61184 Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 

Street, NE., Room 2A, Washington, DC 

20426.

28. From FERC’s Home Page on the 

Internet, this information is available in 

the Commission’s document 

management system, eLibrary. The full 

text of this document is available on 

eLibrary in PDF and Microsoft Word 

format for viewing, printing, and/or 

downloading. To access this document 

in eLibrary, type the docket number 

excluding the last three digits of this 

document in the docket number field. 

29. User assistance is available for 

eLibrary and the FERC’s website during 

normal business hours. For assistance, 

please contact FERC Online Support at 

1–866–208–3676 (toll free) or 202–502–

6652 (e-mail at 

FERCOnlineSupport@FERC.gov), or the 

Public Reference Room at 202–502–

8371, TTY 202–502–8659 (e-mail at 

public.referenceroom@ferc.gov).

List of Subjects in 18 CFR Part 35 

Electric power, Reporting and 

recordkeeping requirements.

By direction of the Commission. 

Magalie R. Salas, 

Secretary.

In consideration of the foregoing, the 

Commission proposes to amend Part 35, 

Chapter I, Title 18 of the Code of 

Federal Regulations, as set forth below:

PART 35—FILING OF RATE 

SCHEDULES AND TARIFFS 

1. The authority citation for part 35 

continues to read as follows:

Authority: 16 U.S.C. 791a–825r, 2601–

2645; 31 U.S.C. 9701; 42 U.S.C. 7101–7352.

2. In § 35.27, paragraph (c) is added to 

read as follows:

§ 35.27 Power sales at market-based rates.

* * * * *

(c) Reporting requirement. Any public 

utility with the authority to engage in 

sales for resale of electric energy in 

interstate commerce at market-based 

rates shall be subject to the following: 

(1) As a condition of obtaining and 

retaining market-based rate authority, a 

public utility with market-based rate 

authority must timely report to the 

Commission any change in status that 

would reflect a departure from the 

characteristics the Commission relied 

upon in granting market-based rate 

authority. A change in status includes, 

but is not limited to each of the 

following: 

(i) Ownership or control of generation 

or transmission facilities or inputs to 

electric power production, or 

(ii) Affiliation with any entity not 

disclosed in the application for marketbased rate authority that owns or 

controls generation or transmission 

facilities or inputs to electric power 

production or affiliation with any entity 

that has a franchised service area. 

(2) Any change in status subject to 

paragraph (c)(1) of this section must be 

filed no later than 30 days after the 

change in status occurs.

[FR Doc. 04–23136 Filed 10–14–04; 8:45 am] 

BILLING CODE 6717–01–P

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 64 

[CC Docket No. 98–170; CG Docket No; 04–

244; FCC 04–162] 

Policies and Rules Governing 

Interstate Pay-Per-Call and Other 

Information Services Pursuant to the 

Telecommunications Act of 1996; 

Truth-in-Billing and Billing Format

AGENCY: Federal Communications 

Commission.

ACTION: Proposed rules.

SUMMARY: In this document, the 

Commission seeks comment on how 

best to protect consumers and foster 

legitimate businesses that offer 

audiotext information services, 

including those that use 900 numbers 

and toll-free numbers.

DATES: Comments are due on or before 

November 15, 2004 and reply comments 

are due on or before November 29, 2004. 

Written comments on the Paperwork 

Reduction Act (PRA) proposed 

information collection requirements 

must be submitted by the public, Office 

of Management and Budget (OMB), and 

other interested parties on or before 

December 14, 2004.

ADDRESSES: Federal Communications 

Commission, 445 12th Street, SW., 

Washington, DC 20554. In addition to 

filing comments with the Secretary, a 

copy of any comments on the 

Paperwork Reduction Act (PRA) 

information collection requirements 

contained herein should be submitted to 

Judith B. Herman, Federal 

Communications Commission, Room 1–

C804, 445 12th Street, SW., Washington, 

DC 20554, or via the Internet to JudithB.Herman@fcc.gov, and to Kristy L. 

LaLonde, OMB Desk Officer, Room 

10234 NEOB, 725 17th Street, NW., 

Washington, DC 20503, via the Internet 

to Kristy_L. LaLonde@omb.eop.gov, or 

via fax at 202–395–5167.

FOR FURTHER INFORMATION CONTACT:

Ruth Yodaiken, of the Consumer & 

Government Affairs Bureau at (202) 

418–2512 (voice), or e-mail 

ruth.yodaiken@fcc.gov. For additional 

information concerning the PRA 

information collection requirements 

contained in this document, contact 

Judith B. Herman at (202) 418–0214, or 

via the Internet at JudithB.Herman@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Notice of 

Proposed Rulemaking (NPRM), adopted 

July 1, 2004, and released July 16, 2004. 

This Notice of Proposed Rulemaking 

(NPRM), Policies and Rules Governing 

Interstate Pay-Per-Call and Other 

Information Services, and Toll-free 

Number Usage; Truth-in-Billing and 

Billing Format, CC Docket No. 98–170, 

CG Docket No. 04–244; FCC 04–162, 

contains proposed information 

collection requirements. It will be 

submitted to the Office of Management 

and Budget (OMB) for review under the 

Paperwork Reduction Act (PRA). OMB, 

the general public, and other federal 

agencies are invited to comment on the 

proposed information collection(s) 

contained in these proceedings. On July 

16, 2004, the Commission also released 

a Memorandum Opinion and Order 

(MO&O), Policies and Rules Governing 

Interstate Pay-Per-Call and Other 

Information Services Pursuant to the 

Telecommunications Act of 1996; 

Policies and Rules Implementing the 

Telephone Disclosure and Dispute 

Resolution Act, Florida Public Service 

Commission Petition to Initiate 

Rulemaking to Adopt Additional 

Safeguards; Application for Review of 

Advisory Ruling Regarding Directly 

Dialed Calls to International 

Information Services, CC Docket Nos. 

96–146 and 98–170, RM–8783, ENF–95–

20; FCC 04–162. The full text of this 

document is available on the 

Commission’s Web site Electronic 

Comment Filing System and for public 

inspection during regular business 

hours in the FCC Reference Center, 

Room CY–A257, 445 12th Street, SW., 

Washington, DC 20554. To request 

materials in accessible formats for 

people with disabilities (Braille, large 

print, electronic files, audio format), 

send an e-mail to fcc504@fcc.gov, or call 

the Consumer & Governmental Affairs 

Bureau at (202) 418–0530 (voice) or 

(202) 418–0432 (TTY). This NPRM can 

also be downloaded in Word and 

Portable Document Format (PDF) at 

http://www.fcc.gov/cgb/policy/

paypercall.html.

Comments filed through the ECFS can 

be sent as an electronic file via the 

Internet to http://www.fcc.gov/e-file/

ecfs.html. Generally, only one copy of 

an electronic submission must be filed. 

Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 61185

If multiple docket or rulemaking 

numbers appear in the caption of this 

proceeding, however, commenters must 

transmit one electronic copy of the 

comments to each docket or rulemaking 

number referenced in the caption. In 

completing the transmittal screen, 

commenters should include their full 

name, Postal Service mailing address, 

and the applicable docket or rulemaking 

number. Parties may also submit an 

electronic comment by Internet e-mail. 

To get filing instructions for e-mail 

comments, commenters should send an 

e-mail to ecfs@fcc.gov, and should 

include the following words in the body 

of the message, ‘‘get form <your e-mail 

address>.’’ A sample form and 

directions will be sent in reply. Parties 

who choose to file by paper must file an 

original and four copies of each filing. 

If more than one docket or rulemaking 

number appears in the caption of this 

proceeding, commenters must submit 

two additional copies for each 

additional docket or rulemaking 

number. Parties who choose to file 

comments on billing issues, please 

reference both CG Docket No. 04–244 

and CC Docket No. 98–170. Parties who 

choose to file comments on any other 

aspect of Policies and Rules Governing 

Interstate Pay-Per-Call and Other 

Information Services, and Toll-free 

Number Usage, should reference only 

CG Docket No. 04–244. Filings can be 

sent by hand or messenger delivery, by 

commercial overnight courier, or by 

first-class or overnight U.S. Postal 

Services mail (although we continue to 

experience delays in receiving U.S. 

