Source: https://www.federalregister.gov/documents/2019/08/30/2019-18229/truth-in-caller-id-rules
Timestamp: 2019-10-18 04:25:31
Document Index: 731701358

Matched Legal Cases: ['§\u200964', '§\u200964', 'art 64', 'art 64', '§\u20099', '§\u200976', 'art 64', '§\u20091', 'art 64', '§\u200964', '§\u200964']

Federal Register :: Truth in Caller ID Rules
Effective February 5, 2020.
84 FR 45669
45669-45678 (10 pages)
FCC 19-73
B. Expanding the Scope of Covered Communications
D. Other Changes to the Rules
C. Response to Comments by the Chief Counsel for Advocacy of the SBA
https://www.federalregister.gov/d/2019-18229 https://www.federalregister.gov/d/2019-18229
In this document, the Federal Communications Commission (Commission) takes the next step in our multi-pronged approach to putting an end to unlawful caller ID spoofing. Specifically, we amend our Truth in Caller ID rules to implement the amendments to section 227(e) of the Communications Act adopted by Congress last year as part of the RAY BAUM'S Act. Consistent with these statutory amendments, we amend our rules to encompass malicious spoofing activities directed at consumers in the United States from actors outside of our country and reach caller ID spoofing using alternative voice and text messaging services. This actions advance our goal of ending the malicious caller ID spoofing that causes billions of dollars of harm to millions of American consumers each year.
Annick Banoun, FCC Wireline Competition Bureau, Competition Policy Division, 445 12th Street SW, Washington, DC 20554, at (202) 418-1521, or annick.banoun@fcc.gov.
This is a summary of the Commission's Second Report and Order, in WC Docket Nos. 18-335 and 11-39, adopted August 1, 2019 and released August 5, 2019. A full text version of this document may be obtained at the following internet address: https://docs.fcc.gov/​public/​attachments/​FCC-19-73A1.pdf.Start Printed Page 45670
1. This Second Report and Order advances our goal of ending the malicious caller ID spoofing that causes billions of dollars of harm to millions of American consumers each year. In section 503 of the 2018 RAY BAUM'S Act, Congress amended section 227(e) of the Act to expand the reach of covered entities from “any person within the United States” to include “any person outside the United States if the recipient is within the United States.” It also changed the scope of covered communications from any “telecommunications service or IP-enabled voice service” to a “voice service or a text message sent using a text messaging service.” The RAY BAUM'S Act directs the Commission to prescribe rules implementing these amendments to section 227(e) within 18 months of enactment, and makes the statutory amendments effective six months after the Commission prescribes its regulations. Earlier this year, we released a notice of proposed rulemaking (NPRM) (84 FR 7315, March 4, 2019) in which we proposed and sought comment on modifications to our current Truth in Caller ID rules that largely track the language of the recent statutory amendments. Consistent with these statutory amendments, we amend our rules to encompass malicious spoofing activities directed at consumers in the United States from actors outside of our country and reach caller ID spoofing using alternative voice and text messaging services.
2. We revise our caller ID spoofing rules to cover communications originating outside the United States directed at recipients within the United States, consistent with revised section 227(e). As Congress recognized, the threat to consumers from overseas fraudulent spoofing continues to grow. We therefore agree with the 42 State Attorneys General and other commenters that expanding our rules to cover bad actors reaching into the United States is a “necessary and important step in the continued fight against robocalls,” and that implementing the RAY BAUM'S Act changes will strengthen the Commission's ability to enforce its rules against fraudulent and other harmful spoofing.
3. To implement the prohibition on caller ID spoofing directed at the United States from callers outside our country, we revise § 64.1604 to provide that no person in the United States, nor any person outside the United States if the recipient is in the United States, shall, with the intent to defraud, cause harm, or wrongfully obtain anything of value, knowingly cause, directly, or indirectly, any caller identification service to transmit or display misleading or inaccurate caller identification information in connection with any voice service or text messaging service. While the current Truth in Caller ID rules uses the phrase “person or entity,” we use the language of the statute, which is limited to “person.” At the same time, consistent with congressional intent and Commission precedent, we make clear that “person” includes both natural persons and non-natural persons, e.g., corporations, associations, and partnerships.
