The FAA has determined that good cause exists for making these special conditions effective upon issuance; however, interested persons are invited to submit such written data, views, or arguments, as they may desire. Communications should identify the regulatory docket number and be submitted in duplicate to the address specified above. All communications received on or before the closing date for comments will be considered by the Administrator. These special conditions may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to these special conditions must include a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. NM183.” The postcard will be date stamped and returned to the commenter.

On April 3, 2000, DaimlerChrysler Aviation, Inc., 7002 Highland Rd., Waterford, MI, applied for a Supplemental Type Certificate (STC) to modify Gulfstream Aerospace Corporation G-1159 airplanes. The G-1159 is a small transport category airplane. The G-1159 airplanes are powered by two Rolls Royce Spey RB (163) 511-8 turbofans with a maximum takeoff weight of 57,500 pounds. This aircraft operates with a 2-pilot crew and can hold up to 19 passengers. The modification incorporates the installation of a Honeywell Primus Epic Control Display System for Retrofit applications (CDS-R). The CDS-R is a replacement for the existing Analog Flight Instrumentation, while also providing additional functional capability and redundancy in the system. The avionics/electronics and electrical systems installed in this airplane have the potential to be vulnerable to high-intensity radiated fields (HIRF) external to the airplane.

Under the provisions of 14 CFR 21.101, DaimlerChrysler Aviation Inc. must show that the Gulfstream Aerospace Corporation G-1159 airplanes, as changed, continue to meet the applicable provisions of the regulations incorporated by reference Type Certificate No. A12EA, or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations included in the certification basis for the Gulfstream Aerospace Corporation G-1159 airplanes include CAR 4b dated December 31, 1953, including Amendments 4b-1 thru 4b-14, Special Regulations SR422B and SR450A, and Special Conditions in Attachment A of FAA letter to Grumman dated September 27, 1965, plus 14 CFR 25.1325 (effective February 1, 1965); 25.175 (effective March 1, 1965) in lieu of 4b.155(b), plus additional requirements listed in the type certificate data sheet that are not relevant to these special conditions.

If the Administrator finds that the applicable airworthiness regulations (i.e., CAR 4b and part 25, as amended) do not contain adequate or appropriate safety standards for the Gulfstream Aerospace Corporation G-1159 airplanes modified by DaimlerChrysler Aviation Inc. because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, these Gulfstream Aerospace Corporation G-1159 airplanes must comply with the fuel vent and exhaust emission requirements of part 34 and the noise certification requirements of part 36.

Special conditions, as defined in § 11.19, are issued in accordance with § 11.38 and become part of the type certification basis in accordance with § 21.101(b)(2).

Special conditions are initially applicable to the model for which they are issued. Should DaimlerChrysler Aviation Inc. apply at a later date for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under the provisions of § 21.101(a)(1).

As noted earlier, the Gulfstream Aerospace Corporation G-1159 airplanes modified by DaimlerChrysler Aviation Inc. will incorporate dual Electronic Primary Flight Display systems that will perform critical functions. This system may be vulnerable to high-intensity radiated fields external to the airplane. The current airworthiness standards of part 25 do not contain adequate or appropriate safety standards for the protection of this equipment from the adverse effects of HIRF. Accordingly, this system is considered to be a novel or unusual design feature.

There is no specific regulation that addresses protection requirements for electrical and electronic systems from HIRF. Increased power levels from ground-based radio transmitters and the growing use of sensitive avionics/electronics and electrical systems to command and control airplanes have made it necessary to provide adequate protection.

To ensure that a level of safety is achieved that is equivalent to that intended by the regulations incorporated by reference, special conditions are needed for the Gulfstream Aerospace Corporation G-1159 airplanes modified by DaimlerChrysler Aviation Inc. These special conditions require that new avionics/electronics and electrical systems that perform critical functions be designed and installed to preclude component damage and interruption of function due to both the direct and indirect effects of HIRF.

With the trend toward increased power levels from ground-based transmitters, plus the advent of space and satellite communications coupled with electronic command and control of the airplane, the immunity of critical avionics/electronics and electrical systems to HIRF must be established.

It is not possible to precisely define the HIRF to which the airplane will be exposed in service. There is also uncertainty concerning the effectiveness of airframe shielding for HIRF. Furthermore, coupling of electromagnetic energy to cockpit-installed equipment through the cockpit window apertures is undefined. Based on surveys and analysis of existing HIRF emitters, an adequate level of protection exists when compliance with the HIRF protection special condition is shown with either paragraph 1 OR 2 below:

1. A minimum threat of 100 volts rms per meter electric field strength from 10 KHz to 18 GHz.

a. The threat must be applied to the system elements and their associated wiring harnesses without the benefit of airframe shielding.

b. Demonstration of this level of protection is established through system tests and analysis.

2. A threat external to the airframe of the following field strengths for the frequency ranges indicated. Both peak and average field strength components from the Table are to be demonstrated.

The threat levels identified above are the result of an FAA review of existing studies on the subject of HIRF, in light of the ongoing work of the Electromagnetic Effects Harmonization Working Group of the Aviation Rulemaking Advisory Committee.

As discussed above, these special conditions are applicable to Gulfstream Aerospace Corporation G-1159 airplanes modified by DaimlerChrysler Aviation Inc. Should DaimlerChrysler Aviation Inc. apply at a later date for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would apply to that model as well under the provisions of § 21.101(a)(1).

This action affects only certain novel or unusual design features on the Gulfstream Aerospace Corporation G-1159 airplanes modified by DaimlerChrysler Aviation Inc. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.

The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comments would result in a significant change from the substance contained herein. For this reason, and because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

Executive Order 13088 of June 9, 1998, as amended by Executive Order 13121 on April 30, 1999, imposed, among other measures, comprehensive U.S. export and reexport prohibitions on the Federal Republic of Yugoslavia (Serbia and Montenegro). On May 4, 1999, the Bureau of Export Administration (BXA) issued a final rule imposing a license requirement for exports and reexports to Serbia of all items subject to the EAR and a case-by-case review of applications with a presumption of denial for other than humanitarian items. These measures were intended to deter Serbia's human rights offenses against ethnic Albanians in Kosovo and to prevent the expansion of the ethnic conflict. BXA's May 4, 1999 rule did not impose similar comprehensive controls on exports or reexports to Montenegro.

Effective January 19, 2001, Executive Order 13192 amended Executive Order 13088 to revoke previously imposed prohibitions, including those on exports and reexports. BXA is taking action under its export control authorities consistent with amended Executive Order 13088. Specifically, this rule removes the additional license requirements imposed under the EAR by the May 4, 1999, rule on exports and reexports to Serbia, and thus restores Serbia to the export control status it had prior to May 4, 1999. However, persons listed in the Annex to Executive Order 13192, as well as persons designated by the Secretary of the Treasury, in consultation with the Secretary of State pursuant to that order, are subject to sanctions administered by the Department of the Treasury's Office of Foreign Assets Control. Exports and reexports of any item subject to the EAR by a U.S. person to a person designated pursuant to amended Executive Order 13088 are subject to a license requirement and a licensing policy of denial. These sanctioned persons are included on a list of specially designated nationals and blocked persons (SDNs) maintained by the Department of the Treasury, Office of Foreign Assets Control (OFAC) and identified by the bracketed suffix initials [FRYM]. To obtain additional information regarding the list of SDNs, contact OFAC at telephone number 202/622-2520. BXA provisions regarding these sanctioned persons are included in new section 744.16 of the EAR.

This rule eliminates the distinctions previously applicable to Serbia, Kosovo and Montenegro, which had been established by the final rule of November 5, 1999, for export control purposes. With the publication of this rule, Serbia (including the province of Kosovo) and Montenegro will be listed together as the Federal Republic of Yugoslavia (Serbia and Montenegro) for License Exception eligibility purposes, as members of “Country Group B” (see Supplement No. 1 to part 740), “Computer Tier 3” (see § 740.7), and in the “Commerce Country Chart” (see Supplement No. 1 part 738).

Note that the arms embargo mandated by United Nations Security Council Resolution 1160 of March 3, 1998 remains in effect. This embargo prohibits the sale or supply of arms and arms-related items to the Federal Republic of Yugoslavia (Serbia and Montenegro), including those controlled under the EAR for crime control and regional stability reasons.

A foreign policy report on the new controls imposed by this rule on designated persons pursuant to amended Executive Order 13088 was submitted to the Congress on February 23, 2001.

1. This rule was determined to be not significant for purposes of Executive Order 12866.

2. This rule involves a collection of information subject to the Paperwork Reduction Act (P.R.A.) of 1995 (U.S.C. 3501 et seq.). This collection has been approved by the Office of Management and Budget under control number 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 45 minutes per manual submission on form BXA-748P and 40 minutes per electronic submission. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the P.R.A., unless that collection of information displays a currently valid OMB Control Number.

3. This rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under Executive Order 13132

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military and foreign affairs function of the United States (Sec. 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Therefore, this regulation is issued in final form.

Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis. Comments should be submitted to Sheila Quarterman, Office of Exporter Services, Bureau of Export Administration, Department of Commerce, P.O. Box 273, Washington, DC 20044.

The final rule made the regulations relating to meetings, correspondence, and the agency’s public calendar more concise and understandable to the public, minimized confusion about publicly available information concerning agency meetings, provided more effective disclosure of such information, and allowed FDA to reallocate resources to areas of more urgent public health need. To the extent that 5 U.S.C. 553 applies to this partial stay of effective date, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A). Alternatively, the agency’s implementation of this action without opportunity for public comment, effective immediately upon publication today in the Federal Register, is based on the good cause exceptions in 5 U.S.C. 553(b)(B) and (d)(3). Seeking public comment is impracticable, unnecessary and contrary to the public interest. The partial stay of effective date is necessary to give Department of Health and Human Services officials the opportunity for further review and consideration of new regulations, consistent with the Assistant to the President’s memorandum of January 20, 2001. Seeking prior public comment on this partial stay and amendments would have been impractical, as well as contrary to the public interest in the orderly promulgation and implementation of regulations.

In FR Doc. 01-1566 appearing on page 6465 in the Federal Register of Monday, January 22, 2001, the following correction is made: On page 6465, in the third column, in the fifth line, “[Docket No. 98-1042]” is corrected to read “[Docket No. 98N-1042]”.

As stated in the summary, the rule is stayed until April 23, 2001, in accordance with the memorandum of January 20, 2001, from the Assistant to the President and Chief of Staff, entitled “Regulatory Review Plan,” published in the Federal Register of January 24, 2001. Because the January 22, 2001, rule entitled “Revision of Administrative Practices and Procedures; Meetings and Correspondence, Public Calendars” inadvertently published with an immediate effective date, the mechanism for delaying the effective date is in some instances shown below to temporarily amend the rule to return to the provisions it contained before January 22, 2001.

For the reasons set forth in this document, FDA amends 21 CFR chapter I as follows:

2. Section 10.30(i)(6) is amended by removing “§ 10.65(f)” and by adding in its place “§ 10.65(h)” from January 22, 2001, to April 22, 2001.

3. Section 10.33(k)(6) is amended by removing “§ 10.65(f)” and by adding in its place “§ 10.65(h)” from January 22, 2001, to April 22, 2001.

4. Section § 10.35(h)(6) is amended by removing “§ 10.65(f)” and by adding in its place “§ 10.65(h)” from January 22, 2001, to April 22, 2001.

5. Section 10.40(g)(7) is amended by removing “§ 10.65(f)” and by adding in its place “§ 10.65(h)” from January 22, 2001, to April 22, 2001.

6. Section 10.65 is stayed from January 22, 2001, to April 22, 2001.

7. Section 10.65a is added to subpart B from January 22, 2001, to April 22, 2001, to read as follows:

(a) In addition to public hearings and proceedings established under this part and other sections of this chapter, meetings may be held and correspondence may be exchanged between representatives of FDA and an interested person outside FDA on a matter within the jurisdiction of the laws administered by the Commissioner. Action on meetings and correspondence does not constitute final administrative action subject to judicial review under § 10.45.

(b) The Commissioner may conclude that it would be in the public interest to hold an open public meeting to discuss a matter (or class of matters) pending before FDA, at which any interested person may participate.

(1) The Commissioner shall give public notice through the public calendar described in § 10.100(a) of the time and place of the meeting and of the matters to be discussed, and may also publish notice of the meeting.

(2) The meeting will be informal, i.e., any interested person may attend and participate in the discussion without prior notice to the agency unless the notice of the meeting specifies otherwise.

(3) No official transcript or recording of the meeting will be made unless it appears to the agency that it will be useful. A written memorandum summarizing the substance of the meeting will be prepared by an FDA representative in all cases.

(c) A meeting with a person outside the Department, including a person in the executive or legislative branch of the Federal Government, concerning a pending court case, administrative hearing, or other regulatory action or decision, which involves more than a brief description of the matter, is to be summarized in a written memorandum, which is filed in the administrative file on the matter.

(d) Every person outside the Federal Government may request and obtain a private meeting with a representative of FDA in agency offices to discuss a matter.

(1) The person requesting a meeting may be accompanied by a reasonable number of employees, consultants, or other persons with whom there is a commercial arrangement within the meaning of § 20.81(a). Neither FDA nor any other person may require the attendance of a person who is not an employee of the executive branch of the Federal Government without the agreement of the person requesting the meeting. Any person may attend by mutual consent of the person requesting the meeting and FDA.

(2) FDA will determine which representatives of the Agency will attend the meeting. The person requesting the meeting may request but not require or preclude the attendance of a specific FDA employee.

(3) Whenever appropriate (e.g., the meeting involves a matter covered by paragraph (c) of this section or other important matter, a decision on an issue, or statements or advice or conclusions to which future reference may be desirable), a written memorandum summarizing the substance of the meeting will be prepared by an FDA representative.

(4) A person who wishes to attend a private meeting, but who either is not permitted to attend by the person requesting the meeting or by FDA or who cannot attend because the meeting is conducted by telephone, may obtain a separate meeting with FDA to discuss the same matter or an additional matter.

(e) FDA employees have a responsibility to meet with all segments of the public to promote the objectives of the laws administered by the Agency. In pursuing this responsibility the following general policy applies where agency employees are invited by persons outside the Federal Government to attend or participate in meetings outside agency offices as representatives of the Agency.

(1) A person outside the executive branch may invite an agency representative to attend or participate in a meeting outside agency offices. The agency representative is not obligated to attend or participate, but may do so where it is in the public interest and will promote the objectives of the act.

(2) The agency representative may request that the meeting be open if that would be in the public interest. The agency representative may decline to participate in a meeting held as a private meeting if that will best serve the public interest.

(3) An agency representative may not knowingly participate in a meeting which is closed on the basis of sex, race, or religion.

(4) A meeting, whether open or closed, is subject to paragraph (d)(3) of this section with respect to memoranda summarizing the substance of the meeting.

(f) Representatives of FDA may initiate a meeting or correspondence with any person outside the Federal Government on any matter concerning the laws administered by the Commissioner.

(1) A meeting initiated by FDA representatives which involves a small number of interested persons, for example, a meeting with a petitioner or with two manufacturers of a particular product which requires additional testing or with a trade association employee to discuss an industry labeling problem, may be a private meeting. A meeting initiated by FDA representatives which involves a large number of interested persons, for example, 10 manufacturers of an ingredient in a discussion of appropriate testing or labeling, must be held as an open conference or meeting under paragraph (b) of this section.

(2) Whenever appropriate (e.g., the meeting involves a matter covered by paragraph (c) of this section or another important matter, a decision on an issue, or statements or advice or conclusions to which future reference may be desirable), a written memorandum summarizing the substance of the meeting will be prepared by an FDA representative.

(g) A person who participates in a meeting described in paragraphs (b) through (f) of this section may also prepare and submit to FDA for inclusion in the administrative file a written memorandum summarizing the substance of the meeting.

(h) Memoranda of meetings prepared by an FDA representative or by any other person and all correspondence which relate to a matter pending before the agency will promptly be filed in the administrative file of the proceeding.

(i) A meeting with a representative of Congress relating to a pending or potential investigation, inquiry, or hearing by a congressional committee or a Member of Congress will be summarized in a written memorandum which is to be forwarded to the Food and Drug Administration, Office of Legislative Affairs. This provision does not restrict the right of an agency employee to participate in the meeting.

(j) A meeting of an advisory committee is subject to the requirements of part 14.

(k) Under 42 U.S.C. 2631(a)(8), a log or summary is to be made of all meetings between representatives of FDA and industry and other interested parties to implement the Radiation Control for Health and Safety Act of 1968.

8. Section 10.100 is stayed from January 22, 2001, to April 22, 2001.

9. Section 10.100a is added to subpart B from January 22, 2001, to April 22, 2001, to read as follows:

(a) Prospective public calendar of public proceedings. (1) A public calendar will be prepared and made publicly available each week showing, to the extent feasible, for the following 4 weeks, the public meetings, conferences, hearings, advisory committee meetings, seminars, and other public proceedings of FDA, and other significant public events involving FDA, e.g., congressional hearings.

(2) A copy of this public calendar will be placed on public display in the following places:

(i) Dockets Management Branch.

(ii) Office of the Associate Commissioner for Public Affairs.

(iii) A central place in each center.

(iv) A central place in each field office.

(v) A central place at the National Center for Toxicological Research.

(b) Retrospective public calendar of meetings. (1) A public calendar will be prepared and made publicly available each week showing for the previous week meetings with persons outside the executive branch and other significant events involving the representatives of FDA designated under paragraph (b)(3) of this section, but telephone conversations will be included on an optional basis and meetings with the working press, except for “house organs” (i.e., publications of firms that manufacture or distribute regulated products, or industry associations), and with on-site contractors will not be included. Meetings with members of the judiciary, representatives of Congress, or staffs of congressional committees will be included when the meeting relates to a pending court case, administrative hearing, or other regulatory action or decision and involves more than a brief description of the matter.

(2) The calendar will include all meetings, conferences, seminars, social events sponsored by the regulated industry, and speeches. The calendar will specify the date and the person and subject matter involved. When more than one FDA representative is in attendance, only the presiding or head representative will report the meeting on the public calendar. If a large number of persons is involved, the name of each need not be specified. Meetings that would prejudice law enforcement activities (e.g., a meeting with an informant) or invade privacy (e.g., a meeting with a candidate for possible employment in FDA) will not be reported.

(3) The following FDA representatives and their deputies are subject to the requirements of paragraphs (b)(1) and (2) of this section:

(i) Commissioner of Food and Drugs.

(ii) Deputy Commissioner.

(iii) Associate Commissioners.

(iv) Executive and Special Assistants to the Commissioner.

(v) [Reserved]

(vi) Director, National Center for Toxicological Research.

(vii) Center Directors.

(viii) Chief Counsel for the Food and Drug Administration, or any representative of that office attending on behalf of the Chief Counsel.

(4) A copy of the public calendar will be placed on public display in the following places:

(i) Dockets Management Branch.

(ii) Office of the Associate Commissioner for Public Affairs.

(iii) A central place in each center.

(iv) A central place in each field office.

(v) A central place at the National Center for Toxicological Research.

11. Section 14.20 is amended by adding paragraph (e) from January 22, 2001, to April 22, 2001, to read as follows:

PDMA (Public Law 100-293) was enacted on April 22, 1988, and was modified by the PDA (Public Law 102-353, 106 Stat. 941) on August 26, 1992. The PDMA, as modified by the PDA, amended sections 301, 303, 503, and 801 of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 331, 333, 353, 381) to, among other things, establish requirements for the wholesale distribution of prescription drugs.

Section 503(e)(1)(A) of the act states that each person who is engaged in the wholesale distribution of a prescription drug who is not the manufacturer or an authorized distributor of record for the drug must, before each wholesale distribution of a drug, provide to the person receiving the drug a statement (in such form and containing such information as the Secretary may require) identifying each prior sale, purchase, or trade of the drug, including the date of the transaction and the names and addresses of all parties to the transaction.1 Section 503(e)(4)(A) of the act states that, for the purposes of section 503(e), the term “authorized distributors of record” means those distributors with whom a manufacturer has established an “ongoing relationship” to distribute the manufacturer's products.

On December 3, 1999, the agency published final regulations in part 203 (21 CFR part 203) implementing these and other provisions of PDMA (64 FR 67720). Section 203.50 requires that, before the completion of any wholesale distribution of a prescription drug by a wholesale distributor that is not an authorized distributor of record to another wholesale distributor or retail pharmacy, the seller must provide to the purchaser a statement identifying each prior sale, purchase, or trade of the drug. The identifying statement must include the proprietary and established name of the drug, its dosage, the container size, the number of containers, lot or control numbers of the drug being distributed, the business name and address of all parties to each prior transaction involving the drug, starting with the manufacturer, and the date of each previous transaction. Section 203.3(b) defines “authorized distributor of record” as a distributor with whom a manufacturer has established an ongoing relationship to distribute the manufacturer's products. “Ongoing relationship” is defined in § 203.3(u) to mean an association that exists when a manufacturer and a distributor enter into a written agreement under which the distributor is authorized to distribute the manufacturer's products for a period of time or for a number of shipments. If the distributor is not authorized to distribute a manufacturer's entire product line, the agreement must identify the specific drug products that the distributor is authorized to distribute.

