Federal Register / Vol. 75, No. 43 / Friday, March 5, 2010 / Proposed Rules 10199 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 54 

[CC Docket No. 02–6; FCC 10–33] 

Schools and Libraries Universal 

Service Support Mechanism 

AGENCY: Federal Communications 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: In the companion order that 

accompanied a Notice of Proposed 

Rulemaking (NPRM), the Commission 

enabled schools that receive funding 

from the E-rate program (more formally, 

the schools and libraries universal 

service support program) to allow 

members of the general public to use the 

schools’ Internet access during nonoperating hours. The Commission 

waived, on its own motion, through 

funding year 2010 (which ends June 30, 

2011), rules that currently discourage 

public use of resources funded under 

the E-rate program. In the NPRM, the 

Commission seeks comment on revising 

its rules to make this change permanent. 

This change will leverage universal 

service funding to serve a larger 

population at no increased cost to the Erate program. The general public will be 

able to use the Internet access already 

present in schools, at the schools’ 

discretion, for purposes such as job 

searches and applications, digital 

literacy programs, and online access to 

governmental services and resources. 

DATES: Comments on the proposed rules 

are due on or before April 5, 2010 and 

reply comments are due on or before 

April 19, 2010. Written comments on 

the Paperwork Reduction Act proposed 

information collection requirements 

should be submitted on or before May 

4, 2010. If you anticipate that you will 

be submitting comments, but find it 

difficult to do so within the period of 

time allowed by this notice, you should 

advise the contact listed below as soon 

as possible. 

ADDRESSES: You may submit comments, 

identified by CC Docket No. 02–6, by 

any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Federal Communications 

Commission’s Web site: http:// 

fjallfoss.fcc.gov/ecfs2/. Follow the 

instructions for submitting comments. 

• People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by e-mail: FCC504@fcc.gov 

or phone: (202) 418–0530 or TTY: (202) 

418–0432. 

• In addition to filing comments with 

the Secretary, a copy of any comments 

on the Paperwork Reduction Act 

information collection requirements 

contained herein should be submitted to 

the Federal Communications 

Commission via e-mail to PRA@fcc.gov 

and to Nicholas A. Fraser, Office of 

Management and Budget, via e-mail to 

Nicholas_A._Fraser@omb.eop.gov or via 

fax at 202–395–5167. 

For detailed instructions for submitting 

comments and additional information 

on the rulemaking process, see the 

SUPPLEMENTARY INFORMATION section of 

this document. 

FOR FURTHER INFORMATION CONTACT: 

Regina Brown, Wireline Competition 

Bureau, Telecommunications Access 

Policy Division, (202) 418–7400 or TTY: 

(202) 418–0484. 

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Notice of 

Proposed Rulemaking in CC Docket No. 

02–6, FCC 10–33, adopted February 18, 

2010, and released February 19, 2010. 

The complete text of this document is 

available for inspection and copying 

during normal business hours in the 

FCC Reference Information Center, 

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

CY–A257, Washington, DC 20554. The 

document may also be purchased from 

the Commission’s duplicating 

contractor, Best Copy and Printing, Inc., 

445 12th Street, SW., Room CY–B402, 

Washington, DC 20554, telephone (800) 

378–3160 or (202) 863–2893, facsimile 

(202) 863–2898, or via the Internet at 

http://www.bcpiweb.com. It is also 

available on the Commission’s Web site 

at http://www.fcc.gov. 

Pursuant to sections 1.415 and 1.419 

of the Commission’s rules, 47 CFR 

1.415, 1.419, interested parties may file 

comments and reply comments on or 

before the dates indicated on the first 

page of this document. Comments may 

be filed using: (1) The Commission’s 

Electronic Comment Filing System 

(ECFS), (2) the Federal Government’s 

eRulemaking Portal, or (3) by filing 

paper copies. See Electronic Filing of 

Documents in Rulemaking Proceedings, 

63 FR 24121 (1998). 

• Electronic Filers: Comments may be 

filed electronically using the Internet by 

accessing the ECFS: http://www.fcc.gov/ 

cgb/ecfs/ or the Federal eRulemaking 

Portal: http://www.regulations.gov. 

