[Federal Register Volume 73, Number 25 (Wednesday, February 6, 2008)]
[Proposed Rules]
[Pages 6888-6895]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-2180]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WC Docket No. 07-267; FCC 07-202]


Petition To Establish Procedural Requirements To Govern 
Proceedings for Forbearance Under Section 10 of the Communications Act 
of 1934, as Amended

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission seeks comment regarding 
whether to adopt procedural rules to govern the Commission's 
consideration of petitions to forbear from enforcing rules that are 
alleged to be unnecessary or inconsistent with the public interest 
(forbearance petitions). The Commission is responding to arguments that 
current procedures governing consideration of forbearance petitions are 
unfair, and to several proposed new rules that would include, for 
example, requiring forbearance petitions to be complete-as-filed, and 
assigning the burden of proof on parties that file forbearance 
petitions. The Commission intends both to solicit comment on the 
proposals before it and to encourage suggestions of other rules that 
the Commission should consider that would govern the form and content 
of forbearance petitions.

DATES: Comments are due March 7, 2008 and Reply Comments are due March 
24, 2008. Written comments on the Paperwork Reduction Act proposed 
information collection requirements must be submitted by the public, 
Office of Management and Budget (OMB), and other interested parties on 
or before April 7, 2008.

ADDRESSES: You may submit comments, identified by WC Docket No. 07-267, 
by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#98fdfbfeebd8fefbfbb6fff7ee"><span class="__cf_email__" data-cfemail="6c090f0a1f2c0a0f0f420b031a">[email protected]</span></a>, and include the following words in 
the body of the message, ``get form.'' A sample form and directions 
will be sent in response. Include the docket number in the subject line 
of the message.
    <bullet> Mail: Secretary, Federal Communications Commission, 445 
12th Street, SW., Washington, DC 20554.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#296f6a6a1c191d694f4a4a074e465f"><span class="__cf_email__" data-cfemail="f8bebbbbcdc8ccb89e9b9bd69f978e">[email protected]</span></a> or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document. In addition to filing comments 
with the Secretary, a copy of any comments on the Paperwork Reduction 
Act information collection requirements contained herein should be 
submitted to the Federal Communications Commission via e-mail to 
<a href="/cdn-cgi/l/email-protection#0e5e5c4f4e686d6d20696178"><span class="__cf_email__" data-cfemail="a3f3f1e2e3c5c0c08dc4ccd5">[email protected]</span></a> and to Nicholas A. Fraser, Office of Management and Budget, 
via e-mail to <a href="/cdn-cgi/l/email-protection#89c7e0eae1e6e5e8fad6c8a7d6cffbe8faecfbc9e6e4eba7ece6f9a7eee6ff"><span class="__cf_email__" data-cfemail="cf81a6aca7a0a3aebc908ee19089bdaebcaabd8fa0a2ade1aaa0bfe1a8a0b9">[email protected]</span></a> or via fax at 202-395-
5167.

FOR FURTHER INFORMATION CONTACT: Jonathan Reel, Wireline Competition 
Bureau, (202) 418-1580. For additional information concerning the 
Paperwork Reduction Act information collection requirements contained 
in this document, contact Jerry R. Cowden at (202) 418-0447, or via the 
Internet at <a href="/cdn-cgi/l/email-protection#0e5e5c4f4e686d6d20696178"><span class="__cf_email__" data-cfemail="3f6f6d7e7f595c5c11585049">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may 
file Comments on or before March 7, 2008 and Reply Comments on or 
before March 24, 2008. Comments may be filed using: (1) The 
Commission's Electronic Comment Filing System (ECFS), (2) the Federal 
Government's eRulemaking Portal, or (3) by filing paper copies. See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121, 
May 1, 1998.
    <bullet> Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers 
should follow the instructions provided on the Web site for submitting 
comments.
    <bullet> For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket or rulemaking number. Parties may also submit 
an electronic comment by Internet e-mail. To get filing instructions, 
filers should send an e-mail to <a href="/cdn-cgi/l/email-protection#6500060316250306064b020a13"><span class="__cf_email__" data-cfemail="1174727762517772723f767e67">[email protected]</span></a>, and include the following 
words in the body of the message, ``get form.'' A sample form and 
directions will be sent in response.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail (although we continue to experience delays in receiving U.S. 
Postal Service mail). All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    <bullet> The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
    <bullet> Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    <bullet> U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington, DC 20554.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an e-mail to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="482e2b2b7d787c082e2b2b662f273e">[email protected]</a> or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).

ADDRESSES: You may submit comments, identified by WC Docket No. 07-267, 
by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.

