30628 Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Proposed Rules 

C. Removal of Expired Rule 

Idaho submitted Docket 58–0101– 

1602 that repealed IDAPA 58.01.01.582 

‘‘Interim Conformity Provisions for 

Northern Ada County Former 

Nonattainment Area for PM–10’’ 

(section 582) because it was outdated 

and no longer applicable. Section 582 

was promulgated in 2001 as a temporary 

measure that was necessary only until a 

required maintenance plan could be 

developed to address CAA 

transportation conformity requirements 

for the PM10 Ada County nonattainment 

area. Idaho has since developed and 

adopted the required maintenance plan 

and EPA approved the maintenance 

plan on October 27, 2003 (68 FR 61106), 

effective November 26, 2003. Idaho 

repealed the expired section 582 (state 

effective March 28, 2017) and submitted 

the revision to EPA. EPA is therefore 

proposing to remove section 582 from 

Idaho’s SIP as requested by Idaho in its 

April 12, 2018 SIP submittal. 

III. Proposed Action 

EPA is proposing to approve, and 

incorporate by reference where 

appropriate, in Idaho’s SIP all revisions 

to IDAPA 58.01.01.107 Incorporations 

by Reference, except .03.f through .p 

(state effective March 28, 2018) as 

requested by Idaho on March 20, 2018, 

and as described in Section II.B. above. 

EPA is also proposing, as requested by 

Idaho on April 12, 2018, to remove 

IDAPA 58.01.01.582 Interim Conformity 

Provisions for Northern Ada County 

Former Nonattainment Area for PM 10 

from the Idaho SIP because it expired in 

2003 and Idaho has repealed it as a 

matter of state law (state effective March 

29, 2017). See Section II.C. (above). 

We have made the preliminary 

determination that the submitted SIP 

revisions are consistent with section 110 

and part C of Title I of the CAA. 

IV. Incorporation by Reference 

In this rule, EPA is proposing to 

include in a final rule, regulatory text 

that includes incorporation by 

reference. In accordance with 

requirements of 1 CFR 51.5, EPA is 

proposing to incorporate by reference 

the provisions described above in 

Section III. Also in this rule, EPA is 

proposing to remove, in a final EPA 

rule, regulatory text that includes 

incorporation by reference. In 

accordance with requirements of 1 CFR 

51.5, EPA is proposing to remove the 

incorporation by reference of IDAPA 

58.01.01.582 as described in Section III. 

EPA has made, and will continue to 

make, these documents generally 

available electronically through 

www.regulations.gov and in hard copy 

at the appropriate EPA office (see the 

ADDRESSES section of this preamble for 

more information). 

V. Statutory and Executive Orders 

Review 

Under the Clean Air Act, the 

Administrator is required to approve a 

SIP submission that complies with the 

provisions of the Act and applicable 

Federal regulations. 42 U.S.C. 7410(k); 

40 CFR 52.02(a). Thus, in reviewing SIP 

submissions, the EPA’s role is to 

approve state choices, provided that 

they meet the criteria of the Clean Air 

Act. Accordingly, this proposed action 

merely approves state law as meeting 

Federal requirements and does not 

impose additional requirements beyond 

those imposed by state law. For that 

reason, this proposed action: 

• Is not a ‘‘significant regulatory 

action’’ subject to review by the Office 

of Management and Budget under 

Executive Orders 12866 (58 FR 51735, 

October 4, 1993) and 13563 (76 FR 3821, 

January 21, 2011); 

• Is not an Executive Order 13771 (82 

FR 9339, February 2, 2017) regulatory 

action because SIP approvals are 

exempted under Executive Order 12866; 

• Does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act (44 

U.S.C. 3501 et seq.); 

• Is certified as not having a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.); 

• Does not contain any unfunded 

mandate or significantly or uniquely 

affect small governments, as described 

in the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4); 

• Does not have Federalism 

implications as specified in Executive 

Order 13132 (64 FR 43255, August 10, 

1999); 

• Is not an economically significant 

regulatory action based on health or 

safety risks subject to Executive Order 

13045 (62 FR 19885, April 23, 1997); 

• Is not a significant regulatory action 

subject to Executive Order 13211 (66 FR 

28355, May 22, 2001); 

• Is not subject to requirements of 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (15 U.S.C. 272 note) because 

it does not involve technical standards; 

and 

• Does not provide the EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

The proposed SIP would not be 

approved to apply on any Indian 

reservation land or in any other area 

where the EPA or an Indian tribe has 

demonstrated that a tribe has 

jurisdiction. In those areas of Indian 

country, the proposed rule does not 

have tribal implications and will not 

impose substantial direct costs on tribal 

governments or preempt tribal law as 

specified by Executive Order 13175 (65 

FR 67249, November 9, 2000). 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Incorporation by 

reference, Intergovernmental relations, 

Ozone, Particulate matter, Reporting 

and recordkeeping requirements, Sulfur 

oxides, Volatile organic compounds. 

Authority: 42 U.S.C. 7401 et seq. 

Dated: June 20, 2018. 

Michelle L. Pirzadeh, 

Regional Administrator, Region 10. 

[FR Doc. 2018–14096 Filed 6–28–18; 8:45 am] 

BILLING CODE 6560–50–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 51 

[WC Docket No. 18–155; FCC 18–68] 

Updating the Intercarrier 

Compensation Regime To Eliminate 

Access Arbitrage 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: In this document, the 

Commission proposed to adopt rules to 

curb the financial incentive to engage in 

access stimulation by giving accessstimulating LECs two choices for 

receiving calls. The access-stimulating 

LEC can choose either: To be financially 

responsible for the delivery of calls to 

its network, in which case intermediate 

access providers would charge the 

access-stimulating LEC for the delivery 

of calls; or to accept direct connections 

from long distance carriers seeking to 

terminate telephone calls to the LEC or 

from intermediate access providers of 

the long distance carriers’ choosing, 

which would allow the long distance 

carriers to bypass intermediate access 

providers chosen by the accessstimulating LEC. This document seeks 

comment on several alternatives, 

including requiring LECs engaged in 

access stimulation to immediately 

transition their terminating access 


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charges to bill-and-keep. This document 

also seeks comment on the effect the 

proposed rules will have on specific 

arbitrage schemes described in the 

record. Finally, it seeks comment on 

how to curb other arbitrage schemes. 

DATES: Comments are due on or before 

July 20, 2018; reply comments are due 

on or before August 3, 2018. 

ADDRESSES: You may submit comments, 

identified by WC Docket No. 18–155, by 

any of the following methods: 

• Federal Communications 

Commission’s website: http://

apps.fcc.gov/ecfs//. 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 email: FCC504@fcc.gov 

or phone: 202–418–0530 or TTY: 888– 

835–5322. 

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: 

Edward Krachmer, FCC Wireline 

Competition Bureau, Pricing Policy 

Division at 202–418–1525, or at 

Edward.Krachmer@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Notice of 

Proposed Rulemaking (NPRM), WC 

Docket No. 18–155; FCC 18–68, adopted 

on June 4, 2018 and released on June 5, 

2018. The full text of this document 

may be obtained at the following 

internet address: https://www.fcc.gov/ 

document/fcc-proposes-reformseliminate-intercarrier-compensationarbitrage. 

I. Background 

A. The Current Access Stimulation 

Rules 

1. To reduce access stimulation, as 

part of the USF/ICC Transformation 

Order, 76 FR 73860, FCC 11–161, the 

Commission defined ‘‘access 

stimulation’’ as occurring when two 

conditions are met. First, the involved 

LEC must have a ‘‘revenue sharing 

agreement,’’ which may be ‘‘express, 

implied, written or oral’’ that ‘‘over the 

course of the agreement, would directly 

or indirectly result in a net payment to 

the other party (including affiliates) to 

the agreement, in which payment’’ by 

the LEC is ‘‘based on the billing or 

collection of access charges from 

interexchange carriers or wireless 

carriers.’’ Second, the LEC must also 

meet one of two traffic tests. An accessstimulating LEC either has ‘‘an interstate 

terminating-to-originating traffic ratio of 

at least 3:1 in a calendar month, has had 

more than a 100 percent growth in 

interstate originating and/or terminating 

switched access minutes of use in a 

month compared to the same month in 

the preceding year.’’ Even if a LEC no 

longer meets either of these traffic tests, 

once it is considered to have engaged in 

access stimulation, this regulatory 

classification persists so long as the LEC 

maintains any revenue sharing 

agreement. 

2. A LEC that is engaged in access 

stimulation is required by our rules to 

reduce its access charges either by 

adjusting its rates to account for its high 

traffic volumes (if a rate-of-return LEC) 

or to reduce its access charges to those 

of the price cap LEC with the lowest 

switched access rates in the state (if a 

competitive LEC). These reduced rates 

lower the cost to interexchange carriers 

(IXCs) and the amount received by the 

LEC and the provider of high call 

volume services with which it has a 

revenue sharing agreement. 

