[Federal Register Volume 66, Number 32 (Thursday, February 15, 2001)]
[Proposed Rules]
[Pages 10413-10419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3787]



[[Page 10413]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 20, and 43

[CC Docket No. 99-301, FCC 01-19]


Local Competition and Broadband Reporting

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, the Federal Communications Commission seeks 
comment about whether it should modify a program to collect basic 
information about the status of local telephone service competition and 
the deployment of advanced telecommunications capability, also known as 
broadband.

DATES: Comments are due on or before March 19, 2001 and reply comments 
are due on or before April 2, 2001. Written comments by the public on 
the proposed information collections are due on or before March 19, 
2001. Written comments must be submitted by the Office of Management 
and Budget (OMB) on the proposed information collection(s) on or before 
April 16, 2001.

ADDRESSES: Comments and replies shall be filed with the Office of the 
Secretary, Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554, with a copy to Ms. Suzanne McCrary of the Common 
Carrier Bureau, Federal Communications Commission, 445 12th Street, 
SW., 6-A220, Washington, DC 20554. Parties should also file one copy of 
any documents filed in this docket with the Commission's copy 
contractor, International Transcription Services, Inc. (ITS), 1231 20th 
Street, NW., Washington, DC 20037. Parties may file electronically 
through the Internet at http://www.fcc.gov/e-file/ecfs.html. In 
addition to filing comments and replies with the Secretary, a copy of 
any comments on the information collections contained herein should be 
submitted to Judy Boley, Federal Communications Commission, Room 1-
C804, 445 12th Street, SW., Washington, DC 20554, or via the Internet 
to <a href="/cdn-cgi/l/email-protection#5e343c31323b271e383d3d70393128"><span class="__cf_email__" data-cfemail="f9939b96959c80b99f9a9ad79e968f">[email protected]</span></a>, and to Edward C. Springer, OMB Desk Officer, 10236 
NEOB, 725--17th Street, NW., Washington, DC 20503 or via the Internet 
to <a href="/cdn-cgi/l/email-protection#6a2f0e1d0b180e44391a1803040d0f182a050708440f051a440d051c"><span class="__cf_email__" data-cfemail="511435263023357f022123383f363423113e3c337f343e217f363e27">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Dr. Ellen Burton, Industry Analysis 
Division, Common Carrier Bureau, at (202) 418-0958, or Thomas J. Beers, 
Deputy Chief of the Industry Analysis Division, Common Carrier Bureau, 
at (202) 418-0952. For additional information concerning the 
information collection(s) contained in this document, contact Judy 
Boley at 202-418-0214, or via the Internet at <a href="/cdn-cgi/l/email-protection#b0dad2dfdcd5c9f0d6d3d39ed7dfc6"><span class="__cf_email__" data-cfemail="8ee4ece1e2ebf7cee8ededa0e9e1f8">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) released January 19, 2001 (FCC 01-19). 
The full text of the NPRM is available for inspection and copying 
during normal business hours in the FCC Reference Center, Room CY-A257, 
445 12th Street, SW., Washington, DC 20554. The complete text also may 
be purchased from the Commission's copy contractor, International 
Transcription Service, Inc. (202) 857-3800, 1231 20th Street, NW., 
Washington, DC 20037. Additionally, the complete item is available on 
the Commission's website at http://www.fcc.gov/Bureaus/Common--Carrier/
Notices/2001/. This NPRM contains proposed information collection(s) 
subject to the Paperwork Reduction Act of 1995 (PRA). It has been 
submitted to the Office of Management and Budget (OBM) for review under 
the PRA. OMB, the general public, and other Federal agencies are 
invited to comment on the proposed information collections contained in 
this proceeding.

Paperwork Reduction Act

    This NPRM contains a proposed information collection. 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(s) contained in 
this NPRM, as required by the Paperwork Reduction Act of 1995, Public 
Law 104-13. Public and agency comments are due at the same time as 
other comments on this NPRM; OMB notification of action is due 60 days 
from date of publication of this NPRM in the Federal Register. Comments 
should address: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    OMB Control Number: 3060-0816.
    Title: ``Local Competition and Broadband Reporting, CC Docket No. 
99-301''.
    Form No.: FCC Form 477.
    Type of Review: Revision of Existing Collection.
    Respondents: Business or Not-for-profit institutions, including 
small businesses.
    Number of Respondents: Up to 490.
    Estimated Time Per Response: 65-70 person-hours.
    Total Annual Burden: Up to 32,924 person-hours.
    Cost to Respondents: $0.
    Needs and Uses: The information collection is a proposed 
modification of an already authorized program. As before, the program 
will be used by the Commission to gather information on the state of 
the development of local competition and broadband deployment. Without 
such information, the Commission faces significant difficulty in 
assessing the development of these markets and, therefore, is less able 
to fulfill its statutory responsibilities in accordance with the 
Communications Act of 1934, as amended.