[[Page 6889]]

    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#0267616471426461612c656d74"><span class="__cf_email__" data-cfemail="b2d7d1d4c1f2d4d1d19cd5ddc4">[email protected]</span></a>, and include the following words in 
the body of the message, ``get form.'' A sample form and directions 
will be sent in response. Include the docket number in the subject line 
of the message.
    <bullet> Mail: Secretary, Federal Communications Commission, 445 
12th Street, SW., Washington, DC 20554.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#286e6b6b1d181c684e4b4b064f475e"><span class="__cf_email__" data-cfemail="2f696c6c1a1f1b6f494c4c01484059">[email protected]</span></a> or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

Initial Paperwork Reduction Act of 1995 Analysis

    This document does not contain proposed information collection 
requirements subject to the Paperwork Reduction Act of 1995, Public Law 
104-13. In addition, therefore, it does not contain any proposed 
information collection burden ``for small business concerns with fewer 
than 25 employees,'' pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

Synopsis of the Notice of Proposed Rulemaking

Petition To Establish Procedural Requirements To Govern Proceedings for 
Forbearance Under Section 10 of the Communications Act of 1934, as 
Amended
    1. In this Notice of Proposed Rulemaking (NPRM), the Commission 
addresses the Petition filed on September 19, 2007 by Covad 
Communications Group, NuVox Communications, XO Communications, LLC, 
Cavalier Telephone Corp., and McLeod USA Telecommunications Services, 
Inc. (Petitioners or Covad, et al.) asking the Commission to consider 
the adoption of procedural rules to govern the Commission's 
consideration of petitions for forbearance pursuant to the 
Communications Act of 1934, as amended (Act).
    2. Pursuant to section 10 of the Act, the Commission is required to 
forbear from any statutory provision or regulation if it determines 
that: (1) Enforcement of the regulation is not necessary to ensure that 
the telecommunications carrier's charges, practices, classifications, 
or regulations are just, reasonable, and not unjustly or unreasonably 
discriminatory; (2) enforcement of the regulation is not necessary to 
protect consumers; and (3) forbearance from applying such provision or 
regulation is consistent with the public interest. In determining 
whether forbearance is consistent with the public interest, the 
Commission also must consider whether forbearance from enforcing the 
provision or regulation will promote competitive market conditions. In 
addition, section 332(c)(1)(A) of the Act authorizes the Commission to 
``forbear'' from applying the provisions of Title II to commercial 
mobile radio service (CMRS) providers, except for sections 201, 202, 
and 208, if certain criteria are satisfied. In particular, the 
Commission may exercise its forbearance authority pursuant to section 
332 if it determines that: (1) Enforcement of the requirement is 
unnecessary to ensure that rates are just, reasonable, and non-
discriminatory; (2) the requirement is not needed to protect consumers; 
and (3) forbearance is consistent with the public interest. The 
Commission also must consider whether any proposed forbearance from the 
requirements of Title II will enhance competition among CMRS providers.
    3. The Commission seeks comment in general on the need for 
procedural rules to govern the Commission's consideration of petitions 
for forbearance pursuant to section 10 and/or section 332 
(collectively, forbearance petitions), and with respect to the issues 
raised and rules proposed by the Petitioners in particular. For 
example, the Petitioners cite the need to apply Administrative 
Procedure Act (APA) notice-and-comment rules to forbearance petitions. 
The Petitioners state that to date the Commission's practice has been 
to provide interested parties with the opportunity to comment on a 
forbearance petition. Petitioners argue, however, that the Commission 
should institutionalize this practice to ensure that potentially-
affected parties have a well-defined right to have their views taken 
into account. The Commission seeks comment both on the Petitioners' 
specific proposal and, more generally, on how the Commission should 
provide notice and an opportunity to comment in forbearance 
proceedings.
    4. The Petitioners also request the adoption of rules governing the 
format and content of forbearance petitions, including a complete-as-
filed requirement. In particular, the Petitioners contend that a 
complete-as-filed rule would facilitate Commission review and would 
help ensure that all interested parties have a full and fair 
opportunity to present their views to the Commission. The Petitioners 
note that the Commission has adopted similar requirements in other 
circumstances, such as section 271 proceedings and formal complaint 
proceedings subject to statutory deadlines. The Commission seeks 
comment on the Petitioners' specific proposal for complete-as-filed 
requirements, including whether the Commission should specify certain 
information necessary for a prima facie showing that forbearance is 
warranted as the Petitioners recommend. The Commission also seeks 
comment on the Petitioners' proposal for a rule specifying that the 
forbearance petitioner has the burden of proof. The Commission also 
seeks comment on whether there are other particular rules governing the 
form and content of forbearance petitions that the Commission should 
consider.
    5. In addition, the Petitioners propose that the Commission require 
a forbearance petitioner to separately demonstrate how it has satisfied 
each component of the forbearance standard. They assert that such a 
requirement is consistent with the Commission's pleading requirements 
in other contexts. The Petitioners contend that, in past practice, 
petitioners have failed to address each element of the section 10 
standard individually, instead generally asserting that the forbearance 
criteria are satisfied with respect to all of the regulations and 
statutory provisions from which they are seeking forbearance. The 
Commission seeks comment on the Petitioners' specific proposal, 
including its relationship to the section 10 or section 332 forbearance 
standard and the Commission's forbearance analysis set forth in prior 
orders.
    6. The Commission also seeks comment on the Petitioners' request 
that the Commission adopt particular rules addressing the scope and 
interpretation of protective orders in forbearance proceedings. The 
Petitioners suggest rules governing the timing of adoption of 
protective orders and the terms of access to, and use of, documents and 
information submitted pursuant to those protective orders. For example, 
the Petitioners suggest that all interested parties should be permitted 
to obtain copies of confidential and highly confidential documents. In 
addition, the Petitioners recommend that parties be allowed to use 
information submitted pursuant to protective order in one forbearance 
proceeding in other Commission forbearance proceedings in which a 
petitioning party seeks relief from the same rules and/or statutory 
provisions and that states be permitted