4. Finally, we reject Yaana Technologies' suggestion that we cannot exercise the extraterritorial jurisdiction that Congress expressly provided in section 503 of the RAY BAUM'S Act, which applies only to communications received in the United States. Yaana Technologies cites no specific treaty obligation that the statutory language contravenes, nor other legal barrier to the Commission's exercise of the legal authority given it by Congress, and we are aware of none. Moreover, the Commission's ongoing work with our international counterparts on caller ID spoofing issues in various fora is not inconsistent with the jurisdictional framework set forth in the statute. The Commission collaborates with our international counterparts on a bilateral, regional, and multilateral basis. For example, the Enforcement Bureau has executed a bilateral Memoranda of Understanding (MOU) with the Commission's Canadian counterpart, the Canadian Radio-television and Telecommunications Commission. The Enforcement Bureau is also a member of UCENet, which is an international organization that brings together law enforcement entities across the globe to coordinate and assist each other's efforts to combat telecommunications fraud, spam, phishing, and the dissemination of computer viruses. Additionally, the Commission works with its international counterparts in the course of U.S. engagement in relevant regional and multilateral fora, such as the International Telecommunication Union (ITU).
5. We also expand the scope of communications covered by our caller ID spoofing rules, consistent with amended section 227(e) and as proposed in the NPRM. Specifically, we incorporate the phrase “in connection with any voice service or text messaging service” into the prohibition on causing “directly, or indirectly, any caller identification service to transmit or display misleading or inaccurate caller identification information.” We find, consistent with our proposal, that amending our rules to explicitly identify the services within § 64.1604's prohibition on unlawful spoofing better tracks the language of the statute and provides more direct notice to covered entities as to which services the prohibitions apply. As one commenter explains, the inclusion of the statutory phrase “in connection with any voice service or text messaging service” is not strictly necessary, because the phrase is encompassed by the definitions of “caller identification service” and “caller identification information” to which the prohibition applies. Amended section 227(e)(8) defines “caller identification service” as any service or device designed to provide the user of the service or device with the telephone number of, or other information regarding the origination of, a call made using a voice service or a text message sent using a text messaging service. Such term includes automatic number identification services. However, the statutory language is clear, and we find that mirroring the statutory language “`will avoid creating ambiguity' or deviating from Congress's choices.”
6. To implement Congress' intent to expand the scope of the prohibition on harmful caller ID spoofing, we adopt definitions of “text message,” “text messaging service,” and “voice service” and revise the definitions of “caller identification information,” and “caller identification service” in accordance with section 503 of the RAY BAUM'S Act. We also adopt definitions of “short message service (SMS)” and “multimedia message service (MMS).” These definitions will be included in the definitions section of subpart P to our part 64 rules. We also take this opportunity to put in alphabetical order the definitions in subpart P of part 64 of our rules.
7. Text Message. We adopt a definition of “text message” that mirrors the statutory language. We clarify that this definition of “text message” is limited for the purpose of addressing malicious caller ID spoofing. Amended section 227(e) defines the term “text message” as a message consisting of text, images, sounds, or other Start Printed Page 45671information that is transmitted to or from a device that is identified as the receiving or transmitting device by means of a 10-digit telephone number or N11 service code. One commenter proposes to replace “a 10-digit telephone number” with “a telephone number” in the definition of “text message” because “a telephone number may contain only seven digits if the call is within the same area code.” We find these concerns are misplaced because even when a consumer is only required to dial seven digits of a phone number, there is a 3-digit area code associated with the 7-digit number the consumer has dialed. Congress further clarified that the term explicitly includes “a short message service (SMS) message and a multimedia message service (MMS) message” but excludes “a real-time, two-way voice or video communication” or “a message sent over an IP-enabled messaging service to another user of the same messaging service, except for [an SMS or MMS message].” We find that this definition is sufficiently inclusive to capture the current universe of text messages that could be used for prohibited spoofing activity and will avoid ambiguity as to Congress' intent. We also believe, and no commenters argue otherwise, that Congress likely included the phrase “ `other information' out of an abundance of caution to allow for the inclusion of future technological advances given the rapid pace of new developments in technology.”
8. For purposes of our Truth in Caller ID rules, we define “N11 service code” as an abbreviated dialing code that allows telephone users to connect with a particular node in the network by dialing only three digits, of which the first digit is any digit other than `1' or `0,' and each of the last two digits is `1.' No commenters offered substantive suggestions on how to define “N11 service code,” so we looked to the language the Commission used nearly two decades ago when it described N11 services as “abbreviated dialing arrangements that allow telephone users to connect with a particular node in the network by dialing only three digits,” as well as the definition of “N11 service code” found in the recently-enacted National Suicide Hotline Prevention Act. The definition we adopt in this document is similar to the Commission's previous description but provides more specificity by clarifying that the first digit of an N11 code is any digit other than “1” or “0”, and that the second two digits are “1,” consistent with the National Suicide Hotline Prevention Act.
