[Federal Register Volume 61, Number 96 (Thursday, May 16, 1996)]
[Proposed Rules]
[Pages 24743-24749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11964]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[GC Docket No. 96-101, FCC 96-192]
In the Matter of Implementation of Section 34(a)(1) of the Public
Utility Holding Company Act of 1935, as Added by the Telecommunications
Act of 1996
agency: Federal Communications Commission.
action: Proposed rule.
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summary: This notice of proposed rulemaking (NPRM) seeks comment on
proposed regulations which implement new section 34(a)(1) of the Public
Utility Holding Company Act of 1935 (PUHCA), as added by section 103 of
the Telecommunications Act of 1996. Under new section 34, registered
public utility
[[Page 24744]]
holding companies may now enter the telecommunications industry without
prior Securities and Exchange Commission (``SEC'') approval by
acquiring or maintaining an interest in an ``exempt telecommunications
company'' (``ETC''). Moreover, exempt public utility holding companies,
by owning or acquiring an interest in an ETC, may now acquire a ``safe
harbor'' from potential SEC regulation under PUHCA section 3(a).
Section 34(a)(1) requires the Commission to promulgate rules
implementing the procedure of determining ETC status within one year of
the date of enactment of the Telecommunications Act of 1996.
DATES: Interested parties may file comments on or before June 17, 1996
and reply comments on or before July 5, 1996. Written comments by the
public on the proposed and/or modified information collections are due
June 17, 1996. Written comments must be submitted by the Office of
Management and Budget (OMB) on the proposed and/or modified information
collections on or before July 15, 1996.
ADDRESSES: Comments and reply comments should be sent to the office of
the Secretary, Federal Communications Commission, 1919 M Street NW.,
Washington, DC 20554, with a copy to Lawrence J. Spiwak, Competition
Division, Office of General Counsel, Federal Communications Commission,
1919 M Street NW., 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., 2100 M Street
NW., Suite 140, Washington, DC 20037. Comments and reply comments will
be available for public inspection during regular business hours in the
FCC Reference Center, 1919 M Street NW., Room 239, Washington, DC
20554.
In addition to filing comments with the Secretary, a copy of any
comments on the information collections contained herein should be
submitted to Dorothy Conway, Federal Communications Commission, Room
234, 1919 M Street NW., Washington, DC 20554, or via the Internet to
dconway@fcc.gov, and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725
17th Street NW., Washington, DC 20503 or via the Internet to
fain__t@al.eop.gov.
FOR FURTHER INFORMATION CONTACT: Lawrence J. Spiwak, Competition
Division, Office of General Counsel. (202) 418-1870. For additional
information concerning the information collections contained in this
NPRM contact Dorothy Conway at 202-418-0217, or via the Internet at
dconway@fcc.gov.
SUPPLEMENTARY INFORMATION: This NPRM contains proposed or modified
information collections subject to the Paperwork Reduction Act of 1995
(PRA). It has been submitted to the Office of Management and Budget
(OMB) for review under the PRA. OMB, the general public, and other
Federal agencies are invited to comment on the proposed or modified
information collections contained in this proceeding.
Paperwork Reduction Act
This NPRM 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 collections
contained in this NPRM, as required by the Paperwork Reduction Act of
1995, Pub. L. No. 104-13. Public and agency comments are due at the
same time as other comments on this NPRM; OMB notification of action is
due 60 days from date of publication of this NPRM in the Federal
Register. Comments should address: (a) whether the proposed collection
of information is necessary for the proper performance of the functions
of the Commission, including whether the information shall have
practical utility; (b) the accuracy of the Commission's burden
estimates; (c) ways to enhance the quality, utility, and clarity of the
information collected; and (d) ways to minimize the burden of the
collection of information on the respondents, including the use of
automated collection techniques or other forms of information
technology.
OMB Approval Number: None.
Title: In the Matter of Implementation of Section 34(a)(1) of the
Public Utility Holding Company Act of 1935, as amended by the
Telecommunications Act of 1996, Notice of Proposed Rulemaking.
Type of Review: New collection.
Respondents: 15. There are fifteen registered public utility
holding companies.
Number of Respondents: 15. We anticipate that each registered
public utility holding company will make at least one application
annually.
Estimated Time Per Response: We estimate that each application will
take 16 hours to prepare. However, the Commission estimates that
respondents will hire attorneys to prepare information. The time for
coordinating the submission is ten hours per respondent.
