[Federal Register Volume 59, Number 93 (Monday, May 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11750]
[[Page Unknown]]
[Federal Register: May 16, 1994]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 20
[GN Docket No. 94-33, FCC 94-101]
Further Forbearance From Title II Regulation for Certain Types of
Commercial Mobile Radio Service Providers
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rule making.
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SUMMARY: This notice of proposed rule making (Notice) solicits comment
on whether, within particular services classified as Commercial Mobile
Radio Service (CMRS), there may be types of providers that merit
forbearance from certain requirements found in Title II of the
Communications Act. Specifically, the Commission asks whether we should
forbear from enforcing those provisions of Title II that we determined
did not merit general forbearance in our Second Report and Order in
Gen. Docket No. 93-252. If the further forbearance is warranted, the
Commission asks how we should determine which types of CMRS providers
should be excused from remaining Title II requirements and how we
should implement and enforce such forbearance provisions.
DATES: Comments are due by June 27, 1994 and reply comments are due by
July 12, 1994.
ADDRESSES: Federal Communications Commission, Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT:
Gina Harrison or Susan McNeil, Private Radio Bureau, Land Mobile and
Microwave Division, (202) 632-7792 and 634-2443, respectively, or Peter
Batacan, Common Carrier Bureau, Tariff Division (202) 632-6917.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice in GN Docket No. 94-33, adopted April 20, 1994 and released May
4, 1994. The full text of Commission decisions are available for
inspection and copying during normal business hours in the FCC Docket
Branch (room 230), 1919 M Street, NW., Washington, DC. The complete
text of this decision may also be purchased from the Commission's copy
contractor, International Transcription Service, Inc., (202) 857-3800,
2100 M Street, NW., Washington, DC 20037.
Synopsis of the Notice of Proposed Rule Making
1. In the Second Report and Order in General Docket No. 93-252, 59
FR 18493 (Apr. 19, 1994) the Commission elected, pursuant to the
Omnibus Budget Reconciliation Act of 1993 (Budget Act), to forbear from
applying Sections 203, 204, 205, 211, 212, and 214 of Title II of the
Communications Act to any service classified as CMRS. The Commission
determined that the remaining sections of Title II should be enforced
with respect to CMRS providers in order to promote competition or to
protect consumers, and that this decision would not place any undue
burden on any CMRS provider or class of providers. Nevertheless, the
Commission also announced that it would consider additional relief in a
future rule making that would gather a more extensive record on the
potential effect of the remaining sections of Title II on particular
types of CMRS providers within each class of service. The purpose of
this Notice is to initiate that rule making.
2. The Budget Act authorizes the Commission to take forbearance
actions if it determines that: (i) Enforcement of such provision is not
necessary in order to ensure that the charges, practice,
classifications, or regulations for or in connection with that service
are just and reasonable and are not unjustly discriminatory; (ii)
enforcement of such provision is not necessary for the protection of
consumers; and (iii) specifying such provision is consistent with the
public interest. The legislative history of this provision indicates
that the Commission may distinguish among types of CMRS providers in
making this determination. Assuming that further forbearance in a
particular case would not adversely affect rates or practices or harm
consumers under the first two prongs of the test, the Commission
tentatively identified two factors under the public interest test of
the last prong that could serve to guide its determinations: (1)
Whether there are differential costs of compliance with the remaining
Title II sections that could make further forbearance appropriate for
particular types of providers; and (2) whether the public interest
benefits from application of particular Title II provisions are less
for certain types of CMRS providers. Thus, in applying the last prong
of the statutory test, the Commission asks commenters to identify (1)
the benefits of applying the remaining Title II sections, (2) the costs
of compliance with any the remaining Title II sections, and (3) whether
the costs of compliance with any of the remaining sections of Title II
outweigh the benefits. In addition, the Commission asks, pursuant to 47
CFR 332(c)(1)(C), whether further forbearance will enhance future CMRS
competition from a diversity of entities.