B. Arbitrage Schemes After the USF/ICC 

Transformation Order 

3. Last year, the Wireline Competition 

Bureau (Bureau) issued a public 

notification, 82 FR 44754, seeking to 

refresh the record on ICC issues raised 

by the Commission in the USF/ICC 

Transformation Order. In response to 

that public notification, commenters 

argue that, notwithstanding prior 

Commission action, arbitrage continues 

as ‘‘companies engaged in access 

stimulation use a variety of tactics to 

prevent interexchange carriers from 

avoiding their excessive charges.’’ The 

record indicates that today’s access 

arbitrage schemes are often enabled by 

the use of intermediate access providers 

selected by the terminating LECs. When 

an intermediate access provider is in the 

call path, the IXC pays access charges 

on a per-minute-of-use (MOU) basis to 

the intermediate access provider and to 

the terminating LEC. This tactic evades 

existing Commission rules intended to 

stop access stimulation to the extent 

that an intermediate access provider is 

not captured by the definition of ‘‘access 

stimulation,’’ and thus, is not subject to 

those rules. 

4. Recent complaint activity suggests 

that much of the post-USF/ICC 

Transformation Order access arbitrage 

activity specifically involves LECs that 

use centralized equal access (CEA) 

providers to connect to IXCs. CEA 

providers are a specialized type of 

intermediate access provider that were 

formed in the 1980s to implement long 

distance equal access obligations 

(permitting end users to use 1+ dialing 

to reach the IXC of their choice) and to 

aggregate traffic for connection between 

rural incumbent LECs and other 

networks, particularly those of IXCs. 

There are currently three CEA 

providers, and the LECs that use them 

(subtending LECs) have traditionally 

been reliant on CEA providers for this 

equal access implementation as well as 

traffic measurement and billing. 

II. Discussion 

5. We propose solutions to the 

persistent, costly, and inefficient access 

stimulation arbitrage scheme described 

here and seek comment on how to 

prevent other types of arbitrage. We are 

mindful of the fact that practices adjust 

to regulatory change; therefore we invite 

comment on how to avoid introducing 

incentives for new types of arbitrage to 

arise. 

A. Requiring Access-Stimulating LECs 

Either To Be Financially Responsible for 

Calls Delivered to Their Networks or To 

Accept Direct Connections 

6. To rid the ICC system of the 

inefficiencies caused by access 

stimulation relating to intermediate 

access providers, we propose to require 

access-stimulating LECs to choose either 

to: (i) Bear the financial responsibility 

for the delivery of terminating traffic to 

their end office, or functional 

equivalent, or; (ii) accept direct 

connections from either the IXC or an 

intermediate access provider of the 

IXC’s choice. 

7. Revised Financial Responsibility. 

We seek comment on the first prong of 

our proposal and the impact it will have 

on access stimulation schemes. Under 

this prong, an access-stimulating LEC 

that does not offer direct connections to 

IXCs would bear all financial 

responsibility for applicable 

intermediate access provider 

terminating charges normally assessed 

to an IXC (from the point of indirect 

interconnection to the accessstimulating LEC’s end office or 

functional equivalent), and would be 

prohibited from assessing transport 

charges for any portion of transport 

between the intermediate access 

provider and the LEC’s end office or 

functional equivalent that the LEC, 

itself, provides. What are the advantages 

of placing the financial responsibility 

for delivery of traffic to its end office, 

or functional equivalent, on the accessstimulating LEC? Are there 

disadvantages? 

8. What implementation issues does 

this part of our proposal raise? What 

steps would intermediate access 

providers need to take to bill accessstimulating LECs for terminating access 


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and to not bill IXCs? How much time do 

access-stimulating LECs and 

intermediate access providers need to 

make modifications necessary to 

accomplish this proposed change in 

financial responsibility? We propose to 

require carriers to come into compliance 

with these requirements within 45 days 

of the effective date of any revised rule. 

Is that timeframe sufficient? For 

example, is it possible to implement 

necessary billing system changes within 

that time frame? We similarly propose 

to require any carriers that newly 

qualify as access-stimulating LECs to 

come into compliance with these 

requirements within 45 days of such 

qualification. 

9. For purposes of this proposal, we 

propose to define ‘‘intermediate access 

provider’’ as ‘‘any entity that carries or 

processes traffic at any point between 

the final interexchange carrier in a call 

path and the carrier providing end office 

access service.’’ We seek comment on 

the use of this definition in this context. 

Does it adequately capture the types of 

intermediate access providers currently 

benefiting from access stimulation 

schemes? Is it too narrow or too broad? 

10. Direct Connection. Commenters 

have argued that the volume of traffic 

bound for access-stimulating LECs 

justifies direct connections, but allege 

that access-stimulating LECs currently 

refuse to accept such connections. 

Direct connections do not pass through 

intermediate switches and are offered 

on a capacity basis at monthly-recurring 

rates, as opposed to a per-MOU rate. If 

there is a sufficient volume of traffic, the 

monthly charges for direct connections 

can often be substantially lower than 

per-MOU rates for an equivalent amount 

of traffic. As the second prong of our 

proposal, we propose to provide accessstimulating LECs the option to offer to 

connect directly to the IXC or an 

intermediate access provider of the 

IXC’s choice as an alternative to bearing 

financial responsibility for intermediate 

access provider charges and ceasing to 

bill their own transport charges. Under 

this proposal, IXCs would have the 

option of selecting an intermediate 

access provider that would bill the IXC 

for transport to the access-stimulating 

LEC on a dedicated basis. We seek 

comment on this proposal and on how 

best to implement it. We note that as a 

result of this election, an IXC would 

have the choice to connect with an 

access-stimulating LEC directly or 

indirectly through the LEC’s existing 

intermediate access provider or another 

IXC directly connecting to the accessstimulating LEC. 

11. For direct connections between an 

IXC (or an intermediate access provider 

of the IXC’s choosing) and an accessstimulating LEC to be established, not 

only must the access-stimulating LEC be 

willing and able to accept direct 

connections, but arrangements need to 

be made between the IXCs seeking to 

avail themselves of such connections 

and the LEC. If we adopt the approach 

we propose today, how long should we 

give existing access-stimulating LECs to 

indicate their willingness to accept 

direct connections and how long should 

we give them to implement those direct 

connections? How detailed a timeline 

should we adopt for this process? 

Should we adopt rules regarding the 


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conduct of any negotiations for direct 

connections? For example, should we 

adopt a timeframe within which 

negotiations must be concluded before 

the LEC must assume financial 

responsibility for the delivery of traffic 

or the impasse submitted to arbitration? 

Similarly, if, at some later date, an 

access-stimulating LEC decides to offer 

direct connections, what process should 

the access-stimulating LEC need to 

follow to cease bearing the financial 

obligation for the intermediate access 

providers’ charges? How should we 

address LECs that meet the definition of 

access-stimulating LEC after adoption of 

our rules? If they chose to offer direct 

connections, what time frame should we 

provide for making and implementing 

that decision? 

12. We propose to adopt a rule that 

makes clear that allowing accessstimulating LECs to accept direct 

connection as a means of not bearing 

financial responsibility for intermediate 

access provider charges does not carry 

with it an obligation for such LECs to 

extend their networks absent a request 

and an independent obligation to do so. 

Is this a reasonable limitation? Are there 

any other limitations or exceptions we 

should apply? Are there other rules we 

should adopt to help providers 

implement the option to accept direct 

connections if a provider makes that 

choice? For example, because IXCs are 

not currently directly connected to 

access-stimulating LECs in the scenario 

to which our proposal applies, a thirdparty vendor may need to connect the 

two networks via dedicated transport 

such as, perhaps, the current 

intermediate access provider. Are there 

any rules that we should adopt to 

facilitate such arrangements? 

13. One result of permitting accessstimulating LECs that subtend CEA 

providers to connect with IXCs directly 

(or an intermediate access provider of 

an IXC’s choice) would be to end the 

‘‘mandatory use’’ policy applicable to 

some CEA providers, at least with 

respect to access-stimulating LECs. 

Historically, this mandatory use policy 

has permitted the CEA providers in 

Iowa and South Dakota to require IXCs 

to connect to LECs that subtend the CEA 

provider indirectly through the CEA 

provider’s tandem switch rather than 

indirectly through another intermediate 

access provider or directly to the 

subtending LEC. In initially permitting 

this practice almost thirty years ago, the 

Commission concluded that it ‘‘[did] not 

believe that the mandatory termination 

requirement for interstate traffic is 

unreasonable or differs substantially 

from the normal way access is provided, 

as both an originating and terminating 

service by the local exchange 

company.’’ 

