The Gramm-Leach-Bliley Act, Pub. Law No. 106-102, 133 Stat. 1338 (Nov. 12, 1999) (GLB Act), amended the Federal Home Loan Bank Act (Bank Act) to change, among other things, the capital structure of the Banks from a “subscription” structure to one that includes both risk-based and minimum leverage requirements. The GLB Act also required the Finance Board to prescribe uniform capital standards for the Banks and required each Bank to adopt and implement a capital plan consistent with provisions of the GLB Act and Finance Board regulations. Under the GLB Act, each Bank must submit a capital plan to the Finance Board for approval within 270 days after the publication of the final capital regulations, in other words by no later than October 29, 2001. See 66 FR 8262. (Jan. 30, 2001) (publication of final capital rule).

In addition to approving the new capital regulations, the Finance Board adopted on December 20, 2000 a resolution directing its staff to develop an ANPR that would seek comment on any issues that could arise in the capital planning process, actions of other regulatory bodies or other events in the general economy that could affect the capital development of the Banks, and could require further action by the Finance Board. Accordingly, the Finance Board is issuing this ANPR to help identify issues or uncertainties that were not contemplated by, or fully addressed in, the final capital rule or that have arisen only after the Banks have begun to develop their capital plans.

This ANPR does not alter or delay the statutory deadline of October 29, 2001 by which the Banks must submit their capital plans to the Finance Board for approval. If the Finance Board determines that it should amend the capital regulations as a result of this ANPR, it would do so in accordance with the Administrative Procedures Act, either through a full notice and comment rulemaking or by interim final rule, depending on the nature and urgency of the change. Therefore, to best assure that any needed amendments will take effect by a date reasonably prior to the October 29 deadline, the Finance Board has established a 30-day comment period for the ANPR and intends to review comments received during the ANPR comment period expeditiously. For similar reasons, the Finance Board requests that commenters be as specific as possible in describing potential problems that could arise under the final capital regulations, discuss with specificity changes to the regulation that the commenters believe are needed to address such problems, and provide a legal analysis detailing the Finance Board's authority to adopt these suggested rule amendments, where applicable. The specific issues on which the Finance Board requests comment and discussion are described below.

As was discussed as part of the final rule, the decision by Congress to confer on the Class B stockholders an ownership interest in the retained earnings of the Banks has created some uncertainty as to the ability of a Bank to pay dividends to its Class A stockholders. Briefly stated, the language of the GLB Act that created the ownership interest in favor of the Class B stockholders might be interpreted as creating a property interest for the Class B stockholders that would effectively preclude that property from being used as a source for dividends on the Class A stock. Further discussion of this issue is set out in some detail in the SUPPLEMENTARY INFORMATION section of the adopting release for the final rule. See 66 FR 8272, 8777-78 (Jan. 30, 2001). Rather than address the issue as part of the final rule, the Finance Board at that time decided to defer consideration of this issue until it could have an opportunity to solicit comments. Nonetheless, because it is unlikely that the Congress intended the GLB Act to preclude the payment of dividends on the Class A stock, the Finance Board is inclined to propose an amendment to its capital regulations to make clear that a Bank that issues Class A stock will be permitted to pay dividends on that stock as determined by the board of directors of the Bank. Before issuing such a proposed rule, however, the Finance Board requests comments on how best to address the issue of payment of dividends on the Class A stock.

The investment by one Bank in the assets of another Bank (such as through the purchase of a participation interest) or in transactions that originated with the member of another Bank has been increasing in recent years. Such “out-of-district” assets may include Acquired Member Assets (AMA) and, as allowed under a recently adopted Finance Board rule, advances originated by another Bank or a participation interest in such advances. See 65 FR 43969, 43981 (July 18, 2000), as corrected by 65 FR 46049 (July 26, 2000) (adopting 12 CFR 950.25). Because the GLB Act and Finance Board regulations require a Bank to sell its stock only to its members, however, these out-of-district assets may present special problems to the extent that a Bank contemplated acquiring the incremental capital necessary to support these transactions through an activity-based stock purchase requirement. See 12 U.S.C. 1426(c)(5)(A), as amended; and 12 CFR 933.2(e)(2) as adopted at 66 FR 8320.

In addition, the GLB Act defines permanent capital specifically to “include the amounts paid for [C]lass B stock and the retained earnings of the [B]ank (as determined in accordance with generally accepted accounting principles) * * *.” 12 U.S.C. 1426(a)(5)(A), as amended. Further, under both the GLB Act and the capital regulations, only permanent capital can be used to satisfy a Bank's minimum risk-based capital requirement. See id. at 1426(a)(3), and 66 FR 8313 (adopting 12 CFR 932.3). Thus, the Finance Board is limited in its ability to define additional sources of permanent capital to meet the incremental risk-based capital requirements associated with new out-of-district assets. By contrast, the GLB Act provides that total capital may include an amount from any source that is available to absorb losses incurred by a Bank and that has been determined by the Finance Board to be appropriately included in total capital. 12 U.S.C. 1426(a)(5)(B), as amended. Thus, the Finance Board has greater flexibility to define sources of total capital that could be used to satisfy the Banks' minimum leverage requirements. See id. at 1426(a)(2) and 66 FR 8813 (adopting 12 CFR 932.2).

The Finance Board did not address the issue of capitalizing out-of-district assets in the final capital rule.1 The Finance Board is soliciting comment on how the Banks may capitalize their out-of-district assets, such as by use of subordinated debt. It seeks discussion on whether there is merit in considering the concept of capitalizing out-of-district assets at all, assistance in identifying problems that may hinder a Bank in implementing its capital plan or in meeting its capital requirements, and, if problems are identified, suggestions for solutions to such problems (including legal analysis to support the adoption of the suggested approach).

In addition to the specific issues discussed above, the Finance Board seeks comments and discussion on other unforeseen issues that were not resolved in the final rule and that may introduce uncertainty or impediments into the process of developing and implementing the required capital plans. In particular, the Finance Board is interested in any tax or accounting issues or other regulatory issues that may have come to light as the Banks have begun development of their capital plans. The Finance Board requests that commenters be as specific as possible in describing any problems or potential problems arising under the capital rule and provide a complete analysis, including any supporting legal analysis, of any proposed solutions to these problems.

Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this action may be changed in light of the comments received.

Submit comments using the following format:

• Organize comments issue-by-issue. For example, discuss a request to change the compliance time and a request to change the service bulletin reference as two separate issues.

• For each issue, state what specific change to the proposed AD is being requested.

• Include justification (e.g., reasons or data) for each request.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2000-NM-268-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2000-NM-268-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received reports indicating two incidents, on a Boeing Model 767-300 series airplane, of wire bundle chafing and subsequent arcing against a ceiling support bracket attached to the F-4/G-2 galley at body station 355. In the first incident, approximately 20 wire segments were burnt and severed, which resulted in smoke in the cabin, release of oxygen masks, tripping of various circuit breakers, loss of flight-essential systems, and an air turnback. In the second incident, there was a flash and static noise followed by a shower of sparks and ash. During an inspection on a recently delivered Model 767-300 series airplane, a potential chafing condition was found between the same wire bundles and support bracket described above.

Because these wires are connected to such flight-essential systems as the fuel shutoff valves for the engines, oxygen deployment for passengers, emergency lighting, passenger signs, and the signal for emergency evacuation, worn or broken wires can cause one or more of these systems to fail. Failure of the fuel shutoff valves, for example, would prevent the flight crew from stopping the flow of fuel to the engines in the event of a fire. This action is necessary to prevent damage to the wires in the bundles due to contact between the bundles and the adjacent ceiling support bracket, which could result in electrical arcing, smoke, or fire in the cabin, and failure of certain systems essential to safe flight and landing of the airplane.

The FAA has reviewed and approved Boeing Alert Service Bulletin 767-33A0085, Revision 2, dated December 7, 2000, which describes, among other things, procedures for a one-time inspection to find chafing and determine adequate clearance of certain wire bundles in the ceiling panel near the main passenger door, and corrective actions. The corrective actions include, but are not limited to, repair or replacement of worn wires in the wire bundles with new wires; installation of a bracket assembly on the wire bundle support bracket for certain airplanes, installation of nut spacer plates for certain other airplanes, and re-routing of the wire bundles to provide adequate clearance between the bundles and the adjacent structure. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition.

Since an unsafe condition has been identified that is likely to exist or develop on other products of this same type design, the proposed AD would require accomplishment of the actions specified in the service bulletin described previously, except as discussed below.

Operators should note that, although the service bulletin specifies accomplishment of the actions as soon as manpower and facilities are available, the FAA has determined that a six-month compliance time for accomplishment of the actions would address the identified unsafe condition in a timely manner. In developing an appropriate compliance time for this AD, the FAA considered not only the manufacturer's recommendation, but the degree of urgency associated with addressing the subject unsafe condition, the average utilization of the affected fleet, and the time necessary to perform the actions. In light of all of these factors, the FAA finds a six-month compliance time for completion of the actions to be warranted, in that it represents an appropriate interval of time allowable for affected airplanes to continue to operate without compromising safety.

There are approximately 135 airplanes of the affected design in the worldwide fleet. The FAA estimates that 53 airplanes of U.S. registry would be affected by this proposed AD.

It would take approximately 1 work hour per airplane to accomplish the proposed inspection, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the inspection proposed by this AD on U.S. operators is estimated to be $3,180, or $60 per airplane.

It would take approximately 2 work hours per airplane to accomplish the proposed repair or replacement, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the repair or replacement proposed by this AD on U.S. operators is estimated to be $6,360, or $120 per airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this proposed AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations proposed herein would not have a substantial direct effect 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. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this action may be changed in light of the comments received.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 99-NM-310-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 99-NM-310-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received reports indicating that, on numerous Boeing Model 737 series airplanes, cracks have been detected in the left and right buttock line (LBL and RBL) 24.8 floor beams in the area of the aileron control quadrant cutout, and in the floor beams and pressure web transverse beams above the main wheelwell. This cracking has been attributed to stress concentration at the aileron control quadrant cutout and to fatigue at beam intersections resulting from pressurization flexure, respectively. This condition, if not corrected, could result in rapid loss of cabin pressure and reduced structural integrity of the airframe.

The FAA has reviewed and approved Boeing Service Bulletin 737-57-1139, Revision 4, dated April 16, 1992. That service bulletin describes procedures for repetitive detailed visual inspections to detect cracking of the LBL and RBL 24.8 floor beams at the aileron control quadrant cutout; corrective actions, if necessary; and eventual modification of that area. That service bulletin also describes procedures for repetitive detailed visual inspections for cracking of the transverse beams and floor beams at the beam intersections, and eventual modification of that area. The modifications eliminate the need for the repetitive inspections. For any cracking of the LBL and RBL 24.8 floor beams at the aileron control quadrant cutout, if the cracking is within certain limits specified in the service bulletin, corrective actions include repair and accomplishment of the modification of the LBL and RBL 24.8 floor beams. For any cracking of the LBL and RBL 24.8 floor beams at the aileron control quadrant cutout that is outside the limits specified in the service bulletin, or any cracking of the transverse beams and floor beams at the beam intersections, the service bulletin specifies to contact Boeing for repair instructions.

The FAA previously has issued AD 90-06-02, amendment 39-6489 (55 FR 8372, March 7, 1990), and AD 93-17-08, amendment 39-8679 (58 FR 46076, September 1, 1993), which apply to certain Boeing Model 737 series airplanes. AD 90-06-02 requires incorporation of structural modifications listed in Boeing Document No. D6-38505, Revision C, dated December 11, 1989; and AD 93-17-08 requires incorporation of structural modifications listed in Appendices A.3 and B.3 of Boeing Document No. D6-38505, Revision F, dated April 23, 1992. The modifications specified in Boeing Service Bulletin 737-57-1139, Revision 4, are listed in Boeing Document No. D6-38505, Revisions C and F. Because the modifications in Boeing Service Bulletin 737-57-1139, Revision 4, are already required by AD 90-06-02 and AD 93-17-08, this proposed AD would require only the inspections in the service bulletin, not the modifications. “Note 3” has been included in the body of this notice of proposed rulemaking to clarify that the modifications in the service bulletin are already required by other AD's. In addition, accomplishment of the modifications in the service bulletin in accordance with AD 90-06-02 and AD 93-17-08 is terminating action for the inspections in this proposed AD, and paragraphs (c)(1) and (c)(2) of this proposed AD clarify this point.

Since an unsafe condition has been identified that is likely to exist or develop on other products of this same type design, the proposed AD would require accomplishment of the inspections specified in the service bulletin described previously, except as discussed below.

Operators should note that, although the service bulletin specifies that the manufacturer may be contacted for disposition of certain repair conditions, this proposed AD would require the repair of those conditions to be accomplished in accordance with a method approved by the FAA, or in accordance with data meeting the type certification basis of the airplane approved by a Boeing Company Designated Engineering Representative who has been authorized by the FAA to make such findings.

