[Federal Register Volume 62, Number 177 (Friday, September 12, 1997)]
[Proposed Rules]
[Pages 48042-48047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24211]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 54 and 69
[CC Docket No. 97-181; FCC 97-316]
Defining Primary Lines
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: As a result of reforms adopted to implement the
Telecommunications Act of 1996, our access charge rules require
incumbent LECs subject to the Commission's price cap rules to charge
subscriber line charges (SLCs) and presubscribed interexchange carrier
charges (PICCs) at different levels for secondary residential and
multi-line business lines. This NPRM considers how Commission should
define and identify primary lines for the purposes of implementing the
Commission's access charge rules.
DATES: Pursuant to applicable procedures set forth in Secs. 1.415 and
1.419 of the Commission's rules, 47 CFR 1.415 and 1.419, interested
parties may file comments on or before September 25, 1997, and reply
comments on or before October 9, 1997. Written comments by the public
on the proposed and/or modified information collections are due
September 25, 1997. Written comments must be submitted by the Office of
Management and Budget (OMB) on the proposed and/or modified information
collections on or before November 12, 1997.
ADDRESSES: Parties should send their comments or reply comments to
Office of the Secretary, Federal Communications Commission, 1919 M
Street, N.W., Room 222, Washington, D.C. 20554. Parties filing on paper
should also send three (3) copies of their comments to Sheryl Todd,
Federal Communications Commission, Accounting and Audits Division,
Universal Service Branch, 2100 M Street, N.W., Room 8611, Washington,
DC 20554. Parties filing in paper form should also file one copy of any
documents filed in this docket with the Commission's copy contractor,
International Transcription Services, Inc., 1231 20th Street, NW,
Washington, D.C. 20036. See Supplementary Information section for
further information about filing comments and reply comments
electronically.
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 234,
1919 M Street, N.W., Washington, DC 20554, or via the Internet to
jboley@fcc.gov, and to Timothy Fain, OMB Desk Officer, 10236 NEOB,
725--17th Street, N.W., Washington, DC 20503 or via the Internet to
fain__t@al.eop.gov.
FOR FURTHER INFORMATION CONTACT: Valerie Yates, Legal Counsel, Common
Carrier Bureau, (202) 418-1500, or Sheryl Todd, Common Carrier Bureau,
(202) 418-7400. For additional information concerning the information
collections contained in this NPRM contact Judy Boley at 202-418-0214,
or via the Internet at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
1. 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, Public Law 104-13. Public and agency comments are due at the same
time as other comments on this NPRM; OMB notification of action is due
60 days from date of publication of this NPRM in the Federal Register.
Comments should address: (a) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
OMB Approval Number: None, new information collection.
Title: In the Matter of Federal-State Joint Board on Universal
Service, Defining Primary Lines, Notice of Proposed Rulemaking, CC
Docket No. 97-181.
Form No.: None.
Type of Review: New collection.
Respondents: Business or other for-profit.
Frequency of Response: On occasion; one-time requirement.
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No. of Est. time per Total annual Est. costs per
Proposed collection respondents response burden respondent
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(a.) Request by ILEC to consumer................ 164 100 16,400 1,6400.00
(b.) Response by consumer to identify primary
line........................................... 149,141,075 \1\.083 12,378,709 0.00
(c.) Disclosure statement....................... 164 100 16,400 0.00
(d.) Recordkeeping.............................. 164 50 8,200 286,040.00
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\1\ 5 min.
Total Annual Burden: 12,419,709 hours.
Needs and Uses: The information collections proposed in this NPRM
are necessary to fully implement the rules the Commission adopted in
its Universal Service Order and Access Charge Reform Order because,
without a definition and a means of identifying and verifying primary
residential lines, incumbent LECs subject to Commission price cap
regulation will not be able to
[[Page 48043]]
assess the appropriate charges for these lines. Requiring incumbent
LECs to assess different-level charges on primary residential lines is
necessary to balance between reforming our access charge rules to
facilitate local competition, and preserving and advancing universal
service by taking action to maintain low rates for subscribers to local
telephone service.