9. For purposes of our Truth in Caller ID rules, we adopt definitions of SMS and MMS that are consistent with our descriptions of those terms in the Commission's 2018 Wireless Messaging Service Declaratory Ruling (84 FR 5008, Feb. 20, 2019). To that end, we define SMS as a wireless messaging service that enables users to send and receive short text messages, typically 160 characters or fewer, to or from mobile phones and can support a host of applications. And we define MMS as a wireless messaging service that is an extension of the SMS protocol and can deliver a variety of media, and enables users to send pictures, videos, and attachments over wireless messaging channels. We find that adopting definitions of those terms will provide clarity to interested parties given that Congress expressly defined “text message” to include “a [SMS] message and a [MMS] message” but it did not define those terms.
10. We also clarify that for purposes of our Truth in Caller ID rules, the definition of “text message” includes messages sent to or from a person or entity using Common Short Codes (Short Codes). Short Codes are “5- to 6-digit codes typically used by enterprises for communicating with consumers at high volume.” Short Codes are an addressing mechanism using the SMS and MMS protocols. Like other SMS and MMS messages, messages sent from a person or entity using Short Codes are directed to devices using 10-digit telephone numbers. As a convenience to consumers and to facilitate the delivery of high-volume traffic, wireless providers developed Short Codes, which are administered by the Common Short Code Administration and leased to enterprises. Once a Short Code is assigned to an applicant and before it can be used, each mobile provider must provision that code to the customer, usually through a third-party “aggregator” that handles the provisioning across multiple providers.
11. While, as Twilio explains, Short Codes may be less likely to be used by a person or entity sending messages in connection with malicious caller ID spoofing because the registration and administration process make “the sender of a short code SMS [ ] far easier to identify than the user of a 10-digit number,” this protection is not absolute. Twilio itself admits that it is not impossible to spoof a Short Code. Consumers have complained about possible Short Code spoofing, and some reporting indicates that Short Codes can be hacked which could lead to spoofing. Nonetheless, CTIA expresses concern about the Commission finding that the definition of “text message” for purposes of our Truth in Caller ID rules includes messages sent to or from a person or entity using Short Codes. CTIA argues that there is no technical evidence in the record that spoofing of Short Codes is possible or has occurred. CTIA also argues that an absence of notice under the Administrative Procedure Act for including Short Codes in the definition of text message and an absence of reference to Short Codes in the RAY BAUM'S Act counsel in favor of not including messages sent from a person or entity using Short Codes in the definition of text message. We find CTIA's arguments to be misplaced. The NPRM sought comment on the definition of text message that we adopt in this document, which includes SMS and MMS messages, and the record demonstrates that messages sent and received using Short Codes are SMS or MMS messages. The record demonstrates that messages sent and received using Short Codes are SMS or MMS messages, and there is nothing in the record that would allow us to conclude that Caller ID associated with a Short Code message cannot be spoofed. We are mindful of Congressional intent to protect against spoofing of SMS and MMS text messages for nefarious purposes, and therefore, because Short Codes are used by a person or entity sending SMS or MMS messages to 10-digit number identified devices, and could be used to perpetrate malicious spoofing, we conclude that the definition of “text message” in section 503 of the RAY BAUM'S Act and in our Truth in Caller ID rules is best interpreted as including messages sent to or from a person or entity using Short Codes. We make clear, however, that our decision only interprets section 503 of RAY BAUM'S Act in the context of Congress' specific intent to broadly expand our anti-spoofing rules to encompass other forms of spoofing sent via SMS and MMS, and we make no finding with respect to any other Commission jurisdiction over Short Codes. We also affirm that nothing in this Second Report and Order affects our decision in the Wireless Messaging Service Declaratory Ruling to refrain from “decid[ing] whether short-code provisioning is a `component' of wireless messaging.”
12. Exclusions. Section 227(e) as amended excludes from the definition of “text message” “real-time, two-way voice or video communications” and “a message sent over an IP-enabled messaging service to another user of the same messaging service, except for [an SMS or MMS message].” Accordingly, Start Printed Page 45672we adopt both exclusions in our rules. We conclude that “real-time, two-way” communications that are transmitted by means of a 10-digit telephone number or N11 service code are excluded from the definition of “text message” because they are intended by Congress to be included in the definition of “voice service.” We interpret the latter exclusion to include non-MMS or SMS messages sent using IP-enabled messaging services such as iMessage, Google hangouts, WhatsApp, and Skype to other users of the same service. As we explained in the NPRM, “a message sent from one computer to another computer using WhatsApp, or the `chat' function on Google Hangouts would appear to be an IP-enabled messaging service between users of the same messaging service under the second exclusion in the statutory definition of `text message.' ” Accordingly, we exclude them from the definition of “text message” in our rules. Similarly, “text communications between or among two or more Skype users or iMessages between or among iPhone users” are also excluded from the definition of “text message.”