There are approximately 971 airplanes of the affected design in the worldwide fleet. The FAA estimates that 333 airplanes of U.S. registry would be affected by this proposed AD, and that it would take approximately 10 work hours per airplane to accomplish the proposed inspections, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the proposed inspections on U.S. operators is estimated to be $199,800, or $600 per airplane, per inspection cycle.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations proposed herein would not have a substantial direct effect 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. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

The copyright laws of the United States grant certain rights to copyright owners for the protection of their works of authorship. Among these rights is the right to make, and to authorize others to make, a reproduction of the copyrighted work, and the right to distribute, and to authorize others to distribute, the copyrighted work. Both the reproduction right and the distribution right granted to a copyright owner inhere in all works of authorship and are, for the most part, exclusive rights. However, for copyright holders of nondramatic musical works, the exclusivity of the reproduction right and distribution right are limited by the compulsory license of section 115 of the Copyright Act. Often referred to as the “mechanical license,” section 115 grants third parties a nonexclusive license to make and distribute phonorecords of nondramatic musical works.

The license can be invoked once a nondramatic musical work embodied in a phonorecord is distributed “to the public in the United States under the authority of the copyright owner.” 17 U.S.C. 115(a)(1). Unless and until such an act occurs, the copyright owner's rights in the musical work remain exclusive, and the compulsory license does not apply. Once it does occur, the license permits anyone to make and distribute phonorecords of the musical work provided, of course, that they comply with all of the royalty and accounting requirements of section 115. It is important to note that the mechanical license only permits the making and distribution of phonorecords of a musical work, and does not permit the use of a sound recording created by someone else. The compulsory licensee must either assemble his own musicians, singers, recording engineers and equipment, or obtain permission from the copyright owner to use a preexisting sound recording. One who obtains permission to use another's sound recording is eligible to use the compulsory license for the musical composition that is performed on the sound recording.

The mechanical license was the first compulsory license in U.S. copyright law, having its origin in the 1909 Copyright Act. It operated successfully for many years, and it continued under the 1976 Copyright Act with only some technical modifications. However, in 1995, Congress passed the Digital Performance Right in Sound Recordings Act (“Digital Performance Act”), Public Law 104-39, 109 Stat. 336, which amended sections 114 and 115 of the Copyright Act to take account of technological changes which were beginning to enable digital transmission of sound recordings. With respect to section 115, the Act expanded the scope of the mechanical license to include the right to distribute, or authorize the distribution of, a phonorecord by means of a digital transmission which constitutes a “digital phonorecord delivery.” 17 U.S.C. 115(c)(3)(A). A “digital phonorecord delivery” is defined as “each individual delivery of a phonorecord by digital transmission of a sound recording which results in a specifically identifiable reproduction by or for any transmission recipient of a phonorecord of that sound recording * * *.” 17 U.S.C. 115(d).

As a result of the Digital Performance Act, the mechanical license applies to two kinds of disseminations of nondramatic musical works: (1) The traditional making and distribution of physical, hard copy phonorecords; and (2) digital phonorecord deliveries, commonly referred to as DPDs. However, in including DPDs within section 115, Congress added a wrinkle by creating a subset of DPDs, commonly referred to as “incidental DPDs.” It did this by requiring that royalty fees established under the compulsory license rate adjustment process of chapter 8 of the Copyright Act distinguish between “(i) digital phonorecord deliveries where the reproduction or distribution of a phonorecord is incidental to the transmission which constitutes the digital phonorecord delivery, and (ii) digital phonorecord deliveries in general.” 17 U.S.C. 115(c)(3)(D). However, Congress did not define what constitutes an incidental DPD, and that omission is the source of today's Notice of Inquiry.

As required by the Digital Performance Act, in 1996 the Library of Congress initiated a Copyright Arbitration Royalty Panel (“CARP”) proceeding to adjust the royalty rates for DPDs and incidental DPDs. 61 FR 37213 (July 17, 1996). The parties to the proceeding avoided arbitration by reaching a settlement as to new rates for DPDs and the time periods for conducting future rate adjustment proceedings for DPDs. The parties could not reach agreement, however, on new rates for incidental DPDs because the representatives of both copyright owners and users of the section 115 license could not agree as to what was, and what was not, an incidental DPD. The resolution of this impasse was to defer establishing rates for incidental DPDs until the next scheduled rate adjustment proceeding.

The Librarian of Congress accepted the settlement agreement of the parties and adopted new regulations governing section 115 royalties for DPDs. 64 FR 6221 (February 9, 1999). Section 255.5 of 37 CFR establishes royalty rates for DPDs “in general,” while § 255.6 of the rules expressly defers consideration of incidental DPDs. And § 255.7 sets the time table for rate adjustment proceedings for general DPDs and incidental DPDs, providing for proceedings at two-year intervals upon the filing of a petition by an interested party. The year 2000 was a window year for the filing of such petitions.

On November 22, 2000, the Copyright Office received a pleading from the Recording Industry Association of America (“RIAA”) styled as a “Petition for Rulemaking and to Convene a Copyright Arbitration Royalty Panel If Necessary.” The RIAA petition requests that the Office resolve, through a rulemaking proceeding, the issue of what types of digital transmissions of prerecorded music are general DPDs, and what types are incidental DPDs. In addition, RIAA petitions the Library of Congress to conduct a CARP proceeding to set rates for incidental DPDs. MP3.com, Inc. (“MP3.com”), Napster, Inc. (“Napster”), and the Digital Media Association (“DiMA”) responded to the RIAA petition. The Office also received a petition to convene a CARP to set rates for general DPDs and incidental DPDs from the National Music Publishers Association, Inc. and the Songwriters Guild of America (collectively, “NMPA/SGA”).

The RIAA petition focuses on two types of digital music deliveries: “On-Demand Streams” and “Limited Downloads.” RIAA defines an “On-Demand Stream” as an “on-demand, real-time transmission using streaming technology such as Real Audio, which permits users to listen to the music they want when they want and as it is transmitted to them.” RIAA Petition at 1. A “Limited Download” is defined as an “on-demand transmission of a time-limited or other use-limited (i.e. non-permanent) download to a local storage device (e.g. the hard drive of the user's computer), using technology that causes the downloaded file to be available for listening only either during a limited time (e.g. a time certain or a time tied to ongoing subscription payments) or for a limited number of times.” Id. RIAA asserts that a rulemaking is necessary to determine the status of On-Demand Streams and Limited Downloads (i.e. whether they are general DPDs or incidental DPDs) because record companies and music publishers cannot reach agreement as to their treatment under section 115.

According to RIAA, music publishers take the position that both On-Demand Streams and Limited Downloads implicate their mechanical rights. In RIAA's view, On-Demand Streams may be incidental DPDs, for which there are currently no established royalty rates. RIAA therefore requests that the Office determine whether On-Demand Streams are incidental DPDs and, if they are, to convene a CARP to set rates for these incidental DPDs.

RIAA also submits that for services offering On-Demand Streams and Limited Downloads to work, it is necessary that the section 115 license be interpreted in such a way as to cover all the copies necessary to operate such services.1 In general, the operator of a service must make multiple phonorecords of musical works on its servers, and those works may be further reproduced, at least in part and for short periods of time, as part of the transmission process. While some of these reproductions may be exempt from copyright liability under 17 U.S.C. 112(a), RIAA asserts that it is likely that certain reproductions necessary for the operation of the services are not exempt and that they should be covered by the section 115 license.

With respect to Limited Downloads, RIAA suggests that they may be either (1) incidental DPDs or (2) more in the nature of record rentals, leases or lendings. The section 115 license authorizes the maker of a phonorecord to rent, lease or lend it, provided that a royalty fee is paid. The statute states:

This provision was added to section 115 in the Record Rental Amendment of 1984, Pub. L. 98-450, which also amended the first sale doctrine codified in section 109 to restrict the owner of a phonorecord from disposing of the phonorecord for direct or indirect commercial advantage by rental, lease or lending without authorization of the sound recording copyright owner. The legislative history of the amendment to section 115 states that the amendment was made to emphasize “that the right of authorization accorded to copyright owners of recorded musical works under revised section 109(a) is subject to compulsory licensing under revised section 115” and that it gives the copyright owner of a nondramatic musical work recorded under a compulsory license the right to a share of the royalties for rental received by a compulsory licensee (a record company) in proportion equal to that received for distribution under section 115(c)(2). H.R. Rep. 98-987, at 5 (1984).

The Office was to issue appropriate regulations relating to the royalty for rental, lease or lending “as and when necessary to carry out the purposes” of section 115(c)(4). S.Rep. No. 98-162, at 9 (1983). Thus far, there has been no need to issue such regulations because the Office has been unaware of any activity by sound recording copyright owners engaging in or authorizing the rental, lease or lending of phonorecords.

In sum, RIAA asserts that it is unclear whether the section 115 license permits all of the activities necessary to make On-Demand Streams or Limited Downloads, and if so, at what royalty rates. Consequently, RIAA petitions the Office to determine (1) whether On-Demand Streams are incidental DPDs covered by the license; (2) whether the license includes the right to make server copies or other copies necessary to transmit On-Demand Streams and Limited Downloads; and (3) the royalty rate applicable to On-Demand Streams (if they are covered by the license) and Limited Downloads.

Napster opposes RIAA's petition and urges the Copyright Office to defer to Congress, which Napster contends is the appropriate forum for resolving the issues raised by the petition. MP3.com submits that the Office should conduct a rulemaking proceeding to determine whether copies made in the course of On-Demand Streams are incidental DPDs, and whether the copies made that are necessary to stream musical works are covered by the section 115 license.2 If they are, MP3.com also petitions the Library to convene a CARP to “determine the appropriate rate or rates (if any)” for incidental DPDs.

MP3.com also asks the Copyright Office to consider additional matters in a rulemaking proceeding. First, MP3.com questions whether distinctions can and should be drawn among streaming audio services. MP3.com's service streams music to recipients who select the streams from a “locker” containing the recipients” personally purchased music collections. MP3.com requests that the Office consider whether this type of service—where the copyright owner has received compensation from the recipient who has already purchased the music—should be distinguished from a service that indiscriminately transmits streams of music to the public at large.

Second, MP3.com requests that the Office consider the effect of the decision to defer adoption of a royalty rate for incidental DPDs to a later date, and what effect that has on services that are currently streaming music. Finally, MP3.com requests that the Office reconsider its current procedural regulations for invoking and complying with the section 115 license with respect to incidental DPDs.

Like RIAA and MP3.com, DiMA is especially concerned with the status of copies of musical works made in the course of streaming. In particular, DiMA notes that the status of temporary RAM buffer copies created in a user's personal computer during audio streaming was raised at the November 29, 2000, Copyright Office/National Telecommunications and Information Administration hearing on the section 104 study mandated by the Digital Millennium Copyright Act of 1998 (“DMCA”) and urges that consideration of the same issue in a rulemaking proceeding be done in such a way as not to prejudice the outcome of that study. Thus, DiMA submits that either this should be resolved in the section 104 study, or the Office should conduct a separate rulemaking proceeding devoted solely to the issue. DiMA suggests, however, that the complexity of the issue counsels for legislative action rather than agency interpretation of the existing statute.

The NMPA/SGA petition does not request any rulemaking from the Copyright Office and simply requests that the Library convene a CARP to set rates for both general DPDs and incidental DPDs. As discussed above, the year 2000 was a window year for filing such petitions with the Library.

The foregoing discussion of the petitions and filings with the Copyright Office reveals that there is considerable uncertainty as to interpretation and application of the copyright laws to certain kinds of digital transmissions of prerecorded musical works. It is also apparent that the impasse presented by these legal questions may impede the ability of copyright owners and users to agree upon royalty rates under section 115 for both general DPDs and incidental DPDs. Therefore, the Copyright Office deems it appropriate to seek public comment on the advisability of conducting a rulemaking proceeding and on the issues that would be addressed in such a proceeding.

Before addressing the matters raised in the parties' petitions and comments, a threshold matter must first be resolved. It appears that when Congress passed the Digital Performance Act in 1995 and amended the section 115 mechanical license, current delivery mechanisms for digital transmission of musical works were unknown. Consequently, On-Demand Streaming and Limited Downloads, as described in the RIAA petition, and the applicability of the section 115 license to these services do not appear to have been anticipated. DiMA and Napster assert that to fully address the copyright implications of all aspects of these services, the law needs to be reconsidered and amended. While amendment of the law is a time-consuming proposition, Congress does have the power, unlike the Copyright Office, to balance the specific concerns of the interested parties and enact a legal regime that addresses those concerns. Must or should the Copyright Office defer to congressional action on some or all of the issues raised by the RIAA and MP3.com petitions? In other words, are there matters raised by these petitions that the Office lacks statutory authority to resolve? If the Office does have authority to interpret the meaning of section 115 as applied to these new services, is agency rulemaking the best forum for addressing such matters, or is congressional (or judicial) action more appropriate? We seek public comment on the extent of our authority to act, as well as the advisability of exercising any such authority.