Thus, the final rule requires unauthorized distributors (i.e., those distributors who do not have a written authorization agreement) to provide a drug origin statement to purchasers showing the entire prior sales history of the drug back to the first sale by the manufacturer. As discussed in the preamble to the final rule (64 FR 67720 at 67747), manufacturers and authorized distributors of record are not required to provide an identifying statement when selling a drug, although the agency encouraged them to do so voluntarily to permit unauthorized distributors to continue to be able to purchase products from them.2

Section 503(c)(3)(A) of the act states that no person may sell, purchase, or trade, or offer to sell, purchase, or trade any prescription drug that was purchased by a public or private hospital or other health care entity. Section 503(c)(3)(B) of the act states several exceptions to section 503(c)(3)(A), none of which are relevant to this discussion. Section 503(c)(3) of the act also states that “[f]or purposes of this paragraph, the term ‘entity' does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law.”

Section 203.20 of the final rule provides, with certain exceptions, that no person may sell, purchase, or trade, or offer to sell, purchase, or trade any prescription drug that was purchased by a public or private hospital or other health care entity or donated or supplied at a reduced price to a charitable organization. In § 203.3(q) of the final rule, “Health care entity” is defined as meaning any person that provides diagnostic, medical, surgical, or dental treatment, or chronic or rehabilitative care, but does not include any retail pharmacy or wholesale distributor. Under both the act and the final rule, a person could not simultaneously be a health care entity and a retail pharmacy or wholesale distributor. Thus, under the final rule, blood centers functioning as health care entities could not engage in wholesale distribution of prescription drugs, except for blood and blood components intended for transfusion, which are exempt from the PDMA under § 203.1 of the final rule. Blood and blood components include whole blood, red blood cells, platelets, and cryoprecipitated antihemophilic factor, which are prepared by blood banks who collect blood from donors and separate out the components using physical or mechanical means. Blood derivatives are derived from human blood, plasma, or serum through a chemical fractionation manufacturing process. Examples of blood derivative products include albumin, antihemophilic factor, immune globulin, and alpha-1 anti-tripsin. As discussed in the preamble to the final rule in response to comments (64 FR 67720 at 67725 through 67727), blood derivative products are not blood or blood components intended for transfusion and therefore could not be distributed by health care entities, including full service blood centers that function as health care entities, after the final rule goes into effect.

After publication of the final rule, the agency received letters and petitions and had other communications with industry, industry trade associations, and members of Congress objecting to the provisions in §§ 203.3(u) and 203.50. On March 29, 2000, the agency met with representatives from the wholesale drug industry and industry associations to discuss their concerns. In addition, FDA received a petition for stay of action requesting that the relevant provisions of the final rule be stayed until October 1, 2001. The agency also received a petition for reconsideration from the Small Business Administration requesting that FDA reconsider the final rule and suspend its effective date based on the severe economic impact it would have on more than 4,000 small businesses.

In addition to the submissions on wholesale distribution by unauthorized distributors, the agency received several letters on, and held several meetings to discuss, the implications of the final regulations for blood centers that distribute blood derivative products and provide health care as a service to the hospitals and patients they serve. The blood center industry asserts that the regulations, and particularly the definition of “health care entity,” will severely inhibit their ability to provide medical care and services to the detriment of client hospitals and the patients they serve, and may disrupt the distribution of blood derivatives to the public. The agency also received a letter from Congress on this issue.

Based on the concerns expressed by industry, industry associations, and Congress about implementing §§ 203.3(u) and 203.50 by the December 4, 2000, effective date, the agency published a document in the Federal Register of May 3, 2000 (65 FR 25639), delaying the effective date for those provisions until October 1, 2001. In addition, the May 2000 document delayed the applicability of § 203.3(q) to wholesale distribution of blood derivatives by health care entities until October 1, 2001. The May 2000 document also reopened the administrative record and gave interested persons until July 3, 2000, to submit written comments. As stated in the May 2000 document, the purpose of delaying the effective date for these provisions was to give the agency time to obtain more information about the possible consequences of implementing them and to further evaluate the issues involved.

On May 16, 2000, the House Committee on Appropriations (the Committee) stated in its report accompanying the Agriculture, Rural Development, FDA, and Related Agencies Appropriations Bill, 2001 (H. Rept. 106-619) that it supported the “recent FDA action to delay the effective date for implementing certain requirements of the Prescription Drug Marketing Act until October 1, 2001, and reopen the administrative record in order to receive additional comments.” In addition, the Committee stated that it “believes the agency should thoroughly review the potential impact of the proposed provisions on the secondary wholesale pharmaceutical industry.” The Committee directed the agency to provide a report to the Committee by January 15, 2001, summarizing the comments and issues raised and agency plans to address the concerns.

After issuing the delay of the effective date for the relevant requirements of the final rule, the agency decided that it would be in the public interest to hold a public hearing to elicit comment on the requirements from interested persons. In the Federal Register of September 19, 2000 (65 FR 56480), the agency announced that a public hearing would be held on October 27, 2000, to discuss the requirements at issue (i.e., the requirements for unauthorized distributors and the provisions relating to distribution of blood derivatives by health care entities). The document set forth the purpose of the hearing and the procedure by which individuals could make a presentation at the hearing. In addition, the document set forth questions the agency wanted hearing participants and comments to address. The hearing was held on October 27, 2000, and comments were accepted until November 20, 2000.

As discussed in section I of this document, the House Committee on Appropriations has directed the agency to provide a report to the Committee by January 15, 2001, summarizing the comments and issues raised and agency plans to address the concerns. The agency is currently considering the comments and testimony received and preparing its report to Congress. If the agency determines that some type of action is appropriate, this action could take the form of a change or modification to the final rule initiated by the agency or a legislative change initiated by Congress. Obviously, it would take a significant amount of time beyond January 15, 2001, to initiate and carry out either change. The agency believes that a legislative change to the act could take well into the 2001 calendar year.

In its hearing testimony and in a letter submitted on November 3, 2000, the Pharmaceutical Distributors Association3 noted that if the final rule were to apply to drugs already in distribution as of the effective date of the final rule, a significant number of these drugs would have to be taken out of distribution because of the absence of a proper pedigree. The association specifically stated that if the final rule as published were to go into effect October 1, 2001, distributors would need to stop buying drugs that do not have the required pedigree under the final rule and would have to begin to exhaust existing inventories of drugs that do not have acceptable pedigrees by the beginning of the year 2001 to avoid economic harm. The association specifically sought a decision by the agency that the final rule not apply to prescription drugs already in distribution as of the effective date so those drugs could be distributed.

FDA acknowledges the concerns of the Pharmaceutical Distributors Association and has decided that, in light of the uncertainty regarding how to resolve the issues involved and the possible adverse consequences that could result from implementation of the relevant provisions of the final rule, it is reasonable and appropriate to delay the effective date of §§  203.3(u) and 203.50 for another 6 months until April 1, 2002. Additionally, the agency has decided to delay the applicability of § 203.3(q) to wholesale distribution of blood derivatives by health care entities until April 1, 2002. This delay will allow time for the agency to make its recommendations to Congress, for Congress to evaluate those recommendations, and, depending on the decisions of the agency and Congress, for a regulatory or legislative change to address the issues raised. Although a further delay of the effective date of the relevant provisions of the final rule is not the exact relief requested by the Pharmaceutical Distributors Association, the agency believes that it accomplishes the same purpose in that it will permit unauthorized distributors to operate for an additional 6 months without concern that the drugs in their inventory may become illegal to distribute and therefore valueless. All other provisions of the PDMA final rule became effective on December 4, 2000. This action should not be construed to indicate that FDA necessarily agrees with or has made decisions about the substantive arguments made in the petitions and other submissions related to implementation of §§ 203.3(u) and 203.50, or § 203.3(q), as it applies to wholesale distribution of blood derivatives by health care entities.

This action is being taken under FDA's authority under 21 CFR 10.35(a). The Commissioner of Food and Drugs finds that this further delay of the effective date is in the public interest.

The final regulations (TD 8934) that are the subject of these corrections are under section 1275 of the Internal Revenue Code.

As published the final regulations (TD 8934) contain errors that may prove to be misleading and are in need of clarification.

Accordingly, the publication of the final regulations (TD 8934), which were the subject of FR Doc. 01-622, is corrected as follows:

On page 2813, column 2, in the preamble under the heading “(2) Yield Test”, second line from the bottom of the column the language “pecent test in the proposed regulations” is corrected to read “percent test in the proposed regulations”.

27 CFR Part 21 contains listings of information relating to the formulation of CDA, SDA, and SDR, to the specifications for denaturants and to the denaturants authorized for use in the formulation of CDA, SDA, and SDR. ATF is authorized under § 5242 of the Internal Revenue Code of 1986 to prescribe the character and quantity of approved denaturing materials. Pursuant to § 21.91, ATF may authorize substitutions or variations from the specified list of denaturants upon application filed with ATF by the denaturer. This final rule amends Part 21 by incorporating additional denaturants that have been approved pursuant to such applications. Additionally, this final rule incorporates several technical corrections.

ATF Ruling 94-4 approved the use of heptane as a substitute denaturant for toluene in SDA Formula No. 2-B (SDA 2-B) and alpha terpineol as a substitute denaturant in SDA Formula No. 38-B (SDA 38-B).

Heptane is currently approved as a substitute denaturant for rubber hydrocarbon solvent in SDA 28-A. This ruling allows for the use of heptane as a substitute, on an equal (1:1) basis, for any one of the denaturants (toluene, benzene or rubber hydrocarbon solvent) in SDA 2-B.

Alpha terpineol, having similar specifications to those of pine oil, N.F., an approved denaturant for SDA 38-B, is now approved for use as a substitute denaturant in SDA 38-B.

This final rule removes the proprietary brand name “BITREX” each place it appears in parts 19 and 21. The use of the proprietary brand name “BITREX” in conjunction with the approved denaturant denatonium benzoate, N.F. may be mistakenly considered a product endorsement by ATF over all over proprietary names.

27 CFR 21.6 and 21.141 are amended to correctly cite referenced information.

On July 31, 1996, ATF published a notice of proposed rulemaking (Notice No. 832, 61 FR 39929-39931) to solicit public comment on regulations to update the information provided in parts 19 and 21 relating to the formulation of CDA, SDA, and SDR; the denaturants authorized for use in the manufacturing of these formulations; and the specifications for these denaturants. The comment period closed on September 30, 1996.

ATF did not receive any comments in response to Notice 832, therefore, most of the amendments proposed in Notice No. 832 have been adopted in this final rule.

The provisions of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR part 1320, do not apply to this final rule because there are no new reporting or recordkeeping requirements.

It is hereby certified that this final rule will not have a significant economic impact on a substantial number of small entities. The regulations provide industry members with the most current listings of denaturants, denatured alcohol and rum formulations and their specifications. The regulations will not increase recordkeeping or reporting requirements. Accordingly, a regulatory flexibility analysis is not required because this final rule will not have a significant economic impact on a substantial number of small entities. Pursuant to section 7805(f) of the Internal Revenue Code, the NPRM preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration, for comment on its impact on small business. The Chief Counsel for Advocacy did not submit any comments.

It has been determined that this final rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, a regulatory assessment is not required.

The principal author of this document is Lisa M. Gesser, Regulations Division, Bureau of Alcohol, Tobacco and Firearms.

To the extent that 5 U.S.C. section 553 applies to this action, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. section 553(b)(A). Alternatively, the Department of Justice's implementation of this action without opportunity for public comment, effective immediately upon publication today in the Federal Register, is based on the good cause exceptions in 5 U.S.C. section 553(b)(B) and 553(d)(3). Seeking public comment is impracticable, unnecessary, and contrary to the public interest. The temporary 60-day delay in effective date is necessary to give Department of Justice officials the opportunity for further review and consideration of new regulations, consistent with the Assistant to the President's memorandum of January 20, 2001. Given the imminence of the effective date, seeking prior public comment on this temporary delay would have been impractical, as well as contrary to the public interest in the orderly promulgation and implementation of regulations. The imminence of the effective date is also good cause for making this action effective immediately upon publication.

The Basic Active Duty Dependents Dental Benefits Plan was implemented on August 1, 1987, allowing Uniformed Service personnel, on active duty for periods of greater than thirty (30) days, to voluntarily enroll their dependents in a basic dental health care plan. Under this plan, DoD shared the cost of the premium with the active duty service member. Although the plan was viewed as a major step in benefit enhancement for Uniformed Service families, there were still complaints that the enabling legislation was too restrictive in scope and that there should be expansion of services to better meet the dental needs of the Uniformed Service family.

Congress responded to these concerns by authorizing the Secretary of Defense to develop and implement an Expanded Active Duty Dependents Dental Benefit Plan (The Defense Authorization Act For Fiscal Year 1993, Pub. L. 102-484, sec. 701). The provisions of this Act specified the expanded benefit structure, as well as maximum monthly premiums for enrollees. Cost-sharing levels for the expanded benefits were left up to the discretion of the Secretary of Defense after consultation with the other Administering Secretaries. The provisions of this Act were implemented on April 1, 1993.

Thereafter, Congress granted legislative authority to allow the Secretary of Defense to expand the dental plan outside the United States and to provide one (1) year of continued dental coverage for enrolled dependents of service members who die while on active duty (The Defense Authorization Act For Fiscal Year 1995, Pub. L. 103-337, sec. 703). In addition, the Congress granted subsequent legislative authority to allow the Secretary of Defense to waive or reduce the cost-shares in overseas locations (The Defense Authorization Act For Fiscal Year 1998, Pub. L. 105-85 sec. 732).

In Fiscal Year 1999, the Congress authorized a methodology by which the enrollee's share of the premium could be increased. This methodology is tied to the lesser of the percent increase in the basic pay of active duty servicemembers or the basic pay for statutory pay systems plus one-half percent. In authorizing language, the Secretary of Defense could apply this premium increase methodology as if it had been in place continuously since December 31, 1993. To allow for an expanded and more comprehensive benefit, the Department will apply this premium increase methodology as authorized. The language further instructed the Secretary of Defense to advise the Congress of any plans to reduce dental plan benefits and to wait one (1) year, after notification, before any benefits could be reduced (The Defense Authorization Act For Fiscal Year 1999, Pub. L. 105-261, sec. 701).

In Fiscal Year 2000, the Congress authorized the establishment of the TRICARE dental program (TDP), by striking 10 U.S.C. 1076a (Dependents' dental program) and 10 U.S.C. 1076b (Selected Reserve dental insurance) and inserting a revised section 1076a, TRICARE dental program (The Defense Authorization Act For Fiscal Year 2000, Pub. L. 106-65, sec. 711). Language in this revision directed the Secretary of Defense to establish a voluntary enrollment dental insurance plan for members of the Selected Reserve of the Ready Reserve (the former Selected Reserve dental insurance plan or more commonly referred to as the TRICARE Selected Reserve Dental Program or TSRDP) and for members of the Individual Ready Reserve described in 10 U.S.C. 10144(b). It also provided authorizing language to allow the Secretary of Defense to establish a dental insurance plan for eligible dependents of Uniformed Service members who are on active duty for periods of greater than thirty (30) days (the former Dependents' dental plan or more commonly referred to as the TRICARE Family Member Dental Plan or TFMDP), members of the Individual Ready Reserve as described in 10 U.S.C. 10144(a), and eligible dependents of members of the Ready Reserve of the Reserve components who are not on active duty for more than thirty (30) days. Essentially, the authorizing language combined the eligible populations of the TFMDP and TSRDP and added, as eligibles, members of the Individual Ready Reserve and dependents of members of the Selected Reserve and Individual Ready Reserve. Additionally, the Congress directed that the insurance plans for the dependents of active duty members and for the members of the Selected Reserve and Individual Ready Reserve (as described in 10 U.S.C. 10144(b)) would be premium sharing plans between the enrollee and the Government. Beneficiaries eligible to enroll in the remaining insurance plans would be required to pay the full premium as a condition of enrollment. To allow for greater participation in the TDP, the Congress allowed the member's share of the premium to be paid from their basic or reserve pay accounts or, for those who do not receive such pay, through payment procedures as specified by the Department. The Congress also authorized waiver of dental plan requirements for surviving dependents of members of the Ready Reserve if the dependent was enrolled in the dental plan on the date of death of the member. This revised the previous waiver authority that applied only to enrolled surviving dependents of active duty members.

These legislative provisions have been codified in 10 U.S.C. 1076a, TRICARE dental program, and are reflected in the regulatory provisions of this final rule. By striking 10 U.S.C. 1076b, its implementing regulation, 32 CFR 199.21, TRICARE Selected Reserve Dental Program (TSRDP), is also removed and reserved.

The below programmatic improvements will be effective once the follow-on TDP contract has been awarded and the performance period has begun. At the present time, the performance period is expected to begin on February 1, 2001.

With the authorizing legislation (The National Defense Authorization Act for Fiscal Year 2000), the final rule extends TDP coverage to newly eligible populations. This is an important step towards improving Reserve member's dental readiness and in promoting proper oral health across the beneficiary population. Designed to be a uniform benefit across all enrollees, the TDP offers a comprehensive benefit package with a strong focus on preventive and diagnostic services as well as pediatric and adolescent oral health. By extending coverage to the members of the Individual Ready Reserve and the dependents of the Selected Reserve and the Individual Ready Reserve and by offering a comprehensive dental benefit to the members of the Selected Reserve (versus the limited benefit previously available under the TSRDP), the Department and the Reserve components continue on the path towards parity with dental insurance plans historically extended only to dependents of the Active component. This final rule also addresses several administrative clarifications that distinguish dental plan requirements for the different beneficiary populations.

Since the TFMDP (and its earlier versions) began, the Uniformed Services have administered the TFMDP dental plan enrollment, disenrollment and eligibility determination functions. The complexities of the dental plan, combined with a high turnover rate of relatively inexperienced Service personnel and other competing responsibilities, separate Service procedures, databases and data transfer processes, high cost and lengthy delays in software modifications, and Uniformed Service personnel downsizing, created the need for a centralized and uniform enrollment process. This can be best achieved by an experienced dental plan contractor and will allow service members to contact one (1) organization to enroll, disenroll, reenroll and discuss other TDP benefit and claims adjudication issues. By allowing the contractor to administer the enrollment function across all of the Uniformed Services, enrollment becomes portable whereas the current system supporting the TFMDP does not allow an active duty member from one (1) Service to enroll his or her family members through a separate Service. Contractor enrollment will also simplify the payroll deduction and eligibility determination process and reduce the possibility of waste and abuse at the local level. In addition, it maintains a stable, trained work force at the front end of the TDP and greatly improves customer service.

An added benefit to contractor enrollment will be the elimination of the current required TFMDP Uniformed Service enrollment forms. The complex DD Form 2494, Active Duty Dependent Dental Plan Enrollment Form, and the DD Form 2494-1, Supplemental Active Duty Dependent Dental Plan Enrollment Form, will no longer be needed and will be replaced by a standard, simplified contractor enrollment form as well as telephonic and fax enrollment options.

Contractor enrollment has proven to be a success with the TRICARE Managed Care Support contractors as well as with contracted enrollment via the TSRDP and the TRICARE Retiree Dental Program (TRDP). The Uniformed Services will continue, as with the former dental plans and current TRICARE/CHAMPUS programs, to determine eligibility for the dental plan and process any changes regarding eligibility through the Defense Enrollment Eligibility Reporting System (DEERS).

The current TFMDP is financed through premiums jointly paid by the Government and the active duty service member. The active duty service member's share of the premiums is deduced from their payroll accounts. In certain situations, otherwise eligible dependents are precluded from enrolling in the dental plan if their sponsor does not have an active payroll account or has insufficient funds in that account. These eligible dependents include dependents of incarcerated sponsors and survivors. By allowing the contractor to directly bill these dependents for their premium share, dependents previously excluded from enrollment can now receive coverage. With the authorizing legislation (The National Defense Authorization Act for Fiscal Year 2000), this improvement eliminates a previous enrollment termination provision in the regulation where eligibility for basic pay was a deciding criterion for continued enrollment in the dental plan. The provision of contractor direct billing is also extended to those Reserve component members and family members who are in similar situations.

A mandatory enrollment period is an essential factor behind Government and contractor actuarial estimates in developing the TDP premium and provides a guarantee to the contracting community that they will collect a certain amount of premiums for the potential benefit payout. The final rule reduces the previous longstanding TFMDP twenty-four (24) month mandatory enrollment period to twelve (12) months under the TDP since this twenty-four (24) month period precluded numerous, otherwise eligible, active duty dependents from enrolling in the dental plan. These eligible dependents include newly eligible dependents of active duty members who are near the end of their active service, dependents of enlisted service members who are outside of their re-enlistment window of opportunity, and dependents of Reserve/Guard personnel called to active duty for less than twenty-four (24) months (such as Reserve/Guard personnel on active duty for training and special assignments). Reduction to a twelve (12) month enrollment period for the TDP has a precedent with other TRICARE plans, to include the TRICARE Managed Care Prime option and the TSRDP. By introducing this more liberal enrollment period, the regulation also calls for a twelve (12) month “lock-out” if the beneficiary disenrolls before completing the twelve (12) month enrollment period for any unauthorized reason or if the beneficiary fails to pay their premiums. A twelve (12) month lock-out period also applies to a Reserve component member who disenrolls before completing the special mandatory enrollment period for Reserve component members ordered to active duty in support of a contingency operation as provided in paragraph (c)(3)(ii)(C)(2) of this final rule. This “lock-out” period has a precedent with other commercial dental insurance plans as well as the TRICARE Managed Care Prime option, the TSRDP and the TRDP. “Lock-out” periods also discourage potential beneficiaries from enrolling in an insurance plan, receiving all of their benefit in a few months and then disenrolling without paying a full twelve (12) months' worth of premiums.