3. The Commission also asks commenters to demonstrate actual or
projected costs of compliance with each provision of Title II that was
not forborne, and the extent to which such costs vary across different
types of providers. For example, if the costs of regulation are fixed,
it could indicate that small CMRS providers are more likely than other
types of CMRS providers to be burdened by the costs of regulation. The
Commission asks whether there are instances where these additional
costs outweigh the public interest benefits of applying the statutory
provision in issue. The Commission seeks evidence on the magnitude of
any such fixed costs.
I. Application of Further Forbearance
4. Commenters should address (1) how the statutory forbearance test
applies to each remaining Title II provision, (2) how further
forbearance from applying each provision of Title II would enhance
future CMRS competition, (3) how Congressional intent underlying each
Title II provision would be affected, (4) how forbearance for
particular types of CMRS providers would comport with regulatory
symmetry and (5) whether there are other factors or alternatives we
should consider in classifying CMRS for further forbearance.
5. The Commission seeks comment on its tentative view that there
would be no purpose in forbearing from applying 47 U.S.C. 210, which
allows common carriers to issue franks and passes to their employees,
and to provide the Government with free service in connection with
preparation for national defense.
6. The Commission characterized 47 U.S.C. 213, 215, 218, 219, and
220 as primarily reservations of authority and reaffirmed its finding
in the Second Report and Order that it was unnecessary to forbear from
applying these provisions to CMRS. Section 213 authorizes the
Commission to make valuations of carrier property. Section 215 gives
the Commission the authority to examine carrier activities and
transactions. Section 218 authorizes the Commission to inquire into the
management of a carrier and its owner. Section 219, inter alia,
authorizes the Commission to require annual reports from carriers.
Section 220 gives the Commission discretion to prescribe the forms of
accounts, records, and memoranda to be kept by carriers, as well as
depreciation rates. Even though these provisions impose no affirmative
obligations on CMRS providers, and may have no immediate impact on
CMRS, the Commission seeks comment on whether the potential for
increased regulation (and any concomitant costs) might have an adverse
economic impact on specific types of provides that is not in the public
interest.
7. 47 CFR 223 governs obscene, harassing and indecent
communications. In relevant part, the statute forbids a common carrier
(if the carrier collects payments for an adult information provider
using the carrier's services) to the extent technically feasible, to
permit access to an obscene or indecent communication from the
telephone of any subscriber who has not previously requested such
access. This requirement, known as ``reverse blocking,'' applies only
if a carrier bills and collects fees for the adult information
provider. As a technical matter, then, a CMRS provider subject to this
obligation would have to program its switch (should it employ one) to
accomplish this blocking.
8. The Commission tentatively reaffirms its general conclusion in
the Second Report and Order that section 223 should continue to apply
to CMRS. Commenters are asked to address the impact of section 223 on
existing and projected CMRS offerings, and in particular, whether CMRS
providers are likely to be involved in services that implicate Section
223.
9. 47 U.S.C. 225, Title IV of the Americans with Disabilities Act,
requires all common carriers providing interstate or intrastate
telephone voice transmission service to provide telecommunications
services that enable persons with hearing and speech disabilities to
communicate with hearing individuals. Common carriers may select one of
several methods of offering TRS, but most have elected to designate a
TRS provider or to provide TRS in concert with other carriers.
10. For purposes of further forbearance, the Commission asks
whether there are any CMRS providers whose market is so specialized, or
their customer base or size of operation so small that applying TRS
obligations to them would not appreciably advance the universal service
objectives of Section 225. Would forbearance in such cases meet the
test in section 332? Parties are also asked to address whether the need
for forbearance is reduced by providers' ability to designate a third
party to provide TRS. The Commission also seeks comment on whether
there are technical or operational limitations that would make
compliance with our TRS technical standards difficult for a particular
type of CMRS provider. The Commission asks whether interfacing with a
third-party TRS provider would also pose technical difficulties,
particularly for those private providers who will be reclassified as
CMRS after new technical/operational rules become effective.
11. The Commission has adopted a shared-funding mechanism for
interstate TRS cost recovery. Under the Commission's shared-funding
plan, providers of interstate telecommunications services are required
to contribute to a TRS fund and comply with reporting and filing
obligations, including conforming their accounts to a specified format.