14. It appears that access stimulation, 

particularly when practiced by 

competitive LECs, which were formed 

well after CEA providers were 

established, presents a reasonable 

circumstance for departing from the 

policy of permitting mandatory use 

requirements because delivery of such 

traffic, particularly in the pertinent 

volumes, was not the purpose for which 

CEA providers were formed. We seek 

comment on this assumption, and on 

the impact of this proposal on CEA 

providers, on the LECs that subtend 

CEA providers, and on the customers of 

such subtending LECs. For example, to 

the extent that creating the opportunity 

for access-stimulation traffic to bypass 

CEA providers threatens the viability of 

CEA providers, we seek comment on 

whether and how this potential effect 

should be addressed. Are there other 

companies that can perform the 

traditional functions of CEA providers, 

including equal access implementation 

and traffic measurement and billing? 

Recognizing that most states do not have 

CEA providers, are there ways that 

equal access and traffic identification 

and measurement are handled by small 

LECs in those states that can inform our 

decision making in this proceeding? 

15. Notice Requirement. We propose 

to require access-stimulating LECs to 

notify affected IXCs and intermediate 

access providers of their intent to accept 

financial responsibility for calls 

delivered to their networks or to accept 

direct connections from IXCs or 

intermediate access providers of the 

IXCs’ choosing. Should we also require 

the access-stimulating LEC to provide 

public, written notice of its choice to the 

Commission? Should we provide 

specific requirements regarding the form 

and content of such notice? For 

example, should we require an accessstimulating LEC to accept direct 

connections at current points of 

interconnection (POI) with intermediate 

access providers, as well as at the LECs’ 

end office, and to provide notice of 

those locations? Or, should we allow an 

access-stimulating LEC to choose where 

to provide POIs and to specify those 

locations in its notice? Should accessstimulating LECs also provide notice to 

the Commission and state commissions 

of their choice to accept direct 

connections and of the location of their 

POIs? To ensure that the investment 

made by an IXC to extend its network 

to directly interconnect with an accessstimulating LEC is not stranded, should 

an access-stimulating LEC be prohibited 

from ending its election of direct 

connections once made? Should such a 

prohibition be permanent or for a 

specified period of time? 

16. Impact of this Proposal. We seek 

comment on the costs and benefits of 

our proposal. To what extent will our 

two-pronged proposal alleviate market 

distortions created by the ability of 

access-stimulating LECs to bill for 

switched transport services at rates that 

our rules have not required to be 

reduced below 2011 interstate levels? 

Will the incentives created by our 

proposal for access-stimulating LECs to 

accept direct connections (to avoid 

bearing intermediate access provider 

charges imposed by a provider of the 

access-stimulating LEC’s choosing) 

alleviate the problem of IXCs paying 

relatively-high tandem-switched 

transport rates by giving IXCs more 

options to reach end users? 

17. How will our proposal affect 

incentives for carriers to migrate their 

services to IP? To what extent do parties 

expect that direct connections would be 

provided in time division multiplexed 

(TDM) format rather than IP? Are there 

circumstances under which an accessstimulating LEC should be required, 

upon request, to interconnect using IP 

rather than TDM and bear any costs 

necessary to do so? Are calls bound for 

high call volume service providers 

ultimately converted to IP for delivery? 

Would requiring IP interconnection 

obviate the need to convert TDM traffic 

to IP for delivery? 

18. NTCA et al. Proposal. NTCA et al. 

has recommended that we adopt rules 

similar to the first prong of our 

proposal, but without providing an 

access-stimulating LEC the option of 

electing to accept direct connections as 

a means of avoiding bearing 

intermediate access provider charges. 

Under the NTCA et al. proposal, within 

45 days of the effective date of the 

implementing rules, access-stimulating 

LECs would be required to revise their 

tariffs to remove any terminating 

interstate tandem switching and tandem 

transport charges of their own and also 

begin to assume financial responsibility 

for all intermediate switched access 

provider interstate tandem switching 

and transport charges for traffic bound 

for such access-stimulating LECs. The 

NTCA et al. proposal would also require 

access-stimulating LECs to provide 

written notice to all affected providers, 

including intermediate access providers, 

of the substance of these tariff revisions 

at the time that such tariff revisions are 

filed, as well as the fact that such 

access-stimulating LECs will be bearing 

financial responsibility for pertinent 

intermediate switched access provider 

interstate tandem switching and 

transport charges. 


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19. Although the NTCA et al. proposal 

does not preclude an access-stimulating 

LEC from avoiding incurring 

intermediate access provider charges by 

beginning to accept direct connections, 

it also does not provide IXCs any 

incentive to accept offers of direct 

connection from such LECs. By 

permitting access-stimulating LECs to 

elect to accept direct connections, our 

proposal seeks to provide a formal 

means by which access-stimulating 

LECs may eventually avoid incurring 

intermediate access provider charges. 

We seek comment on the NTCA et al. 

proposal both as an independent 

proposal and also as it relates to our 

proposal above. 

20. CenturyLink Proposal. 

CenturyLink suggests that we consider 

an approach similar to our proposal, but 

with broader applicability. Rather than 

focusing on access-stimulating LECs, 

CenturyLink recommends shifting 

financial responsibility to any LEC that 

declines to accept a request for direct 

interconnection for the purpose of 

terminating access traffic. We seek 

comment on this recommendation. 

What would be the impact of such an 

approach on the affected companies and 

their customers? 

B. Requiring All Access-Stimulating 

LECs To Transition to Bill-and-Keep 

21. If we do not adopt rules requiring 

access-stimulating LECs to either choose 

to accept financial responsibility for the 

delivery of calls or to accept direct 

connections, should we reduce all 

terminating tandem switching, common 

transport, and tandem-switched 

transport rate elements for access 

stimulators to bill-and-keep? Moving 

these access charges to bill-and-keep 

would be consistent with our 

overarching goals of discouraging 

arbitrage, in particular access 

stimulation, and ultimately 

transitioning all traffic to bill-and-keep. 

It would also be consistent with the 

Commission’s finding in the USF/ICC 

Transformation Order that with respect 

to terminating traffic, the LEC’s end user 

is the cost causer and therefore the LEC 

should look first to its subscribers to 

recover the costs of it network. To what 

extent would this approach resolve the 

access arbitrage concerns identified in 

this NPRM? We also seek comment on 

how this approach fits with the other 

proposals in this NPRM. For example, if 

we reduce all terminating access charges 

to bill-and-keep is there any remaining 

incentive for carriers to stimulate 

traffic? We also seek comment on any 

implementation issues or concerns 

related to the proposal. Should we 

provide for a transition period to billand-keep for access stimulators? If so, 

how long should the transition last and 

what steps should it include? 

22. We also seek comment on whether 

to require an access-stimulating LEC to 

transition its dedicated transport and 

originating rates to bill-and-keep. The 

only potential access arbitrage scheme 

of which we are aware regarding 

originating access concerns 8YY traffic, 

which we leave for separate 

consideration. Outside the 8YY context, 

are there arbitrage schemes involving 

originating access about which we 

should be concerned? Can they be 

addressed by a transition to bill-andkeep or by other proposals in this 

NPRM? 

C. Defining Access Stimulation 

23. Given evidence that access 

stimulation schemes are still being 

perpetrated notwithstanding our 

existing rules, we seek comment on 

whether, and if so how, to revise the 

current definition of access stimulation 

to more accurately and effectively target 

harmful access stimulation practices. 

What has been the impact of the current 

definition over the last seven years? Has 

it proved effective at identifying actors 

that are distorting the ICC system for 

their own gain? If not, how can we 

revise the definition to more accurately 

identify these types of harmful 

practices? Should we, for example, 

modify the ratios or triggers in the 

definition? If so, how should those 

ratios or triggers be modified? Should 

we adopt triggers that relate to the 

stimulation of tandem and transport 

services? If so, what should those 

triggers be? Is the current revenue 

sharing agreement requirement in our 

rules sufficiently broad or should it be 

revised, and if so how? Or, should we 

remove the revenue sharing portion of 

the definition, because access 

stimulation seems to be occurring in 

some instances even in the absence of 

revenue sharing? Do commenters 

believe that revenue sharing alone is an 

indication of access stimulation? If so, 

should we revise our rules so that the 

existence of a revenue sharing 

agreement triggers the access 

stimulation rule? How will we know if 

parties are engaged in revenue sharing? 

Should we require these parties to selfreport? If so, we seek comment on how 

to implement a self-reporting 

requirement. 

24. Alternatively, based on parties’ 

experience with our existing access 

stimulation rules, is there reason to find 

that access stimulation itself is unjust 

and unreasonable because of the 

imposition of excess charges on IXCs, 

wireless carriers, and their customers? 

