Federal Register / Vol. 73, No. 90 / Thursday, May 8, 2008 / Proposed Rules 26071 

towns, townships, villages, school 

districts, or special districts, with a 

population of less than fifty thousand.’’

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. Below, we discuss the total 

estimated numbers of small businesses 

that might be affected by our actions. 

28. The Educational Broadband 

Service (EBS) (previously referred to as 

the Instructional Television Fixed 

Service (ITFS)) is used to provide 

educational services to students. The 

SBA has developed a small business 

size standard for Cable and Other 

Program Distribution, which includes 

all such companies generating $13.5 

million or less in annual receipts. 

According to Census Bureau data for 

2002, there were a total of 1,191 firms 

in this category that operated for the 

entire year. Of this total, 1,087 firms had 

annual receipts of under $10 million, 

and 43 firms had receipts of $10 million 

or more but less than $25 million. 

Consequently, we estimate that the 

majority of providers in this service 

category are small businesses that may 

be affected by the rules and policies 

adopted herein. This SBA small 

business size standard is applicable to 

EBS. There are presently 2,032 EBS 

licensees. All but 100 of these licenses 

are held by educational institutions. 

Educational institutions are included in 

this analysis as small entities. Thus, we 

estimate that at least 1,932 licensees are 

small businesses. 

29. There are presently 2,032 EBS 

licensees. All but 100 of these licenses 

are held by educational institutions. 

Educational institutions may be 

included in the definition of a small 

entity. EBS is a non-profit non-broadcast 

service. We do not collect, nor are we 

aware of other collections of, annual 

revenue data for EBS licensees. We find 

that up to 1,932 of these educational 

institutions are small entities that may 

take advantage of our amended rules to 

provide additional flexibility to EBS. 

D. Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

30. There are no new reporting, 

recordkeeping or other compliance 

requirements proposed in the BRS/EBS 

2nd FNPRM. 

E. Steps Taken to Minimize Significant 

Economic Impact on Small Entities, and 

Significant Alternatives Considered 

31. 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 or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance or reporting requirements 

under the rule for 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 small entities.’’

32. The Commission has not proposed 

an approach for licensing EBS spectrum. 

Instead, the Commission seeks comment 

on three distinct approaches for 

licensing EBS spectrum to determine 

which approach would best suit the 

needs of schools and universities and 

other non-profit educational 

institutions. 

F. Federal Rules That May Duplicate, 

Overlap, or Conflict With the Proposed 

Rule 

33. None. 

Ordering Clauses 

34. It is further ordered that notice is 

hereby given of the proposed regulatory 

changes described in this Second 

Further Notice of Proposed Rulemaking, 

and that comment is sought on these 

proposals. 

35. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this Second Further Notice of Proposed 

Rulemaking, including the IRFA, to the 

Chief Counsel for Advocacy of the Small 

Business Administration. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

[FR Doc. E8–10105 Filed 5–7–08; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety 

Administration 

49 CFR Part 512 

[Docket No. NHTSA–06–26140; Notice 3] 

RIN 2127–AJ95 

Confidential Business Information 

AGENCY: National Highway Traffic 

Safety Administration (NHTSA), DOT. 

ACTION: Denial of Petition for 

Reconsideration. 

SUMMARY: This document denies a 

petition for reconsideration regarding 

amendments to NHTSA’s regulation on 

Confidential Business Information. The 

petition, by the American Association 

for Justice, sought the rescission of class 

determinations that provide confidential 

treatment for certain categories of 

information submitted to NHTSA 

pursuant to the Early Warning Reporting 

regulations. 