13. We also clarify that messages sent over other IP-enabled messaging services that are not SMS or MMS—such as Rich Communications Services (RCS)—are excluded from amended section 227(e) of the Act and our implementing rules to the extent such messages are sent to other users of the same messaging service. RCS and similar services may well enable users to send messages that would meet the first prong of the statutory definition of “text message”—a “message consisting of text, images, sounds, or other information that is transmitted to or from a device that is identified as the receiving or transmitting device by means of a 10-digit telephone number or N11 service code.” But the inquiry does not end there. As noted above, while section 227(e) of the Act makes clear that SMS and MMS are included within the definition of “text message,” it simultaneously makes clear that any “message sent over an IP-enabled messaging service to another user of the same messaging service” that is not SMS or MMS is excluded. RCS fits comfortably within this exclusion. It is an IP-based asynchronous messaging protocol, and it therefore enables users to send messages “over an IP-enabled messaging service.” Also, RCS enables messages to be sent between users of the same messaging service—that is, other users with RCS-enabled devices. RCS messages sent to other users are thus excluded so long as RCS is not SMS or MMS—which it is not. While RCS has been described as a “successor protocol” to SMS or a “next-generation” SMS, it is not the same thing as SMS or MMS. Rather, as the Commission has previously concluded, RCS has “advanced messaging features” that “allow users to, among other things, use mobile banking services, share high-resolution photos and files, track locations and interact with chatbots.” Congress was plainly aware of RCS—a protocol that was first conceived in 2007—when it amended section 227(e) through the RAY BAUM'S Act last year. Yet, Congress chose to exempt from the definition of “text message” any message sent over an IP-enabled messaging service that is not SMS or MMS to another user of the same service, which would include RCS and any other potential successor protocols. Regardless of whether RCS may bear functional similarity to MMS and SMS, the Commission cannot disturb the policy judgment made by Congress to exclude such services from section 227 (a policy judgment perhaps reflecting that the potential for or record of malicious spoofing for such protocols has not yet been established). We therefore agree with Twilio and EZ Texting to the extent they argue that RCS should be excluded from the definition of “text message.” Our determination in this document that RCS is excluded from the definition of “text message” under amended section 227(e) should not be read as determinative of any future decision by the Commission to classify RCS pursuant to other provisions of the Communications Act.
14. As we explained in the NPRM, we also find that the new statutory definition of “text message,” and other amendments to section 227(e) under the RAY BAUM'S Act regarding text messages, do not affect the Commission's finding that text messages are “calls” for purposes of section 227(b). Section 227(b), among other things, places limits on calls made using any automatic telephone dialing system or an artificial or prerecorded voice. Congress placed the new definition of “text message” in section 227(e) rather than in section 227(a), which contains definitions generally applicable throughout section 227. Consequently, we conclude that there is nothing in section 227(e) as amended to suggest that Congress intended to disturb the Commission's long-standing treatment of text messages under section 227(b), which has been in place since 2003.
15. Text Messaging Service. We adopt the statutory definition of “text messaging service” as part of our Truth in Caller ID rules. Section 227(e) as amended defines a “text messaging service” as “a service that enables the transmission or receipt of a text message, including a service provided as part of or in connection with a voice service.” As we explained in the NPRM, “[m]aintaining consistency with the statutory definition of `text messaging service' for unlawful spoofing prevention is particularly important given that it is only text messages `sent using a text messaging service' that Congress includes within the scope of section 227(e) as amended.” One commenter supports this approach and no commenters oppose it.
16. Voice Service. We adopt the definition of “voice service” contained in amended section 227(e) for purposes of our Truth in Caller ID rules. Section 227(e) as amended defines “voice service” as “any service that is interconnected with the public switched telephone network and that furnishes voice communications to an end user using resources from the North American Numbering Plan or any successor to the North American Numbering Plan adopted by the Commission under section 251(e)(1). . . .” It also explicitly includes “transmissions from a telephone facsimile machine, computer, or other device to a telephone facsimile machine.”
17. We interpret the term “voice service” for the purpose of our Truth in Caller ID rules to both include and be more expansive than “telecommunications service” and “interconnected VoIP service” as currently defined in our rules. Our existing rules cover calls made using “telecommunications service” or “interconnected VoIP service.” 47 CFR 64.1600(c), (d). Because we received no comments from stakeholders in support of explicitly including the terms “telecommunications service” and “interconnected VoIP service” within the definition of “voice service,” we refrain from doing so at this time. The statutory language requires that communications encompassed by the definition of “voice service” must be “interconnected” with the public switched telephone network (PSTN). We interpret the term “interconnected” as it is used in the definition of “voice service” to include any service that enables voice communications either to the PSTN or from the PSTN, regardless of whether it enables both inbound and outbound communications within the same service. To this end, we interpret the definition of “voice service” to include one-way VoIP service and any similar IP-based or other technology-Start Printed Page 45673based calling capability that “furnishes voice communications to an end user using resources from the North American Numbering Plan or any successor to the North American Numbering Plan adopted by the Commission under section 251(e)(1).”
