  similar  to  the  NENA/  VON  agreement?  Would  promulgation  of 
 best  practices  or  technical  guidelines  promote  the  provision  of  effective  IP-  based  E911  services?  If  we  conclude  that  mandatory  requirements  are  necessary,  how  can  we  provide  for  technological 
 flexibility  so  that  our  rules  allow  for  the  development  of  new  and  innovative  technologies? 
 57.  We  also  seek  comment  on  the  time  frame  in  which  we  should  consider  911  and  E911  regulatory  issues  in  the  IP  context.  We  note  that  the  rapid  growth,  proliferation,  and 

 evolution  of  IP-  enabled  services  and  platforms,  both  now  and  in  the  future,  may  make  timely  regulatory  assessment  and  response  difficult.  However,  we  recognize  that  the  911  Act 
 establishes  911  as  the  national  emergency  number  and  requires  the  Commission  to  play  an  active  role  in  promoting  the  deployment  of  a  widespread  network  for  public  safety  communications. 
 Thus,  we  ask  whether  it  may  be  appropriate  to  impose  a  requirement  that  some  or  all  IP-  enabled  voice  services  provide  911  functionality  to  consumers  and  seek  comment  on  this  proposal.  In 
 light  of  the  rapid  pace  of  innovation  in  IP  technology  and  services,  and  the  potential  for  these  innovations  to  yield  future  public  safety  benefits,  we  seek  comment  on  whether  consideration 
 should  be  given  to  refraining  from  imposing  E911  or  related  regulatory  obligations  on  IP-enabled  services  until  these  services  are  better  established  and  more  widely  adopted  by 
 consumers.  At  the  same  time,  we  seek  to  avoid  a  scenario  in  which  a  decision  to  impose  E911  requirements  at  a  future  date  would  require  costly  and  inefficient  retrofitting  of  embedded  IP 
 infrastructure.  Therefore,  we  seek  comment  on  how  best  to  balance  these  considerations.  We  also  seek  comment  on  how  IP-  enabled  service  providers,  public  safety  entities,  and  other 
 affected  parties  can  best  ensure  that  their  forward  planning  in  business  and  technology  development  allows  for  the  possibility  of  future  implementation  of  IP-  enabled  E911  services 
 without  the  need  for  retrofitting. 
 c.  Disability  Access 
 58.  We  seek  comment  on  how  we  should  apply  the  disability  accessibility  requirements  set  forth  in  sections  255  and  251(  a)(  2)  to  any  providers  of  VoIP  or  other  IP-  enabled 

 services.  169  In  September  1999,  the  Commission  issued  an  order  adopting  rules  to  implement 
 169  Section  255  requires  a  manufacturer  of  telecommunications  equipment  or  CPE  to  ensure  that  such  equipment  is 
 designed  to  be  accessible  to  and  usable  by  individuals  with  disabilities,  if  readily  achievable,  and  requires  a  provider  of  a  telecommunications  service  to  ensure  that  its  service  is  accessible  to  and  usable  by  people  with  disabilities,  if 

 readily  achievable.  See  47  U.  S.  C.    255.  Where  these  goals  are  not  readily  achievable,  section  255  requires  that  the  equipment  or  service  be  made  compatible  with  peripherals  or  specialized  CPE  commonly  used  to  allow  access  to 
 people  with  disabilities.  See  47  U.  S.  C.    255(  d).  Finally,  section  251(  a)(  2)  prohibits  telecommunications  carriers  from  installing  network  features,  functions,  or  capabilities  that  do  not  comply  with  the  guidelines  and  standards  set 
 forth  in  section  255.  See  47  U.  S.  C.    251(  a)(  2). 
 Section  255,  adopting  definitions  from  the  Americans  with  Disabilities  Act  (ADA),  defines  the  term  disability  to  include  a  physical  or  mental  impairment  that  substantially  limits  one  or  more  of  the  major  life 

 activities  of  such  individual,  a  record  of  such  impairment,  or  the  state  of  being  regarded  as  having  such  an  (continued.) 
39
 Federal  Communications  Commission  FCC  04-  28 
 40 
 sections  255  and  251(  a)(  2)  (Disability  Access  Order),  170  which  included  a  Notice  of  Inquiry  regarding,  among  other  things,  section  255s  applicability  in  the  context  of  Internet  telephony 
 and  computer-  based  equipment  that  replicates  telecommunications  functionality.  171  We  invite  commenters  here  to  refresh  the  record  compiled  in  response  to  that  Notice  of  Inquiry.  We  ask 
 that  commenters  address  the  range  of  questions  presented  above  in  relation  not  only  to  the  IP  telephony  services  that  were  the  focus  of  the  prior  Notice,  but  also  with  regard  to  the  full  range 
 of  other  IP-  enabled  services  at  issue  here.  Specifically,  do  and  should  the  rules  established  in  the  Disability  Access  Order  apply  in  the  context  of  VoIP  or  other  IP-  enabled  services?  We  note 
 specifically  that  in  the  Disability  Access  Order,  the  Commission  relied  on  Title  I  to  apply  section  255  obligations  to  providers  of  voicemail  and  interactive  menu  services,  both  of  which  were 
 deemed  information  services.  172  Would  that  approach  be  appropriate  with  regard  to  any  providers  of  VoIP  or  other  IP-  enabled  services  that  we  deem  to  be  information  services? 

 59.  Section  225  of  the  Communications  Act  requires  common  carriers  offering  voice  telephone  service  to  also  provide  Telecommunications  Relay  Service  (TRS)  so  that  persons  with 
 disabilities  will  have  equal  access  to  the  telecommunications  network.  173  Beyond  traditional  TRS,  which  requires  the  use  of  a  teletypewriter  (TTY),  the  Commission  has  implemented  this 
 mandate  by  determining  that  two  IP-  enabled  services,  IP  Relay  and  Video  Relay  Service  (VRS),  are  forms  of  TRS.  174  In  both  scenarios,  the  Commission  determined  that  TRS,  as  defined,  was 
 (Continued  from  previous  page)  impairment.  See  42  U.  S.  C.    12102(  2)(  A);  see  also  47  U.  S.  C.    255(  a)(  1)  (adopting  ADA  definition  by  reference). 
 The  Commissions  regulations  implementing  section  255  specifically  define  readily  achievable,  usable,  accessible,  and  other  pertinent  terms.  See  47  C.  F.  R.    6.3. 

 170  See  generally  Disability  Access  Order,  16  FCC  Rcd  6417.  Among  other  things,  the  Commission  (1)  required 
 manufacturers  and  service  providers  to  develop  processes  to  evaluate  the  accessibility,  usability,  and  compatibility  of  covered  services  and  equipment,  see  Disability  Access  Order,  16  FCC  Rcd  at  6429-  33,  paras.  21-  30;  (2)  required 

 manufacturers  and  service  providers  to  ensure  that  information  and  documentation  provided  in  connection  with  equipment  or  service  be  accessible  to  people  with  disabilities,  where  readily  achievable,  and  that  employee  training, 
 where  provided  at  all,  account  for  accessibility  requirements,  see  id.;  (3)  required  the  maximum  feasible  deployment  of  accessibility  features  that  can  be  incorporated  into  product  design,  see  id.  at  6440-  42,  paras.  49-  54;  and  (4) 
 prohibited  telecommunications  carriers  from  installing  network  features,  functions,  or  capabilities  that  do  not  comply  with  the  accessibility  requirements  set  forth  elsewhere  in  the  Order,  see  id.  at  6435-  37,  paras.  37-  42. 

 171  Id.  at  6483,  para.  175;  see  generally  id.  at  6483-  87,  paras.  173-  85. 
 172  See  id.  at  6455-  62,  paras.  93-  108. 
 173  47  U.  S.  C    225.  TRS  enables  an  individual  with  a  hearing  or  speech  disability  to  communicate  by  telephone  or 
 other  device  with  a  hearing  individual.  This  is  accomplished  through  TRS  facilities  that  are  staffed  by  specially  trained  communications  assistants  (CAs)  using  special  technology.  The  CA  relays  conversations  between  persons 

 using  various  types  of  assistive  communication  devices  and  persons  who  do  not  require  such  assistive  devices.  See  generally  Telecommunications  Relay  Services  and  Speech-  to-  Speech  Services  for  Individuals  with  Hearing  and 
 Speech  Disabilities,  CC  Docket  No.  98-  67,  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  15  FCC  Rcd  5140,  para.  2  (2000)  (Improved  TRS  Order  &  FNPRM). 

 174  IP  Relay  functions  in  a  similar  manner  to  traditional  TRS  except  that  instead  of  a  TTY,  which  is  generally 
 linked  to  the  PSTN,  the  text  is  provided  to,  and  received  from,  the  communications  assistant  (CA)  via  the  TRS  consumers  computer  or  other  Internet-  enabled  device.  See  generally  Provision  of  Improved  Telecommunications 

 (continued.) 
40
 Federal  Communications  Commission  FCC  04-  28 
 41 
 not  limited  to  telecommunications  and  that  Congress  intended  the  term  telephone  transmission  services  to  be  interpreted  broadly  to  implement  section  225s  goal  to  ensure  that 
 interstate  and  intrastate  [TRS]  are  available,  to  the  extent  possible  and  in  the  most  efficient  manner,  to  hearing-  impaired  and  speech-  impaired  individuals  in  the  United  States.  175  We  seek 
 comment  on  how  these  interpretations  should  inform  our  deliberations  as  we  consider  the  appropriate  classifications  for  IP-  enabled  services.  We  also  note  that  current  or  future  IP-enabled 
 services  may  facilitate  communications  by  individuals  with  disabilities  more  effectively  than  traditional  technologies.  To  what  extent,  if  any,  will  the  advent  of  IP-  enabled  services 
 improve  traditional  services  designed  to  ensure  access  by  persons  with  disabilities? 
 60.  Relatedly,  we  seek  comment  on  how  migration  to  IP-  enabled  services  will  affect  our  statutory  obligation  to  ensure  that  interstate  and  intrastate  telecommunications  relay  services 

 are  available  to  hearing-  impaired  and  speech-  impaired  individuals.  Section  225  created  a  cost  recovery  mechanism  whereby  providers  of  eligible  TRS  services  are  compensated  for  the 
 reasonable  costs  of  providing  interstate  TRS  176  and  required  the  Commission  to  prescribe  regulations  ensuring  that  those  costs  be  recovered  from  all  subscribers  for  every  interstate 
 service  and  costs  caused  by  intrastate  telecommunications  relay  services  shall  be  recovered  from  the  intrastate  jurisdiction.  177  We  seek  comment  regarding  how  other  decisions  we  make  in  this 
 docket  might  affect  contributions  to  the  Interstate  TRS  Fund,  and  how,  if  at  all,  the  Commission  should  amend  its  rules  in  light  of  the  increasing  use  of  IP-  enabled  services.  We  also  seek 
 comment  on  how  any  change  in  our  TRS  rules  will  affect  the  provision  of  intrastate  TRS  by  the  states. 

 2.  Carrier  Compensation 
 (Continued  from  previous  page)  Relay  Services  and  Speech-  To-  Speech  Services  for  Individuals  with  Hearing  and  Speech  Disabilities;  Petition  for 
 Clarification  of  WorldCom,  Inc.,  CC  Docket  No.  98-  67,  Declaratory  Ruling  and  Second  Further  Notice  of  Proposed  Rulemaking,  17  FCC  Rcd  7779  (2002)  (IP  Relay  Order).  TRS  is  a  telecommunications  relay  service  that  allows 
 persons  with  hearing  or  speech  disabilities  who  use  sign  language  to  communicate  with  the  CA  in  sign  language  (rather  than  by  text)  through  video  equipment.  A  video  link  allows  the  CA  to  view  and  interpret  the  partys  signed 
 conversation  (and  vice  versa),  and  then  relay  the  conversation  back  and  forth  with  the  other  party  to  the  call  (the  voice  caller).  In  almost  all  cases,  the  video  link  is  provided  over  the  Internet.  See  Improved  TRS  Order  &  FNPRM, 
 15  FCC  Rcd  at  5152-  54,  paras.  21-  27. 
 175  IP  Relay  Order,  17  FCC  Rcd  at  7783,  para.  10. 

 176  See  47  U.  S.  C.    225(  d)(  3);  47  C.  F.  R.    64.604(  c)(  5)(  iii)(  E). 
 177  47  U.  S.  C.    225(  d)(  3).  Under  our  existing  rules,  every  carrier  providing  interstate  telecommunications  services 
 must  contribute  to  the  Interstate  TRS  Fund  on  the  basis  of  end-  user  telecommunications  revenues.  See  47  C.  F.  R.    64.604(  c)(  5)(  iii)(  A). 
41
 Federal  Communications  Commission  FCC  04-  28 
 42 
 61.  The  Commission  seeks  comment  on  the  extent  to  which  access  charges  178  should  apply  to  VoIP  or  other  IP-  enabled  services.  179  If  providers  of  these  services  are  not  classified  as 
 interexchange  carriers,  or  these  services  are  not  classified  as  telecommunications  services,  should  providers  nevertheless  pay  for  use  of  the  LECs  switching  facilities?  As  a  policy  matter, 
 we  believe  that  any  service  provider  that  sends  traffic  to  the  PSTN  should  be  subject  to  similar  compensation  obligations,  irrespective  of  whether  the  traffic  originates  on  the  PSTN,  on  an  IP 
 network,  or  on  a  cable  network.  We  maintain  that  the  cost  of  the  PSTN  should  be  borne  equitably  among  those  that  use  it  in  similar  ways.  Given  this,  under  what  authority  could  the 
 Commission  require  payment  for  these  services?  If  charges  should  be  assessed  on  these  services,  should  they  be  the  same  as  the  access  charges  assessed  on  providers  of 
 telecommunications  services,  or  should  the  charges  be  computed  and  assessed  differently?  How  should  different  charges  be  computed  and  assessed?  By  seeking  comment  on  whether  access 
 charges  should  apply  to  the  various  categories  of  service  identified  by  the  commenters,  we  are  not  addressing  whether  charges  apply  or  do  not  apply  under  existing  law.  180 

 62.  If,  on  the  other  hand,  VoIP  or  other  IP-  enabled  services  are  classified  as  telecommunications  services,  should  the  Commission  forbear  from  applying  access  charges  to 
 these  services,  or  impose  access  charges  different  from  those  paid  by  non-  IP-  enabled  telecommunications  service  providers?  If  so,  how  should  different  charges  be  computed  and 
 assessed?  If  commenters  believe  charges  should  be  assessed,  must  carriers  pay  access  charges, 

 178  Section  69.5(  b)  of  the  Commissions  rules  states  that  [  c]  arriers  carrier  charges  shall  be  computed  and  assessed 
 upon  all  interexchange  carriers  that  use  local  exchange  switching  facilities  for  the  provision  of  interstate  or  foreign  telecommunications  services.  47  C.  F.  R.    69.5.  To  keep  local  telephone  rates  low,  access  charges  traditionally 

 have  exceeded  the  forward-  looking  economic  costs  of  providing  access  services.  See  Intercarrier  Compensation  NPRM,  16  FCC  Rcd  at  9614,  para.  7  (citing  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45, 
 Report  and  Order,  12  FCC  Rcd  8776  (1997)  (First  Universal  Service  Report  and  Order)). 
 179  Since  1983  the  Commission  has  exempted  enhanced  service  providers  (ESPs)  from  the  payment  of  certain 
 interstate  access  charges  (the  ESP  exemption).  See  Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996;  Intercarrier  Compensation  for  ISP-  Bound  Traffic,  CC  Docket  Nos.  96-  98,  99-  68, 

 Order  on  Remand  and  Report  and  Order,  16  FCC  Rcd  9151,  9158,  para.  11  (2001)  (ISP  Remand  Order)  (citing  MTS/  WATS  Market  Structure  Order,  97  FCC  2d  at  715,  para.  83);  see  also  ESP  Exemption  Order,  3  FCC  Rcd  at 
 2633,  para.  17;  Access  Charge  Reform,  CC  Docket  Nos.  96-  262,  94-  1,  91-  213,  95-  72,  First  Report  and  Order,  12  FCC  Rcd  15982,  16133,  para.  344  (1997)  (Access  Charge  Reform  First  Report  and  Order).  Consequently,  ESPs 
 are  treated  as  end  users  for  the  purpose  of  applying  access  charges  and  are,  therefore,  entitled  to  pay  local  business  rates  for  their  connections  to  the  LEC  central  offices  and  the  PSTN.  See  ISP  Remand  Order,  16  FCC  Rcd  at  9158, 
 para.  11  (citing  ESP  Exemption  Order,  3  FCC  Rcd  at  2635  n.  8,  2637  n.  53);  see  also  Access  Charge  Reform  First  Report  and  Order,  12  FCC  Rcd  at  16133-  35,  paras.  344-  48. 

 180  Thus,  we  expressly  preserve  the  Commissions  flexibility  to  address  one  or  all  of  the  petitions  discussed  above 
 by  issuing  a  declaratory  ruling  or  rulings  before  the  culmination  of  the  instant  proceeding.  We  also  expressly  preserve  the  Commissions  flexibility  to  address  the  Intercarrier  Compensation  and  Universal  Service  proceedings 

 currently  pending  before  the  Commission  before  the  culmination  of  the  instant  proceeding.  See  Intercarrier  Compensation  NPRM,  16  FCC  Rcd  9610  (2001);  Universal  Service  Further  NPRM,  17  FCC  Rcd  24952  (2002). 
42
 Federal  Communications  Commission  FCC  04-  28 
 43 
 or  should  they  instead  pay  compensation  under  section  251(  b)(  5)  of  the  Act?  181  Would  assessment  of  rates  lower  than  access  charge  rates  require  increases  in  universal  service  support 
 or  end-  user  charges?  If  no  access  charges,  or  different  charges,  are  assessed  for  VoIP  and  IP-enabled  service  providers  use  of  the  PSTN,  would  identification  of  this  traffic  result  in 
 significant  additional  incremental  costs? 
 3.  Universal  Service 
 63.  We  seek  comment  on  how  the  regulatory  classification  of  IP-  enabled  services,  including  VoIP,  would  affect  the  Commissions  ability  to  fund  universal  service.  Many  of  these 

 issues  have  already  been  raised  in  the  Wireline  Broadband  NPRM,  and  we  encourage  parties  to  incorporate  into  this  docket  prior  filings  in  that  proceeding  that  are  relevant  to  our  inquiry  here. 
 In  the  Wireline  Broadband  NPRM,  the  Commission  sought  comment  on  whether  facilities-  based  broadband  Internet  access  providers  are  required  to  contribute,  pursuant  to  its  mandatory 
 authority,  182  or  should  be  required  to  contribute  to  universal  service,  pursuant  to  its  permissive  authority.  183  In  this  proceeding,  we  broaden  that  inquiry  by  asking  commenters  to  address  the 
 contribution  obligations  of  both  facilities-  based  and  non-  facilities-  based  providers  of  IP-  enabled  services.  These  questions  are  also  intertwined  with  issues  raised  in  our  separate  Universal 
 Service  Contribution  Methodology  proceeding,  which  explores  possible  ways  to  reform  our  current  methodology  for  assessing  universal  service  contributions.  184  We  leave  questions  of 
 whether  to  reform  the  current  methodology  to  the  separate  Universal  Service  Contribution  Methodology  proceeding. 

 64.  If  certain  classes  of  IP-  enabled  services  are  determined  to  be  information  services,  could  or  should  the  Commission  require  non-  facilities-  based  providers  of  such  services  to 
 181  Section  251(  b)(  5)  requires  LECs  to  establish  reciprocal  compensation  arrangements  for  the  transport  and 
 termination  of  telecommunications.  47  U.  S.  C.    251(  b)(  5). 
 182  See  47  U.  S.  C.    254(  d).  Section  254(  d)  states  that  [  e]  very  telecommunications  carrier  that  provides  interstate 
 telecommunications  services  shall  contribute  to  universal  service.  This  section  is  often  referred  to  as  the  Commissions  mandatory  contribution  authority. 