Total Annual Burden: 150 hours.
Estimated costs per respondent: We estimate that the cost to each
respondent will be approximately $3,200, assuming 16 hours at $200/hour
for outside counsel.
Needs and Uses: The information will be used by the Commission to
determine whether persons satisfy the statutory criteria for ``exempt
telecommunications company'' status. Without such information, the
Commission could not determine whether persons satisfied the requisite
statutory criteria and therefore fulfill its responsibility under
section 34(a)(1) of PUHCA, as amended.
I. Introduction
1. This notice of proposed rulemaking (NPRM) seeks comment on
proposed regulations which implement new section 34(a)(1) of the Public
Utility Holding Company Act of 1935 (PUHCA), 15 U.S.C. 79 et seq., as
added by section 103 of the Telecommunications Act of 1996, Pub. L. No.
104-104, 110 Stat. 56 (1996).\1\ Under new section 34, registered
public utility holding companies may now enter the telecommunications
industry without prior Securities and Exchange Commission (``SEC'')
approval by acquiring or maintaining an interest in an ``exempt
telecommunications company'' (``ETC'').\2\ Moreover, exempt public
utility holding companies, by owning or acquiring an interest in an
ETC, may now acquire a ``safe harbor'' from potential SEC regulation
under PUHCA section 3(a).\3\ The new law vests the Commission with
jurisdiction to determine whether a company warrants ETC status based
on specific statutory criteria.
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\1\ The Telecommunications Act was enacted on February 8, 1996.
\2\ See PUHCA section 34(d).
\3\ See PUHCA section 34(c).
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2. As explained below, we propose to implement section 34(a)(1) by
providing for a simple procedure for ETC determination, under which
applicants briefly describe their planned activities and certify that
they satisfy the specific statutory requirements and any applicable
Commission regulations. The Commission believes that its
responsibilities under section 34(a)(1) are limited to whether the
applicant meets the express statutory criteria for ETC status. Thus, we
believe that an ETC determination should not involve an inquiry into
the public interest merits of entry by the applicant. Nor would the
public interest or the intent of Congress be served if this process
became a regulatory barrier to
[[Page 24745]]
significant new entry into the telecommunications industry.
Accordingly, the proposed rules are limited to the filing requirements
and procedures for persons seeking exempt telecommunications company
status.\4\ We believe that this approach is the best mechanism to
expedite Congress's policy to allow holding companies to become
vigorous competitors in the telecommunications industry in order to
promote the public interest.\5\
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\4\ The proposed rules would create a new subpart S, part 1
under title 47, chapter I of the Code of Federal Regulations.
\5\ See Report of the Committee on Commerce, Science and
Transportation on S. 652, S. Rep. No. 104-23, 104th Cong., 1st Sess.
at 8 (1995) (``Senate Report'').
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3. The Commission invites interested parties to comment on the
matters raised in the proposed rules.
II. Background
4. PUHCA was designed to prevent financial abuse among public
utility holding companies and their affiliates.\6\ PUHCA accomplished
this goal by, among other things, restricting the activities and
investments that holding companies are permitted to make outside of
their core public utility businesses. Prior to the Telecommunications
Act of 1996, the provisions of PUHCA strongly deterred entry by
registered public utility holding companies into the telecommunications
industry.\7\ Somewhat anomalously, however, utilities that are not
public utility holding companies have always been free to enter the
telecommunications industry without prior SEC approval, regardless of
their size or scope.
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\6\ See Arcadia, Ohio v. Ohio Power, 498 U.S. 73, 87, 111 S.Ct.
415, 423 (1990) (Stevens, J. concurring) (citations omitted).
\7\ See PUHCA sections 3(a), 11(b)(1).
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5. Section 103 of the Telecommunications Act of 1996, which adds
new PUHCA section 34(a)(1), ends this disparate treatment by allowing
previously restricted holding companies to enter telecommunications
industries without prior SEC permission by acquiring or maintaining an
interest in an ``exempt telecommunications company.'' Under section
34(a)(1), an ETC is any person determined by the Commission to be
engaged directly or indirectly, wherever located, through one or more
affiliates (as defined in section 2(a)(11)(B) of PUHCA \8\), and
exclusively in the business of providing: (A) telecommunications
services \9\; (B) information services \10\; (C) other services or
products subject to the jurisdiction of the Commission; or (D) products
or services that are related or incidental to the provision of a
product or service described in (A), (B), or (C).