Or, is there a subset of such activities 

that we should separately identify as 

unlawful? 

25. To address specific concerns 

identified in the record, commenters 

should also consider the extent to which 

the access stimulation definition should 

be revised to address intermediate 

access providers. Do intermediate access 

providers that are not engaged in access 

stimulation as defined in our current 

rules nevertheless benefit from access 

stimulation schemes? To remove 

incentives for intermediate access 

providers to enable access arbitrage 

schemes, aside from the proposals 

discussed above, should we adopt new 

access stimulation rules, or modify our 

existing rules, to apply specifically to 

intermediate access providers? Would 

doing so be unduly burdensome to 

intermediate access providers or small 

LECs who subtend them? Are there 

technical obstacles that would make it 

infeasible for intermediate access 

providers to comply with the 

Commission’s current, or any modified, 

access stimulation rules? Would a 

requirement that access-stimulating 

subtending LECs notify the intermediate 

access provider that they are engaged in 

access stimulation and identify the 

traffic that is being stimulated provide 

a practical solution? 

D. Addressing Other Arbitrage Schemes, 

and Alternative Approaches to 

Arbitrage 

26. The record indicates the existence 

of at least three other types of arbitrage 

schemes. We seek comment on the 

prevalence and impact of these types of 

schemes described in more detail below. 

Will any of the rules we propose today 

help retard these schemes? Are there 

other rules we should adopt to prevent 

these schemes? 

27. First, parties describe an access 

arbitrage scheme involving a revenue 

sharing or other type of agreement 

between an intermediate access 

provider and a terminating carrier that 

may not meet the definition of access 

stimulation under our rules, such as a 

Commercial Mobile Radio Service 

(CMRS) carrier. CMRS carriers are 

prohibited from tariffing access charges. 

However, intermediate access providers 

that transport traffic from an IXC to 

CMRS carriers can charge for access 

services through filed tariffs or 

negotiated agreements. Some IXCs claim 

that certain CMRS carriers that 

previously offered direct connections 

between their networks and the IXCs’ 

networks have begun to use 

intermediate access providers to 

terminate their traffic from IXCs, to reap 

the benefit of alleged revenue sharing 


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agreements with the intermediate access 

providers. Should we adopt rules that 

discourage all revenue sharing 

agreements between terminating 

providers and intermediate access 

providers? If a terminating provider 

requires that some or all traffic be 

routed through an intermediate access 

provider, should we require the 

terminating provider to pay the 

intermediate access provider’s charges? 

Or are there instances where it is most 

efficient or beneficial in other ways for 

a carrier to require traffic be routed 

through an intermediate access 

provider? What would be the costs and 

benefits of requiring a terminating 

provider that requires the use of a 

specific intermediate access provider to 

pay the intermediate access provider’s 

charges? And would the cost-benefit 

analysis change if we focused any such 

rules on large terminating providers— 

i.e., those with 100,000 or more ‘‘lines’’ 

at the holding company level? 

28. Second, because LECs and 

intermediate access providers receive 

greater compensation from IXCs the 

further the LEC or intermediate access 

provider carries the traffic to reach a 

POI with the IXC, some commenters 

allege that LECs have changed their POI 

with IXCs for the sole purpose of 

artificially inflating their per-MOU, permile transport rates and revenue. This 

scheme is often referred to as mileage 

pumping. Shortly after the USF/ICC 

Transformation Order, the Commission 

released an order addressing this 

practice finding such network changes 

were merely sham arrangements and 

that the LECs did not have the unilateral 

right under their tariffs to make such 

changes. Nevertheless, allegations of 

mileage pumping continue. We seek 

comment on the prevalence of this 

practice, its impact in the market, and 

the likely effect of the rules proposed in 

this NPRM on this concern. What more 

can we do to prevent these practices? 

29. Third, some commenters raise 

concerns about the addition of 

superfluous network facilities for which 

the LEC can bill switched access 

charges, but the rates for which are not 

subject to the current transition to billand-keep. This practice is sometimes 

referred to as ‘‘daisy chaining.’’ This 

practice may inefficiently inflate permile charges and insert unnecessary 

facilities to justify assessment of 

additional rate elements, such as remote 

switches that subtend end offices. What 

actions can we take to prevent daisy 

chaining? 

30. Would the CenturyLink suggestion 

of shifting financial responsibility to 

LECs that decline to accept direct 

connections eliminate or reduce the 

three types of inefficient routing 

schemes described above? Even if an 

IXC chose not to seek a direct 

connection, would the risk of IXCs 

seeking direct connections provide a 

disciplining counterweight to some 

providers’ incentives to engage in 

mileage pumping or daisy-chaining? 

What would be the impact on affected 

parties? 

E. Other Issues 

31. We recognize that any action we 

take to address access arbitrage may 

affect the costs to carriers and their 

customers and the choices they make, as 

they provide and receive 

telecommunications services. 

Consumers that enjoy high call volume 

services could be affected by regulatory 

adjustments targeting arbitrage. Are 

there efficiencies that are in the public’s 

interest in what some describe as 

arbitrage? Would addressing the 

arbitrage described here unfairly 

advantage any particular competitor or 

class of competitors? If so, are there 

alternative means to address the 

arbitrage issues described here and 

presented in the record? How would the 

changes proposed herein affect small 

businesses? 

32. In the USF/ICC Transformation 

Order, the Commission considered 

direct costs imposed on consumers by 

arbitrage schemes. The Commission also 

found that access stimulation diverts 

‘‘capital away from more productive 

uses such as broadband deployment.’’ 

We believe this continues to be true. Are 

there additional, more-current data 

available to estimate the annual cost of 

arbitrage schemes to companies, long 

distance rate payers, and consumers in 

general? Likewise, are there data 

available to quantify the resources being 

diverted from infrastructure investment 

because of arbitrage schemes? To what 

degree are consumers indirectly affected 

by potentially inefficient networking 

and cost recovery due to current 

regulations and the exploitation of those 

regulations? Are there other costs or 

benefits we should consider? 

F. Legal Authority 

33. The proposals in this NPRM, 

targeted to address the particular issues 

described in the record, continue the 

work the Commission began in the USF/ 

ICC Transformation Order to stop 

economically wasteful arbitrage activity 

and the damage it causes in 

telecommunications markets. Therefore, 

we rely on the legal authority the 

Commission set forth in the USF/ICC 

Transformation Order, as support for 

modifications to rules we propose in 

this NPRM. The Commission made clear 

that its rules to address access arbitrage 

would result in interstate access rates 

‘‘consistent with section 201(b) of the 

Act.’’ The Commission likewise found 

that ‘‘[o]ur statutory authority to 

implement bill-and-keep as the default 

framework for the exchange of traffic 

with LECs flows directly from sections 

251(b)(5) and 201(b) of the Act.’’ We 

seek comment on whether additional 

statutory authority is available, or 

necessary, to support the actions 

proposed here. 

III. Rule Revisions 

34. We seek comment on the rule 

changes proposed at the end of this 

document. What, if any, other rule 

additions or modifications should we 

make to codify these proposals? Are 

there any conforming rule changes that 

commenters consider necessary? For 

example, we intend for any rules that 

we adopt to apply not only to interstate 

traffic, but also intrastate traffic. Do our 

proposed rules adequately address this? 

Are there any conflicts or 

inconsistencies between existing rules 

and those proposed herein? We ask 

commenters to provide any other 

proposed actions and rule additions or 

modifications we should consider to 

address the access arbitrage schemes 

described in this NPRM including 

updates to any relevant comments or 

proposals made in response to the USF/ 

ICC Transformation FNPRM, 76 FR 

78383. 

IV. Procedural Matters 

35. Filing Instructions. Pursuant to 

§§ 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 the Commission’s Electronic 

Comment Filing System (ECFS). 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: https://

www.fcc.gov/ecfs/ 

• Paper Filers: Parties who choose to 

file by paper must file an original and 

one copy 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. All 


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filings must be addressed to the 

Commission’s Secretary, Office of the 

Secretary, Federal Communications 

Commission. 

• 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 8:00 a.m. to 7:00 p.m. All hand 

deliveries must be held together with 

rubber bands or fasteners. Any 

envelopes and boxes 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 9050 

Junction Drive, Annapolis Junction, MD 

20701. 

• U.S. Postal Service first-class, 

Express, and Priority mail must be 

addressed to 445 12th Street SW, 

Washington, DC 20554. 

36. People with Disabilities. To 

request materials in accessible formats 

for people with disabilities (braille, 

large print, electronic files, audio 

format), send an email to fcc504@fcc.gov 

or call the Consumer & Governmental 

Affairs Bureau at 202–418–0530 (voice), 

202–418–0432 (tty). 

37. Ex Parte Requirements. This 

proceeding shall be treated as a ‘‘permitbut-disclose’’ proceeding in accordance 

with the Commission’s ex parte rules. 