Filers should follow the instructions 

provided on the Web site for submitting 

comments. 

• Paper Filers: Parties who choose to 

file by paper must file an original and 

four copies of each filing. If more than 

one docket or rulemaking number 

appears in the caption of this 

proceeding, filers must submit two 

additional copies for each additional 

docket or rulemaking number. 

Filings can be sent by hand or 

messenger delivery, by commercial 

overnight courier, or by first-class or 

overnight U.S. Postal Service mail 

(although we continue to experience 

delays in receiving U.S. Postal Service 

mail). All filings must be addressed to 

the Commission’s Secretary, Office of 

the Secretary, Federal Communications 

Commission. 

Æ All hand-delivered or messengerdelivered paper filings for the 

Commission’s Secretary must be 

delivered to FCC Headquarters at 445 

12th St., SW., Room TW–A325, 

Washington, DC 20554. The filing hours 

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. 

Æ 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. 

Æ U.S. Postal Service first-class, 

Express, and Priority mail should be 

addressed to 445 12th Street, SW., 

Washington, DC 20554. 

In addition, one copy of each 

pleading must be sent to each of the 

following: 

Æ The Commission’s duplicating 

contractor, Best Copy and Printing, Inc., 

445 12th Street, SW., Room CY–B402, 

Washington, DC 20554; Web site: 

www.bcpiweb.com; phone: 1–800–378– 

3160; 

Æ Regina Brown, 

Telecommunications, 

Telecommunications Access Policy 

Division, Wireline Competition Bureau, 

445 12th Street, SW., Room 5–A5360, 

Washington, DC 20554; e-mail: 

Regina.Brown@fcc.gov; and 

Æ Charles Tyler, Telecommunications 

Access Policy Division, Wireline 

Competition Bureau, 445 12th Street, 

SW., Room 5–A452, Washington, DC 

20554; e-mail: Charles.Tyler@fcc.gov. 

People with Disabilities: To request 

materials in accessible formats for 

people with disabilities (Braille, large 

print, electronic files, audio format), 

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

the Consumer & Governmental Affairs 

Bureau at (202) 418–0530 (voice) or 

(202) 418–0432 (TTY). Contact the FCC 

to request reasonable accommodations 

for filing comments (accessible format 

documents, sign language interpreters, 

CART, etc.) by e-mail: fcc504@fcc.gov; 

phone: (202) 418–0530 or (202) 418– 

0432 (TTY). 


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Filings and comments are also 

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, DC 20554. 

Copies may also be purchased from the 

Commission’s duplicating contractor, 

BCPI, 445 12th Street, SW., Room CY– 

B402, Washington, DC 20554. 

Customers may contact BCPI through its 

Web site: http://www.bcpiweb.com, by 

e-mail at fcc@bcpiweb.com, by 

telephone at (202) 488–5300 or (800) 

378–3160 (voice), (202) 488–5562 

(TTY), or by facsimile at (202) 488– 

5563. 

I. Synopsis of the Notice of Proposed 

Rulemaking 

1. Currently, the Commission’s rules 

require schools to certify that they will 

use E-rate funded services solely for 

‘‘educational purposes,’’ defined as 

activities that are integral, immediate, 

and proximate to the education of 

students. In the NPRM, the Commission 

specifically seeks comment on whether 

it should revise sections 54.504(b)(2)(v) 

and 54.504(c)(1)(vii) of its rules to allow 

schools to use underutilized services 

and equipment funded under the E-rate 

program for other, secondary purposes, 

instead of solely for ‘‘educational 

purposes’’ as is now required under its 

rules. Specifically, the Commission 

proposes to revise sections 

54.504(b)(2)(v) and 54.504(c)(1)(vii) of 

its rules to require applicants to certify 

that ‘‘[t]he services the applicant 

purchases at discounts will be used 

primarily for educational purposes 

* * *.’’ It tentatively concludes that, if 

it revise sections 54.504(b)(2)(v) and 

54.504(c)(1)(vii) of its rules to allow 

schools to use underutilized services 

and equipment funded under the E-rate 

program for other, secondary purposes, 

consistent with the Communications 

Act, E-rate funds must, in the first 

instance, be used for educational 

purposes and students shall always get 

first priority in use of the schools’ 

resources. Any additional use of the 

services purchased under the E-rate 

program thus must be incidental to the 

primary purpose of the E-rate funds. 

