An electronic copy of this document may be downloaded by using a computer, modem, and suitable communications software from the Government Printing Office's Electronic Bulletin Board Services at (202) 512-1661. Internet users may reach the Office of the Federal Register's home page at: http://www.nara.gov/fedreg and the Government Printing Office's database at: http://www.access.gpo.gov/nara. You can also view and download this document by going to the webpage of the Department's Docket Management System ( http://dms.dot.gov/ ). On that page click on “search.” On the next page, type the last four digits of the docket number shown on the first page of this document. Then click on “search.”

This rule is part of a joint effort by the Bureau of Transportation Statistics (BTS) and the Office of the Secretary of Transportation (OST) to conduct a broad-based review of the requirements for aviation data and to modernize the way BTS collects, processes, and disseminates aviation data. This rule is being issued under the rulemaking authority delegated to BTS ( See 49 CFR 1.71(a)(3)).

As the first step in this effort, BTS and OST's Office of the Assistant Secretary for Aviation and International Affairs jointly issued an advance notice of proposed rulemaking (ANPRM) (July 15, 1998, 63 FR 28128). The Department solicited comments on the nature, scope, source, and means for collecting, processing, and distributing airline information. The ANPRM covered BTS' major data systems, including those providing traffic, fare, and financial data. The Department invited comments about whether existing aviation data collections should be amended, supplemented, or replaced; whether selected forms and reports should be retained, modified, or eliminated; whether aviation data should be filed electronically; and how the aviation data systems should be re-engineered to enhance efficiency and reduce costs for both the Department and airline industry. The Department subsequently conducted additional outreach and research activities to further assess data requirements and how the data reporting and processing systems could be improved.

The ANPRM, outreach and program analysis took a very broad approach, examining not only the types of traffic, fare, and financial information that should be collected, but also the sources of the data and how the data should be collected and processed. BTS believes it is more practical and manageable to proceed with this rule to correct immediate deficiencies by addressing a distinct aspect of the overall Departmental review.

This final rule deals with the types of market and segment data BTS should collect and from what sources. BTS believes this is an appropriate topic because the reporting changes meet several of the Department's immediate data needs. Support for these changes has also been expressed by several commenters.

On August 28, 2001, BTS published the notice of proposed rulemaking on Air Carrier Traffic and Capacity Data by Nonstop Segment and On-Flight Market in the Federal Register (66 FR 45201).

Comments were received, from the Airports Council International—North America (ACI-NA), America West, Atlas Air, the City of Houston and the Greater Houston Partnership, Data Base Products, Federal Express, Mr. Daniel Kasper, Mr. Robert M. Pryor, Rickenbacker Port Authority, Southern Air, and United Air Lines. The substance of these comments is discussed below under a series of topical captions.

The City of Houston and the Greater Houston Partnership (Houston), Federal Express, Data Base Products, Rickenbacker International Airport and ACI-NA all support reporting detailed nonstop segment and on-flight market information for domestic all-cargo, domestic charter, and military operations.

Houston believes the reporting of domestic all-cargo and charter services would improve the coverage and consistency of traffic reports.

Rickenbacker International Airport in Columbus, Ohio, is an airport that predominantly serves all-cargo air carriers, charter-passenger air carriers, and the military. The collection of detailed data from cargo and charter carriers would provide it with much needed planning and marketing information. More importantly, Rickenbacker International Airport believes the data would assist the FAA in further understanding airport traffic patterns enabling them to make better determinations on the allocation of Airport Improvement Program (AIP) funds.

ACI-NA states that “the proposed changes would produce information regarding on-board traffic loads that is more useful to U.S. airports in understanding market developments including gaps in passenger and cargo service; marketing their airports and communities to U.S. and foreign combination and all-cargo carriers; planning and monitoring a wide-range of airport facilities and services; substantiating to the U.S. Government the need for airport and related facilities and the value of domestic and international air services; and participating in domestic and international policy deliberations and competitive proceedings.”