Persons making ex parte presentations 

must file a copy of any written 

presentation or a memorandum 

summarizing any oral presentation 

within two business days after the 

presentation (unless a different deadline 

applicable to the Sunshine period 

applies). Persons making oral ex parte 

presentations are reminded that 

memoranda summarizing the 

presentation must: (1) List all persons 

attending or otherwise participating in 

the meeting at which the ex parte 

presentation was made; and (2) 

summarize all data presented and 

arguments made during the 

presentation. If the presentation 

consisted in whole or in part of the 

presentation of data or arguments 

already reflected in the presenter’s 

written comments, memoranda, or other 

filings in the proceeding, the presenter 

may provide citations to such data or 

arguments in his or her prior comments, 

memoranda, or other filings (specifying 

the relevant page and/or paragraph 

numbers where such data or arguments 

can be found) in lieu of summarizing 

them in the memorandum. Documents 

shown or given to Commission staff 

during ex parte meetings are deemed to 

be written ex parte presentations and 

must be filed consistent with Rule 

1.1206(b). In proceedings governed by 

Rule 1.49(f) or for which the 

Commission has made available a 

method of electronic filing, written ex 

parte presentations and memoranda 

summarizing oral ex parte 

presentations, and all attachments 

thereto, must be filed through the 

electronic comment filing system 

available for that proceeding, and must 

be filed in their native format (e.g., .doc, 

.xml, .ppt, searchable .pdf). Participants 

in this proceeding should familiarize 

themselves with the Commission’s ex 

parte rules. 

38. Paperwork Reduction Act 

Analysis. This document contains 

proposed new and modified 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 to comment 

on the information collection 

requirements contained in this 

document, as required by the Paperwork 

Reduction Act of 1995, Public Law 104– 

13. 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. 

39. Initial Regulatory Flexibility Act 

Analysis. Pursuant to the Regulatory 

Flexibility Act (RFA), we have prepared 

an Initial Regulatory Flexibility 

Analysis (IRFA) of the possible 

significant economic impact on small 

entities of the policies and actions 

considered in this NPRM. The 

Commission prepared an IRFA to 

accompany the first Further Notice of 

Proposed Rulemaking in this docket, 

USF/ICC Transformation FNPRM. The 

questions asked in this NPRM are 

different than those the Commission 

sought comment on previously. 

Therefore, we have prepared a new 

IRFA to reflect the substance of this 

NPRM. The text of the IRFA is set forth 

in section V of this document. 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’s Consumer 

and Governmental Affairs Bureau, 

Reference Information Center, will send 

a copy of the NPRM, including the 

IRFA, to the Chief Counsel for Advocacy 

of the Small Business Administration. 

40. Contact Person. For further 

information about this proceeding, 

please contact Edward Krachmer, FCC 

Wireline Competition Bureau, Pricing 

Policy Division, Room 5–A230, 445 12th 

Street SW, Washington, DC 20554, (202) 

418–1525, Edward.Krachmer@fcc.gov. 

V. Initial Regulatory Flexibility 

Analysis 

41. As required by the Regulatory 

Flexibility Act of 1980, as amended 

(RFA), we have prepared this 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 (NPRM). We request 

written public comments on this IRFA. 

Comments must be identified as 

responses to the IRFA and must be filed 

by the deadlines for comments provided 

on the first page of the NPRM. We 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. 

A. Need for, and Objective of, the 

Proposed Rules 

42. In the USF/ICC Transformation 

FNPRM, the Commission sought 

comment on additional steps to 

implement the bill-and-keep regime as 

well as possible communications 

network definitional changes, the 

appropriate recovery mechanisms going 

forward and VoIP and IP-to-IP related 

intercarrier compensation issues. In this 

NPRM we propose to adopt rules to 

address access arbitrage schemes that 

persist despite previous Commission 

action. We propose to adopt rules to 

give access-stimulating LECs two 

choices about how they connect to IXCs. 

First, an access-stimulating LEC can 

choose to be financially responsible for 

calls delivered to its networks so it, 

rather than IXCs, pays for the delivery 

of calls to its end office or the functional 

equivalent. Or, second, instead of 

accepting this financial responsibility, 

an access-stimulating LEC can choose to 

accept direct connections from either 

the IXC or an intermediate access 

provider of the IXC’s choosing. In the 

alternative, we seek comment on 

moving all traffic bound for an accessstimulating LEC to bill-and-keep. The 

NPRM also seeks comment on potential 

revisions to the definition of access 

stimulation, in particular to address 

intermediate access providers. The 

record in this proceeding suggests 

additional access arbitrage activities are 

occurring, including: (1) Use of 

intermediate access providers by 

Commercial Mobile Radio Carriers; (2) 

mileage pumping; and (3) daisy 

chaining. Comment is sought on how 

best to address these activities. The 


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NPRM seeks comment on the costs and 

benefits of these proposals. 

B. Legal Basis 

43. The legal basis for any action that 

may be taken pursuant to this NPRM is 

contained in sections 1, 2, 4(i), 201–206, 

214, 218–220, 251, 252, 254, 256, 303(r), 

and 403 of the Communications Act of 

1934, as amended, 47 U.S.C. 151, 152, 

154(i), 201–206, 214, 218–220, 251, 252, 

254, 256, 303(r), and 403. 

C. Description and Estimate of the 

Number of Small Entities to Which the 

Proposed Rules Will Apply 

44. 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 rule revisions, 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. 

45. Small Businesses, Small 

Organizations, Small Governmental 

Jurisdictions. Our actions, over time, 

may affect small entities that are not 

easily categorized at present. We 

therefore describe here, at the outset, 

three comprehensive small entity size 

standards that could be directly affected 

herein. First, while there are industry 

specific size standards for small 

businesses that are used in the 

regulatory flexibility analysis, according 

to data from the SBA’s Office of 

Advocacy, in general a small business is 

an independent business having fewer 

than 500 employees. These types of 

small businesses represent 99.9% of all 

businesses in the United States which 

translates to 28.8 million businesses. 

Next, the type of small entity described 

as 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 August 2016, there 

were approximately 356,494 small 

organizations based on registration and 

tax data filed by nonprofits with the 

Internal Revenue Service (IRS). Finally, 

the small entity described as a ‘‘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.’’ 

U.S. Census Bureau data from the 2012 

Census of Governments indicate that 

there were 90,056 local governmental 

jurisdictions consisting of general 

purpose governments and special 

purpose governments in the United 

States. Of this number there were 37, 

132 General purpose governments 

(county, municipal and town or 

township) with populations of less than 

50,000 and 12,184 Special purpose 

governments (independent school 

districts and special districts) with 

populations of less than 50,000. The 

2012 U.S. Census Bureau data for most 

types of governments in the local 

government category show that the 

majority of these governments have 

populations of less than 50,000. Based 

on this data we estimate that at least 

49,316 local government jurisdictions 

fall in the category of ‘‘small 

governmental jurisdictions.’’ 

46. Wired Telecommunications 

Carriers. The U.S. Census Bureau 

defines this industry as ‘‘establishments 

primarily engaged in operating and/or 

providing access to transmission 

facilities and infrastructure that they 

own and/or lease for the transmission of 

voice, data, text, sound, and video using 

wired communications networks. 

Transmission facilities may be based on 

a single technology or a combination of 

technologies. Establishments in this 

industry use the wired 

telecommunications network facilities 

that they operate to provide a variety of 

services, such as wired telephony 

services, including VoIP services, wired 

(cable) audio and video programming 

distribution, and wired broadband 

internet services. By exception, 

establishments providing satellite 

television distribution services using 

facilities and infrastructure that they 

operate are included in this industry.’’ 

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. Census data 

for 2012 show that there were 3,117 

firms that operated that year. Of this 

total, 3,083 operated with fewer than 

1,000 employees. Thus, under this size 

standard, the majority of firms in this 

industry can be considered small. 

47. Local Exchange Carriers (LECs). 

Neither the Commission nor the SBA 

has developed a size standard for small 

businesses specifically applicable to 

local exchange services. The closest 

applicable NAICS Code category is 

Wired Telecommunications Carriers and 

under the applicable SBA size standard, 

such a business is small if it has 1,500 

or fewer employees. U.S. Census data 

for 2012 show that there were 3,117 

firms that operated that year. Of that 

total, 3,083 operated with fewer than 

1,000 employees. Thus under this 

category and the associated size 

standard, the Commission estimates that 

the majority of local exchange carriers 

are small entities. 

48. Incumbent LECs. Neither the 

Commission nor the SBA has developed 

a small business size standard 

specifically for incumbent local 

exchange services. The closest 

applicable NAICS Code category is 

Wired Telecommunications Carriers as 

defined above. Under that size standard, 

such a business is small if it has 1,500 

or fewer employees. According to 

Commission data, 3,117 firms operated 

in that year. Of this total, 3,083 operated 

with fewer than 1,000 employees. 