Assuming that the Copyright Office does have the authority to act, and assuming that a rulemaking proceeding is the best forum, the RIAA and MP3.com petitions raise a number of questions. Central to RIAA's petition is a determination of the meaning of an incidental DPD under section 115. Is it possible to define “incidental DPD” through a rulemaking proceeding? How should it be defined? Could such a definition be one of general application, or can incidental DPDs be defined only in a manner that is specific to the service offered (such as On-Demand Streams)? If the latter, how can this be accomplished?

As discussed above, there is considerable interest in the streaming of recorded music. Streaming necessarily involves a making of a number of copies of the musical work—or portions of the work—along the transmission path to accomplish the delivery of the work. RIAA and MP3.com relate that copies are made by the computer servers that deliver the musical work (variously referred to as “server,” “root,” “encoded,” or “cache” copies), and additional copies are made by the receiving computer to better facilitate the actual performance of the work (often referred to as “buffer” copies). Some of these copies are temporary; some may not necessarily be so. Are some or all the copies of a musical work made that are necessary to stream that work incidental DPDs? If temporary copies can be categorized as incidental DPDs, what is the definition of “temporary”? Some “temporary” copies may exist for a very short period of time; others may exist for weeks. Is the concept of a “transient” copy more relevant than the concept of a “temporary” copy? If fragmented copies of a musical work are made, can each fragment, or the aggregation of the fragments of a single work, be considered an incidental DPD? If a fragmented copy can be an incidental DPD, does it make a difference in the analysis whether the copy is temporary or is permanent? Aren't incidental DPDs subject to section 115's definition of digital phonorecord deliveries? If so, does the requirement that a DPD result in a “specifically identifiable reproduction” by or for a transmission recipient rule out some of the copies discussed above from consideration as incidental or general DPDs?

DiMA argues that all temporary copies of a musical work that are made to stream that work can be deemed to be covered by the fair use doctrine of section 107 of the Copyright Act. This would mean, of course, that these copies would not be subject to any royalty fee because there is no copyright liability. What is the statutory support for this argument? Should the Copyright Office, in a rulemaking proceeding, declare whether any particular use of a copyrighted work constitutes a fair use, or should it leave that determination to a court of competent jurisdiction?

It is apparent from the filings received by the Copyright Office that currently there are different types or services for the streaming of music. RIAA refers to On-Demand Streams, whereby subscribers can receive real-time transmissions, using technology such as Real Audio, of the musical works that they request. MP3.com transmits streamed performances of musical works to subscribers who select the works from a “locker” containing recorded music that the subscriber has already purchased. MP3.com suggests that a distinction should be drawn between its service and those that indiscriminately transmit streamed music to the public because users of MP3.com have already compensated copyright holders of the music they stream for the reproduction and distribution of the phonorecord. Can and should such distinctions be made between these two streaming services and, if so, what should they be? Are there difficulties in determining whether the subscriber actually has purchased a phonorecord containing the music that is being streamed, and if there are, what impact should that have on how the Office addresses the issue? Are there additional types of streaming services that should be addressed?

MP3.com also calls into question the status of the current royalty structure for incidental DPDs. As discussed above, the rate adjustment proceeding for DPDs in 1998 resulted in a settlement as to the royalty rates for general DPDs, and an agreement to a royalty determination for incidental DPDs. See 64 FR 6221 (February 9, 1999) (adopting 37 CFR 255.6, which provides that royalty rates for incidental DPDs are “deferred until the next digital phonorecord delivery rate adjustment proceeding pursuant to the schedule set forth in § 255.7”). If it is determined in a rulemaking proceeding that streaming does result in the creation of incidental DPDs, is there liability for parties that have been engaging in such streaming activities? In other words, when a CARP is ultimately convened to establish royalty rates for incidental DPDs, can the CARP set rates for the 1998-2000 period, in addition to the current period? What is the meaning of a “deferral” of royalty rates, and is such action statutorily permissible? If the CARP did set rates for incidental DPDs for 1998-2000, would such action constitute impermissible retroactive rulemaking if the Librarian adopted those rates? How would a service account for such incidental DPDs that have already occurred?

In addition to streaming, RIAA seeks clarification of the status of Limited Downloads. It defines a Limited Download as an on-demand transmission of a time-limited or other use-limited download to a storage device (such as a computer's hard drive), using technology that causes the downloaded file to be available for listening only either during a limited time or for a certain number of times. Are the copies made of musical works for Limited Downloads incidental DPDs? Do the time period or the number of times the music is available have any bearing on this determination?

RIAA suggests that if Limited Downloads are not incidental DPDs, then they may be record rentals, leases or lendings under section 115(c)(4). Are Limited Downloads phonorecords distributed by rentals, leases or lendings, and what is the statutory support for such a determination? If Limited Downloads are record rentals, leases or lendings, RIAA requests that the Copyright Office adopt regulations under section 115(c)(4) for assessing the royalty fee for such uses. What should those regulations include? Should they be adopted as part of this rulemaking proceeding, or a separate proceeding? How should the statutory requirement to set a royalty rate at a “proportion of the revenue received by the compulsory licensee” be interpreted? 3

In addition to the RIAA's petition for rulemaking, the Copyright Office has before it several requests to convene a CARP to set rates either for general DPDs or incidental DPDs, or both. As noted above, the year 2000 was a window year for petitioning for an adjustment of the royalty rates for DPDs. There is a difference of opinion, however, as to how and when a CARP should be convened.

The NMPA/SGA petition requests the Librarian to convene a general rate adjustment proceeding for DPDs, asking that the CARP establish rates for both general DPDs and incidental DPDs. NMPA/SGA's request is not conditioned upon the conduct or outcome of a rulemaking proceeding regarding incidental DPDs.

RIAA requests the Library to convene a CARP if and only if the Copyright Office makes a determination that copies of musical works made in the course of On-Demand Streams and/or Limited Downloads are incidental DPDs. RIAA does not seek adjustment of the rates for general DPDs. MP3.com makes a similar request.

DiMA does not petition the Library to convene a CARP, but does suggest a course of action. First, DiMA recommends that the Copyright Office consider the status of temporary copies of musical works made in the course of streaming those works in the context of the study it is conducting under section 104 of the DMCA. If that study concludes that such copies are not fair use, then DiMA recommends that the Office conduct a rulemaking proceeding to determine if the copies are incidental DPDs. If the Office determines that they are not incidental DPDs, then DiMA supports the NMPA/SGA petition to conduct a rate adjustment for DPDs and for Limited Downloads. DiMA submits that the Library should not convene a CARP for incidental DPDs “unless the petitioners first demonstrate that there currently exists some class of known or cognizable incidental digital phonorecord deliveries.” DiMA comments at 3.

The Copyright Office, on behalf of itself and the Library of Congress, seeks comments on these proposals for handling a rate adjustment proceeding in the context of a rulemaking proceeding on the status of DPDs.

The advent of new means of digitally delivering record music to consumers presents new challenges and questions to the interpretation and application of the section 115 license. Some of these new means, as described by the parties seeking action from the Copyright Office, are discussed above. There may be others, existing or contemplated. We also invite comment on whether there are other technologies and services whose existence might affect our interpretation and application of section 115.

See the information provided in the Direct Final action of the same title which is located in the Rules section of this Federal Register.

For additional information, see the Direct Final notice which is located in the Rules section of this Federal Register. Copies of the request and the EPA's analysis are available for inspection at the above address. (Please telephone Christos Panos at (312) 353-8328 before visiting the Region 5 Office.)

This is a summary of the Federal Communications Commission's Notice of Proposed Rule Making (NPRM), FCC 01-36, in WT Docket No. 01-32, adopted on January 31, 2001, and released on February 12, 2001. The full text of this NPRM is available for inspection and copying during normal business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW, Washington, DC 20554. The complete text may be purchased from the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, NW, Washington, DC 20037. The full text may also be downloaded at: http://www.fcc.gov. Alternative formats are available to persons with disabilities by contacting Martha Contee at (202) 418-0260 or TTY (202) 418-2555.

1. In this Notice of Proposed Rule Making (NPRM), we propose rules for awarding licenses for four cellular Rural Service Areas (RSAs) that remain unlicensed because the initial lottery winner was disqualified or has otherwise withdrawn its application. Under the Balanced Budget Act of 1997 (1997 Budget Act), we are now required, with certain exceptions not applicable here, to resolve mutually exclusive applications for initial licenses by competitive bidding. Balanced Budget Act of 1997, Public Law 105-33, section 3002(a), 111 Stat. 251, at 258-60 (1997). We propose to: (1) Allow all eligible parties to apply for these initial licenses; and (2) license these markets on an RSA basis under our Part 22 rules. As discussed below, we also propose to use our Part 1 competitive bidding rules to auction these licenses.

2. The Commission has been awarding cellular licenses since 1982. Although we awarded the first thirty Metropolitan Statistical Area (MSA) licenses pursuant to comparative hearing rules, we adopted rules in 1984 to award the remaining cellular MSA and RSA licenses through lotteries. By 1991, lotteries had been held for every MSA and RSA, and licenses were awarded to the lottery winners in most instances. In some RSA markets, however, the initial RSA license was never awarded.

3. On August 5, 1997, President Clinton signed the 1997 Budget Act into law, which modified the Commission's auction authority by amending Section 309(j) of the Communications Act to require that all mutually exclusive applications for initial licenses or construction permits be auctioned, with certain exceptions not applicable here. 1997 Budget Act, Public Law 105-33, section 3002(a), 111 Stat. 251, 258-60 (1997) (amending 47 U.S.C. 309(j)). The 1997 Budget Act expressly repealed Section 6002(e) of the 1993 Budget Act, id. at Section 3002(a)(4), and terminated the Commission's authority to award licenses through random selection, even in the case of applications filed prior to July 26, 1993, except for licenses for noncommercial educational and public broadcast stations. Id. at Section 3002(a)(2)(B). Because the 1997 Budget Act terminated the Commission's remaining lottery authority, the Commission's Wireless Telecommunications Bureau dismissed all pending RSA lottery applications by separate orders released April 2, 1999, and April 29, 1999. See Certain Cellular Rural Service Area Applications, Order, 14 FCC Rcd 4619 (1999); Certain Cellular Rural Service Area Applications in Market Nos. 599A and 672A, Order, DA 99-814 (rel. Apr. 29, 1999).

4. We propose to allow all eligible applicants to apply for licenses for the four remaining unlicensed cellular RSAs. Further, we propose to license these markets on an RSA basis, subject to the same construction and operational rules as previously licensed RSAs. Finally, if there are mutually exclusive applications for these markets, we propose to use the general competitive bidding rules set forth in Part 1, Subpart Q, of the Commission's rules to conduct the auction. We seek comment on these issues, which we address in greater detail below.

5. We propose to allow all eligible entities and persons to apply for the licenses at issue in this proceeding. Our competitive bidding program seeks to award each license to the applicant who values it most highly, as determined by the marketplace, and who is therefore most likely to offer valued service to the public. To the extent that former lottery applicants continue to have an interest in applying for these markets, open eligibility allows them to do so. We therefore tentatively conclude that it would be in the public interest to permit all eligible entities to participate in an RSA auction. We seek comment on this proposal.

6. In all of the four unlicensed RSAs, the Commission has granted interim operating authority (IOA) to one or more cellular operators to provide cellular service on the Channel A block pending the ultimate permanent licensing of these RSAs. We propose to permit current IOA holders to participate in the auction of licenses for the unlicensed RSAs on an equal basis with other applicants. We also note that under the terms of each of the existing IOAs, the IOA operator must cease operations immediately upon initiation of service by the new licensee, provided that the new licensee gives at least 30 days written notice of its intent to provide service. In order to prevent unnecessary interruption of service to existing cellular customers, we propose that, in the event that any of the current IOA holders do not obtain the RSA license for their markets, they should be allowed to continue providing service on a temporary basis subject to these conditions, i.e., until the auction winner provides the required notice and is prepared to commence service. We seek comment on these proposals.

7. We also seek comment on whether the unlicensed markets for which licenses are to be awarded through competitive bidding should be licensed on an RSA basis, or whether alternative licensing models should be considered. For the reasons discussed below, we tentatively conclude that the unlicensed cellular markets should be licensed on an RSA basis under our Part 22 rules.