Summary of Analysis, Tentative Conclusions, and Issues for Comment
I. Introduction
2. In the Universal Service Order and the Access Charge Reform
Order we concluded that the $3.50 cap on the subscriber line charge
(SLC) for primary residential and single-line businesses should remain
unchanged. See Federal-State Joint Board on Universal Service, (62 FR
32862 (June 17, 1997)) (hereinafter Universal Service Order); Access
Charge Reform, (62 FR 31868, (June 11, 1997)) (hereinafter Access
Charge Reform Order); see also Federal-State Joint Board on Universal
Service, (61 FR 63778 (December 2, 1996)) (hereinafter Recommended
Decision). In the Access Charge Reform Order, however, we adjusted the
SLC caps for additional residential and business lines. We also created
a presubscribed interexchange carrier charge (PICC) that will, over
time, supplant the traffic-sensitive carrier common line charge (CCLC).
Under our new access charge rules, in 1998 SLC and PICC levels for
primary residential and single-line business lines will be lower than
the levels prescribed for secondary residential and multi-line business
lines. As a result of these changes, we must establish criteria to
identify primary residential lines for the purpose of determining SLC
and PICC levels.
II. Discussion
3. Although this NPRM focuses on price cap ILECs, we also solicit
comment on whether the various proposals set forth in this NPRM for
defining, identifying, and verifying primary lines for price cap ILECs
could also be applied for rate-of-return ILECs if, in a future
proceeding, the Commission concludes that all ILECs should assess SLCs
and PICCs that are higher for secondary lines.
A. Defining Single-Line Business Lines and Primary Residential Lines
4. We invite parties to describe the methods carriers use to
distinguish multiple-line businesses from single-line businesses and to
distinguish between residential and business customers, and seek
comment on whether the Commission should revise its rules or policies
to ensure the correct SLCs and PICCs are assessed on these lines. In
particular, we note, that Sec. 69.104(h) defines a single-line business
line. It states: ``A line shall be deemed to be a single line business
line if the subscriber pays a rate that is not described as a
residential rate in the local exchange service tariff and does not
obtain more than one such line from a particular telephone company.''
47 CFR 69.104(h). In the Access Charge Reform Order, we defined the
term ``telephone company'' for the purposes of part 69 of our rules, to
mean an ``incumbent LEC'' as that term is defined in section 251(h)(1)
of the Act. 47 CFR 69.2 We seek comment on whether we should alter this
definition. We seek comment on whether maintaining this definition
would be favorable because, given that only price cap ILECs will assess
different SLCs and PICCs on multi-line businesses, maintaining this
definition would allow incumbent LECs to assess the correct SLCs and
PICCs without determining whether a customer receives service from
other carriers. We note however, that if we maintain this definition, a
business that obtains one line from an ILEC and one line from a
competitive LEC or a wireless carrier would be treated as a single-line
business for the purposes of its SLC and PICC. We seek comment on
whether this outcome would be competitively neutral and whether it
would be consistent with the Joint Board's recommendations with respect
to the level of the primary line SLC. We further seek comment on
whether a business with a single line in each of two locations should
be considered a single-line business.
5. Primary residential line. We seek comment on how we should
define ``primary residential line.'' Specifically, we seek comment on
whether the primary residential line should be defined as the primary
line of an individual subscriber, of a residence, of an individual
household, or on another basis. For example, defining the primary line
as the primary line to a primary residence would not allow two
households in a single residence each to subscribe to a line that is
subject to the primary-line level SLC and PICC (i.e., one of the two
lines would be subject to the higher SLC and PICC). Conversely,
defining the primary line in terms of a subscriber's residence may have
the advantage of being administratively simple and less invasive of
subscribers' privacy because it does not require the gathering of
information regarding subscriber living arrangements that would be
needed to identify households. We seek comment on these issues.
6. Parties that favor defining the primary residential line in
terms of ``subscribers,'' ``residences,'' ``households,'' or any other
term, should propose definitions of such terms, including definitions
used by other entities. We seek comment on whether we should use, for
example, the definition of household used by either the U.S. Census
Bureau, see U.S. Department of Commerce, Bureau of the Census, Census
of Population and Housing, 1990, Technical Documentation (May 1992) at
B-14, or the Internal Revenue Service (IRS), see 26 CFR 1.2-2(b)(3) or
(4); 26 U.S.C. 26 U.S.C. 151. We ask parties to identify other
definitions that may be easily applied by consumers and carriers alike.