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\8\ PUHCA section 2(a)(11)(B) defines ``affiliate'' as ``any
company 5 per centum or more of whose outstanding voting securities
are owned, controlled, or held with power to vote, directly or
indirectly, by such specified company.''
\9\ See Communications Act of 1934 section (3)(51), as added by
the Telecommunications Act of 1996, which provides that the term
``telecommunications service'' means the ``offering of
telecommunications for a fee directly to the public, or to such
classes of users as to be effectively available directly to the
public, regardless of the facilities used to transmit the
telecommunications service.''
\10\ See Communications Act of 1934 section (3)(41), as added by
the Telecommunications Act of 1996, which provides that the term
``information service'' means the ``offering of a capability for
generating, acquiring, storing, transforming, processing,
retrieving, utilizing, or making available information via
telecommunications, and includes electronic publishing, but does not
include any use of any such capability for the management, control,
or operation of a telephone system or the management of a
telecommunications service.''
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6. Section 34(a)(1) provides that an applicant who has applied in
good faith for a determination of ETC status is deemed an ETC until the
Commission makes such a determination. Section 34(a)(1) requires the
Commission to render its determination of whether a person is an ETC
within 60 days of the receipt of an application. Section 34(a)(1) also
requires the Commission to notify the Securities and Exchange
Commission (SEC) whenever it determines that a person is an ETC.
Finally, Section 34(a)(1) requires the Commission to promulgate rules
implementing the procedure of determining ETC status within one year of
the date of enactment of the Telecommunications Act of 1996.
7. By obtaining ETC status, holding companies can now be vigorous
competitors in the telecommunications industry, and, with such
competition, bring more benefits to consumers.11 Indeed, Congress
recognized that utilities in general have experience in
telecommunications operations, as these companies already operate
telecommunications systems for the operation and monitoring of electric
generation, transmission and distribution for reliability
purposes.12 Moreover, Congress recognized that holding companies
have sufficient size and capital to be effective competitors to
incumbent telecommunications companies.13 Finally, Congress also
found that electric utilities, by entering into telecommunications, can
provide more efficient and more ecologically-sound energy service in
the form of ``peak-shaving'' and real-time energy management.14
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\11\ See Senate Report at 7-8.
\12\ Id.
\13\ Id.
\14\ Id.
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III. Discussion
A. Commission Responsibilities
8. We have previously held that the Commission's responsibilities
under section 34(a)(1) do not appear to extend beyond a determination
of whether an applicant complies with the relatively narrow
certification criteria enumerated above.15 This is evident not
only from the unambiguous language of section 34(a)(1), but from other
provisions of section 34, which preserve other statutory provisions
where the merits of ETC entry can be evaluated. For example, section
34(n) preserves this Commission's and applicable states' authority to
regulate the activities of an ETC under provisions of the
Communications Act of 1934 and any applicable state laws. In addition,
section 34(j) retains the jurisdiction of the Federal Energy Regulatory
Commission (FERC) and state commissions to determine whether a public
utility company may recover in its rates the costs of products or
services purchased from or sold to an associate or affiliate company
that is an ETC, regardless of whether such costs are incurred through
the direct or indirect purchase or sale of products or services from
the affiliate or associate company. Finally, section 34(m) provides
state commissions the authority to conduct independent audits of public
utility holding companies and their affiliates. We request comment on
whether our existing interpretation of the scope of our inquiry under
section 34(a)(1) is correct.
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\15\ See Entergy Technology Company, (FCC 96-163, released April
12, 1996) (Entergy Technology).
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B. Filing Requirements
9. We note that PUHCA section 34(a)(1) is similar to the ``exempt
wholesale generator'' paradigm of PUHCA section 32 which permits, inter
alia, public utility holding companies to enter into the independent
power production business.16 FERC, the agency responsible for
implementing PUHCA section 32, interpreted that statute as intended to
give it only narrowly circumscribed authority, and therefore
implemented a procedure whereby an applicant need only briefly describe
its planned activities and certify that it satisfies the requisite
statutory criteria.17
[[Page 24746]]
We believe that similar filing requirements should be required under
section 34(a)(1).
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\16\ See PUHCA section 32, as added by section 711 of the
Energy Policy Act of 1992. 15 U.S.C. 79z-5a.