8. We also propose that licenses awarded for these markets would be subject to the same construction and operational rules as licenses granted to prior RSA lottery winners, including the exclusive right of the licensee of the first cellular system on each channel block to expand its system within that market for a period of five years. See 47 CFR 22.947. After the expiration of the five-year expansion period, any areas within the RSA market that remained unserved would be available for licensing pursuant to our Part 22 unserved areas Phase I and Phase II filing procedures. See 47 CFR 22.949.

9. We propose to conduct the auction of cellular RSA licenses in conformity with the general competitive bidding rules set forth in Part 1, Subpart Q, of the Commission's rules, and consistent with the bidding procedures that have been employed in previous auctions. Specifically, we propose to employ the Part 1 rules governing competitive bidding design, designated entities, application and payment procedures, reporting requirements, collusion issues, and unjust enrichment. Under this proposal, such rules would be subject to any modifications that the Commission may adopt in the Part 1 proceeding. We also note that under the Part 1 rules, winning bidders would be eligible to obtain a bidding credit for serving qualifying tribal lands pursuant to Section 1.2110(f)(3). See 47 CFR 1.2110(f)(3). In this regard, we note that only one RSA subject to these proposals—RSA 582A-Barnes, ND—contains any federally recognized tribal lands. In addition, consistent with current practice, matters such as the appropriate competitive bidding design, as well as minimum opening bids and reserve prices, would be determined by WTB pursuant to its delegated authority. Amendment of Part 1 of the Commission's Rules—Competitive Bidding Procedures, Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use, Third Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd 374, 448-49, 454-55, paragraphs 125, 139 (1997), modified by Erratum, DA 98-419 (rel. Mar. 2, 1998). We seek comment on this approach.

10. We also seek comment on whether to adopt special provisions for small businesses that participate in the auction of cellular RSA licenses. We propose to provide small businesses with bidding credits in order to meet our Congressional mandate to promote competition and to disseminate licenses among a wide variety of applicants. See 47 U.S.C. 309(j)(3)(B). Specifically, we propose to establish three small business definitions. We would define an entrepreneur as an entity with average annual gross revenues for the preceding three years not exceeding $40 million, a small business as an entity with average annual gross revenues for the preceding three years not exceeding $15 million, and a very small business as an entity with average annual gross revenues for the preceding three years not exceeding $3 million. As provided in 47 CFR 1.2110(f)(2) of our rules, we propose to offer entrepreneurs a bidding credit of 15 percent, small businesses a bidding credit of 25 percent, and very small businesses a bidding credit of 35 percent. We seek comment on whether this approach is appropriate here, or whether there is anything about the characteristics and capital requirements of cellular service that would require a different approach.

11. We also seek comment on whether the small business provisions we propose today are sufficient to promote participation by businesses owned by minorities and women, as well as rural telephone companies. To the extent that commenters propose additional provisions to ensure participation by minority-owned or women-owned businesses, they should address how such provisions should be crafted to meet the relevant standards of judicial review. See Adarand Constructors v. Peña, 515 U.S. 200 (1995) (requiring a strict scrutiny standard of review for Congressionally mandated race-conscious measures); United States v. Virginia, 518 U.S. 515 (1996) (applying an intermediate standard of review to a state program based on gender classification).

12. Pursuant to 47 CFR 1.1206 of the Commission's ex parte rules, this rulemaking proceeding proposing rules for awarding licenses for cellular RSAs for which the tentative selectee has been disqualified is a permit-but-disclose proceeding. Provided they are disclosed in accordance with the Commission's rules, ex parte presentations are permitted, except during the Sunshine Agenda period.

13. Pursuant to 47 CFR 1.415 and 1.419 of the Commission's Rules, interested parties may file comments on this NPRM on or before March 19, 2001, and reply comments on or before April 3, 2001. Comments and reply comments should be filed in WT Docket No. 01-32. All relevant and timely filings will be considered by the Commission before final action is taken in this proceeding. To file formally in this proceeding, interested parties must file an original and four copies of each comment or reply comment. Commenters who wish each Commissioner to receive personal copies of their submissions must file an original and nine copies of each comment and reply comment. Comments and reply comments must be directed to the Office of the Secretary, Federal Communications Commission, 445 12th St., SW., Room TW-A325, Washington, DC 20554. Copies of all comments also should be provided to (1) the Commission's copy contractor, and (2) Policy and Rules Branch, Commercial Wireless Division, Wireless Telecommunications Bureau, Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554.

14. Comments may also be filed using the Commission's Electronic Comment Filing System (ECFS). Comments filed through the ECFS can be sent as an electronic file via the Internet to ­<http://www.fcc.gov/e-file/ecfs.html>. Generally, only one copy of an electronic submission must be filed. Parties may also submit an electronic comment by Internet e-mail. To obtain filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and should include the following words in the body of the message: “get form <your e-mail address>. A sample form and directions will be sent in reply. Or you may obtain a copy of the ASCII Electronic Transmittal Form (FORM-ET) at ­<http://www.fcc.gov/e-file/email.html>.

15. Comments and reply comments will be available for public inspection during regular business hours at the FCC Reference Information Center, Room CY-A257, at the Federal Communications Commission, 445 12th St., SW., Washington, DC 20554. Copies of comments and reply comments are available through the Commission's duplicating contractor: International Transcription Service, Inc. (ITS, Inc.), 1231 20th Street, NW., Washington, DC 20037, (202) 857-3800.

16. As required by Section 603 of the Regulatory Flexibility Act (RFA), 5 U.S.C. 603, the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities of the policies and rules proposed in this NPRM. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines as the comments on the rest of the NPRM, but they must have a separate and distinct heading designating them as responses to the Initial Regulatory Flexibility Analysis. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. See 5 U.S.C. 603(a). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register. See id.

17. We originally initiated this rulemaking proceeding in response to a petition filed by Cellular Communications of Puerto Rico, Inc. (CCPR) on September 9, 1996, which requested that the Commission award certain RSA licenses through competitive bidding, rather than random selection. Cellular Communications of Puerto Rico, Inc. Petition for Declaratory Ruling, Or, in the Alternative, for Rulemaking, RM-8897 (filed Sept. 9, 1996). However, we dismissed CCPR's petition as moot in response to the enactment of the Balanced Budget Act of 1997, which requires the Commission to resolve mutually exclusive applications for initial licenses through competitive bidding instead of random selection, with certain exceptions not applicable here. See Certain Cellular Rural Service Area Applications, Order, 14 FCC Rcd 4619 (1999); Certain Cellular Rural Service Area Applications in Market Nos. 599A and 672A, Order, DA 99-814 (rel. April 29, 1999). Our objective in this rulemaking proceeding is to determine, for cellular RSA markets for which a tentative selectee has been disqualified, whether to allow all eligible applicants to participate in the auction of licenses, which competitive bidding rules to use, and the type of market area to be used for licensing.

18. The proposed action is authorized under the Communications Act of 1934 as amended, Sections 4(i), 303(r), 303(c) and 309(j), 47 U.S.C. 154(i), 303(c), 303(r) and 309(j), as amended.

19. 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. 5 U.S.C. 603(b)(3). The Regulatory Flexibility Act defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small business concern” under section 3 of the Small Business Act. Id. at 601(3). 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 SBA. Id. at 632.

20. The Commission is required to estimate in its Final Regulatory Flexibility Analysis the number of small entities to which any new rules would apply, provide a description of such entities, and assess the impact of the rule on such entities. To assist in this analysis, commenters are requested to provide information regarding how many total entities, existing and potential, will be considered small businesses.

21. 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 Services (PCS), which are placed together in that data. Trends in Telephone Service, Table 19.3 (March 2000). The rules proposed in the NPRM would affect all small entities that seek to acquire any of the four cellular RSA licenses discussed therein. In the NPRM, we propose to define three tiers of small businesses for the purpose of providing bidding credits to small entities. We propose to define these three tiers of small businesses as follows: an “entrepreneur” would be an entity with average annual gross revenues not exceeding $40 million for the preceding three years; a “small business” would be an entity with average annual gross revenues not exceeding $15 million for the preceding three years; and a “very small business” would be an entity with average annual gross revenues not exceeding $3 million for the preceding three years. The Small Business Administration approved these proposed small business definitions on January 30, 2001. See Letter from Fred P. Hochberg, Acting Administrator, Small Business Administration, to Margaret W. Wiener, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission, dated Jan. 30, 2001. We will not know how many entities meeting these proposed definitions will apply for or win cellular RSA licenses until an auction is held. In view of our lack of knowledge about the entities that will seek to acquire the cellular RSA licenses in question, we assume that, for purposes of our evaluations and conclusions in this IRFA, all prospective licensees are entrepreneurs, small businesses, or very small businesses under our proposed definitions. We invite comment on this analysis.

22. In making the transition to award the cellular RSA licenses at issue in this proceeding by competitive bidding, the NPRM proposes (1) to accept new license applications, and (2) to use our general Part 1 competitive bidding rules to conduct the auction. If adopted, these proposals would require all applicants to electronically submit FCC Form 175 in order to participate in the auction and, at the conclusion of the auction, all high bidders to electronically submit FCC Form 601 to apply for a license. The purposes of these forms are to ensure that applicants are eligible to participate in the auction and that high bidders are eligible to hold the cellular RSA licenses at issue. The Office of Management and Budget has already approved both of these forms. Under our Part 1 rules, any entity wishing to receive a bidding credit for serving qualifying lands must comply with 47 CFR 1.2110(f)(3).

23. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

24. To provide opportunities for small entities to participate in the auction of cellular RSA licenses discussed in the NPRM, we propose to provide bidding credits for entrepreneurs, small businesses, and very small businesses as defined in Section C of this IRFA. The bidding credits proposed are 15 percent for entrepreneurs, 25 percent for small businesses, and 35 percent for very small businesses. We believe these bidding credits will benefit a range of small entities. In the NPRM, we seek comment on these proposed small business definitions and bidding credits, thus providing interested parties with an opportunity to suggest alternatives.

25. None.

26. Authority for the issuance of this NPRM is contained in Sections 4(i), 303(r) and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r) and 309(j).

27. The Commission's Consumer Information Bureau, Reference Information Center, SHALL SEND a copy of this NPRM, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

Congress made significant changes to the Endangered Species Act of 1973, as amended (Act), with the addition of section 10(j), which provides for the designation of specific reintroduced populations of listed species as “experimental populations.” Previously, we had authority to reintroduce populations into unoccupied portions of a listed species' historical range when doing so would foster the conservation and recovery of the species. However, local citizens often opposed these reintroductions because they were concerned about the placement of restrictions and prohibitions on Federal and private activities. Under section 10(j), the Secretary of the Department of the Interior can designate reintroduced populations established outside the species' current range, but within its historical range, as “experimental.”

Under the Act, species listed as endangered or threatened are afforded protection primarily through the prohibitions of section 9 and the requirements of section 7. Section 9 of the Act prohibits the take of a listed species. “Take” is defined by the Act as harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or attempt to engage in any such conduct. Section 7 of the Act outlines the procedures for Federal interagency cooperation to conserve federally listed species and protect designated critical habitats. It mandates all Federal agencies to determine how to use their existing authorities to further the purposes of the Act to aid in recovering listed species. It also states that Federal agencies will, in consultation with the Service, insure that any action they authorize, fund, or carry out is not likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of designated critical habitat. Section 7 of the Act does not affect activities undertaken on private lands unless they are authorized, funded, or carried out by a Federal agency.

Section 10(j) is designed to increase our flexibility in managing an experimental population by allowing us to treat the population as threatened, regardless of the species' designation elsewhere in its range. Threatened designation gives us more discretion in developing and implementing management programs and special regulations for a population, such as this rule, and allows us to develop any regulations we consider necessary to provide for the conservation of a threatened species. In situations where we have experimental populations, most of the section 9 prohibitions that apply to threatened species no longer apply, and the special rule contains the prohibitions and exceptions necessary and appropriate to conserve that species.

Based on the best available information, we must determine whether experimental populations are “essential,” or “nonessential,” to the continued existence of the species. An experimental population that is essential to the survival of the species is treated as a threatened species. An experimental population that is nonessential to the survival of the species is also treated as a threatened species. However, for section 7 interagency cooperation purposes, if the NEP is located outside of a National Wildlife Refuge or National Park, it is treated as a species proposed for listing. Regulations for NEPs may be developed to be more compatible with routine human activities in the reintroduction area.

For the purposes of section 7 of the Act, in situations where there is an NEP located within a National Wildlife Refuge or National Park (treated as threatened), section 7(a)(1) and the consultation requirements of section 7(a)(2) of the Act would apply. Section 7(a)(1) requires all Federal agencies to use their authorities to conserve listed species. Section 7(a)(2) requires that Federal agencies consult with the Service before authorizing, funding, or carrying out any activity that would likely jeopardize the continued existence of a listed species or adversely modify its critical habitats. When NEPs are located outside a National Wildlife Refuge or National Park, only two provisions of section 7 would apply: section 7(a)(1) and section 7(a)(4). Federal agencies are not required to consult with us under section 7(a)(2). Section 7(a)(4) requires Federal agencies to informally confer with the Service on actions that are likely to jeopardize the continued existence of a species proposed for listing. However, since we determined that the NEP is not essential to the continued existence of the species, it is very unlikely that we would ever determine jeopardy for a project impacting a species within an NEP.