Summary of the Notice of Proposed Rulemaking

    1. In the NPRM summarized here, we seek comment whether we should 
make changes to a previously implemented FCC program (Form 477) to 
collect basic information about the status of local telephone service 
competition and the deployment of advanced telecommunications 
capability, also known as broadband. We seek comment about certain 
specific changes to broadband information submitted pursuant to Form 
477, but propose only relatively minor changes to the portions of Form 
477 that cover local competition data or data about mobile telephone 
services. We do, however, generally solicit comment about all aspects 
of the data collection program including those that deal with local 
competition and mobile services data. Overall, our re-examination of 
the existing data gathering program is driven by concern that we 
require additional data about the deployment and availability of 
broadband services to discrete geographic areas and among distinct 
demographic groups in order to satisfy the statutory mandate of section 
706 of the Telecommunications Act of 1996, 47 U.S.C. 706 nt. 
Nevertheless, we continue to attempt to balance the burdens imposed by 
the Form 477 program on data providers against the usefulness of the 
data. Throughout the NPRM, we explain our reasons for seeking comment 
on specific proposals.

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    2. Reporting Thresholds. For purposes of this data gathering 
program, we continue to define ``broadband services'' to refer to those 
services that deliver an information carrying capacity in excess of 200 
kbps in at least one direction; where the service delivers capacity in 
excess of 200 kbps in both directions, we call it ``full broadband'' or 
``full, two-way broadband.''
    3. Our data collection program currently requires broadband, local 
competition and mobile telephone service providers to complete only 
those portions of Form 477 for which they meet or exceed defined 
reporting thresholds. For broadband reporting, that means that 
facilities-based providers with at least 250 full two-way or one-way 
broadband lines--or wireless channels--in a given state must report 
broadband data per applicable portions of the Form 477; providers who 
fall below the threshold may report data on a voluntary basis. Driven 
by concern that the existing broadband threshold may be too high for us 
to collect sufficient information about broadband deployment, 
particularly in rural and other sparsely populated areas, we ask 
whether we should keep the existing broadband threshold, lower that 
threshold, raise it, or eliminate it altogether. We encourage 
commenters to explain how any alternative would balance our competing 
desires to obtain comprehensive broadband information without imposing 
undue burdens on entities that serve comparatively few customers. In 
particular, we take note of a Petition for Reconsideration of our 
Report and Order adopting the Form 477 program filed by Iowa Telecom. 
In its petition, Iowa Telecom asks the Commission to create an 
exemption for ``mid-sized LECs * * * `` which serve primarily rural 
communities'' and employ statistical sampling to gather needed 
information. We specifically ask commenters to address the Iowa Telecom 
petition which we will consider as part of this proceeding. (Note: We 
do not propose to change existing thresholds for local telephone 
service and mobile telephone service reporting.)
    4. Data to be Reported. Currently, pursuant to Form 477, providers 
must report information about subscribership to their broadband, local 
telephone, and mobile telephone services offerings per two classes of 
users: (1) Residential and small business users; and (2) Large business 
and institutional users. In the NPRM we seek comment whether we should 
alter Form 477 so that it more precisely captures distinctions between 
broadband deployment to residential and business users. We ask, 
accordingly, whether we should require broadband providers to report 
subscribership information per three user classes: (1) residential 
users; (2) small business users; and (3) large business and 
institutional users. We seek comment about what criteria should be used 
to distinguish among these classes of users, and whether reporting 
providers should also distinguish between subscribers who subscribe to 
full, two-way broadband service and those who subscribe to one-way 
broadband service offerings. We note our continued belief that 
information about broadband deployment by zip code is the 
administratively simplest way to obtain finer geographic granularity of 
subscribership information. We seek comment whether providers should 
report actual subscribership by zip code--with a separate breakdown for 
residential subscribership--rather than the current requirement that 
merely lists zip codes where broadband service is delivered. We ask 
whether additional information, including distinctions between the 
types of technology used to provide broadband services, should be 
provided at the zip code level. We seek comment about alternatives to 
zip code-specific data; and ask commenters generally, per the mandate 
of section 706, whether collecting additional subscribership 
information would necessarily increase our understanding of whether 
broadband is being made available to all Americans.
    5. We tentatively conclude that we should require providers to 
report data on the availability of broadband as well as on actual 
subscribership. We seek comment on such measures of availability as (1) 
number of homes passed by broadband-capable infrastructure; (2) zip 
codes where service is currently offered to all or some percentage of 
customers within the zip code; (3) for providers of telephone or cable 
video services, the number of their customers who have broadband 
services available to them; (4) any other measure. We seek comment on 
other issues related to availability and also whether there is other 
useful information we should collect to inform the Commission's 
understanding why broadband subscribership rates remain low in some 
areas where broadband is available. We ask, in particular, whether 
there are alternative sources of availability, demand, and 
subscribership information about low income consumers, those living in 
sparsely populated areas, and others who the Commission has found may 
be particularly vulnerable to not receiving timely access to broadband 
services.
    6. Our existing broadband data gathering is limited to broadband 
lines connected to the Internet or to another public network. We seek 
to clarify the scope of broadband services subject to Form 477 by 
asking whether we also should collect information about broadband lines 
that are not connected to the Internet, for example, so-called 
``private'' broadband lines that connect multiple locations of one 
customer. Examples could include corporate intranet configurations or 
private networks for educational or health care institutions. We seek 
specific comment about how to define such services in order to ensure 
data accuracy and comparability with other collected broadband data.
    7. We seek comment on relatively minor revisions to the local 
competition and mobile telephone service portions of the Form 477 by, 
inter alia, proposing to reorganize certain sections of the form and to 
eliminate data requests that may have caused confusion.
    8. Confidentiality Issues. Currently we attempt to make publicly 
available as much local competition and broadband data as possible, 
while affording providers full opportunity to file data pursuant to 
requests for confidential treatment. Moreover, in the case of broadband 
data, we publish in our reports only data aggregations that do not 
identify particular providers regardless whether they have requested 
confidential treatment. We seek comment whether we should establish a 
rebuttable presumption that some or all Form 477 data do not typically 
meet our standards for competitively sensitive information. We also 
seek comment on how other proposals proffered in the NPRM affect the 
need for confidential treatment of data.
    9. Frequency of Filing. Our current Form 477 program requires 
providers to file data twice each year. Given dynamic growth in the 
broadband market, we seek comment whether we require more frequent 
filings. Alternatively, we ask whether we should reduce increased 
burdens potentially imposed pursuant to this NPRM by reducing the 
number of Form 477 filings to one per year.
    10. Analysis of Data. We seek comment whether the additional data 
proposed to be collected make possible relatively more sophisticated 
statistical and other analyses by the Commission. We also seek comment 
about associated issues, including whether the Commission should--and 
how the Commission could--share data with academics and others, and 
whether we should give outside parties the

