18074 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Proposed Rules

share of the refill market than do

vendors that refill and return ink jet

cartridges to the user. Thus, the initial

result of an ink jet cartridge designation

could well be a net increase in solid

waste, albeit a small increase when

compared to the total amount of solid

waste generated annually.

B. Performance

EPA’s initial research indicated

inconsistent quality among the ink jet

cartridge refill kits and between the

products of the ink jet cartridge refillers.

EPA’s research also indicated a lack of

quality control standards for refillers

and refill kits. Thus, while some

refillers are able to produce refilled ink

jet cartridges with acceptable

performance characteristics, others have

not been able to do so consistently.

Because there are no testing or other

quality control standards for procuring

agencies to reference in their

solicitations, the quality of refilled ink

jet cartridges may be of concern.

Further, EPA’s initial research

indicated that users of refilled ink jet

cartridges had sometimes experienced

clogged nozzles and other performance

problems. EPA has received additional

information in the public comments that

indicates performance problems have

occurred. According to one commenter,

refilled ink jet cartridges can create a

number of problems, ranging from

diminished ink quality to interference

with the proper operation of the ink jet

nozzle. Commenters also provided

anecdotal information that faulty

refilled ink jet cartridges can and have

caused damage to the office equipment

in which they were used. EPA discussed

these performance concerns with GSA

and found that, because GSA has offered

refilled ink jet cartridges only recently,

no record of customer satisfaction has

been established. EPA seeks additional

information about the performance of

refilled ink jet cartridges, in particular

the potential for damage to office

equipment caused by the use of this

item.

EPA also has received conflicting

information about whether ink jet

cartridges are designed to be refilled.

Some original equipment manufacturers

stated, in their public comments, that

the components in ink jet cartridges are

designed to last only for the supply of

original ink. In other words, ink jet

cartridges are designed to be disposable.

However, there is evidence that ink jet

cartridges can and are being refilled and

can perform adequately, even if they are

not performing identically to a new

replacement ink jet cartridge.

C. Product Availability

EPA’s initial research identified 24

companies that refill ink jet cartridges

for customers nationwide. In its

comments, a major manufacturer of new

replacement ink jet cartridges

questioned whether refillers offer

national coverage, particularly to rural

areas, although this manufacturer did

not provide any hard evidence to the

contrary. This manufacturer also

commented that its products are

available immediately, while refilled

ink jet cartridges may not be available

immediately. Again, the manufacturer

did not substantiate this statement.

EPA has never limited its

designations only to items that are

available immediately in every part of

the United States. Because the purpose

of the federal buy-recycled program is to

develop markets for products containing

recovered materials, it has always been

understood that these items might not

be available to all procuring agencies in

all instances. Rather, it is expected that,

as procuring agencies seek to purchase

products containing recovered

materials, these items will become more

widely and universally available. For

this reason, RCRA section 6002 provides

that procuring agencies are not required

to buy an EPA-designated item

containing recovered materials if that

item is not available within a reasonable

time. Nevertheless, the availability of

refilling services and refilled ink jet

cartridges is a consideration for EPA

when designating ink jet cartridges.

Therefore, EPA seeks additional

information about the availability of

refilled ink jet cartridges and refilling

services.

IV. Conclusion

Usage of ink jet printers, facsimile

machines, and plotters is increasing

rapidly. The ink jet cartridge supplier

industry also is evolving rapidly, as is

the technology to refill ink jet cartridges.

EPA believes that, consistent with the

Agency’s waste management hierarchy,

which promotes waste prevention and

recycling, ink jet cartridges should be

designed to be refillable and/or

recyclable, rather than disposable.

However, these products must serve

their intended purpose and perform in

an acceptable manner. While the

Agency acknowledges that some refilled

ink jet cartridges may be of high quality,

the questions about the performance of

refilled cartridges discussed by

commenters raise legitimate concerns

that warrant further consideration

before the Agency designates ink jet

cartridges in the CPG. Moreover,

designation of ink jet cartridges would

not have a significant impact on the

solid waste stream because the specialty

plastic used in these cartridges cannot

currently be made with recovered

materials. There is, in addition, some

concern that designation could actually

result, in the near term, in a small

increase in the generation of solid waste

associated with ink jet cartridges. At

this time, ink jet cartridge refill kits are

generating more waste than discarded

cartridges. Based on these factors, EPA

has tentatively concluded that it is

premature to designate ink jet cartridges

at this time. EPA solicits comment on

the information discussed in this notice

and on the other newly docketed

information referenced in this notice.

Dated: April 8, 1997.

David A. Bussard,

Acting Director, Office of Solid Waste.

[FR Doc. 97–9517 Filed 4–11–97; 8:45 am]

BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 1

[CS Docket No. 97–98; FCC 97–94]

Amendment of Rules and Policies

Governing Pole Attachments

AGENCY: Federal Communications

Commission

ACTION: Proposed rule.

SUMMARY: In 1987, the Commission

adopted its current pole attachment

formula for calculating the maximum

just and reasonable rates utilities may

charge cable operators for pole

attachments. In this Notice of Proposed

Rulemaking, we seek comment as to

whether the current pole attachment

formula should be modified or adjusted

to eliminate certain anomalies and rate

instabilities particular parties assert

have occurred. Should altering the

formula become necessary, we have

tentatively proposed a modification that

would improve the formula’s accuracy.

In addition, we propose changes to the

formula to reflect the present accounting

system that replaced the former rules in

1988. Finally, we propose a new

conduit methodology that will

determine the maximum just and

reasonable rates utilities may charge

cable operators and telecommunications

service providers for their use of

conduit systems.

DATES: Comments are due on or before

May 12, 1997 and Reply Comments are

due on or before June 12, 1997.

ADDRESSES: Office of the Secretary,

Federal Communications Commission,
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Proposed Rules 18075

1919 M Street, N.W., Room 222,

Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT:

Michael T. McMenamin, Cable Services

Bureau, (202) 418–7200, TTY (202) 418–

7172.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Notice of

Proposed Rulemaking, CS Docket No.

97–98, adopted March 14, 1997 and

released March 14, 1997. The full text

of this decision is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room 239), 1919 M Street, NW,

Washington, D.C. 20554, and may be

purchased from the Commission’s copy

contractor, International Transcription

Service, (202) 857–3800, 1919 M Street,

NW, Washington, D.C. 20554. For

copies in alternative formats, such as

braille, audio cassette, or large print,

please contact Sheila Ray at

International Transcription Service.

Synopsis of the Notice of Proposed

Rulemaking

1. This Notice of Proposed

Rulemaking seeks comment on

proposed modifications to the

Commission’s rules relating to the

maximum just and reasonable rates

utilities may charge for attachments

made to a pole, duct, conduit or rightof-way. These attachments are referred

to as ‘‘pole attachments.’’ We believe

that a re-evaluation of this formula may

be necessary to improve accuracy in the

continued application of these rules to

cable television systems and to

telecommunications carriers pursuant to

the Telecommunications Act of 1996,

Public Law 104–104, 110 Stat. 56

(1996). We also propose amending the

formula so that it reflects our current

accounting rules that apply to telephone

companies. Finally, in this Notice, we

propose a conduit methodology that

will determine the maximum just and

reasonable rates utilities may charge

cable systems and telecommunications

carriers for their use of conduit systems.

The proposed formula would apply to

all telecommunications carriers pending

the effectiveness of the new formula

required by the 1996 Act.

2. On August 26, 1994, Southwestern

Bell Telephone Company (‘‘SWB’’) filed

a Petition for Clarification, or in the

Alternative, a Waiver of our formula for

computing maximum reasonable pole

attachment rates. SWB argues that in

Oklahoma, the Commission’s pole

attachment formula produces a negative

net cost of a bare pole and other

negative figures, resulting in negative

rates. SWB asserts that these abnormal

results arise as the original costs of the

poles are depreciated over time,

particularly since the cost of removing

the pole at the end of its useful life is

included in the original cost of the pole.

Because the cost of removal can be high,

SWB argues it has resulted in negative

net pole investment for its poles in

Oklahoma. SWB proposes to remedy the

rate problem by extracting the cost of

removing poles from the formula for

calculating the accumulated

depreciation used to determine pole

attachment rates. This would increase

the net pole investment SWB would use

in applying the formula, thereby making

SWB’s pole attachment rates positive

under that formula.

3. Potential Adjustments to the Pole

Attachment Formula: As detailed

below, we seek comment on the issues

raised by SWB’s petition. We also seek

comment on aspects of the current

formula that may require modification.

4. The Commission seeks comment as

to whether over time, and with

increased demand, the average pole

height has increased to an average of 40

feet and whether the usable space

presumption should also be changed

from 13.5 feet to 11 feet. The

Commission recognizes the National

Electric Safety Code requirement that a

40 inch safety space must exist between

electric lines and communication lines.

We seek comment on the premise that

the safety space emanates from a

utility’s requirement to comply with the

NESC and should properly be assigned

to the utility as part of its usable space.

We also seek comment on the premise

that the 40 inch safety space emanates

from a utility’s requirement to comply

with the NESC and should properly be

assigned to the utility as part of its

usable space.

5. Poles of 30 feet or less are currently

included in the calculation of cost of

bare pole. We seek comment on whether

including these smaller poles in the

numerator and denominator of the cost

of bare pole calculation results in a

distorted determination of the actual

costs of a bare pole. We also seek

comment on this proposal and whether

poles of 30 feet or less lack a sufficient

amount of usable space to accommodate

multiple attachments.

6. We seek comment as to the scope

of the problem raised in SWB’s petition.

For instance, we seek comment on the

number of jurisdictions where

accumulated depreciation balances

exceed the gross pole investment. We

also seek comment on the rates being

charged in such jurisdictions. When our

formula defining the maximum just and

reasonable rate for pole attachments is

applied to poles with negative net asset

values, the result is either extremely low

pole attachment rates or negative rates.

In this Notice, we suggest that if the

frequency with which this problem

occurs does not warrant the proposed

adjustment to the pole attachment

formula, then a case-by-case approach

could be used. If commenters agree that

the scope of the problem warrants an

adjustment, we propose to do so.

7. This Notice proposes eliminating

the anomalous effect by adjusting the

current net investment approach to

allow for the elimination of the net

salvage amount (which is typically a

negative amount) from the accumulated

depreciation balance for poles at such

time that the net asset value of poles

becomes negative. Removal of the net

salvage amount would, for the purpose

of pole attachment rate calculation,

restate the accumulated depreciation

account to reflect only the depreciation

of the pole investment, and would

restore the net pole investment to a

positive balance. The calculation of the

appropriate amounts to recognize the

continuing cost of pole ownership could

then be made as currently provided in

the formula. Each time a new rate is to

be developed, the pole account should

be examined before the accumulated

depreciation balance is adjusted. If there

is a positive balance, no adjustment to

the accumulated depreciation account

should be made. Alternatively, if the

accumulated depreciation balance is

negative our proposed adjustment

should be made. We seek comment on

whether the application of the

appropriate factors to the net pole

amount, adjusted as proposed, would

provide a fair rate for sharing in the

recovery of continuing expenses

associated with pole ownership.

8. Further, in these instances we do

not believe that it would be appropriate

to continue to calculate a return on

investment that has been fully

recovered. Thus, we propose that the

calculation of the return element should

be made separately without removal of

net salvage amounts. The return element

would be computed on the basis of the

unadjusted net pole balance and the

result added (as a negative amount) to

the carrying charges for administrative,

maintenance, and tax expenses. We

believe that the inclusion of this

negative return element is reasonable

and appropriate because the utility has,

in effect, already recovered more than

the original cost of its pole plant

through depreciation charges. While

this ‘‘over-recovery’’ is necessary to

defray the costs of disposing of the poles

when they are retired from service, the

utility has the use of any over-recovered

amounts until the disposal of the poles

actually takes place. We seek comment
18076 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Proposed Rules

on our tentative conclusion that a

utility’s pole attachment rates should

reflect this over-recovery, in the form of

a negative return carrying charge.

Moreover, we seek comment on our

proposal to include only operating

taxes, other than income taxes, in the

rate formula.

9. In proposing the use of this

adjustment methodology, we are

concerned that because telephone and

electric utilities install poles over time

at various original costs and because net

salvage estimates vary over time, the

extraction of the net salvage effect from

accumulated depreciation could prove

to be difficult. In addition, current FCC

and Federal Energy Regulatory

Commission accounting reports do not

provide information with respect to the

net salvage effect. We seek comment on

the feasibility of this methodology as

proposed. Additionally, we seek

comment on the effectiveness of the

methodology for the development of fair

pole attachment rates and on proposed

modifications necessary to make this

methodology effective in attaining this

objective. Finally, commenters are

requested to provide detailed

assessments of the effects of this

methodology on attachment rates. Based

on our initial assessment of this

proposed adjustment, we do not believe

that the application of the adjustment

where appropriate will have any

significant impact on current pole

attachment rates.

10. Alternatively, we seek comment

on calculating pole attachment rates

using gross book costs instead of net

book costs. Under this approach the cost

of a bare pole and most carrying charges

are computed using gross book costs.

Prior to the Amendment of Rules and

Policies Governing the Attachment of

Cable Television Hardware to Utility

Poles, Report and Order, 2 FCC Rcd

4387 (1987), recon., 4 FCC Rcd 468

(1989), the Commission had decided

certain cases using gross book costs to

calculate maximum reasonable pole

attachment rates. The Commission also

has stated that if both parties to a pole

attachment complaint agree, the pole

attachment rates may be computed

using gross book costs. The use of gross

book costs appears consistent with the

legislative history supporting Section

224, which indicates that the

Commission has significant discretion

in selecting a methodology for

determining just and reasonable pole

attachment rates. We seek comment on

this alternative to ensure a complete

record on possible changes to the

current formula. We note that because of

the way administrative costs are

allocated, the application of gross book

costs may produce a slightly higher rate.

We seek comment on whether this

assumption is true and if so what the

impact of this change would be.

11. Proposed Conduit Methodology.

Section 224 provides that total conduit

space and conduit space occupied by a

cable operator or telecommunication

provider is based on duct or conduit

capacity. In addition, Section 224 states

that: ‘‘a rate is just and reasonable if it

assures a utility the recovery of not less

than the additional costs of providing

pole attachments, nor more than an

amount determined by multiplying the

percentage of the total usable space, or

the percentage of the total duct or

conduit capacity * * *’’ The usable

space can be estimated based on the

number of ducts or portion of a duct

that a cable occupies. However, we have

tentatively concluded that measuring

the actual portion of duct space

occupied by a cable would be difficult

and would most likely lead to further

disputes between the parties. Instead of

attempting to measure the actual duct

space occupied, we propose to adopt a

new half-duct conduit methodology as

was recently done by the Commission in

the Memorandum Opinion and Hearing

Designation Order of Multimedia

Cablevision, Inc. v. Southwestern Bell

Telephone, 11 FCC Rcd 11202

(September 3, 1996) (‘‘Southwestern

Bell’’). In order to apply the half-duct

formula, a determination of the cost per

foot of one duct must be made, and then

divided by one-half to produce a ‘‘halfduct convention.’’ This determines the

maximum just and reasonable rate per

duct foot that can be charged for cable

attachments.

12. We seek comment on the

proposed half-duct methodology. The

Commission, in the Southwestern Bell,

concluded that the half-duct

methodology is the simplest and most

reasonable approximation of the actual

space occupied by an attacher. In

addition, the Commission found that the

half-duct methodology is the most

straight forward approach to calculating

a conduit attachment fee because it does

not require the parties to prove the

actual amount of the duct the cable

operator occupies. We solicit comment

on this approach which the Commission

adopted in the Southwestern Bell. We

also seek comment on any additional

proposals that would provide a simple

and administratively efficient conduit

methodology.

Initial Regulatory Flexibility Analysis

12. As required by Section 603 of the

Regulatory Flexibility Act (RFA), 5

U.S.C. § 603, as amended, the

Commission has prepared an Initial

Regulatory Flexibility Analysis (IRFA)

of the expected significant economic

impact on small entities by the policies

and rules proposed in this Notice.

Written public comments are requested

on the IRFA. These comments must be

filed in accordance with the same filing

deadlines as comments on the rest of the

Notice, but they must have a separate

and distinct heading designating them

as responses to the regulatory flexibility

analysis. The Secretary shall cause a

copy of this Notice to be sent to the

Chief Counsel for Advocacy of the Small

Business Administration (‘‘SBA’’) in

accordance with Section 603(a) of the

RFA, 5 U.S.C. § 603(a).

13. Need for Action and Objectives of

the Proposed Rule. In 1987, the

Commission adopted its current pole

attachment formula for calculating the

maximum just and reasonable rates

utilities may charge cable systems for

pole attachments. In this Notice, we

seek comment as to whether the current

pole attachment formula should be

modified or adjusted to eliminate

certain anomalies and rate instabilities

particular parties assert have occurred.

We have also tentatively proposed such

possible modifications to the formula,

should altering the formula become

necessary, that would improve the

accuracy of the formula. In addition, we

propose changes to the formula to

reflect the present Part 32 accounting

system that replaced the former Part 31

rules in 1988. Finally, we propose a new

conduit methodology that will

determine the maximum just and

reasonable rates utilities may charge

cable systems and telecommunications

carriers for their attachments to conduit

systems.

14. Legal Basis. The authority for the

action as proposed for this rulemaking

is contained in Sections 1, 4(i), 4(j), 224,

303 and 403 of the Communications Act

of 1934, as amended, 47 U.S.C. §§ 151,

154(i), 154(j), 224, 303 and 403.

15. Description and Estimate of the

Number of Small Entities Impacted. For

the purposes of this Notice, the RFA

defines a ‘‘small business’’ to be the

same as a small business concern under

the Small Business Act, 15 U.S.C. § 632,

unless the Commission has developed

one or more definitions that are

appropriate to its activities. Under the

Small Business Act, a ‘‘small business

concern’’ is one that: (1) Is

independently owned and operated; (2)

is not dominant in its field of operation;

and (3) satisfies any additional criteria

established by the Small Business

Administration (SBA). The SBA has

defined a small business for Standard

Industrial Classification (SIC) category

4813 (Telephone Communications,
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Proposed Rules 18077

except Radiotelephone) to be a small

entity when it has fewer than 1500

employees, See 13 CFR § 121.201.

A. Utilities

16. Total Number of Utilities Affected.

The decisions and rules adopted herein

may have a significant effect on a

substantial number of utility companies.

Section 224 of the Statue defines a

‘‘utility’’ as ‘‘any person who is a local

exchange carrier or an electric, gas,

water, steam, or other public utility, and

who owns or controls poles, ducts,

conduits, or rights-of-way used, in

whole or in part, for any wire

communications. Such term does not

include any railroad, any person who is

cooperatively organized, or any person

owned by the Federal Government or

any State.’’ The SBA has provided the

Commission with a list of utility firms

which may be effected by this

rulemaking. Based upon the SBA’s list,

the Commission seeks comment as to

whether all of the following utility firms

are relevant to Section 224.

1. Electric Utilities (SIC 4911, 4931 &

4939)

17. Electric Services. The SBA has

developed a definition for small electric

utility firms. The Census Bureau reports

that a total of 1,379 electric utilities

were in operation for at least one year

at the end of 1992. According to SBA,

a small electric utility is an entity whose

gross revenues did not exceed five

million dollars in 1992. The Census

Bureau reported that 447 of the 1,379

firms listed had total revenues below

five million dollars. Electric and Other

Services Combined. The SBA has

classified this entity as a utility whose

business is primarily electric, less than

95%, in combination with some other

type of service. The Census Bureau

reports that a total of 135 such firms

were in operation for at least one year

at the end of 1992. The SBA’s definition

of a small electric and other services

combined utility is a firm whose gross

revenues did not exceed five million

dollars in 1992. The Census Bureau

reported that 45 of the 135 firms listed

had total revenues below five million

dollars. Combination Utilities, Not

Elsewhere Classified. The SBA defines

this utility has providing a combination

of electric, gas, and other services which

are not otherwise classified. The Census

Bureau reports that a total of 79 such

utilities were in operation for at least

one year at the end of 1992. According

to SBA’s definition, a small combination

utility is a firm whose gross revenues

did not exceed five million dollars in

1992. The Census Bureau reported that

63 of the 79 firms listed had total

revenues below five million dollars.

2. Gas Production and Distribution (SIC

4922, 4923, 4924, 4925 & 4932)

18. Natural Gas Transmission. The

SBA’s definition of a small natural gas

transmitter is an entity who is engaged

in the transmission and storage of

natural gas. The Census Bureau reports

that a total of 144 such firms were in

operation for at least one year at the end

of 1992. According to SBA’s definition,

a small natural gas transmitter is an

entity whose gross revenues did not

exceed five million dollars in 1992. The

Census Bureau reported that 70 of the

144 firms listed had total revenues

below five million dollars. Natural Gas

Transmission and Distribution. The

SBA has classified this entity as a utility

who transmits and distributes natural

gas for sale. The Census Bureau reports

that a total of 126 such entities were in

operation for at least one year at the end

of 1992. The SBA’s definition of a small

natural gas transmitter and distributer is

a firm whose gross revenues did not

exceed five million dollars. The Census

Bureau reported that 43 of the 126 firms

listed had total revenues below five

million dollars. Natural Gas

Distribution. The SBA defines a natural

gas distributor as an entity that

distributes natural gas for sale. The

Census Bureau reports that a total of 478

such firms were in operation for at least

one year at the end of 1992. According

to the SBA, a small natural gas

distributor is an entity whose gross

revenues did not exceed five million

dollars in 1992. The Census Bureau

reported that 267 of the 478 firms listed

had total revenues below five million

dollars. Mixed, Manufactured, or

Liquefied Petroleum Gas Production

and/or Distribution. The SBA has

classified this entity as a utility who

engages in the manufacturing and/or

distribution of the sale of gas. These

mixtures may include natural gas. The

Census Bureau reports that a total of 43

such firms were in operation for at least

one year at the end of 1992. The SBA’s

definition of a small mixed,

manufactured or liquefied petroleum

gas producer or distributor is a firm

whose gross revenues did not exceed

five million dollars in 1992. The Census

Bureau reported that 31 of the 43 firms

listed had total revenues below five

million dollars. Gas and Other Services

Combined. The SBA has classified this

entity as a gas company whose business

is less than 95% gas, in combination

with other services. The Census Bureau

reports that a total of 43 such firms were

in operation for at least one year at the

end of 1992. According to the SBA, a

small gas and other services combined

utility is a firm whose gross revenues

did not exceed five million dollars in

1992. The Census Bureau reported that

24 of the 43 firms listed had total

revenues below five million dollars.

3. Water Supply (SIC 4941)

19. Water Supply. The SBA defines a

water utility as a firm who distributes

and sells water for domestic,

commercial and industrial use. The

Census Bureau reports that a total of

3,169 water utilities were in operation

for at least one year at the end of 1992.

According to SBA’s definition, a small

water utility is a firm whose gross

revenues did not exceed five million

dollars in 1992. The Census Bureau

reported that 3,065 of the 3,169 firms

listed had total revenues below five

million dollars.

4. Sanitary Systems (SIC 4952, 4953 &

4959)

20. Sewerage Systems. The SBA

defines a sewage firm as a utility whose

business is the collection and disposal

of waste using sewage systems. The

Census Bureau reports that a total of 410

such firms were in operation for at least

one year at the end of 1992. According

to SBA’s definition, a small sewerage

system is a firm whose gross revenues

did not exceed five million dollars. The

Census Bureau reported that 369 of the

410 firms listed had total revenues

below five million dollars. Refuse

Systems. The SBA defines a firm in the

business of refuse as an establishment

whose business is the collection and

disposal of refuse ‘‘by processing or

destruction or in the operation of

incinerators, waste treatment plants,

landfills, or other sites for disposal of

such materials.’’ The Census Bureau

reports that a total of 2,287 such firms

were in operation for at least one year

at the end of 1992. According to SBA’s

definition, a small refuse system is a

firm whose gross revenues did not

exceed six million dollars. The Census

Bureau reported that 1,908 of the 2,287

firms listed had total revenues below six

million dollars. Sanitary Services, Not

Elsewhere Classified. The SBA defines

these firms as engaged in sanitary

services. The Census Bureau reports that

a total of 1,214 such firms were in

operation for at least one year at the end

of 1992. According to SBA’s definition,

a small sanitary service firms gross

revenues did not exceed five million

dollars. The Census Bureau reported

that 1,173 of the 1,214 firms listed had

total revenues below five million

dollars.
18078 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Proposed Rules

5. Steam and Air Conditioning Supply

(SIC 4961)

21. Steam and Air Conditioning

Supply. The SBA defines a steam and

air conditioning supply utility as a firm

who produces and/or sells steam and

heated or cooled air. The Census Bureau

reports that a total of 55 such firms were

in operation for at least one year at the

end of 1992. According to SBA’s

definition, a steam and air conditioning

supply utility is a firm whose gross

revenues did not exceed nine million

dollars. The Census Bureau reported

that 30 of the 55 firms listed had total

revenues below nine million dollars.

6. Irrigation Systems (SIC 4971)

22. Irrigation Systems. The SBA

defines irrigation systems as firms who

operate water supply systems for the

purpose of irrigation. The Census

Bureau reports that a total of 297 firms

were in operation for at least one year

at the end of 1992. According to SBA’s

definition, an irrigation service is a firm

whose gross revenues did not exceed

five million dollars. The Census Bureau

reported that 286 of the 297 firms listed

had total revenues below five million

dollars.

B. Telephone Companies (SIC 4813)

23. Total Number of Telephone

Companies Affected. Many of the

decisions and rules adopted herein may

have a significant effect on a substantial

number of small telephone companies.

The Census Bureau reports that, at the

end of 1992, there were 3,497 firms

engaged in providing telephone

services, as defined therein, for at least

one year, See United States Department

of Commerce, Bureau of the Census,

1992 Census of Transportation,

Communications, and Utilities:

Establishment and Firm Size, at Firm

Size 1–123 (1995) (1992 Census). This

number contains a variety of different

categories of carriers, including local

exchange carriers (LECs), interexchange

carriers, competitive access providers,

cellular carriers, mobile service carriers,

operator service providers, pay

telephone operators, PCS providers,

covered SMR providers, and resellers. It

seems certain that some of those 3,497

telephone service firms may not qualify

as small entities or small incumbent

LECs because they are not

‘‘independently owned and operated’’,

See 15 U.S.C. § 632(a)(1). It seems

reasonable to conclude, therefore, that

fewer than 3,497 telephone service firms

are small entity telephone service firms

or small incumbent LECs that may be

affected by this Notice. Below, we

estimate the potential number of small

entity telephone service firms or small

incumbent LEC’s that may be affected

by this service category.

24. Wireline Carriers and Service

Providers. SBA has developed a

definition of small entities for telephone

communications companies other than

radiotelephone (wireless) companies.

The Census Bureau reports that, there

were 2,321 such telephone companies

in operation for at least one year at the

end of 1992. According to SBA’s

definition, a small business telephone

company other than a radiotelephone

company is one employing fewer than

1,500 persons. All but 26 of the 2,321

non-radiotelephone companies listed by

the Census Bureau were reported to

have fewer than 1,000 employees. Thus,

even if all 26 of those companies had

more than 1,500 employees, there

would still be 2,295 non-radiotelephone

companies that might qualify as small

entities or small incumbent LECs.

Although it seems certain that some of

these carriers are not independently

owned and operated, we are unable at

this time to estimate with greater

precision the number of wireline

carriers and service providers that

would qualify as small business

concerns under SBA’s definition.

Consequently, we estimate that there are

fewer than 2,295 small entity telephone

communications companies other than

radiotelephone companies that may be

affected by the decisions or rules that

come about from this Notice.

25. Local Exchange Carriers. Neither

the Commission nor SBA has developed

a definition of small providers of local

exchange services (LECs). The closest

applicable definition under SBA rules is

for telephone communications

companies other than radiotelephone

(wireless) companies (SIC 4813). The

most reliable source of information

regarding the number of LECs

nationwide of which we are aware

appears to be the data that we collect

annually in connection with the

Telecommunications Relay Service

(TRS). According to our most recent

data, 1,347 companies reported that

they were engaged in the provision of

local exchange services, See Federal

Communications Commission, CCB,

Industry Analysis Division,

Telecommunications Industry Revenue:

TRS Fund Worksheet Data, Tbl. 21

(Average Total Telecommunications

Revenue Reported by Class of Carrier)

(Feb. 1996) (TRS Worksheet). Although

it seems certain that some of these

carriers are not independently owned

and operated, or have more than 1,500

employees, we are unable at this time to

estimate with greater precision the

number of LECs that would qualify as

small business concerns under SBA’s

definition. Consequently, we estimate

that there are fewer than 1,347 small

incumbent LECs that may be affected by

this Notice.

26. Interexchange Carriers. Neither

the Commission nor SBA has developed

a definition of small entities specifically

applicable to providers of interexchange

services (IXCs). The closest applicable

definition under SBA rules is for

telephone communications companies

other than radiotelephone (wireless)

companies (SIC 4813). The most reliable

source of information regarding the

number of IXCs nationwide of which we

are aware appears to be the data that we

collect annually in connection with

TRS. According to our most recent data,

97 companies reported that they were

engaged in the provision of

interexchange services. Although it

seems certain that some of these carriers

are not independently owned and

operated, or have more than 1,500

employees, we are unable at this time to

estimate with greater precision the

number of IXCs that would qualify as

small business concerns under SBA’s

definition. Consequently, we estimate

that there are fewer than 97 small entity

IXCs that may be affected by the

decisions and rules adopted in this

Notice.

27. Competitive Access Providers.

Neither the Commission nor SBA has

developed a definition of small entities

specifically applicable to providers of

competitive access services (CAPs). The

closest applicable definition under SBA

rules is for telephone communications

companies other than radiotelephone

(wireless) companies (SIC 4813). The

most reliable source of information

regarding the number of CAPs

nationwide of which we are aware

appears to be the data that we collect

annually in connection with the TRS.

According to our most recent data, 30

companies reported that they were

engaged in the provision of competitive

access services. Although it seems

certain that some of these carriers are

not independently owned and operated,

or have more than 1,500 employees, we

are unable at this time to estimate with

greater precision the number of CAPs

that would qualify as small business

concerns under SBA’s definition.

Consequently, we estimate that there are

fewer than 30 small entity CAPs that

may be affected by the decisions and

rules adopted in this Notice.

28. Wireless (Radiotelephone)

Carriers. Although wireless carriers

have not historically affixed their

equipment to utility poles, pursuant to

the terms of the 1996 Act, such entities

are entitled to do so with rates
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Proposed Rules 18079

consistent with the Commission’s rules

discussed herein. SBA has developed a

definition of small entities for

radiotelephone (wireless) companies.

The Census Bureau reports that there

were 1,176 such companies in operation

for at least one year at the end of 1992.

According to SBA’s definition, a small

business radiotelephone company is one

employing fewer than 1,500 persons.

The Census Bureau also reported that

1,164 of those radiotelephone

companies had fewer than 1,000

employees. Thus, even if all of the

remaining 12 companies had more than

1,500 employees, there would still be

1,164 radiotelephone companies that

might qualify as small entities if they

are independently owned and operated.

Although it seems certain that some of

these carriers are not independently

owned and operated, we are unable at

this time to estimate with greater

precision the number of radiotelephone

carriers and service providers that

would qualify as small business

concerns under SBA’s definition.

Consequently, we estimate that there are

fewer than 1,164 small entity

radiotelephone companies that may be

affected by this Notice.

29. Cellular Service Carriers. Neither

the Commission nor SBA has developed

a definition of small entities specifically

applicable to providers of cellular

services. The closest applicable

definition under SBA rules is for

telephone communications companies

other than radiotelephone (wireless)

companies (SIC 4813). The most reliable

source of information regarding the

number of cellular service carriers

nationwide of which we are aware

appears to be the data that we collect

annually in connection with the TRS.

According to our most recent data, 789

companies reported that they were

engaged in the provision of cellular

services. Although it seems certain that

some of these carriers are not

independently owned and operated, or

have more than 1,500 employees, we are

unable at this time to estimate with

greater precision the number of cellular

service carriers that would qualify as

small business concerns under SBA’s

definition. Consequently, we estimate

that there are fewer than 789 small

entity cellular service carriers that may

be affected by the decisions and rules

adopted in this Notice.

30. Mobile Service Carriers. Neither

the Commission nor SBA has developed

a definition of small entities specifically

applicable to mobile service carriers,

such as paging companies. The closest

applicable definition under SBA rules is

for telephone communications

companies other than radiotelephone

(wireless) companies. The most reliable

source of information regarding the

number of mobile service carriers

nationwide of which we are aware

appears to be the data that we collect

annually in connection with the TRS.

According to our most recent data, 117

companies reported that they were

engaged in the provision of mobile

services. Although it seems certain that

some of these carriers are not

independently owned and operated, or

have more than 1,500 employees, we are

unable at this time to estimate with

greater precision the number of mobile

service carriers that would qualify

under SBA’s definition. Consequently,

we estimate that there are fewer than

117 small entity mobile service carriers

that may be affected by the decisions

and rules adopted in this Notice.

31. Broadband PCS Licensees. The

broadband PCS spectrum is divided into

six frequency blocks designated A

through F. As set forth in 47 CFR

§ 24.720(b), the Commission has defined

‘‘small entity’’ in the auctions for Blocks

C and F as a firm that had average gross

revenues of less than $40 million in the

three previous calendar years. Our

definition of a ‘‘small entity’’ in the

context of broadband PCS auctions has

been approved by SBA, See

Implementation of Section 309(j) of the

Communications Act—Competitive

Bidding, PP Docket No. 93–253, Fifth

Report and Order, 9 FCC Rcd 5532,

5581–84 (1994).

The Commission has auctioned

broadband PCS licenses in Blocks A, B,

and C. We do not have sufficient data

to determine how many small

businesses bid successfully for licenses

in Blocks A and B. There were 90

winning bidders that qualified as small

entities in the Block C auction. Based on

this information, we conclude that the

number of broadband PCS licensees

affected by the decisions in this Notice

includes, at a minimum, the 90 winning

bidders that qualified as small entities

in the Block C broadband PCS auction.

32. At present, no licenses have been

awarded for Blocks D, E, and F of

broadband PCS spectrum. Therefore,

there are no small businesses currently

providing these services. However, a

total of 1,479 licenses will be awarded

in the D, E, and F Block broadband PCS

auctions, which are scheduled to begin

on August 26, 1996. Of the 153 qualified

bidders for the D,E, and F Block PCS

auctions, 105 were small businesses,

See Auction of Broadband Personal

Communications Services (D, E and F

blocks), Public Notice, DA 96–1400 (rel.

August 20, 1996). Eligibility for the 493

F Block licenses is limited to

entrepreneurs with average gross

revenues of less than $125 million, See

Amendment of Parts 20 and 24 of the

Commission’s Rules—Broadband PCS

Competitive Bidding and the

Commercial Mobile Radio Service

Spectrum Cap, WT Docket No. 96–59,

Amendment of the Commission’s

Cellular/PCS Cross-Ownership Rule,

Report and Order, GN Docket No. 90–

314, FCC 96–278 ( June 24, 1996). We

cannot estimate, however, the number

of these licenses that will be won by

small entities under our definition, nor

how many small entities will win D or

E Block licenses. Given that nearly all

radiotelephone companies have fewer

than 1,000 employees and that no

reliable estimate of the number of

prospective D, E, and F Block licensees

can be made, we assume for purposes of

this FRFA, that all of the licenses in the

D, E, and F Block Broadband PCS

auctions may be awarded to small

entities under our rules, which may be

affected by the decisions and rules

adopted in this Notice.

33. SMR Licensees. Pursuant to 47

CFR § 90.814(b)(1), the Commission has

defined ‘‘small entity’’ in auctions for

geographic area 800 MHz and 900 MHz

SMR licenses as a firm that had average

annual gross revenues of less than $15

million in the three previous calendar

years. This definition of a ‘‘small entity’’

in the context of 800 MHz and 900 MHz

SMR has been approved by the SBA,

See Amendment of Parts 2 and 90 of the

Commission’s Rules to Provide for the

Use of 200 Channels Outside the

Designated Filing Areas in the 896–901

MHz and the 935–940 MHz Bands

Allotted to the Specialized Mobile Radio

Pool, PR Docket No. 89–583, Second

Order on Reconsideration and Seventh

Report and Order, 11 FCC Rcd 2639,

2693–702 (1995); Amendment of Part 90

of the Commission’s Rules to Facilitate

Future Development of SMR Systems in

the 800 MHz Frequency Band, PR

Docket No. 93–144, First Report and

Order, Eighth Report and Order, and

Second Further Notice of Proposed

Rulemaking, 11 FCC Rcd 1463 (1995).

The rules adopted in this Order may

apply to SMR providers in the 800 MHz

and 900 MHz bands that either hold

geographic area licenses or have

obtained extended implementation

authorizations. We do not know how

many firms provide 800 MHz or 900

MHz geographic area SMR service

pursuant to extended implementation

authorizations, nor how many of these

providers have annual revenues of less

than $15 million. We assume, for

purposes of this FRFA, that all of the

extended implementation

authorizations may be held by small
18080 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Proposed Rules

entities, which may be affected by the

decisions and rules adopted in this

Notice.

34. The Commission recently held

auctions for geographic area licenses in

the 900 MHz SMR band. There were 60

winning bidders who qualified as small

entities in the 900 MHz auction. Based

on this information, we conclude that

the number of geographic area SMR

licensees affected by the rule adopted in

this Order includes these 60 small

entities. No auctions have been held for

800 MHz geographic area SMR licenses.

Therefore, no small entities currently

hold these licenses. A total of 525

licenses will be awarded for the upper

200 channels in the 800 MHz

geographic area SMR auction. However,

the Commission has not yet determined

how many licenses will be awarded for

the lower 230 channels in the 800 MHz

geographic area SMR auction. There is

no basis, moreover, on which to

estimate how many small entities will

win these licenses. Given that nearly all

radiotelephone companies have fewer

than 1,000 employees and that no

reliable estimate of the number of

prospective 800 MHz licensees can be

made, we assume, for purposes of this

FRFA, that all of the licenses may be

awarded to small entities who, thus,

may be affected by the decisions in this

Notice.

35. Resellers. Neither the Commission

nor SBA has developed a definition of

small entities specifically applicable to

resellers. The closest applicable

definition under SBA rules is for all

telephone communications companies

(SIC 4812 and 4813). The most reliable

source of information regarding the

number of resellers nationwide of which

we are aware appears to be the data that

we collect annually in connection with

the TRS. According to our most recent

data, 206 companies reported that they

were engaged in the resale of telephone

services. Although it seems certain that

some of these carriers are not

independently owned and operated, or

have more than 1,500 employees, we are

unable at this time to estimate with

greater precision the number of resellers

that would qualify as small business

concerns under SBA’s definition.

Consequently, we estimate that there are

fewer than 206 small entity resellers

that may be affected by the decisions

and rules adopted in this Notice.

C. Cable System Operators (SIC 4841)

36. Cable Systems: SBA has

developed a definition of small entities

for cable and other pay television

services, which includes all such

companies generating less than $11

million in revenue annually. This

definition includes cable systems

operators, closed circuit television

services, direct broadcast satellite

services, multipoint distribution

systems, satellite master antenna

systems and subscription television

services. According to the Census

Bureau, there were 1,323 such cable and

other pay television services generating

less than $11 million in revenue that

were in operation for at least one year

at the end of 1992.

37. The Commission has developed

its own definition of a small cable

system operator for the purposes of rate

regulation. Under the Commission’s

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

serving fewer than 400,000 subscribers

nationwide, See 47 CFR. § 76.901(e).

Based on our most recent information,

we estimate that there were 1,439 cable

systems that qualified as small cable

system operators at the end of 1995, See

Paul Kagan Associates, Inc., Cable TV

Investor, Feb. 29, 1996 (based on figures

for Dec. 30, 1995). Since then, some of

those companies may have grown to

serve over 400,000 subscribers, and

others may have been involved in

transactions that caused them to be

combined with other cable systems.

Consequently, we estimate that there are

fewer than 1,439 small entity cable

system operators that may be affected by

the decisions and rules proposed in this

Notice.

38. The Communications Act also

contains a definition of a small cable

system operator, 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’’, See 47 U.S.C.

§ 543(m)(2). The Commission has

determined that there are 61,700,000

subscribers in the United States.

Therefore, we found that an operator

serving fewer than 617,000 subscribers

shall be deemed a small operator, if its

annual revenues, when combined with

the total annual revenues of all of its

affiliates, do not exceed $250 million in

the aggregate, See 47 CFR § 76.1403(b).

Based on available data, we find that the

number of cable systems serving

617,000 subscribers or less totals 1,450.

Although it seems certain that some of

these cable system operators are

affiliated with entities whose gross

annual revenues exceed $250,000,000,

we are unable at this time to estimate

with greater precision the number of

cable system operators that would

qualify as small cable systems under the

definition in the Communications Act.

39. Municipalities: The term ‘‘small

governmental jurisdiction’’ is defined as

‘‘governments of * * * districts, with a

population of less than fifty thousand’’,

See 5 U.S.C. § 601(5). There are 85,006

governmental entities in the United

States. This number includes such

entities as states, counties, cities, utility

districts and school districts. We note

that Section 224 of the Act specifically

excludes any utility which is

cooperatively organized, or any person

owned by the Federal Government or

any State. For this reason, we believe

that Section 224 will have minimal if

any affect upon small municipalities.

Further, there are 18 States and the

District of Columbia that regulate pole

attachments pursuant to Section

224(c)(1). Of the 85,006 governmental

entities, 38,978 are counties, cities and

towns. The remainder are primarily

utility districts, school districts, and

states. Of the 38,978 counties, cities and

towns, 37,566 or 96%, have populations

of fewer than 50,000.

40. Reporting, Recordkeeping, and

other Compliance Requirements: The

rules proposed in this Notice may

require a change in certain record

keeping requirements to reflect

modification of Part 31 to Part 32

accounting, as well as maintaining

specific records if adjustments proposed

are used by the pole owner for the

development of attachment rates. We

seek comment on this tentative

conclusion. In addition, as proposed in

this Notice, a pole owner may have to

adjust his pole and conduit attachment

rates.

41. Significant Alternatives Which

Minimize the Impact on Small Entities

and which are Consistent with State

Objectives: The first possible option is

to keep the rules in their current form,

for which we have sought comment.

The alternative would be to adjudicate

anomalies resulting from the current

pole attachment formula on a case-bycase basis, thereby minimizing impact

on all interested parties. In addition,

with respect to conduit methodology,

we have proposed a methodology that

relies on a rebuttable presumption that

an attachment occupies one half of a

duct space. This rebuttable presumption

can be used by small entities to

minimize the detail required to establish

certain rates for use of conduit. If such

methodology was more burdensome to a

small entity, such entity could use its

actual records for establishing the

appropriate rate. We seek comment on

these methodologies and any other

potential impact of these proposals on

small business entities. Finally, the

Notice seeks to further minimize
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Proposed Rules 18081

burdens on small entities in

conformance with the 1996 Act.

42. Federal Rules which Overlap,

Duplicate, or Conflict with the

Commission’s Proposal: None.

Ordering Clauses

43. It is ordered that pursuant to

Sections 1, 4(i), 4(j), 224, 303 and 403

of the Communications Act of 1934, as

amended, 47 U.S.C. §§ 151, 154(i),

154(j), 224, 303 and 403, Notice is

hereby given of the proposals described

in this Notice of Proposed Rulemaking.

44. It is further ordered pursuant to

Sections 4(i), 4(j), and 224 of the

Communications Act of 1934, as

amended, 47 U.S.C. §§ 154(i), 154(j),

and 224, that the Petition for

Clarification, or in the Alternative, a

Waiver of Southwestern Bell Telephone

Company is dismissed.

45. It is further ordered that the

Secretary shall send a copy of this

Notice, including the IRFA, to the Chief

Counsel for Advocacy of the Small

Business Administration in accordance

with paragraph 603(a) of the Regulatory

Flexibility Act, Pub. L. No. 96–354, 94

Stat. 1164, 5 U.S.C. 601, et seq. (1981).

List of Subjects in 47 CFR Part 1

Administrative practice and

procedures, Communications common

carriers, Investigations, Lawyers,

Penalties, Reporting and recordkeeping

requirements, Telecommunications.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 97–9515 Filed 4–11–97; 8:45 am]

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