Individuals used to establish an experimental population may come from a donor population, provided their removal is not likely to jeopardize the continued existence of the species, and appropriate permits are issued in accordance with our regulations (50 CFR 17.22) prior to their removal.

The whooping crane (Grus americana) was listed as an endangered species on March 11, 1967 (32 FR 4001). The whooping crane is classified in the family Gruidae, Order Gruiformes. It is the tallest bird in North America; males approach 1.5 meters (m) (5 feet (ft)) tall. In captivity, adult males average 7.3 kilograms (kg) (16 pounds (lb)) and females 6.4 kg (14 lbs). Adult plumage is snowy white except for black primary feathers, black or grayish alulae, sparse black bristly feathers on the carmine (red) crown and malar region (side of the head), and a dark gray-black wedge-shaped patch on the nape. The bill is dark olive-gray which becomes lighter during the breeding season. The iris of the eye is yellow; legs and feet are gray-black.

Adults are potentially long-lived. Current estimates suggest a maximum longevity in the wild of 22 to 24 years (Binkley and Miller 1980). Captive individuals are known to have survived 27 to 40 years (McNulty 1966, Moody 1931). Mating is characterized by monogamous lifelong pair bonds. Individuals re-mate following death of their mate. Fertile eggs are occasionally produced at age 3 years but more typically at age 4. Experienced pairs may not breed every year, especially when habitat conditions are poor. Whooping cranes ordinarily lay two eggs. They will renest if their first clutch is destroyed or lost before mid-incubation (Erickson and Derrickson 1981, Kuyt 1981). Although two eggs are laid, whooping crane pairs infrequently fledge two chicks. Only about one of every four hatched chicks survives to reach the wintering grounds (U.S. Fish and Wildlife Service 1986)

The whooping crane first appeared in fossil records from the early Pleistocene (Allen 1952) and probably was most abundant during that 2-million-year epoch. They once occurred from the Arctic Sea to the high plateau of central Mexico, and from Utah east to New Jersey, South Carolina, and Florida (Allen 1952, Nesbitt 1982). In the 19th century, the principal breeding range extended from central Illinois northwest through northern Iowa, western Minnesota, northeastern North Dakota, southern Manitoba, and Saskatchewan to the vicinity of Edmonton, Alberta. A nonmigratory breeding population existed in southwestern Louisiana until the early 1900s (Allen 1952, Gomez 1992).

Through the use of two independent techniques of population estimation, Banks (1978) derived estimates of 500 to 700 whooping cranes in 1870. By 1941, the migratory population contained only 16 individuals. The whooping crane population decline in the 19th and early 20th century was a consequence of hunting and specimen collection, human disturbance, and conversion of the primary nesting habitat to hay, pastureland, and grain production (Allen 1952, Erickson & Derrickson 1981).

Allen (1952) described several historical migration routes. One of the most important led from the principal nesting grounds in Iowa, Illinois, Minnesota, North Dakota, and Manitoba to coastal Louisiana. Another went from Texas and the Rio Grande Delta region of Mexico northward to nesting grounds in North Dakota and the Canadian Provinces. A route through west Texas into Mexico probably followed the route still used by sandhill cranes (Grus canadensis). These whooping cranes would have wintered in the interior tablelands of western Texas and the high plateau of central Mexico.

Another migration route crossed the Appalachians to the Atlantic Coast. These birds apparently nested in the Hudson Bay area of Canada. Coastal areas of New Jersey, South Carolina, and river deltas farther south were the wintering grounds. The latest specimen records or sighting reports for some eastern locations are Alabama, 1899; Arkansas, 1889; Florida, 1927 or 1928; Georgia, 1885; Illinois, 1891; Indiana, 1881; Kentucky, 1886; Manitoba, 1948; Michigan, 1882; Minnesota, 1917; Mississippi, 1902; Missouri, 1884; New Jersey, 1857; Ohio, 1902; Ontario, 1895; South Carolina, 1850; and Wisconsin, 1878 (Allen 1952, Burleigh 1944, Hallman 1965, Sprunt and Chamberlain 1949).

Atlantic coast locations used by whooping cranes included the Cape May area and Beesley's Point at Great Egg Bay in New Jersey; the Waccamaw River in South Carolina; the deltas of the Savannah and Altamaha Rivers, and St. Simon's Island in Georgia; and the St. Augustine area of Florida. Gulf coast locations include Mobile Bay, Alabama; Bay St. Louis in Mississippi; and numerous records from southwestern Louisiana, where the last bird was captured in 1949. Coastal Louisiana contained both a nonmigratory flock and wintering migrants (Allen 1952, Gomez 1992).

There is evidence to suggest that whooping cranes occurred in Florida, perhaps well into the 20th century (Nesbitt 1982). Nesbitt described various sighting reports including one by O. E. Baynard, a respected field naturalist, who stated that the last flock of whooping cranes (14 birds) he saw in Florida was in 1911 near Micanopy, southern Alachua County. Two whooping cranes were reported east of the Kissimmee River on January 19, 1936, and a whooping crane was shot (and photographed) north of St. Augustine, St. Johns County, in 1927 or 1928 (Nesbitt 1982).

Records from more interior areas of the Southeast include the Montgomery, Alabama, area; Crocketts Bluff on the White River, and near Corning in Arkansas; in Missouri at sites in Jackson County near Kansas City, in Lawrence County near Corning, southwest of Springfield in Audrain County, and near St Louis; and in Kentucky near Louisville and Hickman. It is unknown whether these records represent wintering locations, remnants of a nonmigratory population, or wandering birds.

The historic breeding range of the whooping crane in the United States included Illinois, Iowa, North Dakota, and Minnesota, with the largest number of confirmed nesting records in Iowa (Allen 1952). There are at least five reliable reports from Wisconsin; although there are no confirmed records of nesting in Wisconsin, there is a nesting record from Dubuque County, Iowa (Allen 1952), which is adjacent to Grant County, Wisconsin.

Whooping cranes currently exist in three wild populations and at six captive locations. The only self-sustaining natural wild population nests in the Northwest Territories and adjacent areas of Alberta, Canada, primarily within the boundaries of Wood Buffalo National Park. These birds winter along the central Texas Gulf of Mexico coast at Aransas National Wildlife Refuge and adjacent areas. Fifty pairs from this population nested in 2000, and 187 adult whooping cranes were reported in spring 2000. The flock recovered from a population low of 15 or 16 birds in 1941. This population is hereafter referred to as the Aransas/Wood Buffalo National Park population (AWP).

The second largest wild population is found in the Kissimmee Prairie area of central Florida. We designated this population as an experimental nonessential population in January 1993 (58 FR 5647-5658). Since 1993, 233 isolation-reared whooping cranes have been released in this area, in an ongoing reintroduction effort to establish a nonmigratory flock. As of October 2000, there are 75 surviving individuals in the project area. Birds in this population have reached breeding age within the past several years. During the 2000 nesting season, a total of 15 pairs defended territories, 3 pairs laid eggs, and 2 of these pairs failed prior to hatching. The remaining pair hatched both eggs, but no chicks survived to fledging.

The third wild flock consists of two remaining individuals from an effort to establish a migratory population in the Rocky Mountains through cross-fostering with greater sandhill cranes (Grus canadensis tabida) (Drewien and Bizeau 1977, Bizeau et al. 1987), and an experiment in 1997 when four whooping cranes were led behind an ultralight aircraft between Idaho and New Mexico (Clegg et al. 1997). The cross-fostering project began in 1975 and has failed to produce any chicks or mated pairs (Ellis et al. 1992a). The term, “cross-fostering” refers to the foster rearing of the whooping crane chicks by another species, the sandhill crane. The cross-fostered whooping cranes have never bred with other whooping cranes. The females in that group may be improperly sexually imprinted on male sandhill cranes. As a consequence of the lack of breeding, and the inordinately high mortality experienced by this population, the project was phased out.

The whooping crane captive breeding program, initiated in 1967, has been very successful. The Service and the Canadian Wildlife Service (CWS) began taking eggs from the nests of the wild population in 1967, and raising the resulting young in captivity. Between 1967 and 1993, 181 eggs were taken from the wild to captive sites. Birds raised from those eggs form the nucleus of the captive flock (USFWS 1994). The captive population is now located at three primary locations: Patuxent Wildlife Research Center in Laurel, Maryland; the International Crane Foundation (ICF) in Baraboo, Wisconsin; and the Calgary Zoo in Alberta, Canada. An additional captive population was started in 1998 at the Audubon Species Survival Center in New Orleans, Louisiana.

The total captive population as of September 2000 stood at 146 birds, with 135 birds present in the 3 primary captive breeding centers, and an additional 11 birds present at 3 other locations. Six whooping cranes are located at the San Antonio Zoological Gardens, Texas; four at the Audubon Institute, New Orleans, Louisiana; and one at the Lowery Park Zoo in Tampa, Florida.

Whooping cranes adhere to ancestral breeding areas, migratory routes, and wintering grounds, leaving little possibility of pioneering into new regions. The only wild, self-sustaining breeding population can be expected to continue utilizing its current nesting location with little likelihood of expansion, except on a local geographic scale. This population remains vulnerable to destruction through a natural catastrophe (hurricane), a red tide outbreak, or a contaminant spill, due primarily to its limited wintering distribution along the intracoastal waterway of the Texas coast. The Gulf Intracoastal Water Way (GIWW) experiences some of the heaviest barge traffic of any waterway in the world. Much of the shipping tonnage is petrochemical products. An accidental spill could destroy whooping cranes and/or their food resources. With the only wild breeding population so vulnerable, it is urgent that additional wild self-sustaining populations be established as soon as practical.

The first recovery plan developed by the Whooping Crane Recovery Team (Team) was approved January 23, 1980. The first revision was approved on December 23, 1986, and the second revision on February 11, 1994. The short-term goal is to downlist the whooping crane from endangered to threatened. The criteria for attaining this downlisting goal is achieving a population level of 40 nesting pairs in the AWP and establishing 2 additional, separate, and self-sustaining populations consisting of 25 nesting pairs each. The recovery plan recommends these goals should be attained for 10 consecutive years before the species is reclassified to threatened. These new populations may be migratory or nonmigratory.

In 1985, the Director-General of the Canadian Wildlife Service and the Director of the U.S. Fish and Wildlife Service signed a memorandum of understanding (MOU) entitled “Conservation of the Whooping Crane Related to Coordinated Management Activities.” The MOU was revised and signed again in 1990 and 1995. It discusses disposition of birds and eggs, postmortem analysis, population restoration and objectives, new population sites, international management, recovery plans, consultation and coordination. All captive whooping cranes and their future progeny are jointly owned by the U.S. Fish and Wildlife Service and the Canadian Wildlife Service. Consequently, both nations are involved in recovery decisions.

In early 1984, pursuant to the recovery plan goals and the recommendation of the Team, potential whooping crane release areas were selected in the eastern United States. At that time the prognosis was favorable for successfully establishing a western population by use of the cross-fostering technique. Consequently, key considerations in selecting areas to evaluate for the eastern release were (1) large areas of potentially suitable wetland habitat; (2) a healthy sandhill crane population sufficient to support recovery using the cross-fostering technique; (3) public and State agency support for such a recovery effort in the release locale; (4) low-to-moderate levels of avian disease pathogens, environmental contaminants, and powerlines; (5) the potential of the habitats to simultaneously support whooping cranes and sandhill cranes; and (6) a reasonable certainty that the new population would not have contact with the AWP.

The areas identified were the Upper Peninsula of Michigan and adjacent areas of Ontario, the Okefenokee Swamp in southern Georgia, and three sites in Florida. The Michigan site was projected to eventually support a migratory population. The Georgia and three Florida sites would each support a nonmigratory population. The Michigan/Ontario wetlands are occupied by greater sandhill cranes that winter in Florida and the Okefenokee Swamp of Georgia. The wetlands in Georgia and Florida are occupied by the nonmigratory Florida sandhill crane (Grus canadensis pratensis) and in winter by greater sandhill cranes, which nest primarily in southern Ontario, Michigan, eastern Minnesota, and Wisconsin. Three-year studies were initiated at each site in October 1984 to evaluate their respective suitabilities.