18. We also clarify that the requirement to “us[e] resources from the North American Numbering Plan” in the definition of “voice service” includes one-way VoIP services that allow customers of such services to send voice communications to any end user who uses NANP resources. It does not require the provision of NANP resources directly to the customer of the service (i.e., the spoofer). We therefore disagree with INCOMPAS' assertion that the definition of “voice service” should exclude one-way VoIP services because such services (1) are not capable of transmitting calls to and receiving calls from the PSTN, and (2) do not require NANP resources to furnish voice communications to an end user. Adopting the INCOMPAS approach could exclude significant amounts of unlawful spoofing accomplished through one-way VoIP services and third-party spoofing platforms, which we find to be contrary to the Congressional intent in section 503 of the RAY BAUM'S Act. We observe that in amending section 227(e), Congress neither defined the term “interconnected” for the purposes of section 227(e) nor referenced other statutory provisions or Commission rules where “interconnected” is used as part of the definition of specific categories of communications. In other statutory contexts, the focus in defining the scope of a covered “service” is on the nature or capabilities of an offering made by a provider to members of the public, and not on prohibited uses of communications services by a person whose identity and means of engaging in unlawful conduct are likely unknown to the consumer. This difference in statutory text and purpose counsels for a broader construction of interconnected service in this context. We further observe that amended section 227(e) specifically removed from the definition of covered voice services the reference to the definition of “interconnected VoIP service” in § 9.3 of the Commission rules. We find that these actions lend support to our conclusion that Congress intended to broaden the scope of IP-enabled voice services subject to the prohibition on unlawful spoofing in section 227(e). This expanded interpretation of “voice service,” however, is limited to our Truth in Caller ID rules, and does not implicate the definitions of “interconnected VoIP” and “interconnected service” elsewhere in the Act and our rules.
19. In the NPRM, we sought comment on “whether we should interpret `interconnected' to include both direct and indirect interconnection to the PSTN to account for different methods of interconnection.” In past Commission investigations, we have found that malicious caller ID spoofing often relies on “dialing platforms” or “third party platforms.” These platforms provide dialing software that can be used for sending either live or pre-recorded robocalls. Not all of these platforms are directly interconnected to the PSTN, however, as they may require a VoIP or local exchange carrier to connect their customers to the PSTN. Therefore, to ensure that our rules address malicious caller ID spoofing made with the aid of these platforms, and in light of the specific statutory context and purpose of the amended section 227(e), which is directed at persons who “knowingly transmit misleading or inaccurate caller identification information,” we clarify that for the purposes of our Truth in Caller ID rules, “interconnected” includes indirect, as well as direct, interconnection.
20. We conclude that “voice services” include “real-time, two-way voice communications” that are transmitted by means of a 10-digit telephone number or N11 service code. Congress explicitly excluded such communications from the definition of “text message” in section 227(e) as amended. Twilio argues that the phrase “ `real-time, two-way voice communications' that use `a 10-digit telephone number or N11 service code' ” is vague and expansive and should not be considered part of the definition of “voice service” for the purpose of our Truth in Caller ID rules because Congress could have easily incorporated that phrase into the definition of “voice service” had it intended such service to be included. Contrary to Twilio's arguments, we find that phrase to be concrete and specific and we think that it is useful in providing clear boundaries around what types of services are covered by the term “voice services.” As such, we find that such real-time, two way voice communications that are transmitted by means of a 10-digit telephone number or N11 service code are covered by the amended definition of “voice services,” i.e., services “interconnected with the public switched telephone network . . . that furnish[ ] voice communications to an end user using resources for the North American Numbering Plan. . . .”
21. We decline to include real-time, two-way voice communications between and among closed user groups that do not use 10-digit telephone numbers or N11 service codes in the definition of “voice service,” as such communications do not meet the statutory definition of “voice services.” In the 2011 Commission Report, the Commission acknowledged that these communications do not present the same degree of caller ID spoofing concern as “interconnected VoIP services.” One notable example of real-time voice communications that do not give rise to such caller ID spoofing concerns is voice communications between players in online games such as Fortnite. Since such services “have no connection to the PSTN,” we find that Congress did not intend to reach these types of voice communications, nor do they fall within the definition of “voice services” for purposes of the rules we adopt in this document.