FOR FURTHER INFORMATION CONTACT: 

Michael Kido, Office of Chief Counsel, 

NHTSA, telephone (202) 366–5263, 

1200 New Jersey Avenue, SE., 

Washington, DC 20590. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Pursuant to the Transportation Recall 

Enhancement, Accountability, and 

Documentation (TREAD) Act, NHTSA 

has adopted Early Warning Reporting 

(EWR) regulations. 49 CFR Part 579. See 

49 U.S.C. 30166(m), Public Law 106–

414. Under these regulations, in general, 

larger manufacturers must submit 

certain data to the NHTSA on a 

quarterly basis. Their EWR reports 

include information on production, 

incidents involving deaths or injuries, 

property damage claims, consumer 

complaints, warranty claims, field 

reports and common green tires, with 

some variation based on the reporting 

sector. In general, smaller manufacturers 

must report on incidents involving 

deaths. 

On October 19, 2007, NHTSA 

published regulations addressing the 

confidentiality of EWR data. 72 FR 

59434. The Appendices to the October 

2007 notice contain class 

determinations providing that certain 

EWR information is confidential. Under 

Appendix C to 49 CFR Part 512, EWR 

data on production (except for light 

vehicles), consumer complaints, 

warranty claims, field reports and 

common green tires, as well as copies of 

field reports are confidential. 72 FR at 

59470. Under Appendix D, the last six 


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26072 Federal Register / Vol. 73, No. 90 / Thursday, May 8, 2008 / Proposed Rules 

1We note that the EWR information on deaths 

and injuries are not covered under the class 

determinations in Appendix C. 

(6) characters of the vehicle 

identification number (VIN) in an EWR 

report on death(s) or injuries are 

confidential. Id. As explained in the 

preamble to the October 2007 rule, 

NHTSA based these class 

determinations on the substantive 

criteria in Exemptions 4 and 6 of the 

Freedom of Information Act (FOIA), 5 

U.S.C. 552(b)(4) and (b)(6). 

Under FOIA Exemption 4, the 

standard for assessing the 

confidentiality of information that 

parties are required to submit to the 

government is whether ‘‘disclosure of 

the information is likely to have either 

of the following effects: (1) To impair 

the Government’s ability to obtain 

necessary information in the future; or 

(2) to cause substantial competitive 

harm to the competitive position of the 

person from whom the information was 

obtained.’’ National Parks & 

Conservation Ass’n v. Morton, 498 F.2d 

765, 770 (D.C. Cir. 1974). The class 

determinations in Appendix C to Part 

512 are based on Exemption 4. FOIA 

Exemption 6 provides for the 

withholding of ‘‘personnel and medical 

files and similar files the disclosure of 

which would constitute a clearly 

unwarranted invasion of personal 

privacy.’’ 5 U.S.C. § 552(b)(6). The 

agency applied Exemption 6 to the last 

six (6) characters of the VINs affixed to 

those vehicles allegedly involved in a 

death or injury reported under 49 CFR 

part 579 to protect the identity of 

individual vehicle owners. The class 

determination in Appendix D to part 

512 is based on Exemption 6. For a more 

detailed discussion of the agency’s 

analysis regarding the class 

determinations in Appendices C and D, 

we refer readers to the preamble of the 

October 2007 rule. 

II. American Association for Justice 

Petition and NHTSA’s Response 

In a December 3, 2007 letter, the 

American Association for Justice (AAJ), 

formerly known as the Association of 

Trial Lawyers of America, petitioned for 

reconsideration of the class 

determinations on EWR data. AAJ asks 

NHTSA to withdraw the class 

determinations, based on two 

arguments. 

First, AAJ asserts that Federal law 

requires NHTSA to apply a balancing 

test used by a court in evaluating a 

motion to unseal court records filed in 

a products liability action. See Chicago 

Tribune Co. v. Bridgestone/Firestone, 

Inc., 263 F.3d 1304 (11th Cir. 2001). 

Under this test, AAJ argues, an agency 

must balance the manufacturer’s interest 

in keeping the information confidential 

with the alternate contention that 

disclosure serves the public interest in 

health and safety. AAJ asserts that a 

blanket exemption under the FOIA 

would violate this federal balancing test 

and that the agency must continue to 

evaluate the disclosure of a 

manufacturer’s EWR data on a case-bycase basis. 