Beneficiaries enrolled in the TFMDP and TSRDP at the time when TDP coverage begins must complete their respective two (2) and one (1) year enrollment periods established under those superseded plans except if one of the conditions for valid disenrollment applies. Once these original enrollment periods are met, the beneficiary may continue TDP enrollment on month-to-month basis. A new one (1) year enrollment period will only be incurred if the beneficiary disenrolls and attempts to reenroll in the TDP at a later date.

The regulations provides that the twelve (12) month enrollment period shall not apply to eligible dependents of Reserve component sponsors ordered to active duty for more than thirty (30) days but less than twelve (12) months (other than for training) in support of a contingency operation as defined in 10 U.S.C. 101(a)(13). Orders may be issued under statutory authorities for recalling Reserve component members to active duty, but must specify that the member is serving in support of a specific contingency operation under the statutory definition. This desperate treatment for certain Reserve component members is necessary because of the involuntary nature of their call to active duty and statutory limitations on their period of active duty.

By contrast, active duty members are enlisted, reenlisted or commissioned for periods of active duty longer than one (1) year. The active duty member has the option to enroll eligible dependents at any time during that period of active duty prior to the last twelve (12) months of service, and at a relatively constant premium cost. Similarly, other Reserve component members generally volunteer for call to active duty and serve for at least one (1) year; therefore they will have the option to enroll family members at any time other than in the last twelve (12) months of that service.

However Reserve component members ordered to active duty in support of a contingency operation are normally limited by statute to a period of active duty of nine (9) months or less. While 38 U.S.C. Chapter 43 provides that a Reserve component member who has coverage under a civilian employer sponsored dental program may elect to continue that coverage during a period of active duty, for up to eighteen (18) months; if serving for more than thirty (30) days, the member may be required to pay the full premium cost with employer cost-sharing no longer required. Upon release from active duty, 38 U.S.C. Chapter 43, provides that the Reserve component member may be reinstated in his or her civilian employer sponsored program without a waiting period. Without an exception to the mandatory twelve (12) month enrollment period for TDP, members who cannot afford to pay the full premium for continuing their civilian plan would be unable to provide dental insurance coverage for their family members while on active duty. This exclusion to the twelve (12) month enrollment period is therefore necessary to preclude such prejudicial treatment of Reserve component members ordered to active duty for less than twelve (12) months to support a contingency operation. In its place, a separate enrollment period is created for the Reserve component member as provided in paragraph (c)(3)(ii)(C)(2) if this final rule.

Although certain cost-shares are mandated by law, the Secretary of Defense has the prerogative to adjust cost-shares for certain types of dental procedures. Available data shows that our lower-paid enlisted families are reluctant to pursue specialized dental care because of the amount of their cost-share. To allow greater participation and dental benefit utilization among our younger enlisted families, this regulation would have a two-tiered maximum cost-share dependent on the service member's pay grade. With the rates below, this reduction for enlisted service members does not have a measurable effect on the overall premium.

A reduction in cost-shares has been chosen over a reduction in premium rates for enlisted service members in these pay grades because the premium rates have traditionally been affordable as compared to similar dental benefits programs administered by commercial dental insurance plans and given the fact that the Government pays sixty (60) percent of the total premium for dependents of active duty members and members of the Selected Reserve and the Individual Ready Reserve (as described in 10 U.S.C. 10144(b)). As such, the greatest effect on participation and utilization can best be achieved through a reduction in cost-shares.

Under the final rule, previous TFMDP enrollment options have been simplified to assist the beneficiary, Government, provider of care and the dental plan contractor. Under the TFMDP (and previous plans), dependents were asked to choose from several different enrollment options depending on whether they had children under the age of four (4). With the advance in pediatric dentistry (pedodontics), dental care for children between the ages of one (1) and four (4) is highly recommended. As such, the dental plan contractor will offer sponsors the opportunity to enroll these particular dependents when eligibility information indicates a dependent is one (1) year of age or older. Although there will continue to be two (2) separate premiums, a “single” premium for one (1) covered life, and a “family” premium for more than one (1) covered life, providing additional exceptions to this rule based on age will advance pediatric care among our beneficiary population, simplify enrollment processing by the dental plan contractor and promote greater understanding of enrollment options by all parties. A discussion of these enrollment policies and options will be found in the TDP contractor's benefit booklet.

Local anesthesia, in conjunction with other covered dental procedures, is considered integral to the procedure itself and has been covered for several years. Other anesthesia services were historically excluded due to their high cost. The regulation allows the Department to add other types of anesthesia services to the TDP benefit package.

This final rule provides clarification on the Department's use of the Congressional waiver for surviving dependents. Since 1993, the Department has used the waiver authority to provide one (1) year of continued TFMDP enrollment at Government expense to eligible dependents of active duty members who die while on active duty for a period of thirty-one (31) days or more. To receive the continued enrollment at Government expense, the eligible dependents must have been enrolled in the TFMDP at the time of the active duty member's death. With the authority in the National Defense Authorization Act for Fiscal Year 2000, the final rule clarifies how the waiver will be used and extends use of the waiver to enrolled dependents of deceased members of the Selected Reserve and the Individual Ready Reserve (as described in 10 U.S.C. 10144(b)).

Under the TDP, the Department wishes to procure a responsive, simple, and two (or greater) tiered appeals program within the dental plan contractor's operation. We have had similar success with this approach under the TSRDP and the TRDP, where the contractors administer the first two (2) levels of the appeals program, which are termed the initial determination and the reconsideration. Under the TDP, the appealing parties would appeal adverse decisions through the contractor's established appeal process where separate parties would perform the initial determination and reconsideration reviews (whether internal or external to the organization). The final levels of review would be, as before, to the Department, subscribing to guidelines under the Formal Review and Hearing procedures listed in 32 CFR 199.10.

The programmatic improvements are scheduled to take effect when the follow-on TDP contract to the current TFMDP contact is awarded and the performance period begins. Operations under the current TSRDP contract will also cease at that time. Considering the magnitude of the planned improvements, the Department plans to “phase-out” operations under the former contractors and methods of operation to accommodate late claims processing and to allow the Uniformed Services time to process retroactive enrollment and coverage information to assist our beneficiaries. This “phase-out” schedule will be jointly determined between the Department and the outgoing and incoming dental plan contractors.

The final rule incorporates several administrative changes. There is revised language on Federal preemption of State and local laws that conforms the dental regulation language to reflect the Department's previous exercise of statutory authority in this area. Other changes include: widespread publication of premium rates; allowing the Department to modify the benefit package based on developments in common dental care practices and standard dental insurance plans; permitting the dental plan contractor to pay “by report” procedures by providing an additional allowance to the primary covered procedure; removing detailed descriptions of types of authorized providers in favor of more general language; updating dental terminology to be consistent with the American Dental Association's Council on Dental Care Program's Code on Dental Procedures and Nomenclature; and, reorganizing and adding language on the maximum amount payable by the TDP.

The final rule incorporates plan name and other changes to reflect current terminology, such as outdated references to the former TRICARE Management Activity address, “Active Duty Dependent Dental Plan”, “TRICARE Family Member Dental Plan”, “TRICARE Selected Reserve Dental Plan” and superceded regulations. It also reduces redundant language and reduces the overall size of the regulation through cross-references to applicable language appearing in other CFR sections. This includes references to appeals, fraud and abuse, eligibility, and adjunctive dental care as well as information on the former dental plans. Items that are more appropriate for inclusion in the actual contract statement of work have also been removed and transferred to that document. This includes equality of benefit processing, coordination of benefits, participating provider lists, Government review of billing practices, and how a Dental Explanation of Benefits should be structured. Finally, the regulation has been reorganized for better flow, ease of reading and understanding.

The proposed rule was published in the Federal Register on Wednesday, November 24, 1999, (64 FR 66126). We received one (1) comment letter. We thank the commenter and their organization; items raised by the commenter and our analysis of the comments are summarized below.

The commenter recognized that there were numerous problems in the current enrollment and eligibility system that supports the TFMDP. They believe though that the Department should totally absorb any increased costs related to the contractor's enrollment function under the TDP.

Response: Under the law, 10 U.S.C. 1076a, the Congress authorized that the dental plans offered will be “premium sharing plans” and “full premium plans”. As such, the Department must share in the cost of all programmatic improvements, to include contractor enrollment, for the majority of the enrollees.

The commenter suggested that, if problems persist with enrollment and eligibility processing under the TDP and which cannot be swiftly handled by the dental contractor, consideration should be given to establishing some form of beneficiary counselor that would act on behalf of the beneficiary.

Response: As with the current contracts, the Department is committed to assisting TDP beneficiaries if problems occur. Representatives from the Uniformed Services (to include Health Benefits Advisors), the Finance Centers, the Defense Manpower Data Center and the TRICARE Management Activity will all be available to act on our beneficiaries' behalf, if needed.

The commenter asked if there are any provisions in the TDP to assist deployed service members with enrollment issues.

Response: Numerous options exist under the TDP to assist deployed service members. These include web-based and electronic mail capabilities, additional toll-free lines, extended hours of operation, and use of commercial business practices that allow representatives of the sponsor to act on enrollment issues during the sponsor's absence.

The commenter requested that enrollees be offered the option to enroll their children who reach the age of four (4) stating that the increase in premium by moving to a family premium will result in more junior service members opting out of the plan.

Response: Under the current TFMDP, when a child reaches four (4) years old, they are automatically enrolled. This has not been a cause of concern with current enrollees nor has it led to measurable disenrollments. Continuing this in the TDP is in keeping with the accepted standards and direction of pediatric and adolescent dentistry, which recommends early preventive and diagnostic intervention and distinct care at set age intervals.

The commenter requested that the final rule contain specific language that the Government will pay premiums for enrolled survivors for the one (1) year period following the sponsor's death.

Response: We appreciate the comment and have clarified this in the final rule.

The commenter questioned eligibility language regarding a child who becomes a re-eligible for TDP benefits because the child's marriage ends before the child is twenty-one (21) years of age and who loses eligibility at twenty-one (21) years of age. The commenter stated that this language was inconsistent with eligibility up to age twenty-three (23) if the child is a full-time student.

Response: Full-time student eligibility for the TDP up to age twenty-three (23) is listed in the final rule by cross-reference to 32 CFR 199.3(b)(2)(iv)(C).

The commenter was opposed to language regarding the provision of alternative delivery systems and potential implementation of these systems under the TDP. Their concern was that alternative delivery systems would limit beneficiaries to a dental health maintenance organization, preclude beneficiary choice of dental providers, allow such entities as Morale, Welfare and Recreation and Exchange organizations the opportunity for increased profits if they were designated as alternative delivery systems, and that both quality and cost could be compromised by the implementation of a closed system.

Response: The alternative delivery system language has been in this regulation since 1988. To date, this provision has not been utilized as the Department supports a traditional network-oriented dental indemnity insurance plan over other forms of managed care. The principle of provider choice is an important element of this regulation as well as the TDP contract and the Department has no immediate plans to engage in “closed” systems. The Department does reserve the right to explore alternative delivery systems in the form of demonstrations or pilot programs if the Congress believes this would be in the beneficiary's best interest.

Executive Order 12866 requires certain regulatory assessments for any “significant regulatory action” defined as one that would result in an annual effect on the economy of $100 million or more, or have other substantial impacts. The Regulatory Flexibility Act (RFA) requires that each federal agency prepare, and make available for public comment, a regulatory flexibility analysis when the agency issues a regulation which would have a significant impact on a substantial number of small entities.

This final rule is not a significant regulatory action under Executive Order 12866. The changes set forth in this final rule are minor revisions to the existing regulation. Since this final rule does not impose information collection requirements, it does not need to be reviewed by the Executive Office of Management and Budget under authority of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

Section 301, in conjunction with sections 110 and 111(c)(1) of the Clean Air Act as amended November 15, 1990, authorize EPA to delegate authority to implement and enforce the standards set out in 40 CFR part 60, New Source Performance Standards (NSPS).

On May 20, 1977, the EPA initially delegated the authority for implementation and enforcement of the NSPS program to Knox County. This agency has subsequently requested a delegation of authority for implementation and enforcement of the previously adopted, undelegated part 60 NSPS categories listed below as well as future NSPS categories codified in 40 CFR part 60.

Delegation Requested on May 8, 1997:

Delegation Requested on October 18, 1996:

All current NSPS categories are delegated with the exception of the following sections within those subparts that may not be delegated. Future NSPS regulations will contain a list of sections that will not be delegated for that subpart.

1. Subpart A—§ 60.8(b) (2) and (3), § 60.11(e) (7) and (8), § 60.13 (g), (i) and (j)(2).

2. Subpart B—§ 60.22, § 60.27, and § 60.29.

3. Subpart Da—§ 60.45a.

4. Subpart Db—§ 60.44b(f), § 60.44b(g), § 60.49b(a)(4).

5. Subpart Dc—§ 60.48c(a)(4).

6. Subpart Ec—§ 60.56(c)(i).

7. Subpart J—§ 60.105(a)(13)(iii), § 60.106(i)(12).

8. Subpart Ka—§ 60.114a.

9. Subpart Kb—§ 60.111b(f)(4), § 60.114b, § 60.116b(e)(3) (iii) and (iv), § 60.116b(f)(2)(iii).

10. Subpart O—§ 60.153(e).

11. Subpart EE—§ 60.316(d).

12. Subpart GG—§ 60.334(b)(2), § 60.335(f)(1).

13. Subpart RR—§ 60.446(c).

14. Subpart SS—§ 60.456(d).

15. Subpart TT—§ 60.466(d).

16. Subpart UU—§ 60.474(g).

17. Subpart VV—§ 60.482-1(c)(2) and § 60.484.

18. Subpart WW—§ 60.496(c).

19. Subpart XX—§ 60.502(e)(6).

20. Subpart AAA—§ 60.531, § 60.533, § 60.534, § 60.535, § 60.536(i)(2), § 60.537, § 60.538(e), § 60.539.

21. Subpart BBB—§ 60.543(c)(2)(ii)(B).

22. Subpart DDD—§ 60.562-2(c).

23. Subpart III—§ 60.613(e).

24. Subpart NNN—§ 60.663(e).

25. Subpart RRR—§ 60.703(e).

26. Subpart SSS—§ 60.711(a)(16), § 60.713(b)(1)(i), § 60.713(b)(1)(ii), § 60.713(b)(5)(i), § 60.713(d), § 60.715(a), § 60.716.

27. Subpart TTT—§ 60.723(b)(1), § 60.723(b)(2)(i)(C), § 60.723(b)(2)(iv), § 60.724(e), § 60.725(b).

28. Subpart VVV—§ 60.743(a)(3)(v)(A) and (B), § 60.743(e), § 60.745(a), § 60.746.

29. Subpart WWW—§ 60.754(a)(5).

After a thorough review of the request, the Regional Administrator determined that such a delegation was appropriate for all source categories. All sources subject to the requirements of 40 CFR part 60 will now be under the jurisdiction of the appropriate above mentioned agency.

Since review of the pertinent laws, rules, and regulations for the local agency has shown them to be adequate for implementation and enforcement of existing, previously adopted, undelegated NSPS and future NSPS, EPA hereby notifies the public that it has delegated the authority for existing, previously adopted and undelegated NSPS as well as the mechanism for delegation (adopt-by-reference) of future NSPS source categories upon publication of this Federal Register document.

The Office of Management and Budget has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

The Congressional Review Act, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.), generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. However, Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the Congressional Review Act if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement. 5 U.S.C. 808(2). As stated previously, EPA has made such a good cause finding, including the reasons therefor, and established an effective date of March 1, 2001. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

We are publishing these rule amendments without a prior proposal because we consider this to be noncontroversial amendment, given the Court's decision, and we do not expect to receive any adverse comment. We believe that this change to the previously promulgated rule adequately addresses the Court's direction expressed in the remand. In the event we receive adverse comment or a hearing request and this direct final rule is subsequently withdrawn, we are also publishing a separate document that will serve as the proposal of this amendment in the “Proposed Rules” section of this Federal Register publication. This final rule amendment will be effective on April 30, 2001 without further notice, unless we receive adverse comment on this rulemaking by April 2, 2001 or we receive a request for a hearing by March 11, 2001. If we receive timely adverse comment or a timely hearing request, we will publish a withdrawal in the Federal Register informing you that this direct final rule will not take effect. In that event, we will address all public comments in a subsequent final rule, based on the proposed rule amendment published in the “Proposed Rules” section of this Federal Register document. Because we will not provide further opportunity for public comment on this action, you must comment on this amendment at this time if you wish to do so.

Regulated entities. The requirements in this regulation may apply to you if you own or operate any facility subject to the compliance certification requirements of part 70 to 71. These regulations apply to, but are not limited to, owners or operators of all sources who must have operating permits under either of these programs. State, local, and tribal governments are potentially affected tot he extent that those governments must revise existing compliance certification requirements in implementing the part 70 operating permits program to make consistent with these revisions.

Internet. The text of this Federal Register document is also available on our web site on the Internet under the Recently Signed Rules category at the following address: http://www.epa.gov/ttn/oarpg/rules.html and the OAQPS, Emissions Measurement Center website at http://www.epa.gov/ttn/emc/. Our Office of Air and Radiation (OAR) homepage on the Internet also contains a wide range of information on the air toxics program and many other air pollution programs and issues. The OAR's homepage address is: http://www.epa.gov/oar.

Electronic Access and Filing Addresses. The official record for this rulemaking, as well as the public version, has been established for this rulemaking under Docket No. A-91-52 (including comments and data submitted electronically). A public version of this record, including printed, paper versions of electronic comments, which does not include any information claimed as confidential business information (CBI), is available for inspection from 8 a.m. to 5:30 p.m., Monday through Friday, excluding legal holidays. The official rulemaking record is located at the address listed in the ADDRESSES section at the beginning of this preamble. You may submit comments on this rulemaking electronically to the EPA's Air and Radiation Docket and Information Center at their address: A-and-R-Docket@epa.gov. Electronic comments must be submitted as an ASCII file avoiding the use of special characters and any form of encryption. Comments and data will also be accepted on disks in WordPerfect in 6.1 file format or ASCII file format. You must identify all comments and data in electronic form by the docket number (A-91-52). You should not submit CBI through electronic mail. You may file electronic comments online at any Federal Depository Library.

Outline. The information in this preamble is organized as follows:

The statutory authority for this action is provided by sections 114 and 501 through 507 of the Clean Air Act, as amended (42 U.S.C. 7414a and 7661-7661f).

On October 22, 1997 (62 FR 54900), we published the final part 64, Compliance Assurance Monitoring (CAM) rule, and revisions to parts 70 and 71, the State and Federal Operating Permits Programs. Part 64 included procedures, design specifications, and performance criteria intended to satisfy, in part, the enhanced monitoring requirements of the Clean Air Act (“the Act”). The revisions to parts 70 and 71 included language to §§ 70.6(c)(5)(iii)(B) and 71.6(c)(5)(iii)(B) specifying the minimum information necessary for the compliance certification required of responsible officials.

Subsequent to that publication, the Natural Resources Defense Council, Inc. (NRDC) and the Appalachian Power Company et al. (industry) filed petitions with the United States Court of Appeals for the District of Columbia Circuit (Court) challenging several aspects of the CAM rule. Industry challenged our authority to promulgate the parts 70 and 71 language requiring that compliance certifications be based on any other material information including credible evidence.

The NRDC argued that the monitoring in part 64 failed to meet Clean Air Act requirements regarding enhanced monitoring and that the parts 70 and 71 revisions were inconsistent with the Act's explicit requirement that compliance certifications indicate whether compliance is continuous or intermittent.

On October 29, 1999, the Court issued its decision (see docket A-91-52, item VIII-A-1) Natural Resources Defense Council v. EPA, 194 F.3d 130 (D.C. Cir. 1999), on these challenges. Most importantly, the court held that “EPA's adoption of CAM as “enhanced monitoring” meets the requirements of the Clean Air Act.” Id. at 137. The court also dismissed the industry's challenge as unripe relying on its earlier decision involving EPA's Credible Evidence Rule. See Clean Air Implementation Project v. EPA, 150 F.3d 1200 (D.C. Cir. 1998). The court did, however, agree with NRDC that EPA's removal from parts 70 and 71 of the explicit requirement that compliance certifications address whether compliance is continuous or intermittent revisions ran contrary to the statutory requirement that each source must certify “whether compliance is continuous or intermittent * * *” See section 114(a)(3)(D), 42 U.S.C. 7414(a)(3)(D). Our rationale for revising the compliance certification language had been that so long as the compliance certification addressed the substance of whether compliance had been continuous or intermittent there was no need to require responsible officials to use the terms “continuous” or “intermittent.” The court disagreed finding Congress” intent to be “express and unambiguous.” 194 F.3d at 138. Accordingly, the court remanded that portion of the CAM rule “pertaining to ‘continuous or intermittent’ compliance certification” to us for revision consistent with the court's decision.