\17\ See Filing and Ministerial Procedures for Persons Seeking
Exempt Wholesale Generator Status, Order No. 550, 58 FR 8897
(February 18, 1993); order on reh'g, Order No. 550-A, 58 FR 21250
(April 20, 1993); see also 18 CFR 365.1 through 365.7.
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10. Accordingly, for the company or companies which are eligible
companies owned and/or operated by the applicant, the proposed rules
would first require the applicant to provide a brief description of the
planned activities of the company or companies which are eligible
companies owned and/or operated by the applicant. Second, the proposed
rules would require a person seeking ETC status (applicant) to file a
sworn statement, by a representative legally authorized to bind the
applicant, attesting to any facts or representations presented to
demonstrate eligibility for ETC status, including a representation that
the applicant is engaged directly, or indirectly, wherever located,
through one or more affiliates (as defined in section 2(a)(11)(B) of
the Public Utility Holding Company Act of 1935), and exclusively in the
business of providing: (A) telecommunications services; (B) information
services; (C) other services or products subject to the jurisdiction of
the Commission; or (D) products or services that are related or
incidental to the provision of a product or service described in (A),
(B), or (C). Finally, the proposed rules would require an applicant to
provide a sworn statement, by a representative legally authorized to
bind the applicant, certifying that the applicant satisfies Part 1,
Subpart P, of the Commission's regulations, 47 CFR 1.2001 through
1.2003r, regarding the Anti-Drug Abuse Act of 1988, 21 U.S.C. 862. The
application would then be placed on public notice for comment on the
adequacy or accuracy of the representations contained therein.18
The Commission would review the application and any comments to
determine whether the application meets the statutory requirements for
ETC status. This analysis would be the extent of the Commission's
inquiry. To the extent parties believe that our inquiry should either
be more expansive or narrow, we invite them to comment on this issue.
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\18\ See Section III.C.
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11. We also seek comment on whether we should adopt rules governing
applications seeking ETC status filed by different entities that are
affiliates of a common holding company parent. While the Act apparently
contemplates that every entity seeking ETC status must apply to the
Commission,19 we see no reason why this should require separate
entities affiliated with the same holding company parent to seek ETC
status through separate applications and proceedings. Such a process
seems administratively wasteful and duplicative.20 Accordingly we
propose to allow multiple entities seeking ETC status, which are
affiliated with the same public utility holding company parent, to seek
a determination for all such entities through a single consolidated
application. In such a case, the application should contain for each
affiliate sufficient information as required by our rules to make a
separate ETC determination for that affiliate. We seek comment on this
proposal.
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\19\ Section 34(a) provides that ``No person shall be deemed to
be an exempt telecommunications company under this section unless
such person has applied to the [Commission] for a determination
under this paragraph.''
\20\ For example, six affiliates of a single public utility
holding company recently filed six separate applications for
determination of ETC status.
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12. The proposed rules also require applicants to serve a copy of
the ETC application on the SEC and affected State commissions. An
affected State commission is defined as the State commission of each
state in which the ETC will be located or doing business. Although
service of applications on the SEC and State commissions is not
required by law, section 34 of PUHCA specifically contemplates a role
for the SEC and State commissions insofar as certain eligible companies
are concerned. It also contemplates that the SEC be aware of ETC
determinations. The Commission sees no reason not to inform these
agencies of pending ETC applications at an early stage, particularly
since the copying and mailing costs associated with serving filings on
the SEC and affected State commissions will be minimal. We note that
FERC took a similar approach in its analogous rules.21 We invite
parties to comment on this proposal.
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\21\ See 18 CFR Sec. 365.3.
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C. Notice and Comment
13. As of April 25, 1995, the Commission has received 11
applications for ETC status, three of which have been granted.22
While staff placed these applications on public notice for comment,
there is no requirement in the Telecommunications Act that the
Commission do so. On the other hand, neither is there any prohibition
on the Commission's discretion to do so. The proposed rules would
provide for public notice and comment on ETC applications, but would
limit consideration of any submissions that might be made in response
to such public notices to the narrow purpose of determining the
adequacy or accuracy of the certification made to satisfy the statutory
criteria. Given the limited focus of the Commission's inquiry under
section 34(a)(1), we do not believe that it would be appropriate to
allow persons to raise issues that fall outside the purview of the
statutorily fixed determination, and that go to the public interest
merits of an applicant's proposed entry. Accordingly, the proposed
rules specify that parties may file comments on a proposed application,
but that any comments must be limited to the adequacy and accuracy of
the representations contained therein. Comments on the adequacy of the
representations may include whether the application is within the scope
of the ETC criteria, e.g., the extent to which applicant's services
constitute telecommunications, information or related services.