Consequently, the Commission 

estimates that most providers of 

incumbent local exchange service are 

small businesses that may be affected by 

the rules and policies adopted. Three 

hundred and seven (307) Incumbent 

Local Exchange Carriers reported that 

they were incumbent local exchange 

service providers. Of this total, an 

estimated 1,006 have 1,500 or fewer 

employees. 

49. Competitive Local Exchange 

Carriers (Competitive LECs), 

Competitive Access Providers (CAPs), 

Shared-Tenant Service Providers, and 

Other Local Service Providers. Neither 

the Commission nor the SBA has 

developed a small business size 

standard specifically for these service 

providers. The appropriate NAICS Code 

category is Wired Telecommunications 

Carriers, as defined above. Under that 

size standard, such a business is small 

if it has 1,500 or fewer employees. U.S. 

Census data for 2012 indicate that 3,117 

firms operated during that year. Of that 

number, 3,083 operated with fewer than 

1,000 employees. Based on this data, the 

Commission concludes that the majority 

of Competitive LECS, CAPs, SharedTenant Service Providers, and Other 

Local Service Providers, are small 

entities. According to Commission data, 

1,442 carriers reported that they were 

engaged in the provision of either 

competitive local exchange services or 

competitive access provider services. Of 

these 1,442 carriers, an estimated 1,256 

have 1,500 or fewer employees. In 

addition, 17 carriers have reported that 

they are Shared-Tenant Service 

Providers, and all 17 are estimated to 

have 1,500 or fewer employees. Also, 72 

carriers have reported that they are 

Other Local Service Providers. Of this 

total, 70 have 1,500 or fewer employees. 

Consequently, based on internally 

researched FCC data, the Commission 


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estimates that most providers of 

competitive local exchange service, 

competitive access providers, SharedTenant Service Providers, and Other 

Local Service Providers are small 

entities. 

50. We have included small 

incumbent 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. 

51. Interexchange Carriers (IXCs). 

Neither the Commission nor the SBA 

has developed a definition for 

Interexchange Carriers. The closest 

NAICS Code category is Wired 

Telecommunications Carriers as defined 

above. The applicable size standard 

under SBA rules is that such a business 

is small if it has 1,500 or fewer 

employees. U.S. Census data for 2012 

indicates that 3,117 firms operated 

during that year. Of that number, 3,083 

operated with fewer than 1,000 

employees. According to internally 

developed Commission data, 359 

companies reported that their primary 

telecommunications service activity was 

the provision of interexchange services. 

Of this total, an estimated 317 have 

1,500 or fewer employees. 

Consequently, the Commission 

estimates that the majority of IXCs are 

small entities. 

52. Local Resellers. The SBA has 

developed a small business size 

standard for the category of 

Telecommunications Resellers. The 

Telecommunications Resellers industry 

comprises establishments engaged in 

purchasing access and network capacity 

from owners and operators of 

telecommunications networks and 

reselling wired and wireless 

telecommunications services (except 

satellite) to businesses and households. 

Establishments in this industry resell 

telecommunications; they do not 

operate transmission facilities and 

infrastructure. Mobile virtual network 

operators (MVNOs) are included in this 

industry. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. Census data for 2012 

show that 1,341 firms provided resale 

services during that year. Of that 

number, all operated with fewer than 

1,000 employees. Thus, under this 

category and the associated small 

business size standard, the majority of 

these resellers can be considered small 

entities. 

53. Toll Resellers. The Commission 

has not developed a definition for Toll 

Resellers. The closest NAICS Code 

Category is Telecommunications 

Resellers. The Telecommunications 

Resellers industry comprises 

establishments engaged in purchasing 

access and network capacity from 

owners and operators of 

telecommunications networks and 

reselling wired and wireless 

telecommunications services (except 

satellite) to businesses and households. 

Establishments in this industry resell 

telecommunications; they do not 

operate transmission facilities and 

infrastructure. Mobile virtual network 

operators (MVNOs) are included in this 

industry. 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. Census data for 2012 

show that 1,341 firms provided resale 

services during that year. Of that 

number, 1,341 operated with fewer than 

1,000 employees. Thus, under this 

category and the associated small 

business size standard, the majority of 

these resellers can be considered small 

entities. According to Commission data, 

881 carriers have reported that they are 

engaged in the provision of toll resale 

services. Of this total, an estimated 857 

have 1,500 or fewer employees. 

Consequently, the Commission 

estimates that the majority of toll 

resellers are small entities. 

54. Other Toll Carriers. Neither the 

Commission nor the SBA has developed 

a definition for small businesses 

specifically applicable to Other Toll 

Carriers. This category includes toll 

carriers that do not fall within the 

categories of interexchange carriers, 

operator service providers, prepaid 

calling card providers, satellite service 

carriers, or toll resellers. The closest 

applicable NAICS Code category is for 

Wired Telecommunications Carriers as 

defined above. Under the applicable 

SBA size standard, such a business is 

small if it has 1,500 or fewer employees. 

Census data for 2012 shows that there 

were 3,117 firms that operated that year. 

Of this total, 3,083 operated with fewer 

than 1,000 employees. Thus, under this 

category and the associated small 

business size standard, the majority of 

Other Toll Carriers can be considered 

small. According to internally 

developed Commission data, 284 

companies reported that their primary 

telecommunications service activity was 

the provision of other toll carriage. Of 

these, an estimated 279 have 1,500 or 

fewer employees. Consequently, the 

Commission estimates that most Other 

Toll Carriers are small entities. 

55. Prepaid Calling Card Providers. 

The SBA has developed a definition for 

small businesses within the category of 

Telecommunications Resellers. Under 

that SBA definition, such a business is 

small if it has 1,500 or fewer employees. 

According to the Commission’s Form 

499 Filer Database, 500 companies 

reported that they were engaged in the 

provision of prepaid calling cards. The 

Commission does not have data 

regarding how many of these 500 

companies have 1,500 or fewer 

employees. Consequently, the 

Commission estimates that there are 500 

or fewer prepaid calling card providers 

that may be affected by the rules. 

56. Wireless Telecommunications 

Carriers (except Satellite). This industry 

comprises establishments engaged in 

operating and maintaining switching 

and transmission facilities to provide 

communications via the airwaves. 

Establishments in this industry have 

spectrum licenses and provide services 

using that spectrum, such as cellular 

services, paging services, wireless 

internet access, and wireless video 

services. The appropriate size standard 

under SBA rules is that such a business 

is small if it has 1,500 or fewer 

employees. For this industry, U.S. 

Census data for 2012 show that there 

were 967 firms that operated for the 

entire year. Of this total, 955 firms had 

employment of 999 or fewer employees 

and 12 had employment of 1000 

employees or more. Thus under this 

category and the associated size 

standard, the Commission estimates that 

the majority of wireless 

telecommunications carriers (except 

satellite) are small entities. 

57. The Commission’s own data— 

available in its Universal Licensing 

System—indicate that, as of October 25, 

2016, there are 280 Cellular licensees 

that may be affected by our actions 

today. The Commission does not know 

how many of these licensees are small, 

as the Commission does not collect that 

information for these types of entities. 

Similarly, according to internally 

developed Commission data, 413 

carriers reported that they were engaged 

in the provision of wireless telephony, 

including cellular service, Personal 

Communications Service, and 

Specialized Mobile Radio Telephony 

services. Of this total, an estimated 261 


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Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Proposed Rules 30637 

have 1,500 or fewer employees, and 152 

have more than 1,500 employees. Thus, 

using available data, we estimate that 

the majority of wireless firms can be 

considered small. 

58. Wireless Communications 

Services. This service can be used for 

fixed, mobile, radiolocation, and digital 

audio broadcasting satellite uses. The 

Commission defined ‘‘small business’’ 

for the wireless communications 

services (WCS) auction as an entity with 

average gross revenues of $40 million 

for each of the three preceding years, 

and a ‘‘very small business’’ as an entity 

with average gross revenues of $15 

million for each of the three preceding 

years. The SBA has approved these 

definitions. 

59. Wireless Telephony. Wireless 

telephony includes cellular, personal 

communications services, and 

specialized mobile radio telephony 

carriers. As noted, the SBA has 

developed a small business size 

standard for Wireless 

Telecommunications Carriers (except 

Satellite). Under the SBA small business 

size standard, a business is small if it 

has 1,500 or fewer employees. 

According to Commission data, 413 

carriers reported that they were engaged 

in wireless telephony. Of these, an 

estimated 261 have 1,500 or fewer 

employees and 152 have more than 

1,500 employees. Therefore, a little less 

than one third of these entities can be 

considered small. 