Second, AAJ asserts that automobile 

companies would not suffer detrimental 

competitive consequences from the 

disclosure of their EWR submissions. It 

states that industry’s arguments 

regarding the competitive impact of the 

disclosure of EWR data should be 

discounted because manufacturers 

already learn about their competitors’

products through reverse-engineering. 

AAJ cites an article in WIRED magazine 

discussing the vehicle tear-down 

process followed by manufacturers in 

general, and General Motors 

Corporation in particular. See Carl 

Hoffman, The Teardown Artists, WIRED 

(Feb. 2006). AAJ contends that since 

manufacturers already conduct these 

types of activities, disclosing EWR data 

may not have an additional impact on 

competition and that it could 

significantly improve public safety. 

As to both of these arguments, we 

disagree with AAJ’s views regarding the 

applicable legal principles. In Chicago 

Tribune, a balancing test was applied in 

the unsealing of documents produced in 

a products liability lawsuit. In our view, 

the body of law that governs the 

disclosure of EWR data is FOIA law, 

rather than the law on the unsealing of 

documents in Chicago Tribune. More 

particularly, as explained in the 

preamble to the October 2007 rule, the 

proper standard is that of Exemption 4 

of the FOIA. See 72 FR at 59437. In 

Exemption 4, Congress has already 

struck the balance and no further 

balancing of the public interest is 

warranted. See Public Citizen Health 

Research Group v. FDA, 185 F.3d 898, 

904 (D.C. Cir. 1999); 72 FR at 59437 and 

59449–50. In any event, to the extent 

relevant, the agency weighed the 

public’s interest in these data against its 

continued ability to obtain EWR data 

under its impairment prong analyses. 

See, e.g., 72 FR at 59449–51 (consumer 

complaints), 59456–57 (warranty 

claims), and 59460–62 (field reports). 

AAJ does not dispute our impairment 

analyses. 

We also disagree with AAJ’s related 

contentions that this information would 

protect consumers and that NHTSA did 

not dispute AAJ’s claim that the 

disclosure of EWR information is vital 

to the public interest but that NHTSA 

gave greater weight to competitive 

consequences that would result from the 

release of the data, which were 

presented by the automotive industry. 

AAJ’s conclusory contentions on the 

value of the information to the public 

were not supported in its submission. 

And, we had explained that the 

disclosure of the EWR data covered by 

the Appendices would provide limited, 

if any, safety benefits to the public, see, 

e.g., 72 FR at 59450, 59457, and 59462, 

but would be likely to cause substantial 

competitive harm to manufacturers and 

significantly impair the agency’s ability 

to carry out the EWR program 

effectively. See, e.g., 72 FR at 59441–

63.1 In the course of our assessment, we 

applied the FOIA law and considered 

the administrative record in reaching 

the determinations in Appendices C and 

D. AAJ and others had the opportunity 

to submit detailed comments presenting 

their views and any facts in support of 

them. 

The AAJ petition and article from 

WIRED do not provide justification for 

revision of the October 2007 rule and its 

appendices on the grounds that 

automobile companies would not likely 

suffer detrimental competitive harm 

from the disclosure of EWR data. The 

article points out that teardowns and 

related activities can yield valuable 

information about a competitor’s 

products, such as dimensions, parts 

weight, and how parts are assembled 

together. However, the AAJ petition and 

article do not indicate, much less 

demonstrate, that teardowns provide 

information comparable to EWR data. 

The preamble to the October 2007 

rule discussed EWR data and explained, 

among other things, the competitive 

value of those data. AAJ does not 

address how an entity could use teardown information to develop EWR 

information or comparable information. 

NHTSA addressed EWR consumer 

complaints, warranty claims, and field 

reports. See 72 FR at 59444–63. The 

compendium of EWR consumer 

complaint data provides valuable 

information on customer satisfaction 

and how well products were received, 

quality and field experience. See 72 FR 

at 59444–48. Tear-downs do not provide 

this information. See e.g., 72 FR at 

59445, 59447–48. 

