[Federal Register Volume 64, Number 212 (Wednesday, November 3, 1999)]
[Proposed Rules]
[Pages 59719-59727]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28792]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1, 20, and 43
[CC Docket No. 99-301, FCC 99-283]
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
proposes to collect basic information about the status of local
telephone service competition and the deployment of advanced
telecommunications capability, also known as broadband. The Commission
seeks comment on all aspects of the proposal, including how it can best
structure such a program to satisfy its needs without overburdening
those entities that would be required to file.
DATES: Comments are due on or before December 3, 1999. Reply comments
are due on or before December 20, 1999. Written comments by the public
on the proposed information collections are due on or before December
3, 1999. Written comments must be submitted by the Office of Management
and Budget (OMB) on the proposed and/or modified information
collections on or before January 3, 2000.
ADDRESSES: Comments and reply comments should be sent to the Office of
the Secretary, Federal Communications Commission, 445 12th Street, SW,
Washington, DC 20554, with a copy to Ms. Terry Conway of the Common
Carrier Bureau, Federal Communications Commission, 445 12th Street, SW,
6A-100, 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 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 jboley@fcc.gov, and to
Virginia Huth, OMB Desk Officer, 10236 NEOB, 725--17th Street, NW,
Washington, DC 20503 or via the Internet to VHuth@omb.eop.gov.
FOR FURTHER INFORMATION CONTACT: Dr. Ellen Burton, Industry Analysis
Division, Common Carrier Bureau, at (202) 418-0958, or Thomas Beers,
Deputy Chief of the Industry Analysis Division, Common Carrier Bureau,
at (202) 418-0952. For additional information concerning the
information collections contained in the Notice of Proposed Rulemaking
(NPRM) contact Judy Boley at 202-418-0214, or via the Internet at
jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM) released October 22, 1999 (FCC 99-283).
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 Services, 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/1999/>.
Paperwork Reduction Act
The NPRM summarized here contains either a proposed or modified
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 contained in the 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 the NPRM; OMB
notification of action is due 60 days from date of publication of this
NPRM in the Federal Register. Comments
[[Page 59720]]
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 Approval Number: 3060-0816.
Title: ``Local Competition and Broadband Reporting, CC Docket No.
99-301.''
Form Number: FCC Form 477.
Type of Review: Revision of Existing Collection.
Respondents: Business or Not-for-profit institutions, including
small businesses.
Burden Estimate:
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Estimated time
Number of respondents per response Total annual burden
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(1) Local Competition and Broadband
Reporting:
(a) Entities completing entire Up to 75.................... 120-576 Up to 19,144.
data collection except section
VI.
(b) Entities completing only Up to 70.................... 32-236 Up to 4,792.
section VI.
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Total Annual Burden: Up to 23,936 person-hours.
Estimated Costs per Respondent: $0.00.
Needs and Uses: The information collection for which approval is
sought would 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 propose to collect basic
information about the status of local telephone service competition and
the deployment of advanced telecommunications capability, also known as
broadband. We tentatively concludes that we need timely and reliable
information about the pace and extent of developing local competition
in different geographic areas in order to evaluate the effectiveness of
actions that this Commission and the states are taking to promote local
competition. We also tentatively conclude that we need timely and
reliable information to assess the deployment of broadband services, as
required by section 706 of the Telecommunications Act of 1996.
2. Moreover, we tentatively conclude that this information would
allow us to avoid ``one size fits all'' regulation, and, specifically,
to reduce regulation wherever we can pursuant to new sections 10 and 11
of the Act. 47 U.S.C. 160, 161. The Commission proposes a simple filing
that should enable it to make better informed decisions, while placing
as low a burden as possible on reporting entities. A proposed data
collection form is attached to the NPRM as Attachment A. Currently, the
Commission does not gather data of the type requested under this
proposed program.
3. Throughout the NPRM, we seek comment on all of the tentative
conclusions we reach. We also encourage commenters to propose
alternative means of collecting the needed information. The following
text represents a brief summary of issues set out for discussion and
comment in the NPRM.