Postal Service mail). The Commission’s 

contractor, Natek, Inc., will receive 

hand-delivered or messenger-delivered 

paper filings for the Commission’s 

Secretary at 236 Massachusetts Avenue, 

NE., Suite 110, Washington, DC 20002. 

The filing hours at this location are 8 

a.m. to 7 p.m. All hand deliveries must 

be held together with rubber bands or 

fasteners. Any envelopes must be 

disposed of before entering the building. 

Commercial overnight mail (other than 

U.S. Postal Service Express Mail and 

Priority Mail) must be sent to 9300 East 

Hampton Drive, Capitol Heights, MD 

20743. U.S. Postal Service first-class 

mail, Express Mail, and Priority Mail 

should be addressed to 445 12th Street, 

SW., Washington, DC 20554. All filings 

must be addressed to the Commission’s 

Secretary, Marlene H. Dortch, Office of 

the Secretary, Federal Communications 

Commission, 445 12th Street, SW., 

Room TW–B204, Washington, DC 

20554. Parties who choose to file paper 

comments also should send four paper 

copies of their filings to Kelli Farmer, 

Federal Communications Commission, 

Room 4–C734, 445 12th Street, SW., 

Washington, DC 20554. 

One copy of each filing must be sent 

to the Commission’s copy contractor, 

Best Copy and Printing, Inc. (BCPI), by 

mail at Portals II, 445 12th Street, SW., 

Room CY–B402, Washington, DC 20554; 

by e-mail at FCC@bcpiweb.com; by 

facsimile at (202) 488–5563; or by 

telephone at (202) 488–5300. 

Initial Paperwork Reduction Act of 

1995 Analysis 

This document contains proposed 

information collection requirements. 

The Commission, as part of its 

continuing effort to reduce paperwork 

burdens, invites the general public and 

the Office of Management and Budget 

(OMB) to comment on the information 

collections requirements contained in 

this document, as required by the 

Paperwork Reduction Act (PRA) of 

1995, Public Law 104–13. Public and 

agency comments are due December 14, 

2004. Comments should address: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

burden estimates; (c) ways to enhance 

the quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on the respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. In addition, 

pursuant to the Small Business 

Paperwork Relief Act of 2002, Public 

Law 107–198, see 44 U.S.C. 3506(c)(4), 

we seek specific comment on how we 

might further reduce the information 

collection burden for small business 

concerns with fewer than 25 employees.

OMB Control Number: 3060–0748. 

Title: Section 64.1504, Disclosure 

Requirements For Information Services 

Provided Through Toll-Free Numbers. 

Form Number: N/A. 

Type of Review: Revision of currently 

approved collection. 

Respondents: Business or other forprofit entities. 

Number of Respondents: 6,500. 

Estimated Time per Response: 2–5 

hours. 

Frequency of Responses:

Occasionally; third party disclosure. 

Total Annual Burden: 13,000–32,500 

hours approximately. 

Total Annual Cost: None. 

Privacy Act Impact Assessement: No 

impact(s). 

Needs and Uses: The item proposes to 

reexamine FCC rules in this area to 

ensure that consumer protections are 

adequate and are not being 

circumvented. The item seeks comment 

on a number of issues relating consumer 

protections and the state of the existing 

900-number regime, toll-free numbers, 

and audiotext information services 

accessed through dialing methods other 

than 900 numbers. The Commission 

seeks comment on whether to revise 

certain recordkeeping requirements to 

allow recordings of customer’s oral 

verification as evidence that charges 

should not be forgiven. We ask if we 

need to modify our existing rules to 

comport with the E-Sign Act which 

should ease any existing burdens. The 

item proposes to clarify that all 

audiotext information services, must 

either have presubscription agreements 

or use charge cards for billing. We note 

that parties are already required to 

garner authorization for such calls. 

These measures are aimed at preventing 

circumvention of our rules. We believe 

that any additional recordkeeping 

burden as a result of these rules would 

be minimal for most businesses. We 

estimate that this requirement will 

account for an additional 7 hours of 

recordkeeping burden per company, or 

an additional 10,500 hours.

OMB Control Number: 3060–0752 

Title: Section 64.1510, Billing 

Disclosure Requirements for Pay-PerCall and Other Information Services. 

Form No.: N/A 

Type of Review: Revision of currently 

approved collection. 

Respondents: Business or other forprofit entities. 

Number of Respondents: 1,946. 

Estimated Time per Response: 10 

hours. 

Frequency of Response: Annual 

reporting requirement; Third party 

disclosure. 

Total Annual Burden: 19,460 hours. 

Total Annual Costs: None. 

Privacy Act Impact Assessments: No 

impact(s). 

Needs and Uses: The item proposes to 

reexamine FCC rules in this area to 

ensure that consumer disclosures are 

adequate. The item also seeks comment 

on a proposal to change the display of 

toll-free numbers on telephone bills to 

clearly indicate the parties charging for 

information services obtained through 

toll-free numbers. 

Synopsis

1. Toll-free Numbers 

The Commission’s rules, which 

implement the statute virtually 

verbatim, have detailed criteria that 

must be met in the limited 

circumstances under which calls 

61186 Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 

involving toll-free numbers can be used 

for purchases of goods and services, 

including audiotext information 

services. Our rules and the statute 

already require common carriers, 

including small carriers, to use contracts 

or tariffs to prohibit their customers 

from using 800 numbers in ways that 

are thought to leave consumers without 

the benefit of protections against fraud. 

For example, carriers must prohibit the 

use of 800 numbers, or any other 

numbers advertised or widely 

understood to be toll-free, in a way that 

the calling party is charged for 

information, with limited exception. 

There are exceptions for charges where 

there are presubscription agreements or 

use of certain credit and charge cards. 

The only way to have information 

charges that appear on a consumer’s 

phone bill is through a presubscription 

agreement which in most cases must be 

in writing, include specific disclosures, 

and use personal identification numbers 

for access to the service. However, 

despite these protections, the 

Commission continues to receive 

complaints in this area. In the first six 

months of 2004, the Commission 

received close to 5,000 complaints that 

referenced toll-free numbers. We are 

interested in finding out why, with 

these protections, there are still 

complaints in this area. For example, 

are there many problems for consumers 

when charge cards are used for 

payment? (See 47 U.S.C. 228(c)(9); 47 

CFR 64.1504(c)(2).) Do more problems 

occur, for example, when the written 

agreement does not require the use of a 

personal identification number? See 47 

U.S.C. 228(c)(8)(C) and (D); 47 CFR 

64.1504(f)(1) We seek comment on 

possible solutions. 

a. Protection for Line Subscribers as 

Well as Callers 

Section 228 and our rules governing 

toll-free calls explicitly protect ‘‘the 

calling party’’ from being charged for 

information conveyed during the call 

unless meeting the criteria discussed 

above. (See 47 U.S.C. 228(c)(7)(C) and 

(c)(8)–(9); See also 47 CFR 64.1504.) In 

the 1996 Order & NPRM, the 

Commission discussed the possibility of 

extending the toll-free number 

protections that apply to the ‘‘calling 

party,’’ so that they also apply to the 

‘‘subscriber to the originating line.’’