The amount of the yearly contribution is a percentage (.00030) of the
carrier's gross interstate revenues. Each carrier must contribute at
least $100, even if its share under the actual computation would be
less.
12. In light of the small percentage used to calculate the
contribution and the low minimum required, the Commission asks whether
the burden from the funding and concomitant filing obligations are
likely to be significant for any type of CMRS. The Commission also
reiterates that providers that do not themselves use TRS facilities are
nevertheless required to contribute to the Fund. The Commission seeks
comment on its tentative view that the public interest would not be
furthered by exempting CMRS entirely because they do not use TRS
facilities.
13. The Telephone Operator Consumer Services Improvement Act
(TOCSIA), codified at 47 U.S.C. 226, protects consumers making
interstate operator service calls from phones available to the public
or to transient users against unreasonably high rates and anti-
competitive practices. It regulates two groups. The first consists of
operator service providers (OSPs). These are providers of interstate
telecommunications service from phones available to the public or to
transient users that give automatic or live assistance for billing or
completion to a caller. The second group are aggregators, generally
persons that, in the ordinary course of their operations, make
telephones available to the public or to transient users of the
premises and who use a provider of operator services. Pursuant to
TOCSIA and Commission rules, OSPs are subject to various
identification, disclosure and billing requirements, including the
requirement that they ``brand'' calls, i.e., audibly identify
themselves at the beginning of the call and before the consumer incurs
any charges for the call. They may not engage in ``call splashing''
(transfer of a call to another carrier at a location different from the
originating consumer where the second carrier cannot tell the
originating location, with the result that the charge to the consumer
is incorrect and not based on originating location). OSPs must file
informational tariffs. Aggregators are required to identify and
disclose certain information regarding the presubscribed OSP and to
disclose that rate information is available and that the consumer has
the right to use an OSP of his or her choice. The aggregator must also
ensure (1) that its telephones presubscribed to an OSP allow consumers
to use 800 or 900 numbers to obtain access to the OSP of choice, and
(2) according to an established implementation schedule, that any of
its presubscribed equipment allows the consumer to use equal access
(10XXX) codes to access the customer's choice of OSP.
14. The Notice requests comment on whether forbearance from section
226 for particular classes of CMRS would be justified. Parties
advocating forbearance for specific types of providers from the
aggregator or OSP rules should explain how such action would meet the
three-part test for forbearance under Section 332. In particular,
parties should address how the first and second prongs of the test,
that rates be just and reasonable and that consumers be adequately
protected, would be met. In connection with the third prong, parties
should address whether the statute imposes any costs that would be
exceptionally difficult for certain types of CMRS provider to bear, and
whether forbearance in such case would significantly diminish statutory
protections for the public. In particular, the Commission seeks comment
on whether such costs are likely to prove unduly burdensome for
specific types of small CMRS providers.
15. The telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C.
227, restricts the use of automatic telephone dialing systems,
artificial or prerecorded voice messages, and telephone facsimile
machines to send unsolicited advertisements. TCPA prohibits autodialed
and prerecorded voice message calls to emergency lines, health care
facilities or similar establishments, and with certain exceptions,
number (such as cellular numbers) for which the called party is charged
for the call.
16. Current TCPA obligations primarily apply to the originator of
the unwanted message, e.g., telemarketers. Unless a CMRS provider also
engages in telemarketing or sends unsolicited facsimiles or other
unwanted communications, the statute generally does not apply to it. In
so far as small CMRS providers act as originators of unsolicited voice
or facsimile transmissions, the Commission tentatively concludes that
forbearance for such providers would not adequately protect consumers'
privacy interests under the second prong of the Section 332 test.
Moreover, the decision to undertake telemarketing services would be a
voluntary business judgment on the part of a CMRS provider. Such
telemarketing is not a necessary part of what is generally regarded as
CMRS. The Commission also sees no public interest benefit under the
third prong of the test in permitting CMRS providers, even small ones,
to undertake such activities without complying with TCPA. The Notice
seeks comment on these tentative views.