Results of the studies were presented in written final reports to the Whooping Crane Recovery Team in fall 1987 (Bennett and Bennett 1987, Bishop 1988, McMillen 1987, Nesbitt 1988) and in verbal reports in February 1988. By 1988, the Team recognized that cross-fostering was not working to establish a migratory population in the West. The possibility of inappropriate sexual imprinting associated with cross-fostering, and the lack of a proven technique for establishing a migratory flock influenced the Team to favor establishing a nonmigratory flock. A nonmigratory population has features that make it easier to achieve success: (1) released birds do not face the hazards of migration (over one half of the losses of fledged, cross-fostered birds occurred during migration); and (2) released birds inhabit a more geographically limited area year-round than do migratory cranes, which increases the opportunity for the cranes to find a compatible mate.

Studies of whooping cranes (Drewien and Bizeau 1977) and greater sandhill cranes (Nesbitt 1988) have shown that, for these species, knowing when and where to migrate is learned rather than innate behavior. Captive-reared whooping cranes released in Florida were expected to develop a sedentary population.

In summer 1988, the Team selected Kissimmee Prairie in central Florida as the area most suitable for the next experiment to establish a self-sustaining population. Since 1993, captive-reared birds have been released annually in an attempt to establish a resident, nonmigratory flock. We expect releases to continue for the foreseeable future.

In 1996, the Team decided to investigate the potential for another reintroduction site in the eastern United States, with the intent of establishing an additional migratory population. Following a study of potential wintering sites by Dr. John Cannon (Cannon 1998), the Team selected the Chassahowitzka NWR /St. Martin's Marsh Aquatic Preserve as the top wintering site for a new migratory flock of whooping cranes. Based on concerns that a reintroduced population in Saskatchewan or Manitoba might mix with the wild AWP, the Team requested that Dr. Cannon see if suitable summering sites were present in Wisconsin, an area well east of the AWP migration corridor. The location of the proposed release area was chosen to fulfill the criteria set forth by the Whooping Crane Recovery Team, that is, to establish a new migratory flock in a location where there would be a minimal chance of contact with the existing natural wild flock. This criterion was established out of concern for adverse impacts to the wild flock due to exchange of disease or undesirable behavior between any newly established migratory flock and the existing wild flock.

After preliminary data were gathered, a decision was made in 1998 to focus on three potential release sites in Wisconsin: Crex Meadows State Wildlife Management Area (WMA), central Wisconsin including Necedah NWR and several Wisconsin WMAs, and Horicon NWR.

Detailed analysis was presented at the Team's meeting in September 1999 (Cannon 1999), and the Team then recommended that releases be started in central Wisconsin. This recommendation was based on the presence of suitable habitat and food resources, favorable local attitudes, and geographic separation from the AWP population. The recommendation also was contingent upon the results of studies to further clarify the level of risk to cranes at this location from two separate sources. These were risks from local contaminants in the form of agricultural chemicals, and the disturbance caused by aircraft overflights associated with operations at the nearby Hardwood Air-to-Surface Bombing Range. The two issues were investigated to the satisfaction of the Team with results indicating a minimal likelihood of occurrence for both concerns, although the Patuxent Wildlife Research Center may conduct noise impact studies on whooping crane chicks. The proposed wintering site is the Chassahowitzka NWR in Florida.

The objectives of the reintroduction are: (1) To implement a primary recovery action for a federally listed endangered species; (2) to further assess the suitability of Wisconsin and the Gulf coast of Florida as whooping crane habitat; and (3) to evaluate the suitability of releasing captive-reared whooping cranes, conditioned for wild release, as a technique for establishing a self-sustaining, migratory population. Information on survival of released birds, movements, behavior, causes of losses, reproductive success, and other data will be gathered throughout the project. Project progress will be evaluated annually.

The likelihood of the releases resulting in a self-sustaining population is believed to be good. Whooping cranes historically occurred in the Upper Midwest, and the release area is similar to that which supported nesting whooping cranes in adjacent Illinois and Iowa. The minimum goal for numbers of cranes to be released annually is based on the research of Griffith et al. (1989). As captive production increases, annual release numbers will be increased, dependent upon availability. For a long-lived species like the whooping crane, continuing releases for a number of years increases the likelihood of reaching a population level that can sustain fluctuating environmental conditions. The rearing and release techniques have proven successful in building the wild population of the endangered Mississippi sandhill cranes.

It is expected that whooping cranes released in Wisconsin and wintering in Florida will eventually interact with the existing flock present in the Kissimmee Prairie area. Whooping cranes led to Chassahowitzka NWR behind the ultralight may choose not to stay in the coastal saltmarsh when released, or may return to the Kissimmee Prairie the following winter and interact with the nonmigratory flock. The nonmigratory population is prone to wander considerable distances, and has been observed outside of the area where introduction efforts are under way (Marty Folk, pers. comm.). Some interaction during winter between migratory and nonmigratory cranes is expected to occur. This raises the possibility that individual birds of each of the two flocks may acquire either migratory or nonmigratory behavior through association, especially if pairs form between members of the different populations. However, research with sandhill cranes in Florida has shown that migratory and nonmigratory populations mix during winter and yet maintain their own migratory and nonmigratory behaviors. The same would be expected with whooping cranes. In light of this knowledge, we expect that any shift in individual migratory behavior would be limited. Therefore, we expect that, even though individuals of the two populations may associate, the two flocks will remain distinct and each will represent a separate population as specified in the Whooping Crane Recovery Plan (USFWS 1994). As such, while the levels of protection will be the same, the two populations may be managed differently.

We may select additional release sites later during the project life to increase potential breeding range. Multiple release areas may increase the opportunity for successful pairing because females tend to disperse from their natal site when searching for a mate. Males, however, have a stronger homing tendency towards establishing their nesting territory near the natal area (Drewien et al. 1989). When captive-reared birds are released at a wild location, the birds may view the release site as a natal area. If they do, females would disperse away from the release area in their search for a mate. In such a circumstance it may be advantageous to have several release sites to provide a broader distribution of territorial males. It is impossible, however, to predict which areas will be chosen by the birds. To allow for adapting release techniques that will maximize the chances for success, some flexibility will likely be necessary in the future. Therefore, it is possible that we will pursue future releases at other sites, which we may select based upon dispersal patterns observed in the birds from initial releases. Several areas previously examined for suitability that may be candidates for future releases (Cannon 1999) include Horicon NWR and Crex Meadows State WMA in Wisconsin, and Seney NWR in the Upper Peninsula of Michigan.

The proposed rule is being coordinated with potentially affected State and Federal agencies, private landowners, and the general public. The Wisconsin Department of Natural Resources manages several wildlife management areas in the primary release area, will be actively involved as a cooperator in releases, and has actively endorsed the project. The Canadian Wildlife Service, a partner with the U.S. Fish and Wildlife Service as noted in the Memorandum of Understanding, has approved the proposed project. We have informed the Florida Department of Environmental Protection, the Department of Defense (Hardwood Air-to-Surface Bombing Range), and other entities about the proposed release, and these parties are aware of the possibility that whooping cranes may be introduced on or move to their project areas.

We propose an initial release of 10 to 25 juvenile, captive-reared whooping cranes in the central Wisconsin area. These birds will be captive-reared to 20-40 days of age at Patuxent Wildlife Research Center in Laurel, Maryland, the International Crane Foundation in Baraboo, Wisconsin, and at other captive-rearing facilities. They will then be transferred to facilities at the Wisconsin release site, and conditioned for wild release to increase post-release survival (Ellis et al. 1992b, Zwank and Wilson 1987) and adaptability to wild foods. The cranes will be radio-tagged at release and monitored to discern movements, habitat use, other behavior, and survival. Whooping cranes would be released in the fall. The primary technique associated with migration will be leading the cranes by ultralight aircraft to the proposed wintering site in Florida. If results of this initial proposed release are favorable, releases will be continued with the goal of releasing up to 30 whooping cranes annually for about 10 years. Total numbers available for release will be dependent upon production at captive propagation facilities and the future need for additional releases into the Kissimmee flock.

Since the migration route is a learned rather than an innate behavior, captive-reared whooping cranes released in Wisconsin, or other northern areas of suitable habitat, will need to be taught where to migrate in order to develop the habit of migrating to a suitable wintering area. Captive-reared cranes are conditioned for wild release by being reared in isolation from humans; by use of conspecific role models (puppets), and by exercising with animal care personnel in crane costumes to avoid imprinting on humans (Ellis et al. 1992a, Horwich 1989, Urbanek and Bookhout 1992). This technique has been successful in supplementing the population of endangered nonmigratory Mississippi sandhill cranes (Grus canadensis pulla) (Zwank and Wilson 1987, Ellis et al. 1992b). Aircraft motor sounds are played to young crane chicks to get them acclimatized to engine noise. The “following” instinct of crane chicks is utilized to get them conditioned to walk behind motorized vehicles and/or aircraft. Once acclimatized, the cranes will follow the taxiing ultralight aircraft and soon learn to fly behind the ultralight. Using this technique (Clegg et al. 1997, Lishman et al. 1997), sandhill cranes were led in migration between Ontario and Virginia in 1997; four whooping cranes and eight sandhill cranes were taught a migration between Idaho and New Mexico in 1997. Cranes led south in the fall have returned north on their own the following spring.

Several different strategies for accomplishing migration to the Florida wintering site may be utilized: (1) Leading the birds using an ultralight aircraft which the birds have been conditioned to follow; (2) allowing the released birds to migrate guided by wild sandhill cranes (Urbanek & Bookhout 1994), or after the first year, guided by whooping cranes; (3) some combination of these two techniques. The rationale is to use the technique that is thought to have the highest probability of success, but to retain the option of using another potentially promising technique if conditions warrant. As the project proceeds, the intent is to use techniques that seem reasonable in light of present understanding of whooping crane biology. However, for the first fall migration season, the primary technique is expected to be use of the ultralight aircraft to lead the cranes to the chosen wintering site in Florida; birds not trainable to follow aircraft may be released with wild sandhills and then relocated to the appropriate wintering area.

We proposed to designate all whooping cranes in the eastern U.S. NEP area (see Nonessential Experimental Population Area, below) as an NEP according to the provisions of section 10(j) of the Act. This designation can be justified because no adverse effects to extant wild or captive whooping crane populations will result from release of progeny from the captive flock. We also have a reasonable expectation that the experiment will result in the successful establishment of a self-sustaining, migratory flock, which will contribute to the recovery of the species. The special rule contained within this proposal is expected to ensure that this reintroduction is compatible with current or planned human activities in the release area.

We have concluded that this experimental population is nonessential to the continued existence of the whooping crane for the following reasons:

(a) For the time being, the AWP and the captive populations will be the primary species populations. With approximately 146 birds in captivity at 6 discrete sites, and approximately 187 birds in the AWP, the experimental population is not essential to the continued existence of the species. The species has been protected against the threat of extinction from a single catastrophic event by gradual recovery of the AWP and by increase and management of the cranes at the captive sites. Loss of the experimental population will not jeopardize the species' survival.

(b) For the time being, the primary repository of genetic diversity for the species will be the approximately 333 wild and captive whooping cranes mentioned in (a) above. The birds selected for reintroduction purposes will be as genetically redundant as possible with the captive population, hence any loss of reintroduced animals in this experiment will not significantly impact the goal of preserving maximum genetic diversity in the species.

(c) Any birds lost during the reintroduction attempt can be replaced through captive breeding. Production from the extant captive flock is already large enough to support the wild release with over 30 juveniles available annually. We expect this number to increase to over 40 as young pairs already in captivity reach breeding age. This illustrates the potential of the captive flock to replace individual birds proposed for release in reintroduction efforts. Levels of production are expected to be sufficient to support both this proposal, and continued releases into the Kissimmee flock.

The hazards and uncertainties of the reintroduction experiment are substantial, but a decision not to attempt to utilize the existing captive breeding potential to establish a second, wild, self-sustaining population could be equally hazardous to survival of the species in the wild. The AWP could be annihilated by catastrophic events such as a Gulf coast hurricane or a contaminant spill on the wintering grounds that would necessitate management efforts to establish an additional wild population. We believe 3 self-sustaining wild populations—consisting of 40 nesting pairs in the AWP and 2 additional, separate and self-sustaining, populations consisting of 25 nesting pairs each—should be in existence before the whooping crane can be downlisted to threatened status. Dependent upon future events, the nonmigratory Florida population would potentially be the second such population. An eastern U.S. migratory flock could be the third population. If this reintroduction effort is successful, conservation of the species will have been furthered considerably by establishing another self-sustaining population in currently unoccupied habitat. It would also confirm that captive-reared cranes can be used to establish a migratory, wild population.