[[Page 6890]]

to use documents designated as Confidential and Highly Confidential in 
related state proceedings. The Commission seeks comment on the 
Petitioners' specific proposals, as well as any other comments 
regarding the submission of, access to, and use of documents and 
information covered by protective orders in forbearance proceedings. 
The Commission also seeks comment specifically on the relationship 
between the rules proposed by Petitioners or other commenters and the 
Commission's rules and precedent regarding information withheld from 
public inspection.
    7. The Petitioners further seek rules establishing a timetable for 
Commission proceedings addressing forbearance petitions, which, among 
other things, incorporates a limited period for a petitioning party to 
cure minor defects in its petition without having to re-start the 
statutory clock, provides a specific vehicle for state commission input 
in the forbearance process; addresses motions to dismiss, and 
establishes a standard comment cycle; as well as a time limit on 
substantive ex parte submissions and other requirements. The Commission 
seeks comment on each of the proposals suggested by the Petitioners, as 
well as their general recommendation for the adoption of specific 
timetables for the Commission's review of forbearance petitions. The 
Commission also seeks comment on other proposals for steps the 
Commission could take to facilitate the participation of state 
commissions, as well as other parties, in forbearance proceedings.
    8. The Petitioners propose that the Commission adopt additional 
requirements for petitions seeking forbearance from sections 251 and/or 
271 of the Act. For example, the Petitioners propose that petitioners 
seeking forbearance from sections 251 or 271 must provide supporting 
data at the wire center level. The Petitioners further propose that the 
Commission adopt a rule inviting states to report to the Commission on 
the potential effects of sections 251 and/or 271 forbearance in their 
states.
    9. The Petitioners also suggest certain procedural requirements 
governing the resolution of forbearance petitions, including a proposal 
that the Commission adopt a rule requiring the issuance of a written 
order on all forbearance petitions, including those petitions that 
previously have been ``deemed granted.'' The Commission seeks comment 
on that proposal.
    10. To the extent that the Commission adopts procedural rules to 
govern forbearance petitions, the Petitioners request that those rules 
apply both to forbearance petitions filed in the future, as the well as 
forbearance petitions already pending before the Commission. The 
Commission seeks comment on the extent of the Commission's authority to 
adopt procedural rules governing both future forbearance petitions as 
well as those that already are pending before the Commission, 
particularly with respect to the procedural rules proposed by the 
Petitioners. The Commission also seeks comment on the propriety, as a 
policy matter, of extending particular procedural rules in such manner.
    11. In recent years, the Commission has witnessed a significant 
increase in the number of petitions seeking forbearance submitted by 
telecommunications carriers that the Commission oversees. These 
petitions have had different results, such as petitions being approved, 
denied, withdrawn or deemed granted. In the course of Congressional 
oversight, some Members of Congress have raised concerns with how 
forbearance is used. Some companies have indicated serious concerns 
with the forbearance process, while others argue that it is an 
important tool for the Commission to eliminate rules, consistent with 
the public interest. The Commission therefore seeks comment on whether 
forbearance is an effective means for the Commission to make changes to 
its regulations. The Commission also seeks comment on whether 
forbearance is being utilized for the purposes intended by Congress. 
The Commission asks whether there are unintended consequences of 
forbearance, such as a focus on these petitions at the expense of other 
industry-wide proceedings, including burdens on stakeholders from 
forbearance proceedings, such as administrative and financial costs. 
The Commission asks whether there are additional burdens placed on 
stakeholders due to the fact that there is a statutory deadline on the 
completion of forbearance petitions. The Commission also seeks comment 
regarding the effects of having a company-specific petition drive 
agency decisions, rather than the Commission deciding to take industry-
wide actions.
    12. Finally, the Commission seeks comment on any other aspects of 
the Petition, as well as any other comments regarding the need for any 
other procedural rules to govern the Commission's consideration of 
forbearance petitions. The Commission also invites comment on the 
possible effect on small entities from adopting any of the Petitioners' 
proposed rules, or variations of those proposals set forth above. To 
the extent that the Commission were to adopt any procedural rules 
governing forbearance petitions proposed by the Petitioners or 
otherwise justified in the record, the Commission asks what would be 
the appropriate remedy for a violation of those rules.

Ex Parte Presentations

    13. The rulemaking this NPRM initiates shall be treated as a 
``permit-but-disclose'' proceeding in accordance with the Commission's 
ex parte rules. Persons making oral ex parte presentations are reminded 
that memoranda summarizing the presentations must contain summaries of 
the substance of the presentations and not merely a listing of the 
subjects discussed. More than a one or two sentence description of the 
views and arguments presented generally is required. Other requirements 
pertaining to oral and written presentations are set forth in Sec.  
1.1206(b) of the Commission's rules.