 183  Wireline  Broadband  NPRM,  17  FCC  Rcd  at  3053,  para.  74;  see  also  Stevens  Report,  13  FCC  Rcd  at  11570, 
 para.  139;  47  U.  S.  C.    254(  d).  Section  254(  d)  states  that  [  a]  ny  other  provider  of  interstate  telecommunications  may  be  required  to  contribute    if  the  public  interest  so  requires.  This  section  is  often  referred  to  as  the 

 Commissions  permissive  contribution  authority. 
 184  See  Federal-  State  Joint  Board  on  Universal  Service,  1998  Biennial  Regulatory  Review    Streamlined 
 Contributor  Reporting  Requirements  Associated  with  Administration  of  Telecommunications  Relay  Service,  North  American  Numbering  Plan,  Local  Number  Portability,  and  Universal  Service  Support  Mechanisms, 

 Telecommunications  Services  for  Individuals  with  Hearing  and  Speech  Disabilities,  and  the  Americans  with  Disabilities  Act  of  1990,  Administration  of  the  North  American  Numbering  Plan  and  North  American  Numbering 
 Plan  Cost  Recovery  Contribution  Factor  and  Fund  Size,  Number  Resource  Optimization,  Telephone  Number  Portability,  Truth-  in-  Billing  and  Billing  Format,  CC  Docket  Nos.  96-  45,  98-  171,  90-  571,  92-  237,  99-  200,  95-  116, 
 98-  170,  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking,  17  FCC  Rcd  24952,  24984-  24998,  paras.  66-  100  (2002). 
43
 Federal  Communications  Commission  FCC  04-  28 
 44 
 contribute  to  universal  service  pursuant  to  its  permissive  authority?  Would  such  providers  provide  telecommunications?  If  the  Commission  were  to  exercise  its  permissive  authority 
 over  facilities-  based  and  non-  facilities-  based  providers  of  IP-  enabled  services,  how  could  it  do  so  in  an  equitable  and  nondiscriminatory  fashion?  Would  the  Commission  identify  specific 
 services  that  are  subject  to  its  permissive  authority?  How  would  providers  of  IP-  enabled  services  identify  the  portion  of  their  IP-  enabled  service  revenues  that  constitute  end-  user 
 telecommunications  revenues?  If  certain  IP-  enabled  services  are  information  services,  the  Commission  has  determined  that  such  services  would  be  subject  to  federal  jurisdiction.  Which 
 entity  is  providing  telecommunications  in  this  instance  and  how  can  we  identify  the  interstate  revenues,  if  any,  associated  with  the  provision  of  such  telecommunications?  If  the  Commission 
 determines  that  other  IP-  enabled  services  are  not  information  services,  how  would  providers  of  such  services  identify  their  interstate  and  international  telecommunications  revenues?  If  IP-enabled 
 services  are  not  subject  to  contributions,  what  would  be  the  magnitude  of  the  forgone  contribution  revenues  over  the  next  five  years?  Does  the  advent  of  IP-  enabled  services  weigh  in 
 favor  of  any  specific  reforms  currently  under  consideration  in  our  Universal  Service  Contribution  Methodology  proceeding?  185  For  example,  under  a  telephone  number-  based 
 methodology,  VoIP  providers  that  utilize  telephone  numbers  would  be  subject  to  assessment.  Under  a  connections-  based  methodology,  providers  of  broadband  connections  used  to  provide 
 VoIP  could  be  subject  to  assessment. 
 65.  In  addition  to  considering  the  impact  of  our  classification  decision  on  funding  the  universal  service  support  mechanisms,  the  Commission  must  also  evaluate  how  the  regulatory 

 classification  of  IP-  enabled  services  would  affect  the  Commissions  universal  service  support  mechanisms.  186  Previously,  the  Commission  concluded  that  the  generic  universal  service 
 definition  in  section  254(  c)(  1)  is  explicitly  limited  to  telecommunications  services.  187  At  the  same  time,  the  Commission  found  that  the  statute  provided  the  authority  to  support  a  broader 

 185  Id. 
 186  Universal  service  programs  consist  of  support  to  subsidize  loop  costs,  and,  in  some  cases,  switching  costs  of 
 eligible  carriers  servicing  high-  cost  areas,  and  Lifeline/  Link  Up,  which  provides  support  to  low-  income  consumers  for  telephone  service  and  installation.  Section  254  of  the  Act  codified  the  Commissions  historical  commitment  to 

 universal  service,  directing  the  Commission  to  establish  policies  to  preserve  and  advance  universal  service.  The  core  services  that  are  currently  supported  by  universal  service  include:  single-  party  service;  voice  grade  access  to 
 the  public  switched  network;  DTMF  signaling  or  its  functional  equivalent;  access  to  emergency  services;  access  to  operator  services;  access  to  interexchange  services;  access  to  directory  assistance;  and  toll  limitation  services  for 
 qualifying  low-  income  consumers.  See  47  C.  F.  R.    54.101.  Section  254  also  directed  the  Commission  to  create  mechanisms  to  enhance  access  to  advanced  telecommunications  and  information  services  for  schools,  libraries  and 
 rural  health  care  providers,  respectively.  Currently,  the  schools  and  libraries  mechanism  provides  support  for  telecommunications  services,  internet  access,  and  internal  connections,  while  the  rural  healthcare  mechanism 
 provides  support  for  telecommunications  services  and  internet  access.  All  of  these  mechanisms  are  referred  to  collectively  as  universal  service. 

 187  First  Universal  Service  Report  and  Order,  12  FCC  Rcd  at  9009,  para.  437. 
44
 Federal  Communications  Commission  FCC  04-  28 
 45 
 class  of  services,  including  Internet  access,  an  information  service,  for  schools  and  libraries.  188  If  IP-  enabled  services,  or  specific  classes  of  services,  are  information  services,  would  the 
 Commission  need  to  revisit  its  interpretation  of  section  254(  c)(  1)  in  order  to  include  such  services  in  the  list  of  supported  services?  189  We  seek  specific  comment  on  how  the  regulatory 
 classification  of  IP-  enabled  services  would  impact  each  of  the  current  universal  service  support  mechanisms    high  cost,  low  income,  schools  and  libraries,  and  rural  health  care  programs    and 
 whether  any  rule  changes  are  necessary  in  light  of  our  ultimate  classification  decision.  We  also  seek  comment  on  whether  the  advent  of  VoIP  or  other  IP-  enabled  services  requires  any 
 modifications  to  our  rules  to  fulfill  the  requirements  of  section  254(  e)  and  254(  k).  190  In  particular,  how  can  the  Commission  ensure  that  services  supported  by  universal  service  bear  no 
 more  than  a  reasonable  portion  of  the  costs  associated  with  facilities  that  are  used  to  provide  both  supported  services  and  unsupported  services? 

 66.  We  seek  comment  more  broadly  on  how  potential  migration  to  IP-  enabled  services  will  affect  our  statutory  obligations  to  support  and  advance  universal  service.  191 
 Commenters  should  describe  whether  migration  to  IP-  enabled  services  might  lessen  eligible  telecommunications  carriers  (ETCs)  ability  to  maintain  existing  circuit-  switched  networks  and 
 deploy  new  packet-  switched  networks.  In  some  instances,  IP-  enabled  providers  reach  end-  user  customers  using  loops  that  are  currently  supported  by  universal  service.  To  what  extent  would 
 classification  of  IP-  enabled  services,  or  specific  classes  of  such  services,  as  information  services  affect  the  eligibility  of  rural  and  non-  rural  ETCs  for  high  cost  support?  Will  migration  to  IP-enabled 
 services  lower  or  raise  the  cost  of  providing  service  on  the  public  switched  network  or  IP-  enabled  platforms?  We  fully  recognize  that  many  IP-  enabled  services  are  delivered  over 
 network  infrastructure  that  traditionally  has  been  supported  by  universal  service.  We  seek  to 

 188  Id.;  see  also  47  U.  S.  C.    254(  c)(  3),  (h)(  1)(  B).  The  U.  S.  Court  of  Appeals  for  the  Fifth  Circuit  upheld  the 
 Commissions  determination  that  it  had  the  authority  to  support  non-  telecommunications  services  for  schools  and  libraries.  See  Texas  Office  of  Pub.  Util.  Counsel  v.  FCC,  183  F.  3d  at  439-  43. 

 189  Even  though  advanced  services  are  not  directly  supported  by  federal  universal  service,  [  Commission]  policies 
 do  not  impede  the  deployment  of  modern  plant  capable  of  providing  access  to  advanced  services.  Federal-  State  Joint  Board  on  Universal  Service,  Multi-  Association  Group  (MAG)  Plan  for  Regulation  of  Interstate  Services  of 

 Non-  Price  Cap  Incumbent  Local  Exchange  Carriers  and  Interexchange  Carriers,  CC  Docket  Nos.  96-  45,  00-  256,  Fourteenth  Report  and  Order,  Twenty  Second  Order  on  Reconsideration,  16  FCC  Rcd  11244,  1322,  paras.  199-  200 
 (2001)  (  Fourteenth  Report  and  Order),  recon.  pending  (  The  public  switched  telephone  network  is  not  a  single-use  network.  Modern  network  infrastructure  can  provide  access  not  only  to  voice  services,  but  also  to  data, 
 graphics,  video,  and  other  services.);  see  also  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  Order  and  Order  on  Reconsideration,  18  FCC  Rcd  15090,  15095,  para.  13  (2003)  (describing  no  barriers 
 policy). 
 190  Section  254(  e)  states  that  support  shall  only  be  used  for  the  provision,  maintenance,  and  upgrading  of  facilities 
 and  services  for  which  the  support  is  intended.  47  U.  S.  C.    254(  e).  Section  254(  k)  also  requires  that  services  supported  by  universal  service  bear  no  more  than  a  reasonable  share  of  the  joint  and  common  costs  of  the  facilities 

 used  to  provide  these  services.  47  U.  S.  C.    254(  k). 
 191  47  U.  S.  C.    254(  b). 
45
 Federal  Communications  Commission  FCC  04-  28 
 46 
 develop  a  record  on  whether  there  is  a  fundamental  need  to  reexamine  our  universal  service  paradigm  if  consumers  increasingly  are  utilizing  other  platforms,  unsupported  by  universal 
 service  funds,  to  fulfill  their  communications  needs. 
 4.  Title  III 
 67.  As  noted  above,  IP-  enabled  services  can  be  provided  over  any  broadband  platform,  including  a  wireless  platform,  and  there  are  numerous  examples  of  wireless  providers 

 offering  such  services.  IP-  enabled  services  may  also  involve  the  use  of  wireless  technology  in  combination  with  other  platforms,  e.  g.,  a  VoIP  call  may  originate  from  a  mobile  device  and 
 terminate  on  a  wireline  or  cable  platform.  To  the  extent  that  providers  of  IP-  enabled  services  use  wireless  technology  to  deliver  such  services,  they  fall  within  the  ambit  of  Title  III  of  the  Act, 
 which  provides  the  structure  for  the  Commissions  regulation  of  spectrum-  based  services,  including  broadcasting  and  all  other  services  that  use  radio  waves.  192  Moreover,  within  Title  III, 
 Section  332  provides  a  specific  framework  for  regulation  of  commercial  mobile  radio  service  (CMRS)  providers.  193  Section  332  provides  that  CMRS  providers  are  common  carriers  subject  to 
 the  provisions  of  Title  II,  but  it  also  authorizes  the  Commission  to  forbear  from  applying  Title  II  provisions  it  determines  are  inapplicable.  194  Accordingly,  in  implementing  Section  332,  the 
 Commission  has  forborne  from  applying  most  Title  II  economic  regulation  to  CMRS  providers  based  on  the  competitive  nature  of  the  CMRS  marketplace.  195  In  addition,  Section  332  limits 
 state  regulation  of  CMRS  by  preempting  states  from  regulating  the  entry  of  or  rates  charged  by  CMRS  providers.  196 

 68.  In  light  of  this  statutory  framework  and  history  of  forbearance,  we  seek  comment  on  what  effect  Title  III  may  have  on  the  provision  or  regulation  of  IP-  enabled  services  provided 
 over,  in  whole  or  in  part,  a  wireless  platform.  Does  Title  III  require  us  to  treat  such  services  differently  from  other  IP-  enabled  services?  We  note  that  Title  III  does  not  expressly  identify  or 
 distinguish  wireless  services  based  on  whether  they  are  IP-  enabled.  Does  Title  III  apply  to  IP-enabled  wireless  services  and  other  wireless  services  in  the  same  way?  We  also  note  that  most 
 of  our  rules  governing  the  licensing  and  operation  of  wireless  services,  particularly  commercial  services,  are  technology-  neutral  except  to  the  extent  necessary  to  prevent  interference  among 
 competing  spectrum  uses.  We  thus  seek  comment  on  whether  the  Commission  should  make  any  distinctions  among  wireless  providers  of  IP-  enabled  services  based  on  the  nature  of  their 
 spectrum  use  (e.  g.,  fixed/  mobile,  licensed/  unlicensed). 

 192  See  Title  III    Provisions  Relating  to  Radio,  47  U.  S.  C.    301  et  seq. 
 193  47  U.  S.  C.    332. 
 194  47  U.  S.  C.    332(  c)(  1). 
 195  See  generally  CMRS  Second  Report  and  Order,  9  FCC  Rcd  1411. 
 196  47  U.  S.  C.    332(  c)(  3). 
46
 Federal  Communications  Commission  FCC  04-  28 
 47 
 69.  We  also  seek  comment  on  the  impact  of  Section  332  on  IP-  enabled  services  offered  by  CMRS  providers.  Section  332(  c)(  1)  provides  that  CMRS  providers  are  common 
 carriers  subject  to  the  provisions  of  Title  II,  but  it  also  gives  the  Commission  authority  to  limit  Title  II  regulation  of  CMRS.  197  Accordingly,  in  implementing  Section  332,  the  Commission  has 
 refrained  from  applying  most  Title  II  economic  regulation  to  CMRS  providers  based  on  the  competitive  nature  of  the  CMRS  marketplace.  198  In  addition,  Section  332(  c)(  3)  preempts  states 
 from  regulating  the  entry  of  or  rates  charged  by  CMRS  providers.  199  Thus,  to  the  extent  that  CMRS  providers  offer  VoIP  or  other  IP-  enabled  CMRS  services  that  we  classify  as  subject  to 
 Title  II,  we  believe  that  the  statutory  provisions  of  Section  332  apply,  i.  e.,  states  are  preempted  from  regulating  entry  or  rates  of  such  services,  and  the  Commission  may  limit  their  regulation 
 under  Title  II.  We  seek  comment  on  this  analysis.  We  also  seek  comment  on  whether  there  is  any  reason  that  the  Commissions  existing  deregulatory  policies  with  respect  to  Title  II 
 regulation  of  CMRS  should  not  apply  uniformly  to  IP-  enabled  CMRS  as  well  as  other  CMRS. 
 5.  Title  VI 
 70.  IP-  enabled  services,  such  as  VoIP,  also  can  be    and  often  are    provided  over  cable  facilities.  What  impact,  if  any,  should  the  provision  of  broadband  over  cable  plant  have  on 

 the  Commissions  treatment  of  IP-  enabled  services?  What  effect,  if  any,  does  Title  VI  of  the  Act  have  on  any  potential  regulation  of  cable-  based  IP-  enabled  services?  200  If  the  Commission 
 determines  that  IP-  enabled  services,  or  any  particular  class  of  IP-  enabled  services,  are  telecommunications  services,  should  the  Commission  forbear  from  applying  certain  Title  II 
 provisions  to  cable  providers  offering  IP-  enabled  services?  Alternatively,  if  the  Commission  determines  that  some  or  all  IP-  enabled  services  constitute  information  services,  could  the 
 Commission  use  its  ancillary  jurisdiction  to  apply  any  Title  II-  like  obligation  to  any  cable  providers  of  IP-  enabled  services?  If  so,  what  is  the  basis  for  an  exercise  of  that  authority? 
 Finally,  is  any  class  of  IP-  enabled  services  properly  classified  under  the  Act  as  cable 

 197  Section  332(  c)(  1)  of  the  Act  provides  that  the  Commission  may  specify  any  provision  of  Title  II,  other  than 
 Sections  201,  202,  and  208,  as  inapplicable  to  CMRS  providers  if  it  finds  certain  criteria  specified  by  the  statute  to  have  been  met.  47  U.  S.  C.    332(  c)(  1).  Since  this  provision  was  adopted,  the  Commission  has  obtained  broader 

 forbearance  authority  with  respect  to  all  telecommunications  providers  under  Section  10  of  the  Act.  47  U.  S.  C.    160. 

 198  See  generally  CMRS  Second  Report  and  Order,  9  FCC  Rcd  1411. 
 199  47  U.  S.  C.    332(  c)(  3).  States  may  petition  the  Commission  for  authority  to  regulate  CMRS  rates  based  on 
 certain  statutory  criteria,  but  no  state  has  been  granted  such  authority  to  date. 
 200  See  47  U.  S.  C.    521  et  seq.;  47  C.  F.  R.    76.1  et  seq.  For  example,  Title  VI  and  our  implementing  rules 
 govern  the  video  programming  that  a  cable  operator  must  carry,  see  47  U.  S.  C.    534,  536,  531;  establish  rules  that  prevent  a  cable  operator  from  unfairly  withholding  affiliated  video  programming  from  other  cable  operators  and 

 satellite  broadcast  providers,  see  47  U.  S.  C.    548;  establish  horizontal  cable  ownership  limits,  see  47  U.  S.  C.    533(  f)(  1);  and  establish  and  limit  the  authority  for  local  franchises  to  regulate  cable  operators,  see  47  U.  S.  C.    541 
 et  seq. 
47
 Federal  Communications  Commission  FCC  04-  28 
 48 
 service?  201  If  so,  what  regulatory  requirements,  if  any,  would  apply  to  those  services?  Specifically,  should  any  class  of  VoIP  or  other  IP-  enabled  service  be  construed  to  be  a  cable 
 service  for  franchising  purposes?  202  In  responding  to  these  questions,  we  ask  commenters  to  explain  whether  the  Commission  should  make  any  distinction  among  categories  of  cable 
 providers  for  regulatory  purposes. 
 VI.  OTHER  REGULATORY  REQUIREMENTS 
 A.  Consumer  Protection 
 71.  In  this  section,  we  seek  comment  on  whether  it  is  necessary  to  extend  the  customer  proprietary  network  information  (CPNI)  requirements  and  other  consumer  protections 

 afforded  in  the  Act  to  subscribers  of  VoIP  or  other  IP-  enabled  services.  First,  section  222  of  the  Act  restricts  telecommunications  carriers  use  and  disclosure  of  CPNI.  203  In  section  222, 
 Congress  recognized  both  that  telecommunications  carriers  are  in  a  unique  position  to  collect  sensitive  personal  information  and  that  customers  maintain  an  important  privacy  interest  in 
 protecting  this  information  from  disclosure  and  dissemination.  We  seek  comment  on  whether  the  CPNI  requirements  should  apply  to  any  provider  of  VoIP  or  other  IP-  enabled  services. 

 72.  Second,  we  seek  comment  regarding  a  number  of  other  consumer  protections  set  forth  in  the  Act  and  Commission  rules.  For  example,  section  214  of  the  Act  requires  common 
 carriers  to  obtain  Commission  authorization  before  constructing,  acquiring,  operating  or  engaging  in  transmission  over  lines  of  communications,  or  discontinuing,  reducing  or  impairing 

 201  The  term  cable  service  means 
 (A)  the  one-  way  transmission  to  subscribers  of  (i)  video  programming,  or  (ii)  other  programming  service,  and  (B)  subscriber  interaction,  if  any,  which  is  required  for  the  selection  or  use  of  such  video  programming  or  other 
 programming  service. 
 47  U.  S.  C.    522(  6).  Video  programming  means  programming  provided  by,  or  generally  considered  comparable  to  programming  provided  by,  a  television  broadcast  station.  47  U.  S.  C.    522(  20).  Other  programming  service 

 means  information  that  a  cable  operator  makes  available  to  all  subscribers  generally.  47  U.  S.  C.    522(  14).  The  term  interactive  on-  demand  service  means  a  service  providing  video  programming  to  subscribers  over  switched 
 networks  on  an  on-  demand,  point-  to-  point  basis,  but  does  not  include  services  providing  video  programming  prescheduled  by  the  programming  providers.  47  U.  S.  C.    522(  12). 

 202  See  47  U.  S.  C.    522(  6)(  A),  (14). 
 203  47  U.  S.  C.    222.  CPNI  is  defined  to  include  (  A)  information  that  relates  to  the  quantity,  technical 
 configuration,  type,  destination,  location,  and  amount  of  use  of  a  telecommunications  service  subscribed  to  by  any  customer  of  a  telecommunications  carrier,  and  that  is  made  available  to  the  carrier  by  the  customer  solely  by  virtue 

 of  the  carrier-  customer  relationship;  and  (B)  information  contained  in  the  bills  pertaining  to  telephone  exchange  service  or  telephone  toll  service  received  by  a  customer  of  a  carrier.  47  U.  S.  C.    222(  h)(  1). 
48
 Federal  Communications  Commission  FCC  04-  28 
 49 
 telecommunications  service  to  a  community.  204  Section  258  of  the  Act  prohibits  slamming  by  requiring  that  any  telecommunications  carrier  must  adhere  to  authorization  and  verification 
 procedures  prescribed  by  the  Commission  when  submitting  and  executing  carrier  changes.  205  Violators  are  liable  to  the  subscribers  properly  authorized  carrier  for  all  charges  collected.  206 
 Moreover,  under  sections  201  and  258  of  the  Act,  the  Commission  has  adopted  Truth-  in-Billing  rules  to  improve  consumers  understanding  of  their  telephone  bills.  207  Finally,  the 
 Commission  has  adopted  rules  pursuant  to  section  226  of  the  Act  208  to  ensure  that  customers  are  able  to  reach  their  preferred  long  distance  carriers  from  public  telephones  and  receive  sufficient 
 information  about  the  rates  they  will  pay  for  operator  services  at  public  phones  and  aggregator  locations  such  as  hotels,  hospitals,  and  educational  institutions.  209  We  seek  comment  on  whether 
 these  billing-  related  requirements    or  any  other  consumer  protections  not  discussed  here  210    should  apply  to  any  providers  of  VoIP  or  other  IP-  enabled  services. 