Applicants would then have the opportunity to respond to any comments
filed. The Commission requests comments on the tentative conclusion to
allow comments, but to limit such comments to the accuracy and adequacy
of the representations contained in the applications. We also request
comments on the length of the time period which should be set for such
comments.
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\22\ See CSW Communications, Inc., (FCC 96-152, released April
4, 1996); Entergy Technology, supra n. 15; Entergy Technology
Holding Company, (FCC 96-162, released April 12, 1996).
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D. Implementation
14. The proposed rules specify that the Commission must act within
60 days of receipt of an application. Applications that do not meet the
requirements of the proposed rule set forth in proposed 1.4002 will be
rejected. Under the proposed rules, if the Commission does not act
within 60 days, the application is deemed to have been granted.
15. Proposed Sec. 1.4005 requires the Secretary of the Commission
to notify the SEC whenever an application for ETC status is granted, as
explicitly required by section 34(a)(1) of PUHCA.
E. Change in Circumstances
16. An ETC determination is based on the facts that are presented
to the Commission. Any material variation from those facts may render
an ETC determination invalid. Accordingly, proposed section 1.4006
requires ETCs, within 30 days of any material change in facts that may
affect an ETC's eligibility for ETC status under section 34(a)(1) of
the Public Utility Holding Company Act of 1935, to either: (a)
[[Page 24747]]
apply to the Commission for a new determination of ETC status; (b) file
a written explanation with the Commission of why the material change in
facts does not affect the ETC's status; or (c) notify the Commission
that it no longer seeks to maintain ETC status. To the extent persons
other than the ETC applicant inform the Commission of a material change
of circumstances, the ETC will be given the opportunity to respond and
the Commission will take further action as appropriate. The Commission
requests comments on this proposed rule.
IV. Procedural Matters
A. Regulatory Flexibility Act
17. 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 the document. The IRFA is set forth below. Written public
comments are requested on the IRFA. These comments must be filed in
accordance with the same filing deadlines as comments on the rest of
the NPRM, but they must have a separate and distinct heading
designating them as responses to the Initial Regulatory Flexibility
Analysis. The Secretary shall send a copy of the NPRM, including the
IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration in accordance with section 603(a) of the Regulatory
Flexibility Act.23
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\23\ Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq.
(1981).
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B. Ex Parte Rules--Non-Restricted Proceeding
18. This is a non-restricted notice and comment rulemaking
proceeding. Ex parte presentations are permitted except during the
Sunshine Agenda period, provided they are disclosed as provided in the
Commission's rules.24
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\24\ See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
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C. Comment Dates
19. Pursuant to applicable procedures set forth in Secs. 1.415 and
1.419 of the Commission's rules, interested parties may file comments
on or before June 17, 1996, and reply comments on or before July 5,
1996.25 To file formally in this proceeding, parties must file an
original and four copies of all comments, reply comments, and
supporting comments. If parties want each Commissioner to receive a
personal copy of their comments, parties must file an original plus
nine copies. Parties should send comments and reply comments to Office
of the Secretary, Federal Communications Commission, 1919 M Street NW.
Washington, D.C., 20554. Comments and reply comments will be available
for public inspection during regular business hours in the Reference
Center of the Federal Communications Commission, Room 239, 1919 M
Street NW., Washington, D.C. 20554.
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\25\ See 47 CFR 1.415 and 1.419.
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D. Paperwork Reduction Act
20. This NPRM 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 collections
contained in this NPRM, as required by the Paperwork Reduction Act of
1995, Pub. L. No. 104-13. Public and agency comments are due at the
same time as other comments on this NPRM; OMB comments are due 60 days
from date of publication of this NPRM in the Federal Register. Comments
should address: (a) whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
21. Written comments by the public on the proposed and/or modified
information collection are due on or before June 17, 1996 and reply
comments on or before July 5, 1996. Written comments must be submitted
by the Office of Management and Budget (OMB) on the proposed and/or
modified information collections on or before 60 days after date of
publication in the Federal Register. In addition to filing comments
with the Secretary, a copy of any comments on the information
collection contained herein should be submitted to Dorothy Conway,
Federal Communications Commission, Room 234, 1919 M Street NW.,
Washington, DC 20554, or via the Internet to dconway@fcc.gov and to
Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 - 17th Street NW.,
Washington, DC 20503 or via the Internet to fain__t@al.eop.gov.