17. 47 U.S.C. 228 incorporates the Telephone Disclosure and Dispute
Resolution Act (TDDRA), which governs pay-per-call services (also known
as ``audiotext'' or ``900'' services), and imposes obligations in
interexchange carriers, local exchange carriers and common carriers in
general. Pursuant to the Act and our implementing regulations, local
exchange carriers must offer subscribers, where technically feasible,
an option to block access to 900 services. They must also tariff the
terms and conditions for such blocking.
18. TDDRA also imposes additional obligations on all common
carriers. (a) 800 Service. With certain exceptions, information service
charges cannot be assessed against callers to 800 and other toll-free
numbers. Common carriers must enforce this obligation by contract or
tariff. (b) Collect Calls. Common carriers may not transmit collect
information services that are either at a per-call or per-time-interval
charge that is greater than, or in addition to, the charge for the
transmission of the call, or have not been affirmatively accepted by
the called party. (c) Payment. Common carriers are prohibited from
disconnecting or interrupting service for failure to remit pay-per-call
or similar service charges. Common carriers may not recover the cost of
complying with TDDRA requirements from ratepayers.
19. The Commission seeks comment on the extent to which the local
exchange carrier obligation to permit subscribers to block access where
technically feasible should apply to CMRS, and whether there are
particular types of CMRS providers for which such an obligation would
be particularly difficult. Would local exchange carriers provide
blocking for customers of CMRS providers that interconnect with the
public switched network? Additional TDDRA obligations, including
restrictions on disconnection or on transmission of collect pay-per-
call charges, are imposed on carriers who bill and collect for 900
services, which is not a common carrier service. The Commission asks
for comment on whether this type of voluntary business activity is not
essential to provision of CMRS and hence, would not justify forbearance
for any type of CMRS.
20. In analyzing application of any of the above TDDRA obligations,
commenters are asked to address the three parts of the section 332
forbearance test. In connection with the third prong, the Commission
asks whether Section 228 obligations would impose exceptional costs on
certain types of CMRS and whether forbearance in such cases would
significantly diminish statutory protections to the public. Parties
should also address the effect forbearance would have on the TDDRA
objectives of promoting the legitimate development of pay-per-call
services and protecting consumers from fraudulent and deceptive
practices.
II. CMRS Providers Meriting Further Forbearance
21. Turning to the question of which types of CMRS providers merit
further forbearance, the Commission asks as a threshold matter whether
any further forbearance is merited, noting that application of Title II
is not expected to create any undue burden on any CMRS provider, or on
CMRS competition generally. To the extent that regulatory obligations
impose fixed costs, however, they would place relatively greater
burdens on small providers who have less of a revenue base and other
resources to support them. The Commission seeks comment on whether
there are technical or operational limitations inherent in the services
these small businesses provide that may make application of certain of
the statutory provisions in question not in the public interest. The
Commission also recognizes the public interest in maintaining
opportunities for small businesses and the role that further
forbearance might play in reducing the cost of doing business for them.
The Notice thus seeks comment on whether the size of the provider may
be a basis for defining CMRS eligibility for further forbearance.
Finally, the Notice seeks comment on whether to consider an analysis of
a CMRS provider's customer base as another possible factor in
determining the appropriateness of further forbearance. Certain types
of providers, particularly small providers, may serve predominantly
business customers who require more advanced communications services
and may have relatively greater bargaining power than CMRS customers
that make personal use of the service. As a result the differing needs
of business and individual customers could affect the analysis of
whether forbearance would reduce benefits to customers. In addition,
the Commission asks whether it should distinguish between medium to
large business customers, and small businesses.
22. The Commission seeks comment on how to determine which type of
provider should be considered ``small'' for purposes of further
forbearance. The Commission asks interested parties to comment on
whether any one or any combination of the options advanced below should
be applied. Parties are invited to identify alternatives and to comment
on how the Commission could draw on its experience in identifying small
carriers in other contexts, e.g., the exemption to the cable-telco
cross-ownership rule. Finally, the Notice asks interested parties to
provide their views on how the Commission might best implement and
enforce any classification scheme. The Notice seeks comment on the
advantages and disadvantages of the various options with respect to
implementation by both the Commission and licensees.