60. Cable and Other Subscription 

Programming. This industry comprises 

establishments primarily engaged in 

operating studios and facilities for the 

broadcasting of programs on a 

subscription or fee basis. The broadcast 

programming is typically narrowcast in 

nature (e.g., limited format, such as 

news, sports, education, or youthoriented). These establishments produce 

programming in their own facilities or 

acquire programming from external 

sources. The programming material is 

usually delivered to a third party, such 

as cable systems or direct-to-home 

satellite systems, for transmission to 

viewers. The SBA has established a size 

standard for this industry stating that a 

business in this industry is small if it 

has 1,500 or fewer employees. The 2012 

Economic Census indicates that 367 

firms were operational for that entire 

year. Of this total, 357 operated with 

less than 1,000 employees. Accordingly 

we conclude that a substantial majority 

of firms in this industry are small under 

the applicable SBA size standard. 

61. Cable Companies and Systems 

(Rate Regulation). The Commission has 

developed its own small business size 

standards for the purpose of cable rate 

regulation. Under the Commission’s 

rules, a ‘‘small cable company’’ is one 

serving 400,000 or fewer subscribers 

nationwide. Industry data indicate that 

there are currently 4,600 active cable 

systems in the United States. Of this 

total, all but eleven cable operators 

nationwide are small under the 400,000- 

subscriber size standard. In addition, 

under the Commission’s rate regulation 

rules, a ‘‘small system’’ is a cable system 

serving 15,000 or fewer subscribers. 

Current Commission records show 4,600 

cable systems nationwide. Of this total, 

3,900 cable systems have fewer than 

15,000 subscribers, and 700 systems 

have 15,000 or more subscribers, based 

on the same records. Thus, under this 

standard as well, we estimate that most 

cable systems are small entities. 

62. Cable System Operators (Telecom 

Act Standard). The Communications 

Act also contains a size standard for 

small cable system operators, which is 

‘‘a cable operator that, directly or 

through an affiliate, serves in the 

aggregate fewer than 1 percent of all 

subscribers in the United States and is 

not affiliated with any entity or entities 

whose gross annual revenues in the 

aggregate exceed $250,000,000.’’ There 

are approximately 52,403,705 cable 

video subscribers in the United States 

today. Accordingly, an operator serving 

fewer than 524,037 subscribers shall be 

deemed a small operator if its annual 

revenues, when combined with the total 

annual revenues of all its affiliates, do 

not exceed $250 million in the 

aggregate. Based on available data, we 

find that all but nine incumbent cable 

operators are small entities under this 

size standard. We note that the 

Commission neither requests nor 

collects information on whether cable 

system operators are affiliated with 

entities whose gross annual revenues 

exceed $250 million. Although it seems 

certain that some of these cable system 

operators are affiliated with entities 

whose gross annual revenues exceed 

$250 million, we are unable at this time 

to estimate with greater precision the 

number of cable system operators that 

would qualify as small cable operators 

under the definition in the 

Communications Act. 

63. All Other Telecommunications. 

The ‘‘All Other Telecommunications’’ 

industry is comprised of establishments 

that are primarily engaged in providing 

specialized telecommunications 

services, such as satellite tracking, 

communications telemetry, and radar 

station operation. This industry also 

includes establishments primarily 

engaged in providing satellite terminal 

stations and associated facilities 

connected with one or more terrestrial 

systems and capable of transmitting 

telecommunications to, and receiving 

telecommunications from, satellite 

systems. Establishments providing 

internet services or voice over internet 

protocol (VoIP) services via clientsupplied telecommunications 

connections are also included in this 

industry. The SBA has developed a 

small business size standard for ‘‘All 

Other Telecommunications,’’ which 

consists of all such firms with gross 

annual receipts of $32.5 million or less. 

For this category, U.S. Census data for 

2012 show that there were 1,442 firms 

that operated for the entire year. Of 

these firms, a total of 1,400 had gross 

annual receipts of less than $25 million. 

Thus a majority of ‘‘All Other 

Telecommunications’’ firms potentially 

may be affected by our action can be 

considered small. 

D. Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements for Small Entities 

64. The NPRM proposes and seeks 

comment on rule changes that will 

affect LECs and intermediate access 

providers, including CEA providers. 

The NPRM proposes rules to further 

limit or eliminate the occurrence of 

access arbitrage, including access 

stimulation, which could reduce 

potential reporting requirements. One 

possible result of the proposed rules 

would be greater availability of direct 

connections between IXCs and accessstimulating LECs to avoid the use of 

intervening third parties, including CEA 

providers, and thus create more efficient 

and economical network connections. 

Direct connections would also likely 

reduce recordkeeping requirements. 

Specifically, we propose amending our 

rules to allow access-stimulating LECs 

to choose either to be financially 

responsible for the delivery of calls to 

their networks or to accept direct 

connections from IXCs or from 

intermediate access providers of the 

IXC’s choosing. The proposed rules also 

contain notification requirements for 

access-stimulating LECs, which may 

impact small entities. Some of these 

requirements may also involve tariff 

changes. 

65. The NPRM also seeks comment on 

other actions the Commission could 

take to further discourage or eliminate 

access arbitrage activity. Rules which 

achieve these objectives could 

potentially affect recordkeeping and 

reporting requirements. 


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30638 Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Proposed Rules 

E. Steps Taken To Minimize the 

Significant Economic Impact on Small 

Entities, and Significant Alternatives 

Considered 

66. 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 rules 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. 

67. This NPRM invites comment on a 

number of proposals and alternatives to 

modify or adopt access arbitrage rules 

and on the legality of access stimulation 

generally. The Commission has found 

these arbitrage practices inefficient and 

to ultimately increase consumer 

telecommunications rates. The NPRM 

proposes rules to further limit or 

eliminate the occurrence of access 

stimulation as well as other access 

arbitrage in turn promoting the efficient 

function of the nation’s 

telecommunications network. We 

believe that if companies are able to 

operate with greater efficiency this will 

benefit the communications network as 

a whole, and its users, by allowing 

companies to increase their investment 

in broadband deployment. Thus, we 

propose to adopt rules to give accessstimulating LECs two choices about how 

they connect to IXCs. First, an accessstimulating LEC can choose to be 

financially responsible for calls 

delivered to its networks so it, rather 

than IXCs, pays for the delivery of calls 

to its end office or the functional 

equivalent. Or, second, instead of 

accepting this financial responsibility, 

an access-stimulating LEC can choose to 

accept direct connections from either 

the IXC or an intermediate access 

provider of the IXC’s choosing. In the 

alternative, we seek comment on 

moving all traffic bound for an accessstimulating LEC to bill-and-keep. The 

NPRM also seeks comment on potential 

revisions to the definition of access 

stimulation, in particular to address 

intermediate access providers. The 

record in this proceeding suggests 

additional access arbitrage activities are 

occurring, including: (1) Use of 

intermediate access providers by 

Commercial Mobile Radio Carriers; (2) 

mileage pumping; and (3) daisy 

chaining. Comment is sought on how 

best to address these activities. The 

NPRM seeks comment on the costs and 

benefits of these proposals. Providing 

carriers, especially small carriers, with 

options will enable them to best assess 

the financial effects on their operation 

allowing them to determine how best to 

respond. 

68. The NPRM also seeks comment on 

other actions we can take to further 

discourage or eliminate access arbitrage 

activity. Comment is sought on 

alternatives to our proposal that could 

be considered to achieve our objectives 

with potentially less impact on small 

entities. 

F. Federal Rules That May Duplicate, 

Overlap, or Conflict With the Proposed 

Rules 

69. None. 

VI. Ordering Clauses 

70. Accordingly, it is ordered that, 

pursuant to sections 1, 2, 4(i), 201–206, 

214, 218–220, 251, 252, 254, 256, 303(r), 

and 403 of the Communications Act of 

1934, as amended, and section 706 of 

the Telecommunications Act of 1996, 47 

U.S.C. 151, 152, 154(i), 201–206, 218– 

220, 251, 252, 254, 256, 303(r), and 403, 

and § 1.1 of the Commission’s rules, 47 

CFR 1.1, this Notice of Proposed 

Rulemaking is adopted. 

71. It is further ordered that pursuant 

to applicable procedures set forth in 

§§ 1.415 and 1.419 of the Commission’s 

rules, 47 CFR 1.415, 1.419, interested 

parties may file comments on this 

Notice of Proposed Rulemaking on or 

before July 20, 2018 and reply 

comments on or before August 3, 2018. 

72. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

the Notice of Proposed Rulemaking, 

including the Initial Regulatory 

Flexibility Analysis, to the Chief 

Counsel for Advocacy of the Small 

Business Administration. 

List of Subjects in 47 CFR Part 51 

Common carriers, Communications. 