Federal Express supports BTS' goal to fill data gaps, but believes BTS did not go far enough. Federal Express believes that all carriers licensed under 49 U.S.C. 41103 should submit the financial reports required under 14 CFR part 241.

A further expansion of the financial reporting universe goes beyond the scope of this rulemaking. BTS does plan, however, to review air carrier financial reporting matters and address any proposed changes that may be identified in a separate rulemaking. Federal Express' comments will be addressed at that time.

Atlas Air is against reporting detailed segment and market data for military operations because the dissemination of such data could compromise national security.

We agree with Atlas Air that the dissemination of detailed segment or market data for military operations has the potential to compromise national security. The risk is lessened by the fact that the data are reported 30 days after the applicable month. Nevertheless, we believe the appropriate safeguard is to withhold the detailed segment or market data for military operations from public release. Military operations are identified by a separate service-class code that BTS is easily able to segregate from the carriers' other reported operations.

Previously, large certificated air carriers did not provide either market or segment data for domestic charter and domestic all-cargo services, nor did they provide detailed information for their military operations. Small certificated and commuter air carriers reported their traffic statistics under the less sophisticated Form 298-C reporting system. Part 291 all-cargo carriers did not report market or segment data. Foreign carriers did not report operations with small aircraft (60 seats or less or 18,000 pounds of payload capacity or less).

The detailed nonstop segment data include the following items:

The detailed on-flight market data include the following items:

Since the Department will be collecting detailed nonstop segment and on-flight market data for all types of flight operations, the Department will calculate from the segment and market records the following data items for all reporting air carriers, thus relieving the carriers of this task:

Atlas Air disagrees with the proposal that wet-lessor carriers should report detailed nonstop segment and on-flight market data for two reasons. Atlas states that the wet lessee is better able to collect and submit this information; and wet lessor reporting may be confusing to the investment community because it is the lessee that is bearing the financial risks of the operation.

ACI-NA agrees that it will be less confusing about which carrier should report the data if the operating carrier is required to file. However, it further maintains that the reporting carrier should also identify the marketing carrier so that interested parties are not required to reconcile multiple data bases. A similar comment was made by Rickenbacker International Airport.

Southern Air submitted to this docket and to the Docket OST-01-10885 comments stating that revenue ton-miles conducted under wet-lease operations should be recognized for the lessor under the Air Transportation Safety and System Stabilization Act.

We do not agree with Atlas Air's assertion that it is easier for the lessee to report T-100 data. In the past, we have received arguments from lessees that they do not have all the required aircraft operational data for T-100 reporting. Capacity, revenue ton-miles, flight hours, and block hours are statistics within the purview of the lessor. In a joint operation, there must be cooperation between the partners for accurate reporting.

We agree with Atlas that the majority of the economic risk for wet-lease service falls on the lessee; however, lessors also suffer a decline in service during economic downturns as exhibited by some carriers following the tragedy of September 11, 2001. Nonetheless, we believe the need for operational data by the FAA and the National Transportation Safety Board (NTSB) outweigh the needs of the investment community. Placing the reporting requirement on the operating carrier removes the confusion as to which carrier must report a joint operation. There were times when cargo carriers were confused as to whether they were performing a wet-lease operation for a direct air carrier or performing a charter for an air freight forwarder. There are companies that have both direct air carrier and freight forwarder subsidiaries. Currently, wet-lease operations are reported by the lessee while charters for a freight forwarder are reported by the operating carrier.

In passenger service, a hybrid type of operation between code-share and wet-lease operations has developed. In these situations, the operating carrier receives a lower lease payment but receives a share of the passenger revenues. Thus, both parties share in the economic risk of the operation. Designating the operating carrier as the reporting carrier removes any confusion about which carrier is required to report the operation.

Regional carrier service is a growing segment of the air transportation industry. Major carriers are increasing the extent to which they hand over service to their code-share partners. The level of service to small communities can be positively or negatively affected by code-sharing. This creates an important need for DOT to monitor the impact of code-sharing on the affected communities. To effectively monitor these industry changes, the Department, the FAA, and NTSB require data on the air carriers actually operating the aircraft under joint-service agreements.