Additionally, we ask parties to estimate, to the extent possible, the
number of lines that will be classified as primary residential lines
under any definition that they support. Parties should also discuss how
the definition of the primary residential line selected would affect
the success of the approach, discussed below, they favor to verify the
number of such lines.
B. Identification of Primary Residential Lines
7. Information Required To Identify Primary Residential Lines. We
tentatively conclude that, although an ILEC's business records likely
distinguish between single-line and multi-line customers, and between
residential and business customers, those records may be inadequate to
identify the primary residential line. For these reasons, we
tentatively conclude that identifying a primary residential line
requires: (1) Identification of the subscriber, residence, or household
(depending on the definition adopted); (2) identification of the
primary residence of the subscriber or household; and (3)
identification of the primary line, and of the incumbent LEC and
interexchange carrier serving that line. We seek comment on these
tentative conclusions.
8. Using Customer Self-Certification To Collect Information. We
tentatively conclude that the Commission should permit price cap ILECs
to use customer self-certification to identify primary lines for access
charge purposes. We make this tentative conclusion because such an
approach presumably would minimize the substantial administrative costs
that would be inherent in any effort to require carriers or the
Commission to identify primary residential lines without information
[[Page 48044]]
from the customer. The burden that self-certification will impose on
individual customers would be significantly less than the burden that
ILECs would otherwise bear to identify each of their customers' primary
line independent of the customer.
9. We seek comment on the language that would have to be posed to
subscribers to determine which is their primary residential line under
such a self-certification proposal. We seek comment on whether we
should adopt uniform language, or whether carriers should devise their
own method of acquiring this information. We seek comment on whether
LECs should be required to inform customers of the consequences of
providing false information or designating more than one line as a
primary line. We seek comment on how often this information should be
collected. We tentatively conclude that this information should be
collected once from all customers currently being served by price cap
ILECs, and thereafter only at the time a customer orders service from a
price cap ILEC. We seek comment on procedures that could be used to
identify when customers switch service to a competing carrier. We also
tentatively conclude that price cap ILECs should be required to
maintain documentation of their customers' self-certification that is
adequate to permit verification of the number of primary lines an ILEC
reportedly serves. We seek comment on whether documentation could be
accomplished by permitting customers to provide oral certification that
is noted in the price cap ILEC's records or whether customers should be
required to self-certify in writing. We also seek comment on how long
these ILECs should be required to maintain documentation of customer
self-certification. In addition, we seek comment on what action the
price cap ILEC should take if a customer fails to provide a self-
certification. We seek comment on any other administrative procedures
parties recommend to implement a self-certification method of
identifying primary residential lines, and are particularly interested
in proposals that will reduce the administrative burden on carriers and
customers.
10. Resellers. We seek comment on how to identify secondary lines
for resellers that resell wholesale exchange service purchased from
price cap ILECs. We seek comment on whether the Commission should
require resellers to identify the primary and secondary lines of their
customers and relay that information to price cap ILECs, or, whether
price cap ILECs should identify the primary and secondary lines for
resellers' customers directly. We seek comment on whether, if, for
example, a reseller collected customer certifications, the reseller
should pass along the original copies of its customers' certifications
to the price cap ILEC from which it is purchasing wholesale service. We
invite alternative proposals, and encourage parties to suggest
proposals that will accurately identify the secondary lines served by
resellers and will be administratively simple to implement.
11. Although databases maintained by price cap ILECs could be
useful to those ILECs for retaining customer records, we tentatively
conclude that we will not use a national database, maintained by the
Commission or another entity on a nation-wide basis, to track primary
residential lines or single-line businesses for two reasons. First,
such a database is not necessary to implement our access charge rules.
Second, the administrative resources necessary to create such a
database might outweigh any additional accuracy gained from this
approach.
12. Other Proposals. We tentatively conclude that we will not
pursue several other approaches presented by commenters in the
Universal Service proceeding. We tentatively conclude that we will not
adopt Teleport's proposal to use county and municipal records and
databases to identify addresses of individuals. We also tentatively
conclude, for the reasons articulated by MFS and to protect the privacy
of consumers, that social security numbers should not be used to track
primary residential lines.