Federal Communications Commission. 

Marlene Dortch, 

Secretary, Office of the Secretary. 

Proposed Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission proposes to amend 47 CFR 

part 51 as follows: 

PART 51—INTERCONNECTION 

■ 1. The authority citation for part 51 

continues to read as follows: 

Authority: 47 U.S.C. 151–55, 201–05, 207– 

09, 218, 220, 225–27, 251–54, 256, 271, 

303(r), 332, 1302. 

■ 2. Amend § 51.903 by adding 

paragraphs (k), (l), and (m) to read as 

follows: 

§ 51.903 Definitions. 

* * * * * 

(k) Access Stimulation has the same 

meaning as that term is defined in 

§ 61.3(bbb) of this chapter. 

(l) Intermediate Access Provider 

means any entity that carries or 

processes traffic at any point between 

the final Interexchange Carrier in a call 

path and the carrier providing End 

Office Access Service. 

(m) Interexchange Carrier means a 

telecommunications carrier that uses the 

exchange access or information access 

services of another telecommunications 

carrier for the provision of 

telecommunications. 

■ 3. Add § 51.914 to read as follows: 

§ 51.914 Additional provisions applicable 

to Access Stimulation traffic. 

(a) Notwithstanding any other 

provision of the Commission’s rules, if 

a local exchange carrier is engaged in 

Access Stimulation, it shall within 45 

days of commencing Access 

Stimulation, or by [date 45 days after 

the effective date of the final rule], 

whichever is later: 

(1)(i) Not bill any affected 

Interexchange Carrier or any 

Intermediate Access Provider for the 

terminating switched access tandem 

switching or any terminating switched 

access transport charges for any traffic 

between such local exchange carrier’s 

terminating end office or equivalent and 

the associated access tandem switch; 

and 

(ii) Assume financial responsibility 

for the applicable Intermediate Access 

Provider terminating tandem switching 

and terminating switched transport 

access charges relating to traffic bound 

for the access-stimulating local 

exchange carrier; or 

(2) Upon request of an Interexchange 

Carrier for direct-trunked transport 

service, provision and enable directtrunked transport service to either the 

Interexchange Carrier or an Intermediate 

Access Provider of the Interexchange 

Carrier’s choosing within [period of 

time to be determined] of such a 

request. 

(b) Notwithstanding any other 

provision of the Commission’s rules, if 

a local exchange carrier is engaged in 


sradovich on DSK3GMQ082PROD with PROPOSALS
Federal Register / Vol. 83, No. 126 / Friday, June 29, 2018 / Proposed Rules 30639 

1The leased access rules are in Subpart N of Part 

76, which was listed in the Media Modernization 

Public Notice as one of the principal rule parts that 

pertains to media entities and that is the subject of 

the media modernization review. 

Access Stimulation, it shall within 45 

days of commencing Access 

Stimulation, or by [date 45 days after 

effective date of the final rule], 

whichever is later, notify in writing all 

Intermediate Access Providers which it 

subtends and Interexchange Carriers 

with which it does business of the 

following: 

(1) That it is a local exchange carrier 

engaged in Access Stimulation; 

(2) That it will either: 

(i) Obtain and pay for terminating 

access services from Intermediate 

Access Providers for such traffic as of 

that date; or 

(ii) Offer direct-trunked transport 

service to any affected Interexchange 

Carrier (or to an Intermediate Access 

Provider of the Interexchange Carrier’s 

choosing); and 

(3) To the extent that the local 

exchange carrier engaged in Access 

Stimulation intends to comply with 

paragraph (a) of this section through 

electing the option described in 

paragraph (a)(2) of this section, 

designate where on its network it will 

accept the requested direct connection. 

(c) Nothing in this section creates an 

independent obligation for a local 

exchange carrier to construct new 

facilities other than, as necessary, 

adding switch trunk ports. 

(d) In the event that an Intermediate 

Access Provider receives notice under 

paragraph (b) of this section that a local 

exchange carrier engaged in Access 

Stimulation will be obtaining and 

paying for terminating access service 

from such Intermediate Access Provider, 

an Intermediate Access Provider shall 

not bill Interexchange Carriers 

terminating tandem switching and 

terminating switched transport access 

for traffic bound for such local exchange 

carrier but, instead bill such local 

exchange carrier for such services. 

(e) Notwithstanding any provision of 

this section, any carrier that is not itself 

engaged in Access Stimulation, as that 

term is defined in § 61.3(bbb) of this 

chapter, but serves as an Intermediate 

Access Provider with respect to traffic 

bound for an access-stimulating local 

exchange carrier, shall not itself be 

deemed a local exchange carrier 

engaged in Access Stimulation or be 

affected by this rule other than 

paragraph (d) of this section. 

■ 4. Amend § 51.917 by revising 

paragraph (c) to read as follows: 

§ 51.917 Revenue recovery for Rate-ofReturn Carriers. 

* * * * * 

(c) Adjustment for Access Stimulation 

activity. 2011 Rate-of-Return Carrier 

Base Period Revenue shall be adjusted 

to reflect the removal of any increases 

in revenue requirement or revenues 

resulting from Access Stimulation 

activity the Rate-of-Return Carrier 

engaged in during the relevant 

measuring period. A Rate-of-Return 

Carrier should make this adjustment for 

its initial July 1, 2012, tariff filing, but 

the adjustment may result from a 

subsequent Commission or court ruling. 

* * * * * 

[FR Doc. 2018–13699 Filed 6–28–18; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[MB Docket Nos. 07–42 and 17–105; FCC 

18–80] 

Leased Commercial Access; 

Modernization of Media Regulation 

Initiative 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: In this document, the 

Commission seeks to update its leased 

access rules as part of its Modernization 

of Media Regulation Initiative. First, the 

Commission tentatively concludes that 

it should vacate its 2008 Leased Access 

Order, which the U.S. Court of Appeals 

for the Sixth Circuit has stayed for a 

decade in conjunction with several 

judicial appeals of the order. Second, 

the Commission seeks input on the state 

of the leased access marketplace 

generally and invites comment on ways 

to modernize its existing leased access 

rules. 

DATES: Comments are due on or before 

July 30, 2018; reply comments are due 

on or before August 13, 2018. 

ADDRESSES: You may submit comments, 

identified by MB Docket Nos. 18–80 and 

17–105, by any of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Federal Communications 

Commission’s website: http://

fjallfoss.fcc.gov/ecfs2/. Follow the 

instructions for submitting comments. 

• Mail: Filings can be sent by hand or 

messenger delivery, by commercial 

overnight courier, or by first-class or 

overnight U.S. Postal Service mail. All 

filings must be addressed to the 

Commission’s Secretary, Office of the 

Secretary, Federal Communications 

Commission. 

• People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by email: FCC504@fcc.gov 

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

418–0432. 

FOR FURTHER INFORMATION CONTACT: For 

additional information on this 

proceeding, contact Diana Sokolow, 

Diana.Sokolow@fcc.gov, of the Policy 

Division, Media Bureau, (202) 418– 

2120. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Further 

Notice of Proposed Rulemaking, FCC 

18–80, adopted on June 7, 2018 and 

released on June 8, 2017. The full text 

is available for public inspection and 

copying during regular business hours 

in the FCC Reference Center, Federal 

Communications Commission, 445 12th 

Street SW, Room CY–A257, 

Washington, DC 20554. This document 

will also be available via ECFS at http:// 

fjallfoss.fcc.gov/ecfs/. Documents will 

be available electronically in ASCII, 

Microsoft Word, and/or Adobe Acrobat. 

Alternative formats are available for 

people with disabilities (Braille, large 

print, electronic files, audio format), by 

sending an email to fcc504@fcc.gov or 

calling the Commission’s Consumer and 

Governmental Affairs Bureau at (202) 

418–0530 (voice), (202) 418–0432 

(TTY). 

Synopsis 

1. In this Further Notice of Proposed 

Rulemaking (FNPRM), we seek to 

update our leased access rules as part of 

the Commission’s Modernization of 

Media Regulation Initiative. In response 

to the public notice initiating the media 

modernization proceeding, some 

commenters made proposals related to 

the Commission’s leased access rules, 

which require cable operators to set 

aside channel capacity for commercial 

use by unaffiliated video programmers.1

By addressing these proposals in this 

FNPRM, we advance our efforts to 

modernize our media regulations and 

remove unnecessary requirements that 

can impede competition and innovation 

in the media marketplace. 

2. We tentatively conclude that we 

should vacate the 2008 Leased Access 

Order, including the Further Notice of 

Proposed Rulemaking issued in 

conjunction with that order. This action 

would enable the Commission to clean 

up a longstanding backlog and position 

us to freshly consider new revisions to 


sradovich on DSK3GMQ082PROD with PROPOSALS