 B.  Economic  Regulation 
 73.  We  also  seek  comment  on  whether  various  traditional  economic  regulations  set  forth  in  Title  II  and  Commission  rules  should  be  applied  to  any  class  of  IP-  enabled  service 

 provider.  Among  other  things,  Title  II  requires  all  common  carriers  of  interstate  or  foreign  communications  by  wire  or  radio  to  provide  those  communications  upon  reasonable  request  at 
 rates,  classifications,  and  practices  that  are  just  and  reasonable;  211  prohibits  common  carriers 
 204  47  U.  S.  C.    214.  See,  e.  g.,  Verizon  Telephone  Companies  Section  63.71  Application  to  Discontinue  Expanded 
 Interconnection  Service  Through  Physical  Collocation,  WC  Docket  No.  02-  237,  Order,  18  FCC  Rcd  22737,  22742,  para.  8  (2003)  (applying  five  factors  to  determine  whether  reasonable  substitutes  are  available  to  consumers). 

 205  47  U.  S.  C.    258(  a). 
 206  47  U.  S.  C.    258(  b);  see  also  47  C.  F.  R.    64.1170. 
 207  See  47  C.  F.  R.    64.2400-  64.2401.  Among  other  things,  a  telephone  bill  must:  (1)  be  accompanied  by  a  brief, 
 clear,  non-  misleading,  plain  language  description  of  the  service  or  services  rendered;  (2)  identify  the  service  provider  associated  with  each  charge;  (3)  clearly  and  conspicuously  identify  any  change  in  service  provider;  (4) 

 identify  those  charges  for  which  non-  payment  will  not  result  in  disconnection  of  the  customer's  basic  local  service;  and  (5)  provide  at  least  one  toll-  free  number  for  customers  to  call  to  inquire  or  dispute  any  charges  on  the  bill.  The 
 Commission  also  determined  that  carriers  should  use  standard  labels  on  bills  when  referring  to  line  item  charges  relating  to  federal  regulatory  action,  such  as  universal  service  fees,  subscriber  line  charges,  and  local  number 
 portability  charges.  See  Truth-  in-  Billing  and  Billing  Format,  CC  Docket  No.  98-  170,  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  14  FCC  Rcd  7492,  7503,  7523,  paras.  21,  50  (1999),  reconsideration  granted  in 
 part,  Order  on  Reconsideration,  15  FCC  Rcd  6023  (2000),  Errata,  15  FCC  Rcd  16544  (Com.  Car.  Bur.  2000).  208 
 47  U.  S.  C.    226.  Section  226  is  also  referred  to  as  the  Telephone  Operator  Consumer  Services  Improvement  Act  (TOCSIA).  See  47  U.  S.  C.    226(  a)(  2)  (defining  aggregator),  (a)(  9)  (defining  provider  of  operator 

 services).  209 
 See  47  C.  F.  R.    64.703-  64.710.  210 
 See,  e.  g.,  47  U.  S.  C.    223  (prohibiting  obscene  or  harassing  telephone  calls);  47  U.  S.  C.    228  (regulating  pay-per-  call  services). 

 211  47  U.  S.  C.    201.  Section  201  also  is  the  basis  for  the  Commissions  authority  to  impose  access  charges  on 
 interexchange  carriers.  See  generally  infra  Section  V.  B.  2.  In  addition,  pursuant  to  section  201,  U.  S.  carriers  are  (continued.) 
49
 Federal  Communications  Commission  FCC  04-  28 
 50 
 from  unjustly  or  unreasonably  discriminating  in  charges,  practices,  classifications,  regulations,  facilities,  or  services  against  similarly  situated  third-  party  customers;  212  and  requires  providers 
 of  telecommunications  service  to  interconnect  directly  or  indirectly  with  the  facilities  and  equipment  of  other  such  providers.  213  Further,  the  Act  imposes  additional  requirements  upon 
 LECs,  including,  for  example,  the  obligation  to  provide  number  portability.  214  The  Act  also  entitles  providers  of  telecommunications  services  to  use  certain  incumbent  LEC  network 
 elements  on  an  unbundled  basis  and  at  cost-  based  rates.  215  Finally,  under  the  Commissions  Computer  Inquiry  decisions,  216  facilities-  based  common  carriers  are  required  to  provide  the 
 basic  transmission  services  underlying  their  enhanced  services  on  a  nondiscriminatory  basis  pursuant  to  tariffs.  217 

 74.  While  several  of  the  regulatory  obligations  discussed  in  previous  sections  of  this  Notice  may  have  general  applicability  to  any  entity  that  seeks  to  offer  voice  services,  many  of 
 the  economic  regulations  set  forth  here  have  been  written  to  apply  specifically  to  cases 
 (Continued  from  previous  page)  required  to  make  international  settlement  payments  to  terminate  international  traffic  unless  they  are  exempted  from 

 such  payments  on  certain  routes  or  receive  a  waiver. 
 212  47  U.  S.  C.    202. 

 213  47  U.  S.  C.    251(  a)(  1);  see  also,  e.  g.,  47  U.  S.  C    203(  a)  (requiring  common  carriers  to  file  with  the 
 Commission  tariffs  for  interstate  and  international  wire  and  radio  communications). 
 214  See  47  U.  S.  C.    251(  b)  (requiring  those  telecommunications  carriers  classified  as  LECs  to  offer  services  for 
 resale;  to  provide  number  portability;  to  offer  dialing  parity;  to  provide  access  to  rights-  of-  way;  and  to  enter  into  reciprocal  compensation  arrangements  for  the  transport  and  termination  of  telecommunications). 

 215  See  47  U.  S.  C.    251(  c)(  3);  Review  of  the  Section  251  Unbundling  Obligations  of  Incumbent  Local  Exchange 
 Carriers;  Implementation  of  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996;  Deployment  of  Wireline  Services  Offering  Advanced  Telecommunications  Capability,  CC  Docket  Nos.  01-  338,  96-  98,  98-  147, 

 Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  18  FCC  Rcd  16978  (2003)  (Triennial  Review  Order),  corrected  by  Errata,  18  FCC  Rcd  19020  (2003),  petitions  for  review  pending,  United  States  Telecom  Assn 
 v.  FCC,  D.  C.  Cir.  No.  00-  1012  (and  consolidated  cases). 
 216  See  Wireline  Broadband  NPRM,  17  FCC  Rcd  at  3036-  40,  paras.  33-  42  (providing  detailed  summary  of  the 
 history  and  requirements  of  the  Computer  Inquiry  regime). 
 217  See  Computer  II  Final  Order,  77  FCC  2d  at  415-  16,  para.  83.  BOCs  have  more  specific  obligations  under  the 
 Computer  Inquiry  regime,  through  either  comparably  efficient  interconnection  (CEI)  or  open  network  architecture  (ONA).  See  generally  Computer  III  Phase  I  Order,  104  FCC  2d  at  1039-  42,  paras.  155-  165 

 (describing  ONA  requirements);  id.  at  1064,  para.  214  (describing  CEI  requirements). 
 We  note  that  the  Commission  has  proceedings  pending  before  it  concerning  whether  it  should  modify  or  eliminate  the  Computer  Inquiry  rules  as  they  apply  to  wireline  facilities.  See,  e.  g.,  Wireline  Broadband  NPRM,  17 

 FCC  Rcd  3019;  Computer  III  Further  Remand  Proceedings:  Bell  Operating  Company  Provision  of  Enhanced  Services;  1998  Biennial  Regulatory  Review  of  Computer  III  and  ONA  Safeguards  and  Requirements,  CC  Docket 
 Nos.  95-  20,  98-  10,  Further  Notice  of  Proposed  Rulemaking,  13  FCC  Rcd  6040  (1998).  We  do  not  seek  to  review  those  issues  in  this  Notice.  Rather,  our  request  for  comment  is  limited  to  the  application  of  those  rules  to  IP-  enabled 
 services,  as  we  have  defined  that  term  above. 
50
 Federal  Communications  Commission  FCC  04-  28 
 51 
 involving  a  monopoly  service  provider  using  its  bottleneck  facilities  to  provide  services  to  a  public  that  is  without  significant  power  to  negotiate  the  rates,  terms,  and  conditions  of  those 
 services.  With  the  advent  of  competition  in  markets  for  telecommunications  services,  the  Commission  has  tailored  the  application  of  these  requirements,  reserving  application  of  the  most 
 stringent  for  carriers  considered  dominant.  218  As  a  threshold  matter,  therefore,  we  seek  comment  on  whether  any  of  these  economic  regulations  are  appropriate  in  the  context  of  IP-enabled 
 services,  given  that  customers  often  can  obtain  these  services  from  multiple,  intermodal,  facilities-  and  non-  facilities-  based  service  providers.  219  Specifically,  we  seek  comment  on  (1) 
 what  regulations,  if  any,  would  apply  to  each  class  of  IP-  enabled  services,  given  the  legal  classification  urged  for  that  class;  (2)  whether,  for  services  classified  as  telecommunications 
 services,  we  should  use  our  forbearance  authority  to  remove  a  particular  obligation  or  entitlement;  220  and  (3)  whether,  for  services  classified  as  information  services,  we  should 
 exercise  our  ancillary  jurisdiction  to  impose  a  particular  obligation  or  entitlement.  In  answering  these  questions,  we  ask  that  commenters  specifically  address  the  market  conditions  that  form  the 
 rationale  for  economic  regulation  in  the  context  of  the  legacy  network,  and  the  extent,  if  any,  to  which  the  market  for  IP-  enabled  services  calls  for  application  of  similar  regulation. 

 C.  Rural  Considerations 
 75.  We  note  that  this  Commission  has  repeatedly  recognized  the  unique  challenges  facing  rural  carriers.  221  Because  rural  carriers  generally  have  higher  operating  and  equipment 

 costs,  which  are  attributable  to  lower  subscriber  density,  small  exchanges,  and  a  lack  of 
 218  It  has  been  the  Commissions  policy  to  detariff  non-  dominant  carriers  in  order  foster  competition  in  the  market 
 for  interstate,  domestic,  interexchange  telecommunications  services  by  subjecting  these  carriers  to  the  same  incentives  and  rewards  that  firms  in  other  competitive  markets  confront.  Policy  and  Rules  Concerning  the 

 Interstate,  Interexchange  Marketplace,  CC  Docket  No.  96-  61,  Second  Report  and  Order,  11  FCC  Rcd  20730,  20732-  33,  paras.  3-  4  (1996).  By  contrast,  the  Commission  continues  to  treat  incumbent  LECs  as  dominant  carriers 
 and,  absent  a  specific  finding  to  the  contrary  for  a  particular  market,  these  carriers  remain  subject  to  tariff  filings,  tariff  support  and  pricing  requirements.  See,  e.  g.,  Review  of  Regulatory  Requirements  for  Incumbent  LEC 
 Broadband  Telecommunications  Services,  CC  Docket  No.  01-  337,  Notice  of  Proposed  Rulemaking,  16  FCC  Rcd  22745,  22747-  48,  para.  5  (2001)  (Incumbent  LEC  Broadband  NPRM).  In  addition,  in  the  Commissions 
 Competitive  Carrier  proceeding,  the  Commission  removed  many  of  the  section  214  obligations  imposed  on  non-dominant  carriers.  See  id.  at  22751-  52,  para.  9. 

 219  For  example,  we  note  that  the  Commission  has  exercised  its  forbearance  authority  several  times  with  respect  to 
 CMRS  providers  because  it  determined  that  consumers  have  competitive  choices  available  to  them.  See,  e.  g.,  CMRS  Second  Report  and  Order,  9  FCC  Rcd  1411  (declining  to  apply  the  requirements  contained  in  sections  203, 

 204,  205,  211,  and  214  of  the  Act  to  CMRS  providers);  see  also  47  C.  F.  R.    20.15.  As  noted  above,  the  D.  C.  Circuit  has  recently  affirmed  the  Commissions  approach.  See  supra  note  123  (citing  Orloff  v.  FCC,  352  F.  3d  415). 

 220  We  note  that  section  10(  d)  prohibits  the  Commission  from  forbearing  from  the  application  of  section  251(  c) 
 unless  it  determines  that  the  latter  provision  has  been  fully  implemented.  See  47  U.  S.  C.    160(  d).  To  the  extent  commenters  urge  forbearance  from  application  of  that  subsection,  we  ask  that  they  address  this  section  10(  d) 

 limitation. 
 221  See,  e.  g.,  Fourteenth  Report  and  Order,  16  FCC  Rcd  at  11302,  para.  145. 
51
 Federal  Communications  Commission  FCC  04-  28 
 52 
 economies  of  scale,  the  Commission  has  historically  not  adopted  one-  size-  fits-  all  policies  that  might  impede  rather  than  support  the  provision  of  affordable  service  by  rural  carriers.  222  We 
 have  sought  comment,  above,  on  the  implications  of  our  decisions  in  this  docket  for  the  universal  service  support  mechanisms,  including  our  high  cost  fund.  In  addition,  we  note  that  rural 
 incumbent  LECs  derive  a  significant  portion  of  their  revenues  from  access  charges.  How  might  the  jurisdictional  analysis,  set  out  above,  affect  the  level  of  intrastate  access  charges  that  these 
 carriers  receive?  We  invite  commenters  to  address  whether  our  policies  for  IP-  enabled  services  have  other  implications  for  rural  communities  and  the  providers  which  serve  them. 

 D.  Other  Considerations 
 76.  Finally,  we  seek  comment  on  other  implications  of  our  decisions  in  this  docket.  First,  we  seek  comment  on  the  potential  international  implications  raised  by  the  use  IP-  enabled 

 services,  such  as  the  potential  impact  on  international  settlement  rates  223  and  the  ability  of  consumers  to  take  their  IP  CPE  overseas  and  continue  to  make  and  receive  calls.  224  We  also  ask 
 parties  to  comment  on  whether  the  growing  use  of  IP-  enabled  services  presents  any  foreign  policy  or  trade  issues.  225  Further,  we  seek  comment  whether  any  action  relating  to  numbering 
 resources  is  desirable  to  facilitate  or  at  least  not  impede  the  growth  of  IP-  enabled  services,  while  at  the  same  time  continuing  to  maximize  the  use  and  life  of  numbering  resources  in  the  North 
 American  Numbering  Plan.  226 

 222  Id. 
 223  See  International  Settlements  Policy  Reform;  International  Settlement  Rates,  IB  Docket  Nos.  02-  324,  96-  261, 
 17  FCC  Rcd  19954,  19961,  para.  7  (2002)  (citing  International  Settlement  Rates,  IB  Docket  No.  96-  261,  Report  and  Order,  12  FCC  Rcd  19806,  19904-  05,  para.  216  (1997);  Report  and  Order  on  Reconsideration  and  Order  Lifting 

 Stay,  14  FCC  Rcd  9256  (1999),  affd  sub  nom.  Cable  &  Wireless  P.  L.  C.  v.  FCC,  166  F.  3d  1224  (D.  C.  Cir.  1999)). 
 224  See  Dan  Gillmor,  Internet  Calls  to  Challenge  Phone  Companies,  San  Jose  Mercury  News,  Jun.  8,  2003,  at  2003 
 WL  19867191  (describing  consumers  in  Japan  using  a  telephone  number  assigned  to  area  code  415,  which  is  assigned  to  California);  Kripa  Raman,  UK  Phone  Numbers  On  Offer  Here,  The  Hindu  Business  Line,  at  2003  WL 

 66051291  (reporting  that  United  Kingdom  company  offers  phone  numbers  assigned  to  the  U.  K.  in  India). 
 225  Currently,  the  Commission  requires  common  carriers  to  obtain  section  214  authorization  to  provide  United 
 States-  international  service.  See  47  C.  F.  R.    63.12,  63.18.  This  authorization  process  provides  the  Executive  Branch  an  opportunity  to  review  applications  for  national  security,  law  enforcement,  foreign  policy,  and  trade  issues 

 prior  to  the  carrier  initiating  international  service.  See  Rules  and  Policies  on  Foreign  Participation  in  the  U.  S.  Telecommunications  Market,  IB  Docket  Nos.  97-  142,  95-  22,  Report  and  Order  and  Order  on  Reconsideration,  12 
 FCC  Rcd  23891,  23919-  21,  paras.  61-  66  (1997)  (explaining  that  the  Commission  accords  deference  to  the  expertise  of  the  Executive  Branch  regarding  issues  of  national  security,  law  enforcement,  foreign  policy,  and  trade  policy 
 related  to  an  international  section  214  application),  Order  on  Reconsideration,  15  FCC  Rcd  18158  (2000). 
 226  The  impact  of  IP-  enabled  services  on  numbering  resources  has  been  raised  by  members  of  the  North  American 
 Numbering  Council  (NANC),  our  federal  advisory  committee  on  numbering  issues,  at  a  number  of  recent  NANC  meetings,  including  those  held  November  19-  20,  2002,  January  22,  2003,  March  19,  2003,  September  25,  2003,  and 

 November  5,  2003.  See  NANC  Meeting  Minutes  (visited  Feb.  7,  2004)  <http://  www.  fcc.  gov/  wcb/  tapd/  Nanc/  nancminu.  html>.  Moreover,  several  members  of  NANC  prepared  two  white 
 (continued.) 
52
 Federal  Communications  Commission  FCC  04-  28 
 53 
 77.  To  the  extent  that  we  determine  IP-  enabled  services  are  information  services,  we  seek  comment  on  whether  there  are  any  other  policy  priorities  that  we  should  consider.  For 
 example,  to  what  extent,  if  any,  do  our  policy  priorities  for  IP-  enabled  services  assume  an  underlying  open  network  architecture?  Will  our  decisions  in  this  proceeding  affect  the 
 incentives  of  facilities-  based  IP  service  providers  to  provide  network  access  to  non-  facilities-based  IP  service  providers?  Will  the  incentives  of  facilities-  based  and  non-  facilities-  based  IP 
 service  providers  differ?  How  should  our  policies  differ  with  a  closed  or  proprietary  architecture?  Similarly,  are  there  customer  privacy  issues,  separate  from  those  raised  in  section 
 222  of  the  Act,  that  this  Commission  should  consider? 
 78.  Further,  what  are  the  impacts  of  our  decisions  on  consumers  ability  to  bring  section  208  complaints  against  IP  service  providers?  Similarly,  will  there  be  any  impact  on  the 

 ability  of  IP  service  providers  to  bring  enforcement  actions  against  carriers  or  other  providers?  Will  our  decisions  have  any  affect  on  the  Commissions  ability  expeditiously  to  address 
 complaints  between  IP  service  and  facilities-  based  carriers?  To  the  extent  that  IP-  enabled  services,  or  some  subset  thereof,  are  considered  to  be  information  services,  would  state 
 commissions  have  the  authority  to  resolve  interconnection  or  service-  related  disputes?  As  a  general  matter,  what  role  should  state  and  local  governments  play  with  respect  to  these  issues?  227 
 How  would  that  change  under  various  approaches  outlined  in  the  item? 
 VII.  PROCEDURAL  MATTERS 
 A.  Ex  Parte  Presentations 
 79.  This  matter  shall  be  treated  as  a  permit-  but-  disclose  proceeding  in  accordance  with  the  Commissions  ex  parte  rules.  228  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.  229  Other  requirements  pertaining  to  oral  and  written  presentations  are  set  forth  in  section  1.1206(  b) 

 (Continued  from  previous  page)  papers  on  the  effect  of  VoIP  on  numbering  resources  for  presentation  at  the  January  22,  2003,  and  March  19,  2003 
 NANC  meetings.  See  BellSouth  et  al.,  VOIP  Numbering  Issues  (visited  Feb.  7,  2004)  <http://  www.  nanc-chair.  org/  docs/  Nov/  Nov02_  VoIP_  White_  Paper.  doc>;  AT&  T,  VOIP  Numbering  Issues    Much  Ado  About  Nothing? 
 (Jan.  22,  2003)  <http://  www.  nanc-  chair.  org/  docs/  nowg/  Jan03_  ATT_  VOIP_  Paper.  doc>.  Finally,  the  Industry  Numbering  Committee  of  the  Alliance  for  Telecommunications  Industry  Solutions  prepared  a  Report  on  VoIP 
 Numbering  Issues  for  presentation  at  the  November  5,  2003  NANC  meeting.  See  <http://  www.  nanc-chair.  org/  docs/  nowg/  Jan03_  BellSouth_  VOIP_  Contribution.  doc>  (visited  Feb.  7,  2004). 

 227  See,  e.  g.,  Letter  from  Matthew  C.  Ames,  Counsel  for  National  League  of  Cities  et  al.,  to  Marlene  H.  Dortch, 
 Secretary,  Federal  Communications  Commission,  WC  Docket  Nos.  02-  361,  03-  45,  03-  211  &  03-  251,  at  4  (filed  Jan.  16,  2004)  (stating  that  local  governments  should  receive  adequate  rent  for  use  of  public  land  or  other  public 

 resources). 
 228  47  C.  F.  R.    1.200  et  seq. 