(1996 Order & NPRM, 11 FCC Rcd at 

14753, para. 44. The calling party could 

be someone other than the subscriber, 

for example, a visitor to the subscriber’s 

home.) We believe this proposal is still 

valid today. For directly-dialed toll calls 

placed without a calling card, it is the 

subscriber—not necessarily the calling 

party—who is assessed charges for calls 

placed over that line. It would not seem 

appropriate for an individual calling a 

toll-free number to be protected from 

incurring charges without extending the 

same protection to the individual or 

entity billed for the calls. We seek 

comment on whether we should amend 

§ 64.1504 of our rules explicitly to 

protect the subscriber as well from the 

practices that Congress has chosen to 

prohibit. Would such an amendment 

help to protect small businesses from 

calls made by employees? 

b. Use of Number Identification for 

Billing Through Toll-Free Numbers 

Section 228(c)(7)(A) of the 1996 Act 

prohibits ‘‘the calling party being 

assessed, by virtue of completing the 

call [to a toll-free number], a charge for 

the call.’’ (47 U.S.C. 228(c)(7).) In the 

1996 Order & NPRM, the Commission 

adopted a rule that mirrors that portion 

of the § 228 and also prohibits such 

conduct. (47 CFR 64.1504(c).) In order 

to assess charges for directly dialed toll 

calls, common carriers identify the 

telephone line used to originate a toll 

call and assess charges to the subscriber 

to that line. The Commission generally 

has held telephone subscribers 

responsible for toll charges resulting 

from unauthorized use of their 

telephone lines. However, in the past, 

the Commission has received 

complaints that parties were using such 

information to bill callers for services 

from calls made to toll-free numbers. In 

the 1996 Order & NPRM, the 

Commission also tentatively concluded 

that a carrier’s billing of calls dialed to 

800 or other toll-free numbers on the 

basis of one such technology, Automatic 

Number Identification (ANI), amounted 

to assessing charges on the basis of 

completion of the call, and therefore 

violated section 228(c)(7)(A) of the Act, 

unless the call involved use of 

telecommunications devices for the 

deaf. (The term ‘‘ANI’’ refers to the 

delivery of the calling party’s billing 

number by a local exchange carrier to 

any interconnecting carrier for billing or 

routing purposes, and to the subsequent 

delivery to end users. See 47 CFR 

64.1600(b). See also 1996 Order & 

NPRM, 11 FCC Rcd at 14754, para. 45. 

Telecommunications devices for the 

deaf utilize ANI to identify the 

telephone subscriber to be billed. The 

Commission also made a tentative 

conclusion that ANI-based billing also 

violates 201(b) in the 1996 Order & 

NPRM. See 1996 Order & NPRM, 11 FCC 

Rcd at 14754, para. 45; See also 47 

U.S.C. 228(c)(7), 47 CFR 64.1504(c), and 

47 U.S.C. 201(b). Section 201(b) requires 

that all charges and practices for and in 

connection with any common carrier 

communications services be just and 

reasonable) At that time, commenters 

generally agreed that a carrier’s billing 

of toll-free calls on the basis of ANI 

violated the statute. In the interests of 

collecting a more complete record to 

include newer technology, we now seek 

comment on whether we should 

specifically prohibit billing calls dialed 

to 800 or other toll-free numbers on the 

basis of not just ANI, but equivalent 

information, automatically provided 

calling number identification. (See, e.g., 

47 CFR 64.1600(d) (charge number—

conveying similar information in a 

System 7 environment).)

2. Audiotext Information Services, 

Including Pay-Per-Call Services 

a. Consumer Protection in General 

The Commission’s rules governing 

pay-per-call services are meant to be a 

framework of consumer protections for 

these audiotext information services. 

The rules require, first, that consumers 

are given appropriate information, such 

as pricing, so they can make informed 

decisions about services. (The 

Commission rules require carriers 

themselves to disclose information, and/

or to require disclosure through contract 

or tariff. See 47 CFR 64.1502, 1504, and 

1509. The rules require compliance with 

Titles II and III of TDDRA, and the 

FTC’s implementing rules. See 16 CFR 

308.5 (FTC’s rules relating to pay-percall).) Second, consumers are meant to 

be able to choose to block unwanted 

access to the pay-per-call services, for 

free or at a reasonable cost. (47 U.S.C. 

228(c)(5). See also 47 CFR 64.1508.) 

And third, consumers are supposed to 

be protected from losing local or longdistance services for nonpayment of 

charges for pay-per-call services. (47 

U.S.C. 228(c)(4). See also 47 CFR 

64.1507.) However, we are concerned 

that as audiotext information services 

have migrated increasingly outside the 

pay-per-call setting, consumers, 

including small business consumers, 

have lost some of these basic 

protections. Consumer disclosure 

requirements for audiotext information 

services only apply to services over 900 

numbers, and, as above, some calls over 

toll-free numbers. Similarly, alternative 

dialing routes circumvent subscriber 

blocking, allowing even children to 

obtain access to audiotext information 

services. Additionally, consumers’ calls 

are sometimes rerouted without their 

authorization through specialized longdistance carriers designed to accumulate 

high rates for what are advertised as free 

information services. Under those 

conditions, consumers can end up being 

Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 61187

disconnected for what are essentially 

services that arguably should be covered 

by pay-per-call protections. In this 

rulemaking we explore several of these 

areas, and seek comment on the best 

way to address concerns of consumers, 

without hindering legitimate businesses, 

including small and new businesses. 

One such example of an item outside 

the standard pay-per-call application is 

a phenomena known informally as 

‘‘modem hijacking.’’ The Commission 

has received complaints about local 

calls which are redirected without the 

caller’s authorization through software 

programs, which disconnects Internet 

users’ calls and dial international 

numbers often through carriers other 

than those chosen by subscribers for 

their long-distance calls. Sometimes 

there is no way to disconnect the call 

other than to unplug the telephone line. 

Furthermore, the placement of a call to 

an international telephone number in 

situations like this does not necessarily 

mean it connects through the country to 

which it is assigned. 

Although the FTC has addressed some 

cases in this area, we seek comment on 

whether additional actions are needed 

from the FCC. (See, e.g., FTC v. BTV 

Industries, Rik Covell, Adam Lewis, 

National Communications Team, Inc., 

LO/AD Communications Corp., and 

Nicholas Loader, CV–S–02–0437–LHR–

PAL, Complaint, and Temporary 

Restraining Order (D Nev. 2002) 

(alleging defendant sent e-mail messages 

claiming that consumers had won a 

prize, and when consumers responded, 

routing the calls to an adult Internet site 

via a 900-number modem connection 

generating high per-minute rates). In 

that case, the FTC alleged that the 

defendant’s practices were deceptive 

and misleading by, among other things, 

leading consumers to believe that the 

connection to the web site was toll-free. 

See, also, FTC v. Verity Int’l, Ltd., 194 

F.Supp.2d 270, 276 (S.D.N.Y. 2002) 

(FCC supported the FTC action in a 

friend of the court brief).) We invite 

commenters to offer specific proposals 

consistent with our section 228 

authority. We have on a case-by-case 

basis looked at some parameters of 

using 201(b) to review certain 

relationships between carriers and 

information providers in chat-line cases. 

(See, e.g., Beehive v. AT&T, 17 FCC Rcd 

11641 (2002); AT&T Corp. v. Jefferson 

Telephone Co., Memorandum Opinion 

and Order, 16 FCC Rcd 16130 (2001) 

(Jefferson).) We seek comment on the 

broader policy of what factors and 

concerns we should take into account in 

making decisions regarding the broad 

practices and conduct in this general 

area, including whether we should 

consider revoking carriers’ section 214 

certification for such conduct. (See 47 

U.S.C. 214.) We seek comment on 

whether consumers should be given 

protections to allow call disconnection. 

b. The 900 Number Regime 

Section 228 also requires the 

Commission to identify procedures that 

common carriers and pay-per-call 

providers, including small carriers and 

providers, can use to protect against 

nonpayment of legitimate charges. (47 

U.S.C. 228(b)(4).) Pay-per-call providers 

have recently commented that audiotext 

information service providers have 

moved outside the 900 number regime 

because it has become a difficult 

environment in which to operate. In 

addition, AT&T Corp. noted that payper-call providers may avoid federal 

regulation by using revenue sharing 

agreements and instant credit to mask 

services that otherwise would be 

regulated as pay-per-call. 

The use of 900 numbers has dropped 

dramatically in the past five years. For 

example, the number of assigned 900 

numbers, which peaked in 1999 with 

447 distinct 900 NXX codes, had 

dropped to 206 by the end of 2002. 

Many of those numbers are not actually 

used by end users. Many carriers 

decline to provide transport or bill for 

900 numbers. Further, some pay-per-call 

providers claimed that carriers forgive 

disputed pay-per-call charges repeatedly 

for the same subscribers without 

instituting 900 number blocking in 

those cases. One participant expressed 

concern that the health of the 900 

number rules, if applicable, is crucial to 

market and consumer confidence. 