A. Measurement Factors
23. One possible standard for size of business operation is the
Small Business Administration (SBA) definition of small entity: an
entity with a net worth not in excess of $6 million with average net
income after Federal income taxes for the two preceding years not in
excess of $2 million. The Commission relied on this standard to define
small businesses entitled to preferences under the spectrum auction
rules. The Commission believes that these criteria are appropriate for
identifying entities entitled to preferred entry into new business
ventures, as in the spectrum auction context. The Commission
tentatively finds, however, that this standard is too generous for
purposes of determining which CMRS providers are entitled to relief
from remaining title II obligations, many of which, as discussed above,
are designed to protect consumers. The Notice thus asks whether the
Commission should employ a more modest income and net worth standard.
Those commenters that nevertheless advocate use of this approach should
discuss how it would affect the different services comprising CMRS,
providing as much data as possible on the number of providers in a
particular service that would be eligible for further forbearance under
this definition, and how it would affect consumer protection. The
Commission might also measure size and scope by a number of objective
factors, such as average revenues per subscriber or percentage of
interconnected traffic, average number of customers or for part 90
licensees, number of mobile units, or average subscriber rate.
Interested parties should provide data to demonstrate whether providers
within their suggested definition would find the costs of complying
with the title II regulatory obligations burdensome and how their
recommended definition comports with the statutory factors set forth in
section 332(c) governing forbearance.
24. The Commission also seeks comment on how, if standards
applicable to individual providers are established, it should treat
affiliated corporations or operators of systems in more than one
geographic area or providers who own multiple small systems. In
addition, the Notice seeks comment on whether the Commission should
attribute ownership of systems that are operated pursuant to an
exclusive management contract, and thus not forbear when management
contracts are in force. Further, it seeks comment on the impact, if
any, of industry mergers on application of a size standard. Should a
small system's affiliation with a corporation that would yield greater
vertical integration disqualify that system from further forbearance?
Would a small mobile system necessarily enjoy benefits of scale and
scope from an affiliation with, for example, a long distance provider?
If so, would such a provider be ineligible for further forbearance?
25. Number of channels would provide an administratively
straightforward means of identifying small CMRS entities. The
Commission thus asks for comment on whether number of channels is a
workable and rational approach to measuring size of CMRS licensees.
Commenters should specify specific types of CMRS providers licensed
under parts 22 and 90 of the Commission's Rules, and suggest numbers of
channels that would identify small providers in each mobile radio
service. In responding to these questions, commenters should consider
the likelihood that channels can be aggregated to form systems that
would no longer be operated by a small provider, and how transition to
a different level of forbearance would be effectuated. Commenters
should also address how licensees conforming to this approach would be
affected by the remaining title II obligations discussed above, and
whether their users or competitors would be adversely affected by
further forbearance.
26. The character of a provider's customer base,--i.e., whether its
customers subscribe to the service to meet their business
communications requirements, or whether customers are primarily
consumers with a personal need for mobile communications service--may
be another possible factor to consider in determining whether to
undertake further forbearance. To the extent that certain types of CMRS
providers predominantly serve business customers.--such as traditional
SMR and business radio service,--rather than individual customers, such
business customers may have relatively greater bargaining power and
information concerning their telecommunications options. In addition,
the Commission asks whether it should also distinguish between large
and medium-sized and small business customers, on the assumption that
small businesses may be more like individual consumers in their
bargaining power over telecommunications services. The Commission
accordingly seeks comment on (1) whether to apply an analysis of a CMRS
provider's customer base and (2) what factors might contribute to this
analysis.
B. Case-by-Case Determination
27. The Commission might also extend further forbearance to
particular CMRS providers on a case-by-case basis. Under this approach,
providers desiring further forbearance from the remaining provisions of
title II that continue to apply could petition the Commission to
forbear in individual circumstances. To qualify for further
forbearance, petitioners would have to demonstrate that they meet the
statutory test for forbearance, as implemented by the rules and
policies established in this proceeding. The Notice seeks comment on
this approach, which is consistent with the Commission's previous
conclusion that the degree of forbearance adopted in the Second Report
and Order should not be unduly burdensome for the vast majority of CMRS
providers.