E. Legal Authority
22. Authority for issuance of this NPRM is contained in section
34(a)(1) of the Public Utility Holding Company Act of 1935 (PUHCA), as
amended by section 103 of the Telecommunications Act of 1996, Pub. L.
No. 104-104, 110 Stat. 56 (1996), and sections 4(i), 4(j) and 303(r) of
the Communications Act of 1934, as amended, 47 U.S.C. Secs. 154(i),
154(j), and 303(r).
F. Further Information
23. For further information concerning this proceeding, contact
Lawrence J. Spiwak, Competition Division, Office of General Counsel at
(202) 418-1870.
Initial Regulatory Flexibility Analysis
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 policies and
rules proposed in this Notice of Proposed Rule Making (NPRM). Written
public comments are requested on the IRFA.
Reason for Action: This rulemaking proceeding was initiated to
secure comment on proposals for establishing filing requirements and
procedures for implementing section 34(a)(1) of the Public Utility
Holding Company Act of 1935 (PUHCA), as amended by section 103 of the
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56
(1996), and sections 4(i), 4(j) and 303(r) of the Communications Act of
1934, as amended, 47 U.S.C. 154(i), 154(j), and 303(r).
Objectives: The proposed rules, if adopted, would provide filing
requirements and procedures to expedite public utility holding company
entry into the telecommunications industry. To achieve this goal, the
proposed regulations require persons seeking a determination of ETC
status to file in good faith for a determination by the Commission.
Applicants would be required to file with the Commission a brief
description of their planned activities, and a sworn statement
attesting to any facts presented to demonstrate eligibility for ETC
status and attesting to any representation otherwise offered to
demonstrate eligibility for ETC status. Applicants would also be
required to submit sworn statements certifying that they complied with
part 1, subpart P, of the Commission's regulations, 47 CFR 1.2001
through 1.2003, regarding implementation of the Anti-Drug Abuse Act of
1988, 21 U.S.C. 862. Finally, applicants would be required to serve
copies of their application with the SEC and affected state
commissions.
Legal Basis: The proposed action is authorized by section 34(a)(1)
of the Public Utility Holding Company Act of 1935 (PUHCA), as amended
by section
[[Page 24748]]
103 of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110
Stat. 56 (1996), and sections 4(i), 4(j) and 303(r) of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j) and
303(r).
Reporting, Recordkeeping, and Other Compliance Requirements: Under
the proposal contained in the NPRM, within thirty days of any change in
material fact that may affect ETC status, persons who received ETC
status have an affirmative duty to either: (a) apply to the Commission
for a new determination of ETC status; (b) file a written explanation
with the Commission of why the material change in facts does not affect
the ETC's status; or (c) notify the Commission that it no longer seeks
to maintain ETC status.
Federal Rules Which Overlap, Duplicate or Conflict With These
Rules: None.
Description, Potential Impact, and Number of Small Entities
Involved: The proposed rules are designed to provide an expedited
procedural process as contemplated in the Section 34(a)(1) of PUHCA.
The proposed rules should therefore increase the flexibility of small
businesses with minimal administrative burden. After evaluating
comments filed in response to the NPRM, the Commission will examine
further the impact of all rule changes on small entities and set forth
its findings in the Final Regulatory Flexibility Analysis.
Significant Alternatives Minimizing the Impact on Small Entities
Consistent with the Stated Objectives: This NPRM solicits comment on a
variety of alternatives. Any additional significant alternatives
presented in the comments will also be considered.
IRFA Comments: We request written public comment on the foregoing
Initial Regulatory Flexibility Analysis. Comments must have a separate
and distinct heading designating them as responses to the IRFA and must
be filed by the comment deadlines set forth in this NPRM.
List of Subjects in 47 CFR Part 1
Administrative practice and procedure, Telecommunications.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
Part 1 of title 47 of the Code of Federal Regulations is proposed
to be amended as follows:
PART 1--PRACTICE AND PROCEDURE
The authority citation for part 1 continues to read as follows:
Authority: 47 U.S.C. 151, 154, 303, and 309(j) unless otherwise
noted.
