[Federal Register Volume 73, Number 200 (Wednesday, October 15, 2008)]
[Proposed Rules]
[Pages 60997-61006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24476]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 43

[WC Docket No. 08-190; FCC 08-203]


Service Quality, Customer Satisfaction, Infrastructure and 
Operating Data Gathering

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In the Notice of Proposed Rulemaking (NPRM), the Federal 
Communications Commission (Commission) recognizes that it has 
continually sought to ensure that it has access to the data necessary 
for its public safety and broadband policymaking, and that certain 
infrastructure and operating data might be useful, but only if 
collected on an industry-wide basis from all relevant facilities-based 
providers of broadband and/or telecommunications. In addition, the 
Commission recognizes that certain service quality and customer 
satisfaction data might be useful, but only if collected on an 
industry-wide basis from all relevant facilities-based providers of 
broadband and/or telecommunications. The NPRM therefore seeks comment 
on whether and what types of such data should be collected from all 
relevant providers in furtherance of those goals.

DATES: Comments are due on or before November 14, 2008. Reply comments 
are due on or before December 15, 2008.

ADDRESSES: You may submit comments, identified by WC Docket No. 08-190, 
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> Mail: Parties choosing to file by paper must file an 
original and four copies of each filing in WC Docket No. 07-38. 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 the Commission continues to experience delays in receiving 
U.S. Postal Service mail). If more than one docket or rulemaking number 
appears in the caption of this proceeding, commenters must submit two 
additional copies for each additional docket or rulemaking number. The 
Commission's mail contractor, Vistronix, Inc., 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. 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. U.S. Postal Service first-class mail, Express Mail, 
and Priority Mail should be addressed to 445 12th Street, SW., 
Washington, DC 20554. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    <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#1d5b5e5e282d295d7b7e7e337a726b"><span class="__cf_email__" data-cfemail="5b1d18186e6b6f1b3d3838753c342d">[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.

FOR FURTHER INFORMATION CONTACT: Jeremy Miller, Wireline Competition 
Bureau, Industry Analysis and Technology Division, (202) 418-0940.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking in WC Docket No. 08-190, adopted on September 6, 
2008, and released on September 6, 2008. The complete text of this 
Notice of Proposed Rulemaking, and its accompanying Memorandum Opinion 
and Order, is available for public inspection Monday through Thursday 
from 8 a.m. to 4:30 p.m. and Friday from 8 a.m. to 11:30 a.m. in the 
Commission's Consumer and Governmental Affairs Bureau, Reference 
Information Center, Room CY-A257, 445 12th Street, SW., Washington, DC 
20554. The complete text is available also on the Commission's Internet 
site at www.fcc.gov. Alternative formats are available for persons with 
disabilities by contacting the Consumer and Governmental Affairs 
Bureau, at (202) 418-0531, TTY (202) 418-7365, or at <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="7a1c19194f4a4e3a1c1919541d150c">[email protected]</a>. 
The complete text of the decision may be purchased from the 
Commission's duplicating contractor,

[[Page 60998]]

Best Copying and Printing, Inc., Room CY-B402, 445 12th Street, SW., 
Washington, DC 20554, telephone (202) 488-5300, facsimile (202) 488-
5563, TTY (202) 488-5562, or e-mail at <a href="/cdn-cgi/l/email-protection#c5a3a6a685a7a6b5acb2a0a7eba6aaa8"><span class="__cf_email__" data-cfemail="e0868383a082839089978582ce838f8d">[email protected]</span></a>.

Synopsis of Further Notice of Proposed Rulemaking

    1. In the NPRM, the Commission recognizes that the collection of 
certain service quality, customer satisfaction, infrastructure, and 
operating data information might be warranted, if tailored in scope to 
be consistent with Commission objectives, and if obtained from the 
entire relevant industry of facilities-based providers of broadband 
and/or telecommunications. In the Memorandum Opinion and Order that 
accompanies the NPRM, the Commission conditionally grants in part 
petitions filed by certain carriers to forbear from their obligation to 
file the Automated Reporting Management Information System (ARMIS) 
Reports 43-05, 43-06, 43-07, and 43-08. See Attachment A to the NPRM 
for a summary of these reports.
    2. As an initial matter, the Commission seeks comment on what 
information the Commission should collect on an industry-wide basis. In 
the NPRM, the Commission tentatively concludes that collection of 
infrastructure and operating data information would be useful to the 
Commission's public safety and broadband policymaking and seeks comment 
on the specific information that the Commission should collect. The 
Commission seeks comment on this tentative conclusion. The Commission 
further finds that this data would be useful only if they are collected 
from the entire relevant industry. Therefore, any such data collection 
would gather this information from all facilities-based providers of 
broadband and/or telecommunications.
    3. The Commission also recognizes the possibility that service 
quality and customer satisfaction data contained in ARMIS Reports 43-05 
and 43-06 might be useful to consumers to help them make informed 
choices in a competitive market, but only if available from the entire 
relevant industry. The Commission thus tentatively concludes that it 
should collect this type of information, and seeks comment on the 
specific information that it should collect. The Commission seeks 
comment on this tentative conclusion. Again, the Commission finds that 
these data would be useful only if they are collected from the entire 
relevant industry. Thus, any such data collection would gather this 
information from all facilities-based providers of broadband and/or 
telecommunications.
    4. To the extent that the Commission collects any of the types of 
information described above, the Commission also seeks comment on the 
appropriate mechanism for such data collection. The Commission 
tentatively concludes that it should collect the infrastructure and 
operating data through Form 477, and seeks comment on that tentative 
conclusion. In addition, the Commission notes that while ARMIS 
information generally has been publicly available, carrier-specific 
Form 477 data is treated as confidential. What confidentiality 
protections, if any, are appropriate for the information here? To the 
extent that commenters support Commission collection of service quality 
and customer satisfaction data, the Commission also seeks comment on 
the appropriate mechanisms for such collections. Finally, the 
Commission seeks comment on possible methods for reporting information, 
as well as suggestions of methods to maintain and report the 
information, that achieve the purposes of the information collection 
while minimizing the burden on reporting entities, including small 
entities.