While we agree with ACI-NA that identifying the marketing carrier would be helpful information, neither the Office of the Secretary nor the FAA identified the data element as fundamental to their needs. The requirement to report marketing carriers would generally fall on the smaller code-share partners of major carriers. Some of these small operators have multiple code-share arrangements between the same city-pairs. While the total burden to report the marketing carrier may not be substantial to the industry as a whole, it may be an inordinate burden to several smaller carriers. Based on these factors, at this time, we have elected not to collect this data item.

Southern's comments have been addressed in Docket OST-01-10885, and are outside the scope of this rulemaking.

ACI-NA requests that BTS expand the T-100 System to collect citizenship data. ACI-NA recognizes that the Department of Commerce collects I-92 citizenship data, but argues that it is of limited use because it excludes Canada-U.S. traffic. Citizenship data would be helpful in calculating the economic benefits derived from foreign tourists and business travelers.

BTS agrees that citizenship data needs to be improved, especially the data gap for Canada-U.S. operations. At the same time, BTS believes that the data gap can best be filed by the Department of Commerce, which already has a system in place to collect citizenship data. BTS recommends that ACI-NA petition the Department of Commerce to expand I-92 citizenship data to include Canada-U.S. operations.

The City of Houston strongly supports the proposal to require small certificated and commuter air carriers to report T-100 data. It believes that the Part 298 reporting rules are obsolete for the regional airline industry operations. It further states that: “There is no reason to maintain separate reporting systems that complicate the ability to track the activity of both large and small aircraft at our nation's airports.”

United Air Lines supports the proposal to expand the T-100 collection to include data from all commuter carriers regardless of the type of aircraft used in the service.

America West supports the lowering of the reporting threshold to include aircraft with seating capacities of 50 seats or lower.

ACI-NA strongly supports T-100 traffic reporting by all carriers and states that: “These changes will improve the allocation of Airport Improvement funds and make it easier to track Passenger Facility Charges.”

Mr. Robert M. Pryor states that the BTS proposal will provide a significant improvement to the nation's reporting system.

Mr. Daniel M. Kasper fully supports requiring small certificated and commuter air carriers to report T-100 data. However, he does express concerns about dropping the requirement to report Form 298-C, Schedule T-1, Report of Revenue Traffic by On-Line Origin and Destination, without imposing a corresponding requirement to submit the Passenger Origin-Destination Survey Report. Similar concerns were expressed by Mr. Earl Doolin of Data Base Products and ACI-NA.

For the purpose of reporting traffic statistics, BTS is removing distinction of large and small aircraft. All operations will be reported on Schedule T-100. While there is agreement that small certificated and commuter air carriers should report T-100 data, some parties believe that BTS should have gone further and required these carriers to report the Passenger Origin-Destination Survey data. As stated earlier, this rulemaking is the first step in modernizing aviation data. In the future, the Department will issue a rulemaking that addresses the Passenger Origin-Destination Survey Report. That rulemaking will address the reporting universe, the required data elements, and the technology to be used for submitting the Passenger Origin-Destination Survey Report. Given the future rulemaking, it would not be cost effective to require a segment of the industry to adopt a reporting system that may soon become obsolete.

As an alternative to the Passenger Origin-Destination Survey Report, the commenter proposed that the small certificated and commuter air carriers continue to file Form 298-C, Schedule T-1 Report of Revenue Traffic by On-Line Origin and Destination. Schedule T-1 provides for an air carrier's on-line origin and destination of its passengers. On-line origin is the airport where a passenger enters a carrier's system. On-line destination is the airport where a passenger exits that carrier's system. Intermediate points or connecting points are not reported under this system.