2. In the companion order, in granting 

a waiver of these rules, the Commission 

set forth certain conditions regarding 

other uses of school facilities that 

choose to allow the community to use 

their E-rate funded services: (1) Schools 

participating in the E-rate program are 

not permitted to request more services 

than are necessary for ‘‘educational 

purposes’’; (2) any community use of Erate funded services at a school facility 

is limited to non-operating hours, such 

as after school hours or during times 

when the students are out of school; and 

(3) consistent with the Communications 

Act, schools’ discounted services or 

network capacity may not be ‘‘sold, 

resold, or transferred by such user in 

consideration for money or any other 

thing of value.’’ In the NPRM, the 

Commission, if it revises its rules, 

tentatively concludes that it would 

continue to impose these conditions and 

seeks comment on that conclusion. It 

also seeks comment on whether there 

are any additional conditions to guard 

against waste, fraud, and abuse that it 

should impose on schools that allow 

community use of their E-rate funded 

services and equipment. Further, the 

Commission seeks comment on any 

practical or operational implications 

such a change in its rules would have 

on schools and the community at large. 

Lastly, the Commission invites 

comment on whether it should modify 

our definition of educational purposes. 

Commenters should address whether 

modification of that definition would 

accomplish the objectives of 

maximizing the use of facilities and 

services supported by E-rate funding 

and reducing the likelihood of waste, 

fraud, and abuse. 

3. The Commission proposes these 

rule revisions for a number of reasons. 

First, the Commission believes that 

changing these rules will leverage E-rate 

funds to serve a larger population at no 

increased cost to the E-rate program. 

Currently, services and facilities 

purchased using E-rate funding remain 

unused during evenings, weekends, 

school holidays, and summer breaks. 

Second, many people lack access or 

have limited access to affordable 

Internet services for educational and job 

training opportunities, particularly, for 

example, in rural, minority, and Tribal 

communities. Thus, by opening up 

these facilities to members of the public 

to use during non-operating hours, the 

Commission will maximize the use of 

facilities and services supported by Erate funding and increase community 

access to the Internet. Third, the 

Commission finds that these rule 

changes are consistent with the goals of 

universal service by making Internet 

access available to more members of the 

general public. Fourth, the Commission 

believes these rule changes are 

consistent with the use of E-rate funding 

by libraries. Libraries currently provide 

access to the Internet to members of the 

general public as part of their mission. 

Allowing schools to do the same, at 

their discretion, would simply provide 

more opportunities for public access to 

Internet services. Finally, these rule 

changes would further the 

Commission’s directive from Congress 

to encourage access to advanced 

telecommunications and information 

services. 

II. Procedural Matters 

A. Initial Paperwork Reduction Act 

Analysis 

4. This document does not contain 

proposed information collection(s) 

subject to the Paperwork Reduction Act 

of 1995, 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). 

B. Initial Regulatory Flexibility Analysis 

5. As required by the Regulatory 

Flexibility Act of 1980, see 5 U.S.C. 603, 

as amended, the Commission has 

prepared this present Initial Regulatory 

Flexibility Analysis (IRFA) of the 

possible significant economic impact on 

small entities by the policies and rules 

proposed in the NPRM. 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 

NPRM. The Commission will send a 

copy of this NPRM, including this IRFA, 

to the Chief Counsel for Advocacy of the 

Small Business Administration (SBA), 

see 5 U.S.C. 603(a). In addition, the 

NPRM and IRFA (or summaries thereof) 

will be published in the Federal 

Register. 