Section 10(j) of the Act requires that an experimental population be geographically separate from other populations of the same species. The proposed NEP area will involve a large part of the eastern United States, with the expectation that most whooping cranes would be concentrated within the States of Wisconsin and Florida, as well as adjacent States, and those States within the migration corridor. States within the NEP area include Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, North Carolina, Ohio, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. All of these States are considered to be within the probable historic range of the species. Any whooping crane found within this area will be considered part of the experimental population. Initial releases are planned for central Wisconsin, with plans for a wintering location on the Florida Gulf coast. It is impossible to predict where individual whooping cranes may disperse following release within the project area. One pair of whooping cranes from the Kissimmee Florida flock is known to have traveled as far away as Illinois and Michigan during the summer of 2000. Designation of this NEP allows for the possible occurrence of cranes in a large area of the eastern United States.

The whooping cranes also occurred in, or migrated through, the remaining northeastern States not proposed for inclusion in the NEP area. However, this occurrence is not as well documented as it is for other eastern States. Given the propensity for the species to wander and the potential future dispersal of the proposed whooping crane population in the eastern United States, we are considering including the States of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, New Jersey, Pennsylvania, Rhode Island, and Vermont within the eastern United States NEP area.

The proposed potential release areas in Wisconsin include Necedah NWR, Horicon NWR, and Crex Meadows State Wildlife Management Area. Initial releases are proposed for the Necedah NWR in Juneau County, Wisconsin. The location of future releases will depend upon habitat use and dispersal patterns of released cranes.

A majority of the movements of the released cranes are expected to occur within the central Wisconsin area, which comprises approximately 2,000 square kilometers characterized by a mosaic of forest and open wetlands. Numerous small streams cut across the landscape, many of which have been ditched for purposes of agricultural drainage. Much of the landscape is forested, consisting of mixed forests interspersed with open expanses of sedge and shrub wetlands, small streams and ponds.

On surrounding private lands, a significant amount of historic wetland habitat has been converted to cranberry culture. Land ownership includes a number of larger private holdings devoted to cranberry production and six large public ownerships totaling 83,222 hectares (ha) (205,651 acres). County-owned lands within the four-county area surrounding Necedah NWR include significant acreage, primarily devoted to forestry, totaling 65,810 ha (162,624 ac).

The principal private land uses are forestry, cranberry culture and other agriculture, and recreational hunting. Upland forests are managed for sawtimber and firewood production, on either a clear-cut rotational basis or selective harvest, dependent upon forest type and management objectives. Wetland habitat utilized for cranberry culture is managed mainly through the manipulation of water regime, in the form of seasonal flooding. The public lands are managed for wildlife values, recreation, water conservation, and to maintain natural habitat conditions. Compared to other areas in Wisconsin, the central Wisconsin area has experienced limited human population growth over the past 30 years due to its distance from major population centers and low suitability for agriculture. The presence of large public land holdings is at least in part a result of unsuccessful agricultural development. Cannon (1999) has estimated that approximately 37,000 ha (92,000 ac) of suitable whooping crane habitat exists in the central Wisconsin area.

The proposed primary wintering site is on the Chassahowitzka NWR, of which 55 percent (6,908 ha or 17,070 ac) is suitable crane habitat. The refuge comprises over 12,500 ha (31,000 ac) of saltwater bays, estuaries, and brackish marshes with a fringe of hardwood swamps along the eastern boundary. Dispersed throughout the salt marsh in a jigsaw puzzle fashion is 4,048 ha (10,000 ac) of estuarine habitat in the form of shallow bays and tidal streams; the largest of the streams being the Chassahowitzka and Homosassa Rivers. Because of three transitional salinity stages (ranging from fresh spring water, to brackish, and then to the saline waters of the Gulf of Mexico), a wide range of aquatic plant and animal life flourishes within all parts of the system. A wintering site study (Cannon 1998) rated Chassahowitzka NWR as an excellent site for wintering whooping cranes based on available habitat, adjacent expansion possibilities, adequate isolation, and abundant food resources.

Adjacent to the Chassahowitzka NWR, are two State of Florida-owned properties that support suitable crane habitat the wintering cranes may occasionally use. These areas are the 36,000-acre (14,568 ha) St. Martin's Marsh Aquatic Preserve and the 9,308 ha (23,000 ac) Crystal River State Buffer Preserve. Both sites contain habitats similar to those in Chassahowitzka NWR.

Whooping cranes will be intensively monitored by project personnel prior to and after release. The birds will be observed daily while they are in the conditioning pen. Facilities for captive maintenance of the birds will be modeled after facilities at the U.S. Geological Survey's Patuxent Wildlife Research Center (PWRC) and the International Crane Foundation. They will conform to standards set forth in the Animal Welfare Act and Florida Wildlife Code (Title 39.6 F.A.C). To further ensure the well-being of birds in captivity and their suitability for release to the wild, facilities will incorporate features of their natural environment (e.g., feeding, loafing, and roosting habitat) to the extent possible. The conditioning pens will be similar to those being used successfully to release Mississippi sandhill cranes. Pre-release conditioning will occur at facilities near the release site.

To ensure contact with the released birds, each crane will be equipped with legband-mounted radio telemetry transmitters. Subsequent to gentle-release, the birds will be monitored regularly to assess movements and dispersal from the area of the release pen. Whooping cranes will be checked regularly for mortality or indications of disease (listlessness, social exclusion, flightlessness, or obvious weakness). Social behavior (e.g., pair formation, dominance, cohort loyalty) will also be evaluated.

A voucher blood serum sample will be taken for each crane prior to its arrival in Wisconsin. A second sample will be taken just prior to release. Any time a bird is handled after release, a blood sample may be taken to monitor disease exposure and physiological condition. One year after release, when possible, all surviving whooping cranes may be captured and an evaluation made of their exposure to disease/parasites through blood, fecal, and other sampling regimens. Monitoring will continue, opportunistically, for multiple years whenever cranes are recaptured to replace radio transmitters. If preliminary results are favorable, the releases will be continued annually, with the goal of releasing up to 30 birds per year for about 10 years and then evaluating the success of the recovery effort.

Both sandhill and whooping cranes are known to be vulnerable, in part or all of their natural range, to avian herpes (inclusion body disease), avian cholera, acute and chronic mycotoxicosis, eastern equine encephalitis (EEE), and avian tuberculosis. Additionally, Eimeria spp., Haemogroteus spp., Leucocytozoon spp., avian pox, lead poisoning, and Hexamita sp. have been identified as debilitating or lethal factors in wild or pre-release, captive populations.

A group of crane veterinarians and disease specialists have developed protocols for pre-release and pre-transfer health screening for birds selected for release to prevent introduction of diseases and parasites into the eastern flyway. Exposure to disease and parasites will be evaluated through blood, serum, and fecal analysis of any individual crane handled post-release or at the regular monitoring interval. Remedial action will be taken to return to good health any sick individuals taken into captivity. Sick birds will be held in special facilities and their health and treatment monitored by veterinarians. Special attention will be given to EEE because an outbreak at the PWRC in 1984 killed 7 of 39 whooping cranes present there. After the outbreak a vaccine was developed for use on captive cranes. In 1989, EEE was documented in sentinel bobwhite quail and sandhill cranes at the PWRC. No whooping cranes became ill, and it appears the vaccine may provide protection. EEE is present in Wisconsin, so the released birds may be vaccinated. Other strains of encephalitis (St. Louis, Everglades) also occur in Wisconsin. The vaccine for EEE may also provide protection against these arboviruses.

When appropriate, other avian species may be used to assess the prevalence of certain disease factors. This could mean using sentinel turkeys for ascertaining exposure probability to encephalitis or evaluating a species with similar food habits for susceptibility to chronic mycotoxicosis.

The ultimate genetic goal of the reintroduction program is to establish wild reintroduced populations that possess the maximum level of genetic diversity available from the captive population. Early reintroductions will likely consist of a biased sample of the genetic diversity of the captive gene pool, with certain genetic lineages over-represented. This bias will be corrected at a later date by selecting and re-establishing breeding whooping cranes that, theoretically, compensate for any genetic biases in earlier releases.

Although efforts will be made to minimize mortality, some will inevitably occur as captive-reared birds adapt to the wild. Collision with power lines and fences are known hazards to wild whooping cranes. No major power lines cross the proposed release or wintering sites. Tall woven-wire and barbed-wire fencing is commonly used in the central Wisconsin area and presents some collision hazard. If whooping cranes begin regular use of areas traversed by power lines or fences, the Service and Wisconsin DNR will consider placing markers on the obstacles to reduce the probability of collisions.

Wolves are known predators of adult sandhill cranes and would be potential predators of adult whooping cranes, as would coyotes and bald eagles. Red fox, bobcats, owls, and raccoons are potential predators of young cranes. Natural mortality from predators, fluctuating food availability, disease, and wild feeding inexperience will be reduced through predator management, vaccination, gentle release, supplemental feeding for a post-release period, and pre-release conditioning. This conditioning will include teaching the habit of roosting in standing water. Predation by bobcats has been a significant source of mortality in the Kissimmee flock, and teaching this roosting behavior to young birds should help to reduce losses to wolves, coyotes, and bobcats. Human-caused mortality will be reduced by information and education efforts directed at landowners and land users, and review and management of human activities in the area.

Recently released whooping cranes will need protection from natural sources of mortality (predators, disease, and inadequate foods) and from human-caused sources of mortality. Natural mortality will be reduced through pre-release conditioning, gentle release, vaccination, and predator control. We will minimize human-caused mortality through a number of measures such as: (a) Placing whooping cranes in an area with low human population density and relatively low development; (b) working with and educating landowners, land managers, developers, and recreationists to develop means for conducting their existing and planned activities in a manner that is compatible with whooping crane recovery; and (c) conferring with developers on proposed actions and providing recommendations that will reduce any likely adverse impacts to the cranes.

The Service, State employees, and their agents will be authorized to relocate whooping cranes to avoid conflict with human activities; relocate whooping cranes that have moved outside the appropriate release area or the NEP area when removal is necessary or requested; relocate whooping cranes within the NEP area to improve survival and recovery prospects; and aid animals that are sick, injured or otherwise in need of special care. If a whooping crane is determined to be unfit to remain in the wild, it will be returned to captivity. The Service, State employees, and their agents will be authorized to salvage dead whooping cranes.

Conflicts have resulted in the central and western United States from the hunting of migratory birds in areas utilized by whooping cranes, particularly the hunting of sandhill cranes and snow geese (Chen cerulescens), which to novice hunters may appear similar to whooping cranes.

In recent years, only two to three crane mortalities have been documented incidental to hunting activities. Sandhill cranes are not hunted in Wisconsin although a future hunting season is being considered, and snow geese are an uncommon migrant and have not been present in large numbers. Sandhill cranes and snow geese are not hunted in the area of the proposed wintering site in Florida. Accidental shooting of a whooping crane in this experimental population occurring in the course of otherwise lawful hunting activity is exempt from take restrictions under the Act in this proposed special regulation. Applicable Federal penalties under the Migratory Bird Treaty Act and/or State penalties, however, may still apply. There will be no federally mandated hunting area or season closures or season modifications for the purpose of protecting whooping cranes (see Protection, below). We will minimize mortality due to accidental shootings by providing educational opportunities and information to hunters to assist them in distinguishing whooping cranes from other legal game species.

The bulk of traditional hunting in the primary release area has been for deer (Odocoileus virginianus), turkey (Meleagris gallopavo), and small game. Conflict with traditional hunting in the release area is not anticipated. Access to some limited areas at release or wintering sites and at ultralight migration stopover points could be temporarily restricted at times when whooping cranes might be particularly vulnerable to human disturbance (i.e., around rearing and training facilities in the spring/summer and conditioning and holding pens in the fall/winter). Any temporary restricted access to areas for these purposes will be of the minimum size and duration necessary for protection of the proposed NEP cranes, and will be closely coordinated with and at the discretion of the respective States. Any such access restrictions will not require Federal closure of hunting areas or seasons.

States within the NEP area maintain their management prerogatives regarding the whooping crane. They are not directed by this rule to take any specific actions to provide any special protective measures, nor are they prevented from imposing restrictions under State law, such as protective designations, and area closures. None of the States within the NEP area have indicated that they would propose hunting restrictions or closures related to game species because of the proposed whooping crane reintroduction.

Overall, the presence of whooping cranes is not expected to result in placement of constraints on hunting of wildlife or to affect economic gain landowners might receive from hunting leases. The potential exists for future hunting seasons to be established for other migratory birds that are not currently hunted in some of the States within the NEP area. The proposed action will not prevent the establishment of future hunting seasons approved for other migratory bird species by the Mississippi or Atlantic Flyway Councils.

The principal activities on private property adjacent to the release area are agriculture and recreation. Use of these private properties by whooping cranes will not preclude such uses. The proposed special regulation accompanying this proposed rule authorizes incidental take of the whooping crane in the proposed NEP area when the take is accidental and incidental to an otherwise lawful activity.