There are a number of advantages that will result from moving small certificated and commuter air carriers to the T-100 system. The reporting changes will result in: (1) A unified traffic reporting system for all types of operations; (2) small certificated and commuter air carriers reporting traffic movements for intermediate points; (3) the FAA having the airport enplanement data it needs for distributing Airport Improvement Program (AIP) funds, auditing the collection of Passenger Facilities Charges, and forecasting future traffic trends and movements; (4) airports having data that will facilitate their analysis of traffic flows and infrastructure needs; (5) the newly created Transportation Security Administration having the data it needs to review an air carrier's remittance of civil aviation security service fees; and (6) the Essential Air Service Program (EAS) having market data for hub airports for use in analyzing the service of small communities. The Department through the EAS program guarantees small communities access to the national aviation system; therefore, it is more important to know a small community's total traffic into a hub rather than its traffic into a number of spoke airports.

There are some disadvantages in that the on-line origin-destination passenger data will not be available from small certificated and commuter air carriers. Schedule T-100 is designed to track aircraft movements. We will have information on where a passenger got on and off a particular flight rather than where the passenger got on and off a particular carrier's route network. As stated before, Form 298-C Schedule T-1 tracks where passengers enter and exit a carrier's route system. Under this rule, on-line origin-destination data are lost when a passenger changes flights within a small certificated or a commuter air carriers' route network. This is a problem that is generally associated with a hub-and-spoke network. Passengers traveling from spoke-to-spoke will be shown as two passenger enplanements under T-100. When there is a change in flight numbers, one enplanement is recorded for the flight into the hub and another enplanement is recorded for the flight to the destination spoke. There will not be market data for spoke-to-spoke passengers when there is a change in flight numbers and those passengers' itinerary did not involve passage on a carrier that submits the Passenger Origin-Destination Survey Report.

There are costs and benefits to the proposal to require small air carriers to report both T-100 and Form 298-C Schedule T-1 data until the Department implements changes to the current Passenger Origin-Destination Survey. The benefit is that we would retain the on-line market data for local spoke-to-spoke travelers. Under T-100, we still will have the enplanement data at the spoke airports, which is used to make EAS determinations and allocate AIP funds. Moreover, not all small carriers operate hub-and-spoke systems where there would be a loss of on-line market data. We believe that the costs of dual reporting exceed the benefits at this time.

Mr. Kasper identified a number of medium to large-size markets (40,000 to 275,000 quarterly passengers) that are substantially under-reported in the Passenger Origin-Destination Survey Report. These include:

The above list makes a strong argument for reviewing the threshold requirements for submitting the Passenger Origin-Destination Survey Report. Requiring small carriers to continue to report On-Line Passenger Origin-Destination data will not resolve or ease the problem. Each of the markets listed above is served on a nonstop basis by a small air carrier. These carriers will report the market data in their monthly T-100 on-flight market records.

BTS has not identified a regulatory need to require dual reporting of T-100 and Form 298-C Schedule T-1 reporting. The burden to the small carriers outweighs the Department's need for spoke-to-spoke market data.

Ms. Lucretia Frederich, Mr. Robert Pryor, and Mr. Earl Doolin all proposed that carriers report total aircraft hours, aircraft days assigned to service, and aircraft fuels by aircraft type on Form 41 Schedules P-5.1 and P-5.2, Aircraft Operating Expenses , rather than on Schedule P-2, Notes to BTS Form 41 Report .

These data items are currently reported on the supplemental Schedule T-2 because these data elements cannot be calculated by BTS from the detailed Schedule T-100 reports. Based on the importance of these data elements and the fact we are eliminating Schedule T-2, we must find an appropriate reporting location. BTS agrees with the comments that locating them on the Schedules P-5.1 and P-5.2 is a better alternative than placing them in the free form Schedule P-2. By adding these items to the aircraft operating expense schedules, it will be easier for analysts to calculate expenses per hour, cost of fuel per gallon, and aircraft utilization.

Small certificated and commuter air carriers do not currently submit Form 41 financial reports, and we are not requiring them to do so now. Small certificated air carriers submit Form 298-C, Schedule F-2 Report of Aircraft Operating Expenses and Related Statistics , which already contains gallons of fuel issued. Commuter air carriers submit a basic quarterly income statement, with no detailed aircraft costing information. Since BTS will calculate revenue block hours and departures from the detailed T-100 data, we are eliminating these two elements from Form 298-C Schedule F-2.