C. Implementation
28. If the Commission exercises further forbearance with respect to
individual providers, how should the Commission enforce its standards
efficiently, in terms of both identifying eligible entities and
deterring evasive behavior? One option would be to amend application
forms to require certification of compliance with specific standards as
part of our revised application form for the mobile services. The
Commission could use random staff audits of licensees to determine
whether they in fact quality for further forbearance. A second
alternative would be to impose affirmative reporting requirements on
small providers. A third option would be to rely on complaints alleging
violations of our further forbearance standards. Commenters should
discuss these and any alternative enforcement methods. The Notice also
seeks comment on whether existing licensees should have to file a
separate certification to be eligible for further forbearance.
Procedural Matters
Ex Parte Consideration
29. This is a non-restricted proceeding. Ex parte presentations are
permitted, except during the Sunshine Agenda period, provided they are
disclosed as provided in the Commission's rules. See generally 47 CFR
1.1202, 1.203 and 1.206(a).
Comment Information
30. Pursuant to applicable procedures set forth in Sections 1.415
and 1.419 of the Commission's Rules, 47 CFR Secs. 1.415, 1.419,
interested parties may file comments on or before June 27, 1994 and
reply comments on or before July 12, 1994. All relevant and timely
comments will be considered by the Commission before final action is
taken in this proceeding.
Initial Regulatory Flexibility Statement
I. Reason for Action. In an effort to avoid the imposition of
unwarranted costs or other burdens upon carriers, the Second Report and
Order determined that the Commission would initiate a rule making (the
instant proceeding) to determine whether further forbearance from
application of Title II provisions to CMRS was necessary.
II. Objectives of the Action. We seek here to determine whether to
forbear further from the imposition of Title II regulation on certain
types of CMRS providers, particularly small providers, and how to
define small CMRS providers.
III. Legal Basis. Communications Act, section 332, 47 U.S.C. 332.
IV. Description, potential impact, and number of small entities
affected. We do not have the data at this time to estimate the number
of CMRS providers affected by this rule making, but we are herein
proposing to reduce regulatory burdens for these providers.
V. Reporting, record keeping and other compliance requirements. The
proposals under consideration in this Notice include the possibility of
new reporting and record keeping requirements for small CMRS providers;
however, one of the objectives in this proceeding is to minimize such
burdens.
VI. Federal rules which overlap, duplicate or conflict with these
rules. If adopted, the proposals here in would modify existing rules
codified at 47 CFR part 20 and 47 CFR 1.728-1.734.
VII. Any significant alternatives minimizing the impact on small
entities and consistent with stated objectives. This Notice proposes to
reduce the administrative burdens and costs of compliance with Title II
regulation on small CMRS providers. As required by Section 603 of the
Regulatory Flexibility Act, the Commission has prepared an Initial
Regulatory Flexibility Analysis (IRFA) of the expected impact on small
entities of the proposals suggested in this document. Written public
comments are requested on the IFRA. These comments must be filed in
accordance with the same filing deadlines as comments on the rest of
the Notice, but they must have a separate and distinct heading
designating them as responses to the IRFA. The Secretary shall send a
copy of this Notice, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration in accordance with
paragraph 603(a) of the Regulatory Flexibility Act. Pub. L. No. 96-354,
94 Stat. 1164, 5 U.S.C. 601 et seq. (1981).
Paperwork Reduction Act Statement
The proposal contained herein has been analyzed with respect to the
Paperwork Reduction Act of 1980 and found to impose a new or modified
information collection requirement on the public. This proposed
requirement would, however, reduce information collection requirements
otherwise applicable to small CMRS providers. Implementation of any new
or modified requirement will be subject to approval by the Office of
Management and Budget as prescribed by the Act.
Ordering Clauses
Accordingly, the Commission adopts this Notice pursuant to the
authority contained in Section 332 of the Communications Act of 1934,
as amended, 47 U.S.C. Sec. 332.
List of Subjects in 47 CFR Part 20
Commercial mobile radio services, Radio.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 94-11750 Filed 5-13-94; 8:45 am]
BILLING CODE 6712-01-M