4. Types of Entities that Must Report: In the NPRM, we discuss the
types of entities that should be required to report data describing the
extent and intensity of local competition and the extent of broadband
services deployment. Based on our determination that we need
comprehensive data about developing local services competition, we
tentatively conclude that large and medium incumbent local exchange
carriers (LECs)--as well as their wireline and fixed wireless telephony
competitors, and also their mobile wireless telephony potential
competitors--should complete sections I-III of the survey if the
reporting entity is a wireline or fixed wireless LEC and section VI if
the entity is a mobile wireless telephony carrier. Consistent with our
need for comprehensive local competition information, we tentatively
conclude that the obligation to complete the survey should not depend
on the type of technology that an incumbent LEC or competitive LEC uses
to provide local service. We tentatively conclude that we should
require carriers with 50,000 or more local access lines or channels (of
any capacity) nationwide, or 50,000 or more subscribers nationwide to
file information pursuant to this program. Further, we propose to
collect information about certain mobile wireless services because of
their potential to become substitutes for wireline service. Thus, we
propose to require any carrier who provides mobile telephony (defined
here as, real time, two-way switched voice service that is
interconnected with the public switched network utilizing an in-network
switching facility that enables the provider to reuse frequencies and
accomplish seamless handoffs of subscriber calls) to report if such an
entity has more than 50,000 subscribers nationwide. We note that
providers of mobile telephony services may include facilities-based
providers of cellular, broadband personal communications service (PCS),
specialized mobile radio services (SMR), as well as providers using
satellite technology. We ask commenters to address whether the 50,000
nationwide access line/subscribers threshold that we propose is
sufficient to provide the information that the Commission needs, while
not burdening smaller entities.
5. We next turn to a consideration of those entities that should
report data on deployment of broadband services. The Notice tentatively
concludes that given our broad statutory mandate under section 706 of
the Telecommunications Act of 1996, to evaluate the deployment of
broadband services, regardless of the transmission media or technology
employed, the survey should include questions about the deployment of
what we term ``full broadband'' services. For purposes of the proposed
data collection, ``full broadband'' service is defined, consistent with
the Advanced Telecommunications Report, as having an information
carrying capacity of over 200 Kilobits per second (Kbps) in each
direction, simultaneously. An Inquiry Concerning the Deployment of
Advanced Telecommunications Capabilities to All Americans in a
Reasonable and Timely Fashion, 14 FCC 2d 2398, paragraphs 20-25
(Advanced Telecommunications Report). The Notice recognizes, however,
that entities may provide services with bandwidth that exceeds voice
grade (i.e. 48 Kbps) but is less than 200 Kbps, and seeks
[[Page 59721]]
comment on the extent to which the Commission should consider services
deployed in this range of bandwidth in assessing the progress of
broadband deployment. Actual or potential providers of broadband
services may include: LECs (incumbent and competitive, both resale and
facilities-based, regardless of the technology used), cable television
companies, utilities, MMDS/MDS/''wireless cable'' carriers, mobile
wireless carriers (both terrestrial and satellite-based), fixed
wireless providers, and others. We believe that only by casting our net
wide enough to include all such entities can we discern progress, or
the lack of it, in meeting the goals stated in the Advanced
Telecommunications Report. We also tentatively conclude, that any
entity that provides at least 1,000 full broadband service lines (or
wireless channels), or has at least 1,000 full broadband subscribers,
should be required to complete all relevant parts of the survey,
regardless of whether that entity meets the criterion for reporting
local competition data (i.e., at least 50,000 nationwide local access
lines or telephony subscribers). Therefore, it is possible, for
example, that a LEC with fewer than 50,000 local access lines in
service could have 1,000 or more full broadband lines in service, in
which case that LEC would complete both the sections of the survey
related to broadband services and the sections concerning local
competition.
6. Frequency of Reports: We also ask commenters to address the
frequency with which the Commission should gather the information
sought by this proposed program. The majority of commenters to our
Local Competition Public Notice proceeding concluded that for the
program to be effective, the information should be collected quarterly.
Public Notice, 63 FR 29409, CC Docket No. 91-141, DA 98-839, 13 FCC Rcd
9279 (May 28, 1998). We ask for comment on whether quarterly, semi-
annual or annual reporting would best serve the goals of this
information collection program.
7. Exempting Smaller Entities: We want to explore whether we can
totally exempt some carriers from reporting without materially
affecting our ability to effectively assess the development of local
competition. Thus, we again ask commenters to address the desirability
of the proposed threshold levels for local competition and broadband
reporting. With regard to cable companies providing local exchange
telephony, we seek comment on how best to measure the threshold for
complying with our proposed reporting requirement.
8. With respect to broadband, we tentatively conclude that we
should establish a more comprehensive reporting requirement for
providers of broadband services. We promised in the Advanced
Telecommunications Report to keep a close watch on deployment of
broadband services to rural and other insular groups. Thus, to ensure
that we do not miss broadband deployment by smaller entities, we seek
comment on whether our threshold of 1,000 customers will allow us to
accurately gauge its deployment, particularly to rural America.
9. Finally, we seek comment on whether, to reduce reporting burdens
even further, we should allow an incumbent LEC of any size to file a
brief letter in lieu of reporting local competition and broadband
deployment data for states where that incumbent faces no local service
competition and if it provides a de minimis number of broadband lines.
We tentatively conclude that such an approach would reduce reporting
burdens imposed on carriers without compromising our ability to get
necessary information.
10. Definition of Reporting Area: To minimize the burden the
reporting requirement places on reporting entities, we tentatively
conclude that information should be reported by state. The Commission
recognizes that collecting information about competitive activity and
broadband services deployment in smaller geographic areas might yield
sharper pictures of the extent and intensity of these developments. At
the same time, we recognize that companies may regard such information
as confidential, and we seek comment on whether a requirement that they
disclose such information is appropriate to the extent such
confidentiality concerns exist. Therefore, we seek comment on whether a
level more narrowly defined than state level would be appropriate.
11. Confidentiality of Data: We think it extremely important that
all local competition and broadband information collected pursuant to
the proposed survey be made available to the public. Public
availability will assist Commission staff in interpreting and utilizing
such data, and it will facilitate Commission publication of data and
analysis in Commission reports. Notwithstanding our belief that
submitted information will not ordinarily raise legitimate protection
issues, we cannot prevent parties submitting data from asserting
confidentiality or other claims and seeking protection from public
release. We, of course, expect such parties to follow Commission rules
and guidelines when seeking protection pursuant, primarily, to relevant
sections of the Freedom of Information Act. We seek comment on our
tentative conclusions regarding the confidentiality of the type of
information to be gathered.
12. Electronic Filing: Because we seek to ensure that the filing
requirement does not impose undue burdens on those entities that must
complete the form and to allow the staff of the Commission to more
efficiently analyze the data, we tentatively conclude that data should
be submitted in spreadsheet form, utilizing Excel format. Additionally,
we propose that filers make their submissions to an e-mail address over
the Internet. We ask commenters about the desirability of such an e-
mail/spreadsheet-based electronic filing system, as well as other
electronic filing systems.
13. Survey Modification and Termination: We expect the local
services and broadband services markets will become increasingly
dynamic as competition develops. Therefore, it may be necessary to make
changes to the form, content, or reporting obligations of this
information collection to ensure its continuing value, while minimizing
filing burdens on respondents. Finally, to ensure that the program does
not outlive its usefulness, we ask commenters whether it would be best
to ``sunset'' this program, or perhaps to require a regular review
process.
14. Data to be Reported: We describe and seek comment on, in the
NPRM, the specific items set out in the proposed data collection form.
A brief description of the proposed data collection form follows, with
greater detail found in the complete NPRM.
15. Section I of the survey collects information about: (1) The
number of voice grade and equivalent wireline or fixed wireless lines/
channels in service that connect residential and, separately, non-
residential end users to the public switched telephone network (for
convenience, ``voice grade lines''); and (2) the extent to which LECs
use their own facilities, and the facilities or services of other LECs,
in providing these lines.
16. Section II of the survey collects information about numbers of
voice grade lines served from LEC switching centers, as defined in
Attachment A of the NPRM, in which local service competitors have
operational collocation arrangements.
17. Section III of the survey collects information from LECs about
the number of high capacity lines or channels in service connecting end
users to the public switched network (for convenience, ``high-capacity
lines'').
[[Page 59722]]
High capacity lines are defined as lines with information carrying
capacity capability to the customer's premises in excess of 200 Kbps in
at least one direction, and at least 48 Kbps (i.e., voice grade) in the
other direction.
18. Providers of mobile telephony services (including mobile
telephony affiliates of LECs) would not report data in sections I, II
or III, but would instead report data on number of subscribers to voice
grade mobile telephony service in section VI.
19. Sections IV and V of the survey collect information about the
number of broadband lines in service to consumers. This includes
information about both ``full broadband'' lines, with information
carrying capacity in excess of 200 Kbps in both directions,
simultaneously, and asymmetric ``one way broadband'' lines, with
information carrying capacity in excess of 200 Kbps in one direction
but not both. Section IV collects information about broadband lines in
service to all customers, and section V collects information about
broadband lines in service to residential customers. From the total and
residential information, we will be able to derive information about
broadband deployment to all other customers, such as business,
government, and institutional customers.
20. The Notice seeks comment on whether answers to the survey
questions are necessary and sufficient to describe and understand the
state of local competition and deployment of broadband services in
diverse areas of the nation.
Procedural Matters
A. Initial Paperwork Reduction Act of 1995 Analysis
21. The NPRM summarized here contains a proposed or modified
information collection. As part of its continuing effort to reduce
paperwork burdens, we invite the general public and the Office of
Management and Budget (OMB) to take this opportunity to comment on the
information collections contained in the 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 the NPRM; OMB
comments are due 60 days from the date of the publication of this
summary of the 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 collection of information on respondents,
including the use of automated collection techniques or other forms of
information technology.
B. Initial Regulatory Flexibility Act
22. As required by the Regulatory Flexibility Act (RFA), the
Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant economic impact on small entities of
the policies and rules proposed in the NPRM. A copy of the IRFA is
attached to this summary. Written public comments are requested with
respect to the IRFA. These comments must be filed in accordance with
the same filing deadlines for comments on the rest of the NPRM and they
must have a separate and distinct heading, designating the comments as
responses to the IRFA. The Office of Public Affairs, Reference
Operations Division, will send a copy of the NPRM, including the IRFA,
to the Chief Counsel for Advocacy of the Small Business Administration.
23. This proceeding will be treated as a ``permit-but-disclose''
proceedings subject to the ``permit-but-disclose'' requirements under
Sec. 1.1206 of the Commission's rules, as revised. Additional rules
pertaining to oral and written presentations are set forth in
Sec. 1.1206.
C. Notice and Comment Provisions
24. General. Pursuant to Secs. 1.415 and 1.419 of the Commission's
rules, 47 CFR 1.415, 1.419, interested parties may file comments on or
before December 3, 1999, and reply comments on or before Decemeber 20,
1999. Comments may be filed using the Commission's Electronic Comment
Filing System (ECFS) or by filing paper copies.
25. Comments filed through the ECFS can be sent as an electronic
file via the Internet to http://www.fcc.gov/e-file/ecfs.html>.
Generally, only one copy of an electronic submission must be filed. If
multiple docket or rulemaking numbers appear in the caption of this
proceeding, however, commenters must transmit one electronic copy of
the comments to each docket or rulemaking number referenced in the
caption. In completing the transmittal screen, commenters should
include their full name, Postal Service mailing address, and the
applicable docket or rulemaking number. Parties may also submit an
electronic comment by Internet e-mail. To get filing instructions for
e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and
should include the following words in the body of the message, ``get
form ''. A sample form and directions will be sent
in reply.
26. Parties who choose to file by paper must file an original and
four copies of each filing. If more than one docket or rulemaking
number appear in the caption of this proceeding, commenters must submit
two additional copies for each additional docket or rulemaking number.
All filings must be sent to the Commission's Secretary, Magalie Roman
Salas, Office of the Secretary, Federal Communications Commission, 445
12th St. SW, Washington, DC 20554, with a copy to: Ms. Terry Conway,
Common Carrier Bureau, Industry Analysis Division, 445 12th St. SW,
Room 6A-100, Washington, DC 20554. Written comments by the public on
the proposed information collection are due on or before December 3,
1999. Written comments must be submitted by the Office of Management
and Budget (OMB) on the proposed information collection on or before
January 3, 2000. In addition to filing comments with the Secretary, a
copy of any comments on the information collection 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 jboley@fcc.gov and to Virginia Huth, OMB Desk Officer,
10236 NEOB, 725--17th Street, NW, Washington, DC 20503 or via the
Internet to VHuth@omb.eop.gov.
27. Parties who choose to file by paper should also submit their
comments on diskette. These diskettes should be submitted to: Ms. Terry
Conway, Common Carrier Bureau, Industry Analysis Division, 445 12th St.
SW, Room 6A-100, Washington, DC 20554. Such a submission should be on a
3.5 inch diskette formatted in an IBM compatible format using
WordPerfect 5.1 for Windows or compatible software. The diskette should
be accompanied by a cover letter and should be submitted in ``read
only'' mode. The diskette should be clearly labelled with the
commenter's name, proceeding (CC Docket No. 99-301), type of pleading
(comment or reply comment), date of submission, and the name of the
electronic file on the diskette. The label should also include the
following phrase ``Disk Copy--Not an Original.'' Each diskette should
contain only one party's pleading, preferably in a single electronic
file. In addition, commenters must send diskette copies to the
Commission's copy contractor, International Transcription Service,
[[Page 59723]]
Inc., 1231 20th Street, NW, Washington, DC 20037.
Initial Regulatory Flexibility Act Analysis
28. As required by the Regulatory Flexibility Act (RFA), the
Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) of any possible significant economic impact on small entities by
the policies and rules proposed in the Notice. Written public comments
are requested on the IRFA. Comments must be identified as responses to
the IRFA and must be filed by the deadlines for comments on the Notice,
which are set out in paragraph 91 of the Notice. The Commission will
send a copy of the Notice, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration. In addition, the Notice
and IRFA (or summaries thereof) will be published in the Federal
Register.
I. Need for, and Objectives of, the Proposed Action
29. The Commission has initiated this proceeding to determine
whether it should require certain providers of communications services
to report a limited amount of information about the development of
local telephone competition and the deployment of broadband services as
mandated by the Telecommunications Act of 1996. The 1996 Act--in
particular, sections 251 and 271--tasked this Commission and the states
with important roles in opening up local telephone markets to
competition. The Commission needs timely and reliable information about
the pace and extent of developing competition in different geographic
markets in order to evaluate the effectiveness of the actions this
Commission and the states are taking to promote local telephone
competition. Moreover, the Commission tentatively concluded that
gathering broadband deployment information is critical given that
section 706 of the 1996 Act requires the Commission to issue periodic
reports on the state of broadband deployment.
II. Legal Basis
30. 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, and 403 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
and 403, 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
31. The Commission tentatively concludes that local exchange
carriers and providers of mobile telephony services that serve 50,000
or more subscribers, and any entity that provides at least 1,000 full
broadband lines, should comply with the proposed reporting requirement.
Based on data available to it at present, the Commission estimates that
fewer than 50 of the nation's largest local exchange carriers and
between 40 and 70 mobile telephony providers would be required to
comply with the proposed requirement. Nevertheless, and 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.
32. 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 Small Business Administration (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.
33. 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
3,604 interstate carriers. These carriers 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.
34. We have included small incumbent LECs in the 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 the RFA analysis, although we emphasize that
the RFA action has no effect on FCC analyses and determinations in
other, non-RFA contexts.
35. 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.
36. Wireline Carriers and Service Providers. 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
[[Page 59724]]
such telephone companies in operation for at least one year at the end
of 1992. According to SBA's definition, a small business telephone
company other than a radiotelephone company is one employing 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 may be affected by the decisions and
rules proposed in the Notice.
37. Local Exchange Carriers, Interexchange Carriers, Competitive
Access Providers, Operator Service Providers, and Resellers. Neither
the Commission nor SBA has developed a definition of small local
exchange carriers (LECs), interexchange carriers (IXCs), competitive
access providers (CAPs), 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 (TRS). According
to our most recent data, there are 1,410 LECs, 151 IXCs, 129 CAPs, 32
OSPs, and 351 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 1,410 small entity LECs or small incumbent
LECs, 151 IXCs, 129 CAPs, 32 OSPs, and 351 resellers that may be
affected by the decisions and rules proposed in the Notice.
38. Wireless (Radiotelephone) Carriers. SBA has developed a
definition of small entities for radiotelephone (wireless) companies.
The Census Bureau reports that there were 1,176 such companies in
operation for at least one year at the end of 1992. According to SBA's
definition, a small business radiotelephone company is one employing 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 and operated, we are unable at this time to
estimate with greater precision the number of radiotelephone carriers
and service providers that would qualify as small business concerns
under SBA's definition. Consequently, we estimate that there are fewer
than 1,164 small entity radiotelephone companies that may be affected
by the decisions and rules proposed in the Notice.
39. 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, 732 companies reported that they are engaged in the provision of
Wireless Telephony services and 23 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 in
paragraphs 40-52, that would qualify as small business concerns under
SBA's definition. Consequently, we estimate that there are fewer than
732 small entity Wireless Telephony Providers and fewer than 23 small
entity Other Mobile Service Providers that might be affected by the
decisions and rules proposed in the Notice.
40. 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. However, licenses for
Blocks C through F have not been awarded fully, therefore there are
few, if any, small businesses currently providing PCS services. 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.
41. 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 MHz SMR has
been approved by the SBA, and approval for the 900 MHz SMR definition
has been sought. 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
[[Page 59725]]
held by small entities, some of which may be affected by the decisions
and rules proposed in the Notice. 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 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.
42. 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 to 1999 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.
43. 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. An auction of Phase II licenses commenced on
September 15, 1998, and closed on October 22, 1998. 908 licenses were
auctioned in 3 different-sized geographic areas: three nationwide
licenses, 30 Regional Economic Area Group 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.
44. Paging. The Commission has adopted a two-tier definition of
small businesses in the context of auctioning licenses in the Common
Carrier Paging and exclusive Private Carrier Paging services. A small
business is defined as either (1) an entity that, together with its
affiliates and controlling principals, has average gross revenues for
the three preceding years of not more than $3 million, or (2) an entity
that, together with affiliates and controlling principals, has average
gross revenues for the three preceding calendar years of not more than
$15 million. The SBA approved this definition for paging services on
December 12, 1999. At present, there are approximately 24,000 Private
Paging licenses and 74,000 Common Carrier Paging licenses. According to
the most recent Carrier Locator data, 137 carriers reported that they
were engaged in the provision of either paging or messaging services,
which are placed together in the data. We do not have data specifying
the number of these carriers that meet this two-tiered definition, and
thus are unable at this time to estimate with greater precision the
number of paging carriers that would qualify as small business concerns
under the SBA's definition. Consequently, we estimate that there are
fewer than 137 small paging carriers that may be affected by the
decisions and rules proposed in the Notice.
45. 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.
46. 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.
47. 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.
48. 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
[[Page 59726]]
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 of, if any, 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.
49. 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.
50. Offshore Radiotelephone Service. This service operates on
several UHF TV broadcast channels that are not used 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.
51. 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.
52. 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.
53. In addition to the estimates provided in paragraphs 40-52, 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 in paragraphs 54-61 other types of firms that
may provide broadband services, including cable companies, MDS
providers, and utilities, among others.
54. 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.
55. 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.
56. 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 66,000,000
subscribers in the United States. Therefore, we found that an operator
serving fewer than 660,000 subscribers shall be deemed a small
operator, if its annual revenues, when combined with the total annual
revenues of all of its affiliates, do not exceed $250 million in the
aggregate. Based on available data, we find that the number of cable
operators serving 660,000 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. It should be further noted that recent industry
estimates project that there will be a total of 66,000,000 subscribers,
and we have based our fee revenue estimates on that figure.
57. Multipoint Distribution Systems (MDS): The Commission has
defined ``small entity'' for the auction of MDS as an entity that,
together with its affiliates, has average gross annual revenues that
are not more than $40 million for the preceding three calendar years.
This definition of a small entity in the context of MDS auctions has
been approved by the SBA. The Commission completed its MDS auction in
March 1996 for authorizations in 493 basic trading areas (BTAs). Of 67
winning bidders, 61 qualified as small entities.
58. MDS is also heavily encumbered with licensees of stations
authorized prior to the auction. The SBA has developed a definition of
small entities for pay television services, which includes all such
companies generating $11 million or less in annual receipts. This
definition includes multipoint
[[Page 59727]]
distribution systems, and thus applies to MDS licensees and wireless
cable operators which did not participate in the MDS auction.
Information available to us indicates that there are 832 of these
licensees and operators that do not generate revenue in excess of $11
million annually. Therefore, for purposes of this IRFA, we find there
are approximately 892 small MDS providers as defined by the SBA and the
Commission's auction rules, some which may be affected by the decisions
and rules proposed in the Notice.
59. 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.
60. 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.
61. 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 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
62. The very focus of this proceeding is whether the Commission
should require certain providers of communications services to report a
limited amount of information about the development of local telephone
competition and the deployment of broadband services. The Notice
tentatively concludes that the Commission should undertake such a data
collection and that local exchange carriers and providers of mobile
telephony services that serve 50,000 or more subscribers, and any
entity that provides at least 1,000 full broadband lines, should report
specifically targeted information. The Notice sets out in detail, and
seeks comment on, the Commission's tentative conclusions about the
types of carriers that should report, exempting smaller carriers,
frequency of reports, data to be reported, and methods (such as
electronic filing) of reporting. In particular, the Commission has
tentatively concluded that given the comprehensive data to be obtained
from large and medium-size carriers, it can exempt most small carriers
from completing the survey without materially affecting its ability to
assess the development of local competition and the deployment of
broadband services.
V. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
63. The Commission makes specific provision to exempt most smaller
carriers from the proposed requirement to report local telephone
competition data. The Commission tentatively concludes that carriers
with fewer than 50,000 nationwide local access lines (or mobile
telephony subscribers, in the case of mobile telephony providers)
should be exempted from the proposed reporting requirement. Based on
this exemption, the Commission estimates that fewer than 50 of the
nation's largest service providers would remain subject to the proposed
requirement. The Commission provides a detailed explanation for this
proposed exemption and seeks comment on the 50,000 local access line
threshold in the Notice.
64. With respect to broadband service, and irrespective of the
criteria for reporting local competition data, the Commission
tentatively concludes that entities that provide full broadband
services to at least 1,000 customers should report. The Commission
tentatively concludes that this more comprehensive reporting
requirement is necessary to monitor broadband developments by smaller
entities, for example, in rural areas. The Commission seeks comment on
this proposed threshold and invites commenters to suggest alternative
thresholds.
65. Among significant alternatives, the Commission considers
whether it might rely on publicly available data or voluntary surveys,
in lieu of a mandatory data collection program. The Commission
tentatively concludes other publicly available information sources
present less than complete pictures of actual conditions and trends in
developing local service markets and in the deployment of broadband.
Further, the Commission considers the need for, and size of, its
proposed exemptions for small entities. The Commission tentatively
concludes that the proposed thresholds will allow it exempt most small
entities from completing the survey without materially affecting its
ability to assess the development of local competition and the
deployment of broadband services.
VI. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rule
66. None.
Ordering Clause
67. Accordingly, it is ordered that, pursuant to sections 1-5, 10,
11, 201-205, 215, 218-220, 251-271, 303(r), 332, and 403 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, and 403, and pursuant to
section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt,
this notice of proposed rulemaking is hereby adopted.
68. It is further ordered that the Commission's Office of Public
Affairs, Reference Operations Division, shall send a copy of this
notice of proposed rulemaking, including the regulatory flexibility
certification, 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.
Magalie Roman Salas,
Secretary.
[FR Doc. 99-28792 Filed 11-1-99; 11:13 am]
BILLING CODE 6712-01-P