 229  See  47  C.  F.  R.    1.1206(  b)(  2). 
53
 Federal  Communications  Commission  FCC  04-  28 
 54 
 of  the  Commissions  rules. 
 B.  Comment  Filing  Procedures 
 80.  Pursuant  to  sections  1.415  and  1.419  of  the  Commissions  rules,  230  interested  parties  may  file  comments  within  60  days  after  publication  of  this  Notice  in  the  Federal  Register 

 and  may  file  reply  comments  within  90  days  after  publication  of  this  Notice  in  the  Federal  Register.  All  filings  should  refer  to  WC  Docket  No.  04-  36.  Comments  may  be  filed  using  the 
 Commissions  Electronic  Comment  Filing  System  (ECFS)  or  by  filing  paper  copies.  231 
 81.  Comments  filed  through  ECFS  can  be  sent  in  electronic  form  via  the  Internet  to  <http://  www.  fcc.  gov/  e-  file/  ecfs.  html>.  Only  one  copy  of  an  electronic  submission  must  be  filed. 

 In  completing  the  transmittal  screen,  commenters  should  include  a  full  name,  postal  service  mailing  address,  and  the  applicable  docket  number,  which  in  this  instance  is  WC  Docket  No.  04- 
 36.  Parties  may  also  submit  an  electronic  comment  by  Internet  e-  mail.  To  obtain  filing  instructions  for  e-  mail  comments,  commenters  should  send  an  e-  mail  to  ecfshelp@  fcc.  gov,  and 
 should  include  the  following  words  in  the  regarding  line  of  the  message:  get  form<  your  e-  mail  address>.  A  sample  form  and  directions  will  be  sent  in  reply. 

 82.  Parties  who  choose  to  file  by  paper  must  file  an  original  and  four  copies  of  each  filing.  Parties  filing  by  paper  must  also  send  five  (5)  courtesy  copies  to  the  attention  of  Janice 
 M.  Myles,  Wireline  Competition  Bureau,  Competition  Policy  Division,  445  12th  Street,  S.  W.,  Suite  5-  C327,  Washington,  D.  C.  20554,  or  via  e-  mail  janice.  myles@  fcc.  gov.  Paper  filings  and 
 courtesy  copies  must  be  delivered  in  the  following  manner.  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). 
 83.  The  Commissions  contractor,  Natek,  Inc.,  will  receive  hand-  delivered  or  messenger-  delivered  paper  filings  for  the  Commissions  Secretary  at  236  Massachusetts  Avenue, 

 N.  E.,  Suite  110,  Washington,  D.  C.  20002.  The  filing  hours  at  this  location  last  from  8:  00  a.  m.  to  7:  00  p.  m.  All  hand  deliveries  must  be  held  together  with  rubber  bands  or  fasteners.  Any 
 envelopes  must  be  disposed  of  before  entering  the  building.  This  facility  is  the  only  location  where  hand-  delivered  or  messenger-  delivered  paper  filings  or  courtesy  copies  for  the 
 Commissions  Secretary  and  Commission  staff  will  be  accepted. 
 84.  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. 

 85.  U.  S.  Postal  Service  first-  class  mail,  Express  Mail,  and  Priority  Mail  should  be  addressed  to  445  12th  Street,  SW,  Washington,  D.  C.  20554. 

 230  47  C.  F.  R.    1.415,  1.419. 
 231  See  Electronic  Filing  of  Documents  in  Rulemaking  Proceedings,  63  Fed.  Reg.  24121  (1998). 
54
 Federal  Communications  Commission  FCC  04-  28 
 55 
 86.  All  filings  must  be  addressed  to  the  Commissions  Secretary,  Office  of  the  Secretary,  Federal  Communications  Commission. 
 87.  One  copy  of  each  filing  must  be  sent  to  Qualex  International,  Portals  II,  445  12th  Street,  S.  W.,  Room  CY-  B402,  Washington,  D.  C.  20554,  telephone  202-  863-  2893,  facsimile  202- 
 863-  2898,  or  via  e-  mail  qualexint@  aol.  com. 
 88.  Each  comment  and  reply  comment  must  include  a  short  and  concise  summary  of  the  substantive  arguments  raised  in  the  pleading.  Comments  and  reply  comments  must  also 

 comply  with  section  1.48  and  all  other  applicable  sections  of  the  Commissions  rules.  232  We  direct  all  interested  parties  to  include  the  name  of  the  filing  party  and  the  date  of  the  filing  on 
 each  page  of  their  comments  and  reply  comments.  All  parties  are  encouraged  to  utilize  a  table  of  contents,  regardless  of  the  length  of  their  submission. 

 89.  Filings  and  comments  may  be  downloaded  from  the  Commissions  ECFS  web  site,  and  filings  and  comments  are  available  for  public  inspection  and  copying  during  regular 
 business  hours  at  the  FCC  Reference  Information  Center,  Portals  II,  445  12th  Street,  SW,  Room  CY-  A257,  Washington,  D.  C.  20554.  They  may  also  be  purchased  from  the  Commissions 
 duplicating  contractor,  Qualex  International,  which  can  be  reached  at  Portals  II,  445  12th  Street,  SW,  Room  CY-  B402,  Washington,  D.  C.  20554,  by  telephone  at  202-  863-  2893,  by  facsimile  at 
 202-  863-  2898,  or  via  e-  mail  at  qualexint@  aol.  com. 
 C.  Accessible  Formats 
 90.  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-  0531  (voice),  202-  418-  7365  (tty). 
 D.  Initial  Regulatory  Flexibility  Analysis 
 91.  As  required  by  the  Regulatory  Flexibility  Act,  5  U.  S.  C.    603,  the  Commission  has  prepared  an  Initial  Regulatory  Flexibility  Analysis  (IRFA)  of  the  possible  significant 

 economic  impact  on  small  entities  of  the  policies  and  rules  addressed  in  this  document.  The  IRFA  is  set  forth  in  Appendix  A.  Written  public  comments  are  requested  on  the  IRFA.  These 
 comments  must  be  filed  in  accordance  with  the  same  filing  deadlines  as  comments  filed  in  response  to  this  Notice  of  Proposed  Rule  Making  as  set  forth  in  paragraph  80,  and  have  a 
 separate  and  distinct  heading  designating  them  as  responses  to  the  IRFA. 
 VIII.  ORDERING  CLAUSES 
 92.  Accordingly,  IT  IS  ORDERED  that  pursuant  to  the  authority  contained  in  sections  1,  4(  i),  and  4(  j)  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151, 

 232  See  47  C.  F.  R.    1.48. 
55
 Federal  Communications  Commission  FCC  04-  28 
 56 
 154(  i),  154(  j),  this  Notice  of  Proposed  Rulemaking  IS  ADOPTED. 
 93.  IT  IS  FURTHER  ORDERED  that  the  Commissions  Consumer  and  Governmental  Affairs  Bureau,  Reference  Information  Center,  SHALL  SEND  a  copy  of  this 

 Notice  of  Proposed  Rulemaking,  including  the  IRFA,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration,  in  accordance  with  the  Regulatory  Flexibility  Act.  233 

 FEDERAL  COMMUNICATIONS  COMMISSION 

 Marlene  H.  Dortch  Secretary 

 233  See  5  U.  S.  C.    603(  a). 
56
 Federal  Communications  Commission  FCC  04-  28 
 Appendix  A:  Initial  Regulatory  Flexibility  Analysis 
 1.  As  required  by  the  Regulatory  Flexibility  Act  of  1980,  as  amended  (RFA),  1  the  Commission  has  prepared  the  present  Initial  Regulatory  Flexibility  Analysis  (IRFA)  of  the 

 possible  significant  economic  impact  on  small  entities  that  might  result  from  this  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.  2  In  addition,  the  Notice  and  IRFA  (or  summaries  thereof)  will  be  published  in  the  Federal 
 Register.  3 
 1.  Need  for,  and  Objectives  of,  the  Proposed  Rules 
 2.  This  Notice  examines  issues  relating  to  services  and  applications  making  use  of  Internet  Protocol  (IP),  including  but  not  limited  to  voice  over  IP  (VoIP)  services  (collectively, 

 IP-  enabled  services).  IP-  enabled  services  could  include  the  digital  communications  capabilities  of  increasingly  higher  speeds,  which  use  a  number  of  transmission  network 
 technologies,  and  which  generally  have  in  common  the  use  of  the  Internet  Protocol.  Some  of  these  may  be  highly  managed  to  support  specific  communications  functions.  IP-  enabled 
 applications  could  include  capabilities  based  in  higher-  level  software  that  can  be  invoked  by  the  customer  or  on  the  customers  behalf  to  provide  functions  that  make  use  of  communications 
 services.  The  Notice  states  that  the  Commission  must  examine  what  its  role  should  be  in  this  new  environment  of  increased  consumer  choice  and  power,  and  asks  whether  it  can  best  meet 
 its  role  of  safeguarding  the  public  interest  by  continuing  its  established  policy  of  minimal  regulation  of  the  Internet  and  the  services  provided  over  it. 

 3.  To  assist  the  Commission  in  its  analysis  of  how  properly  to  treat  IP-  enabled  services,  the  Notice  seeks  comment  on  ways  in  which  the  Commission  might  distinguish  among 
 such  services,  and  on  what  regulatory  treatment,  if  any,  would  be  appropriate  for  different  classes  of  service.  The  Notice  then  requests  comment  on  whether  the  services  comprising  each 
 category  constitute  telecommunications  services  or  information  services  under  the  definitions  set  forth  in  the  Act.  Finally,  recognizing  the  central  importance  of  these  legal 
 classifications  but  also  highlighting  the  Commissions  statutory  forbearance  authority  and  Title  I  ancillary  jurisdiction,  the  Notice  describes  a  number  of  central  regulatory  requirements 
 (including,  for  example,  those  relating  to  access  charges,  universal  service,  the  911  and  E911  systems,  and  disability  accessibility),  and  asks  which,  if  any,  should  apply  to  each  category  of 
 IP-  enabled  services. 
 1  See  5  U.  S.  C.    603.  The  RFA,  see  5  U.  S.  C.    601  et.  seq.,  has  been  amended  by  the  Small  Business  Regulatory 
 Enforcement  Fairness  Act  of  1996  (SBREFA),  Pub.  L.  No.  104-  121,  110  Stat.  857  (1996). 
 2  See  5  U.  S.  C.    603(  a). 

 3  See  id. 
57
 Federal  Communications  Commission  FCC  04-  28 
 2 
 2.  Legal  Basis 
 4.  The  legal  basis  for  any  action  that  may  be  taken  pursuant  to  this  Notice  is  contained  in  sections  1,  4(  i),  and  4(  j)  of  the  Communications  Act  of  1934,  as  amended,  47 

 U.  S.  C.    151,  154(  i)  and  154(  j),  and  sections  1.1,  1.48,  1.411,  1.412,  1.415,  1.419,  and  1.1200-  1.1216,  of  the  Commissions  rules,  47  C.  F.  R.    1.1,  1.48,  1.411,  1.412,  1.415,  1.419,  and 
 1.1200-  1.1216. 
 3.  Description  and  Estimate  of  the  Number  of  Small  Entities  to  Which  the  Proposed  Rules  May  Apply 

 5.  The  RFA  directs  agencies  to  provide  a  description  of  and,  where  feasible,  an  estimate  of  the  number  of  small  entities  that  may  be  affected  by  the  proposed  rules.  4  The  RFA 
 generally  defines  the  term  small  entity  as  having  the  same  meaning  as  the  terms  small  business,  small  organization,  and  small  governmental  jurisdiction.  5  In  addition,  the  term 
 small  business  has  the  same  meaning  as  the  term  small  business  concern  under  the  Small  Business  Act.  6  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).  7  This  present  Notice  of  Proposed 
 Rulemaking  might,  in  theory,  reach  a  variety  of  industries;  out  of  an  abundance  of  caution,  we  have  attempted  to  cast  a  wide  net  in  describing  categories  of  potentially  affected  small  entities. 
 We  would  appreciate  any  comment  on  the  extent  to  which  the  various  entities  might  be  affected  by  our  action. 

 6.  Small  Businesses.  Nationwide,  there  are  a  total  of  approximately  22.4  million  small  businesses,  according  to  SBA  data.  8 
 7.  Small  Organizations.  Nationwide,  there  are  approximately  1.6  million  small  organizations.  9 

 4  5  U.  S.  C.    603(  b)(  3),  604(  a)(  3). 
 5  Id.    601(  6). 
 6  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  terms  which  are  appropriate  to  the  activities  of  the  agency  and  publishes  such  definitions(  s)  in  the  Federal  Register. 

 7  15  U.  S.  C.    632. 
 8  See  SBA,  Programs  and  Services,  SBA  Pamphlet  No.  CO-  0028,  at  page  40  (July  2002). 
 9  Independent  Sector,  The  New  Nonprofit  Almanac  &  Desk  Reference  (2002). 
58
 Federal  Communications  Commission  FCC  04-  28 
 3 
 8.  Small  Governmental  Jurisdictions.  The  term  "small  governmental  jurisdiction"  is  defined  as  governments  of  cities,  towns,  townships,  villages,  school  districts,  or  special 
 districts,  with  a  population  of  less  than  fifty  thousand.  10  As  of  1997,  there  were  approximately  87,453  governmental  jurisdictions  in  the  United  States.  11  This  number  includes  39,044  county 
 governments,  municipalities,  and  townships,  of  which  37,546  (approximately  96.2%)  have  populations  of  fewer  than  50,000,  and  of  which  1,498  have  populations  of  50,000  or  more. 
 Thus,  we  estimate  the  number  of  small  governmental  jurisdictions  overall  to  be  84,098  or  fewer. 
 a.  Telecommunications  Service  Entities 
 (i)  Wireline  Carriers  and  Service  Providers 
 9.  We  have  included  small  incumbent  local  exchange  carriers  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.  12  The  SBAs  Office  of 
 Advocacy  contends  that,  for  RFA  purposes,  small  incumbent  local  exchange  carriers  are  not  dominant  in  their  field  of  operation  because  any  such  dominance  is  not  national  in  scope.  13 
 We  have  therefore  included  small  incumbent  local  exchange  carriers  in  this  RFA  analysis,  although  we  emphasize  that  this  RFA  action  has  no  effect  on  Commission  analyses  and 
 determinations  in  other,  non-  RFA  contexts. 
 10.  Incumbent  Local  Exchange  Carriers  (LECs).  Neither  the  Commission  nor  the  SBA  has  developed  a  small  business  size  standard  specifically  for  incumbent  local  exchange 

 services.  The  appropriate  size  standard  under  SBA  rules  is  for  the  category  Wired  Telecommunications  Carriers.  Under  that  size  standard,  such  a  business  is  small  if  it  has  1,500 
 or  fewer  employees.  14  According  to  Commission  data,  15  1,337  carriers  have  reported  that  they 

 10  5  U.  S.  C.    601(  5). 
 11  U.  S.  Census  Bureau,  Statistical  Abstract  of  the  United  States:  2000,  Section  9,  pages  299-  300,  Tables  490  and 
 492. 

 12  Id.    632. 
 13  Letter  from  Jere  W.  Glover,  Chief  Counsel  for  Advocacy,  SBA,  to  William  E.  Kennard,  Chairman,  FCC  (May 
 27,  1999).  The  Small  Business  Act  contains  a  definition  of  small-  business  concern,  which  the  RFA  incorporates  into  its  own  definition  of  small  business.  See  15  U.  S.  C.    632(  a)  (Small  Business  Act);  5  U.  S.  C.    601(  3)  (RFA). 

 SBA  regulations  interpret  small  business  concern  to  include  the  concept  of  dominance  on  a  national  basis.  See  13  C.  F.  R.    121.102(  b). 

 14  13  C.  F.  R.    121.201,  NAICS  code  517110  (changed  from  513310  in  Oct.  2002). 
59
 Federal  Communications  Commission  FCC  04-  28 
 4 
 are  engaged  in  the  provision  of  incumbent  local  exchange  services.  Of  these  1,337  carriers,  an  estimated  1,032  have  1,500  or  fewer  employees  and  305  have  more  than  1,500  employees. 
 Consequently,  the  Commission  estimates  that  most  providers  of  incumbent  local  exchange  service  are  small  businesses  that  may  be  affected  by  our  action. 

 11.  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.  16  According  to  Commission  data,  17  609  carriers  have  reported  that  they  are 
 engaged  in  the  provision  of  either  competitive  access  provider  services  or  competitive  local  exchange  carrier  services.  Of  these  609  carriers,  an  estimated  458  have  1,500  or  fewer 
 employees  and  151  have  more  than  1,500  employees.  In  addition,  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,  35  carriers  have  reported  that  they  are  Other  Local  Service  Providers.  Of  the  35,  an  estimated  34  have  1,500  or  fewer  employees  and  one  has  more  than 
 1,500  employees.  Consequently,  the  Commission  estimates  that  most  providers  of  competitive  local  exchange  service,  competitive  access  providers,  Shared-  Tenant  Service  Providers,  and 
 Other  Local  Service  Providers  are  small  entities  that  may  be  affected  by  our  action. 
 12.  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.  18  According  to  Commission  data,  19  133  carriers  have  reported  that  they  are  engaged  in  the  provision  of  local  resale  services.  Of  these,  an  estimated  127  have 
 1,500  or  fewer  employees  and  six  have  more  than  1,500  employees.  Consequently,  the  Commission  estimates  that  the  majority  of  local  resellers  are  small  entities  that  may  be  affected 
 by  our  action. 
 13.  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.  20  According  to  Commission  data,  21  625  carriers  have  reported  (Continued  from  previous  page) 
 15  FCC,  Wireline  Competition  Bureau,  Industry  Analysis  and  Technology  Division,  Trends  in  Telephone 
 Service  Table  5.3,  page  5-  5  (Aug.  2003)  (  Trends  in  Telephone  Service).  This  source  uses  data  that  are  current  as  of  December  31,  2001. 

 16  13  C.  F.  R.    121.201,  NAICS  code  517110  (changed  from  513310  in  Oct.  2002). 
 17  Trends  in  Telephone  Service  at  Table  5.3. 
 18  13  CFR    121.201,  NAICS  code  517310  (changed  from  513330  in  Oct.  2002). 
 19  Trends  in  Telephone  Service  at  Table  5.3. 
 20  13  CFR    121.201,  NAICS  code  517310  (changed  to  513330  in  Oct.  2002). 
60
 Federal  Communications  Commission  FCC  04-  28 
 5 
 that  they  are  engaged  in  the  provision  of  toll  resale  services.  Of  these,  an  estimated  590  have  1,500  or  fewer  employees  and  35  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. 

 14.  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.  22 
 According  to  Commission  data,  23  761  carriers  have  reported  that  they  are  engaged  in  the  provision  of  payphone  services.  Of  these,  an  estimated  757  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. 

 15.  Interexchange  Carriers  (IXCs).  Neither  the  Commission  nor  the  SBA  has  developed  a  small  business  size  standard  specifically  for  providers  of  interexchange  services. 
 The  appropriate  size  standard  under  SBA  rules  is  for  the  category  Wired  Telecommunications  Carriers.  Under  that  size  standard,  such  a  business  is  small  if  it  has  1,500  or  fewer  employees.  24 
 According  to  Commission  data,  25  261  carriers  have  reported  that  they  are  engaged  in  the  provision  of  interexchange  service.  Of  these,  an  estimated  223  have  1,500  or  fewer  employees 
 and  38  have  more  than  1,500  employees.  Consequently,  the  Commission  estimates  that  the  majority  of  IXCs  are  small  entities  that  may  be  affected  by  our  action. 

 16.  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.  26 
 According  to  Commission  data,  27  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. 

 (Continued  from  previous  page)  21  Trends  in  Telephone  Service  at  Table  5.3. 
 22  13  CFR    121.201,  NAICS  code  517110  (changed  from  513310  in  Oct.  2002). 
 23  Trends  in  Telephone  Service  at  Table  5.3. 
 24  13  C.  F.  R.    121.201,  NAICS  code  517110  (changed  from  513310  in  Oct.  2002). 
 25  Trends  in  Telephone  Service  at  Table  5.3. 
 26  13  C.  F.  R.    121.201,  NAICS  code  517110  (changed  from  513310  in  Oct.  2002). 
 27  Trends  in  Telephone  Service  at  Table  5.3. 
61
 Federal  Communications  Commission  FCC  04-  28 
 6 
 17.  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.  28 
 According  to  Commission  data,  29  37  carriers  have  reported  that  they  are  engaged  in  the  provision  of  prepaid  calling  cards.  Of  these,  an  estimated  36  have  1,500  or  fewer  employees 
 and  one  has  more  than  1,500  employees.  Consequently,  the  Commission  estimates  that  the  majority  of  prepaid  calling  card  providers  are  small  entities  that  may  be  affected  by  our  action. 