Ex Parte Presentations

    5. This proceeding 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 is generally required. Other rules pertaining 
to oral and written presentations are set forth in Section 1.1206(b) of 
the Commission's rules as well.

Comment Filing Procedures

    6. Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document. All filings related to this Notice of Proposed Rulemaking 
should refer to WC Docket No. 08-190. Comments may be filed using: (1) 
The Commission's Electronic Comment Filing System (ECFS), (2) the 
Federal Government's rulemaking Portal, or (3) by filing paper copies. 
See Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. 
Reg. 24,121 (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.
    [cir] For ECFS filers, if multiple dockets 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#a8cdcbcedbe8cecbcb86cfc7de"><span class="__cf_email__" data-cfemail="6b0e080d182b0d0808450c041d">[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 the Commission continues to experience delays in 
receiving U.S. Postal Service mail). All filings must be addressed to 
the Commission's Secretary, Office of the Secretary, Federal 
Communications Commission.
    [cir] 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.
    [cir] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [cir] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street, SW., Washington, DC 20554.
    7. Comments and reply comments and any other filed documents in 
this matter may be obtained from Best Copy and Printing, Inc., in 
person at 445 12th Street, SW., Room CY-B402,

[[Page 60999]]

Washington, DC 20554, via telephone at (202) 488-5300, via facsimile at 
(202) 488-5563, or via e-mail at <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="e9afaaaaa9abaab9a0beacabc7aaa6a4">[email protected]</a>. The pleadings will 
also be available for public inspection and copying during regular 
business hours in the FCC Reference Information Center, Room CY-A257, 
445 12th Street, SW., Washington, DC 20554, and through the 
Commission's Electronic Comment Filing System (ECFS) accessible on the 
Commission's Web site, http://www.fcc.gov/cgb/ecfs.
    8. 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="e98f8a8adcd9dda98f8a8ac78e869f">[email protected]</a> or call the Consumer & Governmental 
Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).
    9. Comments and reply comments must include a short and concise 
summary of the substantive arguments raised in the pleading. Comments 
and reply comments also must comply with section 1.49 and all other 
applicable sections of the Commission's rules. All parties are 
encouraged to utilize a table of contents, and to include the name of 
the filing party and the date of the filing on each page of their 
submission.
    10. Commenters who file information that they believe should be 
withheld from public inspection may request confidential treatment 
pursuant to section 0.459 of the Commission's rules. Commenters should 
file both their original comments for which they request 
confidentiality and redacted comments, along with their request for 
confidential treatment. Commenters should not file proprietary 
information electronically. Even if the Commission grants confidential 
treatment, information that does not fall within a specific exemption 
pursuant to the Freedom of Information Act (FOIA) must be publicly 
disclosed pursuant to an appropriate request. See 47 CFR 0.461; 5 
U.S.C. 552. The Commission may grant requests for confidential 
treatment either conditionally or unconditionally. As such, the 
Commission has the discretion to release information on public interest 
grounds that does fall within the scope of a FOIA exemption.

Initial Paperwork Reduction Act of 1995 Analysis

    11. The Notice of Proposed Rulemaking seeks comment on potential 
information collection requirements. The Commission, as part of its 
continuing effort to reduce paperwork burdens, invites the general 
public and the Office of Management and Budget to comment on the 
potential information collection requirements contained in this 
document. A copy of any Paperwork Reduction Act (PRA) comments on the 
information collection(s) contained herein should be submitted to the 
Federal Communications Commission, Room 1-C804, 445 12th Street, SW., 
Washington, D.C. 20554, or via the Internet to <a href="/cdn-cgi/l/email-protection#51010310113732327f363e27"><span class="__cf_email__" data-cfemail="6e3e3c2f2e080d0d40090118">[email protected]</span></a>, and to 
Nicholas Fraser, Office of Management and Budget (OMB), via e-mail to 
Nicholas--A.--Fraser@ omb.eop.gov or via fax at 202-395-5167.
    12. In addition, pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the 
Commission seeks specific comment on how it might ``further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees.''
    13. The Commission will also invite the general public to comment 
at a later date on any rules developed as a result of this proceeding 
that require the collection of information, as required by the 
Paperwork Reduction Act of 1995, Public Law 104-13. The Commission will 
at that time publish a separate notice seeking these comments from the 
public. In addition, pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the 
Commission also seek specific comment on how it might ``further reduce 
the information collection burden for small business concerns with 
fewer than 25 employees.''

Legal Basis

    14. The legal basis for any action that may be taken pursuant to 
the NPRM is contained in sections 1-5, 10, 11, 201-205, 211, 215, 218-
220, 251-271, 303(r), 332, 403, 502, and 503 of the Communications Act 
of 1934, as amended, 47 U.S.C. 151-155, 160, 161, 201-205, 211, 215, 
218-220, 251-271, 303(r), 332, 403, 502, and 503, and section 706 of 
the Telecommunications Act of 1996, 47 U.S.C. 157 nt.