(1) Need for, and Objectives of, the 

Proposed Rules 

6. In the NPRM, we specifically seek 

comment on whether we should revise 

sections 54.504(b)(2)(v) and 

54.504(c)(1)(vii) of our rules to allow 

schools to use underutilized services 

and equipment funded under the E-rate 

program for other, secondary purposes, 

instead of solely for ‘‘educational 

purposes’’ as is now required under our 

rules. Specifically, we propose to revise 

sections 54.504(b)(2)(v) and 

54.504(c)(1)(vii) of our rules to require 

applicants to certify that ‘‘[t]he services 

the applicant purchases at discounts 

will be used primarily for educational 

purposes * * *.’’ 

7. We propose these rule revisions for 

several reasons. As we noted above in 

our order granting a waiver of our rules 

requiring that services and facilities 

supported by E-rate be used solely for 

educational purposes through the end of 

funding year 2010, we believe changing 


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these rules will leverage E-rate funds to 

serve a larger population at no increased 

cost to the E-rate program. Currently, 

services and facilities purchased using 

E-rate funding remain unused during 

evenings, weekends, school holidays, 

and summer breaks. Moreover, many 

people lack access or have limited 

access to affordable Internet services for 

educational and job training 

opportunities, particularly, for example, 

in rural, minority, and Tribal 

communities. Thus, by opening up 

these facilities to members of the public 

to use during non-operating hours, we 

will maximize the use of facilities and 

services supported by E-rate funding 

and increase community access to the 

Internet. Further, we find that these rule 

changes are consistent with the goals of 

universal service by making Internet 

access available to more members of the 

general public. We also believe these 

rule changes are consistent with the use 

of E-rate funding by libraries. Libraries 

currently provide access to the Internet 

to members of the general public as part 

of their mission. Allowing schools to do 

the same, at their discretion, would 

simply provide more opportunities for 

public access to Internet services. 

Finally, these rule changes would 

further the Commission’s directive from 

Congress to encourage access to 

advanced telecommunications and 

information services. 

(2) Legal Basis 

8. The legal basis for the NPRM is 

contained in sections 1–4 and 254 of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 151–154 and 254, 

and sections 0.91, 0.291, and 1.3 of the 

Commission’s rules, 47 CFR 0.91, 0.291, 

and 1.3. 

(3) Description and Estimate of the 

Number of Small Entities to Which 

Rules Will Apply 

9. 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, 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 that: (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. Nationwide, there are a total of 

approximately 22.4 million small 

businesses, according to SBA data. A 

small organization is generally ‘‘any notfor-profit enterprise which is 

independently owned and operated and 

is not dominant in its field.’’ 

Nationwide, there are a total of 

approximately 29.6 million small 

businesses, according to the SBA. A 

‘‘small organization’’ is generally ‘‘any 

not-for-profit enterprise which is 

independently owned and operated and 

is not dominant in its field.’’ 

Nationwide, as of 2002, there were 

approximately 1.6 million small 

organizations. The term ‘‘small 

governmental jurisdiction’’ is defined 

generally as ‘‘governments of cities, 

towns, townships, villages, school 

districts, or special districts, with a 

population of less than fifty thousand.’’ 

Census Bureau data for 2002 indicate 

that there were 87,525 local 

governmental jurisdictions in the 

United States. We estimate that, of this 

total, 84,377 entities were ‘‘small 

governmental jurisdictions.’’ Thus, we 

estimate that most governmental 

jurisdictions are small. 

10. Small entities potentially affected 

by the proposals herein include eligible 

schools and libraries and the eligible 

service providers offering them 

discounted services, including 

telecommunications service providers, 

Internet Service Providers (ISPs), and 

vendors of the services and equipment 

used for internal connections. 

(a) Schools 

11. As noted, ‘‘small entity’’ includes 

non-profit and small governmental 

entities. Under the schools and libraries 

universal service support mechanism, 

which provides support for elementary 

and secondary schools, an elementary 

school is generally ‘‘a non-profit 

institutional day or residential school 

that provides elementary education, as 

determined under state law.’’ A 

secondary school is generally defined as 

‘‘a non-profit institutional day or 

residential school that provides 

secondary education, as determined 

under state law,’’ and not offering 

education beyond grade 12. For-profit 

schools, and schools and libraries with 

endowments in excess of $50,000,000, 

are not eligible to receive discounts 

under the program. Certain other 

statutory definitions apply as well. The 

SBA has also defined for-profit, 

elementary and secondary schools 

having $7 million or less in annual 

receipts as small entities. In funding 

year 2007, approximately 105,500 

schools received funding under the 

schools and libraries universal service 

mechanism. Although we are unable to 

estimate with precision the number of 

these additional entities that would 

qualify as small entities under SBA’s 

size standard, we estimate that fewer 

than 105,500 such schools might be 

affected annually by our action, under 

current operation of the program. 

(b) Telecommunications Service 

Providers 

12. Incumbent Local Exchange 

Carriers (LECs). Neither the Commission 

nor the SBA has developed a size 

standard for small incumbent local 

exchange services. The closest 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 data, 1,311 

incumbent carriers reported that they 

were engaged in the provision of local 

exchange services. Of these 1,311 

carriers, an estimated 1,024 have 1,500 

or fewer employees and 287 have more 

than 1,500 employees. Thus, under this 

category and associated small business 

size standard, we estimate that the 

majority of entities are small. 

13. We have included small 

incumbent local exchange carriers in 

this RFA analysis. 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 

local exchange carriers are not dominant 

in their field of operation because any 

such dominance is not ‘‘national’’ in 

scope. We have therefore included small 

incumbent carriers in this RFA analysis, 

although we emphasize that this RFA 

action has no effect on the 

Commission’s analyses and 

determinations in other, non-RFA 

contexts. 

14. Interexchange Carriers. Neither 

the Commission nor the SBA has 

developed a definition of small entities 

specifically applicable to providers of 

interexchange services (IXCs). The 

closest applicable definition under the 

SBA rules is for wired 

telecommunications carriers. This 

provides that a wired 

telecommunications carrier is a small 

entity if it employs no more than 1,500 

employees. According to the 

Commission’s 2008 Trends Report, 300 

companies reported that they were 

engaged in the provision of 

interexchange services. Of these 300 

IXCs, an estimated 268 have 1,500 or 

fewer employees and 32 have more than 

1,500 employees. Consequently, the 

Commission estimates that most 


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providers of interexchange services are 

small businesses. 

15. Competitive Access Providers. 

Neither the Commission nor the SBA 

has developed a definition of small 

entities specifically applicable to 

competitive access services providers 

(CAPs). The closest applicable 

definition under the SBA rules is for 

wired telecommunications carriers. This 

provides that a wired 

telecommunications carrier is a small 

entity if it employs no more than 1,500 

employees. According to the 2008 

Trends Report, 1,005 CAPs and 

competitive local exchange carriers 

(competitive LECs) reported that they 

were engaged in the provision of 

competitive local exchange services. Of 

these 1,005 CAPs and competitive LECs, 

an estimated 918 have 1,500 or fewer 

employees and 87 have more than 1,500 

employees. Consequently, the 

Commission estimates that most 

providers of competitive exchange 

services are small businesses. 

16. Wireless Telecommunications. 

Neither the Commission nor the SBA 

has developed a definition of small 

entities specifically for wireless 

telephony. The closest definition is the 

SBA definition for Wireless 

Telecommunications Carriers (except 

Satellite). Under this definition, a 

cellular licensee is a small entity if it 

employs no more than 1,500 employees. 

According to the 2008 Trends Report, 

434 providers classified themselves as 

providers of wireless telephony, 

including cellular telecommunications, 

Personal Communications Service, and 

Specialized Mobile Radio (SMR) 

Telephony Carriers. Of these 434 

wireless telephony providers, an 

estimated 222 have 1,500 or fewer 

employees and 212 have more than 

1,500 employees. Consequently, the 

Commission estimates that more than 

half of the providers of wireless 

telephony services are small businesses. 

17. Other Wireless Services. Neither 

the Commission nor the SBA has 

developed a definition of small entities 

specifically applicable to wireless 

services other than wireless telephony. 

The closest applicable definition under 

the SBA rules is again that of Wireless 

Telecommunications (except Satellite), 

under which a service provider is a 

small entity if it employs no more than 

1,500 employees. According to the 2008 

Trends Report, 69 providers classified 

themselves as wireless data carriers or 

other mobile service providers. Of these 

69 providers, an estimated 65 have 

1,500 or fewer employees and 4 have 

more than 1,500 employees. 

Consequently, the Commission 

estimates that most providers of 

wireless services other than wireless 

telephony are small businesses. 

18. Paging and Messaging Service 

Providers. 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. 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. 

An auction of Metropolitan Economic 

Area licenses commenced on February 

24, 2000, and closed on March 2, 2000. 

Of the 985 licenses auctioned, 440 were 

sold. Fifty-seven companies claiming 

small business status won. In addition, 

at present, there are approximately 

24,000 Private-Paging site-specific 

licenses and 74,000 Common Carrier 

Paging licenses. Finally, according to 

Commission data, 281 carriers reported 

that they were engaged in the provision 

of paging services, messaging services, 

or other mobile services. Of those, the 

Commission estimates that 279 are 

small, under the SBA-approved small 

business size standard. 

(c) Internet Service Providers 

19. The 2007 Economic Census places 

these firms, whose services might 

include voice over Internet protocol 

(VoIP), in either of two categories, 

depending on whether the service is 

provided over the provider’s own 

telecommunications facilities (e.g., cable 

and DSL ISPs), or over client-supplied 

telecommunications connections (e.g., 

dial-up ISPs). The former are within the 

category of Wired Telecommunications 

Carriers, which has an SBA small 

business size standard of 1,500 or fewer 

employees. The latter are within the 

category of All Other 

Telecommunications, which has a size 

standard of annual receipts of $25 

million or less. The most current Census 

Bureau data for all such firms, however, 

are the 2002 data for the previous 

census category called Internet Service 

Providers. That category had a small 

business size standard of $21 million or 

less in annual receipts, which was 

revised in late 2005 to $23 million. The 

2002 data show that there were 2,529 

such firms that operated for the entire 

year. Of those, 2,437 firms had annual 

receipts of under $10 million, and an 

additional 47 firms had receipts of 

between $10 million and $24,999,999. 

Consequently, we estimate that the 

majority of ISP firms are small entities. 

(d) Vendors of Internal Connections 

20. Telephone Apparatus 

Manufacturing. The Census Bureau 

defines this category as follows: ‘‘This 

industry comprises establishments 

primarily engaged in manufacturing 

wire telephone and data 

communications equipment. These 

products may be standalone or boardlevel components of a larger system. 

Examples of products made by these 

establishments are central office 

switching equipment, cordless 

telephones (except cellular), PBX 

equipment, telephones, telephone 

answering machines, LAN modems, 

multi-user modems, and other data 

communications equipment, such as 

bridges, routers, and gateways.’’ The 

SBA has developed a small business 

size standard for Telephone Apparatus 

Manufacturing, which is: All such firms 

having 1,000 or fewer employees. 

According to Census Bureau data for 

2002, there were a total of 518 

establishments in this category that 

operated for the entire year. Of this 

total, 511 had employment of under 

1,000, and an additional 7 had 

employment of 1,000 to 2,499. Thus, 

under this size standard, the majority of 

firms can be considered small. 

21. Radio and Television 

Broadcasting and Wireless 

Communications Equipment 

Manufacturing. The Census Bureau 

defines this category as follows: ‘‘This 

industry comprises establishments 

primarily engaged in manufacturing 

radio and television broadcast and 

wireless communications equipment. 

Examples of products made by these 

establishments are: transmitting and 

receiving antennas, cable television 

equipment, GPS equipment, pagers, 

cellular phones, mobile 

communications equipment, and radio 

and television studio and broadcasting 

equipment.’’ The SBA has developed a 

small business size standard for Radio 

and Television Broadcasting and 

Wireless Communications Equipment 

Manufacturing, which is: all such firms 

having 750 or fewer employees. 

According to Census Bureau data for 

2002, there were a total of 1,041 

establishments in this category that 

operated for the entire year. Of this 

total, 1,010 had employment of under 

500, and an additional 13 had 

employment of 500 to 999. Thus, under 

this size standard, the majority of firms 

can be considered small. 

22. Other Communications 

Equipment Manufacturing. The Census 


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Bureau defines this category as follows: 

‘‘This industry comprises establishments 

primarily engaged in manufacturing 

communications equipment (except 

telephone apparatus, and radio and 

television broadcast, and wireless 

communications equipment).’’ The SBA 

has developed a small business size 

standard for Other Communications 

Equipment Manufacturing, which is: all 

such firms having 750 or fewer 

employees. According to Census Bureau 

data for 2002, there were a total of 503 

establishments in this category that 

operated for the entire year. Of this 

total, 493 had employment of under 

500, and an additional 7 had 

employment of 500 to 999. Thus, under 

this size standard, the majority of firms 

can be considered small. 

(4) Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

23. The schools’ voluntary offering of 

Internet resources, as proposed in the 

NPRM, would not result in additional 

compliance requirements for small 

businesses. 

(5) Steps Taken To Minimize Significant 

Economic Impact on Small Entities, and 

Significant Alternatives Considered 

24. The RFA requires an agency to 

describe any significant 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 and 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 part thereof, for 

small entities. 

25. In the NPRM, we seek comment 

on whether we should revise sections 

54.504(b)(2)(v) and 54.504(c)(1)(vii) of 

our rules to allow schools to use 

underutilized services and equipment 

funded under the E-rate program for 

other, secondary purposes, instead of 

solely for ‘‘educational purposes’’ as is 

now required under our rules. 

Specifically, we tentatively conclude 

that, if we revise sections 54.504(b)(2)(v) 

and 54.504(c)(1)(vii) of our rules to 

allow schools to use underutilized 

services and equipment funded under 

the E-rate program for other purposes, 

consistent with the Act, E-rate funds 

must, in the first instance, be used for 

educational purposes and students shall 

always get first priority in use of the 

schools’ resources. Any additional use 

of the services purchased under the Erate program must therefore be 

incidental to the primary purpose of the 

E-rate funds. Under this proposed rule, 

applicants will now be able to use their 

E-rate eligible facilities and services for 

other, secondary purposes, such as adult 

education, job training, and digital 

literacy programs, to benefit the 

community. We also invite comment on 

whether we should modify our 

definition of educational purposes to 

accomplish the same objective. We thus 

believe that these rule changes will not 

have an economic impact on small 

entities under the E-rate program since 

we are simply opening school facilities 

and services, already funded under the 

E-rate program, for community use 

during non-operating school hours. In 

fact, it will benefit participants by 

giving them the option to maximize the 

use of their facilities and services 

supported by E-rate funding. We 

welcome, however, comments from 

parties that have opinions different from 

those reached in this analysis. 

(6) Federal Rules That May Duplicate, 

Overlap, or Conflict With the Proposed 

Rules 

26. None. 

List of Subjects in 47 CFR Part 54 

Communications common carriers, 

Health facilities, Infants and children, 

Libraries, Reporting and recordkeeping 

requirements, Schools, 

Telecommunications, Telephone. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

Proposed Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission proposes to amend 47 CFR 

part 54 as follows: 

PART 54—UNIVERSAL SERVICE 

1. The authority citation continues to 

read as follows: 

Authority: 47 U.S.C. 1, 4(i), 201, 205, 214, 

and 254 unless otherwise noted. 

2. Section 54.504 is amended by 

revising paragraphs (b)(2)(v) and 

(c)(1)(vii) to read as follows: 

§ 54.504 Requests for services. 

* * * * * 

(b) * * * 

(2) * * * 

(v) The services the applicant 

purchases at discounts will be used 

primarily for educational purposes and 

will not be sold, resold, or transferred in 

consideration for money or any other 

thing of value. 

* * * * * 

(c) * * * 

(1) * * * 

(vii) The services the applicant 

purchases at discounts will be used 

primarily for educational purposes and 

will not be sold, resold, or transferred in 

consideration for money or any other 

thing of value. 

* * * * * 

[FR Doc. 2010–4688 Filed 3–4–10; 8:45 am] 

BILLING CODE 6712–01–P 


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