Clearly the Commission does not want 

to direct pay-per-call providers to a 

system that does not function. We seek 

comment on what steps can be taken to 

ensure the 900 number regime functions 

properly. 

One commenter noted that a practice 

used in the United Kingdom requiring 

pay-per-call providers to record the 

customer’s voice greatly reduced 

disputes over charges. We seek 

comment on whether it would be 

appropriate to allow carriers to accept 

recordings of customer’s oral 

verification that they understand and 

agree to the charges as evidence that 

charges should not be forgiven. We seek 

comment from pay-per-call providers on 

whether such items would be necessary. 

c. Presubscription or Comparable 

Arrangement

As noted previously, the Commission 

requires services meeting the pay-percall definition to be accessed only 

through 900 numbers, and the only 

ways that audiotext information services 

fall outside the pay-per-call definition, 

and therefore the requirement that they 

be offered only over 900 numbers, are 

(1) by being directory services as 

described in the statute, or (2) to have 

charges assessed only after there is a 

‘‘presubscription or comparable 

agreement.’’ (47 U.S.C. 228(i) and 

(b)(5).) In the 1996 Order & NPRM, the 

Commission sought comment on 

refining the definition of 

presubscription and comparable 

agreement so that it is clear what criteria 

must be met for all audiotext 

information services other than 

directory services to be offered over 

numbers outside of the 900 prefixes, 

including those services using toll-free 

numbers. Rather than having the 

Commission designate all prefixes as 

pay-per-call prefixes to ensure 

protection for consumers, the 

Commission proposed to make clear 

that to operate outside of 900 numbers, 

all audiotext information services (other 

than directory services) must either 

have presubscription agreements 

executed in writing or, alternatively, 

require that payments be made through 

direct remittance, prepaid account, or 

debit, credit, charge or calling card. For 

example, this proposal would apply 

such protections to 500 numbers, 700 

numbers, plain old telephone service 

and international numbers when used to 

provide audiotext information services. 

We again seek comment on the 

usefulness and practicality of such a 

proposal. In particular, we ask whether 

this proposal would be adequate to 

balance the need to protect consumers, 

but allow businesses to develop. In 

particular, how would this proposal 

effect small businesses? Are small 

businesses already keeping such 

records? In addition, we seek comment 

on whether there is still a need for such 

changes in this area given developments 

in electronic commerce and related 

laws, and the now-common use of thirdparty verifications in telephone 

transactions. 

We also seek comment on whether we 

need to modify our existing and 

proposed rules given our obligations 

under the Electronic Signatures in 

Global and National Commerce Act (ESign Act). (Electronic Signatures in 

Global and National Commerce Act, S. 

761, 106th Cong., 2d Sess. (signed into 

law June 30, 2000).) Under the E-Sign 

Act, a contract or business transaction 

cannot be denied validity or 

enforceability solely because the 

contract or transaction is not in writing, 

so long as the contract or transaction is 

a properly authenticated electronic 

61188 Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 

record or has been affirmed by an 

electronic signature. The E-Sign Act 

provides a specific framework for the 

use of electronic records and signatures 

and places limits on the interpretation 

authority of federal and state regulatory 

agencies with regard to this framework. 

We seek comment on how we might 

best adjust our current and proposed 

requirements for presubscription or 

comparable agreements to best comply 

with the E-Sign Act. 

3. Billing 

Section 228 and our rules already 

mandate certain billing practices for 

pay-per-call services and 800 numbers 

billed via the telephone bill. (See 47 

U.S.C. 228(c)(8)(B) and (d)(4); See also

47 CFR 64.1504, 1509 and 1510.) 

Telephone billing of subscribers for any 

pay-per-call services must already 

display any such charges ‘‘in a part of 

the subscriber’s bill that is identified as 

not being related to local and long 

distance telephone charges,’’ and, at a 

minimum, describe the type of service, 

the amount of the charge, and the date, 

time, and duration of the call. There 

must also be a clearly-identified toll-free 

number established for customers to call 

with any questions. 47 U.S.C. 228(d)(4); 

See also 47 CFR 64.1509(b) and 47 CFR 

64.1510(2). For toll-free numbers used 

to bill items on a telephone bill, the 

number called must be listed clearly 

with a disclaimer in prominent type that 

neither local nor long distance service 

could be disconnected for ‘‘failure to 

pay disputed charges for information 

services.’’ In addition, the Commission 

has developed rules and guidelines in 

the Truth-in-Billing proceeding to 

ensure that all telephone billing is 

readily discernable to consumers. (See

47 CFR 64.2400–2401; see also Truth-inBilling and Billing Format, CC Docket 

No. 98–170, First Report and Order and 

Further Notice of Proposed Rule 

Making, 14 FCC Rcd 7492 (1999) (Truthin-Billing Order)). In general, charges 

must be accompanied by ‘‘a brief, clear, 

non-misleading, plain language 

description of the service or services 

rendered’’ that allows consumers to 

‘‘accurately assess that the services for 

which they are billed correspond to 

those that they requested and received,’’

and that the costs ‘‘conform to their 

understanding of the prices charged.’’

(47 CFR 64.2401(b). See also Truth-inBilling Order.) The Truth-in-Billing 

Order requires that telephone bills 

highlight changes in or additions of new 

providers, but non-recurring pay-percall services are specifically exempt 

from that requirement. (Truth-in-Billing 

and Billing Format, Order on 

Reconsideration, 15 FCC Rcd 6023, at 

6025, para. 5 (2000) (Truth-in-Billing 

Reconsideration.)) 

We seek comment on whether our 

existing rules governing billing 

specifically for pay-per-call services and 

those for charges billed through toll-free 

numbers, in combination with our 

Truth-in-Billing rules and guidelines, 

are sufficient to address any current 

billing concerns. (We note that the 

Commission’s billing rules specifically 

do not preempt states from adopting or 

enforcing their own consistent rules. 47 

CFR 64.2400(b). For example, Florida 

has adopted a rule specifically aimed at 

pay-per-call problems. See Policies and 

Rules Implementing the Telephone 

Disclosure and Dispute Resolution Act, 

Florida Public Service Commission 

Notice of Withdrawal of Petition to 

Initiate Rulemaking, filed January 26, 

2004.) We seek comment specifically on 

whether we should adopt a rule stating 

that charges for presubscribed audiotext 

information services accessed through 

toll-free numbers must be displayed 

separately from local and long-distance 

telephone service. How would such a 

rule affect small carriers? 

4. Revenue-Sharing Arrangements 

The definition of pay-per-call services 

found in § 228 rests on the requirement 

that such calls are only those calls to 

audiotext information services for 

which the caller pays a per-call or pertime-interval charge greater than or in 

addition to the ‘‘charge for transmission 

of the call.’’ Some businesses have used 

revenue-sharing arrangements to offer 

for-profit audiotext information services 

without pay-per-call regulation. The 

classic scenario is when an audiotext 

information service provider does not 

charge callers for the service outright, 

but instead receives a commission from 

a common carrier for the telephone 

traffic, which might be charged at a high 

rate.

In the 1996 Order & NPRM, the 

Commission sought to address these 

types of evasions of consumer 

protections. The Commission tentatively 

concluded that certain revenue-sharing 

arrangements were in reality charging 

for more than just transmission of the 

call, even if the caller was not billed 

separately for the audiotext information 

service. (1996 Order & NPRM at 14756 

para. 48. The Commission based its 

tentative conclusion on its authority 

under § 154(i), and addressed 

circumvention of section 228 through 

the language related to the cost of 

transmission.) Specifically, the 

Commission tentatively concluded that 

any form of remuneration between a 

carrier and audiotext information 

services provider constituted per se

evidence that the charge levied actually 

exceeds the charge for the transmission. 

Accordingly, under this tentative 

conclusion, interstate services provided 

through such an arrangement would fit 

within the pay-per-call definition and, 

thus, be required to be offered 

exclusively through 900 numbers. The 

1996 Order & NPRM also notes a staff 

letter which discussed several 

hypothetical scenarios in which 

revenue-sharing arrangements were 

used essentially to mask audiotext 

information services from pay-per-call 

regulation. In the Marlowe Letter, the 

staff’s opinion was that such scenarios 

would violate both sectiion 228 and 

section 201(b). (Letter from John Muleta, 

Chief of the Common Carrier 

Enforcement Bureau at that time, to 

Ronald Marlowe, 10 FCC Rcd 10945, DA 

95–1905 (September 1, 1995) (Marlowe 

Letter). See 47 U.S.C. 201(b). Section 

201(b) requires all charges and practices 

for and in connection with any common 

carrier communications services be just 

and reasonable.) 