An additional issue identified as a possible conflict is the potential for crop depredation. There is evidence that some sandhill cranes have caused locally significant losses of emerging corn in some areas in Wisconsin. It is possible that whooping cranes could engage in this type of behavior as well. Whooping cranes are socially less gregarious than sandhill cranes, and tend to restrict the bulk of their foraging activities to wetland areas. Therefore, they are believed to be less likely to cause significant crop depredations. If such depredations occur, they can be eliminated through use of bird scaring devices and other techniques. Ongoing research on seed treatments as a deterrent to corn depredation is promising (Blackwell, Helon and Dolbeer, in press).

Other agricultural crops found in the release area include cranberries. Some concern has been expressed that whooping cranes may consume cranberries. Although potential habitat is present near cranberry operations, cranberries are not likely to be an attractive food item as compared to animal matter, during most of the time period that whooping cranes would be present in Wisconsin. Cranberry beds are flooded at harvest time, and when large numbers of berries are gathered they could be more vulnerable to depredation. However, this event occurs in late fall, after whooping cranes would have departed for their wintering grounds. In addition, the numerous sandhill cranes in Wisconsin have not caused cranberry crop depredation. Therefore, we do not expect that whooping cranes will pose a significant threat to crop depredation on cranberries.

Released whooping cranes might wander into other States or other locations in the eastern United States outside of the expected migration corridor, or even outside the NEP area. We believe the frequency of such movements is likely to be low. Any whooping cranes that leave this experimental population area will be considered as endangered. However, for any whooping cranes that move outside the eastern United States NEP area, including those that move into the migration corridor of the AWP, attempts will be made to capture and return them to the appropriate area if a reasonable possibility exists for contact with the AWP population or if removal is requested by the State which they enter.

Birds from the AWP flock have rarely been observed in any of the States within the NEP area except as a result of an extreme weather event; they are expected to be in the NEP area very infrequently and only temporarily. Any whooping cranes that occur within the NEP area will be considered to be part of the NEP and will be subject to the protective measures in place for the NEP. Because of the extremely limited number of incidents anticipated, the decreased level of protections afforded AWP cranes that cross into the NEP is not expected to have any significant adverse impacts to the AWP.

For at least the first year of project life, whooping cranes will be led to the Florida wintering site utilizing an ultralight aircraft and stopping at a series of previously chosen stopover locations en route. During subsequent migration periods, it will be difficult to predict which specific sites will be utilized by the birds, and some cranes may use stopover sites with which they have no previous experience. Whooping cranes that appear in undesirable locations while in migration will be considered for relocation by capture and/or hazing of the birds. Possible conflicts with recreation and agriculture interests within the migration corridor will be minimized through an extensive public education program.

Access to whooping cranes may be temporarily restricted in limited areas near rearing and acclimatization facilities and at ultralight migration stopover locations to minimize disturbance at times of greatest vulnerability and sensitivity. Any temporarily restricted access to areas for these purposes will be of the minimum size and duration necessary for protection of the proposed NEP cranes, will not require Federal closure of hunting areas or seasons, and will be closely coordinated with and at the discretion of the respective States.

Public meetings were held in Florida in December of 1997 and in Wisconsin in May of 1999, to determine public interest and concerns regarding the potential reintroduction of a migratory flock of whooping cranes to the eastern United States. In 1999, the Service, the Wisconsin DNR, and International Crane Foundation representatives met to identify issues and concerns related to whooping crane reintroduction.

The Wisconsin and Florida informational meetings offered the general public an opportunity to review and offer informal comments on the proposed action. The public has appeared extremely supportive of the proposed action, provided it does not interfere with existing lifestyles and current and potential income. We will attempt to notify all known or determinable affected parties and other interested agencies, groups, and individuals of the opportunity to comment on this proposed rule. We will hold a series of public hearings during the public comment period as a further measure to encourage public input on the proposed action. We will incorporate information and comments into the final rule.

The Service has made presentations to numerous organizations and potentially affected interest groups, government representatives of States along the potential migration route, the Atlantic and Mississippi Flyway Councils and their Technical Sections, the Wisconsin Natural Resources Board, the Florida Fish and Wildlife Conservation Commission (FLFWCC), and other interested agencies to obtain input on the potential for reintroduction of a migratory whooping crane population in the eastern United States. We have conducted extensive coordination, both formal and informal, with all States within the proposed NEP area. All States have been asked to give their formal endorsement to the project prior to implementation.

An extensive sharing of information about the program and the species, via educational efforts targeted toward the public throughout the NEP area and nationally, will enhance public awareness of this species and its reintroduction. We will encourage the public to cooperate with the Service, Wisconsin DNR, and the Florida FWCC in attempts to maintain and protect whooping cranes in the release areas and wintering area.

Whooping crane chicks intended for wild release are transported to field release facilities at about 20-40 days of age, where they are then conditioned for wild release. Because of the nesting phenology (recurring natural phenomena) of the captive breeding pairs at the rearing facilities, these chicks are ready for transport to field facilities on or about May 1 in any given year. In order to facilitate the timely initiation of this reintroduction project and not delay whooping crane recovery efforts, we must expedite this nonessential experimental rulemaking process. Therefore, we are providing a 45-day comment period on this rule, instead of the standard 60 days.

We want the final rule to be as effective as possible and the environmental assessment on the proposed action to effectively evaluate all potential issues associated with this action. Therefore, we invite the public, concerned Tribal and government agencies, the scientific community, industry and other interested parties to submit comments or recommendations concerning any aspect of this proposed rule and the draft environmental assessment. Comments should be as specific as possible. To issue a final rule to implement this proposed action and to determine whether to prepare a finding of no significant impact or an environmental impact statement, we will take into consideration all comments and any additional information we receive. Such communications may lead to a final rule that differs from this proposal.

In particular, we are seeking comments on the appropriateness of including the States of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, New Jersey, Pennsylvania, Rhode Island, and Vermont within the eastern U.S. NEP area.

Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address from the rulemaking record, which we will honor to the extent allowable by law. In some circumstances, we will withhold a respondent's identity from the rulemaking record, as allowable by law. If you wish for us to withhold your name and/or address, you must state this request prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, available for public inspection in their entirety.

The purpose of the public informational open houses is to provide additional opportunities for the public to gain information and ask questions about the proposed rule. These open house sessions should assist interested parties in preparing substantive comments on the proposed rule. All comments we receive at the hearings, both verbal and written, will be considered in making our final decision on the proposed NEP.

In accordance with the criteria in Executive Order 12866, the proposed rule to designate NEP status for the whooping crane reintroduction into the eastern United States is not a significant regulatory action subject to Office of Management and Budget review. This rule will not have an annual economic effect of $100 million and will not have an adverse effect upon any economic sector, productivity, competition, jobs, the environment, or other units of government. Therefore, a cost-benefit economic analysis is not required.

Lands where releases are proposed include Necedah and Horicon National Wildlife Refuges, and the Crex Meadows State Wildlife Area in Wisconsin. The proposed wintering site in Florida is Chassahowitzka National Wildlife Refuge and the adjacent St. Martin's Marsh Aquatic Preserve and Crystal River State Buffer Preserve. Following release, birds from the NEP are likely to utilize private lands adjacent to both the release areas and the wintering site. Because of the substantial regulatory relief provided by NEP designations, we do not believe the reintroduction of whooping cranes would conflict with existing human activities or hinder public or private use of lands within the NEP area. Likewise, no governments, individuals or corporations will be required to manage specifically for reintroduced whooping cranes.

This rule will not create inconsistencies with other agency's actions or otherwise interfere with an action taken or planned by another agency. Federal agencies most interested in this rulemaking are primarily other Department of the Interior bureaus (e.g., National Park Service). The action proposed by this rulemaking is consistent with the policies and guidelines of other Interior bureaus.

This rule will not materially affect entitlements, grants, user fees, loan programs or the rights or obligations of their recipients. This rule will not raise novel legal or policy issues. We have previously designated an experimental population of whooping cranes in Florida and for other species at numerous locations throughout the nation.

The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The area affected by this rule includes 20 States within the eastern United States. We do not expect this rule to have any significant effect on recreational, agricultural, or development activities within the NEP area. There will be no federally mandated closures of seasons or areas to hunting for protection of the proposed NEP. We expect only temporary access restrictions to limited areas in the vicinity of rearing and release facilities at times during the spring/summer rearing period, during migration with ultralight aircraft, or at the wintering site. In the primary release area, this is not expected to occur outside of existing, long-established closed areas on Necedah NWR. Any temporarily restricted access to areas will be of the minimum size and duration necessary to provide for protection to the proposed NEP cranes during rearing or release activities, and will be conducted in close coordination with the States. Because any such access restrictions will be of short duration and will not require Federal closure of hunting areas or seasons, we do not expect any significant effect on recreational activities. Because there will be no new or additional economic or regulatory restrictions imposed upon States, Federal agencies, or members of the public due to the presence of members of the proposed NEP, this rulemaking is not expected to have any significant adverse impacts to recreation, agriculture, or any development activities. The designation of an NEP in this rule will significantly reduce the regulatory requirements regarding the reintroduction of these whooping cranes, will not create inconsistencies with other agency actions, and will not conflict with existing or proposed human activity, or State, Tribal or private use of lands within the NEP area.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule will not have an annual effect on the economy of $100 million or more for reasons outlined above. It will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. The rule does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

The NEP designation will not place any additional requirements on any city, county, or other local municipalities. The proposed NEP designation has been endorsed by all of the States within the proposed NEP area. A Small Government Agency Plan is not required. Because this rulemaking does not require that any action be taken by local or State government or private entities, we have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502 et seq., that this rulemaking will not impose a cost of $100 million or more in any given year on local or State governments or private entities (i.e., it is not a “significant regulatory action”).

In accordance with Executive Order 12630, the rule does not have significant takings implications. We do not expect this rule to have a potential takings implication under Executive Order 12630 because it would exempt individuals or corporations from prosecution for take that is accidental and incidental to an otherwise lawful activity. In addition, private entities would also be exempt from any restrictions imposed by consultation requirements under section 7(a)(2) of the Act, as consultation will not be conducted except on National Wildlife Refuges or National Parks. Because of the substantial regulatory relief provided by NEP designations, we do not believe the reintroduction of whooping cranes would conflict with existing human activities or hinder public use of lands within the proposed NEP area. None of the States within the proposed NEP area will be required to manage specifically for reintroduced whooping cranes, and all of those States have endorsed the proposed NEP designation. A takings implication assessment is not required.

In accordance with Executive Order 13132, the rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. This rule will not have substantial direct effects on the States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government. As stated above, designation of this population as nonessential experimental will preclude any additional regulatory burdens on public and private entities within the NEP area. A Federalism assessment is not required.

In accordance with Executive Order 12988, the Office of the Solicitor has determined that the rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Executive Order.

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951) and E.O. 13175, we have notified the Native American Tribes within the nonessential experimental population area about this proposal. They have been advised through verbal and written contact, including informational mailings from the Service. Information was also sent to the Great Lakes Indian Fish and Wildlife Commission, 1854 Authority, Chippewa Ottawa Resource Authority, and Native American Fish and Wildlife Society. If future activities resulting from this proposed rule may affect Tribal resources, a Plan of Cooperation will be developed with the affected Tribe or Tribes.

This proposed rule contains information collection activity for experimental populations. The Fish and Wildlife Service has Office of Management and Budget approval for the collection under OMB Control Number 1018-0094. The Service may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.

We have prepared a draft environmental assessment as defined under the authority of the National Environmental Policy Act of 1969. It is available from Service offices identified in the ADDRESSES section.

Executive Order 12866 requires each agency to write regulations that are easy to understand. We invite your comments on how to make this rule easier to understand including answers to questions such as the following: (1) Are the requirements in the rule clearly stated? (2) Does the rule contain technical language or jargon that interferes with its clarity? (3) Does the format of the rule (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce its clarity? (4) Would the rule be easier to understand if it were divided into more (but shorter) sections? (5) Is the description of the rule in the Supplementary Information section of the preamble helpful in understanding the proposed rule? What else could we do to make the rule easier to understand?

Send a copy of any comments that concern how we could make this rule easier to understand to: Office of Regulatory Affairs, Department of the Interior, Room 7229, 1849 C Street NW, Washington, DC 20240. You may also e-mail the comments to this address: Exsec@ios.doi.gov.

A complete list of all references cited in this proposed rule is available upon request from the Green Bay Field Office (see ADDRESSES section).

The principal authors of this rule are Joel Trick and Janet Smith, U.S. Fish and Wildlife Service, Green Bay, WI (Phone: 920-465-7440); Tom Stehn, U.S. Fish and Wildlife Service, Austwell, TX (Phone 361-286-3559); and Linda Walker, U.S. Fish and Wildlife Service, Jacksonville, FL (Phone: 904-232-2580).

Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below: