[Federal Register Volume 75, Number 43 (Friday, March 5, 2010)]
[Proposed Rules]
[Pages 10199-10203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4688]



[[Page 10199]]

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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.

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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 non-operating 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 E-rate 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:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#11575252242125517772723f767e67"><span class="__cf_email__" data-cfemail="20666363151014604643430e474f56">[email protected]</span></a> or phone: (202) 
418-0530 or TTY: (202) 418-0432.
    <bullet> 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 <a href="/cdn-cgi/l/email-protection#33636172735550501d545c45"><span class="__cf_email__" data-cfemail="74242635341217175a131b02">[email protected]</span></a> and to Nicholas A. 
Fraser, Office of Management and Budget, via e-mail to <a href="/cdn-cgi/l/email-protection#da94b3b9b2b5b6bba9859bf4859ca8bba9bfa89ab5b7b8f4bfb5aaf4bdb5ac"><span class="__cf_email__" data-cfemail="2866414b404744495b776906776e5a495b4d5a6847454a064d4758064f475e">[email protected]</span></a> 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).
    <bullet> 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.
    <bullet> 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.
    [cir] All hand-delivered or messenger-delivered 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.
    [cir] 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.
    [cir] 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:
    [cir] 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;
    [cir] Regina Brown, Telecommunications, Telecommunications Access 
Policy Division, Wireline Competition Bureau, 445 12th Street, SW., 
Room 5-A5360, Washington, DC 20554; e-mail: <a href="/cdn-cgi/l/email-protection#134176747a7d723d51617c647d537570703d747c65"><span class="__cf_email__" data-cfemail="d082b5b7b9beb1fe92a2bfa7be90b6b3b3feb7bfa6">[email protected]</span></a>; and
    [cir] Charles Tyler, Telecommunications Access Policy Division, 
Wireline Competition Bureau, 445 12th Street, SW., Room 5-A452, 
Washington, DC 20554; e-mail: <a href="/cdn-cgi/l/email-protection#14577c75667871673a406d787166547277773a737b62"><span class="__cf_email__" data-cfemail="4a09222b38262f39641e33262f380a2c2929642d253c">[email protected]</span></a>.
    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 <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="55333636606561153336367b323a23">[email protected]</a> 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: <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="e5838686d0d5d1a5838686cb828a93">[email protected]</a>; phone: 
(202) 418-0530 or (202) 418-0432 (TTY).

[[Page 10200]]

    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 <a href="/cdn-cgi/l/email-protection#96f0f5f5d6f4f5e6ffe1f3f4b8f5f9fb"><span class="__cf_email__" data-cfemail="86e0e5e5c6e4e5f6eff1e3e4a8e5e9eb">[email protected]</span></a>, 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 E-rate 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 E-rate 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

[[Page 10201]]

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 not-for-
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

[[Page 10202]]

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 board-
level 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

[[Page 10203]]

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 E-rate 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:


Sec.  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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