In 2001, the Commission determined 

that the existence of a revenue-sharing 

arrangement between a common carrier 

and a chat-line service alone did not 

demonstrate that a carrier’s conduct was 

unjust and unreasonable under section 

201(b). (Jefferson., 16 FCC Rcd at 16136, 

para. 13. (2001) (overruling Marlowe to 

the extent that it was not consistent 

with the conclusions in the Order). See 

also Beehive; Jefferson; AT&T Corp. v. 

Frontier Communications of Mt. 

Pulaski, Inc., 17 FCC Rcd 4041 (2002) 

(follows Jefferson), AT&T v. Atlas 

Telephone Co. and Total 

Telecommunications Services, Inc., 16 

FCC Rcd 5726 (2001), aff’d in part and 

remanded sub nom, AT&T Corp. v. 

F.C.C., 317 F.3d 227 (DC Cir. 2003); 

dismissed, Atlas Telephone Co. v. AT&T 

Corp., File No. E–97–03, Order, 18 FCC 

Rcd 11533.) Although the Commission 

noted in Jefferson that it was not 

addressing the application of section 

228 to such a situation, the decision 

calls into question our basis for our 

prior tentative conclusion in the 1996 

Order & NPRM. (Jefferson, 16 FCC Rcd 

at 16133 n.18.) Thus, we no longer reach 

that tentative conclusion here. Instead, 

we invite commenters, including small 

carriers and small audiotext information 

service providers, to address the issue of 

revenue-sharing arrangements in light of 

the Jefferson decision. Parties should 

discuss whether it is possible or 

appropriate to find that any revenuesharing arrangements do not comply 

with section 228 even if such 

arrangements would not violate 201(b). 

Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 61189

5. New and Evolving Services 

a. Definition of Exempted Directory 

Services 

Section 228 exempts ‘‘directory 

services’’ from the definition of pay-percall. In the TDDRA R&O implementing 

section 228, commenters asked the 

Commission to interpret the definition 

of ‘‘directory services’’ to include only 

‘‘basic’’ directory services. The 

Commission noted that a common 

carrier also operating as a provider of 

audiotext information services ‘‘cannot 

shield its information services from payper-call regulation by offering them 

through a directory services number.’’ In 

2003, some commenters stated that 

ambiguities in this area persist. They 

asked that the Commission ‘‘clarify’’

that enhanced directory services were 

exempt from pay-per-call. 

Examples of such services mentioned 

in the comments to CC Docket No. 96–

146 include such things as a service that 

allows subscribers to access directory 

listings by category, and then obtain 

additional information about the listing, 

upload personal contacts into a private 

database, and use a live operator to 

access their own personal data. Another 

service allows wireless subscribers to 

store personal address books on a 

network server and have voice-activated 

access to data with news, receive wakeup calls and get travel information ‘‘at 

no additional charge.’’ Another 

proposed service would add more 

content such as information about the 

weather, and have partnerships with 

businesses to allow for such 

connections as transferring customers to 

places for ticket purchases. 

In other proceedings, the Commission 

has already been presented with 

questions about the offering of directory 

services that are more than ‘‘traditional’’

operator provision of local telephone 

numbering. In the N11 numbering 

proceeding, some commenters had 

argued that Local Exchange Carrier 

(LEC) use of the 411 number should be 

restricted to the provision of 

‘‘traditional’’ directory services, 

meaning operator provision of local 

telephone numbers. (The Use of N11 

Code and Other Abbreviated Dialing 

Arrangements, CC Docket No. 92–105, 

First Report and Order and Further 

Notice of Proposed Rulemaking, 12 FCC 

Rcd 5572, 5600, para. 48 (N11 First 

Report and Order).) The Commission 

declined to do so at that time, and 

instead concluded that a LEC could 

offer enhanced services using a 411 

code, or any other N11 code, only if that 

LEC offered access to the code on a 

reasonable, nondiscriminatory basis to 

competing enhanced services providers. 

In January 2002, the Commission 

released a Notice of Proposed 

Rulemaking in a related proceeding 

specifically asking whether allowing 

enhanced directory assistance to be 

available through presubscribed 411 

would be consistent with Commission 

rules regarding pay-per-call and related 

services. (Provision of Directory Listing 

Information Under the Communications 

Act of 1934, as Amended, CC Docket 

No. 99–273; The Use of N11 Codes and 

Other Abbreviated Dialing 

Arrangements, CC Docket No. 92–105; 

Administration of the North American 

Numbering Plan, CC Docket No. 92–237, 

Notice of Proposed Rulemaking, 17 FCC 

Rcd 1164, 1183, para. 37 (FCC 01–384) 

(N11 NPRM).) We seek comment on the 

narrow question of how to further 

define ‘‘directory services’’ that are 

specifically exempt from the consumer 

protections of pay-per-call, regardless of 

whether any presubscription or 

comparable agreement exists.

b. Data Services 

At least two commenters in 2003, 

claimed that data services are exempt 

from regulation under section 228 and 

another has suggested that uncertainty 

in this area might fluster development 

of nascent industries. However, section 

228 has several provisions that allude to 

data services being pay-per-call services. 

First, section 228(f)(3) required the 

Commission to review the ‘‘extension of 

regulation under [section 228] with 

respect to persons that provide, for a 

per-call charge, data services that are 

not pay-per-call services.’’ In the First 

TDDRA Order, the Commission noted 

that the statutory definition of pay-percall includes ‘‘data information 

services,’’ but it did not find a need to 

warrant extension of regulation of 

section 228 outside pay-per-call data 

services. In addition, section 228(c)(8) 

provides an exception to the criteria for 

written agreements for ‘‘any purchase of 

goods or of services that are not 

information services.’’ We seek 

comment on whether further 

clarification is needed on this topic of 

what data services fit within the payper-call definition. We seek specific 

comments on items that might be of 

significant concern for consumers and 

for developing businesses, including 

small businesses. 

Initial Regulatory Flexibility Analysis 

(IRFA) 

Initial Regulatory Flexibility Analysis 

(IRFA), as required by the Regulatory 

Flexibility Act of 1980, as amended 

(RFA), the Commission has prepared 

this present Initial Regulatory 

Flexibility Analysis (IRFA) of the 

possible significant economic impact on 

a substantial number of small entities by 

the policies and rules proposed in this 

Notice of Proposed Rulemaking and 

Memorandum Opinion and Order 

(NPRM). (See 5 U.S.C. 603. The RFA, 

see 5 U.S.C. 601–612, has been amended 

by the Small Business Regulatory 

Enforcement Fairness Act of 1996 

(SBREFA), Public Law Number. 104–

121, Title II, 110 Statute 857 (1996).) 

Written public comments are requested 

on this IRFA. Comments must be 

identified as responses to the IRFA and 

must be filed by the deadline for 

comments on the NPRM provided above 

in the Comment Filing Procedures 

section paragraph 45. The Commission 

will send a copy of the NPRM, including 

this IRFA, to the Chief Counsel for 

Advocacy of the Small Business 

Administration (SBA). In addition, the 

NPRM and IRFA (or summaries thereof) 

will be published in the Federal 

Register. 

Need for, and Objectives of, the 

Proposed Rules 

The Commission has rules to afford 

consumers protection from deceptive 

practices associated with the provision 

of audiotext information services, and 

the use of toll-free numbers. In 1996, the 

Commission issued a Notice of 

Proposed Rulemaking (NPRM) 

proposing rules which were intended to 

address potential circumvention of the 

regulations. Later, in March of 2003, the 

Commission issued a Public Notice 

seeking to refresh the record in the 

proceeding. In this NPRM, the 

Commission initiates a new proceeding 

to review the effectiveness of our rules 

governing pay-per-call services, related 

audiotext information services, and tollfree numbers. The Commission seeks 

comment on the state of the 900-number 

regime regulating pay-per-call services, 

the effectiveness of consumer 

protections relating to toll-free numbers, 

and to those audiotext information 

services accessed through dialing 

methods other than 900 numbers. We 

are interested in learning the extent to 

which consumer protections have been 

circumvented, and what steps we might 

take to protect consumers, including 

small business consumers, from such 

practices. In addition, we seek comment 

on changes in technology that warrant 

re-examination and clarification of these 

rules. 