Initial Regulatory Flexibility Analysis

    15. 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 today's 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 Further Notice provided above. The Commission will 
send a copy of the Further Notice, including this IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration.

Need for, and Objectives of, the Proposed Rules

    16. In the NPRM, the Commission considers whether to implement 
reporting requirements relating to service quality and infrastructure 
information. Specifically, the Commission seeks comment on whether to 
impose reporting requirements previously required through ARMIS Reports 
43-05, 43-06, 43-07 and 43-08, or similar requirements. The Commission 
also seeks comment on the mechanism for collecting that information. In 
addition, the NPRM seeks comment on the appropriate confidentiality 
protections for such information. For each of these issues, the 
Commission also seeks comment on the burdens, including those placed on 
small entities, associated with possible Commission data collection and 
whether there are alternative rules that might lessen any burden.

Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules May Apply

    17. 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 rules adopted herein. 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 Small Business 
Administration (SBA).
    18. Incumbent Local Exchange Carriers (ILECs). Neither the 
Commission nor the SBA has developed a size standard for small 
businesses specifically applicable to incumbent local exchange 
services. The closest applicable size standard under SBA rules is for 
Wired Telecommunications Carriers. Under that size standard, such a 
business is small if it has 1,500 or fewer employees. According to 
Commission data, 1,307 carriers reported that they were engaged in the 
provision of local exchange services. Of these 1,307 carriers, an 
estimated 1,019 have 1,500 or fewer employees and 288 have more than 
1,500 employees. Consequently, the Commission

[[Page 61000]]

estimates that most providers of incumbent local exchange service are 
small businesses that may be affected by the Commission's action.
    19. 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, 859 carriers reported that they were engaged in the 
provision of either competitive local exchange carrier or competitive 
access provider services. Of these 859 carriers, an estimated 741 have 
1,500 or fewer employees and 118 have more than 1,500 employees. In 
addition, 16 carriers have reported that they are ``Shared-Tenant 
Service Providers,'' and all 16 are estimated to have 1,500 or fewer 
employees. In addition, 44 carriers have reported that they are ``Other 
Local Service Providers.'' Of the 44, an estimated 43 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 the Commission's action.
    20. The Commission has included small incumbent local exchange 
carriers (LECs) in this present RFA analysis. As noted above, a ``small 
business'' under the RFA is one that, inter alia, meets the pertinent 
small business size standard (e.g. , a telephone communications 
business having 1,500 or fewer employees), and ``is not dominant in its 
field of operation.'' The SBA's Office of Advocacy contends that, for 
RFA purposes, small incumbent LECs are not dominant in their field of 
operation because any such dominance is not ``national'' in scope. The 
Commission has therefore included small incumbent LECs in this RFA 
analysis, although the Commission emphasizes that this RFA action has 
no effect on Commission analyses and determinations in other, non-RFA 
contexts.
    21. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 184 carriers have reported 
that they are engaged in the provision of local resale services. Of 
these, an estimated 181 have 1,500 or fewer employees and three have 
more than 1,500 employees. Consequently, the Commission estimates that 
the majority of local resellers are small entities that may be affected 
by the Commission's action.
    22. Toll Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 881 carriers have reported 
that they are engaged in the provision of toll resale services. Of 
these, an estimated 853 have 1,500 or fewer employees and 28 have more 
than 1,500 employees. Consequently, the Commission estimates that the 
majority of toll resellers are small entities that may be affected by 
the Commission's action.
    23. Payphone Service Providers (PSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
payphone services 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, 657 carriers have reported 
that they are engaged in the provision of payphone services. Of these, 
an estimated 653 have 1,500 or fewer employees and four have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of payphone service providers are small entities that may be 
affected by the Commission's action.
    24. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to interexchange services. The closest applicable size 
standard under SBA rules is for Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 330 companies reported 
that their primary telecommunications service activity was the 
provision of interexchange services. Of these 330 companies, an 
estimated 309 have 1,500 or fewer employees and 21 have more than 1,500 
employees. Consequently, the Commission estimates that the majority of 
interexchange service providers are small entities that may be affected 
by the Commission's action.
    25. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator 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, 23 carriers have reported that 
they are engaged in the provision of operator services. Of these, an 
estimated 22 have 1,500 or fewer employees and one has more than 1,500 
employees. Consequently, the Commission estimates that the majority of 
OSPs are small entities that may be affected by the Commission's 
action.
    26. Prepaid Calling Card Providers. Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
prepaid calling card providers. The appropriate size standard under SBA 
rules is for the category Telecommunications Resellers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 104 carriers have reported that they are 
engaged in the provision of prepaid calling cards. Of these, an 
estimated 102 have 1,500 or fewer employees and two have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of prepaid calling card providers are small entities that may 
be affected by the Commission's action.
    27. 800 and 800-Like Service Subscribers. Neither the Commission 
nor the SBA has developed a small business size standard specifically 
for 800 and 800-like service (``toll free'') subscribers. The 
appropriate size standard under SBA rules is for the category 
Telecommunications Resellers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. The most reliable source 
of information regarding the number of these service subscribers 
appears to be data the Commission collects on the 800, 888, 877, and 
866 numbers in use. According to the Commission's data, at the 
beginning of July 2006, the number of 800 numbers assigned was 
7,647,941; the number of 888 numbers assigned was 5,318,667; the number 
of 877 numbers assigned was 4,431,162; and the number of 866 numbers 
assigned was 6,008,976. The Commission does not have data specifying 
the number of these subscribers that are not independently owned and 
operated or have more than 1,500 employees, and thus are unable at this 
time to estimate with greater precision the number of toll free 
subscribers that would qualify as small businesses under the SBA size 
standard. Consequently, the

[[Page 61001]]

Commission estimates that there are 7,647,941 or fewer small entity 800 
subscribers; 5,318,667 or fewer small entity 888 subscribers; 4,431,162 
or fewer small entity 877 subscribers; and 5,318,667 or fewer small 
entity 866 subscribers.

Wireless Carriers and Service Providers

    28. Below, for those services subject to auctions, the Commission 
notes that, as a general matter, the number of winning bidders that 
qualify as small businesses at the close of an auction does not 
necessarily represent the number of small businesses currently in 
service. Also, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated.
    29. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the SBA has recognized wireless firms within this new, broad, 
economic census category. Because there is not, as yet, much if any 
data to establish small business size standards for the different 
categories of wireless firms that fall under this broad, new census 
category, the Commission will use data gathered under superseded census 
categories to estimate the relevant size standards. Prior to 2007, the 
SBA had developed a small business size standard for wireless firms 
within the now-superseded census categories of ``Paging'' and 
``Cellular and Other Wireless Telecommunications.'' Under the present 
and prior categories, the SBA has deemed a wireless business to be 
small if it has 1,500 or fewer employees. Because Census Bureau data 
are not yet available for the new category, the Commission will 
estimate small business prevalence using the prior categories and 
associated data. For the first category of Paging, data for 2002 show 
that there were 807 firms 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. For the second 
category of Cellular and Other Wireless Telecommunications, data for 
2002 show that there were 1,397 firms 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, using the prior categories and the available data, the Commission 
estimates that the majority of wireless firms can be considered small. 
According to Commission data, 432 carriers reported that they were 
engaged in the provision of cellular service, Personal Communications 
Service (PCS), or Specialized Mobile Radio (SMR) Telephony services, 
which are placed together in the data. The Commission has estimated 
that 221 of these are small, under the SBA small business size 
standard. Thus, under this category and size standard, about half of 
firms can be considered small.
    30. Common Carrier Paging. The SBA has developed a small business 
size standard for the superseded category of ``Paging,'' under which a 
business is small if it has 1,500 or fewer employees. According to 
Commission data, 365 carriers have reported that they are engaged in 
Paging or Messaging Service. Of these, an estimated 360 have 1,500 or 
fewer employees, and 5 have more than 1,500 employees. Consequently, 
the Commission estimates that the majority of paging providers are 
small entities that may be affected by the Commission's action. In 
addition, in the Paging Third Report and Order, the Commission 
developed a small business size standard for ``small businesses'' and 
``very small businesses'' for purposes of determining their eligibility 
for special provisions such as bidding credits and installment 
payments. A ``small business'' is an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $15 million for the preceding three years. Additionally, a 
``very small business'' is an entity that, together with its affiliates 
and controlling principals, has average gross revenues that are not 
more than $3 million for the preceding three years. The SBA has 
approved these small business size standards. An auction of 
Metropolitan Economic Area licenses commenced on February 24, 2000, and 
closed on March 2, 2000. Of the 985 licenses auctioned, 440 were sold. 
Fifty-seven companies claiming small business status won.
    31. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission established small business size standards for the 
wireless communications services (WCS) auction. A ``small business'' is 
an entity with average gross revenues of $40 million for each of the 
three preceding years, and a ``very small business'' is an entity with 
average gross revenues of $15 million for each of the three preceding 
years. The SBA has approved these small business size standards. The 
Commission auctioned geographic area licenses in the WCS service. In 
the auction, held in April 1997, there were seven winning bidders that 
qualified as ``very small business'' entities, and one that qualified 
as a ``small business'' entity.
    32. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services (PCS), and specialized mobile radio 
(SMR) telephony carriers. As noted earlier, the SBA has developed a 
small business size standard for the superseded census category of 
``Cellular and Other Wireless Telecommunications'' services. Under that 
SBA small business size standard, a business is small if it has 1,500 
or fewer employees. According to Commission data, 432 carriers reported 
that they were engaged in the provision of wireless telephony. The 
Commission has estimated that 221 of these are small under the SBA 
small business size standard.
    33. Broadband Personal Communications Service. The broadband 
Personal Communications Service (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission defined ``small entity'' for 
Blocks C and F as an entity that has average gross revenues of $40 
million or less in the three previous calendar years. For Block F, an 
additional classification 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 standards defining ``small entity'' 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 re-auctioned 347 C, D, E, and F Block licenses. 
There were 48 small business winning bidders. 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.
    34. Narrowband Personal Communications Services. To date, two 
auctions of narrowband personal communications services (PCS) licenses 
have been conducted. For purposes of the two auctions that have already 
been held, ``small businesses'' were entities

[[Page 61002]]

with average gross revenues for the prior three calendar years of $40 
million or less. Through these auctions, the Commission has awarded a 
total of 41 licenses, out of which 11 were obtained by small 
businesses. To ensure meaningful participation of small business 
entities in future auctions, the Commission has 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. In the future, the Commission will auction 459 licenses to 
serve Metropolitan Trading Areas (MTAs) and 408 response channel 
licenses. There is also one megahertz of narrowband PCS spectrum that 
has been held in reserve and that the Commission has not yet decided to 
release for licensing. The Commission cannot predict accurately the 
number of licenses that will be awarded to small entities in future 
actions. However, four of the 16 winning bidders in the two previous 
narrowband PCS auctions were small businesses, as that term was defined 
under the Commission's Rules. The Commission assumes, for purposes of 
this analysis, that a large portion of the remaining narrowband PCS 
licenses will be awarded to small entities. The Commission also assumes 
that at least some small businesses will acquire narrowband PCS 
licenses by means of the Commission's partitioning and disaggregation 
rules.
    35. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. Phase I licensing was conducted 
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized 
to operate in the 220 MHz band. The Commission has not developed a 
small business size standard for small entities specifically applicable 
to such incumbent 220 MHz Phase I licensees. To estimate the number of 
such licensees that are small businesses, the Commission applies the 
small business size standard under the SBA rules applicable to 
``Cellular and Other Wireless Telecommunications'' companies. Under 
this category, the SBA deems a wireless business to be small if it has 
1,500 or fewer employees. The Commission estimates that nearly all such 
licensees are small businesses under the SBA's small business size 
standard.
    36. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. The Phase II 220 MHz service is 
a new service, and is subject to spectrum auctions. In the 220 MHz 
Third Report and Order, the Commission adopted a small business size 
standard for ``small'' and ``very small'' businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits and installment payments. This small business size standard 
indicates that 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. A ``very small 
business'' is an entity that, together with its affiliates and 
controlling principals, has average gross revenues that do not exceed 
$3 million for the preceding three years. The SBA has approved these 
small business size standards. Auctions of Phase II licenses commenced 
on September 15, 1998, and closed on October 22, 1998. In the first 
auction, 908 licenses were auctioned in three different-sized 
geographic areas: three nationwide licenses, 30 Regional Economic Area 
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 
licenses auctioned, 693 were sold. Thirty-nine small businesses won 
licenses in the first 220 MHz auction. The second auction included 225 
licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies 
claiming small business status won 158 licenses.
    37. 800 MHz and 900 MHz Specialized Mobile Radio Licenses. The 
Commission awards ``small entity'' and ``very small entity'' bidding 
credits in auctions for Specialized Mobile Radio (SMR) geographic area 
licenses in the 800 MHz and 900 MHz bands to firms that had revenues of 
no more than $15 million in each of the three previous calendar years, 
or that had revenues of no more than $3 million in each of the previous 
calendar years, respectively. These bidding credits apply to SMR 
providers in the 800 MHz and 900 MHz bands that either hold geographic 
area licenses or have obtained extended implementation authorizations. 
The Commission does 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 
no more than $15 million. One firm has over $15 million in revenues. 
The Commission assumes, for purposes here, that all of the remaining 
existing extended implementation authorizations are held by small 
entities, as that term is defined by the SBA. The Commission has held 
auctions for geographic area licenses in the 800 MHz and 900 MHz SMR 
bands. There were 60 winning bidders that qualified as small or very 
small entities in the 900 MHz SMR auctions. Of the 1,020 licenses won 
in the 900 MHz auction, bidders qualifying as small or very small 
entities won 263 licenses. In the 800 MHz auction, 38 of the 524 
licenses won were won by small and very small entities.
    38. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order, 
the Commission adopted a small business size standard for ``small 
businesses'' and ``very small businesses'' for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments. A ``small business'' as an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $15 million for the preceding three years. 
Additionally, a ``very small business'' is an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues that are not more than $3 million for the preceding three 
years. An auction of 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 sold to three bidders. One of these bidders was a small 
business that won a total of two licenses.
    39. 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). The Commission uses 
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 adopted herein.

[[Page 61003]]

    40. Air-Ground Radiotelephone Service. The Commission has not 
adopted a small business size standard specific to the Air-Ground 
Radiotelephone Service. The Commission will use 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 100 licensees in the Air-Ground 
Radiotelephone Service, and the Commission estimates that almost all of 
them qualify as small under the SBA small business size standard.
    41. Aviation and Marine Radio Services. Small businesses in the 
aviation and marine radio services use a very high frequency (VHF) 
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator 
transmitter. The Commission has not developed a small business size 
standard specifically applicable to these small businesses. 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. Most 
applicants for recreational licenses are individuals. Approximately 
581,000 ship station licensees and 131,000 aircraft station licensees 
operate domestically and are not subject to the radio carriage 
requirements of any statute or treaty. For purposes of the Commission's 
evaluations in this analysis, the Commission estimates that there are 
up to approximately 712,000 licensees that are small businesses (or 
individuals) under the SBA standard. In addition, between December 3, 
1998 and December 14, 1998, the Commission held an auction of 42 VHF 
Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 
161.775-162.0125 MHz (coast transmit) bands. For purposes of the 
auction, the Commission defined a ``small'' business as an entity that, 
together with controlling interests and affiliates, has average gross 
revenues for the preceding three years not to exceed $15 million 
dollars. In addition, a ``very small'' business is one that, together 
with controlling interests and affiliates, has average gross revenues 
for the preceding three years not to exceed $3 million. There are 
approximately 10,672 licensees in the Marine Coast Service, and the 
Commission estimates that almost all of them qualify as ``small'' 
businesses under the above special small business size standards.
    42. 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 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 up to 22,015 
common carrier fixed licensees and up to 61,670 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 adopted herein. The Commission noted, however, that the 
common carrier microwave fixed licensee category includes some large 
entities.
    43. Offshore Radiotelephone Service. This service operates on 
several UHF television broadcast channels that are not used for 
television broadcasting in the coastal areas of states bordering the 
Gulf of Mexico. There are presently approximately 55 licensees in this 
service. The Commission is unable to estimate at this time the number 
of licensees that would qualify as small under the SBA's small business 
size standard for ``Cellular and Other Wireless Telecommunications'' 
services. Under that SBA small business size standard, a business is 
small if it has 1,500 or fewer employees.
    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. 
Consequently, the Commission estimates that 18 or fewer 39 GHz 
licensees are small entities that may be affected by the Commission's 
action.
    45. Wireless Cable Systems. Wireless cable systems use 2 GHz band 
frequencies of the Broadband Radio Service (``BRS''), formerly 
Multipoint Distribution Service (``MDS''), and the Educational 
Broadband Service (``EBS''), formerly Instructional Television Fixed 
Service (``ITFS''), to transmit video programming and provide broadband 
services to residential subscribers. These services were originally 
designed for the delivery of multichannel video programming, similar to 
that of traditional cable systems, but over the past several years 
licensees have focused their operations instead on providing two-way 
high-speed Internet access services. The Commission estimates that the 
number of wireless cable subscribers is approximately 100,000, as of 
March 2005. Local Multipoint Distribution Service (``LMDS'') is a fixed 
broadband point-to-multipoint microwave service that provides for two-
way video telecommunications. As described below, the SBA small 
business size standard for the broad census category of Cable and Other 
Program Distribution, which consists of such entities generating $13.5 
million or less in annual receipts, appears applicable to MDS, ITFS and 
LMDS. Although this census category has been superseded by the new 
census category of Cable and Other Subscription Programming, the 
Commission uses the size standards under the superseded census category 
because no standards have been established for the new category. Other 
standards also apply, as described.
    46. The Commission has defined small MDS (now BRS) and LMDS 
entities in the context of Commission license auctions. In the 1996 MDS 
auction, the Commission defined a small business as an entity that had 
annual average gross revenues of less than $40 million in the previous 
three calendar years. This definition of a small entity in the context 
of MDS auctions has been approved by the SBA. In the MDS auction, 67 
bidders won 493 licenses. Of the 67 auction winners, 61 claimed status 
as a small business. At this time, the Commission estimates that of the 
61 small business MDS auction winners, 48 remain small business 
licensees. In addition to the 48 small businesses that hold BTA 
authorizations, there are approximately 392 incumbent MDS licensees 
that have gross revenues that are not more than $40 million and are 
thus considered small entities. MDS licensees and

[[Page 61004]]

wireless cable operators that did not receive their licenses as a 
result of the MDS auction fall under the SBA small business size 
standard for Cable and Other Program Distribution. Information 
available to us indicates that there are approximately 850 of these 
licensees and operators that do not generate revenue in excess of $13.5 
million annually. Therefore, the Commission estimates that there are 
approximately 850 small entity MDS (or BRS) providers, as defined by 
the SBA and the Commission's auction rules.
    47. Educational institutions are included in this analysis as small 
entities; however, the Commission has not created a specific small 
business size standard for ITFS (now EBS). The Commission estimates 
that there are currently 2,032 ITFS (or EBS) licensees, and all but 100 
of the licenses are held by educational institutions. Thus, the 
Commission estimates that at least 1,932 ITFS licensees are small 
entities.
    48. In the 1998 and 1999 LMDS auctions, the Commission defined a 
small business as an entity that has annual average gross revenues of 
less than $40 million in the previous three calendar years. Moreover, 
the Commission added an additional classification for a ``very small 
business,'' which was defined as an entity that had annual average 
gross revenues of less than $15 million in the previous three calendar 
years. These definitions of ``small business'' and ``very small 
business'' in the context of the LMDS auctions have been approved by 
the SBA. In the first LMDS auction, 104 bidders won 864 licenses. Of 
the 104 auction winners, 93 claimed status as small or very small 
businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based 
on this information, the Commission believes that the number of small 
LMDS licenses will include the 93 winning bidders in the first auction 
and the 40 winning bidders in the re-auction, for a total of 133 small 
entity LMDS providers as defined by the SBA and the Commission's 
auction rules.
    49. 218-219 MHz Service. The first auction of 218-219 MHz spectrum 
resulted in 170 entities winning licenses for 594 Metropolitan 
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by 
entities qualifying as a small business. For that auction, the small 
business size standard was 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, the 
Commission established a small business size standard for 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 to exceed $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, 
holds interests in such an entity and its affiliates, has average 
annual gross revenues not to exceed $3 million for the preceding three 
years. These size standards will be used in future auctions of 218-219 
MHz spectrum.
    50. 24 GHz--Incumbent 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. 
The Commission believes 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 the Commission's understanding that Teligent and its related 
companies have less 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.
    51. 24 GHz--Future Licensees. With respect to new applicants in the 
24 GHz band, the small business size standard for ``small business'' is 
an entity that, together with controlling interests and affiliates, has 
average annual gross revenues for the three preceding years not in 
excess of $15 million. ``Very small business'' in the 24 GHz band is an 
entity that, together with controlling interests and affiliates, has 
average gross revenues not exceeding $3 million for the preceding three 
years. The SBA has approved these small business size standards. These 
size standards will apply to the future auction, if held.

Satellite Service Providers

    52. Satellite Telecommunications. Since 2007, the SBA has 
recognized satellite firms within this revised category, with a small 
business size standard of $15 million. The most current Census Bureau 
data, however, are from the (last) economic census of 2002, and the 
Commission will use those figures to gauge the prevalence of small 
businesses in this category. Those size standards are for the two 
census categories of ``Satellite Telecommunications'' and ``Other 
Telecommunications.''
    53. 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, the Commission estimates that the 
majority of Satellite Telecommunications firms are small entities that 
might be affected by the Commission's action.
    54. 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, 303 firms had annual 
receipts of under $10 million and 15 firms had annual receipts of $10 
million to $24,999,999. Consequently, the Commission estimates that the 
majority of Other Telecommunications firms are small entities that 
might be affected by the Commission's action.

Cable and OVS Operators

    55. In 2007, the SBA recognized new census categories for small 
cable entities. However, there is no census data yet in existence that 
may be used to calculate the number of small entities that fit these 
definitions. Therefore, the Commission will use prior definitions of 
these types of entities in order to estimate numbers of potentially-
affected small business entities. In addition to the estimates provided 
above, the Commission considers certain additional entities that may be 
affected by the data collection from broadband service providers. 
Because section 706 requires us to monitor the deployment

[[Page 61005]]

of broadband regardless of technology or transmission media employed, 
the Commission anticipates that some broadband service providers will 
not provide telephone service. Accordingly, the Commission describes 
below other types of firms that may provide broadband services, 
including cable companies, MDS providers, and utilities, among others.
    56. Cable and Other Program Distribution. The Census Bureau defines 
this category as follows: ``This industry comprises establishments 
primarily engaged as third-party distribution systems for broadcast 
programming. The establishments of this industry deliver visual, aural, 
or textual programming received from cable networks, local television 
stations, or radio networks to consumers via cable or direct-to-home 
satellite systems on a subscription or fee basis. These establishments 
do not generally originate programming material.'' The SBA has 
developed a small business size standard for Cable and Other Program 
Distribution, which is: all such firms having $13.5 million or less in 
annual receipts. According to Census Bureau data for 2002, there were a 
total of 1,191 firms in this category that operated for the entire 
year. Of this total, 1,087 firms had annual receipts of under $10 
million, and 43 firms had receipts of $10 million or more but less than 
$25 million. Thus, under this size standard, the majority of firms can 
be considered small.
    57. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide. Industry data 
indicate that, of 1,076 cable operators nationwide, all but eleven are 
small under this size standard. In addition, under the Commission's 
rules, a ``small system'' is a cable system serving 15,000 or fewer 
subscribers. Industry data indicate that, of 7,208 systems nationwide, 
6,139 systems have under 10,000 subscribers, and an additional 379 
systems have 10,000-19,999 subscribers. Thus, under this second size 
standard, most cable systems are small.
    58. Cable System Operators. The Communications Act of 1934, as 
amended, also contains a size standard for small cable system 
operators, which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that an operator serving 
fewer than 677,000 subscribers shall be deemed a small operator, if its 
annual revenues, when combined with the total annual revenues of all 
its affiliates, do not exceed $250 million in the aggregate. Industry 
data indicate that, of 1,076 cable operators nationwide, all but ten 
are small under this size standard. The Commission notes that it 
neither requests nor collects information on whether cable system 
operators are affiliated with entities whose gross annual revenues 
exceed $250 million, and therefore the Commission is unable to estimate 
more accurately the number of cable system operators that would qualify 
as small under this size standard.
    59. Open Video Services. Open Video Service (OVS) systems provide 
subscription services. As noted above, the SBA has created a small 
business size standard for Cable and Other Program Distribution. This 
standard provides that a small entity is one with $13.5 million or less 
in annual receipts. The Commission has certified approximately 45 OVS 
operators to serve 75 areas, and some of these are currently providing 
service. Affiliates of Residential Communications Network, Inc. (RCN) 
received approval to operate OVS systems in New York City, Boston, 
Washington, DC, and other areas. RCN has sufficient revenues to assure 
that they do not qualify as a small business entity. Little financial 
information is available for the other entities that are authorized to 
provide OVS and are not yet operational. Given that some entities 
authorized to provide OVS service have not yet begun to generate 
revenues, the Commission concludes that up to 44 OVS operators (those 
remaining) might qualify as small businesses that may be affected by 
the rules and policies adopted herein.

Electric Power Generation, Transmission and Distribution

    60. Electric Power Generation, Transmission and Distribution. The 
Census Bureau defines this category as follows: ``This industry group 
comprises establishments primarily engaged in generating, transmitting, 
and/or distributing electric power. Establishments in this industry 
group may perform one or more of the following activities: (1) Operate 
generation facilities that produce electric energy; (2) operate 
transmission systems that convey the electricity from the generation 
facility to the distribution system; and (3) operate distribution 
systems that convey electric power received from the generation 
facility or the transmission system to the final consumer.'' The SBA 
has developed a small business size standard for firms in this 
category: ``A firm is small if, including its affiliates, it is 
primarily engaged in the generation, transmission, and/or distribution 
of electric energy for sale and its total electric output for the 
preceding fiscal year did not exceed 4 million megawatt hours.'' 
According to Census Bureau data for 2002, there were 1,644 firms in 
this category that operated for the entire year. Census data do not 
track electric output and the Commission has not determined how many of 
these firms fit the SBA size standard for small, with no more than 4 
million megawatt hours of electric output. Consequently, the Commission 
estimates that 1,644 or fewer firms may be considered small under the 
SBA small business size standard.

Internet Service Providers, Web Portals and Other Information Services

    61. In 2007, the SBA recognized two new small business, economic 
census categories. They are (1) Internet Publishing and Broadcasting 
and Web Search Portals, and (2) All Other Information Services. 
However, there is no census data yet in existence that may be used to 
calculate the number of small entities that fit these definitions. 
Therefore, the Commission will use prior definitions of these types of 
entities in order to estimate numbers of potentially affected small 
business entities.
    62. Internet Service Providers. The SBA has developed a small 
business size standard for Internet Service Providers (ISPs). ISPs 
``provide clients access to the Internet and generally provide related 
services such as web hosting, web page designing, and hardware or 
software consulting related to Internet connectivity.'' Under the SBA 
size standard, such a business is small if it has average annual 
receipts of $23 million or less. According to Census Bureau data for 
2002, there were 2,529 firms in this category that operated for the 
entire year. Of these, 2,437 firms had annual receipts of under $10 
million, and an additional 47 firms had receipts of between $10 million 
and $24,999,999. Consequently, the Commission estimates that the 
majority of these firms are small entities that may be affected by the 
Commission's action.
    63. Web Search Portals. The Commission's action pertains to 
interconnected VoIP services, which could be provided by entities that 
provide other services such as email, online gaming, web browsing, 
video conferencing, instant messaging, and other, similar IP-enabled 
services. The

[[Page 61006]]

Commission has not adopted a size standard for entities that create or 
provide these types of services or applications. However, the Census 
Bureau has identified firms that ``operate web sites that use a search 
engine to generate and maintain extensive databases of Internet 
addresses and content in an easily searchable format. Web search 
portals often provide additional Internet services, such as e-mail, 
connections to other web sites, auctions, news, and other limited 
content, and serve as a home base for Internet users.'' The SBA has 
developed a small business size standard for this category; that size 
standard is $6.5 million or less in average annual receipts. According 
to Census Bureau data for 2002, there were 342 firms in this category 
that operated for the entire year. Of these, 303 had annual receipts of 
under $5 million, and an additional 15 firms had receipts of between $5 
million and $9,999,999. Consequently, the Commission estimates that the 
majority of these firms are small entities that may be affected by the 
Commission's action.
    64. Data Processing, Hosting, and Related Services. Entities in 
this category ``primarily * * * provid[e] infrastructure for hosting or 
data processing services.'' The SBA has developed a small business size 
standard for this category; that size standard is $23 million or less 
in average annual receipts. According to Census Bureau data for 2002, 
there were 6,877 firms in this category that operated for the entire 
year. Of these, 6,418 had annual receipts of under $10 million, and an 
additional 251 firms had receipts of between $10 million and 
$24,999,999. Consequently, the Commission estimates that the majority 
of these firms are small entities that may be affected by the 
Commission's action.
    65. All Other Information Services. ``This industry comprises 
establishments primarily engaged in providing other information 
services (except new syndicates and libraries and archives).'' The 
Commission's action pertains to interconnected VoIP services, which 
could be provided by entities that provide other services such as 
email, online gaming, web browsing, video conferencing, instant 
messaging, and other, similar IP-enabled services. The SBA has 
developed a small business size standard for this category; that size 
standard is $7 million or less in average annual receipts. According to 
Census Bureau data for 2002, there were 155 firms in this category that 
operated for the entire year. Of these, 138 had annual receipts of 
under $5 million, and an additional four firms had receipts of between 
$5 million and $9,999,999. Consequently, the Commission estimates that 
the majority of these firms are small entities that may be affected by 
the Commission's action.
    66. Internet Publishing and Broadcasting. ``This industry comprises 
establishments engaged in publishing and/or broadcasting content on the 
Internet exclusively. These establishments do not provide traditional 
(non-Internet) versions of the content that they publish or 
broadcast.'' The SBA has developed a small business size standard for 
this census category; that size standard is 500 or fewer employees. 
According to Census Bureau data for 2002, there were 1,362 firms in 
this category that operated for the entire year. Of these, 1,351 had 
employment of 499 or fewer employees, and six firms had employment of 
between 500 and 999. Consequently, the Commission estimates that the 
majority of these firms are small entities that may be affected by the 
Commission's action.

Description of Projected Reporting, Recordkeeping and Other Compliance 
Requirements

    67. In the NPRM, the Commission considers whether to implement 
certain reporting requirements relating to service quality and 
infrastructure information. Specifically, the Commission seeks comment 
on whether to impose certain reporting requirements previously required 
through ARMIS Reports 43-05, 43-06, 43-07 and 43-08, or similar 
requirements. In addition, the NPRM seeks comment on the appropriate 
confidentiality protections for such information. The Commission also 
seeks comment on the mechanism for collecting that information.

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

    68. 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.
    69. As noted above, the NPRM seeks comment on possible methods for 
reporting the proposed information collections, as well as suggestions 
of methods to maintain and report the information that achieve the 
purposes of the NPRM while minimizing the burden on reporting entities, 
including small entities. This information will assist the Commission 
in determining whether these various proposed information collections 
would impose a significant economic impact on small entities. Based on 
these questions, the Commission anticipates that the record will be 
developed concerning alternative ways in which the Commission could 
lessen the burden on small entities.

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

    70. None.

Ordering Clauses

    71. Accordingly, it is ordered that, pursuant to sections 1-5, 10, 
11, 201-205, 211, 215, 218-220, 251-271, 303(r), 332, 403, 502, and 503 
of the Communications Act of 1934, as amended, 47 U.S.C. 151-155, 160, 
161, 201-205, 211, 215, 218-220, 251-271, 303(r), 332, 403, 502, and 
503, and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 
157 nt, this Memorandum Opinion and Order and Notice of Proposed 
Rulemaking is adopted.
    72. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Further Notice of Proposed Rulemaking, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.
    73. It is further ordered, pursuant to sections 1.103(a) and 
1.427(b) of the Commission's rules, 47 CFR 1.103(a), 1.427(b), that 
comments are due on or before November 14, 2008 and reply comments are 
due on or before December 15, 2008.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
 [FR Doc. E8-24476 Filed 10-14-08; 8:45 am]
BILLING CODE 6712-01-P


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