In response to the court's remand, we have added text to sections, §§ 70.6(c)(5)(iii)(B) and 71.6(c)(5)(iii)(B), to require that the responsible official for the affected facility include in the annual (or more frequent) compliance certification whether compliance during the period was continuous or intermittent. Specifically, the revised text, including the introductory language for both sections reads: “Permits shall include each of the following * * *: A requirement that the compliance certification include all of the following * * *: The status of compliance with the terms and conditions of the permit for the period covered by the certification, including whether compliance during the period was continuous or intermittent. The certification shall be based on the method or means designated in paragraph (c)(5)(iii)(B) of this section.” The italicized text indicates the revisions made in response to the Court decision. Other text within both of these sections remains as promulgated in 1997. Under this revised language, the responsible official must include in the compliance certification a statement as to whether compliance during the period was continuous or intermittent. We believe these revisions respond directly and adequately to the Court's decision to remand the compliance certification requirements to us and are consistent with the requirements of the Act.

The Court's decision and this amendment to our regulations also necessitate a change to a guidance document issued in connection with the CAM rulemaking. In “Compliance Assurance Monitoring Rule Implementation Questions and Responses” (from Steve Hitte, OPG-ITPID to APMs, Regions I-X (January 8, 1998)), we advised permitting authorities that they could require sources to certify compliance using either existing state regulations that tracked the statute (e.g., certify to whether compliance was continuous or intermittent) or the certification language in the CAM revisions to Part 70. See at Question 10. This guidance was based on our interpretation that (1) the statutory requirement to certify whether compliance is continuous or intermittent had sufficient flexibility to allow the approach taken in the revisions to Part 70 and (2) the state regulations on compliance certification generally tracked exactly the statutory language on certification of continuous or intermittent compliance. The Court, however, disagreed with our interpretation of the statutory language and remanded the revisions to Part 70 to us. As a result, the guidance above is no longer justified. Accordingly, we withdraw the guidance provided to permitting authorities in Question and Response 10 in the above-mentioned guidance to the extent it states that permitting authorities may allow certifications based on the Part 70 revisions set aside by the Court. We are aware that most if not all approved state program regulations continue to require responsible officials to certify whether compliance was intermittent or continuous. Accordingly, any state programs that followed the interpretation in Question 10 above should be able to expeditiously require certifications to be based upon the proper statutory certification language.

The compliance certification is your assessment, signed by your facility's responsible official, as to whether your facility complied with the terms and conditions of the permit. The compliance certification includes three main elements. The first is identification of all the permit terms and conditions to which your facility is subject. These include applicable design provisions, work practice elements, required operating conditions, and emissions limitations in addition to general and specific monitoring, reporting, and record keeping requirements.

Second, you must identify the method(s) and any other material information used to determine compliance status of each term and condition. The method(s) includes at a minimum any testing and monitoring methods required by Parts 70 or 71 that were conducted during the period for the certification. You must describe whether the data collection using the methods referenced for the compliance certification provide continuous or intermittent data.

Third, you must certify as to the status of compliance including whether compliance was continuous or intermittent. You must base this status on the results of the identified methods and other material information. You must note as possible exceptions to compliance any deviations from the permit requirements and any excursions, or exceedances as defined in part 64, or other underlying applicable requirements, during which compliance is required.

You can find additional explanation on our interpretation of a certification of continuous or intermittent compliance in the preamble to the final CAM rule. 62 FR 54937

Under Executive Order 12866 (58 FR 51735, October 4, 1993), we must determine whether the regulatory action is “significant” and therefore subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order. The Order defines “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety in State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlement, grants, user fees, or loan programs of the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Because the annualized cost of this final rule amendment would be significantly less than $100 million and would not meet any of the other criteria specified in the Executive Order, we have determined that this action is not a “significant regulatory action” under the terms of Executive Order 12866, and is therefore not subject to OMB review. Executive Order 12866 also encourages agencies to provide a meaningful public comment period, and suggests that in most cases the comment period should be 60 days. However, in consideration of the very limited scope of this amendment, we consider 30 days to be sufficient in providing a meaningful public comment period for this rulemaking.

The Regulatory Flexibility Act (RFA) requires us to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. We determined that these amendments to the parts 70 and 71 do not have a significant impact on a substantial number of small entities. We intended that compliance with the CAM rule would provide monitoring information sufficient to demonstrate whether compliance was continuous or intermittent. Even though we did not require that the responsible official use those terms in the revisions to the compliance certification, we did require that the responsible rely on the monitoring information in making that certification. That the court held that the responsible official must address explicitly whether compliance was continuous or intermittent does not substantively change the monitoring responsibilities or economic impact. The revisions to parts 70 and 71 in this action add no burden on responsible officials other than to categorize their compliance status as continuous or intermittent. We have determined that a regulatory flexibility analysis is not necessary in connection with this action.

This amendment does not include or create any information collection activities subject to the Paperwork Reduction Act, and therefore we will submit no information collection request (ICR) to OMB for review in compliance with the Paperwork Reduction Act, 44 U.S.C. 3501, et seq.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, we must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before we promulgate a rule for which a written statement is needed, section 205 of the UMRA requires us to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows us to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation of why that alternative was not adopted. Before we establish any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, we must have developed under section 203 of the UMRA a small government agency plan. That plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

As noted above, this amendment is of very narrow scope, and provides a compliance alternative very similar to one already available in the promulgated part 70 compliance certification requirements. We have determined that this action contains no regulatory requirements that might significantly or uniquely affect small governments. We have also determined that this action does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one year. Thus, today's action is not subject to the requirements of sections 202 and 205 of the UMRA.

The docket includes an organized and complete file of all the information upon which we relied in taking this direct final action. The docketing system is intended to allow you to identify and locate documents readily so that you can participate effectively in the rulemaking process. Along with the proposed and promulgated standards and their preambles, the contents of the docket, except for certain interagency documents, will serve as the record for judicial review. (See CAA section 307(d)(7)(A).)

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires us to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

Under Section 6 of Executive Order 13132, we may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or we consult with State and local officials early in the process of developing the proposed regulation. We also may not issue a regulation that has federalism implications and that preempts State law, unless we consult with State and local officials early in the process of developing the proposed regulation.

This final rule does not have federalism implications. The rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Today's action does not create a mandate on State, local or tribal governments. The amendments to the rule do not impose any new or additional enforceable duties on these entities. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

Executive Order 13045 applies to any rule that the EPA determines (1) economically significant as defined under E.O. 12866, and (2) the environmental health or safety risk addressed by the rule has a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. These amendments to the State and Federal operating permits program are not subject to E.O. 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), because it is not an economically significant regulatory action as defined by E.O. 12866, and the amendments do not address an environmental health or safety risk that would have a disproportionate effect on children.

Under Executive Order 13084, we may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments, or EPA consults with those governments. If we comply by consulting, Executive Order 13084 requires us to provide to the Office of Management and Budget, in a separate identified section of the preamble to the rule, a description of the extent of our prior consultation with representatives of affected tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires us to develop an effective process permitting elected officials and other representatives of Indian tribal governments “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.” These amendments to parts 70 and 71 do not significantly or uniquely affect the communities of Indian tribal governments. The amendments to the rule do not impose any new or additional enforceable duties on these entities. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this action.

The Congressional Review Act, 5 U.S.C. 801 et seq., added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of Congress and to the Comptroller General of the United States. We will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the Federal Register.

Under section 12(d) of the National Technology Transfer and Advancement Act (NTTAA), Public Law 104-113 (March 7, 1996), we are required to use voluntary consensus standards in its regulatory and procurement activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, business practices, etc.) which are adopted by voluntary consensus standard bodies. Where we do not use available and potentially applicable voluntary consensus standards, the NTTA requires us to provide Congress, through OMB, an explanation of the reasons for not using such standards. This action does not involve technical standards. Therefore, we did not consider the use of any voluntary consensus standards.

This is a summary of the Commission's Third Report and Order and Second Order on Reconsideration (Third Report and Order) in CC Docket No. 94-129, which was released on August 15, 2000. This summary also contains amendments and modifications to the Third Report and Order that were adopted in an Order released on February 22, 2001. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC 20554.

1. In this Third Report and Order and Second Order on Reconsideration (Order), we adopt rules proposed in the Second Report and Order and Further Notice of Proposed Rulemaking (Section 258 Order or FNPRM, 64 FR 07745 (2/16/1999) to implement Section 258 of the Communications Act of 1934 (Act), as amended by the Telecommunications Act of 1996 (1996 Act). Section 258 prohibits any telecommunications carrier from submitting or executing an unauthorized change in a subscriber's selection of a provider of telephone exchange service or telephone toll service. This practice, known as “slamming,” enables those companies who engage in fraudulent activity to increase their customer and revenue bases at the expense of consumers and law-abiding companies. The rules we adopt in this Order will improve the carrier change process for consumers and carriers alike, while making it more difficult for unscrupulous carriers to perpetrate slams.

2. In the Section 258 Order, we established a comprehensive framework designed to close loopholes used by carriers who slam consumers and to bolster certain aspects of our slamming rules to increase their deterrent effect. In particular, we adopted aggressive new liability rules designed to take the profit out of slamming. We also broadened the scope of our slamming rules to encompass all carriers and imposed more rigorous verification measures. In our First Reconsideration Order, we amended certain aspects of the slamming liability rules, granting in part petitions for reconsideration of our Section 258 Order. Although the petitions raised a broad range of issues relating to the slamming rules, the First Reconsideration Order addressed only those issues relating to our liability rules, which had been stayed by the D.C. Circuit. We chose to resolve those issues separately, and on an expedited basis, because of the overriding public interest in reinstating the liability rules in order to deter slamming.

3. When the Commission released the Section 258 Order, it recognized that additional revisions to the slamming rules could further improve the preferred carrier change process and prevent unauthorized changes. Thus, concurrent with the release of the Section 258 Order, the Commission issued a Further Notice of Proposed Rulemaking and sought comment on the following proposals: (1) Permitting the authorization and verification of preferred carrier changes over the Internet; (2) requiring resellers to obtain their own carrier identification codes (CICs), or, in the alternative, some type of pseudo-CIC that would provide underlying facilities-based carriers and subscribers of resellers with a way to identify the service provider; (3) modifying the independent third party verification method; (4) defining the term “subscriber” for purposes of authorizing preferred carrier changes; (5) requiring carriers to submit reports on the number of slamming complaints they receive; (6) creating a registration requirement for all providers of interstate telecommunications services; and (7) requiring unauthorized carriers to remit to authorized carriers certain amounts in addition to the amount paid by slammed subscribers.

4. On June 30, 2000, the President signed into law a piece of legislation that is relevant to our slamming rules and some of the issues pending in this proceeding, particularly our proposal in the FNPRM to allow the authorization and verification of preferred carrier changes using the Internet. The Electronic Signatures in Global and National Commerce Act, S. 761 (E-Sign Act) is intended to foster the development of e-commerce, or commerce conducted electronically over the Internet. To accomplish this goal, the E-Sign Act establishes a framework governing the use of electronic signatures and records in transactions in or affecting interstate and foreign commerce. With certain exceptions not relevant here, the provisions of the E-Sign Act took effect on October 1, 2000.

5. In this Order, we adopt a number of the proposals discussed in the FNPRM, and we also address the remaining issues that were raised on reconsideration of the Section 258 Order. Specifically, in this Order, we amend the current carrier change authorization and verification rules to expressly permit the use of Internet Letters of Agency (Internet LOAs) in a manner consistent with the new E-Sign Act; we direct the North American Numbering Plan Administration (NANPA) to eliminate the requirement that carriers purchase Feature Group D access in order to obtain a CIC; we provide further guidance on independent third party verification; we define the term “subscriber;” we require each carrier providing telephone exchange and/or telephone toll service to submit a semiannual report on the number of slamming complaints it receives; and we expand the existing registration requirement on carriers providing interstate telecommunications service to include additional facts that will assist our enforcement efforts. This Order also contains a Second Order on Reconsideration, in which we uphold our rules governing the submission of preferred carrier freeze orders, the handling of preferred carrier change requests and freeze orders in the same transaction, and the automated submission and administration of freeze orders and changes. In addition, we reaffirm our decision not to preempt state regulations governing verification procedures for preferred carrier change requests that are consistent with the provisions of Section 258. We also decline to adopt a 30-day limit on the amount of time an LOA confirming a carrier change request should be considered valid and instead adopt a 60-day limit. Finally, we clarify certain of our rules regarding the payment of preferred carrier change charges after a slam.

6. Discussion. We continue to believe that the Internet provides a quick and efficient means of signing up new subscribers and should be made widely available to carriers and consumers. We recognize that consumers' use of the Internet for electronic commerce has grown tremendously in recent years, as more and more businesses provide services online, and a greater percentage of consumers and businesses utilize computers and the Internet to transact business. In addition, we recognize that Section 104(e) of the E-Sign Act directs us not to differentiate between written LOAs and LOAs that are submitted and signed electronically. In view of these developments, we hereby amend our carrier change authorization and verification rules to expressly permit the use of Internet LOAs, in a manner consistent with the provisions of the E-Sign Act.

7. As stated in the FNPRM, we believe that subscribers using the Internet to change telecommunications service providers are entitled to the same level of protection against slamming that we have mandated for other forms of solicitation. Internet LOAs must comply with the requirements of our rules governing written LOAs, subject to the clarifications and modifications adopted in this Order. Carriers who wish to sign up new subscribers over the Internet must adhere to the informational requirements for written LOAs, as specified in § 64.1130(e) of our existing rules. In light of the E-Sign Act, we now conclude that an electronic signature used for a carrier change submitted over the Internet will satisfy the signature requirement of § 64.1130(b) governing LOAs, and that the information submitted to authorize and verify a carrier change request may be submitted in the form of an electronic record.

8. Carriers using Internet LOAs to sign up subscribers will be required to comply with the consumer disclosure requirements of Section 101(c) of the E-Sign Act. Section 101(c) requires, among other things, that the carrier obtain the subscriber's consent to use electronic records, obtain the subscriber's acknowledgment that he or she has the software and hardware necessary to access the information in the electronic form (i.e., Internet LOA) used by the carrier, and give the subscriber notice of the procedures for withdrawing consent. Section 101(c) also requires carriers to inform subscribers of any right (after consent to the transaction) to a non-electronic (that is, paper) copy of the electronic record of the transaction, to tell them how to obtain such a copy, and to make clear whether a fee will be charged for the copy. Accordingly, we modify our rules to incorporate by reference the requirements of Section 101(c) of the E-Sign Act. We note that these consumer disclosures, in conjunction with the form and content requirements for LOAs under § 64.1130 of our rules, are likely to address concerns about unwary consumers who might inadvertently switch their telephone service providers while exploring websites or participating in contests on the Internet. At the same time, we recognize that many commenters expressed concerns regarding fraudulent use of Internet LOAs that may not be fully addressed by the protections afforded by compliance with Section 101(c) of the E-Sign Act. In this regard, we note that, if a subscriber contests the authenticity of an Internet LOA, the carrier will have the burden of proof to counter the subscriber's allegation. For this reason, we would expect a carrier to employ procedures that would enable it to demonstrate that the electronic signature on an Internet LOA could not have been submitted by anyone other than the subscriber. While it is our expectation that the consumer protection measures afforded by the combination of the requirements in the E-Sign Act and our LOA rules will suffice, we note that, if we detect an inordinate increase in slamming after these changes take effect, we may choose to re-evaluate our rules.

9. We are aware that some consumers may be concerned about security and privacy issues associated with submitting carrier change requests and associated personal information over the Internet. Security and privacy issues arise because Internet communications are sent from computer to computer until the communications reach their final destinations. When information is sent from point A to point B over the Internet, every computer involved in the transmission path has an opportunity to intercept and view the information being sent. As a result, we acknowledge the concerns of commenters who argue that carriers should provide subscribers with a secured web transaction for submitting Internet LOAs. At this time, we decline to impose specific requirements regarding security and privacy as it relates to Internet LOAs, but we strongly encourage carriers who utilize Internet LOAs to sign up new subscribers to employ security measures in keeping with the best practices used for Internet transactions, such as providing subscribers with secured web access. In addition, we strongly encourage carriers to provide notice to subscribers regarding the level of security that applies to the submission of Internet LOAs. We also support the use of digital signatures, when they are made widely available, in order to more precisely establish the identity of the subscriber submitting an Internet LOA, the date of the submission, and other specifics.

10. We also acknowledge that consumers have a legitimate interest in the privacy of personal information that they may be asked to submit with an Internet LOA. Again, we decline to mandate a specific action with regard to such information at this time. However, we encourage carriers to keep such information confidential and not use a subscriber's information, including his or her electronic mail (e-mail) address, for marketing or other business purposes without the express consent of the subscriber. In addition, we recognize that some consumers may prefer, for a variety of reasons, not to use the Internet to authorize carrier changes. Consistent with Section 101(b)(2) of the E-Sign Act, we will amend our rules to state that carriers must give subscribers the option of using one of the other authorization and verification methods specified in § 64.1120 of our rules, in addition to the use of Internet LOAs.

11. We recognize that some carriers and subscribers who have pre-existing business relationships may wish to follow a more truncated authorization and verification process for making carrier changes than required for written and Internet LOAs. AOL and other commenters assert that subscribers and carriers belonging to a closed user group (CUG) or linked in a similar ongoing business relationship should be permitted to utilize a less stringent verification method for Internet LOAs. However, we see no compelling reason to determine that our LOA rules, which are designed to protect subscribers, should apply to a lesser degree when the subscriber belongs to a CUG or has a similar type of pre-existing relationship with the carrier. Therefore, at this time, we decline to permit carriers and subscribers with pre-existing business relationships, such as CUG providers and members, to use less stringent verification methods to authorize and verify carrier changes processed over the Internet.

12. In the FNPRM, we sought comment on the extent to which change requests submitted over the Internet may or may not contain all the required elements of a valid LOA, and we also sought comment on ways in which we might ensure that consumer interests are protected when Internet LOAs are used. In certain respects, our existing rules on the form and content of LOAs reflect the fact that they were written with paper documents in mind. For example, a written LOA must be a separate document not combined with inducements of any kind. In order to conform Internet LOAs to this preexisting requirement, we amend our rules to specify that Internet LOAs must appear on a separate screen from any inducements or solicitations for a carrier's services and contain only the authorizing language found in § 64.1130(e) of our rules. We regard this requirement as the functional equivalent of the pre-existing requirements that a written LOA must be a separate document not combined with inducements of any kind. Moreover, as noted by several commenters, this separate screen requirement is easily achievable and is necessary to eliminate the possibility of customer confusion and the potential for inadvertent selection of a new preferred carrier.

13. We believe that this determination is consistent with Section 104(b)(2)(C) of the E-Sign Act. That section of the E-Sign Act allows agencies to include requirements for electronic records that are “substantially equivalent to the requirements imposed on records that are not electronic records,” that will not “impose unreasonable costs on the acceptance and use of electronic records,” and will not “require, or accord greater legal status or effect to, the implementation or application of a specific technology or technical specification for performing the functions of creating, storing, generating, receiving, communicating, or authenticating electronic records or electronic signatures.” As stated above, this separate screen requirement is substantially equivalent to the requirements found in §§ 64.1130(b) and (c) as they apply to written LOAs. Moreover, the record in this proceeding indicates that this separate screen requirement will not impose unreasonable costs on the acceptance and use of electronic records.

14. We adopt our tentative conclusion that carriers who solicit service over the Internet and require subscribers to sign up for more than one service (e.g., interLATA and intraLATA) in order to authorize a carrier change, rather than giving subscribers the option of signing up for individual services, violate our rule requiring all LOAs to contain separate statements regarding choices of interLATA and intraLATA toll service. While we presented this issue in the FNPRM as a “general concern[] about the content of the solicitation using the Internet” and cited some IXC webpages as examples of the practice, we note that there is no reason to believe this type of inappropriate carrier change solicitation would only appear in an electronic medium. We emphasize that carriers must clearly and conspicuously delineate on any LOA, written or Internet, the individual services that the subscriber may choose to be covered by the carrier change request, including, but not limited to, local, intraLATA, and interLATA services. Consumers should know what specific services are being offered and should have the discretion to subscribe to only the services they desire. Such consumer choice and discretion are essential to maintaining and advancing the development of a competitive telecommunications marketplace.

15. Consistent with our amendment of the rules governing LOAs, we are also amending our rules to allow subscribers to submit, and carriers to process, the imposition and/or lifting of preferred carrier freezes over the Internet, as recommended by many commenters. Carriers must comply with the same verification requirements that apply to LOAs, as discussed, to help prevent the unauthorized imposition or lifting of preferred carrier freezes over the Internet. In addition, we encourage carriers to employ measures to protect the security and confidentiality of subscribers' personal information.

16. We note that the amendments to our rules that we adopt in this Order for Internet LOAs represent a minimum threshold for carrier change authorization and verification with which all carriers must comply. State jurisdictions may adopt verification requirements for Internet LOAs, so long as they are consistent with Section 258, as implemented by our rules, and the E-Sign Act. We disagree with Cable & Wireless that we should preempt state laws regarding the legality and form of Internet LOAs at this time. Carriers already must comply with state requirements for written LOAs that are consistent with Section 258 and the Commission's rules, and state requirements for Internet LOAs that are consistent with Section 258, as implemented by our rules, and the E-Sign Act warrant the same compliance.