 18.  800  and  800-  Like  Service  Subscribers.  30  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.  31  The  most  reliable  source  of  information  regarding  the  number  of  these  service  subscribers  appears  to  be  data  the  Commission  collects  on  the  800,  888,  and  877 
 numbers  in  use.  32  According  to  our  data,  at  the  end  of  January,  1999,  the  number  of  800  numbers  assigned  was  7,692,955;  the  number  of  888  numbers  assigned  was  7,706,393;  and  the 
 number  of  877  numbers  assigned  was  1,946,538.  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  7,692,955  or  fewer  small  entity  800  subscribers;  7,706,393  or  fewer  small  entity  888  subscribers;  and  1,946,538  or  fewer  small  entity  877 
 subscribers. 
 (ii)  International  Service  Providers 
 19.  The  Commission  has  not  developed  a  small  business  size  standard  specifically  for  providers  of  international  service.  The  appropriate  size  standards  under  SBA  rules  are  for 

 the  two  broad  categories  of  Satellite  Telecommunications  and  Other  Telecommunications.  Under  both  categories,  such  a  business  is  small  if  it  has  $12.5  million  or  less  in  average  annual 
 receipts.  33  For  the  first  category  of  Satellite  Telecommunications,  Census  Bureau  data  for  1997 
 28  13  C.  F.  R.    121.201,  NAICS  code  517310  (changed  from  513330  in  Oct.  2002). 
 29  Trends  in  Telephone  Service  at  Table  5.3. 
 30  We  include  all  toll-  free  number  subscribers  in  this  category,  including  those  for  888  numbers. 
 31  13  C.  F.  R.    121.201,  NAICS  code  517310  (changed  from  513330  in  Oct.  2002). 
 32  FCC,  Common  Carrier  Bureau,  Industry  Analysis  Division,  Study  on  Telephone  Trends,  Tables  21.2,  21.3,  and 
 21.4  (Feb.  1999). 
 33  13  C.  F.  R.    121.201,  NAICS  codes  517410  and  517910  (changed  from  513340  and  513390  in  Oct.  2002). 
62
 Federal  Communications  Commission  FCC  04-  28 
 7 
 show  that  there  were  a  total  of  324  firms  that  operated  for  the  entire  year.  34  Of  this  total,  273  firms  had  annual  receipts  of  under  $10  million,  and  an  additional  24  firms  had  receipts  of  $10 
 million  to  $24,999,999.  Thus,  the  majority  of  Satellite  Telecommunications  firms  can  be  considered  small. 

 20.  The  second  category    Other  Telecommunications    includes  establishments  primarily  engaged  in    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.  35 
 According  to  Census  Bureau  data  for  1997,  there  were  439  firms  in  this  category  that  operated  for  the  entire  year.  36  Of  this  total,  424  firms  had  annual  receipts  of  $5  million  to  $9,999,999  and 
 an  additional  six  firms  had  annual  receipts  of  $10  million  to  $24,999,990.  Thus,  under  this  second  size  standard,  the  majority  of  firms  can  be  considered  small. 

 (iii)  Wireless  Telecommunications  Service  Providers 
 21.  Wireless  Service  Providers.  The  SBA  has  developed  a  small  business  size  standard  for  wireless  firms  within  the  two  broad  economic  census  categories  of  Paging  37  and 

 Cellular  and  Other  Wireless  Telecommunications.  38  Under  both  SBA  categories,  a  wireless  business  is  small  if  it  has  1,500  or  fewer  employees.  For  the  census  category  of  Paging,  Census 
 Bureau  data  for  1997  show  that  there  were  1,320  firms  in  this  category,  total,  that  operated  for  the  entire  year.  39  Of  this  total,  1,303  firms  had  employment  of  999  or  fewer  employees,  and  an 
 additional  17  firms  had  employment  of  1,000  employees  or  more.  40  Thus,  under  this  category  and  associated  small  business  size  standard,  the  majority  of  firms  can  be  considered  small.  For 
 the  census  category  Cellular  and  Other  Wireless  Telecommunications,  Census  Bureau  data  for 

 34  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  "Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),"  Table  4,  NAICS  code  513340  (issued  Oct.  2000). 
 35  Office  of  Management  and  Budget,  North  American  Industry  Classification  System  513  (1997)  (NAICS  code 
 513390,  changed  to  517910  in  Oct.  2002). 
 36  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  "Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),"  Table  4,  NAICS  code  513390  (issued  Oct.  2000). 
 37  13  C.  F.  R.    121.201,  NAICS  code  513321  (changed  to  517211  in  October  2002). 

 38  13  C.  F.  R.    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 39  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Table  5,  Employment  Size  of  Firms 
 Subject  to  Federal  Income  Tax:  1997,  NAICS  code  513321  (issued  October  2000). 
 40  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  Firms  with  1000  employees  or  more. 
63
 Federal  Communications  Commission  FCC  04-  28 
 8 
 1997  show  that  there  were  977  firms  in  this  category,  total,  that  operated  for  the  entire  year.  41  Of  this  total,  965  firms  had  employment  of  999  or  fewer  employees,  and  an  additional  12  firms 
 had  employment  of  1,000  employees  or  more.  42  Thus,  under  this  second  category  and  size  standard,  the  majority  of  firms  can,  again,  be  considered  small. 

 22.  Cellular  Licensees.  The  SBA  has  developed  a  small  business  size  standard  for  wireless  firms  within  the  broad  economic  census  category  Cellular  and  Other  Wireless 
 Telecommunications.  43  Under  this  SBA  category,  a  wireless  business  is  small  if  it  has  1,500  or  fewer  employees.  For  the  census  category  Cellular  and  Other  Wireless  Telecommunications 
 firms,  Census  Bureau  data  for  1997  show  that  there  were  977  firms  in  this  category,  total,  that  operated  for  the  entire  year.  44  Of  this  total,  965  firms  had  employment  of  999  or  fewer 
 employees,  and  an  additional  12  firms  had  employment  of  1,000  employees  or  more.  45  Thus,  under  this  category  and  size  standard,  the  great  majority  of  firms  can  be  considered  small. 
 According  to  the  most  recent  Trends  in  Telephone  Service  data,  719  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.  46  We  have  estimated  that  294  of  these  are  small,  under  the  SBA  small  business  size  standard.  47 

 23.  Common  Carrier  Paging.  The  SBA  has  developed  a  small  business  size  standard  for  wireless  firms  within  the  broad  economic  census  categories  of  Cellular  and  Other 
 Wireless  Telecommunications.  48  Under  this  SBA  category,  a  wireless  business  is  small  if  it  has  1,500  or  fewer  employees.  For  the  census  category  of  Paging,  Census  Bureau  data  for  1997 
 show  that  there  were  1,320  firms  in  this  category,  total,  that  operated  for  the  entire  year.  49  Of 

 41  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Table  5,  Employment  Size  of  Firms 
 Subject  to  Federal  Income  Tax:  1997,  NAICS  code  513322  (issued  October  2000). 
 42  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  Firms  with  1000  employees  or  more. 
 43  13  C.  F.  R.    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 

 44  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Table  5,  Employment  Size  of  Firms 
 Subject  to  Federal  Income  Tax:  1997,  NAICS  code  513322  (issued  October  2000). 
 45  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  Firms  with  1000  employees  or  more. 
 46  Trends  in  Telephone  Service  at  Table  5.3. 

 47  Trends  in  Telephone  Service  at  Table  5.3. 
 48  13  C.  F.  R.    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 49  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Table  5,  Employment  Size  of  Firms 
 Subject  to  Federal  Income  Tax:  1997,  NAICS  code  513321  (issued  October  2000). 
64
 Federal  Communications  Commission  FCC  04-  28 
 9 
 this  total,  1,303  firms  had  employment  of  999  or  fewer  employees,  and  an  additional  17  firms  had  employment  of  1,000  employees  or  more.  50  Thus,  under  this  category  and  associated  small 
 business  size  standard,  the  great  majority  of  firms  can  be  considered  small.  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.  51  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.  52  The  SBA  has  approved  these  small 
 business  size  standards.  53  An  auction  of  Metropolitan  Economic  Area  licenses  commenced  on  February  24,  2000,  and  closed  on  March  2,  2000.  54  Of  the  985  licenses  auctioned,  440  were 
 sold.  Fifty-  seven  companies  claiming  small  business  status  won.  According  to  the  most  recent  Trends  in  Telephone  Service,  433  carriers  reported  that  they  were  engaged  in  the  provision  of 
 paging  and  messaging  services.  55  Of  those,  we  estimate  that  423  are  small,  under  the  SBA  approved  small  business  size  standard.  56 

 24.  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.  57 
 The  Commission  auctioned  geographic  area  licenses  in  the  WCS  service.  In  the  auction,  there 
 50  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  Firms  with  1000  employees  or  more. 
 51  Amendment  of  Part  90  of  the  Commissions  Rules  to  Provide  for  the  Use  of  the  220-  222  MHz  Band  by  the 
 Private  Land  Mobile  Radio  Service,  PR  Docket  No.  89-  552,  Third  Report  and  Order  and  Fifth  Notice  of  Proposed  Rulemaking,  12  FCC  Rcd  10943,  11068-  70,  paras.  291-  295,  62  FR  16004  (Apr.  3,  1997). 

 52  See  Letter  to  Amy  Zoslov,  Chief,  Auctions  and  Industry  Analysis  Division,  Wireless  Telecommunications 
 Bureau,  FCC  ,  from  A.  Alvarez,  Administrator,  SBA  (Dec.  2,  1998)  (SBA  Dec.  2,  1998  letter). 
 53  Revision  of  Part  22  and  Part  90  of  the  Commissions  Rules  to  Facilitate  Future  Development  of  Paging  Systems, 
 Memorandum  Opinion  and  Order  on  Reconsideration  and  Third  Report  and  Order,  14  FCC  Rcd  10030  paras.  98-  107  (1999). 

 54  Id.  at  10085  para.  98. 
 55  Trends  in  Telephone  Service  at  Table  5.3. 
 56  Trends  in  Telephone  Service  at  Table  5.3. 
 57  SBA  Dec.  2,  1998  letter. 
65
 Federal  Communications  Commission  FCC  04-  28 
 10 
 were  seven  winning  bidders  that  qualified  as  very  small  business  entities,  and  one  that  qualified  as  a  small  business  entity. 
 25.  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  Cellular  and  Other  Wireless  Telecommunications  services.  58  Under  that  SBA  small  business  size  standard,  a 
 business  is  small  if  it  has  1,500  or  fewer  employees.  59  According  to  the  most  recent  Trends  in  Telephone  Service  data,  719  carriers  reported  that  they  were  engaged  in  the  provision  of 
 wireless  telephony.  60  We  have  estimated  that  294  of  these  are  small  under  the  SBA  small  business  size  standard. 

 26.  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.  61  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.  62  These  standards  defining  small  entity  in  the  context  of  broadband  PCS  auctions  have  been 
 approved  by  the  SBA.  63  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.  64  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 

 58  13  C.  F.  R.    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 59  13  C.  F.  R.    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 60  Trends  in  Telephone  Service  at  Table  5.3. 
 61  See  Amendment  of  Parts  20  and  24  of  the  Commissions  Rules    Broadband  PCS  Competitive  Bidding  and  the 
 Commercial  Mobile  Radio  Service  Spectrum  Cap,  WT  Docket  No.  96-  59,  Report  and  Order,  11  FCC  Rcd  7824,  61  FR  33859  (July  1,  1996)  (PCS  Order);  see  also  47  C.  F.  R.    24.720(  b). 

 62  See  PCS  Order). 
 63  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  5332,  59  FR  37566  (July  22,  1994). 
 64  FCC  News,  Broadband  PCS,  D,  E  and  F  Block  Auction  Closes,  No.  71744  (rel.  Jan.  14,  1997).  See  also 
 Amendment  of  the  Commissions  Rules  Regarding  Installment  Payment  Financing  for  Personal  Communications  Services  (PCS)  Licenses,  WT  Docket  No.  97-  82,  Second  Report  and  Order,  12  FCC  Rcd  16436,  62  FR  55348  (Oct. 

 24,  1997). 
66
 Federal  Communications  Commission  FCC  04-  28 
 11 
 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.  In  addition,  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. 

 27.  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.  65  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.  66  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.  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  Commissions  partitioning  and  disaggregation  rules. 

 28.  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 
 65  Amendment  of  the  Commissions  Rules  to  Establish  New  Personal  Communications  Services,  Narrowband  PCS, 
 Docket  No.  ET  92-  100,  Docket  No.  PP  93-  253,  Second  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking,  15  FCC  Rcd  10456,  65  FR  35875  (June  6,  2000). 

 66  See  SBA  Dec.  2,  1998  letter. 
67
 Federal  Communications  Commission  FCC  04-  28 
 12 
 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.  This  category  provides  that  a  small  business  is  a  wireless  company  employing  no  more  than  1,500  persons.  67  According  to  the  Census  Bureau 
 data  for  1997,  only  12  wireless  firms  out  of  a  total  of  1,238  such  firms  that  operated  for  the  entire  year,  had  1,000  or  more  employees.  68  If  this  general  ratio  continues  in  the  context  of 
 Phase  I  220  MHz  licensees,  the  Commission  estimates  that  nearly  all  such  licensees  are  small  businesses  under  the  SBAs  small  business  size  standard. 

 29.  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.  69  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.  70  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.  71  Auctions 
 of  Phase  II  licenses  commenced  on  September  15,  1998,  and  closed  on  October  22,  1998.  72  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.  73  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.  74 

 67  13  CFR    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 68  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),  Table  5,  NAICS  code  513322  (issued  October  2000). 
 69  220  MHz  Third  Report  and  Order,  12  FCC  Rcd  10943,  11068-  70  paras.  291-  295  (1997). 

 70  Id.  at  11068-  70  para.  291. 
 71  See  letter  to  D.  Phythyon,  Chief,  Wireless  Telecommunications  Bureau,  Federal  Communications  Commission, 
 from  A.  Alvarez,  Administrator,  Small  Business  Administration  (Jan.  6,  1998). 
 72  See  generally  Public  Notice,  220  MHz  Service  Auction  Closes,  14  FCC  Rcd  605  (1998). 

 73  See,  e.  g.,  Public  Notice,  FCC  Announces  It  is  Prepared  to  Grant  654  Phase  II  220  MHz  Licenses  After  Final 
 Payment  is  Made,  14  FCC  Rcd  1085  (1999). 
 74  Public  Notice,  Phase  II  220  MHz  Service  Spectrum  Auction  Closes,  14  FCC  Rcd  11218  (1999). 
68
 Federal  Communications  Commission  FCC  04-  28 
 13 
 30.  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.  75  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.  Consequently,  the  Commission  estimates  that  there  are  301  or  fewer  small  entity  SMR  licensees  in  the  800  MHz  and  900  MHz 
 bands  that  may  be  affected  by  the  rules  and  policies  adopted  herein. 
 31.  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.  76  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.  77  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.  78 
 32.  Rural  Radiotelephone  Service.  The  Commission  has  not  adopted  a  size  standard 
 75  47  CFR    90.814(  b)(  1). 
 76  See  Service  Rules  for  the  746-  764  MHz  Bands,  and  Revisions  to  part  27  of  the  Commissions  Rules,  WT 
 Docket  No.  99-  168,  Second  Report  and  Order,  65  FR  17599  (April  4,  2000). 
 77  See  generally  Public  Notice,  220  MHz  Service  Auction  Closes,  Report  No.  WT  98-  36  (Oct.  23,  1998). 

 78  Public  Notice,  700  MHz  Guard  Band  Auction  Closes,  DA  01-  478  (rel.  Feb.  22,  2001). 
69
 Federal  Communications  Commission  FCC  04-  28 
 14 
 for  small  businesses  specific  to  the  Rural  Radiotelephone  Service.  79  A  significant  subset  of  the  Rural  Radiotelephone  Service  is  the  Basic  Exchange  Telephone  Radio  System  (BETRS).  80  The 
 Commission  uses  the  SBAs  small  business  size  standard  applicable  to  Cellular  and  Other  Wireless  Telecommunications,  i.  e.,  an  entity  employing  no  more  than  1,500  persons.  81  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. 
 33.  Air-  Ground  Radiotelephone  Service.  The  Commission  has  not  adopted  a  small  business  size  standard  specific  to  the  Air-  Ground  Radiotelephone  Service.  82  We  will  use  SBAs 

 small  business  size  standard  applicable  to  Cellular  and  Other  Wireless  Telecommunications,  i.  e.,  an  entity  employing  no  more  than  1,500  persons.  83  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. 

 34.  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.  84  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 

 79  The  service  is  defined  in  section  22.99  of  the  Commissions  Rules,  47  C.  F.  R.    22.99. 
 80  BETRS  is  defined  in  sections  22.757  and  22.759  of  the  Commissions  Rules,  47  C.  F.  R.    22.757  and  22.759. 
 81  13  C.  F.  R.    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 82  The  service  is  defined  in  section  22.99  of  the  Commissions  Rules,  47  C.  F.  R.    22.99. 
 83  13  CFR    121.201,  NAICS  codes  513322  (changed  to  517212  in  October  2002). 
 84  13  CFR    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
70
 Federal  Communications  Commission  FCC  04-  28 
 15 
 affiliates,  has  average  gross  revenues  for  the  preceding  three  years  not  to  exceed  $3  million  dollars.  85  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. 

 35.  Fixed  Microwave  Services.  Fixed  microwave  services  include  common  carrier,  86  private  operational-  fixed,  87  and  broadcast  auxiliary  radio  services.  88  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.  89  The  Commission  does  not  have  data  specifying  the  number  of  these  licensees  that 
 have  more  than  1,500  employees,  and  thus  is  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  SBAs  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. 

 36.  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.  90  There  are  presently  approximately  55  licensees  in  this 
 85  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). 
 86  See  47  C.  F.  R.    101  et  seq.  (formerly,  Part  21  of  the  Commissions  Rules)  for  common  carrier  fixed 
 microwave  services  (except  Multipoint  Distribution  Service). 
 87  Persons  eligible  under  parts  80  and  90  of  the  Commissions  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  licensees  commercial,  industrial,  or  safety  operations. 
 88  Auxiliary  Microwave  Service  is  governed  by  Part  74  of  Title  47  of  the  Commissions  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. 

 89  13  CFR    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 90  This  service  is  governed  by  Subpart  I  of  Part  22  of  the  Commissions  rules.  See  47  C.  F.  R.    22.1001-  22.1037. 
71
 Federal  Communications  Commission  FCC  04-  28 
 16 
 service.  We  are  unable  to  estimate  at  this  time  the  number  of  licensees  that  would  qualify  as  small  under  the  SBAs  small  business  size  standard  for  Cellular  and  Other  Wireless 
 Telecommunications  services.  91  Under  that  SBA  small  business  size  standard,  a  business  is  small  if  it  has  1,500  or  fewer  employees.  92 

 37.  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.  93  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.  94  The  SBA  has  approved  these  small  business  size  standards.  95  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  the  rules  and  polices  adopted  herein. 
 38.  Multipoint  Distribution  Service,  Multichannel  Multipoint  Distribution  Service,  and  ITFS.  Multichannel  Multipoint  Distribution  Service  (MMDS)  systems,  often  referred  to  as 

 wireless  cable,  transmit  video  programming  to  subscribers  using  the  microwave  frequencies  of  the  Multipoint  Distribution  Service  (MDS)  and  Instructional  Television  Fixed  Service 
 (ITFS).  96  In  connection  with  the  1996  MDS  auction,  the  Commission  established  a  small  business  size  standard  as  an  entity  that  had  annual  average  gross  revenues  of  less  than  $40 
 million  in  the  previous  three  calendar  years.  97  The  MDS  auctions  resulted  in  67  successful  bidders  obtaining  licensing  opportunities  for  493  Basic  Trading  Areas  (BTAs).  Of  the  67 
 auction  winners,  61  met  the  definition  of  a  small  business.  MDS  also  includes  licensees  of  stations  authorized  prior  to  the  auction.  In  addition,  the  SBA  has  developed  a  small  business 
 size  standard  for  Cable  and  Other  Program  Distribution,  which  includes  all  such  companies 

 91  13  C.  F.  R.    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 92  Id. 
 93  See  Amendment  of  the  Commissions  Rules  Regarding  the  37.0-  38.6  GHz  and  38.6-  40.0  GHz  Bands,  ET 
 Docket  No.  95-  183,  Report  and  Order,  63  Fed.  Reg.  6079  (Feb.  6,  1998). 
 94  Id. 