Initial Regulatory Flexibility Analysis

    14. As required by the Regulatory Flexibility Act of 1980, the 
Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities of 
the policies and rules addressed in this document. The IRFA is set 
forth separately below. Written public comments are requested on this 
IRFA. Comments must be identified as responses to the IRFA. Comments 
are due March 7, 2008 and Reply Comments are due March 24, 2008.

Paperwork Reduction Act

    15. This document contains proposed new or 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 (OMB) 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.''

Accessible Formats

    16. To request materials in accessible formats for people with 
disabilities (Braille, large print, electronic files, audio format), 
send an e-mail to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="274144441217136741444409404851">[email protected]</a> or call the Consumer &

[[Page 6891]]

Governmental Affairs Bureau at 202-418-0530 (voice) or 202-418-0432 
(TTY). Contact the FCC to request reasonable accommodations for filing 
comments (accessible format documents, sign language interpreters, 
CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#c7818484f2f7f387a1a4a4e9a0a8b1"><span class="__cf_email__" data-cfemail="460005057376720620252568212930">[email protected]</span></a>; phone: 202-418-0530 or TTY: 202-
418-0432.

Initial Regulatory Flexibility Analysis

    17. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared the present Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on small entities that might result from this NPRM. 
Written public comments are requested on this IRFA. Comments must be 
identified as responses to the IRFA and must be filed by the deadlines 
for comments on the NPRM provided above. The Commission will send a 
copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. In addition, the NPRM 
and the IRFA (or summaries thereof) will be published in the Federal 
Register.

A. Need For, and Objectives Of, the Proposed Rules

    18. In this NPRM, we seek comment on whether the Commission should 
adopt procedural rules governing its consideration of petitions for 
forbearance pursuant to section 10 or section 332 of the Act. In 
particular, we seek comment on the need to apply APA notice-and-comment 
rules to forbearance petitions. We also seek comment on the burdens of 
proof and production in forbearance proceedings. Additionally, we seek 
comment on whether to adopt rules governing the form and content of 
forbearance petitions, including possibly a ``complete-as-filed'' 
requirement and a requirement that the petitioner demonstrate that it 
has satisfied each element of the forbearance standard. Further, we 
solicit comment on the need for rules governing the scope and 
interpretation of protective orders in forbearance proceedings. In 
addition, we seek comment on the need for rules establishing timetables 
for Commission proceedings addressing forbearance petitions. In the 
NPRM, we also seek comment on whether additional rules are warranted 
for petitions seeking forbearance from section 251 or section 271 of 
the Act. We further seek comment on whether we should adopt procedural 
requirements governing the resolution of forbearance petitions. We also 
seek comment on the need for any other procedural rules governing 
forbearance petitions, the scope of application of such rules, and the 
appropriate remedies for violation should the Commission adopt such 
rules. For each of these issues, we seek comment on the possible 
effects on small entities, associated with any rules the Commission 
might adopt.

B. Legal Basis

    19. The legal basis for any action that may be taken pursuant to 
this NPRM is contained in sections 1, 4(i), 4(j), 10, 303, 332 and 403 
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i)-
(j), 160, 303, 332, 403.

C. Description and Estimate of the Number of Small Entities To Which 
the Proposed Rules May Apply

    20. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, 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.
    21. Small Businesses. Nationwide, there are a total of 22.4 million 
small businesses, according to SBA data.
    22. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.
    23. Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand.'' Census Bureau data for 2002 
indicate that there were 87,525 local governmental jurisdictions in the 
United States. We estimate that, of this total, 84,377 entities were 
``small governmental jurisdictions.'' Thus, we estimate that most 
governmental jurisdictions are small.
    24. Incumbent Local Exchange Carriers (ILECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. According to Commission 
data, 1,303 carriers have reported that they are engaged in the 
provision of incumbent local exchange services. Of these 1,303 
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of incumbent local exchange service are small businesses 
that may be affected by our proposed action.
    25. Competitive Local Exchange Carriers (CLECs), 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 size standard under SBA rules is for the 
category Wired Telecommunications Carriers. Under that size standard, 
such a business is small if it has 1,500 or fewer employees. According 
to Commission data, 769 carriers have reported that they are engaged in 
the provision of either competitive access provider services or 
competitive local exchange carrier services. Of these 769 carriers, an 
estimated 676 have 1,500 or fewer employees and 94 have more than 1,500 
employees. In addition, 12 carriers have reported that they are 
``Shared-Tenant Service Providers,'' and all 12 are estimated to have 
1,500 or fewer employees. In addition, 39 carriers have reported that 
they are ``Other Local Service Providers.'' Of the 39, an estimated 38 
have 1,500 or fewer employees and one has more than 1,500 employees. 
Consequently, the Commission estimates that most providers of 
competitive local exchange service, competitive access providers, 
``Shared-Tenant Service Providers,'' and ``Other Local Service 
Providers'' are small entities that may be affected by our proposed 
action.
    26. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
providers of interexchange services. The appropriate size standard 
under SBA rules is for the category Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 316 carriers have 
reported that they are engaged in the provision of interexchange 
service. Of these, an estimated 292 have 1,500 or fewer employees and 
24 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority

[[Page 6892]]

of IXCs are small entities that may be affected by our proposed action.
    27. International Service Providers. There is no small business 
size standard developed specifically for providers of international 
service. The appropriate size standards under SBA rules are for the two 
broad census categories of ``Satellite Telecommunications'' and ``Other 
Telecommunications.'' Under both categories, such a business is small 
if it has $13.5 million or less in average annual receipts.
    28. The first category of Satellite Telecommunications ``comprises 
establishments primarily engaged in providing point-to-point 
telecommunications services to other establishments in the 
telecommunications and broadcasting industries by forwarding and 
receiving communications signals via a system of satellites or 
reselling satellite telecommunications.'' For this category, Census 
Bureau data for 2002 show that there were a total of 371 firms that 
operated for the entire year. Of this total, 307 firms had annual 
receipts of under $10 million, and 26 firms had receipts of $10 million 
to $24,999,999. Consequently, we estimate that the majority of 
Satellite Telecommunications firms are small entities that might be 
affected by our action.
    29. The second category of Other Telecommunications ``comprises 
establishments primarily engaged in (1) providing specialized 
telecommunications applications, such as satellite tracking, 
communications telemetry, and radar station operations; or (2) 
providing satellite terminal stations and associated facilities 
operationally connected with one or more terrestrial communications 
systems and capable of transmitting telecommunications to or receiving 
telecommunications from satellite systems.'' For this category, Census 
Bureau data for 2002 show that there were a total of 332 firms that 
operated for the entire year. Of this total, 259 firms had annual 
receipts of under $10 million and 15 firms had annual receipts of $10 
million to $24,999,999. Consequently, we estimate that the majority of 
Other Telecommunications firms are small entities that might be 
affected by our action.
    30. Wireless Service Providers. The SBA has developed a small 
business size standard for wireless firms within the two broad economic 
census categories of ``Paging'' and ``Cellular and Other Wireless 
Telecommunications.'' Under both categories, the SBA deems a wireless 
business to be small if it has 1,500 or fewer employees. For the census 
category of Paging, Census Bureau data for 2002 show that there were 
807 firms in this category that operated for the entire year. Of this 
total, 804 firms had employment of 999 or fewer employees, and three 
firms had employment of 1,000 employees or more. Thus, under this 
category and associated small business size standard, the majority of 
firms can be considered small. For the census category of Cellular and 
Other Wireless Telecommunications, Census Bureau data for 2002 show 
that there were 1,397 firms in this category that operated for the 
entire year. Of this total, 1,378 firms had employment of 999 or fewer 
employees, and 19 firms had employment of 1,000 employees or more. 
Thus, under this second category and size standard, the majority of 
firms can, again, be considered small.
    31. Cellular Licensees. The SBA has developed a small business size 
standard for wireless firms within the two broad economic census 
categories of ``Paging'' and ``Cellular and Other Wireless 
Telecommunications.'' Under both categories, the SBA deems a wireless 
business to be small if it has 1,500 or fewer employees. For the census 
category of Paging, Census Bureau data for 2002 show that there were 
807 firms in this category that operated for the entire year. Of this 
total, 804 firms had employment of 999 or fewer employees, and three 
firms had employment of 1,000 employees or more. Thus, under this 
category and associated small business size standard, the majority of 
firms can be considered small. For the census category of Cellular and 
Other Wireless Telecommunications, Census Bureau data for 2002 show 
that there were 1,397 firms in this category that operated for the 
entire year. Of this total, 1,378 firms had employment of 999 or fewer 
employees, and 19 firms had employment of 1,000 employees or more. 
Thus, under this second category and size standard, the majority of 
firms can, again, be considered small.
    32. Common Carrier Paging. As noted, the SBA has developed a small 
business size standard for wireless firms within the broad economic 
census categories of ``Cellular and Other Wireless 
Telecommunications.'' Under this SBA category, a wireless business is 
small if it has 1,500 or fewer employees. For the census category of 
Paging, U.S. Census Bureau data for 1997 show that there were 1,320 
firms in this category, total, that operated for the entire year. Of 
this total, 1,303 firms had employment of 999 or fewer employees, and 
an additional 17 firms had employment of 1,000 employees or more. Thus, 
under this category and associated small business size standard, the 
great majority of firms can be considered small.
    33. In addition, in the Paging Second Report and Order, the 
Commission adopted a size standard for ``small businesses'' for 
purposes of determining their eligibility for special provisions such 
as bidding credits and installment payments. A small business is an 
entity that, together with its affiliates and controlling principals, 
has average gross revenues not exceeding $15 million for the preceding 
three years. The SBA has approved this definition. An auction of 
Metropolitan Economic Area (MEA) licenses commenced on February 24, 
2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985 
were sold. Fifty-seven companies claiming small business status won 440 
licenses. An auction of MEA and Economic Area (EA) licenses commenced 
on October 30, 2001, and closed on December 5, 2001. Of the 15,514 
licenses auctioned, 5,323 were sold. One hundred thirty-two companies 
claiming small business status purchased 3,724 licenses. A third 
auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 
licenses in all but three of the 51 MEAs commenced on May 13, 2003, and 
closed on May 28, 2003. Seventy-seven bidders claiming small or very 
small business status won 2,093 licenses. Currently, there are 
approximately 74,000 Common Carrier Paging licenses. According to the 
most recent Trends in Telephone Service, 408 private and common 
carriers reported that they were engaged in the provision of either 
paging or ``other mobile'' services. Of these, we estimate that 589 are 
small, under the SBA-approved small business size standard. We estimate 
that the majority of common carrier paging providers would qualify as 
small entities under the SBA definition.
    34. 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. The Commission auctioned geographic area licenses in 
the WCS service. In the auction, which commenced on April 15, 1997 and 
closed on April 25, 1997, there were seven bidders that won 31 licenses 
that qualified as very small business entities,