Legal Basis 

The legal basis for any action that may 

be taken pursuant to this NPRM is 

contained in sections 1–4, 201(b), 228, 

and 303(r) of the Communications Act 

61190 Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 

of 1934, as amended, 47 U.S.C. 151–154, 

201(b), 228, and 303(r). 

Description and Estimate of the Number 

of Small Entities To Which the 

Proposed Rules Will Apply 

The RFA directs agencies to provide 

a description of, and where feasible, an 

estimate of the number of small entities 

that may be affected by the proposed 

rules and policies, if adopted. The RFA 

generally defines the term ‘‘small 

entity’’ as having the same meaning as 

the terms ‘‘small business,’’ ‘‘small 

organization,’’ and ‘‘small governmental 

jurisdiction.’’ In addition, the term 

‘‘small business’’ has the same meaning 

as the term ‘‘small business concern’’

under the Small Business Act. A ‘‘small 

business concern’’ is one which: (1) Is 

independently owned and operated; (2) 

is not dominant in its field of operation; 

and (3) satisfies any additional criteria 

established by the SBA. 

Small entities potentially affected by 

the policies and rules proposed herein 

include organizations, governmental 

jurisdictions, providers of audiotext 

information services, and providers of 

telecommunications and other services, 

including both wired and wireless 

services, such as operator service 

providers, prepaid calling card 

providers, and other toll carriers. 

Small Businesses. Nationwide, there 

are approximately 22.4 million small 

businesses, according to SBA data. 

Small Organizations. A small 

organization is generally ‘‘any not-forprofit enterprise which is independently 

owned and operated and is not 

dominant in its field.’’ Nationwide, 

there are approximately 1.6 million 

small organizations. Small 

Governmental Jurisdictions. The term 

‘‘small governmental jurisdiction’’ is 

defined as ‘‘governments of cities, 

counties, towns, townships, villages, 

school districts, or special districts, with 

a population of less than fifty 

thousand.’’ As of 1997, there were 

approximately 87,453 government 

jurisdictions in the United States. This 

number includes 39,044 county 

governments, municipalities, and 

townships, of which 37,546 have 

populations of fewer than 50,000 and 

1,498 have populations of 50,000 or 

more. Thus, we estimate the number of 

small governmental jurisdictions overall 

to be up to 85,955. 

Providers of audiotext information 

services. While the Commission’s rules 

directly apply to common carriers that 

transmit and bill subscribers for 

information services, other companies 

actually providing the information 

services might be indirectly affected. 

For example, audiotext information 

service providers that have used tollfree numbers to provide information 

services will be affected by the proposed 

limitations involving the use of toll-free 

numbers and mandatory written 

presubscription. These companies may 

experience an adverse economic impact 

in that they will have to change the 

manner in which they provide services 

to secure billing. 

The Commission has only limited 

unverifiable information to predict 

either the total number of audiotext 

information service providers, or the 

percentage of providers that qualify as 

small entities. Audiotext Information 

Service providers are not subject to 

federal licensing or reporting 

requirements. In 1996, staff had been 

able to obtain from industry sources 

only an informal estimate that the total 

number of these entities operating, 

which at that time was noted as 

probably somewhere between 10,000 

and 20,000 total operating entities. 

Although the Commission asked for 

comment as to the number of small 

businesses that would have been 

affected by regulations proposed in this 

area in 1996, the Commission received 

no data in comments. Even assuming 

that this rough estimate is correct, we 

cannot, with certainty identify what 

portion of such providers might be 

providing services in a manner that 

would subject them to the proposed 

regulations governing toll-free numbers 

and presubscription agreements, or 

predict what portion of all such 

providers are small businesses. We 

invite parties commenting on this IRFA 

to provide information as to the number 

of small businesses that would be 

affected by our proposed regulations 

and to identify alternatives that would 

reduce the burden on these entities 

while still ensuring that consumers are 

protected adequately. 

All Other Information Services. ‘‘This 

industry comprises establishments 

primarily engaged in providing other 

information services (except new 

syndicates and libraries and archives).’’

We note that, in our Notice, we have 

described activities such as email, 

online gaming, web browsing, video 

conferencing, instant messaging, and 

other, similar Internet Protocol-enabled 

services. The SBA has developed a 

small business size standard for this 

category; that size standard is $6 million 

or less in average annual receipts. 

According to United States Bureau of 

the Census (the Census Bureau) data for 

1997, there were 195 firms in this 

category that operated for the entire 

year. Of these, 172 had annual receipts 

of under $5 million, and an additional 

nine firms had receipts of between $5 

million and $9,999,999. Consequently, 

we estimate that the majority of these 

firms are small entities that may be 

affected by our action.

Providers of Telecommunications and 

Other Services. We have included small 

incumbent local exchange carriers 

(LECs) in this present RFA analysis. As 

noted above, a ‘‘small business’’ under 

the RFA is one that, inter alia, meets the 

pertinent small business size standard 

(e.g., a telephone communications 

business having 1,500 or fewer 

employees), and ‘‘is not dominant in its 

field of operation.’’ The SBA’s Office of 

Advocacy contends that, for RFA 

purposes, small incumbent LECs are not 

dominant in their field of operation 

because any such dominance is not 

‘‘national’’ in scope. We have therefore 

included small incumbent LECs in this 

RFA analysis, although we emphasize 

that this RFA action has no effect on 

Commission analyses and 

determinations in other, non-RFA 

contexts. 

Total Number of Telephone 

Companies Affected. The Census 

Bureau reports that, at the end of 1997, 

there were 6,239 firms engaged in 

providing telephone services, as defined 

therein. This number contains a variety 

of different categories of carriers, 

including local exchange carriers, 

interexchange carriers, competitive 

access providers, mobile service 

carriers, operator service providers, pay 

telephone operators, personal 

communications service (PCS) 

providers, covered small mobile radio 

(SMR) providers, and resellers. It seems 

certain that some of those 6,239 

telephone service firms may not qualify 

as small entities because they are not 

‘‘independently owned and operated.’’

For example, a PCS provider that is 

affiliated with an interexchange carrier 

having more than 1,500 employees 

would not meet the definition of a small 

business. It seems reasonable to 

conclude, therefore, that 6,239 or fewer 

telephone service firms are small entity 

telephone service firms that may be 

affected by the policies and rules 

proposed in this NPRM.

Wired Telecommunications Carriers.

The SBA has developed a small 

business size standard for Wired 

Telecommunications Carriers, which 

consists of all such companies having 

1,500 or fewer employees. 

According to Census Bureau data for 

1997, there were 2,225 firms in this 

category, total, that operated for the 

entire year. Of this total, 2,201 firms had 

employment of 999 or fewer employees, 

and an additional 24 firms had 

employment of 1,000 employees or 

more. Thus, under this size standard, 

Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 61191

the great majority of firms can be 

considered small. 

Incumbent LECs. Neither the 

Commission nor the SBA has developed 

a small business size standard 

specifically for incumbent LECs. The 

appropriate size standard under SBA 

rules is for the category Wired 

Telecommunications Carriers. Under 

that size standard, such a business is 

small if it has 1,500 or fewer employees. 

According to Commission data, 1,337 

carriers have reported that they are 

engaged in the provision of incumbent 

local exchange services. Of these 1,337 

carriers, an estimated 1,032 have 1,500 

or fewer employees and 305 have more 

than 1,500 employees. Consequently, 

the Commission estimates that most 

providers of incumbent local exchange 

service are small businesses that may be 

affected by our proposed policies and 

actions. 

Competitive LECs, Competitive Access 

Providers (CAPs), and ‘‘Other Local 

Service Providers.’’ Neither the 

Commission nor the SBA has developed 

a small business size standard 

specifically for these service providers. 