22. Finally, tracking the language of section 227(e) as amended, we conclude that the definition of “voice service” includes transmissions to “a telephone facsimile machine (fax machine) from a computer, fax machine, or other device.” We believe that Congress intended the inclusion of telephone facsimile machine transmissions within the definition of “voice service” to be narrow in scope, and therefore, decline to expand that definition to encompass “a computer or other device whose purpose is to store an image that could have been sent to a telephone facsimile machine,” as suggested by commenter John Shaw. We believe it is necessary to incorporate this additional specification into our rules to ensure consistency with the RAY BAUM'S Act and avoid confusion as to the scope of the prohibition. Indeed, in response to the NPRM, one commenter emphasized that its fax line “routinely receives unsolicited material promising treasures if certain steps are taken.”
23. Caller Identification Information and Caller Identification Service. We revise the existing definitions of “caller identification information” and “caller identification service” in our rules to be consistent with section 227(e)(8) as amended. In doing so, we mirror the amended statutory text by substituting “voice service or a text message sent using a text messaging service” for “telecommunications service or interconnected VoIP service.” One commenter supports our proposal to adopt these definitions and no commenters oppose it.Start Printed Page 45674
24. While numerous commenters took the opportunity to advocate for the adoption of the SHAKEN/STIR call authentication framework and for other issues beyond the scope of this proceeding, we decline to make other changes to our Truth in Caller ID rules, or other rules beyond the scope of this proceeding, at this time.
25. Effective Date. Pursuant to section 503 of the RAY BAUM'S Act, the statutory amendments to section 227(e) will be effective six months after the Commission prescribes its implementing rules. Because the Commission's rules implementing the amendments to section 227(e) cannot be effective until the statutory amendments themselves are effective, we make the rules adopted here effective six months after adoption and release of this Report and Order, or 30 days after publication in the Federal Register, whichever is later.
26. Paperwork Reduction Act. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198.
27. Congressional Review Act. The Commission will send a copy of this Second Report and Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
28. Final Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the notice of proposed rulemaking Implementing Section 503 of RAY BAUM'S Act, Rules and Regulation Implementing the Truth in Caller ID (NPRM), released February 2019 (84 FR 7315). The Commission sought written public comment on the proposals in the NPRM, including comment on the IRFA. No comments were filed addressing the IRFA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
29. Nefarious schemes that manipulate caller ID information to deceive consumers about the name and phone number of the party that is calling them, in order to facilitate fraudulent and other harmful activities, continue to plague American consumers. Last year, as part of the RAY BAUM'S Act, Congress amended section 227(e) of the Communications Act to (1) extend its scope to encompass malicious spoofing activities directed at consumers in the United States from actors outside the United States; and (2) extend its reach to caller ID spoofing using alternative voice and text messaging services. In this Report and Order (Order), we implement these recently adopted amendments to expand and clarify the Act's prohibition on the use of misleading and inaccurate caller ID information. The amended Truth in Caller ID rules largely adopt the language contained in the RAY BAUM'S Act. The amended rules do not impose record keeping or reporting obligations on any entity.
30. There were no comments filed that specifically addressed the proposed rules and policies presented in the IRFA.
31. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments.
32. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.
33. The RFA directs agencies to provide a description and, where feasible, an estimate of the number of small entities that may be affected by the final rules adopted pursuant to the Order. 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. Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register.” A “small-business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.
34. Small Businesses, Small Organizations, Small Governmental Jurisdictions. Our actions, over time, may affect small entities that are not easily categorized at present. We therefore describe here, at the outset, three broad groups of small entities that could be directly affected herein. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, according to data from the SBA's Office of Advocacy, in general a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States which translates to 28.8 million businesses.
35. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of August 2016, there were approximately 356,494 small organizations based on registration and tax data filed by nonprofits with the Internal Revenue Service (IRS). Reports generated using the NCCS online database indicated that as of August 2016 there were 356,494 registered nonprofits with total revenues of less than $100,000. Of this number, 326,897 entities filed tax returns with 65,113 registered nonprofits reporting total revenues of $50,000 or less on the IRS Form 990-N for Small Exempt Organizations and 261,784 nonprofits reporting total revenues of $100,000 or less on some other version of the IRS Form 990 within 24 months of the August 2016 data release date.
36. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2012 Census of Governments indicates that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Local governmental jurisdictions are classified in two categories—General purpose governments (county, municipal and Start Printed Page 45675town or township) and Special purpose governments (special districts and independent school districts). Of this number there were 37,132 General purpose governments (county (there were 2,114 county governments with populations less than 50,000), municipal and town or township (there were 18,811 municipal and 16,207 town and township governments with populations less than 50,000) with populations of less than 50,000 and 12,184 Special purpose governments (independent school districts (there were 12,184 independent school districts with enrollment populations less than 50,000) and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category shows that the majority of these governments have populations of less than 50,000. Based on this data we estimate that at least 49,316 local government jurisdictions fall in the category of “small governmental jurisdictions.”