13. Privacy Issues. We encourage parties to comment on any
potential issues related to subscriber privacy that may be raised by
the customer self-certification proposal discussed above. Specifically,
we seek comment on whether requiring consumers to provide information
to their price cap ILECs regarding the identification of their
households and primary residences would be consistent with those
consumers' reasonable expectations of privacy and whether the Privacy
Act would apply to the collection of self-certifications by ILECs. We
tentatively conclude that we should require ILECs that collect this
information to use this information only for the purposes of
determining the correct SLC and PICC for individual consumers' lines,
and not disclose it or permit access to it for any other purposes. We
request comment on whether primary line information would constitute
customer proprietary network information as defined in section
222(f)(1) of the Act. 47 U.S.C. 222(f)(1). We seek comment on whether
sections 222 (c)(1), (d)(1), (d)(2), other parts of section 222, or
other sections of the Act present exceptions that would allow carriers
to disclose primary line information to the Commission, or another
entity selected by the Commission, without customer approval.
C. Verifying Primary Residential Line Information
14. We tentatively conclude the Commission should implement a
method to verify the number of primary lines served by a carrier,
identified through customer self-certification. In light of the
potential incentives for carriers to misreport the number of lines to
which the end users subscribe, we tentatively conclude that we should
adopt a method of verifying the number of primary lines served by price
cap ILECs.
15. Audits. Although the Commission has broad authority to audit
telecommunications carriers' records, 47 U.S.C. 220(c), we seek comment
on whether audits would be an effective way to examine discrepancies in
the number of primary lines a carrier serves and the number of primary-
line SLCs and PICCs the carrier charges. Such audits would utilize
appropriate auditing techniques and procedures to verify the number of
primary-line SLCs and PICCs assessed by price cap ILECs. We tentatively
conclude that audits of the ILEC's records could be performed to
determine whether the ILEC misreported primary lines. We seek comment
on our tentative conclusion to use audits to verify primary lines and
on the type of audit that would be most effective and efficient. We
also seek comment on what controls or procedures should be implemented
that would protect against the possibility of a price cap ILEC
misreporting primary lines.
16. Models. In the context of formulating a forward-looking
economic cost mechanism to estimate the cost of providing service in
high cost areas, the proponents of the Hatfield model have developed a
method for estimating the number of primary lines in a census block. We
seek comment on whether this method, or another modeling approach,
could assist the Commission in verifying the number of primary lines
served by price cap ILECs. Specifically, we seek comment on whether the
Commission could use the estimates generated by the Hatfield model in
conjunction with an audit. We also seek comment on whether the Hatfield
approach would have to be modified to account for second homes. In
addition,
[[Page 48045]]
we note that the Commission recently collected data on, inter alia, the
number of loops served by carriers and the number of residential
customers that subscribe to more than one line. We seek comment on
whether these data would assist in verifying primary line counts.
D. Enforcement
17. We seek comment on available methods for the Commission to
enforce its access charge rules, which impose different maximum SLCs
and PICCs depending on whether a line is a primary or secondary line.
We seek comment on whether the Commission's authority under sections
4(i), 206-209, 312, 403, and 503 of the Communications Act of 1934, and
the provisions of Title 18 of the United States Code, 18 U.S.C.
1001(a), is sufficient to deter fraud or misrepresentation by carriers
or consumers that may arise under the customer self-certification
approach. We tentatively conclude that we should require carriers to
notify their customers of the requirement to identify a single primary
local exchange carrier and a single primary residence. We request
comment on this tentative conclusion. We also seek comment on whether
we should adopt measures to deter consumers from identifying more than
one primary line.
18. We also seek comment on what types of sanctions would be
appropriate and consistent with the Commission's statutory authority to
punish violations of our rules regarding the identification of primary
lines and request comment on whether section 222(c)(1) or any other
portion of section 222 provides adequate authority to prevent misuse of
the information that carriers collect. We tentatively conclude that, if
the Commission, as a result of an audit or other method of verifying
primary line counts, discovered that a price cap ILEC had misreported
the number of primary lines it serves, the Commission could take the
following actions: (1) Order the price cap ILEC to correct its billing
practices and assess SLCs and PICCs at the correct level; (2) impose
forfeitures pursuant to 47 U.S.C. 220(d) or 503(b) for violations of
the Commission's rules; and (3) require the price cap ILEC to have an
independent auditor conduct audits of its records at regular intervals
determined by the Commission. We seek comment on these tentative
conclusions.
E. Consumer Disclosure
19. We seek comment on whether the Commission should require
carriers to provide consumers with a uniform disclosure statement
describing this distinction. We tentatively conclude that such a
disclosure requirement would be consistent with applicable First
Amendment standards and invite comment on that conclusion. We seek
comment on whether, for example, all local exchange carriers that
charge a SLC should be required to make the following statement:
The subscriber line charge is a fee collected by your local
telephone company to defray part of the costs of providing telephone
service. The subscriber line charge covers the costs that can be
attributed to providing customers with the ability to place
telephone calls across state lines. In order to ensure that all
customers have affordable access to local telephone service, the
Federal Communications Commission allows your local telephone
company to charge no more than $3.50 for the subscriber line charge
for each primary residential line. For additional lines, the Federal
Communications Commission allows local telephone companies to charge
no more than $5.00 per line for the subscriber line charge in 1998.
We seek comment on whether this statement will be easily understood
by all consumers. We invite alternate suggestions for a uniform
consumer disclosure statement. We seek comment on whether this
statement should be given orally at the time when a subscriber orders
telephone service. We seek comment on whether this statement should be
provided in writing to all consumers when the change takes effect. We
seek comment on how, if we adopt a consumer disclosure statement
including a reference to the SLC cap on secondary lines, such
disclosure statement should indicate the annual increases in the SLC
cap. We seek comment on whether such a statement would be compatible
with marketing and consumer information campaigns that carriers may
have instituted or that they may be formulating in preparation for the
Commission's new access charge rules.
Deadlines and Instructions for Filing Comments
20. Pursuant to applicable procedures set forth in Secs. 1.415 and
1.419 of the Commission's rules, 47 CFR 1.415 and 1.419, interested
parties may file comments on or before September 25, 1997, and reply
comments on or before October 9, 1997.
21. We direct all interested parties to include the name of the
filing party and the date of the filing on each page of their comments
and reply comments. Comments and reply comments also must clearly
identify the specific portion of this NPRM to which a particular
comment or set of comments is responsive. If a portion of a party's
comments does not fall under a particular topic listed in the outline
of this NPRM, such comments must be included in a clearly labelled
section at the beginning or end of the filing. Irrespective of the
length of their comments or reply comments, parties shall include a
table of contents in their documents. Cf. 47 CFR 1.49(b).
22. Parties should send their comments or reply comments to Office
of the Secretary, Federal Communications Commission, 1919 M Street,
N.W., Room 222, Washington, D.C. 20554. Parties filing on paper should
also send three (3) copies of their comments to Sheryl Todd, Federal
Communications Commission, Accounting and Audits Division, Universal
Service Branch, 2100 M Street, N.W., Room 8611, Washington, DC 20554.
Parties filing in paper form should also file one copy of any documents
filed in this docket with the Commission's copy contractor,
International Transcription Services, Inc., 1231 20th Street, NW,
Washington, D.C. 20036. Comments and reply comments will be available
for public inspection during regular business hours in the FCC
Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C.
20554.
23. Commenters may also file informal comments or an exact copy of
formal comments electronically via the Internet at: http://
gullfoss.fcc.gov/cgi-bin/websql/cgi-bin/comment/comment.hts>. Only one
copy of electronically filed comments must be submitted. A commenter
must note whether an electronic submission is an exact copy of formal
comments on the subject line. A commenter also must include its full
name and Postal Service mailing address its submission.
24. Parties not submitting an exact copy of their comments via the
Internet are also asked to submit their comments and reply comments on
diskette. Such diskette submissions are in addition to and not a
substitute for the formal filing requirements addressed above. Parties
submitting diskettes should submit them to Sheryl Todd of the Common
Carrier Bureau, 2100 M Street, N.W., Room 8611, Washington, D.C. 20554.
Such a submission should be on a 3.5 inch diskette formatted in an IBM
compatible form using WordPerfect 5.1 for Windows or compatible
software. The diskette should be submitted in ``read only'' mode. The
diskette should be clearly labelled with the party's name, proceeding,
type of pleading (comment or reply comments) and date of submission.
Each diskette should contain only one party's comments in a single
electronic file. The diskette
[[Page 48046]]
should be accompanied by a cover letter.
25. Written comments by the public on the proposed information
collections are due September 25, 1997. Written comments must be
submitted by OMB on the proposed information collection on or before 60
days after the date of publication in the Federal Register. 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 234, 1919 M Street,
N.W., Washington, D.C. 20554, or via the Internet to jboley@fcc.gov and
to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W.,
Washington, D.C. 20503 or via the Internet to fain__t@al.eop.gov.
Initial Regulatory Flexibility Analysis
26. Pursuant to the Regulatory Flexibility Act (RFA), the
Commission has prepared this Initial Regulatory Flexibility Analysis
(IRFA) of the expected significant economic impact of these proposed
policies and rules on small entities. 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 this NPRM, and
should have a separate and distinct heading designating them as
responses to the IRFA. The Commission will send a copy of this NPRM,
including the IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration (SBA) in accordance with the RFA. See 5 U.S.C.
603. The RFA, see 5 U.S.C. 601 et seq., has been amended by the
Contract With America Advancement Act of 1996, Public Law 104-121, 110
Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA).
27. Need for and Objectives of the Proposed Rules. Three principal
goals of the Telecommunications Act of 1996 are: (1) Opening local
exchange and exchange access markets to competition; (2) promoting
increased competition in telecommunications markets that are already
open to competition, particularly long distance services markets; and
(3) reforming our system of universal service so that universal service
is preserved and advanced as local exchange and exchange access markets
move from monopoly to competition. The Commission's access charge and
universal service rules were adopted at a time when interstate access
and local exchange services were offered on a monopoly basis, and in
many cases are inconsistent with the competitive market envisioned by
the 1996 Act. This NPRM is necessary to implement the rules the
Commission adopted in its Universal Service Order and Access Charge
Reform Order because, without a definition and a means of identifying
and verifying primary residential lines, price cap ILECs will not be
able to assess the appropriate charges for these lines. With this NPRM,
we seek to identify primary residential lines in order to make the
Commission's access charge and universal service rules consistent with
Sections 251 and 254 of the Telecommunications Act of 1996.
28. Legal Basis. The proposed action is supported by Sections 4(i),
4(j), 201-205, 251, 254, and 403 of the Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 201-205, 251, 254, and 403.
29. Description and Estimate of the Number of Small Entities That
May Be Affected by This NPRM. The RFA directs the Commission to provide
a description of, and where feasible, and estimate of the number of
small entities that might be affected by proposed rules. The RFA
defines the term ``small entity'' as having the same meaning as the
term ``small business,'' ``small organization,'' and ``small business
concern'' under section 3 of the Small Business Act (SBA). See 5 U.S.C.
601(3) (incorporating by reference the definition of ``small business
concern'' in 15 U.S.C. 632). The Commission may also develop additional
definitions that are appropriate to its activities. To be a small
business concern, an entity must: (1) Be independently owned and
operated; (2) be not dominant in its field of operation; and (3) meet
any additional criteria established by the SBA. See 15 U.S.C. 632.
30. We believe that small ILECs are not small businesses for IRFA
purposes because each is either dominant in its field of operation or
is not independently owned and operated. We have found ILECs to be
``dominant in their field of operation'' since the early 1980s, and we
consistently have certified under the Regulatory Flexibility Act, see 5
U.S.C. 605(b), that ILECs are not subject to regulatory flexibility
analysis requirements because they are not ``small business concerns.''
Out of an abundance of caution, for regulatory flexibility analysis
purposes we will consider small ILECs within this present analysis and
use the term ``small ILECs'' to refer to any incumbent LEC that
arguably might be defined by SBA as a small business concern.
31. The proposals under consideration in this NPRM, if adopted,
would affect the fourteen (14) ILECs subject to price cap regulation by
the Commission. Neither the Commission nor the SBA has developed a
definition of small providers of local exchange service. The closest
applicable definition under SBA rules is for telephone
telecommunications companies other than radiotelephone (wireless)
companies. The SBA has defined a small business for Standard Industrial
Classification (SIC) category 4813 (Telephone Communications, Except
Radiotelephone) to be an entity with no more than 1,500 employees, 15
U.S.C. 632 (citing 13 CFR 121.201). Of the fourteen ILECs subject to
price cap regulation, we estimate that, at a maximum, six (6) of them
have no more than 1,500 employees. Of these six, we estimate that at
least one is not independently owned and operated. We seek comment on
these estimates.
32. In addition, the proposals in this NPRM may also affect
providers of local exchange service that purchase wholesale services
from the 14 incumbent price cap LECs and resell that service to
customers. Neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to resellers. The
closest applicable SBA definition for a reseller is a telephone
communications company except radiotelephone (wireless) companies. 13
CFR 121.201, SIC 4813. However, the most reliable source of information
regarding the number of resellers nationwide is the data that the
Commission collects annually in connection with the TRS Worksheet.
According to our most recent data, 260 companies reported that they
were engaged in the resale of telephone service. We estimate that
between 50 and 150 of these companies offer local exchange service on a
resale basis, but we do not have data regarding how many of these
carriers purchase service from price cap ILECs. We also do not have
information on the number of these carriers that are not independently
owned and operated or have more than 1,500 employees, and thus we are
unable at this time to estimate with greater precision the number of
resellers that would qualify as small entities or small incumbent LEC
concerns under the SBA's definition. Consequently, we estimate that
there are fewer than 150 small entity resellers.
33. Reporting, record keeping, and other compliance requirements.
The proposals to establish a customer certification system amy require
price cap ILECs to ask customers to identify their primary lines,
maintain records verifying a customer's primary line
[[Page 48047]]
designation, submit their records to Commission audits to verify
accuracy of primary line counts, and publish a consumer disclosure
statement in their monthly bills.
34. Steps Taken to Minimize Significant Economic Impact on Small
Entities and Alternatives Considered. Throughout this NPRM, we seek
comment on alternatives that will reduce the impact on all entities
affected by these proposals, including small ILECs. We tentatively
adopt a definition of single-line business lines that, we believe, will
result in a smaller administrative burden for ILECs as they identify
primary and secondary lines in order to charge the correct SLC or PICC.
In addition, we ask commenters to identify the relative costs and
benefits, including administrative costs, of adopting a particular
definition of primary residential line. We ask parties to identify a
definition of primary residential line that will be easy for carriers
and customers to apply. We tentatively adopt customer self-
certification as a means to identify primary lines because this method
of identification is less administratively burdensome for ILECs than a
method that does not include customer input. We seek comment on
whether, and if so, the amount of time, ILECs must keep records of
customer self-certification. We particularly encourage parties to
submit proposals that will reduce the administrative burden on carriers
and customers. We seek comment on whether we should include a
standardized customer disclosure statement, and if so, whether that
disclosure should be made in writing or may be made orally.
35. At this time, we tentatively conclude to eliminate several
options because they would be too administratively burdensome. The
proposals we tentatively reject include: creating and maintaining a
national database of primary line designations; using local property
records to identify and track primary lines; and using social security
numbers to track primary lines.
36. Federal rules which overlap, duplicate or conflict with this
rule. None.
Ordering Clauses
37. It is ordered, pursuant to Sections 1, 4 (i) and (j), 201-209,
218-222, 251, 254, and 403 of the Communications Act as amended, 47
U.S.C. 151, 154(i), 154(j), 201-209, 218-222, 251, 254, and 403 that
this Notice of Proposed Rulemaking is hereby adopted and comments are
requested as described above.
38. It is further ordered that the Commission shall send a copy of
this Notice of Proposed Rulemaking, including the Initial Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
List of Subjects
47 CFR Part 54
Communications common carriers, Health facilities, Libraries,
Reporting and recordkeeping requirements, Schools, Telecommunications,
Telephone.
47 CFR Part 69
Communications common carriers, Reporting and recordkeeping
requirements, Telephone.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-24211 Filed 9-11-97; 8:45 am]
BILLING CODE 6712-01-U