The appropriate size standard under 

SBA rules is for the category Wired 

Telecommunications Carriers. Under 

that size standard, such a business is 

small if it has 1,500 or fewer employees. 

According to Commission data, 609 

carriers have reported that they are 

engaged in the provision of either 

competitive access provider services or 

competitive local exchange carrier 

services. Of these 609 carriers, an 

estimated 458 have 1,500 or fewer 

employees and 151 have more than 

1,500 employees. In addition, 35 

carriers have reported that they are 

‘‘Other Local Service Providers.’’ Of the 

35, an estimated 34 have 1,500 or fewer 

employees and one has more than 1,500 

employees. Consequently, the 

Commission estimates that most 

providers of competitive local exchange 

service, competitive access providers, 

and ‘‘Other Local Service Providers’’ are 

small entities that may be affected by 

our proposed policies and actions. 

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. 

According to Commission data, 133 

carriers have reported that they are 

engaged in the provision of local resale 

services. Of these, an estimated 127 

have 1,500 or fewer employees and six 

have more than 1,500 employees. 

Consequently, the Commission 

estimates that the majority of local 

resellers are small entities that may be 

affected by our proposed policies and 

actions. 

Interexchange Carriers. Neither the 

Commission nor the SBA has developed 

a small business size standard 

specifically for providers of 

interexchange services. The appropriate 

size standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. According to 

Commission data, 261 carriers have 

reported that they are engaged in the 

provision of interexchange service. Of 

these, an estimated 223 have 1,500 or 

fewer employees and 38 have more than 

1,500 employees. Consequently, the 

Commission estimates that the majority 

of interexchange carriers are small 

entities that may be affected by our 

proposed policies and actions. 

Operator Service Provider (OSP).

Neither the Commission nor the SBA 

has developed a small business size 

standard specifically for operator 

service providers. The appropriate size 

standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. According to 

Commission data, 23 carriers have 

reported that they are engaged in the 

provision of operator services. Of these, 

an estimated 22 have 1,500 or fewer 

employees and one has more than 1,500 

employees. Consequently, the 

Commission estimates that the majority 

of OSPs are small entities that may be 

affected by our proposed policies and 

actions. 

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. According to Commission 

data, 37 carriers have reported that they 

are engaged in the provision of prepaid 

calling cards. Of these, an estimated 36 

have 1,500 or fewer employees and one 

has more than 1,500 employees. 

Consequently, the Commission 

estimates that the majority of prepaid 

calling card providers are small entities 

that may be affected by our proposed 

policies and actions. 

Other Toll Carriers. Neither the 

Commission nor the SBA has developed 

a size standard for small businesses 

specifically applicable to ‘‘Other Toll 

Carriers.’’ This category includes toll 

carriers that do not fall within the 

categories of interexchange carriers, 

OSPs, prepaid calling card providers, 

satellite service carriers, or toll resellers. 

The closest applicable size standard 

under SBA rules is for Wired 

Telecommunications Carriers. Under 

that size standard, such a business is 

small if it has 1,500 or fewer employees. 

According to Commission’s data, 42 

companies reported that their primary 

telecommunications service activity was 

the provision of payphone services. Of 

these 42 companies, an estimated 37 

have 1,500 or fewer employees and five 

have more than 1,500 employees. 

Consequently, the Commission 

estimates that most ‘‘Other Toll 

Carriers’’ are small entities that may be 

affected by our proposed policies and 

actions. 

Wireless Service Providers. The SBA 

has developed a small business size 

standard for wireless firms within the 

two broad economic census categories 

of Paging and Cellular and Other 

Wireless Telecommunications. 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. 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. Thus, under this category and 

associated small business size standard, 

the great majority of firms can be 

considered small. For the census 

category Cellular and Other Wireless 

Telecommunications, Census Bureau 

data for 1997, show that there were 977 

firms in this category, total, that 

operated for the entire year.

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. Thus, under this second category 

and size standard, the great majority of 

firms can, again, be considered small. 

Narrowband Personal Communications 

Services. The Commission held an 

auction for Narrowband PCS licenses 

that commenced on July 25, 1994, and 

closed on July 29, 1994. A second 

auction commenced on October 26, 

1994, and closed on November 8, 1994. 

For purposes of the first two 

Narrowband PCS auctions, ‘‘small 

businesses’’ were entities with average 

gross revenues for the prior three 

calendar years of $40 million or less. 

Through these auctions, the 

Commission awarded a total of 41 

licenses, 11 of which were obtained by 

four small businesses. To ensure 

meaningful participation by small 

business entities in future auctions, the 

61192 Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 

Commission adopted a two-tiered small 

business size standard in the 

Narrowband PCS Second Report and 

Order. 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. A third auction commenced 

on October 3, 2001 and closed on 

October 16, 2001. Here, five bidders 

won 317 (Metropolitan Trading Areas 

and nationwide) licenses. Three of these 

claimed status as a small or very small 

entity and won 311 licenses. 

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. 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. 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. Thus, under 

this category and associated small 

business size standard, the great 

majority of firms can be considered 

small. 

In the Paging Second Report and 

Order, the Commission adopted a size 

standard for ‘‘small businesses’’ for 

purposes of determining their eligibility 

for special provisions such as bidding 

credits and installment payments. 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. The SBA has 

approved this definition. An auction of 

Metropolitan Economic Area (MEA) 

licenses commenced on February 24, 

2000, and closed on March 2, 2000. Of 

the 2,499 licenses auctioned, 985 were 

sold. Fifty-seven companies claiming 

small business status won 440 licenses. 

An auction of MEA and Economic Area 

(EA) licenses commenced on October 

30, 2001, and closed on December 5, 

2001. Of the 15,514 licenses auctioned, 

5,323 were sold. One hundred thirtytwo companies claiming small business 

status purchased 3,724 licenses. A third 

auction, consisting of 8,874 licenses in 

each of 175 EAs and 1,328 licenses in 

all but three of the 51 MEAs 

commenced on May 13, 2003, and 

closed on May 28, 2003. Seventy-seven 

bidders claiming small or very small 

business status won 2,093 licenses. 

Currently, there are approximately 

74,000 Common Carrier Paging licenses. 

According to the most recent Trends in 

Telephone Service, 608 private and 

common carriers reported that they 

were engaged in the provision of either 

paging or ‘‘other mobile’’ services. Of 

these, we estimate that 589 are small, 

under the SBA-approved small business 

size standard. We estimate that the 

majority of common carrier paging 

providers would qualify as small 

entities under the SBA definition. 

Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

There are several compliance 

requirements addressed in this item. 

One, carriers are responsible for 

assuring that toll-free numbers, when 

they appear on a telephone bill, must 

appear in a separate section of the bill 

in order to make it easier for consumers 

to understand charges that stem from 

calls to toll-free numbers. Carriers are 

already required to separate out a 

variety of calls, e.g. local versus long 

distance; therefore, we do not expect 

this compliance requirement to be 

particularly burdensome for carriers, 

even small carriers. 

This is not a new requirement, just a 

clarification of an existing one. Two, in 

order to operate outside 900 numbers, 

all audiotext information services—not 

only those using toll-free numbers—

must be provided pursuant to a written 

(or the electronic equivalent) 

presubscription agreement or made 

through payments involving direct 

remittance, prepaid account, or debit, 

credit, charge, or calling cards. These 

proposed policies and rules are 

designed to clarify the existing 

requirement that the presubscription or 

comparable agreement be in writing or 

make use of one of the payment 

methods discussed above. As such, any 

proposed policy or rule changes do not 

constitute an additional compliance 

burden. 

Steps Taken To Minimize Significant 

Economic Impact on Small Entities, and 

Significant Alternative Considered 

The RFA requires an agency to 

describe any significant, specifically 

small business, alternatives that it has 

considered in reaching its proposed 

approach, which may include the 

following four alternatives (among 

others): ‘‘(1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance and reporting requirements 

under the rule for such small entities; 

(3) the use of performance rather than 

design standards; and (4) an exemption 

from coverage of the rule, or any part 

thereof, for such small entities.’’