Mr. Robert Pryor expressed his concern about the public availability of the data elements that were reported on supplemental Schedules T-1, T-2, and T-3. In the NPRM, BTS stated that it would calculate the data elements eliminated on the supplemental schedules by using the detailed market and segment data reported on Schedule T-100. However, BTS did not specifically address the issue of public availability of the computed data. Mr. Pryor proposed that BTS amend Part 241 to state that BTS will construct Schedules T-1, T-2, and T-3 and that BTS will make these schedules publicly available after processing. Also, Mr. Pryor was concerned that restrictions on detailed international data may impact the release of supplemental data.

BTS will continue to make available to the public the data elements that were reported on supplemental Schedules T-1, T-2, and T-3. These data will be available after BTS completes its editing and processing. BTS' current information technology plans call for adding more data elements to the BTS web site to expand data availability to the public. BTS does not believe it is necessary to revise its regulations to include Mr. Pryor's proposal since it has been and will continue to be BTS policy to release Schedule T-1, T-2 and T-3 data.

BTS will use international segment and market data in its creation of supplemental T-1, T-2, and T-3 data. Nevertheless, the supplemental schedules do not include the detailed market information that is competitively sensitive. Consequently, the supplemental reports will not be withheld from public release.

Rickenbacker International Airport commented that part 291 should be clarified by defining scheduled service . It stated that the airport receives regular scheduled all-cargo flights. Some of these flights are operated daily, others are operated three times a week or weekly. While these flights are available to the public, they are not always published in the Official Airline Guide (OAG). Rickenbacker wants to be assured that these flights are considered to be scheduled flights.

We will add a definition of scheduled service to § 291.2. We agree with Rickenbacker's interpretation that a scheduled cargo flight does not have to operate daily or be published in the OAG to meet the definition of scheduled service. The definition will read:

Service, scheduled cargo means transport service operated pursuant to published flight schedules including extra sections. There is no requirement on the number of weekly flights nor is there a requirement that the schedule must be published in the OAG.

There were general comments from Data Base Products, Mr. Robert Pryor, the City of Houston, and ACI-NA in favor of the proposed changes. There were no comments opposing foreign air carriers being required to report small aircraft operations.

Given the proliferation of regional jet aircraft in trans-border service between the U.S. and Canada, the intense level of competition in the marketplace, the maturity of the industry, and the advances in information technology, the absence of data for this segment of the air transportation industry accounts for a significant adverse gap in the Department's ability to perform industry analyses. To close this gap, the Department is eliminating the provision that allows foreign air carriers to exclude segment and market data for aircraft operations conducted wholly with small aircraft. Currently, foreign air carriers are required to report only operations conducted with large aircraft, which are defined as aircraft with more than 60 seats or greater than 18,000 pounds of payload capacity.

Foreign air carriers have replaced large aircraft with regional jet aircraft. For many trans-border operations, regional jets account for a significant number of trans-border enplanements. Regional jets also replaced large aircraft on some longer haul routes, such as Ottawa-Washington. When regional jets were substituted for large jet aircraft, operations that were once included on Schedule T-100(f) were no longer reported, further widening the data gap. As the use of the regional jet becomes even more prevalent, the absence of data increases the volume of market traffic-flow information that is either incomplete or nonexistent.

It appears that the current small aircraft exclusion for foreign air carriers no longer serves a purpose. In fact, Air Canada, which may conduct the most small aircraft operations to the United States, communicated to the Department that it is cumbersome to identify and then exclude statistics for small aircraft in their T-100(f) submissions. Air Canada is, in fact, reporting detailed T-100 data for its small aircraft operations on a voluntary basis.

The FAA uses enplanement data for U.S. airports to distribute the annual AIP entitlement funds to eligible primary airports. U.S. airports receiving significant service from foreign air carriers operating small aircraft could thus be receiving less than their fair share of AIP entitlement funds. Collecting Schedule T-100(f) data for small aircraft operations will enable the FAA to more fairly distribute these funds.