17. Discussion. As set forth below, we shall direct the NANPA to eliminate the requirement that carriers purchase “Feature Group D” to obtain CICs. This action will facilitate the assignment of CICs to switchless resellers and remove one obstacle to their independent use of CICs. At the present time, we are not requiring resellers to obtain their own CICs, nor are we adopting either of our other two proposals. Although we believe that requiring switchless resellers to obtain CICs may well be an effective solution to soft slamming and related carrier identification problems, commenters have raised a number of concerns regarding the potential impact of such a requirement on the carrier industry. Based on our review of the record, as discussed herein, we are not persuaded that we should adopt a CIC requirement for switchless resellers at this time. However, in order to continue developing the record, we shall refer the CIC assignment and use issues discussed below to the North American Numbering Council (NANC) for analysis and recommendations. We intend to reevaluate the costs and benefits of the proposed CIC requirement when we receive the NANC's report.

18. Under the current CIC Assignment Guidelines, a carrier must purchase Feature Group D access service to be assigned a CIC. A switchless reseller does not require the physical or trunk access to the public switched telephone network (PSTN) available through the purchase of Feature Group D, and is unlikely to bear the expense simply to obtain a CIC. The NANC's CIC Ad Hoc Working Group has recommended elimination of the Feature Group D requirement as “an unnecessary administrative burden for resale providers[.]” In light of this recommendation, and based on our examination of the record in this proceeding, we direct the NANPA to eliminate the Feature Group D requirement. This action, which is an aspect of our first proposal, “will facilitate the assignment of CICs to resellers, and thereby allow easier [carrier] identification * * *, enhancing the ability to resolve conflicts, including disputes which involve slamming.”

19. Commenters are divided on our proposal to require switchless resellers to obtain their own CICs. Generally, supporters argue that it would be a cost-effective and administratively simple solution to soft slamming and related problems. Opponents raise a number of concerns regarding the impact of a CIC requirement on the carrier industry, including that it would: (1) Impose undue financial burdens on resellers and damage them competitively; (2) require expensive and time-consuming LEC switch upgrades; and (3) accelerate exhaustion of the four-digit CIC pool. Opponents also contend that the record contains insufficient evidence of the dimensions of soft slamming and related problems to warrant regulatory action and, in any event, that other recent Commission actions are likely to address such problems. We address these issues in turn below.

20. Turning to the first issue, the principal cost of the subject proposal for a switchless reseller would be deploying or loading a CIC in LEC switches in each LATA where it operates. In this regard, “the use of translations access does not significantly reduce the time or expense required” to deploy a CIC. On a nationwide basis, most estimates of this cost range from $500,000 to $1 million for a single CIC. Relying on such estimates, and on the small size of many resellers, opponents maintain that a CIC requirement would create a substantial market entry barrier for resellers. Our review of the record suggests that in many cases such estimates are unrealistic because resellers typically operate on a regional basis. In addition, CIC deployment costs may be viewed as “a legitimate cost of doing business,” and the independent use of CICs clearly has competitive advantages for resellers. Nevertheless, we are concerned about restricting competition in the wholesale long distance service market by limiting resellers' ability to change and/or use multiple underlying carriers. Although some resellers use their own CICs despite the asserted disadvantages, we are reluctant to adopt a requirement that resellers obtain their own CICs pending further review of the conclusions reached by the NANC.

21. Second, GTE, SBC, and USTA express concern that a CIC requirement may exhaust the limited capacity of certain types of LEC switches. For example, GTE states that:

It is unclear how many LEC switches are implicated by this issue, as only GTE has identified the number of limited-capacity switches deployed in its territory, and the likelihood of exhausting switch capacity depends on the related questions of demand and location. To the extent that upgrades are necessary, however, GTE, SBC, and USTA state that they are likely to be costly and time-consuming. Furthermore, although the need for upgrades was contemplated when the carrier industry moved from a three-digit to a four-digit CIC format, USTA suggests that requiring investment in switch upgrades may be wasteful because the industry now is moving towards new technology platforms. There may be ways to ensure that any systems modifications necessary to accommodate the use of additional CICs do not impose undue burdens on LECs. Nevertheless, we believe that this matter warrants further consideration.

22. Third, several commenters argue that adoption of a CIC requirement would accelerate exhaustion of the pool of four-digit CICs, thereby inflicting undue disruption and expense on the entire carrier industry. Preliminarily, we find no compelling evidence of a significant threat of premature CIC exhaustion. The pool of four-digit CICs is 10,000, of which only 2,031 were assigned as of January, 2000, and the NANC CIC Report predicts that they will last for 22 years, assuming a limit of six per carrier. In addition, it is not clear that the subject proposal would substantially increase the long-term net demand for CICs, given that some resellers already have CICs, and those without CICs are likely to obtain them as their businesses develop, without any regulatory requirement.

23. Turning to the fourth issue, there is a consensus among commenters that the shared use of CICs by resellers gives rise to significant problems that warrant Commission action. Opponents of the subject proposal, however, argue that the record contains insufficient evidence for us to determine whether a CIC requirement is warranted in light of its potential costs. The Commission does not maintain data as to the specific dimensions of these problems, but our review of the record suggests that they represent a substantial percentage of all slamming complaints. We agree, however, that recent Commission actions in this proceeding and in the Truth-in-Billing proceeding may help to address soft slamming and related problems indirectly. In this regard, Bell Atlantic and USTA point out that the Section 258 Order imposes on facilities-based carriers the responsibilities of executing carriers in soft slam situations, and AT&T notes that the framework of the slamming rules is “intended to increase effective deterrence of slamming, including * * * ‘soft slamming.’ ” In the Truth-in-Billing proceeding, the Commission adopted a rule that the name of the service provider associated with each charge must be clearly and conspicuously identified on the telephone bill. AT&T contends that this action “should substantially alleviate the ‘soft slamming’ problem by making unauthorized carrier changes readily detectable by end users.”

24. Based on our review of the record as a whole, we are not persuaded that we should adopt a CIC requirement at this time. Rather, as explained below, we wish to have more information on the financial and competitive issues discussed herein before imposing a CIC requirement. By directing that the Feature Group D requirement be eliminated, we are taking a step that will facilitate the ability of switchless resellers to obtain and use their own CICs, while allowing them to choose whether to do so based on their own competitive needs. Nevertheless, we continue to believe that requiring resellers to obtain their own CICs holds promise as a direct and effective solution to the significant problems that arise from the shared use of CICs. We therefore wish to continue developing a record on the subject proposal, in order to be in a position to take informed and expeditious action, should we deem it necessary to do so. Accordingly, we shall refer the CIC use and assignment issues discussed herein to the NANC for analysis and recommendations. To the extent possible, we also request that the NANC submit any data it develops that may shed light on the financial and competitive issues discussed herein, as well as the dimensions of soft slamming and related problems. We request that the NANC provide its report to the Commission by August 1, 2001. We intend to reassess the costs and benefits of the proposed CIC requirement after receiving the NANC's report. In the meantime, we anticipate that the reporting requirements we adopt herein will help to furnish us with more data as to the ongoing significance of the problems at issue and the impact of the Commission's recent anti-slamming and truth-in-billing measures.

25. Finally, we conclude that adoption of either the second or the third proposals set forth in the FNPRM would not serve the public interest. Whereas a CIC requirement would rely on existing call routing and billing systems and provide consumers with equal access to switchless resellers, the “pseudo-CIC” proposal would require extensive systems modifications by both LECs and underlying carriers, without the advantage of equal access. Commenters argue persuasively that the third proposal, carrier systems modifications, is not viable because, among other things, it would be costly and time-consuming to implement, would be likely to complicate and delay the carrier change process, and would not comport with existing billing systems.

34. Discussion. The first issue we address is whether a carrier's sales representative should be permitted to remain on the line during the three-way verification call. NAAG raises concerns that the subscriber might remain under the influence of the sales representative during the verification process. NAAG argues that third party verification should be separated completely from the sales transaction, so that a carrier would not be permitted to connect the subscriber to the third party verifier by initiating a three-way call. Other commenters support allowing the carrier's representative to remain on the line during the three-way conference call.

35. As we stated in the FNPRM, the three-way call is often the most efficient means of accomplishing third party verification. We believe that subscribers may benefit from the convenience of authorizing and verifying the carrier change in one phone call. In addition, use of this method of verification minimizes the risk that the subscriber will not be available when the third party verifier calls to confirm the change.

36. Some commenters propose that the Commission impose certain limited restrictions on such calls to ensure that the verification process will not become tainted, cause subscriber confusion, or go forward without the subscriber's express consent. The proposed restrictions range from prohibiting carriers from remaining on the line once a connection is established with the third party verifier to requiring that all conversation on a three-way conference call be recorded.

37. We agree with NAAG and others that the Commission should delineate minimum requirements to ensure that verification ultimately involves only the consumer and the third party verifier. Given the convenience and cost-effectiveness of the three-way conference call as a verification method, we will retain the three-way call as a verification method, subject to one limited restriction. The carrier's sales representative may initiate the three-way conference call but must drop off the call once the connection has been established between the subscriber and the third party verifier. We believe that this limited restriction will help ensure the independence of the third party verification process and prevent the carrier's sales representative from improperly influencing subscribers, without burdening the verification process. Once the connection has been established between the subscriber and the third party verifier, there is no need for the carrier's sales representative to stay on the line.

38. With respect to the content and format of the third party verification, we asked parties in the FNPRM to comment on a possible requirement that all third party verifications include certain information, such as information on preferred carrier freezes or the carrier change process. We also asked parties to comment on any benefits that might be gained from permitting or requiring third party verifiers to provide subscribers with such additional information. This proposal generated both strong support and opposition. Although many commenters argue that requiring third party verifiers to follow a scripted format would impose unnecessary, additional rules on the carrier change process without producing a significant corresponding benefit, several other commenters ask the Commission for additional guidance regarding the format and content of the third party verification. For instance, Media One states that third party verifiers should be required to confirm the identity of the subscriber, to ascertain that the person contacted is authorized to make a change, and to frame the request for confirmation of the change as a simple yes/no question.

39. We decline to mandate specific language to be used in third party verification calls. In order to eliminate uncertainty as to what practices are necessary and acceptable, however, we adopt minimum content requirements for third party verification. We believe that having minimum content requirements for third party verification calls will provide useful guidance to the third party verifiers and carriers without locking carriers into using a set script. These requirements also allow for more streamlined enforcement because they will assist the Commission in determining the adequacy of steps taken by independent third parties in the verification process. Accordingly, we conclude that a script for third party verification should elicit, at a minimum, the identity of the subscriber; confirmation that the person on the call is authorized to make the carrier change; confirmation that the person on the call wants to make the change; the names of the carriers affected by the change; the telephone numbers to be switched; and the types of service involved (i.e., local, in-state toll, out-of-state toll, or international service). We note that these content requirements do not differ in substance from our rules regarding LOAs.

40. In addition, the third party verification must be conducted in the same language that was used in the underlying sales transaction. We also conclude that the entire third party verification transaction must be recorded, a practice that is already common in the industry. Consistent with our requirements under § 64.1120(a)(1)(ii), submitting carriers must maintain and preserve these recordings for a minimum period of two years after obtaining such verification. If a slamming dispute arises, having a recorded verification will help determine whether the subscriber was simply seeking information or was in fact agreeing to change carriers and, if so, which service(s) the subscriber agreed to change.

41. We further conclude that third party verifiers may not dispense information concerning the carrier or its services, including information regarding preferred carrier freeze procedures or other non-telecommunications services that the carrier may offer to the subscriber. Allowing third party verifiers to effectively market the carrier's services could compromise the third party verifiers' independence and neutrality because verifiers could easily be drawn into presenting the particular market viewpoints of carriers by whom they are retained. In addition, providing the verifier with certain carrier information could result in the disclosure of proprietary information to competing carriers. We also believe that incorporating information about preferred carrier freezes into the verification script is likely to be confusing to subscribers and would prolong the verification process unnecessarily.

42. Finally, we conclude that automated systems that preserve the independence of the third party verification process may be used to verify carrier change requests. The use of automated third party verification systems not only promotes consistency in the verification process and adequacy of the information provided to subscribers, but also gives carriers a cost-effective way to create a readily accessible record of each order confirmation. Moreover, the recordings generated by this automated process may be useful in addressing subscriber complaints of slamming. For instance, the recording can reveal whether the carrier change at issue was properly verified and whether an authorized person provided the verification. Automated systems may also help provide predictable and consistent service.

43. Although several commenters argue that using automated verification systems that record the verification should obviate the need for more detailed script requirements, we conclude that these systems should elicit, at a minimum, the same information that our rules currently require, as well as the information specified. To reiterate, automated verification systems must elicit, at a minimum, the identity of the subscriber; confirmation that the person on the call is authorized to make the carrier change; confirmation that the person on the call wants to make the change; the names of the carriers affected by the change; the telephone numbers to be switched; and the types of service affected by the transaction (i.e., local, in-state toll, out-of-state toll, or international service). In addition, automated verifications must be conducted in the same language that was used in the underlying sales transaction and must be recorded in their entirety to ensure that there is a record of the verification in the event of a slamming dispute. As with the three-way conference call, and for the same reasons, a carrier's sales representative initiating the automated verification call may not remain on the line after the connection has been established. We further conclude that automated verification systems should provide subscribers with an option of speaking with a live person at any time during the call. We believe that, in situations where the subscriber cannot follow the prompts of an automated system (or has questions once the automated verification commences), the subscriber should be able to reach a live person who can complete the process. If the subscriber does not want to complete the verification process, or is unable to do so, the third party verifier must end the call, and the transaction must be treated as unverified.

44. We note that, although our rules do not generally prohibit automated third party verification systems, certain types of automated verification systems undermine the independence requirement and contradict the intent behind our rules to produce evidence, independent of the telemarketing carrier, that a subscriber wishes to change his or her carrier. In particular, we conclude that the “live-scripted” automated verification system is at odds with our rules because it permits the carrier's agent, who is not an independent party located in a separate physical location, to solicit the subscriber's confirmation. From a subscriber perspective, the “live-scripted” version may be appealing because the subscriber is interacting with a live person, even though that person is following a set script. The fact that the questions on the script are being read by the carrier's sales representative, however, compromises the independence of the verification. The risk that the sales representative may ask the questions in a pressuring or misleading manner is inherent in the “live-scripted” version. Because the carrier's sales representative is usually compensated for sales completed, and not for sales attempts, the sales representative could not be considered an unbiased third party that lacks motivation to influence the outcome of the verification process.

45. Discussion. Based on our consideration of the comments filed in this proceeding, we adopt the following definition of the term “subscriber” for purposes of our rules implementing Section 258 of the Act: “The party identified in the account records of a common carrier as responsible for payment of the telephone bill, any adult person authorized by such party to change telecommunications services or to charge services to the account, and any person contractually or otherwise lawfully authorized to represent such party.” We believe that this definition will serve our public interest goals of promoting consumer protection, consumer convenience, and competition in telecommunications services. Specifically, this definition will allow customers of record to authorize additional persons to make telecommunications decisions, while protecting consumers by giving the customers of record control over who is authorized to make such decisions on their behalf. In addition, this definition will provide carriers with the flexibility to establish authorization procedures that are appropriate to their own and their customers' needs, consistent with the framework of our rules.

46. The definition we adopt is similar to the SBC proposal set forth in the FNPRM, in that it allows customers of record to authorize additional persons to make telecommunications decisions. We believe that it is preferable to the SBC proposal, however, because it clearly identifies the customer of record as the source of authority over who is authorized to make telecommunications decisions. In addition, the definition we adopt distinguishes between two different types of authority: (1) Authority based on the express or implied authorization of the customer of record, as reflected in carrier account records or elsewhere; and (2) authority based on federal and/or state law and regulations concerning agency and authority.

47. The principal concern expressed by commenters opposed to a definition that allows customers of record to authorize additional persons to make telecommunications decisions is that such a definition invites disputes among household members. We conclude that this concern does not warrant restricting customer options. Commenters favoring a broad definition generally indicate that the current carrier practice is to allow persons other than the customer of record to make telecommunications decisions subject to varying authorization procedures, and that consumers expect and value this service. Examination of the record does not indicate that this practice has given rise to a substantial number of slamming complaints. Moreover, as discussed below, we believe that our current rules provide sufficient incentives for carriers to adopt appropriate safeguards to ensure that only authorized persons are permitted to change telecommunications services. Absent more concrete evidence of the likelihood of harm to consumers, we agree with the majority of commenters that consumers “should be able to make decisions about their preferred carrier [and] delegate that authority if needed[.]”

48. We emphasize that, by adopting a definition, we are not imposing additional responsibilities on carriers in the submission or execution of carrier changes. Rather, carriers' responsibilities are determined by the framework of the current rules. Under these rules, submitting carriers are subject to liability for the submission of unauthorized changes, regardless of intent. As we held in the Section 258 Order, strict liability “provides appropriate incentives for carriers to obtain authorization properly and to implement their verification procedures in a trustworthy manner.” Within this framework, the definition that we adopt will permit submitting carriers to utilize varying authorization procedures based on their own and their customers' needs, without tolerating procedures likely to enable unauthorized persons to make telecommunications decisions. With regard to executing carriers, their responsibility is limited to prompt execution of changes verified by a submitting carrier. Carriers that execute changes verified by submitting carriers are not subject to liability for unauthorized changes. For these reasons, we are not concerned that the definition we adopt will impose unreasonable burdens on executing carriers.

49. In sum, we believe the “subscriber” definition that we adopt herein will serve our public interest goals of promoting consumer convenience and competition in telecommunications services, without leading to increased slamming. The definition we adopt is consistent with the framework of our rules and will enable carriers to adopt safeguards against unauthorized carrier changes that are suited to their own and their customers' needs.

50. Discussion. We will require carriers providing telephone exchange and/or telephone toll service to periodically submit reports regarding slamming complaints they received. Carriers objecting to this reporting requirement are concerned that the reports on slamming complaints received by carriers would produce inaccurate and misleading information. Specifically, these carriers argue that such information, when provided by LECs, will inflate the number of slams attributed to other carriers because what is reported is the total number of slamming allegations, without reference to their validity or their underlying causes. We believe the reporting requirement adopted herein is designed to address these concerns, and we are confident that reliance on the reported information as an “early warning” system will not misdirect the enforcement of the Commission's slamming rules. Moreover, the information will be invaluable in enabling the Commission to identify, as soon as possible, the carriers who repeatedly initiate unauthorized changes. In addition, because the reports will be available for public inspection, they may compel carriers to reduce slamming on their own to avoid public embarrassment or loss of goodwill.

51. We recognize that a subscriber complaint is not, in and of itself, dispositive proof of a slam. Nevertheless, an excessive number of complaints directed at a particular carrier, or an increase in the number of such complaints, suggests that an immediate investigation into that carrier's practices may be warranted. Accordingly, to assist our enforcement efforts in this area, we conclude that each carrier providing telephone exchange and/or telephone toll service must submit to the Commission via e-mail, U.S. Mail, or facsimile, a slamming complaint reporting form which will identify the number of slamming complaints received and state the number of such complaints that the carrier has investigated and found to be valid. This report also must include the number of slamming complaints involving local intrastate and interstate interexchange service, investigated or not, that the carrier has chosen to resolve directly with subscribers. Moreover, because most subscribers who are slammed by an IXC report the slam to their LEC, rather than the IXC, LECs should include in their reports the name of each entity against which slamming complaints have been directed and the number of complaints involving unauthorized changes that have been lodged against each entity. Carriers shall file their first slamming complaint reports on August 15, 2001, to cover the period commencing on the effective date of this requirement, as announced in the Federal Register, and ending on June 30, 2001. Reports for the second half of 2001 shall be filed on February 15, 2002, covering the period between July 1, 2001 and December 31, 2001. Thereafter, carriers shall submit their semiannual slamming complaint reports on August 15 (covering January 1 through June 30) and on February 15 (covering July 1 through December 31). The slamming complaint reporting form may be obtained in the Commission's Public Reference Room or by accessing the Commission's website.

52. Based on the record before us, we do not believe that this requirement will impose significant additional costs or administrative burdens on carriers. Indeed, several carriers have indicated that they already track slamming complaints received from subscribers. It would be a reasonable business practice for all telecommunications carriers, including small carriers, to track slamming complaints they receive in the course of their business; we would be surprised if carriers did not do this. Thus, we do not believe we are requiring carriers to keep information that they would not otherwise keep.

53. Discussion. The Commission currently requires carriers providing interstate interexchange telecommunications service to submit various types of information, and the Commission recently streamlined many of these information collection requirements. For example, the Commission has consolidated several different worksheets into the Telecommunications Reporting Worksheet (FCC Form 499), which is used to calculate carriers' contributions to fund four different programs: interstate telecommunications relay service (TRS), federal universal service support mechanisms, the cost-recovery mechanism for the North American Numbering Plan Administration, and the cost recovery mechanism for the shared costs of long-term local number portability. In addition, to assist carriers in meeting the requirement of Section 1.47 of our rules that all common carriers must designate an agent for service of process in the District of Columbia, we have allowed carriers to report such information on the Form 499. Our rules now provide that carriers may file the relevant portion of the Form 499 with the Commission to satisfy this requirement, and must update the information about the registered agent for service of process by submitting the revised portion of the Form 499 to the Chief of the Enforcement Bureau's Market Disputes Resolution Division within one week of any changes. The rules also provide that a paper copy of the designation list shall be maintained in the Office of the Secretary of the Commission.