[[Page 6893]]

and one bidder that won one license that qualified as a small business 
entity. An auction for one license in the 1670-1674 MHz band commenced 
on April 30, 2003 and closed the same day. One license was awarded. The 
winning bidder was not a small entity.
    35. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. The SBA has developed a small business size 
standard for ``Cellular and Other Wireless Telecommunications'' 
services. Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Trends in 
Telephone Service data, 437 carriers reported that they were engaged in 
wireless telephony. We have estimated that 260 of these are small under 
the SBA small business size standard.
    36. Broadband Personal Communications Service. The broadband 
personal communications services (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission has created a small business 
size standard for Blocks C and F as an entity that has average gross 
revenues of less than $40 million in the three previous calendar years. 
For Block F, an additional small business size standard for ``very 
small business'' was added and is defined as an entity that, together 
with its affiliates, has average gross revenues of not more than $15 
million for the preceding three calendar years. These small business 
size standards, in the context of broadband PCS auctions, have been 
approved by the SBA. No small businesses within the SBA-approved small 
business size standards bid successfully for licenses in Blocks A and 
B. There were 90 winning bidders that qualified as small entities in 
the Block C auctions. A total of 93 ``small'' and ``very small'' 
business bidders won approximately 40 percent of the 1,479 licenses for 
Blocks D, E, and F. On March 23, 1999, the Commission reauctioned 155 
C, D, E, and F Block licenses; there were 113 small business winning 
bidders.
    38. On January 26, 2001, the Commission completed the auction of 
422 C and F Broadband PCS licenses in Auction No. 35. Of the 35 winning 
bidders in this auction, 29 qualified as ``small'' or ``very small'' 
businesses. Subsequent events, concerning Auction 35, including 
judicial and agency determinations, resulted in a total of 163 C and F 
Block licenses being available for grant. On February 15, 2005, the 
Commission completed an auction of 188 C Block licenses and 21 F Block 
licenses in Auction No. 58. There were 24 winning bidders for 217 
licenses. Of the 24 winning bidders, 16 claimed small business status 
and won 156 licenses.
    39. Narrowband Personal Communications Services. The Commission 
held an auction for Narrowband PCS licenses that commenced on July 25, 
1994, and closed on July 29, 1994. A second auction commenced on 
October 26, 1994 and closed on November 8, 1994. For purposes of the 
first two Narrowband PCS auctions, ``small businesses'' were entities 
with average gross revenues for the prior three calendar years of $40 
million or less. Through these auctions, the Commission awarded a total 
of 41 licenses, 11 of which were obtained by four small businesses. To 
ensure meaningful participation by small business entities in future 
auctions, the Commission adopted a two-tiered small business size 
standard in the Narrowband PCS Second Report and Order. A ``small 
business'' is an entity that, together with affiliates and controlling 
interests, has average gross revenues for the three preceding years of 
not more than $40 million. A ``very small business'' is an entity that, 
together with affiliates and controlling interests, has average gross 
revenues for the three preceding years of not more than $15 million. 
The SBA has approved these small business size standards. A third 
auction commenced on October 3, 2001 and closed on October 16, 2001. 
Here, five bidders won 317 (Metropolitan Trading Areas and nationwide) 
licenses. Three of these claimed status as a small or very small entity 
and won 311 licenses.
    40. Lower 700 MHz Band Licenses. We adopted criteria for defining 
three groups of small businesses for purposes of determining their 
eligibility for special provisions such as bidding credits. We have 
defined a ``small business'' as an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $40 million for the preceding three years. A ``very small 
business'' is defined as an entity that, together with its affiliates 
and controlling principals, has average gross revenues that are not 
more than $15 million for the preceding three years. Additionally, the 
lower 700 MHz Service has a third category of small business status 
that may be claimed for Metropolitan/Rural Service Area (MSA/RSA) 
licenses. The third category is ``entrepreneur,'' which is defined as 
an entity that, together with its affiliates and controlling 
principals, has average gross revenues that are not more than $3 
million for the preceding three years. The SBA has approved these small 
size standards. An auction of 740 licenses (one license in each of the 
734 MSAs/RSAs and one license in each of the six Economic Area 
Groupings (EAGs)) commenced on August 27, 2002, and closed on September 
18, 2002. Of the 740 licenses available for auction, 484 licenses were 
sold to 102 winning bidders. Seventy-two of the winning bidders claimed 
small business, very small business or entrepreneur status and won a 
total of 329 licenses. A second auction commenced on May 28, 2003, and 
closed on June 13, 2003, and included 256 licenses: 5 EAG licenses and 
476 Cellular Market Area licenses. Seventeen winning bidders claimed 
small or very small business status and won 60 licenses, and nine 
winning bidders claimed entrepreneur status and won 154 licenses. On 
July 26, 2005, the Commission completed an auction of 5 licenses in the 
Lower 700 MHz band (Auction No. 60). There were three winning bidders 
for five licenses. All three winning bidders claimed small business 
status.
    41. Upper 700 MHz Band Licenses. In Service Rules for the 746-764 
and 776-794 MHz Bands, 16 FCC Rcd 1239 (January 12, 2001), the 
Commission authorized service in the upper 700 MHz band. This auction, 
previously scheduled for January 13, 2003, has been postponed.
    42. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, 
we adopted size standards for ``small businesses'' and ``very small 
businesses'' for purposes of determining their eligibility for special 
provisions such as bidding credits and installment payments. A small 
business in this service is an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $40 million for the preceding three years. Additionally, a 
very small business is an entity that, together with its affiliates and 
controlling principals, has average gross revenues that are not more 
than $15 million for the preceding three years. SBA approval of these 
definitions is not required. An auction of 52 Major Economic Area (MEA) 
licenses commenced on September 6, 2000, and closed on September 21, 
2000. Of the 104 licenses auctioned, 96 licenses were sold to nine 
bidders. Five of these bidders were small businesses that won a total 
of 26 licenses. A second auction of 700 MHz Guard Band licenses 
commenced on February 13, 2001, and closed on February 21, 2001. All 
eight of the licenses auctioned were