 95  See  Letter  to  Kathleen  OBrien  Ham,  Chief,  Auctions  and  Industry  Analysis  Division,  Wireless 
 Telecommunications  Bureau,  FCC,  from  Aida  Alvarez,  Administrator,  SBA  (Feb.  4,  1998). 
 96  Amendment  of  Parts  21  and  74  of  the  Commissions  Rules  with  Regard  to  Filing  Procedures  in  the  Multipoint 
 Distribution  Service  and  in  the  Instructional  Television  Fixed  Service  and  Implementation  of  Section  309(  j)  of  the  Communications  Act    Competitive  Bidding,  MM  Docket  No.  94-  131  and  PP  Docket  No.  93-  253,  Report  and 

 Order,  10  FCC  Rcd  9589,  9593  para.  7  (1995). 
 97  47  C.  F.  R.    21.961(  b)(  1). 
72
 Federal  Communications  Commission  FCC  04-  28 
 17 
 generating  $12.5  million  or  less  in  annual  receipts.  98  According  to  Census  Bureau  data  for  1997,  there  were  a  total  of  1,311  firms  in  this  category,  total,  that  had  operated  for  the  entire 
 year.  99  Of  this  total,  1,180  firms  had  annual  receipts  of  under  $10  million  and  an  additional  52  firms  had  receipts  of  $10  million  or  more  but  less  than  $25  million.  Consequently,  we  estimate 
 that  the  majority  of  providers  in  this  service  category  are  small  businesses  that  may  be  affected  by  the  rules  and  policies  adopted  herein.  This  SBA  small  business  size  standard  also  appears 
 applicable  to  ITFS.  There  are  presently  2,032  ITFS  licensees.  All  but  100  of  these  licenses  are  held  by  educational  institutions.  Educational  institutions  are  included  in  this  analysis  as  small 
 entities.  100  Thus,  we  tentatively  conclude  that  at  least  1,932  licensees  are  small  businesses. 
 39.  Local  Multipoint  Distribution  Service.  Local  Multipoint  Distribution  Service  (LMDS)  is  a  fixed  broadband  point-  to-  multipoint  microwave  service  that  provides  for  two-  way 

 video  telecommunications.  101  The  auction  of  the  1,030  Local  Multipoint  Distribution  Service  (LMDS)  licenses  began  on  February  18,  1998  and  closed  on  March  25,  1998.  The  Commission 
 established  a  small  business  size  standard  for  LMDS  licenses  as  an  entity  that  has  average  gross  revenues  of  less  than  $40  million  in  the  three  previous  calendar  years.  102  An  additional  small 
 business  size  standard  for  very  small  business  was  added  as  an  entity  that,  together  with  its  affiliates,  has  average  gross  revenues  of  not  more  than  $15  million  for  the  preceding  three 
 calendar  years.  103  The  SBA  has  approved  these  small  business  size  standards  in  the  context  of  LMDS  auctions.  104  There  were  93  winning  bidders  that  qualified  as  small  entities  in  the  LMDS 
 auctions.  A  total  of  93  small  and  very  small  business  bidders  won  approximately  277  A  Block  licenses  and  387  B  Block  licenses.  On  March  27,  1999,  the  Commission  re-  auctioned  161 
 licenses;  there  were  40  winning  bidders.  Based  on  this  information,  we  conclude  that  the  number  of  small  LMDS  licenses  consists  of  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. 
 40.  218-  219  MHz  Service.  The  first  auction  of  218-  219  MHz  spectrum  resulted  in 

 98  13  C.  F.  R.    121.201,  NAICS  code  513220  (changed  to  517510  in  October  2002). 
 99  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),  Table  4,  NAICS  code  513220  (issued  October  2000). 
 100  In  addition,  the  term  small  entity  within  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. 

 101  See  Local  Multipoint  Distribution  Service,  Second  Report  and  Order,  12  FCC  Rcd  12545  (1997). 
 102  Id. 
 103  See  Local  Multipoint  Distribution  Service,  Second  Report  and  Order,  12  FCC  Rcd  12545  (1997). 
 104  See  Letter  to  Dan  Phythyon,  Chief,  Wireless  Telecommunications  Bureau,  FCC,  from  Aida  Alvarez, 
 Administrator,  SBA  (Jan.  6,  1998). 
73
 Federal  Communications  Commission  FCC  04-  28 
 18 
 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.  105  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.  106  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.  107  We  cannot  estimate,  however,  the  number  of  licenses  that  will  be 
 won  by  entities  qualifying  as  small  or  very  small  businesses  under  our  rules  in  future  auctions  of  218-  219  MHz  spectrum. 

 41.  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.  108  According  to  Census  Bureau  data  for  1997,  there  were  977  firms  in  this  category,  total,  that  operated  for  the  entire 
 year.  109  Of  this  total,  965  firms  had  employment  of  999  or  fewer  employees,  and  an  additional  12  firms  had  employment  of  1,000  employees  or  more.  110  Thus,  under  this  size  standard,  the 
 great  majority  of  firms  can  be  considered  small.  These  broader  census  data  notwithstanding,  we  believe  that  there  are  only  two  licensees  in  the  24  GHz  band  that  were  relocated  from  the  18 

 105  Implementation  of  Section  309(  j)  of  the  Communications  Act    Competitive  Bidding,  PP  Docket  No.  93-  253, 
 Fourth  Report  and  Order,  59  Fed.  Reg.  24947  (May  13,  1994). 
 106  In  the  Matter  of  Amendment  of  Part  95  of  the  Commissions  Rules  to  Provide  Regulatory  Flexibility  in  the  218- 
 219  MHz  Service,  WT  Docket  No.  98-  169,  Report  and  Order  and  Memorandum  Opinion  and  Order,  64  Fed.  Reg.  59656  (Nov.  3,  1999). 

 107  In  the  Matter  of  Amendment  of  Part  95  of  the  Commissions  Rules  to  Provide  Regulatory  Flexibility  in  the  218- 
 219  MHz  Service,  WT  Docket  No.  98-  169,  Report  and  Order  and  Memorandum  Opinion  and  Order,  64  Fed.  Reg.  59656  (Nov.  3,  1999). 

 108  13  C.  F.  R.    121.201,  NAICS  code  513322  (changed  to  517212  in  October  2002). 
 109  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Employment  Size  of  Firms  Subject 
 to  Federal  Income  Tax:  1997,  Table  5,  NAICS  code  513322  (issued  Oct.  2000). 
 110  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  Firms  with  1,000  employees  or  more. 
74
 Federal  Communications  Commission  FCC  04-  28 
 19 
 GHz  band,  Teligent  111  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. 
 42.  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.  112  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.  113  The  SBA  has  approved  these  small  business  size  standards.  114 
 These  size  standards  will  apply  to  the  future  auction,  if  held. 
 b.  Cable  and  OVS  Operators 
 43.  Cable  and  Other  Program  Distribution.  This  category  includes  cable  systems  operators,  closed  circuit  television  services,  direct  broadcast  satellite  services,  multipoint 

 distribution  systems,  satellite  master  antenna  systems,  and  subscription  television  services.  The  SBA  has  developed  small  business  size  standard  for  this  census  category,  which  includes  all 
 such  companies  generating  $12.5  million  or  less  in  revenue  annually.  115  According  to  Census  Bureau  data  for  1997,  there  were  a  total  of  1,311  firms  in  this  category,  total,  that  had  operated 
 for  the  entire  year.  116  Of  this  total,  1,180  firms  had  annual  receipts  of  under  $10  million  and  an  additional  52  firms  had  receipts  of  $10  million  or  more  but  less  than  $25  million. 
 Consequently,  the  Commission  estimates  that  the  majority  of  providers  in  this  service  category  are  small  businesses  that  may  be  affected  by  the  rules  and  policies  adopted  herein. 

 44.  Cable  System  Operators  (Rate  Regulation  Standard).  The  Commission  has  developed  its  own  small  business  size  standard  for  cable  system  operators,  for  purposes  of  rate 

 111  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. 
 112  In  the  Matter  of  Amendments  to  Parts  1,2,  87  and  101  of  the  Commissions  Rules  to  License  Fixed  Services  at 
 24  GHz,  Report  and  Order,  15  FCC  Rcd  16934,  16967  (2000);  see  also  47  C.  F.  R.    101.538(  a)(  2). 
 113  In  the  Matter  of  Amendments  to  Parts  1,2,  87  and  101  of  the  Commissions  Rules  to  License  Fixed  Services  at 
 24  GHz,  Report  and  Order,  15  FCC  Rcd  16934,  16967  (2000);  see  also  47  C.  F.  R.    101.538(  a)(  1). 
 114  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). 
 115  13  CFR    121.201,  North  American  Industry  Classification  System  (NAICS)  code  513220  (changed  to  517510 
 in  October  2002). 
 116  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),  Table  4,  NAICS  code  513220  (issued  October  2000). 
75
 Federal  Communications  Commission  FCC  04-  28 
 20 
 regulation.  Under  the  Commissions  rules,  a  small  cable  company  is  one  serving  fewer  than  400,000  subscribers  nationwide.  117  The  most  recent  estimates  indicate  that  there  were  1,439 
 cable  operators  who  qualified  as  small  cable  system  operators  at  the  end  of  1995.  118  Since  then,  some  of  those  companies  may  have  grown  to  serve  over  400,000  subscribers,  and  others  may 
 have  been  involved  in  transactions  that  caused  them  to  be  combined  with  other  cable  operators.  Consequently,  the  Commission  estimates  that  there  are  now  fewer  than  1,439  small  entity  cable 
 system  operators  that  may  be  affected  by  the  rules  and  policies  adopted  herein. 
 45.  Cable  System  Operators  (Telecom  Act  Standard).  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.  119  The  Commission  has  determined  that  there  are  67,700,000  subscribers  in  the  United  States.  120  Therefore,  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.  121  Based  on  available  data,  the  Commission  estimates  that  the  number  of  cable  operators  serving  677,000  subscribers  or  fewer,  totals  1,450.  122  The  Commission  neither 
 requests  nor  collects  information  on  whether  cable  system  operators  are  affiliated  with  entities  whose  gross  annual  revenues  exceed  $250  million,  123  and  therefore  are  unable,  at  this  time,  to 
 estimate  more  accurately  the  number  of  cable  system  operators  that  would  qualify  as  small  cable  operators  under  the  size  standard  contained  in  the  Communications  Act  of  1934. 

 46.  Open  Video  Services.  Open  Video  Service  (OVS)  systems  provide  subscription 
 117  47  CFR    76.901(  e).  The  Commission  developed  this  definition  based  on  its  determination  that  a  small  cable 
 system  operator  is  one  with  annual  revenues  of  $100  million  or  less.  Implementation  of  Sections  of  the  1992  Cable  Act:  Rate  Regulation,  Sixth  Report  and  Order  and  Eleventh  Order  on  Reconsideration,  10  FCC  Rcd  7393  (1995),  60 

 FR  10534  (Feb.  27,  1995). 
 118  Paul  Kagan  Associates,  Inc.,  Cable  TV  Investor,  February  29,  1996  (based  on  figures  for  December  30,  1995). 

 119  47  U.  S.  C.    543(  m)(  2). 
 120  See  FCC  Announces  New  Subscriber  Count  for  the  Definition  of  Small  Cable  Operator,  Public  Notice  DA  01- 
 158  (Jan.  24,  2001). 
 121  47  CFR    76.901(  f). 

 122  See  FCC  Announces  New  Subscriber  Count  for  the  Definition  of  Small  Cable  Operators,  Public  Notice,  DA-01- 
 0158  (rel.  January  24,  2001). 
 123  The  Commission  does  receive  such  information  on  a  case-  by-  case  basis  if  a  cable  operator  appeals  a  local 
 franchise  authoritys  finding  that  the  operator  does  not  qualify  as  a  small  cable  operator  pursuant  to    76.901(  f)  of  the  Commissions  rules.  See  47  CFR    76.909(  b). 
76
 Federal  Communications  Commission  FCC  04-  28 
 21 
 services.  124  The  SBA  has  created  a  small  business  size  standard  for  Cable  and  Other  Program  Distribution.  125  This  standard  provides  that  a  small  entity  is  one  with  $12.5  million  or  less  in 
 annual  receipts.  The  Commission  has  certified  approximately  25  OVS  operators  to  serve  75  areas,  and  some  of  these  are  currently  providing  service.  126  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  24  OVS  operators  (those  remaining)  might  qualify  as  small 
 businesses  that  may  be  affected  by  the  rules  and  policies  adopted  herein. 
 c.  Internet  Service  Providers 
 47.  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.  127  Under  the  SBA  size  standard,  such  a 
 business  is  small  if  it  has  average  annual  receipts  of  $21  million  or  less.  128  According  to  Census  Bureau  data  for  1997,  there  were  2,751  firms  in  this  category  that  operated  for  the  entire  year.  129 
 Of  these,  2,659  firms  had  annual  receipts  of  under  $10  million,  and  an  additional  67  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. 
 d.  Other  Internet-  Related  Entities 
 48.  Web  Search  Portals.  We  note  that,  in  this  Notice,  we  have  described  activities  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 

 124  See  47  U.  S.  C.    573. 
 125  13  CFR    121.201,  NAICS  code  513220  (changed  to  517510  in  October  2002). 
 126  See  <http://  www.  fcc.  gov/  csb/  ovs/  csovscer.  html>  (current  as  of  March  2002). 
 127  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  518111  Internet  Service  Providers  (Feb.  2004) 
 <www.  census.  gov>. 
 128  13  C.  F.  R.    121.201,  NAICS  code  518111  (changed  from  previous  code  514191,  On-  Line  Information 
 Services,  in  Oct.  2002). 
 129  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  "Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),"  Table  4,  NAICS  code  514191  (issued  Oct.  2000). 
77
 Federal  Communications  Commission  FCC  04-  28 
 22 
 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.  130  The  SBA  has  developed  a  small  business  size  standard  for  this  category;  that  size  standard  is  $6  million  or  less  in  average  annual  receipts.  131  According  to  Census  Bureau  data 
 for  1997,  there  were  195  firms  in  this  category  that  operated  for  the  entire  year.  132  Of  these,  172  had  annual  receipts  of  under  $5  million,  and  an  additional  nine  firms  had  receipts  of  between  $5 
 million  and  $9,999,999.  Consequently,  we  estimate  that  the  majority  of  these  firms  are  small  entities  that  may  be  affected  by  our  action. 

 49.  Data  Processing,  Hosting,  and  Related  Services.  Entities  in  this  category  primarily    provid[  e]  infrastructure  for  hosting  or  data  processing  services.  133  The  SBA  has 
 developed  a  small  business  size  standard  for  this  category;  that  size  standard  is  $21  million  or  less  in  average  annual  receipts.  134  According  to  Census  Bureau  data  for  1997,  there  were  3,700 
 firms  in  this  category  that  operated  for  the  entire  year.  135  Of  these,  3,477  had  annual  receipts  of  under  $10  million,  and  an  additional  108  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. 

 50.  All  Other  Information  Services.  This  industry  comprises  establishments  primarily  engaged  in  providing  other  information  services  (except  new  syndicates  and  libraries 
 and  archives).  136  We  note  that,  in  this  Notice,  we  have  described  activities  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 

 130  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  518112  Web  Search  Portals  (Feb.  2004)  <www.  census.  gov>. 
 131  13  C.  F.  R.    121.201,  NAICS  code  518112  (changed  from  514199  in  Oct.  2002). 
 132  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  "Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),"  Table  4,  NAICS  code  514199  (issued  Oct.  2000).  This  category  was  created  for  the  2002  Economic  Census  by  taking  a  portion  of  the  superseded  1997  category,  All  Other  Information 

 Services,  NAICS  code  514199.  The  data  cited  in  the  text  above  are  derived  from  the  superseded  category. 
 133  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  518210  Data  Processing,  Hosting,  and  Related  Services 
 (Feb.  2004)  <www.  census.  gov>. 
 134  13  C.  F.  R.    121.201,  NAICS  code  518210  (changed  from  514210  in  Oct.  2002). 

 135  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  "Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),"  Table  4,  NAICS  code  514210  (issued  Oct.  2000). 
 136  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  519190  All  Other  Information  Services  (Feb.  2004) 
 <www.  census.  gov>. 
78
 Federal  Communications  Commission  FCC  04-  28 
 23 
 size  standard  is  $6  million  or  less  in  average  annual  receipts.  137  According  to  Census  Bureau  data  for  1997,  there  were  195  firms  in  this  category  that  operated  for  the  entire  year.  138  Of  these, 
 172  had  annual  receipts  of  under  $5  million,  and  an  additional  nine  firms  had  receipts  of  between  $5  million  and  $9,999,999.  Consequently,  we  estimate  that  the  majority  of  these  firms 
 are  small  entities  that  may  be  affected  by  our  action. 
 51.  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.  139  The  SBA  has  developed  a  small  business  size  standard  for  this  new  (2002) 
 census  category;  that  size  standard  is  500  or  fewer  employees.  140  To  assess  the  prevalence  of  small  entities  in  this  category,  we  will  use  1997  Census  Bureau  data  for  a  relevant,  now-superseded 
 census  category,  All  Other  Information  Services.  The  SBA  small  business  size  standard  for  that  prior  category  was  $6  million  or  less  in  average  annual  receipts.  According  to 
 Census  Bureau  data  for  1997,  there  were  195  firms  in  the  prior  category  that  operated  for  the  entire  year.  141  Of  these,  172  had  annual  receipts  of  under  $5  million,  and  an  additional  nine 
 firms  had  receipts  of  between  $5  million  and  $9,999,999.  Consequently,  we  estimate  that  the  majority  of  the  firms  in  this  current  category  are  small  entities  that  may  be  affected  by  our 
 action. 
 52.  Software  Publishers.  These  companies  may  design,  develop  or  publish  software  and  may  provide  other  support  services  to  software  purchasers,  such  as  providing 

 documentation  or  assisting  in  installation.  The  companies  may  also  design  software  to  meet  the  needs  of  specific  users.  The  SBA  has  developed  a  small  business  size  standard  of  $21  million 
 or  less  in  average  annual  receipts  for  all  of  the  following  pertinent  categories:  Software  Publishers,  Custom  Computer  Programming  Services,  and  Other  Computer  Related  Services.  142 
 For  Software  Publishers,  Census  Bureau  data  for  1997  indicate  that  there  were  8,188  firms  in 

 137  13  C.  F.  R.    121.201,  NAICS  code  519190  (changed  from  514199  in  Oct.  2002). 
 138  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  "Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),"  Table  4,  NAICS  code  514199  (issued  Oct.  2000).  This  category  was  created  for  the  2002  Economic  Census  by  taking  a  portion  of  the  superseded  1997  category,  All  Other  Information 

 Services,  NAICS  code  514199.  The  data  cited  in  the  text  above  are  derived  from  the  superseded  category. 
 139  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  516110  Internet  Publishing  and  Broadcasting  (Feb.  2004) 
 <www.  census.  gov>. 
 140  13  C.  F.  R.    121.201,  NAICS  code  516110  (derived  from  514199  and  other  1997  codes). 

 141  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  "Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),"  Table  4,  NAICS  code  514199  (issued  Oct.  2000).  This  category  was  created  for  the  2002  Economic  Census  by  taking  portions  of  numerous  1997  categories. 

 142  13  C.  F.  R.    121.201,  NAICS  codes  511210,  541511,  and  541519. 
79
 Federal  Communications  Commission  FCC  04-  28 
 24 
 the  category  that  operated  for  the  entire  year.  143  Of  these,  7,633  had  annual  receipts  under  $10  million,  and  an  additional  289  firms  had  receipts  of  between  $10  million  and  $24,  999,999.  For 
 providers  of  Custom  Computer  Programming  Services,  the  Census  Bureau  data  indicate  that  there  were  19,334  firms  that  operated  for  the  entire  year.  144  Of  these,  18,786  had  annual  receipts 
 of  under  $10  million,  and  an  additional  352  firms  had  receipts  of  between  $10  million  and  $24,999,999.  For  providers  of  Other  Computer  Related  Services,  the  Census  Bureau  data 
 indicate  that  there  were  5,524  firms  that  operated  for  the  entire  year.  145  Of  these,  5,484  had  annual  receipts  of  under  $10  million,  and  an  additional  28  firms  had  receipts  of  between  $10 
 million  and  $24,999,999.  Consequently,  we  estimate  that  the  majority  of  the  firms  in  each  of  these  three  categories  are  small  entities  that  may  be  affected  by  our  action. 

 e.  Equipment  Manufacturers 
 53.  In  section  V.  B.  1  of  this  Notice,  we  invite  comment  on  whether  the  disability  access  provisions  of  sections  255  and  252(  a)(  2)  of  the  Act,  as  well  as  the  Commissions  Rules 

 implementing  these  statutes  in  the  Disability  Access  Order,  apply  in  the  context  of  VoIP  and  other  IP-  enabled  services.  Section  V.  B.  1  notes  that  sections  255  and  252(  a)(  2)  and  the 
 Commissions  implementing  rules  apply  to  manufacturers  of  equipment  that  the  Act  and  the  rules  deem  covered  by  the  provisions.  146  The  Commission  currently  does  not  collect  data 
 regarding  how  many,  or  which,  companies  manufacture  such  equipment.  Thus,  out  of  an  abundance  of  caution,  we  have  perhaps  been  over-  inclusive  in  creating  the  following  list  of 
 possibly  covered  entities.  Again,  commenters  are  invited  to  comment  on  these  categories  and  on  the  possible  number  of  small  entities  within  these  categories. 

 54.  Wireless  Communications  Equipment  Manufacturers.  The  SBA  has  established  a  small  business  size  standard  for  Radio  and  Television  Broadcasting  and  Wireless 
 Communications  Equipment  Manufacturing.  Examples  of  products  in  this  category  include  transmitting  and  receiving  antennas,  cable  television  equipment,  GPS  equipment,  pagers, 
 cellular  phones,  mobile  communications  equipment,  and  radio  and  television  studio  and  broadcasting  equipment  147  and  may  include  other  devices  that  transmit  and  receive  IP-  enabled 

 143  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  "Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),"  Table  4,  NAICS  code  511210  (issued  Oct.  2000). 
 144  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Professional,  Scientific,  and  Technical  Services, 
 Establishment  and  Firm  Size  (Including  Legal  Form  of  Organization),"  Table  4a,  NAICS  code  541511  (issued  Oct.  2000). 

 145  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Professional,  Scientific,  and  Technical  Services, 
 Establishment  and  Firm  Size  (Including  Legal  Form  of  Organization),"  Table  4a,  NAICS  code  541519  (issued  Oct.  2000). 