EWR warranty data provide a 

compendium of information on the 

quality and in-use performance of 

significant systems or components. See 

72 FR at 59451–55. These data serve as 

a valuable indicator of the field 

performance and experience of parts 

and systems in vehicles and tires. See 


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Federal Register / Vol. 73, No. 90 / Thursday, May 8, 2008 / Proposed Rules 26073 

72 FR at 59454–55. Vehicle tear-downs 

do not provide this information. 

EWR field report data address 

malfunctions or performance problems. 

See 72 FR at 59457. They reflect the inuse experience of a manufacturer’s 

product collected at its expense and 

with the intent of identifying problems 

associated with its products. 72 FR at 

59459; see also 72 FR at 59457–60. 

These data provide in-use information 

on technologies employed by 

manufacturers and provide 

competitively valuable information on 

product performance and experience in 

the field, including at times reliability 

and durability of systems and 

components. 72 FR at 59459–60. Again, 

vehicle tear-downs do not provide this 

information. 

Furthermore, NHTSA addressed EWR 

production data and explained why 

they are confidential (other than for 

light vehicles). See, e.g., 72 FR at 

59441–44. AAJ’s petition does not 

address production data at all. NHTSA 

also explained why EWR common green 

tire identifiers are confidential. 72 FR at 

59462–63. AAJ does not address this 

information either. 

Also, AAJ does not address the issue 

of costs in collecting information on 

competitor products. In general, the 

ability of a competitor to engage in 

reverse engineering, which forms a basis 

for AAJ’s contentions, does not alone 

resolve the confidentiality of 

information; cost is a significant factor. 

See 72 FR at 59448 (quoting 

Worthington Compressors v. Costle, 662 

F.2d 45, 51–52 (D.C. Cir. 1981)). The 

article from Wired alluded to the 

considerable costs incurred by GM to 

conduct vehicle tear-downs. It noted 

that a full vehicle tear-down takes 

approximately six weeks and requires 

work by technicians and the use of 

sophisticated equipment. The article 

also noted that the process focuses on 

costs; cost estimators estimate the price 

of every part used in the examined 

vehicle. AAJ does not address any of 

these vehicle tear-down costs. If there 

was a means by which competitors 

could acquire the competitive 

information provided by EWR 

submissions, such as consumer 

complaints, warranty claims, and field 

reports, these costs would certainly be 

considerable. See, e.g., 72 FR at 59448, 

59454, and 59459. 

Lastly, AAJ does not address 

Appendix D or any of the FOIA 

Exemption 6 issues detailed in the 

preamble to the October 2007 rule 

related to the disclosure of the full VIN 

reported in an incident involving an 

alleged death or injury. See 72 FR at 

59463–65. For example, it does not 

address the privacy concerns raised by 

the agency if complete VIN information 

were disclosed. It does not address the 

fact that the agency’s final rule permits 

the disclosure of the first eleven (11) of 

the seventeen (17) characters that 

comprise each VIN or that the first 

eleven characters are sufficient to 

identify the make, model, and model 

year of a vehicle. And, it does not 

address relevant case law. See Center for 

Auto Safety v. NHTSA, 809 F. Supp. 148 

(D.D.C. 1993); see also 72 FR at 59465. 

III. Conclusion 

For the reasons stated above, the 

agency is denying AAJ’s petition for 

reconsideration. 

Authority: 49 U.S.C. 322; 5 U.S.C. 552; 49 

U.S.C. 30166, 49 U.S.C. 30167; 49 U.S.C. 

32307; 49 U.S.C. 32505; 49 U.S.C. 32708; 49 

U.S.C. 32910; 49 U.S.C. 33116; delegation of 

authority at 49 CFR 1.50. 

Issued on: April 30, 2008. 

James F. Ports, Jr., 

Deputy Administrator. 

[FR Doc. E8–10192 Filed 5–7–08; 8:45 am] 

BILLING CODE 4910–59–P 


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