[[Page 6894]]

sold to three bidders. One of these bidders was a small business that 
won a total of two licenses.
    43. Fixed Microwave Services. Fixed microwave services include 
common carrier, private operational-fixed, and broadcast auxiliary 
radio services. At present, there are approximately 22,015 common 
carrier fixed licensees and 61,670 private operational-fixed licensees 
and broadcast auxiliary radio licensees in the microwave services. The 
Commission has not created a size standard for a small business 
specifically with respect to fixed microwave services. For purposes of 
this analysis, the Commission uses the SBA small business size standard 
for the category ``Cellular and Other Telecommunications,'' which is 
1,500 or fewer employees. The Commission does not have data specifying 
the number of these licensees that have no more than 1,500 employees, 
and thus are unable at this time to estimate with greater precision the 
number of fixed microwave service licensees that would qualify as small 
business concerns under the SBA's small business size standard. 
Consequently, the Commission estimates that there are 22,015 or fewer 
common carrier fixed licensees and 61,670 or fewer private operational-
fixed licensees and broadcast auxiliary radio licensees in the 
microwave services that may be small and may be affected by the rules 
and policies proposed herein. We note, however, that the common carrier 
microwave fixed licensee category includes some large entities.
    44. 39 GHz Service. The Commission created a special small business 
size standard for 39 GHz licenses--an entity that has average gross 
revenues of $40 million or less in the three previous calendar years. 
An additional size standard for ``very small business'' is: An entity 
that, together with affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. The SBA has 
approved these small business size standards.
    The auction of the 2,173 39 GHz licenses began on April 12, 2000 
and closed on May 8, 2000.
    The 18 bidders who claimed small business status won 849 licenses.
    45. Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (LMDS) is a fixed broadband point-to-multipoint 
microwave service that provides for two-way video telecommunications. 
The auction of the 986 Local Multipoint Distribution Service (LMDS) 
licenses began on February 18, 1998 and closed on March 25, 1998. The 
Commission established a small business size standard for LMDS licenses 
as an entity that has average gross revenues of less than $40 million 
in the three previous calendar years. An additional small business size 
standard for ``very small business'' was added as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. The SBA has 
approved these small business size standards in the context of LMDS 
auctions. There were 93 winning bidders that qualified as small 
entities in the LMDS auctions. A total of 93 small and very small 
business bidders won approximately 277 A Block licenses and 387 B Block 
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; 
there were 32 small and very small businesses that won 119 licenses.
    46. 218-219 MHz Service. The first auction of 218-219 MHz 
(previously referred to as the Interactive and Video Data Service or 
IVDS) spectrum resulted in 178 entities winning licenses for 594 
Metropolitan Statistical Areas (MSAs). Of the 594 licenses, 567 were 
won by 167 entities qualifying as a small business. For that auction, 
we defined a small business as an entity that, together with its 
affiliates, has no more than a $6 million net worth and, after federal 
income taxes (excluding any carry over losses), has no more than $2 
million in annual profits each year for the previous two years. In the 
218-219 MHz Report and Order and Memorandum Opinion and Order, we 
defined a small business as an entity that, together with its 
affiliates and persons or entities that hold interests in such an 
entity and their affiliates, has average annual gross revenues not 
exceeding $15 million for the preceding three years. A very small 
business is defined as an entity that, together with its affiliates and 
persons or entities that hold interests in such an entity and its 
affiliates, has average annual gross revenues not exceeding $3 million 
for the preceding three years. The SBA has approved of these 
definitions. A subsequent auction is not yet scheduled. Given the 
success of small businesses in the previous auction, and the prevalence 
of small businesses in the subscription television services and message 
communications industries, we assume for purposes of this analysis that 
in future auctions, many, and perhaps most, of the licenses may be 
awarded to small businesses.
    47. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio System (BETRS). In the present 
context, we will use the SBA's small business size standard applicable 
to ``Cellular and Other Wireless Telecommunications,'' i.e., an entity 
employing no more than 1,500 persons. There are approximately 1,000 
licensees in the Rural Radiotelephone Service, and the Commission 
estimates that there are 1,000 or fewer small entity licensees in the 
Rural Radiotelephone Service that may be affected by the rules and 
policies proposed herein.
    48. Incumbent 24 GHz Licensees. This analysis may affect incumbent 
licensees who were relocated to the 24 GHz band from the 18 GHz band, 
and applicants who wish to provide services in the 24 GHz band. The 
applicable SBA small business size standard is that of ``Cellular and 
Other Wireless Telecommunications'' companies. This category provides 
that such a company is small if it employs no more than 1,500 persons. 
For the census category of Paging, Census Bureau data for 2002 show 
that there were 807 firms in this category that operated for the entire 
year. Of this total, 804 firms had employment of 999 or fewer 
employees, and three firms had employment of 1,000 employees or more. 
Thus, under this category and associated small business size standard, 
the majority of firms can be considered small. For the census category 
of Cellular and Other Wireless Telecommunications, Census Bureau data 
for 2002 show that there were 1,397 firms in this category that 
operated for the entire year. Of this total, 1,378 firms had employment 
of 999 or fewer employees, and 19 firms had employment of 1,000 
employees or more. Thus, under this second category and size standard, 
the majority of firms can, again, be considered small. These broader 
census data notwithstanding, we believe that there are only two 
licensees in the 24 GHz band that were relocated from the 18 GHz band, 
Teligent and TRW, Inc. It is our understanding that Teligent and its 
related companies have fewer than 1,500 employees, though this may 
change in the future. TRW is not a small entity. Thus, only one 
incumbent licensee in the 24 GHz band is a small business entity.
    49. Future 24 GHz Licensees. With respect to new applicants in the 
24 GHz band, we have defined ``small business'' as an entity that, 
together with controlling interests and affiliates, has average annual 
gross revenues for the three preceding years not exceeding $15 million. 
``Very small business'' in the 24 GHz band is defined as an entity 
that, together with controlling interests and affiliates, has average 
gross revenues not exceeding $3 million for the preceding