2. A new subpart S is added to part 1 to read as follows:
Subpart S--Exempt Telecomunications Companies
Sec.
1.4000 Purpose.
1.4001 Definitions.
1.4002 Contents of application and procedure for filing.
1.4003 Effect of filing.
1.4004 Commission action.
1.4005 Notification of Commission action to the Securities and
Exchange Commission.
1.4006 Procedure for notifying Commission of material change in
facts.
1.4007 Comments.
Subparts--Exempt Telecommunications Companies
Sec. 1.4000 Purpose.
The purpose of part 1, subpart S, is to implement section 34(a) of
the Public Utility Holding Company Act of 1935, 15 U.S.C. 79 through
79z-56 as added by section 103 of the Telecommunications Act of 1996,
Public Law No. 104-104, 110 Stat. 56.
Sec. 1.4001 Definitions.
(a) For the purpose of this part, the terms telecommunications
services and information services shall have the same meanings as
provided in the Communications Act of 1934, as amended;
(b) Commission shall be defined as the Federal Communications
Commission; and
(c) ETC shall be defined as an exempt telecommunications company.
Sec. 1.4002 Contents of application and procedure for filing.
A person seeking status as an exempt telecommunications company
(applicant) must file with the Commission with respect to the company
or companies which are eligible companies owned and/or operated by the
applicant, and serve on the Securities and Exchange Commission and any
affected State commission, the following:
(a) A brief description of the planned activities of the company or
companies which are or will be eligible companies owned and/or operated
by the applicant;
(b) A sworn statement, by a representative legally authorized to
bind the applicant, attesting to any facts or representations presented
to demonstrate eligibility for ETC status, including a representation
that the applicant is engaged directly, or indirectly, wherever
located, through one or more affiliates (as defined in section
2(a)(11)(B) of the Public Utility Holding Company Act of 1935), and
exclusively in the business of providing:
(1) Telecommunications services;
(2) Information services;
(3) Other services or products subject to the jurisdiction of the
Commission; or
(4) Products or services that are related or incidental to the
provision of a product or service described in paragraphs (b)(1), (2),
or (3) of this section; and
(c) A sworn statement, by a representative legally authorized to
bind the applicant, certifying that the applicant satisfies part 1,
subpart P, of the Commission's regulations, 47 CFR 1.2001 through
1.2003, regarding implementation of the Anti-Drug Abuse Act of 1988, 21
U.S.C. 862.
Sec. 1.4003 Effect of filing.
A person applying in good faith for a Commission determination of
exempt telecommunications company status will be deemed to be an exempt
telecommunications company from the date of receipt of the application
until the date of Commission action pursuant to Sec. 1.4004.
Sec. 1.4004 Commission action.
If the Commission has not issued an order granting or denying an
application within 60 days of receipt of the application, the
application will be deemed to have been granted as a matter of law.
Sec. 1.4005 Notification of Commission action to the Securities and
Exchange Commission.
The Secretary of the Commission will notify the Securities and
Exchange Commission whenever a person is determined to be an exempt
telecommunications company.
Sec. 1.4006 Procedure for notifying commission of material change in
facts.
If there is any material change in facts that may affect an ETC's
eligibility for ETC status under section 34(a)(1) of the Public Utility
Holding Company Act of 1935, the ETC must, within 30 days of the change
in fact, either:
(a) Apply to the Commission for a new determination of ETC status;
(b) File a written explanation with the Commission of why the
material change in facts does not affect the ETC's status; or
[[Page 24749]]
(c) Notify the Commission that it no longer seeks to maintain ETC
status.
Sec. 1.4007 Comments.
(a) Any person wishing to be heard concerning an application for
ETC status may file comments with the Commission within fifteen (15)
days from the release date of a public notice regarding the
application, or such other period of time set by the Commission. Any
comments must be limited to the adequacy or accuracy of the
application.
(b) Any person who files comments with the Commission must also
serve copies of all comments on the applicant.
(c) An applicant has seven (7) days to reply to any comments filed
regarding the adequacy and accuracy of its application, or such other
period of time as set by the Commission. Such reply shall be served on
the commenters.
[FR Doc. 96-11964 Filed 5-15-96; 8:45 am]
BILLING CODE 6712-01-P