 146  See  Notice  section  V.  B.  1. 
 147  Office  of  Management  and  Budget,  North  American  Industry  Classification  System  308-  09  (1997)  (NAICS 
 code  334220). 
80
 Federal  Communications  Commission  FCC  04-  28 
 25 
 services,  such  as  personal  digital  assistants  (PDAs).  Under  the  SBA  size  standard,  firms  are  considered  small  if  they  have  750  or  fewer  employees.  148  According  to  Census  Bureau  data  for 
 1997,  there  were  1,215  establishments  149  in  this  category  that  operated  for  the  entire  year.  150  Of  those,  there  were  1,150  that  had  employment  of  under  500,  and  an  additional  37  that  had 
 employment  of  500  to  999.  The  percentage  of  wireless  equipment  manufacturers  in  this  category  was  approximately  61.35%,  151  so  we  estimate  that  the  number  of  wireless  equipment 
 manufacturers  with  employment  of  under  500  was  actually  closer  to  706,  with  and  additional  23  establishments  having  employment  of  between  500  and  999.  Consequently,  we  estimate  that 
 the  majority  of  wireless  communications  equipment  manufacturers  are  small  entities  that  may  be  affected  by  our  action. 

 55.  Telephone  Apparatus  Manufacturing.  This  category  comprises  establishments  primarily  engaged  primarily  in  manufacturing  wire  telephone  and  data  communications 
 equipment.  152  Examples  of  pertinent  products  are  central  office  switching  equipment,  cordless  telephones  (except  cellular),  PBX  equipment,  telephones,  telephone  answering 
 machines,  and  data  communications  equipment,  such  as  bridges,  routers,  and  gateways.  153  The  SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size 
 standard  is  1,000  or  fewer  employees.  154  According  to  Census  Bureau  data  for  1997,  there  were  598  establishments  in  this  category  that  operated  for  the  entire  year.  155  Of  these,  574  had 
 employment  of  under  1,000,  and  an  additional  17  establishments  had  employment  of  1,000  to  2,499.  Consequently,  we  estimate  that  the  majority  of  these  establishments  are  small  entities 
 that  may  be  affected  by  our  action. 

 148  13  C.  F.  R.    121.201,  NAICS  code  334220. 
 149  The  number  of  establishments  is  a  less  helpful  indicator  of  small  business  prevalence  in  this  context  than 
 would  be  the  number  of  firms  or  companies,  because  the  latter  take  into  account  the  concept  of  common  ownership  or  control.  Any  single  physical  location  for  an  entity  is  an  establishment,  even  though  that  location  may 

 be  owned  by  a  different  establishment.  Thus,  the  numbers  given  may  reflect  inflated  numbers  of  businesses  in  this  category,  including  the  numbers  of  small  businesses.  In  this  category,  the  Census  breaks-  out  data  for  firms  or 
 companies  only  to  give  the  total  number  of  such  entities  for  1997,  which  were  1,089. 
 150  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Industry  Statistics  by 
 Employment  Size,  Table  4,  NAICS  code  334220  (issued  Aug.  1999). 
 151  Id.  Table  5. 

 152  Office  of  Management  and  Budget,  North  American  Industry  Classification  System  308  (1997)  (NAICS  code 
 334210). 
 153  Id. 

 154  13  C.  F.  R.    121.201,  NAICS  code  334210. 
 155  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Telephone  Apparatus 
 Manufacturing,  Table  4,  NAICS  code  334210  (issued  Sept.  1999). 
81
 Federal  Communications  Commission  FCC  04-  28 
 26 
 56.  Electronic  Computer  Manufacturing.  This  category  comprises  establishments  primarily  engaged  in  manufacturing  and/  or  assembling  electronic  computers,  such  as 
 mainframes,  personal  computers,  workstations,  laptops,  and  computer  servers.  156  The  SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard 
 is  1,000  or  fewer  employees.  157  According  to  Census  Bureau  data  for  1997,  there  were  563  establishments  in  this  category  that  operated  for  the  entire  year.  158  Of  these,  544  had 
 employment  of  under  1,000,  and  an  additional  11  establishments  had  employment  of  1,000  to  2,499.  Consequently,  we  estimate  that  the  majority  of  these  establishments  are  small  entities 
 that  may  be  affected  by  our  action. 
 57.  Computer  Terminal  Manufacturing.  Computer  terminals  are  input/  output  devices  that  connect  with  a  central  computer  for  processing.  159  The  SBA  has  developed  a  small 

 business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  1,000  or  fewer  employees.  160  According  to  Census  Bureau  data  for  1997,  there  were  142  establishments  in  this 
 category  that  operated  for  the  entire  year,  and  all  of  the  establishments  had  employment  of  under  1,000.  161  Consequently,  we  estimate  that  the  majority  or  all  of  these  establishments  are 
 small  entities  that  may  be  affected  by  our  action. 
 58.  Other  Computer  Peripheral  Equipment  Manufacturing.  Examples  of  peripheral  equipment  in  this  category  include  keyboards,  mouse  devices,  monitors,  and  scanners.  162  The 

 SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  1,000  or  fewer  employees.  163  According  to  Census  Bureau  data  for  1997,  there  were 
 1061  establishments  in  this  category  that  operated  for  the  entire  year.  164  Of  these,  1,046  had 
 156  Office  of  Management  and  Budget,  North  American  Industry  Classification  System  306  (1997)  (NAICS  code 
 334111). 
 157  13  C.  F.  R.    121.201,  NAICS  code  334111. 

 158  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Electronic  Computer 
 Manufacturing,  Table  4,  NAICS  code  334111  (issued  Aug.  1999). 
 159  Office  of  Management  and  Budget,  North  American  Industry  Classification  System  307  (1997)  (NAICS  code 
 334113). 
 160  13  C.  F.  R.    121.201,  NAICS  code  334113. 

 161  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Computer  Terminal 
 Manufacturing,  Table  4,  NAICS  code  334113  (issued  Aug.  1999). 
 162  Office  of  Management  and  Budget,  North  American  Industry  Classification  System  307-  08  (1997)  (NAICS 
 code  334119). 
 163  13  C.  F.  R.    121.201,  NAICS  code  334119. 

 164  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Other  Computer  Peripheral 
 Equipment  Manufacturing,  Table  4,  NAICS  code  334119  (issued  Aug.  1999). 
82
 Federal  Communications  Commission  FCC  04-  28 
 27 
 employment  of  under  1,000,  and  an  additional  six  establishments  had  employment  of  1,000  to  2,499.  Consequently,  we  estimate  that  the  majority  of  these  establishments  are  small  entities 
 that  may  be  affected  by  our  action. 
 59.  Fiber  Optic  Cable  Manufacturing.  These  establishments  manufacture  insulated  fiber-  optic  cable  from  purchased  fiber-  optic  strand.  165  The  SBA  has  developed  a  small 

 business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  1,000  or  fewer  employees.  166  According  to  Census  Bureau  data  for  1997,  there  were  38  establishments  in  this 
 category  that  operated  for  the  entire  year.  167  Of  these,  37  had  employment  of  under  1,000,  and  one  establishment  had  employment  of  1,000  to  2,499.  Consequently,  we  estimate  that  the 
 majority  of  these  establishments  are  small  entities  that  may  be  affected  by  our  action. 
 60.  Other  Communication  and  Energy  Wire  Manufacturing.  These  establishments  manufacture  insulated  wire  and  cable  of  nonferrous  metals  from  purchased  wire.  168  The  SBA 

 has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  1,000  or  fewer  employees.  169  According  to  Census  Bureau  data  for  1997,  there  were 
 275  establishments  in  this  category  that  operated  for  the  entire  year.  170  Of  these,  271  had  employment  of  under  1,000,  and  four  establishments  had  employment  of  1,000  to  2,499. 
 Consequently,  we  estimate  that  the  majority  or  all  of  these  establishments  are  small  entities  that  may  be  affected  by  our  action. 

 61.  Audio  and  Video  Equipment  Manufacturing.  These  establishments  manufacture  electronic  audio  and  video  equipment  for  home  entertainment,  motor  vehicle,  public  address 
 and  musical  instrument  amplifications.  171  The  SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  750  or  fewer  employees.  172 

 165  Office  of  Management  and  Budget,  North  American  Industry  Classification  System  330  (1997)  (NAICS  code 
 335921). 
 166  13  C.  F.  R.    121.201,  NAICS  code  335921. 

 167  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Fiber  Optic  Cable 
 Manufacturing,  Table  4,  NAICS  code  335921  (issued  Nov.  1999). 
 168  Office  of  Management  and  Budget,  North  American  Industry  Classification  System  331  (1997)  (NAICS  code 
 335929). 
 169  13  C.  F.  R.    121.201,  NAICS  code  335929. 

 170  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Other  Communication  and 
 Energy  Wire  Manufacturing,  Table  4,  NAICS  code  335929  (issued  Nov.  1999). 
 171  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334310  Audio  and  Video  Equipment  Manufacturing  (Feb. 
 2004)  <www.  census.  gov>. 
 172  13  C.  F.  R.    121.201,  NAICS  code  334310. 
83
 Federal  Communications  Commission  FCC  04-  28 
 28 
 According  to  Census  Bureau  data  for  1997,  there  were  554  establishments  in  this  category  that  operated  for  the  entire  year.  173  Of  these,  542  had  employment  of  under  500,  and  nine 
 establishments  had  employment  of  500  to  999.  Consequently,  we  estimate  that  the  majority  of  these  establishments  are  small  entities  that  may  be  affected  by  our  action. 

 62.  Electron  Tube  Manufacturing.  These  establishments  are  primarily  engaged  in  manufacturing  electron  tubes  and  parts  (except  glass  blanks).  174  The  SBA  has  developed  a 
 small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  750  or  fewer  employees.  175  According  to  Census  Bureau  data  for  1997,  there  were  158  establishments 
 in  this  category  that  operated  for  the  entire  year.  176  Of  these,  148  had  employment  of  under  500,  and  three  establishments  had  employment  of  500  to  999.  Consequently,  we  estimate  that  the 
 majority  of  these  establishments  are  small  entities  that  may  be  affected  by  our  action. 
 63.  Bare  Printed  Circuit  Board  Manufacturing.  These  establishments  are  primarily  engaged  in  manufacturing  bare  (i.  e.,  rigid  or  flexible)  printed  circuit  boards  without  mounted 

 electronic  components.  177  The  SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  500  or  fewer  employees.  178  According  to 
 Census  Bureau  data  for  1997,  there  were  1,389  establishments  in  this  category  that  operated  for  the  entire  year.  179  Of  these,  1,369  had  employment  of  under  500,  and  16  establishments  had 
 employment  of  500  to  999.  Consequently,  we  estimate  that  the  majority  of  these  establishments  are  small  entities  that  may  be  affected  by  our  action. 

 64.  Semiconductor  and  Related  Device  Manufacturing.  These  establishments  manufacture  computer  storage  devices  that  allow  the  storage  and  retrieval  of  data  from  a  phase 
 change,  magnetic,  optical,  or  magnetic/  optical  media.  180  The  SBA  has  developed  a  small 
 173  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Audio  and  Video  Equipment 
 Manufacturing,  Table  4,  NAICS  code  334310  (issued  Aug.  1999). 
 174  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334411  Electron  Tube  Manufacturing  (Feb.  2004) 
 <www.  census.  gov>. 
 175  13  C.  F.  R.    121.201,  NAICS  code  334411. 

 176  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Electron  Tube  Manufacturing, 
 Table  4,  NAICS  code  334411  (issued  July  1999). 
 177  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334412  Bare  Printed  Circuit  Board  Manufacturing  (Feb. 
 2004)  <www.  census.  gov>. 
 178  13  C.  F.  R.    121.201,  NAICS  code  334412. 

 179  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Bare  Printed  Circuit  Board 
 Manufacturing,  Table  4,  NAICS  code  334412  (issued  Aug.  1999). 
 180  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334413  Semiconductor  and  Related  Device  Manufacturing 
 (Feb.  2004)  <www.  census.  gov>. 
84
 Federal  Communications  Commission  FCC  04-  28 
 29 
 business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  500  or  fewer  employees.  181  According  to  Census  Bureau  data  for  1997,  there  were  1,082  establishments  in 
 this  category  that  operated  for  the  entire  year.  182  Of  these,  987  had  employment  of  under  500,  and  52  establishments  had  employment  of  500  to  999. 

 65.  Electronic  Capacitor  Manufacturing.  These  establishments  manufacture  electronic  fixed  and  variable  capacitors  and  condensers.  183  The  SBA  has  developed  a  small 
 business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  500  or  fewer  employees.  184  According  to  Census  Bureau  data  for  1997,  there  were  128  establishments  in  this 
 category  that  operated  for  the  entire  year.  185  Of  these,  121  had  employment  of  under  500,  and  four  establishments  had  employment  of  500  to  999. 

 66.  Electronic  Resistor  Manufacturing.  These  establishments  manufacture  electronic  resistors,  such  as  fixed  and  variable  resistors,  resistor  networks,  thermistors,  and 
 varistors.  186  The  SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  500  or  fewer  employees.  187  According  to  Census  Bureau 
 data  for  1997,  there  were  118  establishments  in  this  category  that  operated  for  the  entire  year.  188  Of  these,  113  had  employment  of  under  500,  and  5  establishments  had  employment  of  500  to 
 999. 
 67.  Electronic  Coil,  Transformer,  and  Other  Inductor  Manufacturing.  These  establishments  manufacture  electronic  inductors,  such  as  coils  and  transformers.  189  The  SBA 

 has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size 
 181  13  C.  F.  R.    121.201,  NAICS  code  334413. 
 182  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Semiconductor  and  Related 
 Device  Manufacturing  ,  Table  4,  NAICS  code  334413  (issued  July  1999). 
 183  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334414  Electronic  Capacitor  Manufacturing  (Feb.  2004) 
 <www.  census.  gov>. 
 184  13  C.  F.  R.    121.201,  NAICS  code  334414. 

 185  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Electronic  Capacitor 
 Manufacturing,  Table  4,  NAICS  code  334414  (issued  July  1999). 
 186  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334415  Electronic  Resistor  Manufacturing  (Feb.  2004) 
 <www.  census.  gov>. 
 187  13  C.  F.  R.    121.201,  NAICS  code  334415. 

 188  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Electronic  Resistor 
 Manufacturing,  Table  4,  NAICS  code  334415  (issued  Aug.  1999). 
 189  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334416  Electronic  Coil,  Transformer,  and  Other  Inductor 
 Manufacturing  (Feb.  2004)  <www.  census.  gov>. 
85
 Federal  Communications  Commission  FCC  04-  28 
 30 
 standard  is  500  or  fewer  employees.  190  According  to  Census  Bureau  data  for  1997,  there  were  448  establishments  in  this  category  that  operated  for  the  entire  year.  191  Of  these,  446  had 
 employment  of  under  500,  and  two  establishments  had  employment  of  500  to  999. 
 68.  Electronic  Connector  Manufacturing.  These  establishments  manufacture  electronic  connectors,  such  as  coaxial,  cylindrical,  rack  and  panel,  pin  and  sleeve,  printed 

 circuit  and  fiber  optic.  192  The  SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  500  or  fewer  employees.  193  According  to 
 Census  Bureau  data  for  1997,  there  were  347  establishments  in  this  category  that  operated  for  the  entire  year.  194  Of  these,  332  had  employment  of  under  500,  and  12  establishments  had 
 employment  of  500  to  999. 
 69.  Printed  Circuit  Assembly  (Electronic  Assembly)  Manufacturing.  These  are  establishments  primarily  engaged  in  loading  components  onto  printed  circuit  boards  or  who 

 manufacture  and  ship  loaded  printed  circuit  boards.  195  The  SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  500  or  fewer 
 employees.  196  According  to  Census  Bureau  data  for  1997,  there  were  714  establishments  in  this  category  that  operated  for  the  entire  year.  197  Of  these,  673  had  employment  of  under  500,  and 
 24  establishments  had  employment  of  500  to  999. 
 70.  Other  Electronic  Component  Manufacturing.  These  are  establishments  primarily  engaged  in  loading  components  onto  printed  circuit  boards  or  who  manufacture  and 

 ship  loaded  printed  circuit  boards.  198  The  SBA  has  developed  a  small  business  size  standard 
 190  13  C.  F.  R.    121.201,  NAICS  code  334416. 
 191  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Electronic  Coil,  Transformer, 
 and  Other  Inductor  Manufacturing,  Table  4,  NAICS  code  334416  (issued  Aug.  1999). 
 192  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334417  Electronic  Connector  Manufacturing  (Feb.  2004) 
 <www.  census.  gov>. 
 193  13  C.  F.  R.    121.201,  NAICS  code  334417. 

 194  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Electronic  Connector 
 Manufacturing,  Table  4,  NAICS  code  334417  (issued  July  1999). 
 195  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334418  Printed  Circuit  Assembly  (Electronic  Assembly) 
 Manufacturing  (Feb.  2004)  <www.  census.  gov>. 
 196  13  C.  F.  R.    121.201,  NAICS  code  334418. 

 197  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Printed  Circuit  Assembly 
 (Electronic  Assembly)  Manufacturing,  Table  4,  NAICS  code  334418  (issued  Sept.  1999). 
 198  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334419  Other  Electronic  Component  Manufacturing  (Feb. 
 2004)  <www.  census.  gov>. 
86
 Federal  Communications  Commission  FCC  04-  28 
 31 
 for  this  category  of  manufacturing;  that  size  standard  is  500  or  fewer  employees.  199  According  to  Census  Bureau  data  for  1997,  there  were  1,835  establishments  in  this  category  that  operated 
 for  the  entire  year.  200  Of  these,  1,814  had  employment  of  under  500,  and  18  establishments  had  employment  of  500  to  999. 

 71.  Computer  Storage  Device  Manufacturing.  These  establishments  manufacture  computer  storage  devices  that  allow  the  storage  and  retrieval  of  data  from  a  phase  change, 
 magnetic,  optical,  or  magnetic/  optical  media.  201  The  SBA  has  developed  a  small  business  size  standard  for  this  category  of  manufacturing;  that  size  standard  is  1,000  or  fewer  employees.  202 
 According  to  Census  Bureau  data  for  1997,  there  were  209  establishments  in  this  category  that  operated  for  the  entire  year.  203  Of  these,  197  had  employment  of  under  500,  and  eight 
 establishments  had  employment  of  500  to  999 
 4.  Description  of  Projected  Reporting,  Recordkeeping  and  Other  Compliance  Requirements 

 72.  None  at  this  time. 
 5.  Steps  Taken  to  Minimize  Significant  Economic  Impact  on  Small  Entities,  and  Significant  Alternatives  Considered 

 73.  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.  204 
 74.  The  Notice  expressly  states  that  the  Commission  may  ultimately  need  to 

 199  13  C.  F.  R.    121.201,  NAICS  code  334419. 
 200  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Other  Electronic  Component 
 Manufacturing,  Table  4,  NAICS  code  334419  (issued  Aug.  1999). 
 201  U.  S.  Census  Bureau,  2002  NAICS  Definitions:  334112  Computer  Storage  Device  Manufacturing  (Feb. 
 2004)  <www.  census.  gov>. 
 202  13  C.  F.  R.    121.201,  NAICS  code  334112. 

 203  U.  S.  Census  Bureau,  1997  Economic  Census,  Industry  Series:  Manufacturing,  Computer  Storage  Device 
 Manufacturing,  Table  4,  NAICS  code  334112  (issued  July  1999). 
 204  5  U.  S.  C.    603(  c). 
87
 Federal  Communications  Commission  FCC  04-  28 
 32 
 differentiate  among  various  IP-  enabled  services,  and  that  regulation  may  be  deemed  inappropriate  with  regard  to  most,  if  not  all,  IP-  enabled  services,  applications  or  providers.  It 
 thus  seeks  comment  on  the  appropriate  grounds  on  which  to  differentiate  among  providers  of  IP-  enabled  services.  The  Notice  further  seeks  comment  on  the  appropriate  legal  classification 
 for  each  category  of  IP-  enabled  services,  and  on  which  regulatory  requirements,  if  any,  should  be  applied  to  services  falling  into  each  category.  The  Notice  makes  no  conclusions  regarding 
 which  regulations,  if  any,  would  apply  to  any  entity,  including  small  entities.  We  seek  comment  here  on  the  effect  various  proposals  will  have  on  small  entities,  and  on  the  effect 
 alternative  rules  would  have  on  those  entities. 
 6.  Federal  Rules  that  May  Duplicate,  Overlap,  or  Conflict  with  the  Proposed  Rules 

 75.  None. 
88
 Federal  Communications  Commission  FCC  04-  28 
 STATEMENT  OF  CHAIRMAN  MICHAEL  K.  POWELL 

 Re:  IP-  Enabled  Services,  WC  Docket  No.  04-  36. 
 More  than  two  decades  ago,  the  Commission  made  the  courageous  decision  to  fence  off  information  services    the  precursors  of  todays  internet    from  traditional  monopoly  regulation. 
 This  approach  was  embraced  by  Congress  in  that  1996  Act.  The  Commissions  pro-  competitive  and  deregulatory  policies  allowed  competition  to  flourish  and  helped  usher  in  a  period  of  growth 
 and  innovation  unlike  any  other  in  our  nations  history.  Today,  we  issue  an  item  that  follows  in  that  tradition  of  fostering  innovation  and  consumer  choice.  The  item  recognizes  that  we  have 
 entered  an  Age  of  Personal  Communications.  IP-  enabled  services  and  the  proliferation  of  IP  devices  enable  consumers  to  increasingly  choose  innovative,  personalized  Internet  applications 
 and  content. 
 As  new  and  innovative  ways  to  communicate  have  emerged,  so  too  have  calls  for  us  to  examine  the  appropriate  public  policy  for  highly  innovative,  highly  efficient  services  based  on 
 Internet  Protocol.  In  this  comprehensive  Notice  of  Proposed  Rulemaking,  we  seek  comment  on  how  applications  that  use  IP  are  changing  our  communications  network  and  the  very 
 assumptions  on  which  our  current  regulatory  policies  are  based. 
 Our  starting  point    and  our  most  important  finding    is  the  recognition  that  all  IP-  enabled  services  exist  in  a  dynamic,  fast-  changing  environment  that  is  peculiarly  ill-  suited  to  the  century 
 old  telephone  model  of  regulation.  Competitive  market  forces,  rather  than  prescriptive  rules,  will  respond  to  public  need  much  more  quickly  and  more  effectively  than  even  the  best 
 intentioned  responses  of  government  regulators.  Indeed,  our  best  hope  for  continuing  the  investment,  innovation,  choice  and  competition  that  characterizes  Internet  services  today  lies  in 
 limiting  to  a  minimum  the  labyrinth  of  regulations  and  fees  that  apply  to  the  Internet.  All  too  often,  these  edicts  can  thwart  competition  even  among  traditional  telecommunications  providers. 