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opportunity to review and comment on preliminary findings and 
methodologies before we adopt any final section 706 reports.

Procedural Matters

Initial Regulatory Flexibility Analysis

    11. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared this present Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on small 
entities by the policies and rules proposed in this Notice. 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 this Notice, which are set out in paragraph 33 of the 
Notice. The Commission will send a copy of this Notice, including this 
IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA). In addition, this Notice and IRFA (or summaries 
thereof) will be published in the Federal Register.

I. Need for, and Objectives of, the Proposed Action

    12. The Commission has initiated this proceeding to seek comment on 
how it might refine or improve the data gathering effort that we 
authorized on March 30, 2000 to assess the degree of deployment of 
broadband services and the development of local competition. In 
considering revisions to this program, we seek to develop more fully 
our understanding of the deployment and availability of broadband 
services and the development of local competition. At the same time, we 
seek to eliminate any unnecessary or unduly burdensome aspects of the 
program and identify aspects of the program that may need further 
clarification. In particular, we believe that additional data about 
deployment of broadband services to discrete geographic areas and 
amongst distinct demographic groups is essential in order to satisfy 
more fully our obligations under section 706 of the 1996 Act.

II. Legal Basis

    1. The legal basis for the action as proposed for this rulemaking 
is contained in sections 1-5, 10, 11, 201-205, 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, 215, 218-220, 251-271, 
303(r), 332, 403, 502, and 503 and pursuant to section 706 of the 
Telecommunications Act of 1996, 47 U.S.C. 157 nt.