[[Page 6895]]

three years. The SBA has approved these definitions. The Commission 
will not know how many licensees will be small or very small businesses 
until the auction, if required, is held.

D. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    50. Should the Commission decide to adopt any procedural rules 
governing petitions for forbearance, the associated rules potentially 
could modify or impose new reporting or recordkeeping requirements. For 
example, we seek comment on the possible need for rules governing the 
form and content of forbearance petitions, such as ``complete-as-
filed'' requirements and obligations for forbearance petitioners to 
demonstrate that they have satisfied each element of the forbearance 
standard. The Commission also seeks comment on the possible need or 
rules governing the scope and interpretation of protective orders in 
forbearance proceedings, including rules governing the submission of, 
access to, and use of information submitted pursuant to protective 
orders in forbearance proceedings. In addition, we seek comment on the 
need for rules establishing timetables for Commission proceedings 
addressing forbearance petitions, including requirements governing 
modification of forbearance petitions and processes for ex parte 
filings. We further seek comment on whether we should adopt procedural 
requirements governing petitions for reconsideration of forbearance 
decisions. The Commission also seeks comment on the need for any other 
procedural rules governing forbearance petitions, the scope of 
application of such rules, and the appropriate remedies for violation 
should the Commission adopt such rules. These proposals may impose 
additional reporting and recordkeeping requirements on entities. Also, 
we seek comment on the effects of any of these proposals on small 
entities. Entities, especially small businesses, are encouraged to 
quantify the costs and benefits or any reporting requirement that may 
be established in this proceeding.

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    51. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include (among others) the following four alternatives: (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    52. The Commission's primary objective is to implement the ``pro-
competitive, deregulatory'' framework established in sections 10 and 
332 of the Act. We seek comment on the burdens, including those placed 
on small carriers, associated with related Commission rules and whether 
the Commission should adopt different requirements for small 
businesses.

F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    53. None.

Ordering Clauses

    54. Accordingly, it is ordered that pursuant to sections 1, 4(i), 
4(j), 10, 303, 332 and 403 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 154(i)-(j), 160, 303, 332, 403, this Notice of 
Proposed Rulemaking in WC Docket No. 07-267 is adopted.
    55. It is further ordered that the Covad, et al. Petition to 
Establish Procedural Requirements to Govern Proceedings for Forbearance 
Under Section 10 of the Communications Act of 1934, as Amended, WC 
Docket No. 07-267 (filed Sept. 19, 2007), is granted to the extent 
indicated herein and otherwise is denied.
    56. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this NPRM, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
 [FR Doc. E8-2180 Filed 2-5-08; 8:45 am]
BILLING CODE 6712-01-P


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