37. Wired Telecommunications Carriers. The U.S. Census Bureau defines this industry as “establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.” The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees. Census data for 2012 show that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. Thus, under this size standard, the majority of firms in this industry can be considered small.
38. Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small businesses applicable to local exchange services. The closest applicable NAICS Code category is for Wired Telecommunications Carriers, as defined in paragraph 10 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2012 show that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. The Commission therefore estimates that most providers of local exchange carrier service are small entities.
39. Incumbent Local Exchange Carriers (incumbent LECs). Neither the Commission nor the SBA has developed a small business size standard for incumbent local exchange services. The closest applicable NAICS Code category is Wired Telecommunications Carriers as defined in paragraph 10 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 3,117 firms operated in that year. Of this total, 3,083 operated with fewer than 1,000 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by the rules and policies adopted. 1,307 Incumbent Local Exchange Carriers reported that they were incumbent local exchange service providers. Of this total, an estimated 1,006 have 1,500 or fewer employees. Thus, using the SBA's size standard, the majority of incumbent LECs can be considered small entities.
40. Competitive Local Exchange Carriers (competitive LECs), Competitive Access Providers (CAPs), Shared-Tenant Service Providers, and Other Local Service Providers. Neither the Commission nor the SBA has developed a small business size standard for these service providers. The appropriate NAICS Code category is Wired Telecommunications Carriers, as defined in paragraph 10 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees. U.S. Census data for 2012 indicate that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees. Based on this data, the Commission concludes that the majority of Competitive LECs, CAPs, Shared-Tenant Service Providers, and Other Local Service Providers are small entities. According to Commission data, 1,442 carriers reported that they were engaged in the provision of either competitive local exchange services or competitive access provider services. Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees. In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees. In addition, 72 carriers have reported that they are Other Local Service Providers. Of this total, 70 have 1,500 or fewer employees. Consequently, based on internally researched FCC data, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities.
41. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a definition for Interexchange Carriers. The closest NAICS Code category is Wired Telecommunications Carriers as defined in paragraph 10 of this FRFA. The applicable size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. According to Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services. Of this total, an estimated 317 have 1,500 or fewer employees and 42 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 adopted rules.
42. Local Resellers. The SBA has developed a small business size standard for Telecommunications Resellers which includes Local Resellers. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. Under the SBA's size standard, such a business is small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2012 show that 1,341 firms provided resale services during that year. Of that number, all operated with fewer than 1,000 employees. Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 213 carriers have reported that they are engaged in the provision of local resale services. Of these, an estimated 211 have 1,500 or fewer employees. Consequently, the Commission Start Printed Page 45676estimates that the majority of Local Resellers are small entities.
43. Toll Resellers. The Commission has not developed a definition for Toll Resellers. The closest NAICS Code Category is Telecommunications Resellers. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees. Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services. Of this total, an estimated 857 have 1,500 or fewer employees. Consequently, the Commission estimates that the majority of toll resellers are small entities.
44. Other Toll Carriers. Neither the Commission nor the SBA has developed a size standard for small businesses applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable NAICS Code category is for Wired Telecommunications Carriers, as defined in paragraph 10 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. Thus, under this category and the associated small business size standard, the majority of Other Toll Carriers can be considered small. According to Commission data, 284 companies reported that their primary telecommunications service activity was the provision of other toll carriage. Of these, an estimated 279 have 1,500 or fewer employees. Consequently, the Commission estimates that most Other Toll Carriers that may be affected by our rules are small entities.
45. Wireless Telecommunications Carriers (Except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had employment of 999 or fewer employees and 12 had employment of 1000 employees or more. Available census data do not provide a more precise estimate of the number of firms that have employment of 1,500 or fewer employees; the largest category provided is for firms with “1000 employees or more.” Thus, under this category and the associated size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities.
46. The Commission's own data—available in its Universal Licensing System—indicate that, as of October 25, 2016, there are 280 Cellular licensees that will be affected by our actions in this document. For the purposes of this FRFA, consistent with Commission practice for wireless services, the Commission estimates the number of licensees based on the number of unique FCC Registration Numbers. The Commission does not know how many of these licensees are small, as the Commission does not collect that information for these types of entities. Similarly, according to internally developed Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service, and Specialized Mobile Radio Telephony services. Of this total, an estimated 261 have 1,500 or fewer employees, and 152 have more than 1,500 employees. Thus, using available data, we estimate that the majority of wireless firms can be considered small.
47. Wireless Communications Services. This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (WCS) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these small business size standards.