Commenters, in 2003, noted that 

audiotext service providers found the 

900 number regime has become a 

difficult environment in which to 

operate a business. Some businesses 

complained that charges for audiotext 

information services were dropped from 

carriers’ bills. In order to address this 

concern we are considering allowing 

carriers to accept recordings of customer 

oral verifications as evidence that 

charges through 900 numbers should 

not be removed from the telephone bill. 

These verifications would indicate that 

the customer understood and agreed to 

the 900 number charges. We expect this 

alternative to assist small businesses, 

both carriers and audiotext information 

service providers, by facilitating billing 

on a telephone bill as opposed to a 

credit card or other such means. We 

note in the primary item that disputes 

over such charges were greatly reduced 

once oral verification was implemented 

in another country. 

Federal Rules That May Duplicate, 

Overlap, or Conflict With the Proposed 

Rules 

Federal Trade Commission (FTC) 

regulations pursuant to the Telephone 

Disclosure and Dispute Resolution Act 

(TDDRA), prescribe federal standards 

governing some audiotext information 

service providers and all entities, 

including common carriers, which bill 

and collect for interstate information 

services. The FTC has noted that the 

expansion of the definition of covered 

services under its governing statutes 

from Titles II and III of TDDRA, does 

not have any effect upon the main 

definition of pay-per-call services under 

Title I of TDDRA, codified as section 

228. The FTC initiated a proceeding in 

this area in 1998, but at this time it has 

not issued final conclusions. 

Ordering Clauses 

Accordingly, pursuant to the 

authority contained in sections 1–4, 

201(b), 228 and 303(r) of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 151–154, 201(b), 

228 and 303(r); and 47 CFR 64.1501–

1515 of the Commission’s rules, this 

Notice of Proposed Rulemaking is 

adopted. 

The Commission’s Consumer & 

Governmental Affairs Bureau, Reference 

Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 61193

Information Center, shall send a copy of 

this Notice of Proposed Rulemaking,

including the Initial Regulatory 

Flexibility Analysis, to the Chief 

Counsel for Advocacy of the Small 

Business Administration.

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary.

[FR Doc. 04–23192 Filed 10–14–04; 8:45 am] 

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[CS Docket No. 95–184; MM Docket No. 92–

260; FCC 04–228] 

Telecommunications Services Inside 

Wiring, Customer Premises Equipment 

and Implementation of the Cable 

Television Consumer Protection and 

Competition Act of 1992: Cable Home 

Wiring

AGENCY: Federal Communications 

Commission.

ACTION: Proposed rule.

SUMMARY: In this document, the 

Commission addresses an amendment 

to a Note in its rules to include wiring 

behind sheet rock as an example, along 

with wiring located behind brick, metal 

conduit or cinder blocks, as wiring 

considered to be ‘‘physically 

inaccessible’’ as that term is used 

regarding the Commission’s cable 

television inside wiring rules. The 

consequence of that conclusion is to 

move the point at which a competing 

multichannel video programming 

distributor (‘‘MVPD’’) can gain access to 

wiring located behind sheet rock closer 

to the incumbent cable operator’s 

junction box, thereby facilitating 

competition between MVPD providers 

to serve an MDU. The Court of Appeals 

found that the Commission offered no 

reasoned basis for the amendment to 

add sheet rock and remanded the case 

back to the Commission for further 

consideration. This document seeks 

additional comment from interested 

parties regarding the Commission’s 

conclusion that cable wiring located 

behind sheet rock is ‘‘physically 

inaccessible’’ as that term is used in our 

rules.

DATES: Comments are due November 15, 

2004 and reply comments are due 

December 6, 2004.

ADDRESSES: Federal Communications 

Commission, 445 12th Street, SW., 

Washington, DC 20554. See 

Supplementary Information for filing 

instructions.

FOR FURTHER INFORMATION CONTACT:

Karen A. Kosar, Media Bureau at (202) 

418–1053 or via internet at 

karen.kosar@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Further 

Notice of Proposed Rule Making 

(FNPRM), CS Docket No. 95–184 and 

MM Docket No. 92–260, adopted 

September 22, 2004 and released 

September 29, 2004. The full text is 

available for inspection and copying 

during normal business hours in the 

FCC Reference Center, Federal 

Communications Commission, 445 12th 

Street, SW, CY–A267, Washington, DC 

20554. Persons with disabilities who 

need assistance in the FCC Reference 

center may contact Bill Cline at (202) 

418–0267 (voice), (202) 418–7365 

(TTY), or bcline@fcc.gov. Documents are 

also available from the Commission’s 

Electronic Comment Filing System. 

Documents are available electronically 

in ASCII, Word 97, and Adobe Acrobat. 

Copies of documents also may be 

obtained from Best Copy and Printing, 

Inc., Portals II, 445 12th Street, SW., 

Room CY–B402, Washington, DC 20554, 

telephone (202) 488–5300 or (800) 378–

3160, e-mail fcc@bcpiweb.com, or via its 

Web site http:// www.bcpiweb.com. 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 consumer and 

Governmental Affairs Bureau at 202–

418–0531 (voice), 202–418–7365 (TTY). 

1. This Further Notice of Proposed 

Rule Making (FNPRM) is issued in 

response to a decision issued by the 

United States Court of Appeals for the 

District of Columbia Circuit regarding 

amendment of the Commission’s cable 

television inside wiring rules. In the 

First Order on Reconsideration and 

Second Report and Order in the 

proceeding, the Commission, in part, 

modified its rules to provide that home 

run wiring located behind sheet rock is 

considered to be physically inaccessible 

for purposes of determining the 

demarcation point between home wiring 

and home run wiring. At issue in the 

Appeals Court decision is the 

Commission’s amendment of the Note to 

§ 76.5(mm)(4) of the Commission’s rules 

to indicate that wiring embedded in 

sheet rock would be considered 

physically inaccessible. Prior to its 

Reconsideration Order and amendment 

of the Note to § 76.5(mm)(4), the 

Commission determined under its 

definition of ‘‘physically inaccessible,’’

for example, that wiring embedded in 

brick, metal conduit or cinder blocks 

would likely be physically inaccessible; 

wiring simply enclosed within hallway 

molding would not. By expanding the 

Note to § 76.5(mm)(4) to include sheet 

rock in its Reconsideration Order, the 

Court of Appeals found that the 

Commission offered no reasoned basis 

for the amendment and remanded the 

case to the Commission for further 

consideration. 

2. In response to the Court’s decision, 

the FNPRM seeks additional comment 

on whether accessing inside wiring 

behind sheet rock (1) will involve 

significant modification of or damage to 

preexisting structural elements and (2) 

will add significantly to the difficulty 

and cost of wiring an MDU. The FNPRM 

seeks comment as to whether our 

conclusions in general as stated in the 

Reconsideration Order with regard to 

§ 76.5(mm)(4) of the rules and the 

applicable Note are correct. In addition, 

the FNPRM seeks comment as to 

whether there is an additional or more 

appropriate standard that would 

support the amendment of our rule in 

light of the Court’s remand. The FNPRM 

also seeks comment as to whether any 

specific language changes or 

eliminations should be made to our 

rule. 

I. Procedural Matters 

A. Initial Regulatory Flexibility Analysis 

3. As required by the Regulatory 

Flexibility Act, the Commission has 

prepared an Initial Regulatory 

Flexibility Analysis (IRFA) of the 

possible significant economic impact on 

a substantial number of small entities of 

the proposals addressed in this 

document. The IRFA is set forth in the 

below. Written public comments are 

requested on the IRFA. These comments 

must be filed in accordance with the 

same filing deadlines for comments on 

the FNPRM, and they should have a 

separate and distinct heading 

designating them as responses to the 

IRFA. 

B. Paperwork Reduction Act 

4. This FNPRM does not contain 

proposed information collections 

subject to the Paperwork Reduction Act 

of 1995 (‘‘PRA’’), Public Law 104–13. In 

addition, therefore, it does not contain 

any new or modified ‘‘information 

collection burden for small business 

concerns with fewer than 25 

employees,’’ pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Public Law 107–198, see 44 U.S.C. 

3506(c)(4).