III. Description and Estimate of the Number of Small Entities to Which 
the Proposed Action May Apply

    14. The Commission seeks comment on whether it should revise its 
rules so that any entity that provides broadband services must comply 
with the reporting requirement. Out of an abundance of caution, we set 
out below a detailed description of the types of entities that could 
possibly be required to comply with the proposed reporting requirement 
and we detail our understanding of the number of small entities within 
each of these categories.
    15. 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, if adopted. To estimate the number of 
small entities that may be affected by the proposed rules, we first 
consider the statutory definition of ``small entity'' under the RFA. 
The RFA generally defines ``small entity'' as having the same meaning 
as the term ``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, unless the Commission has developed one or more 
definitions that are appropriate to its activities. Under the Small 
Business Act, a ``small business concern'' is one that: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) meets any additional criteria established by the 
SBA. The SBA has defined a small business for Standard Industrial 
Classification (SIC) categories 4812 (Radiotelephone Communications) 
and 4813 (Telephone Communications, Except Radiotelephone) to be small 
entities when they have no more than 1,500 employees. We first discuss 
the number of small telephone companies falling within these SIC 
categories, then attempt to refine further those estimates to 
correspond with the categories of telephone companies that are commonly 
used under our rules.
    16. The most reliable source of information regarding the total 
numbers of common carrier and related providers nationwide, as well as 
the numbers of commercial wireless entities, appears to be data the 
Commission publishes annually in its Carrier Locator report, derived 
from filings made in connection with the Telecommunications Relay 
Service (TRS). According to data in the most recent report, there are 
4,822 interstate service providers. These providers include, inter 
alia, local exchange carriers, wireline carriers and service providers, 
interexchange carriers, competitive access providers, operator service 
providers, pay telephone operators, providers of telephone toll 
service, providers of telephone exchange service, and resellers.
    17. We have 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. We 
have therefore included small incumbent LECs in this RFA analysis, 
although we emphasize that this RFA action has no effect on FCC 
analyses and determinations in other, non-RFA contexts.
    18. Total Number of Telephone Companies Affected. The United States 
Bureau of the Census (the Census Bureau) reports that, at the end of 
1992, there were 3,497 firms engaged in providing telephone services, 
as defined therein, for at least one year. This number contains a 
variety of different categories of carriers, including local exchange 
carriers, interexchange carriers, competitive access providers, 
cellular carriers, mobile service carriers, operator service providers, 
pay telephone operators, PCS providers, covered SMR providers, and 
resellers. It seems certain that some of those 3,497 telephone service 
firms may not qualify as small entities or small incumbent LECs because 
they are not ``independently owned and operated.'' For example, a PCS 
provider that is affiliated with an interexchange carrier having more 
than 1,500 employees would not meet the definition of a small business. 
It seems reasonable to conclude, therefore, that fewer than 3,497 
telephone service firms are small entity telephone service firms or 
small incumbent LECs that may be affected by the decisions and rules 
proposed in the Notice.
    19. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
other than radiotelephone companies. The Census Bureau reports that, 
there were 2,321 such telephone companies in operation for at least one 
year at the end of 1992. According to SBA's definition, a small 
business telephone company other than a radiotelephone company is one