48. Wireless Telephony. Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. The closest applicable SBA category is Wireless Telecommunications Carriers (except Satellite) and the appropriate size standard for this category under the SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census Bureau data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had fewer than 1,000 employees and 12 firms had 1000 employees or more. Available census data do not provide a more precise estimate of the number of firms that have employment of 1,500 or fewer employees; the largest category provided is for firms with “1000 employees or more.” Thus, under this category and the associated size standard, the Commission estimates that a majority of these entities can be considered small. According to Commission data, 413 carriers reported that they were engaged in wireless telephony. Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees. Therefore, more than half of these entities can be considered small.
49. Cable and Other Subscription Programming. This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature (e.g. limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers. The SBA size standard for this industry establishes as small, any company in this category which has annual receipts of $38.5 million or less. According to 2012 U.S. Census Bureau data, 367 firms operated for the entire year. Of that number, 319 operated with annual receipts of less than $25 million a year and 48 firms operated with annual receipts of $25 million or more. Start Printed Page 45677Available census data does not provide a more precise estimate of the number of firms that have receipts of $38.5 million or less. Based on this data, the Commission estimates that the majority of firms operating in this industry are small.
50. Cable Companies and Systems (Rate Regulation). The Commission has developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. Industry data indicate that there are currently 4,600 active cable systems in the United States. Of this total, all but nine cable operators nationwide are small under the 400,000-subscriber size standard. In addition, under the Commission's rate regulation rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Current Commission records show 4,600 cable systems nationwide. Of this total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 systems have 15,000 or more subscribers, based on the same records. Thus, under this standard as well, we estimate that most cable systems are small entities.
51. Cable System Operators (Telecom Act Standard). 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 one percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” There are approximately 52,403,705 cable video subscribers in the United States today. Accordingly, an operator serving fewer than 524,037 subscribers shall be deemed a small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that all but nine incumbent cable operators are small entities under this size standard. We clarify that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. The Commission does receive such information on a case-by-case basis if a cable operator appeals a local franchise authority's finding that the operator does not qualify as a small cable operator pursuant to § 76.901(f) of the Commission's rules. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.
52. All Other Telecommunications. This category is comprised of establishments primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing internet services or voice over internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry. The SBA has developed a small business size standard for All Other Telecommunications, which consists of all such firms with annual receipts of $32.5 million or less. For this category, U.S. Census Bureau data for 2012 shows that there were 1,442 firms that operated for the entire year. Of those firms, a total of 1,400 had annual receipts less than $25 million and 42 firms had annual receipts of $25 million to $49,999,999. Thus, the Commission estimates that the majority of “All Other Telecommunications” firms potentially affected by our action can be considered small.
53. This Order modifies the Commission's Truth in Caller ID rules by adopting in large part the language in section 227(e) as amended. The amended rules adopted in the Order do not contain reporting or recordkeeping requirements.
54. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its approach, which may include the following four alternatives (among others): “(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof for such small entities.”
55. The relevant portions of the RAY BAUM'S Act do not distinguish between small entities and other entities and individuals. This Order largely tracks the statutory language and, as a result, the adopted revisions to the Commission's rules do not result in significant economic impact to small entities.
56. The Commission will send a copy of the Order, including this FRFA, in a report to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Order, including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Order and FRFA (or summaries thereof) will also be published in the Federal Register.
57. Accordingly, it is ordered, pursuant to sections 1, 4(i), 201(b), 227(e), 251(e) and 303 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 201(b), 227(e), 251(e) and 303, and section 503(a)(5), Public Law 115-141, 132 Stat. 348, 1092 (2018), that this Second Report and Order is adopted.
58. It is further ordered that part 64 of the Commission's rules are amended as set forth in the Final Rules.
59. It is further ordered that, pursuant to §§ 1.4(b)(1) and 1.103(a) of the Commission's rules, 47 CFR 1.4(b)(1), 1.103(a), and section 503(a)(5), Public Law 115-141, 132 Stat. 348, 1092 (2018), this Second Report and Order shall be effective six months after adoption and release of this Second Report and Order, or 30 days after publication of this Second Report and Order in the Federal Register, whichever is later.
60. It is further ordered that the Commission shall send a copy of this Second Report and Order to Congress and to the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
61. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Second Report and Order, including the Final Regulatory Flexibility Analysis (FRFA), to the Chief Counsel for Advocacy of the Small Business Administration.
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The Federal Communications Commission amends part 64 of title 47 of the Code of Federal Regulations as follows:
2. Amend § 64.1600 by revising paragraphs (c) and (d) and (f) through (l) and adding paragraphs (m) through (r) to read as follows:
3. Amend § 64.1604 by revising paragraph (a) and removing the heading from paragraph (b) to read as follows:
[FR Doc. 2019-18229 Filed 8-29-19; 8:45 am]