 While  IP-  enabled  services  should  remain  free  from  traditional  monopoly  regulation,  rules  designed  to  ensure  law  enforcement  access,  universal  service,  disability  access,  and  emergency 
 911  service  can  and  should  be  preserved  in  the  new  architecture.  In  todays  Notice,  we  seek  comment  on  whether  and  how  to  apply  discrete  regulatory  requirements  where  necessary  to 
 fulfill  important  federal  policy  objectives. 
 Above  all,  law  enforcement  access  to  IP-  enabled  communications  is  essential.  The  Communications  Assistance  for  Law  Enforcement  Act  (CALEA)  requires  telecommunications 
 carriers  to  ensure  that  their  equipment  is  capable  of  providing  surveillance  capabilities  to  law  enforcement  agencies.  CALEA  requirements  can  and  should  apply  to  VoIP  and  other  IP  enabled 
 service  providers,  even  if  these  services  are  information  services  for  purposes  of  the  Communications  Act.  Nothing  in  todays  proceeding  should  be  read  to  suggest  that  law 
 enforcement  agencies  should  not  have  the  access  to  communications  infrastructure  they  need  to  protect  our  nation.  On  the  contrary,  all  IP-  enabled  services  should  consider  the  needs  of  law 
89
 Federal  Communications  Commission  FCC  04-  28 
 enforcement  as  they  continue  to  develop  innovative  technologies.  Nevertheless,  the  technical  issues  associated  with  law-  enforcement  access  to  VoIP  communications  are  both  novel  and 
 complex,  and,  ultimately,  worthy  of  their  own  separately  docketed  proceeding.  To  address  these  issues,  we  intend  to  initiate  a  CALEA  rulemaking  proceeding  in  the  near  future.  The  new 
 proceeding  will  address  the  scope  of  covered  services,  assign  responsibility  for  compliance,  identify  the  wiretap  capabilities  required  by  law  enforcement  and  provide  acceptable  compliance 
 standards. 
 IP  networks  cost  much  less  to  build  and  operate.  As  in  so  many  other  areas,  I  believe  VoIP  can  help  control  high  universal  service  costs  in  order  to  ensure  that  every  American  has 
 affordable  telephone  service.  As  the  item  notes,  however,  IP  services  ride  atop  a  physical  layer  that,  in  many  areas,  is  still  expensive  to  build  and  maintain.  To  continue  to  ensure  the  entire 
 nation  has  access  to  vital  communications  services,  the  NPRM  considers  distinguishing  service  providers  that  offer  interconnection  with  the  nations  public  switched  telephone  network  from 
 those  that  do  not.  To  determine  the  precise  scope  of  support  obligations  in  the  new  IP  world,  todays  action  quite  properly  seeks  comment  on  a  number  of  complex  funding  questions.  Yet  it 
 does  not    and  cannot    change  the  existing  obligations  of  providers  to  comply  with  our  rules,  especially  our  rules  requiring  providers  of  traditional  long  distance  services  to  pay  fair 
 compensation  for  using  the  public  switched  telephone  network.  During  and  after  the  transition  to  next  generations  communications  networks,  the  Commission  can  and  will  fulfill  its  statutory 
 obligation  to  ensure  that  every  American  has  access  to  the  network  at  an  affordable  price. 
 As  we  move  forward,  the  Commission  will  also  hold  a  series  of  Solutions  Summits  to  tackle  how  a  VoIP  provider  can  best  respond  to  the  needs  of  various  communities  where  the 
 market  may  not  readily  respond.  We  will  be  asking  leaders  in  the  law-  enforcement,  first-responder  and  disabled  communities  to  come  together  to  talk  about  creative  ways  to  address 
 some  of  these  issues.  It  is  my  hope  that  industry  can  take  the  lead  in  solving  some  of  the  real  problems  that  stem  from  the  migration  from  the  monopoly  analog  world  to  the  competitive  new 
 digital  world  of  communications.  If  leaders  from  industry  and  the  government  work  together  to  identify  issues,  study  them  and  stay  vigilant,  we  can  rely  on  enterprise  and  entrepreneurship  to 
 respond  to  many  public  needs.  Our  first  Solutions  Summits  will  be  held  on  March  18  and  will  address  E911  issues. 

 Todays  notice  recognizes  that  we  simply  cannot  contort  the  character  of  the  Internet  to  suit  our  familiar  notions  of  regulation.  We  will  not  dumb  down  the  genius  of  the  web  to  match  the 
 limited  vision  of  a  regulator.  At  the  same  time,  we  remain  committed  to  making  special  efforts  to  target  those  areas  most  in  need  of  public  protection.  Working  together,  we  will  ensure  that  the 
 promise  of  these  new  innovative  technologies  and  services  is  realized  for  all  Americans. 
90
 Federal  Communications  Commission  FCC  04-  28 
 CONCURRING  STATEMENT  OF  COMMISSIONER  MICHAEL  J.  COPPS 

 Re:  IP-  Enabled  Services,  WC  Docket  No.  04-  36. 
 After  two  years  of  dialogue  on  classifying,  reclassifying  and  declassifying  services,  in  this  proceeding  the  Commission  finally  focuses  on  the  consequences  of  a  Title  I  approach  on  a  whole 
 range  of  public  safety,  emergency  response,  universal  service  and  disabilities  access  policies  that  we  have  a  duty  to  protect.  I  have  long  advocated  that  we  do  this. 

 But  I  limit  my  support  to  concurring  here  because  this  proceeding  on  IP-  enabled  services  strikes  me  as  getting  rather  too  close  to  final  conclusions.  In  this  Notice,  we  seem  to  be  judging 
 IP-  related  services  without  defining  them.  We  ask  questions  about  how  to  classify  these  ill-defined  services,  but  then  presume,  or  at  least  suggest,  the  answers.  The  impression  is  left  that 
 we  are  asking  what  rules  we  should  apply  when  we  relocate  whole  services  and  technologies  to  Title  I  from  Title  II.  Were  we  eventually  to  take  this  route,  we  would  be  rewriting  the  1996 
 Act  from  top  to  bottom.  This  agency  has  no  right  to  substitute  its  reclassification  wishes  for  the  will  of  Congress. 

 So  I  will  support  this  Notice  only  with  the  understanding  that,  once  we  have  a  full  record,  our  options  remain  completely  open. 
 We  all  marvel  at  the  transformative  potential  of  new  IP  services.  They  sizzle  with  possibility  for  consumers  and  businesses  alike.  But  for  this  transformation  to  happen  with  real  spark,  we 
 need  keep  some  fundamentals  in  mind.  For  example,  we  need  to  address  intercarrier  compensation  to  create  a  level  playing  field  that  minimizes  arbitrages  and  maximizes  the 
 opportunities  for  new  technologies  to  flourish.  And  we  must  recognize  the  role  that  universal  service  will  play  to  make  sure  that  all  areas  of  the  nation  are  covered  with  the  technologies  to 
 create  a  seamless  communications  system  and  a  seamless  country.  IP  applications  will  only  revolutionize  communications  if  everyone  has  access  to  really  high  capacity  bandwidth.  Only 
 when  everyone,  everywhere  in  America  has  access  to  broadband,  will  the  IP  transformation  we  herald  here  really  take  place. 
93
 Federal  Communications  Commission  FCC  04-  28 
 STATEMENT  OF  COMMISSIONER  KEVIN  J.  MARTIN 

 Re:  IP-  Enabled  Services,  WC  Docket  No.  04-  36. 
 I  am  glad  that  the  Commission  is  moving  forward  today  with  a  Notice  of  Proposed  Rulemaking  to  address  and  clarify  the  regulatory  status  of  Voice  over  Internet  Protocol  (VoIP) 
 and  Internet  Protocol  (IP)-  enabled  services.  Todays  NPRM  recognizes  the  benefits  that  VoIP  brings  such  as  greater  efficiency  and  that  the  Commission  will  approach  VoIP  with  a  light 
 regulatory  touch. 
 VoIP  and  IP  based  services  will  provide  consumers  with  personalized  applications  and  content  resulting  in  more  competition  and  greater  choice.  These  IP  services  have  the  potential 
 to  spur  further  innovation  and  help  drive  the  ubiquitous  deployment  of  broadband  and  IP  networks  that  will  bring  even  greater  benefits  to  consumers  in  the  future. 

 As  I  have  stated  previously,  as  VoIP  services  move  toward  becoming  a  substitute  for  traditional  telephony  services,  we  need  to  carefully  consider  and  address  any  questions  and 
 concerns  regarding  the  obligations  to  provide  traditional  public  safety  services  such  as  911  and  the  ability  to  comply  with  law  enforcement  requirements.  I  thus  support  todays  announcement 
 that  the  Commission  will  soon  initiate  a  comprehensive  rulemaking  to  address  law  enforcements  needs  relative  to  CALEA  and  that  our  decision  today  will  not  prejudice  the 
 outcome  of  that  proceeding. 
 Todays  decision,  however,  also  raises  many  of  the  difficult  questions  that  arise  regarding  VoIPs  potential  to  displace  traditional  telephony  services.  I  encourage  all  interest  parties  to 
 comment  on  these  issues.  In  particular,  I  will  look  with  great  interest,  at  how  we  should  address  many  of  the  important  public  safety,  law  enforcement  and  consumer  protection  functions  in  a 
 VoIP  world. 
 I  am  also  pleased  that  todays  item  recognizes  the  many  different  types  of  VoIP  service  offerings  that  currently  exist,  and  that  may  potentially  develop  in  the  marketplace.  The  NPRM 
 acknowledges  that  VoIP  offerings,  at  times,  may  or  may  not  need  to  use  the  public  switch  network  (  PSTN)  and  asks  how  we  should  take  their  key  distinctions  into  account.  The  item 
 also  makes  clear  that  functionally  equivalent  services  should  be  subject  to  similar  obligations  and  that  the  cost  of  the  PSTN  should  be  born  equitably  among  those  that  use  it  in  similar  ways. 

 As  we  move  forward,  we  must  ensure  that  our  policies  treat  similar  services  in  a  similar  fashion  and  that  we  do  not  create  a  regulatory  framework  that  promotes  potential  arbitrage 
 opportunities. 
94
 Federal  Communications  Commission  FCC  04-  28 
 STATEMENT  OF  COMMISSIONER  JONATHAN  S.  ADELSTEIN  APPROVING  IN  PART  AND  CONCURRING  IN  PART 

 Re:  IP-  Enabled  Services,  WC  Docket  No.  04-  36. 
 Re:  Petition  for  Declaratory  Ruling  that  pulver.  coms  Free  World  Dialup  is  Neither  Telecommunications  Nor  a  Telecommunications  Service,  Memorandum  Opinion  and 
 Order,  WC  Docket  No.  03-  45. 
 Today,  we  consider  two  items    a  comprehensive  Notice  of  Proposed  Rulemaking  and  a  declaratory  ruling  on  a  specific  service    related  to  Voice  over  Internet  Protocol  (VoIP)  and 
 Internet  Protocol  (IP)-  enabled  services. 
 NPRM 
 With  this  Notice,  we  examine  the  extent  and  legal  significance  of  the  telecommunications  industrys  growing  adoption  of  IP-  enabled  services.  This  technological  evolution  stems  from  the 
 development  of  a  common  digital  protocol,  the  IP  in  VoIP.  It  is  integral  to  an  explosion  of  choices  for  consumers,  such  as  phones  in  PDAs,  voice  through  Instant  Messaging-  like  services, 
 not  to  mention  lower  prices  on  the  services  we  are  accustomed  to.  I  am  struck  by  the  wealth  of  innovation  occurring  under  the  banner  of  VoIP.  As  a  consumer,  I  think  we  all  have  much  to 
 look  forward  to. 
 As  a  Commissioner,  I  think  we  take  an  important  and  responsible  step  today  by  opening  a  comprehensive  Notice  of  Proposed  Rulemaking  on  the  regulatory  issues  associated  with  IP-enabled 
 services.  VoIP  services  have  matured  recently  and  it  is  apparent  that  VoIP  providers  have  their  sights  set  on  that  most  mainstream  of  telecommunications  markets    the  residential 
 consumer.  VoIP  providers  point  out  that  their  services  have  the  potential  to  provide  a  rich  and  diverse  array  of  complementary  non-  voice  applications  that  will  stir  demand.  All  indications  are 
 that  IP  is  becoming  the  building  block  for  the  future  of  telecommunications. 
 Questions  about  what  this  evolution  means  for  consumers,  providers,  and  this  Commission  are  far  from  simple.  What  they  present,  though,  is  an  opportunity    indeed  a  necessity    for  this 
 Commission  to  facilitate  that  evolution.  Todays  items  herald  the  Commissions  role  in  promoting  innovative  technologies.  At  the  same  time,  though,  we  are  charged  under  the 
 Communications  Act  with  ensuring  that  the  goals  set  out  by  Congress  are  fulfilled.  Forging  the  right  regulatory  scheme  to  achieve  these  goals  is  our  task  and  it  is  fundamental  that  we  begin  to 
 wrestle  with  these  issues  in  earnest. 
 I  would  like  to  thank  Chairman  Powell  for  his  leadership  on  VoIP.  The  Chairman  convened  a  forum  on  these  issues  in  December  that  I  found  extremely  useful.  I  have  also  appreciated  his 
 willingness  to  engage  his  colleagues  in  the  deliberations  over  these  items.  We  do  not  agree  on  every  detail  about  how  to  move  forward,  but  I  appreciate  his  willingness  to  accommodate  so 
 many  of  my  concerns  as  we  start  this  larger  rulemaking. 
95
 Federal  Communications  Commission  FCC  04-  28 
 I  fully  expect  that  this  Notice  will  allow  us  to  develop  a  comprehensive  record  about  the  development  of  IP-  enabled  services.  Chief  among  our  tasks  is  to  determine  how  the  adoption  of 
 IP-  enabled  services  affects  those  most  fundamental  telecommunications  policies  embodied  in  the  Communications  Act.  The  Act  charges  us  to  maintain  universal  service,  which  is  crucial  in 
 delivering  communications  services  to  our  nations  schools,  libraries,  low  income  consumers,  and  rural  communities.  We  will  need  to  look  closely  at  how  IP-  enabled  services  affect  our 
 ability  to  fund  and  deliver  those  services.  The  support  that  our  universal  service  programs  bring  to  our  nations  rural  communities  is  critical,  so  I  am  particularly  glad  that  this  Notice  seeks  direct 
 comment  on  issues  of  concern  to  Rural  America. 
 As  we  go  forward,  we  also  must  understand  how  IP-  enabled  services  will  affect  the  provision  of  911,  E911,  and  other  emergency  services;  the  ability  of  people  with  disabilities  to  access 
 communications  services;  the  application  of  our  consumer  protection  laws;  the  ability  of  our  law  enforcement  officials  to  rely  on  CALEA  to  protect  public  safety  and  national  security;  and  other 
 national  priorities  such  as  consumer  privacy  and  network  reliability.  We  must  understand  that  our  decisions  can  have  disparate  impact  on  particular  communities.  We  raise  many  issues  in 
 todays  NPRM,  and  we  will  need  to  reach  out  to  the  many  and  diverse  interests  of  consumers,  network  providers  of  all  types,  hardware  and  software  manufacturers,  and  federal,  state  and  local 
 policymakers. 
 I  agree  with  my  colleagues  that  there  may  be  some  questions  that  we  need  to  answer  about  the  regulation  of  VoIP  services  sooner  rather  than  later.  There  are  time  sensitive  issues  on  the  table 
 for  us,  such  as  the  erosion  of  the  base  of  support  for  universal  service.  This  Commission  has  not  hesitated  in  the  past  to  address  issues  of  regulatory  arbitrage,  and  I  think  that  we  will  have  to 
 look  closely  and  quickly  at  some  of  the  concerns  that  have  been  brought  to  our  attention. 
 Pulver.  com 
 In  approaching  these  monumental  tasks,  however,  I  am  concerned  that  we  not  get  too  far  ahead  of  our  record.  The  rapid  and  dynamic  pace  of  the  migration  to  IP  and  broadband  services 
 counsels  for  a  full  consideration  of  the  issues  wherever  possible. 
 Many  persuasive  arguments  were  made  as  to  why  Pulver.  coms  Free  World  Dialup  (FWD)  is  not  telecommunications  or  a  telecommunications  service.  I  concur  that  this  service  is  not 
 telecommunications  or  a  telecommunications  service  and  in  practice  should  remain  largely  unregulated.  In  particular,  the  peer-  to-  peer  nature  of  FWD  differs  in  significant  respects  from 
 traditional  telecommunications  services  that  traditional  phone  companies  have  offered.  However,  I  cannot  fully  join  todays  pulver.  com  Order  because  it  reaches  far  beyond  the  petition 
 filed  by  pulver.  com  and,  regrettably,  speaks  prematurely  to  many  of  the  important  questions  raised  in  todays  NPRM. 

 Despite  attempts  to  characterize  this  Order  as  limited  to  the  specific  facts  of  pulver.  coms  FWD,  I  am  concerned  that  the  decision  speaks  much  more  expansively.  By  deciding  the 
 statutory  classification  of  pulver.  coms  service  as  an  interstate  information  service,  the  Order  raises  a  host  of  questions  about  the  continuing  relevance  of  those  most  fundamental 
96
 Federal  Communications  Commission  FCC  04-  28 
 telecommunications  policy  objectives  that  Congress  has  entrusted  to  this  Commission.  At  last  Decembers  VoIP  forum,  I  talked  about  these  concerns  and  was  struck  by  how  widely-  held  those 
 concerns  seemed  to  be. 
 Todays  Order  does  not  fully  address  these  widely-  acknowledged  concerns.  One  might  read  this  Order  as  silent  on  many  of  these  ultimate  issues,  which  strikes  me  as  curiously  dismissive 
 given  the  magnitude  of  the  responsibilities  entrusted  to  us.  Parsing  more  closely,  the  declarations  about  jurisdiction  and  the  unregulated  nature  of  the  service  seem  to  presume  the 
 outcome  of  the  very  rulemaking  we  launch  today.  Pulver.  coms  petition  did  not  request  a  ruling  on  the  appropriate  jurisdictional  classification,  and  many  parties  may  be  unaware  that  we 
 planned  to  reach  that  question  in  this  Order.  With  both  the  jurisdictional  finding  and  the  unaddressed  implications  of  the  statutory  classification,  I  would  have  preferred  that  we  defer 
 these  important  policy  considerations  until  the  Commission  has  a  more  comprehensive  record  with  the  benefit  of  the  participation  of  the  many  stakeholders  who  should  be  part  of  this  debate. 

 One  area  where  we  did  have  participation  was  in  the  critical  area  of  law  enforcement.  Legitimate  concerns  were  raised  by  the  Federal  Bureau  of  Investigation  and  the  Department  of 
 Justice.  While  the  Department  of  Justice  has  acquiesced  to  the  desire  to  open  this  inquiry,  its  clearly  stated  preference  was  to  resolve  CALEA  matters  as  soon  as  possible.  While  I  dissented 
 from  todays  ruling  that  FWD  is  an  information  service,  I  am  pleased  that  we  commit  to  opening  a  CALEA  proceeding  very  soon,  and  that  the  Justice  Department  has  not  objected  to  our  moving 
 forward  in  the  interim. 
 For  these  reasons,  I  can  only  concur  in  part  and  dissent  in  part  on  the  pulver.  com  Order  and  thus  I  can  only  concur  in  those  portions  of  the  NPRM  where  that  item  imports  this  overreaching 
 analysis. 
 Finally,  I  would  like  to  thank  the  Wireline  Competition  Bureau,  and  in  particular,  the  Competition  Policy  Division.  Bureau  staff  members,  as  well  as  my  own  staff,  have  spent 
 countless  hours  and  long  nights  working  through  complex  issues.  They  are  truly  public  servants  of  the  highest  caliber. 
97