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employing no more than 1,500 persons. All but 26 of the 2,321 non-
radiotelephone companies listed by the Census Bureau were reported to 
have fewer than 1,000 employees. Thus, even if all 26 of those 
companies had more than 1,500 employees, there would still be 2,295 
non-radiotelephone companies that might qualify as small entities or 
small incumbent LECs. Although it seems certain that some of these 
carriers are not independently owned and operated, we are unable at 
this time to estimate with greater precision the number of wireline 
carriers and service providers that would qualify as small business 
concerns under SBA's definition. Consequently, we estimate that there 
are fewer than 2,295 small entity telephone communications companies 
other than radiotelephone companies that are small entities or small 
incumbent LECs and that may be affected by the rules proposed in the 
Notice.
    20. Local Exchange Carriers, Competitive Access Providers, 
Interexchange Carriers, Operator Service Providers, and Resellers. 
Neither the Commission nor the SBA has developed a definition of small 
LECs, competitive access providers (CAPs), interexchange carriers 
(IXCs), operator service providers (OSPs), or resellers. The closest 
applicable definition for these carrier-types under SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies. The most reliable source of information regarding the number 
of these carriers nationwide of which we are aware appears to be the 
data that we collect annually in connection with the Telecommunications 
Relay Service. According to our most recent data, there are 1,395 LECs, 
349 CAPs, 204 IXCs, 21 OSPs, and 541 resellers. Although it seems 
certain that some of these carriers are not independently owned and 
operated, or have more than 1,500 employees, we are unable at this time 
to estimate with greater precision the number of these carriers that 
would qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 1,395 small entity 
LECs or small incumbent LECs, 348 CAPs, 204 IXCs, 21 OSPs, and 541 
resellers that may be affected by the decisions and rules proposed in 
the Notice.
    21. Wireless (Radiotelephone) Carriers. SBA has developed a 
definition of small entities for wireless (radiotelephone) companies. 
The Census Bureau reports that there were 1,176 such companies in 
operation for at least one year at the end of 1992. According to SBA's 
definition, a small business radiotelephone company is one employing no 
more than 1,500 persons. The Census Bureau also reported that 1,164 of 
those radiotelephone companies had fewer than 1,000 employees. Thus, 
even if all of the remaining 12 companies had more than 1,500 
employees, there would still be 1,164 radiotelephone companies that 
might qualify as small entities if they are independently owned are 
operated. Although it seems certain that some of these carriers are not 
independently owned or operated, we are unable at this time to estimate 
with greater precision the number of radiotelephone carriers and 
service providers that would qualify as small business concerns under 
SBA's definition. Consequently, we estimate that there are fewer than 
1,164 small entity radiotelephone companies that may be affected by the 
decisions and rules proposed in the Notice.
    22. Cellular, PCS, SMR and Other Mobile Service Providers. In an 
effort to further refine our calculation of the number of 
radiotelephone companies that may be affected by the rules adopted 
herein, we consider the data that we collect annually in connection 
with the TRS for the subcategories Wireless Telephony (which includes 
Cellular, PCS, and SMR) and Other Mobile Service Providers. We will 
utilize the closest applicable definition under SBA rules--which, for 
both categories, is for telephone companies other than radiotelephone 
(wireless) companies, however, to the extent that the Commission has 
adopted definitions for small entities providing PCS and SMR services, 
we discuss those definitions below. According to our most recent TRS 
data, 806 companies reported that they are engaged in the provision of 
Wireless Telephony services and 44 companies reported that they are 
engaged in the provision of Other Mobile Services. Although it seems 
certain that some of these carriers are not independently owned and 
operated, or have more than 1,500 employees, we are unable at this time 
to estimate with greater precision the number of Wireless Telephony 
Providers and Other Mobile Service Providers, except as described 
below, that would qualify as small business concerns under SBA's 
definition. Consequently, we estimate that there are fewer than 806 
small entity Wireless Telephony Providers and fewer than 44 small 
entity Other Mobile Service Providers that might be affected by the 
decisions and rules proposed in the Notice.
    23. Broadband PCS Licensees. The broadband 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 less than $40 million 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 regulations defining ``small 
entity'' in the context of broadband PCS auctions have been approved by 
SBA. No small businesses within the SBA-approved definition 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% 
of the 1,479 licenses for Blocks D, E, and F. Based on this 
information, we estimate that the number of small broadband PCS 
licenses will include the 90 winning C Block bidders and the 93 
qualifying bidders in the D, E, and F blocks, for a total of 183 small 
PCS providers as defined by SBA and the Commissioner's auction rules.
    24. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission 
has defined ``small entity'' in auctions for geographic area 800 MHz 
and 900 MHz SMR licenses as a firm that had average annual gross 
revenues of less than $15 million in the three previous calendar years. 
The definition of a ``small entity'' in the context of 800 and 900 MHz 
SMR has been approved by the SBA. The proposed rules may apply to SMR 
providers in the 800 MHz and 900 MHz bands that either hold geographic 
area licenses or have obtained extended implementation authorizations. 
We do not know how many firms provide 800 MHz or 900 MHz geographic 
area SMR service pursuant to extended implementation authorizations, 
nor how many of these providers have annual revenues of less than $15 
million. Consequently, we estimate, for purposes of this IRFA, that all 
of the extended implementation authorizations may be held by small 
entities, some of which may be affected by the rules proposed in the 
Notice.
    25. The Commission recently held auctions for geographic area 
licenses in the 900 MHz SMR band. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. Based on this 
information, we estimate that the number of geographic area SMR 
licensees that may be affected by the decisions and rules proposed in 
the

[[Page 10417]]

Notice includes these 60 small entities. No auctions have been held for 
800 MHz geographic area SMR licenses. Therefore, no small entities 
currently hold these licenses. A total of 525 licenses will be awarded 
for the upper 200 channels in the 800 MHz geographic area SMR auction. 
The Commission, however, has not yet determined how many licenses will 
be awarded for the lower 230 channels in the 800 MHz geographic area 
SMR auction. There is no basis, moreover, on which to estimate how many 
small entities will win these licenses. Given that nearly all 
radiotelephone companies have fewer than 1,000 employees and that no 
reliable estimate of the number of prospective 800 MHz licensees can be 
made, we estimate, for purposes of this IRFA, that all of the licenses 
may be awarded to small entities, some of which may be affected by the 
decisions and rules proposed in the Notice.
    26. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. 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 definition of small entities specifically applicable to 
such incumbent 220 MHz Phase I licensees. To estimate the number of 
such licensees that are small businesses, we apply the definition under 
the SBA rules applicable to Radiotelephone Communications companies. 
According to the Bureau of the Census, only 12 radiotelephone firms out 
of a total of 1,178 such firms which operated during 1992 had 1,000 or 
more employees. Therefore, if this general ratio continues in the 
context of Phase I 220 MHz licensees, we estimate that nearly all such 
licensees are small businesses under the SBA's definition, some of 
which may be affected by the decisions and rules proposed in the 
Notice.
    27. 220 MHz Radio Service--Phase II Licensees. The Phase II 220 MHz 
service is a new service, and is subject to spectrum auctions. In the 
220 MHz Third Report and Order we adopted criteria for defining small 
businesses and very small businesses for purposes of determining their 
eligibility for special provisions such as bidding credits and 
installment payments. We have defined 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 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 definitions. An 
auction of Phase II licenses commenced on September 15, 1998, and 
closed on October 22, 1998. Nine hundred and eight (908) licenses were 
auctioned in 3 different-sized geographic areas: three nationwide 
licenses, 30 Regional Economic Area Group (Regional) Licenses, and 875 
Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693 were 
sold. Companies claiming small business status won: one of the 
Nationwide licenses, 67% of the Regional licenses, and 54% of the EA 
licenses. As of October 7, 1999, the Commission had granted 681 of the 
Phase II 220 MHz licenses won at a first auction and an additional 221 
Phase II licenses won at a second auction.
    28. Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS. The Commission does not have 
sufficient information to determine whether any of these licensees are 
small businesses within the SBA-approved definition for radiotelephone 
companies. At present, there have been no auctions held for the major 
trading area (MTA) and basic trading area (BTA) narrowband PCS 
licenses. The Commission anticipates a total of 561 MTA licenses and 
2,958 BTA licenses will be awarded by auction. Such auctions have not 
yet been scheduled, however. Given that nearly all radiotelephone 
companies have no more than 1,500 employees and that no reliable 
estimate of the number of prospective MTA and BTA narrowband licensees 
can be made, we assume, for purposes of this IRFA, that all of the 
licenses will be awarded to small entities, as that term is defined by 
the SBA.
    29. Rural Radiotelephone Service. The Commission has not adopted a 
definition of small entity specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio Systems (BETRS). We will use the 
SBA's definition applicable to radiotelephone companies, i.e., an 
entity employing no more than 1,500 persons. There are approximately 
1,000 licensees in the Rural Radiotelephone Service, and we estimate 
that almost all of them qualify as small entities under the SBA's 
definition.
    30. Air-Ground Radiotelephone Service. The Commission has not 
adopted a definition of small entity specific to the Air-Ground 
Radiotelephone Service. Accordingly, we will use the SBA's definition 
applicable to radiotelephone companies, i.e., an entity employing no 
more than 1,500 persons. There are approximately 100 licensees in the 
Air-Ground Radiotelephone Service, and we estimate that almost all of 
them qualify as small entities under the SBA definition.
    31. Private Land Mobile Radio (PLMR). PLMR systems serve an 
essential role in a range of industrial, business, land transportation, 
and public safety activities. These radios are used by companies of all 
sizes operating in all U.S. business categories. The Commission has not 
developed a definition of small entity specifically applicable to PLMR 
licensees due to the vast array of PLMR users. For the purpose of 
determining whether a licensee is a small business as defined by the 
SBA, each licensee would need to be evaluated within its own business 
area. The Commission is unable at this time to estimate the number, if 
any, of small businesses that could be impacted by the proposed rules. 
However, the Commission's 1994 Annual Report on PLMRs indicates that at 
the end of fiscal year 1994 there were 1,087,267 licensees operating 
12,481,989 transmitters in the PLMR bands below 512 MHz. Because any 
entity engaged in a commercial activity is eligible to hold a PLMR 
license, the proposed rules in this context could potentially impact 
every small business in the United States. We note, however, that 
because the vast majority of these licensees are end-users, not 
providers of telephony or broadband services, they would not be 
directly affected by the rules proposed in this Notice.
    32. Fixed Microwave Services. Microwave services include common 
carrier, private-operational fixed, and broadcast auxiliary radio 
services. At present, there are approximately 22,015 common carrier 
fixed licensees in the microwave services. The Commission has not yet 
defined a small business with respect to microwave services. For 
purposes of this IRFA, we will utilize the SBA's definition applicable 
to radiotelephone companies--i.e., an entity with no more than 1,500 
persons. We estimate, for this purpose, that all of the Fixed Microwave 
licensees (excluding broadcast auxiliary licensees) would qualify as 
small entities under the SBA definition for radiotelephone companies.
    33. Offshore Radiotelephone Service. This service operates on 
several UHF TV broadcast channels that are not used

[[Page 10418]]

for TV broadcasting in the coastal area of the states bordering the 
Gulf of Mexico. At present, there are approximately 55 licensees in 
this service. We are unable at this time to estimate the number of 
licensees that would qualify as small entities under the SBA's 
definition for radiotelephone communications.
    34. Wireless Communications Services. This service can be used for 
fixed, mobile, radio-location 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 Commission auctioned 
geographic area licenses in the WCS service. In the auction, there were 
seven winning bidders that qualified as very small business entities, 
and one that qualified as a small business entity. We conclude that the 
number of geographic area WCS licensees that may be affected by the 
decisions and rules proposed in the Notice includes these eight 
entities.
    35. Satellite Services. The Commission has not developed a 
definition of small entities applicable to satellite service licensees. 
Therefore, the applicable definition of small entity is generally the 
definition under the SBA rules applicable to Communications Services, 
Not Elsewhere Classified (NEC). This definition provides that a small 
entity is expressed as one with $11.0 million or less in annual 
receipts. According to the Census Bureau, there were a total of 848 
communications services providers, NEC, in operation in 1992, and a 
total of 775 had annual receipts of less than $9.999 million. The 
Census report does not provide more precise data.
    36. In addition to the estimates provided above, we consider 
certain additional entities that may be affected by the data collection 
from broadband service providers. Because section 706 requires us to 
monitor the deployment of broadband regardless of technology or 
transmission media employed, we anticipate that some broadband service 
providers will not provide telephone service. Accordingly, we describe 
below other types of firms that may provide broadband services, 
including cable companies, MDS providers, and utilities, among others.
    37. Cable services or systems. The SBA has developed a definition 
of small entities for cable and other pay television services, which 
includes all such companies generating $11 million or less in revenue 
annually. This definition includes cable systems operators, closed 
circuit television services, direct broadcast satellite services, 
multipoint distribution systems, satellite master antenna systems and 
subscription television services. According to the Census Bureau data 
from 1992, there were 1,788 total cable and other pay television 
services and 1,423 had less than $11 million in revenue.
    38. The Commission has developed its own definition of a small 
cable system operator for the purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide. Based on our most recent information, 
we estimate that there were 1,439 cable operators that qualified as 
small cable system operators at the end of 1995. Since then, some of 
those companies may have grown to serve over 400,000 subscribers, and 
others may have been involved in transactions that caused them to be 
combined with other cable operators. Consequently, we estimate that 
there are fewer than 1,439 small entity cable system operators.
    39. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1 percent of 
all subscribers in the United States and is not affiliated with any 
entity or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 66,690,000 
subscribers in the United States. Therefore, we found that an operator 
serving fewer than 666,900 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that the number of cable 
operators serving 666,900 subscribers or less totals 1,450. We do not 
request nor do we collect information concerning whether cable system 
operators are affiliated with entities whose gross annual revenues 
exceed $250,000,000, and thus are unable at this time to estimate with 
greater precision the number of cable system operators that would 
qualify as small cable operators under the definition in the 
Communications Act.
    40. Multipoint Distribution Systems (MDS). This service has 
historically provided primarily point-to-multipoint one-way video 
services to subscribers. The Commission recently amended its rules to 
allow MDS licensees to provide a wide range of high-speed, two-way 
services to a variety of users.
    41. In connection with the 1996 MDS auction, the Commission defined 
small businesses as entities that had annual average gross revenues for 
the three preceding years not in excess of $40 million. The Commission 
established this small business definition in the context of this 
particular service and with the approval of the SBA. The MDS auction 
resulted in 67 successful bidders obtaining licensing opportunities for 
493 Basic Trading Areas. Of the 67 auction winners, 61 met the 
definition of a small business. At this time, we estimate that of the 
61 small business MDS auction winners, 48 remain small business 
licensees.
    42. In addition to the 48 small businesses that hold BTA 
authorizations, there are approximately 392 incumbent MDS licensees 
that are considered small entities. After adding the number of small 
business auction licensees to the number of incumbent licensees not 
already counted, we find that there are currently approximately 440 MDS 
licensees that are defined as small businesses under either the SBA or 
the Commission's rules. Some of those 440 small business licensees may 
be affected by the proposals in this Notice.
    43. Electric Services (SIC 4911). The SBA has developed a 
definition for small electric utility firms. The Census Bureau reports 
that a total of 1379 electric utilities were in operation for at least 
one year at the end of 1992. According to SBA, a small electric utility 
is an entity whose gross revenues did not exceed five million dollars 
in 1992. The Census Bureau reports that 447 of the 1379 firms listed 
had total revenues below five million dollars.
    44. Electric and Other Services Combined (SIC 4931). The SBA has 
classified this entity as a utility whose business is less than 95% 
electric in combination with some other type of service. The Census 
Bureau reports that a total of 135 such firms were in operation for at 
least one year at the end of 1992. The SBA's definition of a small 
electric and other services combined utility is a firm whose gross 
revenues did not exceed five million dollars in 1992. The Census Bureau 
reported that 45 of the 135 firms listed had total revenues below five 
million dollars.
    45. Combination Utilities, Not Elsewhere Classified (SIC 4939). The 
SBA defines this utility as providing a combination of electric, gas, 
and other services which are not otherwise classified. The Census 
Bureau reports that a total of 79 such utilities were in operation for 
at least one year at the end

[[Page 10419]]

of 1992. According to SBA's definition, a small combination utility is 
a firm whose gross revenues did not exceed five million dollars in 
1992. The Census Bureau reported that 63 of the 79 firms listed had 
total revenues below five million dollars.

IV. Description of Proposed Reporting, Recordkeeping, and Other 
Compliance Requirements

    46. The Notice sets out in detail, and seeks comment on, various 
proposals to modify the Commission's existing Local Competition and 
Broadband reporting program. Pursuant to the current reporting program, 
certain providers of broadband services and of local telephone services 
must complete FCC Form 477, which collects data on their deployment of 
those services. Since the adoption of the reporting program, providers 
have reported data twice and the Commission has issued its Second 
Report on Advanced Telecommunications Capability based in significant 
part on the data collected through this program. Thus, the Notice seeks 
comment, in light of these experiences, on ways that the Commission 
might improve this data gathering effort. The Notice asks whether 
certain measures to gain additional data might assist the Commission in 
its efforts to understand the degree and status of deployment of 
broadband services, without imposing an undue burden on reporting 
providers. For example, the Notice seeks comment on possible revisions 
to FCC Form 477 that might more precisely capture distinctions between 
the deployment of broadband services to residential and business users. 
Similarly, the Notice seeks comment on whether we should revise the 
form so that providers report the actual subscribership by zip code, in 
lieu of the current requirement that providers report a list of zip 
codes where broadband service is being delivered. Further, the Notice 
asks whether it is possible to eliminate any unnecessary or unduly 
burdensome aspects of the reporting program. In addition to seeking 
comment on the types of data to be reported, the Notice seeks comment 
on whether to adjust the current reporting thresholds, whether the 
Commission should alter its confidentiality procedures for data 
collected, whether it would be appropriate to alter the frequency of 
filing, and whether there are additional steps that the Commission 
might take to promote additional analyses of the data. The Notice asks 
commenters to document, insofar as possible, the burdens that are 
imposed by our current requirements and the additional burdens that 
would be imposed by more detailed reporting requirements.

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

    47. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives: (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.
    48. As mentioned previously, the Notice seeks comment, in light of 
our experiences since the adoption of the reporting program, on ways 
that we might improve this data gathering effort. The Notice asks 
whether there is additional data that would enhance the Commission's 
ability to understand the status and degree of broadband and local 
telephone service deployment. At the same time, the Notice asks whether 
it is possible to eliminate any unnecessary or unduly burdensome 
aspects of the reporting program. This proposal would reduce burdens on 
all respondents, including any small entities that must report under 
the program. Among the alternatives considered in the Notice that might 
affect small entities is a proposal by Iowa Telecom seeking to create 
an exemption for ``mid-size LECs * * * which serve primarily rural 
communities.'' Small entities are specifically encouraged to comment on 
such an exemption. The Notice seeks comment on whether the burdens 
imposed on smaller providers by our reporting requirements outweigh the 
benefits of these requirements. At the same time, the Commission also 
asks whether access to more complete information about broadband 
subscribership in rural areas--areas that are often served by smaller 
telephone and cable companies--might enable us to better fulfill the 
congressional directive to assess the state of deployment of broadband 
services to all Americans. The Notice expressly states the Commission's 
desire and intention to work closely with service providers, including 
small entities, to minimize burdens wherever possible, particularly for 
smaller providers that may have limited resources.

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

    49. None.

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

    50. None.

Ordering Clauses

    51. Pursuant to sections 1-5, 10, 11, 201-205, 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, 215, 218-220, 251-
271, 303(r), 332, 403, 502, and 503, and pursuant to section 706 of the 
Telecommunications Act of 1996, 47 U.S.C. 157 nt, this [notice], with 
all attachments, is hereby [adopted].
    52. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Second Notice of Proposed 
Rulemaking, including the Initial Regulatory Flexibility Analysis, to 
the Chief Counsel for Advocacy of the Small Business Administration in 
accordance with paragraph 603(a) of the Regulatory Flexibility Act, 5 
U.S.C. 601 et seq. (1981).

List of Subjects

47 CFR Parts 1 and 43

    Communications common carriers, Reporting and recordkeeping 
requirements, Telecommunications, Telephone.

47 CFR Part 20

    Communications common carriers.

Federal Communications Commission.
Shirley Suggs,
Chief, Publications Branch.
[FR Doc. 01-3787 Filed 2-14-01; 8:45 am]
BILLING CODE 6712-01-U


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