54. We adopt our tentative conclusion that all new and existing common carriers providing interstate telecommunications service must register with the Commission. We believe such a registration requirement will bolster our efforts to curb slamming by enabling us to monitor the entry of carriers into the interstate telecommunications market and any associated increases in slamming activity. This requirement will also enhance our ability to take appropriate enforcement action against carriers that have demonstrated a pattern or practice of slamming. Slammers that simply change their names and/or move to different jurisdictions will find it difficult to escape detection if they cannot escape the obligation to register with the Commission. This registration information will enable the Commission to identify those entities providing interstate telecommunications service, it will complement the certification and registration requirements in effect in almost every state for intrastate service providers, and it will enable the Commission and state authorities to coordinate enforcement actions through the creation of a central repository of key facts about carriers providing interstate telecommunications.

55. While we decline to rely exclusively on existing annual reporting mechanisms, we are mindful of the importance of not overburdening carriers with obligations. Therefore, we will revise the annually-filed Telecommunications Reporting Worksheet (FCC Form 499-A), which must be filed by all telecommunications carriers in April of each year, to include the following additional information that is targeted to assist our anti-slamming efforts and thereby minimize the burden of this registration requirement: the carrier's business name(s) and primary address; the names and business addresses of the carrier's chief executive officer, chairman, and president, or, in the event that a company does not have such executives, three similarly senior-level officials of the company; the carrier's regulatory contact and/or designated agent for service of process; all names under which the carrier has conducted business in the past; and the state(s) in which the carrier provides telecommunications service. The next scheduled filing of the Form 499-A is April 1, 2001, at which time carriers will file the revised form containing the additional information described above in accordance with the Instructions to FCC Form 499-A. This information shall be submitted under oath and penalty of perjury, and must be updated to reflect any changes. Pursuant to the existing requirement in § 1.47 of our rules, a carrier shall update its registration to reflect any changes by submitting the revised relevant portion of the FCC Form 499-A within no more than one week of the change. The Commission will make the registration information described above available for public inspection in its reference room and on its website.

56. We believe that all carriers providing interstate telecommunications service, including small carriers providing such service, should be able to submit this information without much expense or difficulty because it is readily available and, to a large degree, must already be submitted in state jurisdictions. In addition, we note that making the registration information part of an existing form that must be completed and submitted for other obligations will minimize the burden on carriers. We therefore conclude that carriers failing to register with the Commission may, after notice and opportunity to respond, be subject to a fine. Carriers providing false or misleading information in their registrations may have their operating authority revoked or suspended, after receiving appropriate notice and opportunity to respond.

57. We further conclude that any telecommunications carrier providing telecommunications service for resale shall have an affirmative duty to ascertain whether a potential carrier-customer (i.e., a reseller) has filed a registration with the Commission prior to providing that carrier-customer with service. Once the telecommunications carrier that provides telecommunications service for resale determines the registration status of its potential carrier-customer, such carrier will not be responsible for monitoring the registration status of that customer on an ongoing basis, although we believe that a prudent carrier may choose to do so. In situations where such carrier is currently providing a reseller with service, we direct the reseller to notify its underlying carrier that it has submitted the registration information to the Commission, within a week of having done so.

58. We note that a telecommunications carrier providing telecommunications service for resale will not be responsible for the accuracy of the registration provided to the Commission by its potential carrier-customer, nor will such carrier, relying in good faith on the absence of such registration, be liable under Section 251 of the Act for withholding service from the unregistered entity. The Commission may, however, after giving appropriate notice and opportunity to respond, impose a fine on carriers that fail to determine the registration status of other carriers before providing them with service. The dollar amount of the fine imposed on such carrier for failing to meet its affirmative duty with respect to an unregistered reseller will depend on the egregiousness of the facts surrounding the particular incident. We conclude that this will deter carriers from providing service to resellers that have not registered with the Commission, which will, in turn, make it more difficult for “bad actor” resellers to stay in business.

59. Discussion. We believe that the issue of recovery of additional amounts from unauthorized carriers has been effectively resolved in the context of our First Reconsideration Order. As discussed, in that order, we reaffirmed our decision to absolve consumers of liability for slamming charges for a limited period of time, i.e., within the first 30 days after the unauthorized change. We established procedures that apply when a consumer has not paid charges to the slamming carrier and also modified the liability rules that apply when a subscriber has paid charges to a slamming carrier. Specifically, we concluded that, when the slamming carrier receives payment from the subscriber, such carrier must pay out 150% of the collected charges to the authorized carrier, which, in turn, will pay to the subscriber 50% of his or her original payment. In addition, the order provides specific notification requirements to facilitate carriers' compliance with the liability rules. Given these modifications, we do not believe that there is a need for further action in this area at the present time.

60. Several parties argue on reconsideration that the Commission should allow carriers to verify and submit orders to implement or lift preferred carrier freezes, just as the Commission allows carriers to verify and submit preferred carrier change orders. We decline to modify our rules and retain the requirement that subscribers must implement or lift preferred carrier freezes through contact with their local carriers.

61. In the Section 258 Order, we decided carriers should not be permitted to submit preferred carrier freeze lifts, even if those lift orders were first verified by a neutral third party. We stated that “the essence of a preferred carrier freeze is that a subscriber must specifically communicate his or her intent to request or lift a freeze [and it is this] limitation on lifting preferred carrier freezes that gives the freeze mechanism its protective effect.” We determined that subscribers would gain no additional protection from the implementation of a preferred carrier freeze if we were to allow third party verification of a carrier change to override a preferred carrier freeze. Although such a proposal minimizes the risk that unscrupulous carriers might attempt to impose preferred carrier freezes without the consent of subscribers, we concluded that it frustrates the subscriber's ability to change carriers. Petitioners have not persuaded us that we erred in making these determinations. We therefore affirm our decision that only a subscriber may request or lift a preferred carrier freeze.

62. Consistent with this purpose, we also take this opportunity to clarify that LECs may not accept preferred carrier freeze orders from carriers on behalf of subscribers, even if they are properly verified. We believe that limiting the submission of preferred carrier freeze requests to subscribers will help curb the potential for abuse by slamming carriers. To interpret our rules otherwise would undermine the effectiveness of preferred carrier freezes. For example, if a slamming carrier were allowed to submit an unauthorized freeze order with an unauthorized change order, not only would the subscriber be slammed, but it would also be more difficult for the subscriber to be switched back to the authorized carrier because of the unauthorized freeze. This freeze mechanism assures that no carrier change is processed without the direct involvement of the subscriber.

63. RCN and Excel seek clarification that a subscriber request a change and obtain a preferred carrier freeze in the same transaction. Nothing in our rules prohibits a subscriber from changing a carrier and requesting a freeze in the same transaction. We emphasize that the LEC must, however, verify both the freeze request and the carrier change request in accordance with our rules. Specifically, the LEC must obtain a Letter of Agency, electronic authorization, or third party verification that applies to the freeze request and, if the LEC is the provider of the requested long distance service, the LEC must also properly verify the carrier change request. We note that, in situations where a customer initiates or changes long distance service by contacting the LEC directly, verification of the customer's choice is not necessary by either the LEC or the chosen IXC because neither carrier is the “submitting carrier” as we have defined it.

64. MCI asks the Commission to clarify that executing carriers have an obligation to lift a preferred carrier freeze and switch a customer during the same three-way call. MCI states that it has experienced difficulties in making authorized carrier changes where preferred carrier freezes have been in place. MCI explains that, after a carrier change request is properly verified, MCI electronically sends the request to the executing carrier. In situations where the customer has a preferred carrier freeze in place, but may have forgotten, the change request has been rejected by the executing carrier. At that point, MCI states that it contacts the customer and initiates a three-way call between the executing carrier, the customer, and MCI. According to MCI, the executing carrier will only sometimes accept the three-way call, will only sometimes lift the preferred carrier freeze during the three-way call, and will never execute the carrier change during the three-way call. Thus, MCI appears to argue that, in situations where the submitting carrier initiates a three-way call for the purpose of simultaneously lifting a preferred carrier freeze and submitting a carrier change request that has been already properly verified, the Commission should require the executing carrier to accept the freeze lift and effect the carrier change request in the same three-way call.

65. Although we agree with MCI that accepting both freeze lift and properly verified carrier change requests during the same three-way call may be an efficient means of effectuating a consumer's carrier change request, we need not mandate that executing carriers follow this course at this time. As we stated in the Section 258 Order, carriers must offer subscribers a simple, easily understandable, but secure way of lifting preferred carrier freezes in a timely manner. We concluded that LECs administering a preferred carrier freeze program must accept the subscriber's authorization, either oral or written and signed, stating an intent to lift a preferred carrier freeze. We determined that LECs also must permit a submitting carrier to conduct a three-way conference call with the LEC and the subscriber in order to lift a freeze. Our rules do not, however, prohibit LECs from requiring submitting carriers to use separate methods for lifting a preferred carrier freeze and submitting a carrier change request. If MCI is concerned about the delay that may result from some LECs refusing to accept properly verified carrier change orders during the same three-way call initiated for the purpose of lifting a freeze, it may file a complaint in the appropriate forum.

66. We also note that, in the Section 258 Order, we declined to enumerate all acceptable procedures for lifting preferred carrier freezes. Rather, we encouraged parties to develop other methods of accurately confirming a subscriber's identity and intent to lift a preferred carrier freeze, in addition to offering written and oral authorization to lift preferred carrier freezes. We continue to believe that, as long as these other methods are secure and “impose only the minimum burdens necessary on subscribers who wish to lift a preferred carrier freeze,” we need not mandate an automated process for carrier freezes, as requested by AT&T.

67. Furthermore, for the same reasons articulated in the Section 258 Order, we will not require LECs administering preferred carrier freeze programs to make subscriber freeze information available to other carriers. We continue to believe that, in light of our preferred carrier freeze solicitation requirements, subscribers should know whether there are preferred carrier freezes in place on their carrier selections. As we noted in the Section 258 Order, if a subscriber is uncertain about whether a preferred carrier freeze has been imposed, the submitting carrier may use the three-way calling mechanism to confirm the presence of a freeze. Carriers therefore would not need to rely on a LEC-prepared list identifying those subscribers who have freezes in place. Moreover, there is no indication, based on the record before us, that this information has been used in an anti-competitive manner, as AT&T suggests. If, in the future, we find that LECs are using this information for anti-competitive purposes, we will revisit this issue at that time.

68. Several carriers ask the Commission to clarify that an executing carrier is liable for an unauthorized carrier change when the carrier improperly executes a carrier change request. Section 258 of the Act contemplates that the submitting carrier and/or the executing carrier could be liable for an unauthorized change in a subscriber's telecommunications service. In the Section 258 Order, we delineated the duties and obligations of submitting and executing carriers in order to minimize disputes over the source or cause of unauthorized carrier changes. Generally, we concluded that submitting carriers are responsible for submitting, without unreasonable delay, authorized and properly verified carrier change requests; while executing carriers are charged with executing promptly and without unreasonable delay changes that have been verified by the submitting carrier. We found that “where the submitting carrier submits a carrier change request that fails to comply with our rules and the executing carrier performs the change in accordance with the submission, only the submitting carrier is liable as an unauthorized carrier; [but] where the submitting carrier submits a change request that conforms with our rules and the executing carrier fails to perform the change in conformance with the submission, * * * the executing carrier is liable. * * *” Thus, an executing carrier that fails to execute promptly and without unreasonable delay a change request that has been properly submitted and verified is in violation of Section 258 of the Act and § 64.1100(b) of our rules and may be subject to liability for damages.

69. We affirm our decision to require separate authorization for each service for which a subscriber requests a carrier change and/or freeze. Excel has not presented any new arguments or credible evidence that would cause us to conclude our original decision was in error.

70. We also clarify that the separate authorization requirement does not prohibit carriers from obtaining a customer's authorization to change more than one service on the same LOA. Section 64.1130(d) of our rules allows carriers to use these “combined check-LOAs,” as long as they comply with all the requirements governing Letters of Agency in § 64.1130. Thus, a carrier may use one combined check-LOA to obtain authorization for more than one service. It must be clear to the subscriber, however, that he or she will be receiving each service listed on the combined check-LOA from the same carrier.

71. We will not adopt a 30-day limit on the effectiveness of an LOA as suggested by petitioner SBC. We believe a more reasonable limitation on the amount of time an LOA should be considered valid is 60 days, and we hereby adopt this 60-day limit. We further conclude that the 60-day limit shall apply to submitting carriers rather than executing carriers, because submitting carriers are actually parties to the contractual agreement with the customer and, as such, are more capable of conforming their behavior to the obligation.

72. Although we recognize that a LEC may be able to lift a freeze in as few as 24 or 48 hours, there are several factors to consider in determining the time period that an LOA should be considered valid. For example, if a carrier change request is rejected because the subscriber has not lifted the freeze on his or her account, the carrier must contact the subscriber and give him or her the opportunity to lift the freeze via a three-way call to the LEC. The subscriber may, however, be out of town or otherwise unable to be reached immediately. In either case, the carrier will be forced to continue to hold the LOA indefinitely or until the subscriber can be contacted. A 60-day limitation permits more flexibility under these and other, similar circumstances. We emphasize that this 60-day limitation represents the maximum time period for which an LOA will be considered valid. We note that consumers expect that their expressed preference for a new carrier will be honored within a reasonable time frame, and we think that a 60-day period sets a reasonable outer limit. In addition, a time period exceeding 60 days may cause confusion for customers regarding requests they may have made concerning their account but no longer remember. We encourage carriers to submit a change order immediately after the subscriber authorizes the change to minimize the risk that the subscriber will have forgotten the change.

73. Under § 64.1130(e)(5) of our rules, LOAs are required to include a statement “[t]hat the subscriber understands that any preferred carrier selection the subscriber chooses may involve a charge to the subscriber for changing the subscriber's preferred carrier.” In its petition, MediaOne explains that this requirement, which initially applied only to changes of a subscriber's long distance provider, can now be read to apply to changes of local service providers. Because preferred carrier change charges do not apply when a subscriber changes from one local service provider to another, MediaOne argues that the requirement set forth in Section 64.1130(e) will result in consumer confusion. Accordingly, MediaOne asserts that this rule should be revised to provide that this statement is not required in LOAs authorizing changes of local service providers.

74. We will revise our requirements for the content of LOAs. Our current rules state that an LOA must indicate to the subscriber that a charge “may” be assessed for any preferred carrier change. We agree with MediaOne that § 64.1130(e)(5) of our rules, as written, may result in consumer confusion to the extent there is no preferred carrier change charge applied for a change in local service providers. To alleviate consumer confusion, we therefore amend § 64.1130(e)(5) to provide that an LOA must contain language giving a subscriber the option of consulting with the carrier as to whether a fee applies to his or her preferred carrier change.

75. There are two preferred carrier change charges that can be involved in a slam. The first charge is assessed when the LEC executes the slamming carrier's preferred carrier change order. The second charge is assessed when the LEC returns the subscriber to his or her authorized carrier. SBC seeks clarification as to whether, under the new slamming procedures, the unauthorized carrier is responsible for paying the carrier change charge when the subscriber is returned to his or her authorized carrier. SBC also requests clarification that, when a slam has been alleged, the LEC, acting as executing carrier, is no longer obligated to investigate or make a determination as to the validity of the initial carrier change.

76. We have previously stated that where an IXC submits a request that is disputed by a subscriber and the IXC is unable to produce verification of that subscriber's change request, the LEC must assess the applicable change charge against that IXC. We also stated in the Section 258 Order that the unauthorized carrier must pay for the expenses of restoring the subscriber to his or her authorized carrier. We continue to believe that an unscrupulous carrier should bear full financial responsibility for the costs of its unlawful actions. Accordingly, we hereby clarify that the unauthorized carrier shall pay the preferred carrier change charges that are assessed in the event of a slam, i.e., the charge assessed when the LEC executes the slamming carrier's preferred carrier change order and the charge assessed when the LEC returns the subscriber to his or her authorized carrier. Unauthorized carriers also are responsible for reimbursing authorized carriers in accordance with the requirements set forth in Section 258 of the Act and § 64.1170 of our rules.

77. We note that SBC's second clarification request regarding the executing carrier's role in investigating slamming allegations was made in response to the Commission's prior liability rules, which were superceded by the liability rules adopted in the First Reconsideration Order. The procedures we adopted in the First Reconsideration Order provide that “disputes between alleged slamming carriers, authorized carriers, and subscribers now will be brought before an appropriate state commission, or this Commission in cases where the state has not elected to administer these rules, rather than to the authorized carriers, as adopted in the Section 258 Order.” Under these procedures, carriers must inform subscribers who believe that they have been slammed of their right to file a complaint with the appropriate governmental entity. We have not, however, restricted the ability of carriers to try to satisfy subscribers who alleged they have been slammed. For example, an IXC might authorize a LEC to fix alleged slams on a no-fault basis or to investigate the validity of the carrier changes. Nothing in the First Reconsideration Order precludes carriers from attempting to resolve slamming allegations, either directly or through contractual arrangement with another carrier, before the subscribers have filed complaints, and, indeed, we anticipate that carriers will have incentives to continue such practices.

78. Excel and RCN argue in their petitions that the Commission should reconsider its decision not to preempt state regulations regarding slamming because they believe that “the costs to carriers to comply with a patchwork of inconsistent federal and state regulations could be exorbitant, while accruing little benefit to consumers.” Although we recognize that it may be simpler for carriers to comply with one set of verification rules, we will not interfere with the states' ability to adopt more stringent regulations. As we observed in both the Section 258 Order and the First Reconsideration Order, the Commission must work hand-in-hand with the states towards the common goal of eliminating slamming. States have valuable insight into the slamming problems experienced by consumers in their respective locales and can share their expertise with this Commission. We will not thwart that effort by requiring states to limit their verification requirements so that they are no more stringent than those promulgated by this Commission. The carriers challenging the Commission's decision to refrain from preempting state regulations have failed to identify a particular state law that should be preempted and how that state law conflicts with federal law or obstructs federal objectives. In the absence of such evidence, we will not preempt state regulations governing verification procedures for preferred carrier change requests.

89. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the FNPRM in this proceeding. The Commission sought written public comment on the proposals in the FNPRM, including comment on the IRFA. The comments received are discussed below. The instant Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

90. Section 258 of the Act makes it unlawful for any telecommunications carrier “to submit or execute a change in a subscriber's selection of a provider of telephone exchange services or telephone toll service except in accordance with such verification procedures as the Commission shall prescribe.” In the Section 258 Order, the Commission established a comprehensive framework of rules to implement Section 258 and strengthen its existing anti-slamming rules. Concurrent with the release of the Section 258 Order, the Commission issued a FNPRM seeking comment on a number of additional proposals to further improve the preferred carrier change process and to prevent unauthorized carrier changes. In the instant Order, the Commission adopts some of the proposals set forth in the FNPRM. Specifically, the Commission: (1) amends the current carrier change authorization and verification rules to expressly permit the use of Internet Letters of Agency (Internet LOAs) in a manner consistent with the new E-Sign Act; (2) directs the North American Numbering Plan Administration (NANPA) to eliminate the requirement that carriers purchase Feature Group D access in order to obtain a carrier identification code (CIC); (3) provides further guidance on the independent third party verification process; (4) defines the term “subscriber” for purposes of its slamming rules; (5) requires carriers providing telephone exchange and/or telephone toll service to submit a semiannual report on the number of slamming complaints it receives; and (6) expands the existing registration requirement on carriers providing interstate telecommunications service to include additional facts that will assist the Commission's enforcement efforts. The objectives of the modified rules adopted in this Order are to implement Section 258 by improving the preferred carrier change process and strengthening the Commission's framework of anti-slamming rules.

91. The Commission received no comments directly in response to the IRFA.

92. Resellers and CICs. Relying in part on the small size of many resellers, opponents of the Commission's proposal to require switchless resellers to use their own CICs argue that such a requirement would create a substantial market entry barrier for resellers. Others maintain that CIC deployment costs would be manageable for resellers because they typically operate on a regional rather than on a national basis, that such costs may be viewed as “a legitimate cost of doing business,” and that the independent use of CICs has significant competitive advantages for switchless resellers. These comments are discussed in more detail in paragraph 27 above.

93. Submission of Reports by Carriers. Commenters contend that requiring each carrier to submit reports on the number of slamming complaints that it receives would create serious burdens for the Commission and compliant carriers alike. We do not believe that the reporting requirement adopted in this Order will impose significant additional costs or administrative burdens on carriers. Several carriers indicated that they already track slamming complaints received from subscribers. Thus, we do not believe that we are requiring carriers to keep information that they would not otherwise already keep. Moreover, this requirement will enable the Commission to identify the carriers who repeatedly initiate unauthorized changes. In addition, carriers may be compelled to reduce slamming on their own because the reports will be available for public inspection.

94. Registration Requirement. Commenters argue that the proposed registration requirement would impose unnecessary costs on carriers and would do little to alleviate the slamming problem. We believe that all carriers providing interstate telecommunications should be able to comply with the registration requirement adopted herein without much expense or difficulty because the information requested is readily available, and to a large degree, must be provided to the states. We have minimized the burden that this requirement may have on carriers by making the registration information part of an existing form that must be completed and submitted for other obligations. We believe this requirement will benefit consumers by enhancing our ability to take appropriate enforcement action against carriers that have demonstrated a pattern or practice of slamming.

95. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” “small governmental jurisdiction,” and “small business concern” under section 3 of the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). A small organization is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of 1992, there were approximately 275,801 small organizations. “Small governmental jurisdiction” generally means “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than 50,000.” As of 1992, there were approximately 85,006 such jurisdictions in the United States. This number includes 38,978 counties, cities, and towns; of these, 37,566, or 96 percent, have populations of fewer than 50,000. The Census Bureau estimates that this ratio is approximately accurate for all governmental entities. Thus, of the 85,006 governmental entities, we estimate that 81,600 (96 percent) are small entities. According to SBA reporting data, there were 4.44 million small business firms nationwide in 1992. Below, we further describe and estimate the number of small entity licensees and regulatees that may be affected by the proposed rules, if adopted.

96. The most reliable source of information regarding the total numbers of certain common carrier and related providers nationwide, as well as the number of commercial wireless entities, appears to be data the Commission publishes in its Trends in Telephone Service report. In a recent news release, the Commission indicated that there are 4,144 interstate carriers. These carriers include, inter alia, local exchange carriers, wireline carriers and service providers, interexchange carriers, competitive access providers, operator service providers, pay telephone operators, providers of telephone service, providers of telephone exchange service, and resellers.

97. The SBA has defined establishments engaged in providing “Radiotelephone Communications” and “Telephone Communications, Except Radiotelephone” to be small businesses when they have no more than 1,500 employees. Below, we discuss the total estimated number of telephone companies falling within the two categories and the number of small businesses in each, and we then attempt to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules.

98. We have included small incumbent LECs in this present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard (e.g., a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. We have therefore included small incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on FCC analyses and determinations in other, non-RFA contexts.

99. Total Number of Telephone Companies Affected. The U.S. Bureau of the Census (“Census Bureau”) reports that, at the end of 1992, there were 3,497 firms engaged in providing telephone services, as defined therein, for at least one year. This number contains a variety of different categories of carriers, including local exchange carriers, interexchange carriers, competitive access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone operators, covered specialized mobile radio providers, and resellers. It seems certain that some of these 3,497 telephone service firms may not qualify as small entities because they are not “independently owned and operated.” For example, a PCS provider that is affiliated with an interexchange carrier having more than 1,500 employees would not meet the definition of a small business. It is reasonable to conclude that 3,497 or fewer telephone service firms are small entity telephone service firms that may be affected by the new rules.

100. Wireline Carriers and Service Providers. The SBA has developed a definition of small entities for telephone communications companies except radiotelephone (wireless) companies. The Census Bureau reports that there were 2,321 such telephone companies in operation for at least one year at the end of 1992. According to the SBA's definition, a small business telephone company other than a radiotelephone company is one employing no more than 1,500 persons. All but 26 of the 2,321 non-radiotelephone companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 non-radiotelephone companies that might qualify as small entities. We do not have data specifying the number of these carriers that are not independently owned and operated, and thus are unable at this time to estimate with greater precision the number of wireline carriers and service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that 2,295 or fewer small telephone communications companies other than radiotelephone companies are small entities that may be affected by the new rules.

101. Local Exchange Carriers. Neither the Commission nor the SBA has developed a definition for small providers of local exchange services (LECs). The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Telecommunications Industry Revenue data, 1,348 incumbent carriers reported that they were engaged in the provision of local exchange services. We do not have data specifying the number of these carriers that are either dominant in their field of operations, are not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of LECs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that 1,348 or fewer providers of local exchange service are small entities that may be affected by the new rules.

102. Interexchange Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of interexchange services (IXCs). The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Trends in Telephone Service data, 171 carriers reported that they were engaged in the provision of interexchange services. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of IXCs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 171 or fewer small entity IXCs that may be affected by the new rules.

103. Competitive Access Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to competitive access services providers (CAPs). The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Trends in Telephone Service data, 212 CAP/CLECs carriers and 10 other LECs reported that they were engaged in the provision of competitive local exchange services. We do not have data specifying the number of these carriers that are not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of CAPs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 212 or fewer small entity CAPs and 10 other LECs that may be affected by the new rules.

104. Operator Service Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of operator services. The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Trends in Telephone Service data, 24 carriers reported that they were engaged in the provision of operator services. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of operator service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 24 or fewer small entity operator service providers that may be affected by the new rules.

105. Pay Telephone Operators. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to pay telephone operators. The closest applicable definition under SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent Trends in Telephone Service data, 615 carriers reported that they were engaged in the provision of pay telephone services. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of pay telephone operators that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 615 or fewer small entity pay telephone operators that may be affected by the new rules.

106. Resellers (including debit card providers). 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 other than radiotelephone (wireless) companies. According to the most recent Trends in Telephone Service data, 388 toll and 54 local entities reported that they were engaged in the resale of telephone service. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of resellers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 388 or fewer small toll entity resellers and 54 small local entity resellers that may be affected by the new rules.

107. Toll-Free 800 and 800-Like Service Subscribers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to 800 and 800-like service (“toll free”) subscribers. The most reliable source of information regarding the number of these service subscribers appears to be data the Commission collects on the 800, 888, and 877 numbers in use. According to our most recent data, at the end of January 1999, the number of 800 numbers assigned was 7,692,955; the number of 888 numbers that had been assigned was 7,706,393; and the number of 877 numbers assigned was 1,946,538. We do not have data specifying the number of these subscribers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 7,692,955 or fewer small entity 800 subscribers, 7,706,393 or fewer small entity 888 subscribers, and 1,946,538 or fewer small entity 877 subscribers may be affected by the new rules.

108. Cellular Licensees. Neither the Commission nor the SBA has developed a definition of small entities applicable to cellular licensees. Therefore, the applicable definition of small entity is the definition under the SBA rules applicable to radiotelephone (wireless) companies. This provides that a small entity is a radiotelephone company employing no more than 1,500 persons. According to the Census Bureau, only twelve radiotelephone firms from a total of 1,178 such firms which operated during 1992 had 1,000 or more employees. Therefore, even if all twelve of these firms were cellular telephone companies, nearly all cellular carriers were small businesses under the SBA's definition. In addition, we note that there are 1,758 cellular licenses; however, a cellular licensee may own several licenses. In addition, according to the most recent Telecommunications Industry Revenue data, 808 carriers reported that they were engaged in the provision of either cellular service or Personal Communications Service (PCS) services, which are placed together in the data. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of cellular service carriers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 808 or fewer small cellular service carriers that may be affected by the new rules.

109. Below, we analyze the projected reporting, recordkeeping, and other compliance requirements that might affect small entities.

110. Preferred Carrier Changes Using the Internet. The Commission amends its rules to expressly permit preferred carrier changes to be conducted electronically through the use of Internet Letters of Agency (LOAs). Internet LOAs must comply with all current Commission authorization and verification requirements (as modified), and consumers must have the option of using alternative authorization and verification methods. This action is consistent with the E-Sign Act's mandate that electronic signatures and transactions be treated the same as written ones, and will promote consumer convenience and competition by facilitating the use of the Internet for preferred carrier changes.

111. Resellers and CICs. The Commission directs the NANPA to eliminate the requirement that carriers purchase “Feature Group D access” to obtain CICs. This action will facilitate the assignment of CICs to switchless resellers and eliminate a financial and administrative obstacle to their independent use of CICs.

112. Independent Third Party Verification. The Commission retains the three-way conference call and confirms that automated systems may be used as independent third party verification methods, but requires that the carrier's sales representative drop off the call once the connection has been established between the subscriber and the third-party verifier. This action will ensure the independence of the third party verification process and prevent the carrier's sales representative from improperly influencing subscribers, without burdening the verification process. In addition, the Commission adopts minimum content requirements for third party verification to provide guidance as to what practices are necessary and acceptable, and confirms that automated verification systems that preserve the independence of the third party verification process may be used to verify carrier change requests.

113. Definition of “Subscriber.” The Commission adopts a definition of the term “subscriber” for purposes of its slamming rules that will allow customers of record to authorize additional persons to make telecommunications decisions, while retaining control over who is authorized to make such decisions on their behalf. The adoption of this definition will benefit all carriers, including small carriers, by providing them with the flexibility to establish authorization procedures appropriate to their own and their customers' needs, consistent with the framework of the Commission's slamming rules.

114. Submission of Reports by Carriers. Each carrier providing telephone exchange and/or telephone toll service is required to submit to the Commission a semiannual report identifying the number of complaints involving unauthorized changes that it has received, the number that it has investigated and found to be valid, and the number, investigated or not, that it has chosen to resolve directly with consumers. The report also must include the number of slamming complaints involving local intrastate and interstate interexchange service, investigated or not, that the carrier has chosen to resolve directly with subscribers. Because most subscribers who are slammed by an IXC report the slam to their LEC, rather than the IXC, LECs should include in their reports the name of each entity against which slamming complaints were directed and the number of complaints involving unauthorized changes that have been lodged against each entity. These reporting requirements will enable the Commission to identify carriers who repeatedly initiate unauthorized changes, and may induce carriers to reduce slamming on their own to avoid public embarrassment or loss of goodwill.

115. Registration Requirement. Each carrier is required to register with the Commission, and an affirmative duty is established on the part of a telecommunications carrier providing telecommunications service for resale to confirm that a reseller has registered with the Commission prior to providing that reseller with service. Specifically, the annually-filed Telecommunications Reporting Worksheet (FCC Form 499-A), which must be filed by all telecommunications carriers in April of each year, will be revised to include the following additional information that is targeted to assist the Commission's anti-slamming efforts: the carrier's business name(s) and primary address; the names and business addresses of the carrier's chief executive office, chairman, and president, or, in the event that a company does not have such executives, three similarly senior-level officials of the company; the carrier's regulatory contact and/or designated agent for service of process; all names under which the carrier has conducted business in the past; and the state(s) in which the carrier provides telecommunications service. The new registration requirement will enable the Commission to monitor the entry of carriers into the interstate telecommunications market and any associated increases in slamming, enhance the Commission's ability to take appropriate enforcement action against carriers that have demonstrated a pattern or practice of slamming, and deter carrier providing telecommunications service for resale from offering service to unregistered resellers.

116. Resellers and CICs. The Commission requested comment in the FNPRM on three possible approaches to the problems arising from the shared use of CICs by switchless resellers and their underlying, facilities-based carriers. The Commission believes that its proposal to require resellers to obtain their own CICs holds promise as a direct and effective solution to the significant problems that arise from the shared use of CICs. Based on review of the record as a whole, however, including concerns raised by some commenters regarding the financial and competitive impact of a CIC requirement on resellers, many of which are small entities, the Commission is not adopting a CIC requirement at this time. By directing that the Feature Group D requirement be eliminated, the Commission is taking a step that will facilitate the ability of resellers to obtain and use their own CICs, while allowing them to choose whether to do so based on their own competitive needs.

117. Submission of Reports by Carriers. The Commission has considered whether the reporting requirements adopted herein will impose significant additional costs or administrative burdens on carriers. The Commission concludes that this requirement would not impose significant additional costs or administrative burdens on carriers. In this regard, the Commission notes the comments of several carriers that they already track slamming complaints received from subscribers, and reasons that it would be a reasonable business practice for all telecommunications carriers, including small carriers, to track slamming complaints they receive in the course of their business. Indeed, the Commission states that it would be surprised if carriers did not do this. Accordingly, the Commission concludes that it is not requiring carriers to keep information that they would not otherwise keep. Moreover, these modest reporting requirements will help the Commission to achieve important objectives: identifying carriers that repeatedly initiate unauthorized changes, and deterring carriers from slamming.

118. Registration Requirement. To minimize the administrative burden on carriers of the registration requirement adopted herein, the Commission makes the registration information part of an existing form that must be completed and submitted for other obligations. The Commission also observes that all carriers providing interstate telecommunications service, including small carriers providing such service, should be able to submit this information without much expense or difficulty because it is readily available, and to a large degree, must already be submitted in state jurisdictions.

119. The Commission will send a copy of the Order, including this FRFA, in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. In addition, the Commission will send a copy of the Order, including the FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the Order and FRFA (or summaries thereof) also will be published in the Federal Register.

120. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Further Notice of Proposed Rule Making and Memorandum Opinion and Order on Reconsideration, 62 FR 43493, August 14, 1997, in this proceeding. The Commission sought written public comment on the proposals in the FNPRM and Order, including comment on the IRFA. A Final Regulatory Flexibility Analysis (FRFA) was incorporated in the subsequent Section 258 Order in this proceeding. The Commission received a number of petitions for reconsideration in response to the Section 258 Order. The instant Second Order on Reconsideration addresses issues raised in those reconsideration petitions. This associated Supplemental Final Regulatory Flexibility Analysis (SFRFA) reflects revised or additional information to that contained in the FRFA. This SFRFA is thus limited to matters raised in response to the Section 258 Order and addressed in the instant Second Order on Reconsideration. This SFRFA conforms to the RFA.

121. Section 258 of the Act makes it unlawful for any telecommunications carrier “to submit or execute a change in a subscriber's selection of a provider of telephone exchange services or telephone toll service except in accordance with such verification procedures as the Commission shall prescribe.” In the Section 258 Order, the Commission established a comprehensive framework of rules to implement section 258 and strengthen its existing anti-slamming rules. In this Second Order on Reconsideration, the Commission upholds its rules governing the submission of preferred carrier freeze orders, the handling of preferred carrier change requests and freeze orders in the same transaction, and the automated submission and administration of freeze orders and changes. In addition, the Commission reaffirms its decision not to preempt state regulations governing verification procedures for preferred carrier change requests that are consistent with the provisions of Section 258. Furthermore, the Commission declines to adopt a 30-day limit on the amount of time an LOA confirming a carrier change request should be considered valid and instead adopts a 60-day limit. Finally, the Commission clarifies certain of its rules regarding the payment of preferred carrier change charges after a slam.

122. The Commission received no comments directly in response to the previous FRFA concerning the issues addressed in this Order.

123. In the associated FRFA, supra, we have provided a detailed description of the pertinent small entities. Those entities include wireline carriers, local exchange carriers, interexchange carriers, competitive access providers, resellers, and wireless carriers. We hereby incorporate those detailed descriptions by reference.

124. Administration of Preferred Carrier Freezes. The Commission clarifies that only subscribers may submit freeze requests to LECs. The Commission also clarifies that a subscriber may request a preferred carrier change and obtain a preferred carrier freeze in the same transaction. In addition, the Commission declines to prohibit LECs from requiring submitting carriers to use separate methods for lifting a preferred carrier freeze and submitting a carrier change request, or to require LECs to make subscriber freeze information available to other carriers.

125. Verification of Preferred Carrier Changes. The Commission clarifies that an executing carrier that fails to promptly execute a properly submitted and verified change request has violated Section 258 and the Commission's slamming rules. In addition, the Commission reaffirms its prior decision to require separate authorization for each service for which a subscriber requests a carrier change and/or freeze, and clarifies that the separate authorization requirement does not prohibit carriers from obtaining authorization to change more than one service in the same LOA.

126. Rules Governing Letters of Agency (LOAs). The Commission declines to adopt 30-day limit on the amount of time that an LOA confirming a carrier change request is considered valid, instead adopting a 60-day limit as a more reasonable limitation. The 60-day limit applies to submitting carriers only. To avoid customer confusion as to whether a preferred carrier change charge applies for a change in local service providers, the Commission also amends its rules to provide that LOAs must contain language giving a subscriber the option of consulting with the carrier as to whether a fee applies to his or her preferred carrier change.

127. Payment of Preferred Carrier Change Charge After Slam. The Commission clarifies that the unauthorized carrier shall pay the preferred carrier change charge assessed when the LEC executes the slamming carrier's preferred carrier change order and the change charge assessed when the LEC returns the subscriber to his or her authorized carrier. The Commission also clarifies that slamming carriers are responsible for payment of all preferred carrier change charges associated with a slam, including both the charge assessed when the LEC executes the slamming carrier's preferred carrier change order and the charge assessed when the LEC returns the subscriber to his or her authorized carrier.

128. Preemption of State Regulations. The Commission reaffirms its decision in the Section 258 Order not to preempt state regulations regarding slamming.

129. The clarifications and minor modifications to the Commission's slamming rules made in this Second Order on Reconsideration will benefit all carriers, including small carriers, by providing certainty and guidance in the preferred carrier change process. For instance, the Commission declines to adopt a 30-day time limit on the amount of time that an LOA confirming a carrier change request is considered valid because it does not provide enough flexibility to submitting carriers. Instead, the Commission adopts a 60-day time limit as a reasonable time frame which will provide flexibility but will also avoid consumer confusion that may be produced by a indefinite period of validity. We expect that the 60-day time limit will have no significant economic impact.

130. The Commission will send a copy of the Second Order on Reconsideration, including this SFRFA, in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. In addition, the Commission will send a copy of the Second Order on Reconsideration, including the SFRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the Second Order on Reconsideration and SFRFA (or summaries thereof) also will be published in the Federal Register.

131. The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose new or modified reporting and recordkeeping requirements or burdens on the public. Implementation of these new or modified reporting and recordkeeping requirements will be subject to approval by the Office of Management and Budget (OMB) as prescribed by the Act and will go into effect upon announcement in the Federal Register of OMB approval.

132. Pursuant to Sections 1, 4, 201-205, and 258 of the Communications Act of 1934, as amended, the policies, rules, and requirements set forth herein are adopted. It is further ordered that 47 CFR Part 64 is amended as set forth.

133. Pursuant to Sections 1, 4(i), 4(j) of the Communications Act of 1934, as amended, that the petitions for reconsideration or clarification filed by AT&T Corp., Excel Telecommunications, Inc., MediaOne Group, National Telephone Cooperative Association, RCN Telecom Services, Inc., Rural LECs, and SBC Communications, Inc. are granted in part and denied in part to the extent discussed.

134. The requirements contained herein not pertaining to new or modified reporting or recordkeeping requirements shall become effective April 2, 2001 except for §§ 64.1130(a) through (c), 64.1130(i), 64.1130(j), 64.1180, 64.1190(d)(2), 64.1190(d)(3), 64.1190(e), and 64.1195, which contain information collection requirements that have not yet been approved by the Office of Management Budget (OMB). The Commission will publish a document in the Federal Register announcing the effective date of those sections.

135. The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this Order, including the Final Regulatory Flexibility Analysis and the Supplemental Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-235, adopted February 23, 2001, and released February 26, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center 445 12th Street, S.W., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW., Washington, DC 20036.

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-236, adopted February 23, 2001, and released February 26, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center 445 12th Street, S.W., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW, Washington, DC 20036.

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-188, adopted February 23, 2001, and released February 26, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center 445 12th Street, S.W., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW, Washington, DC 20036.

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-237, adopted February 7, 2001, and released February 16, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center (Room CY-A257), 445 Twelfth Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, NW., Washington, DC 20036, (202) 857-3800.

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-215 adopted February 7, 2001, and released February 16, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW., Washington, DC 20036.

Provisions of the Regulatory Flexibility Act of 1980 do not apply to this proceeding.

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-16; MM Docket No. 00-146; and MM Docket No. 00-147; MM Docket No. 00-212; MM Docket No. 00-213; and MM Docket No. 00-214, adopted February 7, 2001, and released February 16, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Information Center (Room CY-A257), 445 12th Street, SW., 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, 1231 20th Street, NW., Washington, DC 20036.

The Commission, at the request of NationWide Radio Stations, allots Channel 264A at Burke, South Dakota, as the community's first local aural transmission service. See 65 FR 12155, March 8, 2000. Channel 264A can be allotted at Burke in compliance with the Commission's minimum distance separation requirements with a site restriction of 3.5 kilometers (2.2 miles) east to avoid a short-spacing to the vacant allotment site for Channel 264A, Mission, South Dakota. The coordinates for Channel 264A at Burke are 43-11-06 North Latitude and 99-15-02 West Longitude.

The Commission, at the request of Robert Sanders, allots Channel 250A at Marietta, Mississippi, as the community's first local aural transmission service. See 65 FR 53689, September 5, 2000. Channel 250A can be allotted to Marietta in compliance with the Commission's minimum distance separation requirements distance separation requirements with a site restriction of 1.3 kilometers (0.8 miles) east to avoid short-spacings to the licensed sites of Station WWMS(FM), Channel 248C1, Oxford, Mississippi, Station WKGL(FM), Channel 249A, Russellville, Alabama, and Station WZLQ(FM), Channel 253C1, Tupelo, Mississippi. The coordinates for Channel 250A at Marietta are 34-30—20 North Latitude and 88-27-18 West Longitude.

The Commission, at the request of The Parker Radio Project, allots Channel 247A at Lake City, Colorado as the community's first local aural transmission service. See 65 FR 53689, September 5, 2000. Channel 247A can be allotted at Lake City in compliance with the Commission's minimum distance separation requirements at city reference coordinates. The coordinates for Channel 247A are 38-01-47 North Latitude and 107-18-52 West Longitude.

The Commission, at the request of Donald Staats d/b/a Media Staats, allots Channel 299A at Glenville, West Virginia, as the community's first local aural transmission service. See 65 FR 67691, November 13, 2000. Channel 299A can be allotted at Glenville in compliance with the Commission's minimum distance separation requirements with a site restriction 1.0 kilometers (0.6 miles) southwest to avoid a short-spacing to the licensed site of Station WFSP-FM, Channel 299A, Kingwood, West Virginia. The coordinates for Channel 299A at Glenville are 38-55-43 North Latitude and 80-50-47 West Longitude.

The Commission, at the request of Bernice P. Hedrick, allots Channel 292A at Pigeon Forge, Tennessee, as the community's first local aural transmission service. See 65 FR 67691, November 13, 2000. Channel 292A can be allotted at Pigeon Forge in compliance with the Commission's minimum distance separation requirements with a site restriction 7.5 kilometers (4.7 miles) southeast to avoid a short-spacing to the licensed site of Station WRIL-FM, Channel 292A, Pineville, Kentucky. The coordinates for Channel 292A at Pigeon Forge are 33-43-33 North Latitude and 83-31-18 West Longitude.

The Commission, at the request of H. David Hedrick, allots Channel 254A at Lincolnton, Georgia, as the community's first local aural transmission service. See 65 FR 67691, November 13, 2000. Channel 254A can be allotted at Lincolnton in compliance with the Commission's minimum distance separation requirements with a site restriction of 13 kilometers (8.1 miles) south to avoid a short-spacing to the licensed site of Station WSPA-FM, Channel 255C, Spartanburg, South Carolina. The coordinates for Channel 254A at Lincolnton are 33-40-37 North Latitude and 82-30-18 West Longitude.

The Federal Communications Commission published a document amending parts 21, 73, and 76 in the Federal Register of February 13, 2001 (66 FR 9962). This document corrects the Federal Register as it appeared. In rule FR Doc. 01-3175 published on February 13, 2001 (66 FR 9962), the Commission is correcting § 73.3615 of the Commission's rules to reflect an amendment to § 73.3615(a)(3)(iv)(B), rather than § 73.3615(a)(3)(iii)(B). In rule FR Doc. 01-3175 published on February 13, 2001, make the following corrections:

This interim rule amends EPAAR Subpart 1516.6 to provide for issuance, by an EPA Federal Classification Series (FCS) 1102 contracting officer or duly authorized EPA on-scene coordinator with a delegation of procurement authority, of a letter contract known as a Notice to Proceed to undertake certain emergency response actions as authorized under, and consistent with, CERCLA sections 104 (a)(1) and (h) (42 U.S.C. 9604(a)(1) and (h)), sections 311 (c)(2) and (e)(1)(B) of the Clean Water Act (33 U.S.C. 1321(c)(2) and (e)(1)(B)), and the National Oil and Hazardous Substances Pollution Contingency Plan (40 CFR part 300)(1999). Under CERCLA section 104 (a)(1), the EPA (as delegated by the President under Executive Order 12580) is authorized to take certain response actions, consistent with the NCP, to protect the public health, welfare or the environment whenever any hazardous substance is released or there is a substantial threat of such a release into the environment, or there is a release or substantial threat of release into the environment of any pollutant or contaminant which may present an imminent and substantial danger to the public health or welfare. Similarly, pursuant to sections 311 (c)(2) and (e)(1)(B) of the Clean Water Act, the EPA (as delegated by the President under Executive Order 12777) is authorized to take certain actions if a discharge, or a substantial threat of a discharge (to or upon navigable waters, adjoining shorelines, the contiguous zone, or natural resources belonging to, appertaining to, or under the exclusive management of the United States) of oil or a hazardous substance from a vessel, offshore facility, or onshore facility is of such a nature as to be a substantial threat to the public health or welfare. In addition, CERCLA Section 104(h), 42 U.S.C. 9604(h), and Clean Water Act sections 311 (c)(2)(B) and (d), 33 U.S.C. 1321 (c)(2)(B) and (d), generally provide that procurement procedures may be developed to effectuate the purposes of these sections. Accordingly, this interim rule identifies the circumstances and conditions under which an EPA FCS 1102 contracting officer or a duly authorized EPA on-scene coordinator with a delegation of procurement authority may award an NTP to carry out the EPA's obligations under CERCLA section 104(a)(1) and the Clean Water Act sections 311 (c)(2) and (e)(1)(B). In addition, the procedures provided for by this rule in EPAAR 1516.6 may also be used, as appropriate and authorized, for any actions that EPA may be directed to take by the Federal Emergency Management Agency under the authority of the Stafford Act, 42 U.S.C. 5121, et seq.

This interim rule is not a significant regulatory action for the purposes of Executive Order 12866; therefore, no review is required by the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB).

The Paperwork Reduction Act does not apply because this interim rule does not contain information collection requirements that require the approval of OMB under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impact of today's rule on small entities, small entity is defined as: (1) a small business that meets the definition of a small business found in the Small Business Act and codified at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's interim rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. Based on a review of EPA's historical experience, over the last three fiscal years EPA entered into only two letter contracts for the type of work contemplated by this interim rule, each of less than $10,000.00. Consequently, because of the emergency nature of an NTP, and the strict conditions on its use, and based on its limited historical utilization, it is believed that the authority provided by this interim rule will be used on a very limited basis so that it will have little, if any, impact on small businesses. This interim rule, therefore, will have no adverse and no significant impact on small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess their regulatory actions on State, local, and Tribal governments, and the private sector. This interim rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in one year. Any private sector costs for this action relate to paperwork requirements and associated expenditures that are far below the level established for UMRA applicability. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is determined to be economically significant as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This rule is not subject to Executive Order 13045 because it is not an economically significant rule as defined by Executive Order 12866, and because it does not involve decisions on environmental health or safety risks.

Executive Order 13132 entitled “Federalism” (64 FR 43255, August 10, 1999) requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

Under Section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This interim rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian Tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by Tribal governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 13084 requires EPA to provide to the OMB, in a separately identified section of the preamble to the rule, a description of the extent of EPA's prior consultation with representatives of affected Tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected and other representatives of Indian Tribal government “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.”

Today's rule does not significantly or uniquely affect the communities of Indian Tribal governments. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.

EPA will use voluntary consensus standards, as directed by section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note), in its procurement activities. The NTTAA directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This interim rulemaking does not involve technical standards. Therefore, EPA is not considering use of any voluntary consensus standards. EPA welcomes comments on this aspect of the interim rulemaking, and, specifically, invites the public to identify potentially applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rules report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under the Office of Federal Procurement Policy Act, 41 U.S.C. 418b, and Federal Acquisition Regulation (FAR) 1.501-3(b), a procurement regulation may take effect on a temporary basis prior to notice and comment when there are urgent and compelling circumstances that make compliance with prior notice and comment impracticable, the notice of the procurement regulation is published in the Federal Register and includes a statement that the procurement regulation is temporary pending completion of the public comment period, and provision is made for a public comment period of at least 30 days. For the reasons set forth below, a determination has been made by the authorized official that such conditions exist justifying the promulgation of this interim rule without prior opportunity for public comment. Pursuant to the Office of Federal Procurement Policy Act, 41 U.S.C. 418b(d), the EPA will consider public comments received in response to this interim rule in the formation of the final rule.

Immediate effectiveness of this interim rule is essential to ensure that the EPA, if necessary, will be able to obtain the services required to respond to certain environmental emergency situations as authorized by and consistent with CERCLA sections 104(a)(1) and (h) (42 U.S.C. 9604(a)(1) and (h)), the Clean Water Act sections 311(c)(2) and (e)(1)(B) (33 U.S.C. 1321(c)(2) and (e)(1)(B), and the National Oil and Hazardous Substances Pollution Contingency Plan (40 CFR part 300). Under these statutes and regulations, the EPA is authorized to take certain actions to protect the public health, welfare or the environment.

Although EPA has contracted on a competitive basis with a number of firms to provide emergency response cleanup services, certain types of emergencies may be so acute, and the threat to human health or the environment so severe, that cleanup actions must be commenced prior to the required response times of these contracts. Some examples of these types of emergencies include: a train derailment in a remote area with leakage of highly toxic chemicals into the ground or nearby water source; an oil or hazardous chemical spill into a river, lake, or stream that may affect wildlife or the public health or welfare; and a fire or explosion at a petrochemical facility or a chemical distributors warehouse that may release toxic chemicals into the air, water, or land endangering the public and the environment. Furthermore, emerging threats that the EPA may be tasked to address include releases caused by terrorists/weapons of mass destruction, which are events which could threaten first responders, the public and the environment.

In such emergencies, the standard contract response time may be too long to wait to begin cleanup services or for some reason the contracted cleanup contractor may not be able to respond in time and no other alternate existing contractor is available. Consequently, the urgent and compelling circumstances attendant to this interim rule stem from the concern that unforeseen and unpredictable situations could materialize where existing contractual vehicles in place to deal with an emergency environmental problem are not capable, for any reason, to timely respond to the situation thereby exposing the public and the environment to the risk of harm or injury. Although the EPA does not anticipate many situations where the existing contractual coverage will be insufficient to timely and adequately respond to an environmental emergency demanding immediate attention, in order to fulfill its responsibilities to protect the public health, welfare and the environment, the Agency needs a contractual mechanism to obtain immediate services to respond to environmental releases, discharges or threats that cannot be adequately and timely addressed by existing contractual coverage.

The Agency therefore intends to use a letter contract called an NTP in those limited situations where the existing contractual coverage is not available in a timely manner to respond to certain environmental discharges, releases or threats as described in CERCLA section 104(a)(1) (42 U.S.C. 9604(a)(1)), Clean Water Act sections 311(c)(2) and (e)(1)(B) (33 U.S.C. 1321(c)(2) and (e)(1)(B)), and the National Oil and Hazardous Substances Pollution Contingency Plan (40 CFR part 300). The use of the NTP letter contract will be governed by the applicable procedures mandated by the FAR and the additional requirements set forth in this rule.

Accordingly, because of the urgent and compelling nature of this action, and the potential danger and damage that could materialize if there were no adequate contractual coverage available to timely respond to an environmental emergency, pursuant to 41 U.S.C. 418b(d) and FAR 1.501-3(b), EPA is promulgating this interim rule on a temporary basis and providing for a public comment period of 60 days from the date of publication of this interim rule. After considering the comments received, EPA may issue a final rule. In accordance with 41 U.S.C. 418b(d), this interim rule will be in effect on a temporary basis during the public comment period and while EPA considers any comments received.

Further, consistent with the urgent and compelling nature of this action, the Agency will execute a class Justification For Other Than Full And Open Competition as required by FAR 6.302-2 and 6.303-1(c) to allow for the award, under the conditions consistent with this rule, of an NTP letter contract on a non-competitive basis, and the EPA will also prepare and execute any additional determinations and/or deviations necessary to effectuate the purposes of this rule.

The FMP was developed jointly by the Atlantic States Marine Fisheries Commission (Commission) and the Mid-Atlantic Fishery Management Council (Council) in consultation with the New England and South Atlantic Fishery Management Councils. The management units specified in the FMP include scup (Stenotomus chrysops) and black sea bass (Centropristis striata) in U.S. waters of the Atlantic Ocean from 35°13.3′ N. lat. (the latitude of Cape Hatteras Light, NC) northward to the U.S./Canadian border. Implementing regulations for these fisheries are found at 50 CFR part 648, subparts A, H (scup), and I (black sea bass).

Pursuant to §§ 648.120 (scup) and 648.140 (black sea bass), the Administrator, Northeast Region, NMFS, (Regional Administrator) implements measures for the fishing year to assure that the target fishing mortality rate (F) or exploitation rate for each fishery, as specified in the FMP, is not exceeded. The target F or exploitation rate and management measures (e.g., mesh requirements, minimum fish sizes, seasons, and area restrictions) are summarized here, by species. Detailed background information regarding the status of these stocks and the development of the proposed specifications was provided in the proposed specifications for the 2001 summer flounder, scup, and black sea bass fisheries (65 FR 71042, November 28, 2000) and is not repeated here. In addition to establishing the annual measures, this action modifies the trip limit provisions in the scup and black sea bass fisheries so that they are possession limits, to enhance at-sea enforcement. For black sea bass and scup, this action also specifies that the possession limit is the maximum amount that can be landed in a calendar day. NMFS will publish a proposed and final rule for the 2001 recreational management measures for these fisheries in the Federal Register at a later date.

The FMP established a target exploitation rate for scup in 2001 of 33 percent. The total allowable catch (TAC) associated with that rate is allocated 78 percent to the commercial sector and 22 percent to the recreational sector by the FMP. Scup discard estimates are deducted from both TACs to establish total allowable landings (TAL) for both sectors (TAC - discards = TAL). The commercial TAL is then allocated with differing percentages to three quota periods: Winter I (January-April)-45.11 percent; Summer (May-October)-30.95 percent; and Winter II (Nov-December)-15.94 percent.

In 2000, NMFS implemented GRAs, a management tool recommended by the Council, to reduce discards of scup in small-mesh fisheries. The GRAs are seasonally closed to specified small-mesh fisheries using trawl gear with codend mesh sizes less than 4.5 inches (11 cm). GRAs initially went into effect on November 1, 2000, with an exemption for the Atlantic herring small-mesh fishery (65 FR 33486, May 24, 2000). They were later modified in size, effective December 23, 2000, (65 FR 81761, December 27, 2000), and a temporary exemption for the Loligo squid fishery and a permanent exemption for the Atlantic mackerel small-mesh fishery were implemented.

In the proposed rule for this action, NMFS noted the continued importance of reducing scup discards in small-mesh fisheries. NMFS also noted that it recognized that GRAs are not the only way to address scup discard mortality. Therefore, NMFS sought comments on four options to meet the regulatory requirement at 50 CFR 648.120 that the Regional Administrator implement measures to ensure that the target exploitation rate would not be exceeded. The four options varied in terms of the TAC level, the discard deduction made to calculate TALs, the size and location of the GRAs, and the fisheries to be exempted from the GRAs. In general, if GRAs were used to reduce scup bycatch, the discard deduction made in establishing the TAL would be lower than it would have been without GRAs, and the resultant quotas would be higher. The options are outlined here.

Option I: (1) The Council’s proposed quota for scup (a TAC of 8.37 million lb (3.80 million kg), a discard deduction of 2.15 million lb (0.97 million kg), and a TAL of 6.22 million lb (2.82 million kg)); (2) the GRAs currently in effect (as recommended by the Council); and (3) exemptions for Atlantic herring, Atlantic mackerel and Loligo squid small-mesh fisheries.

Under this option, the commercial TAC would be 6.53 million lb (2.96 million kg) minus discards of 2.08 million lb (0.94 million kg), resulting in a commercial quota of 4.45 million lb (2.02 million kg). The recreational TAC would be 1.84 million lb (0.83 million kg) minus discards of 0.07 million lb (0.03 million kg), resulting in a recreational harvest limit of 1.77 million lb (0.80 million kg).

Option II: (1) The Scup Monitoring Committee’s quota recommendation for 2001 (a TAC of 7.85 million lb (3.56 million kg), a discard deduction of 2.85 million lb (1.29 million kg), and a TAL of 5.0 million lb (2.27 million kg)); (2) the GRAs currently in effect (as recommended by the Council); and (3) exemptions for the Atlantic herring and Atlantic mackerel small-mesh fisheries.

Under this option, the commercial TAC would be 6.12 million lb (2.78 million kg) minus discards of 2.76 million lb (1.25 million kg), resulting in a commercial quota of 3.36 million lb (1.52 million kg). The recreational TAC would be 1.73 million lb (0.78 million kg) minus discards of 0.09 million lb (0.04 million kg), resulting in a recreational harvest limit of 1.64 million lb (0.74 million kg).

Option III: (1) The temporary suspension of GRA restrictions for 2001; and (2) a TAL established at a level that is consistent with the stock assessment’s conclusion that commercial discards are approximately equal to commercial landings (a TAC of 7.85 million lb (3.56 million kg), a discard deduction of 3.15 million lb (1.43 million kg), and a TAL of 4.70 million lb (2.13 million kg)).

Under this option, the commercial TAC would be 6.12 million lb (2.78 million kg) minus discards of 3.06 million lb (1.39 million kg), resulting in a commercial quota of 3.06 million lb (1.39 million kg). The recreational TAC would be 1.73 million lb (0.78 million kg) minus discards of 0.09 million lb (0.04 million kg), resulting in a recreational harvest limit of 1.64 million lb (0.74 million kg).

Option IV: (1) Modified GRAs that are shorter in duration and that exclude the Hudson Canyon area, but incorporate other areas of high scup concentration and small-mesh fishing activities during the winter months; (2) the Monitoring Committee’s quota recommendation for 2001 (a TAC of 7.85 million lb (3.56 million kg), a discard deduction of 2.85 million lb (1.29 million kg), and a TAL of 5.0 million lb (2.27 million kg)); and (3) exemptions for the Atlantic herring and Atlantic mackerel small-mesh fisheries.

Under this option, the commercial TAC would be 6.12 million lb (2.78 million kg) minus discards of 2.76 million lb (1.25 million kg), resulting in a commercial quota of 3.36 million lb (1.52 million kg). The recreational TAC would be 1.73 million lb (0.78 million kg) minus discards of 0.09 million lb (0.04 million kg), resulting in a recreational harvest limit of 1.64 million lb (0.74 million kg).

Based on the comments received on the proposed specifications and the requirements of the FMP, NMFS is implementing for 2001 the Council’s recommended TAC of 8.37 million lb (3.80 million kg) and associated TAL of 6.22 million lb (2.82 million kg), as described in Option I. This final rule also establishes the modified GRAs and exemptions described in Option IV (exempts Atlantic mackerel and Atlantic herring fisheries), which will remain in effect until modified by a subsequent action.

The TAC implemented by this final rule results in a consistent scup quota throughout the management unit, because it is the same as that adopted by the Commission for 2001. This prevents the confusion and inequities that would occur if different TALs were applicable to state-permitted and federally permitted vessels. In that situation, federally permitted vessels would be precluded from fishing for scup during a Federal closure, even though state-permitted vessels could continue to fish in state waters. Furthermore, because the Commission adopted a 6.22 million lb (282-million kg) scup quota, landings of 6.22 million lb (2.82 million kg) would likely occur in 2001 even if a lower Federal quota of 5.0 million lb (2.27 million kg) were adopted, because fishing by state-permitted vessels would continue in state waters even after Federal waters were closed to scup fishing.

In the proposed rule for this action, NMFS indicated concern regarding the scup quota recommended by the Council and the underlying assumption that scup biomass would be greater in 2001 than in 2000. However, during the comment period, the New York Department of Environmental Conservation presented new information indicating very strong recent scup year classes, particularly the 1999 year class, providing evidence that scup are rebuilding and that the biomass will increase in 2001. State fisheries managers from Rhode Island and Connecticut also indicated during the December 2000, Council meeting that their states’ inshore surveys indicated strong recent scup year classes. These states have provided preliminary information to NMFS showing a strong 1999 year class and also potentially strong 1998 and 2000 year classes. NMFS recognizes that these data are preliminary. Nevertheless, the information indicates at least one very strong scup year class. If protected from excessive discard mortality, the 1999 year class, and possibly others, should contribute significantly to rebuilding the resource.

Because of these potentially strong recent year classes, the harvest level recommended by the Council and adopted in this final rule can be reasonably expected to attain the target exploitation rate. However, these strong year classes also mean that GRAs remain necessary to protect juvenile scup from discard mortality and to allow rebuilding to take place. The GRAs described in Option IV and implemented through this final rule will extend farther south than the existing GRAs to include areas of high winter scup abundance and coincidental Loligo squid fishing effort, as identified by the Northeast Fisheries Science Center (NEFSC) winter bottom trawl survey and in vessel logbook reports. Although quantitative estimates are not available, these GRAs are expected to reduce scup discards in the winter. These GRAs will also allow small-mesh fishing in the Hudson Canyon area, which has been identified by industry as a priority area for winter fishing activity in several small-mesh fisheries. NMFS believes that these GRAs will reduce scup discards with simultaneously fewer adverse impacts on small-mesh fisheries than the existing GRAs.

The commercial allocation is shown in Table 1. These allocations are subject to a downward adjustment for any overages that occurred in a period’s scup harvest in 2000, as is required by § 648.120(d)(6). Scup preliminary landings data are listed in Table 2. Preliminary data indicate that the Winter I and Summer period allocations were exceeded in 2000. The resulting adjusted 2001 commercial quota for each period is given in Table 3.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The Pacific halibut bycatch mortality allowance for groundfish included in the other hook-and-line fishery, which is defined at § 679.21(d)(4)(iii)(C), was established by the Final 2001 Harvest Specifications and Associated Management Measures for the Groundfish Fisheries Off Alaska (66 FR 7276, January 22, 2001) for the first season, the period January 1, 2001, through May 17, 2001, as 175 metric tons. The other hook-and-line fishery includes all groundfish except sablefish or demersal shelf rockfish.

In accordance with § 679.21(d)(7)(ii), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the first seasonal apportionment of the 2001 Pacific halibut bycatch mortality allowance specified for the hook-and-line groundfish fisheries other than sablefish or demersal shelf rockfish in the GOA has been caught. Consequently, NMFS is prohibiting directed fishing for groundfish other than sablefish or demersal shelf rockfish by vessels using hook-and-line gear in the GOA.

Maximum retainable bycatch amounts may be found in the regulations at § 679.20(e) and (f).

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, finds that the need to immediately implement this action because the first seasonal bycatch mortality allowance of Pacific halibut apportioned to hook-and-line gear in the GOA has been caught constitutes good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(3)(B) and 50 CFR 679.20(b)(3)(iii)(A), as such procedures would be unnecessary and contrary to the public interest. Similarly the need to implement these measures in a timely fashion because the first seasonal bycatch mortality allowance of Pacific halibut apportioned to hook-and-line gear in the GOA has been caught constitutes good cause to find that the effective date of this action cannot be delayed for 30 days. Accordingly, under 5 U.S.C. 553(d), a delay in the effective date is hereby waived.

This action is required by § 679.21 and is exempt from review under Executive Order 12866.