The BTS encourages carriers to use advanced information technologies to submit their reports to BTS. To avoid a multitude of file formats that could lead to inefficiencies in processing, we are adopting a standard length of fields for submission of personal computer (PC) generated reports. The field descriptions and field lengths are identical to the fields prescribed for magnetic tape/cartridge submissions. Submitters must separate fields by using commas or tabs (comma delimited ASCII or tab delimited ASCII format). The Department will accept alternative formats after prior approval by the Assistant Director—Airline Information, Bureau of Transportation Statistics.

Internet users may access all comments received by the U.S. DOT Docket Facility, Room PL-401, by using the universal resource locator (URL) http://dms.dot.gov. It is available 24 hours each day, 365 days each year. Please follow the instructions online for more information and help.

An electronic copy of this document may also be downloaded by using a computer, modem and suitable communications software from the Government Printing Office's Electronic Bulletin Board Service at (202) 512-1661. Internet users may also reach the Office of the Federal Register's home page at http://www.nara.gov/fedreg and the Government Printing Office's web page at http:///access.gpo.gov/nara.

The FHWA published an interim final rule of Revision No. 1 on February 15, 2002, at 67 FR 7073. This interim final rule revised the guidance and supporting information relating to the decisionmaking process concerning accessible pedestrian signals in Parts 1 and 4 of the MUTCD. Additionally, in the interim final rule, the FHWA provided a 60-day comment period for the public to review and make comment on the necessary changes to the pertinent electronic files on the FHWA's MUTCD Internet site ( http://mutcd.fhwa.dot.gov ) to comply with section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d).

The text of this Revision No. 1 and the text of the 2000 Millennium Edition of the MUTCD with Revision No. 1 text incorporated are available for inspection and copying as prescribed in 49 CFR part 7 at the FHWA Office of Transportation Operations. Furthermore, Revision No. 1 changes are available on the MUTCD Internet site ( http://mutcd.fhwa.dot.gov ). The entire MUTCD text with Revision No. 1 text incorporated is also available on this Internet site.

The FHWA received no comments to the docket in response to the interim final rule, concerning either the text of the Revision No. 1 or the changes made to electronic files to comply with Section 508 of the Rehabilitation Act of 1973. Therefore, this final rule adopts the interim final rule without change as an amendment to the 2000 Millennium Edition of the MUTCD as Revision No. 1. This final rule revises the guidance and supporting information relating to the decisionmaking process concerning accessible pedestrian signals in Parts 1 and 4 of the MUTCD.

The FHWA has determined that this action is not a significant regulatory action within the meaning of Executive Order 12866 or significant within the meaning of the U.S. Department of Transportation regulatory policies and procedures. The economic impact of this rulemaking will be minimal. The changes in this final rule provide additional guidance and support information relating to the decisionmaking process concerning whether or not to install accessible pedestrian signals. The FHWA believes that the uniform application of traffic control devices will greatly improve the traffic operations efficiency and roadway safety. The standards, guidance, and support are also used to create uniformity and to enhance safety and mobility at little additional expense to public agencies or the motoring public. Therefore, a full regulatory evaluation is not required.

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) the FHWA has evaluated the effects of this action on small entities. This final rule only revises guidance and support information related to the decisionmaking process concerning accessible pedestrian signals in the MUTCD. The changes are intended to improve traffic operations and safety, to expand guidance, and to clarify the application of traffic control devices as related to accessible pedestrian signals. For these reasons, the FHWA certifies that this action will not have a significant economic impact on a substantial number of small entities.

This rule does not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22, 1995, 109 Stat. 48). This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (2 U.S.C. 1531 et seq. )

This action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, and the FHWA has determined that this action does not have a substantial direct effect or sufficient federalism implications on States and local governments that would limit the policymaking discretion of the States and local governments. This action merely adds guidance and supporting information for the decisionmaking process concerning whether or not to install accessible pedestrian signals. The FHWA has also determined that this action does not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions.

The FHWA has analyzed this action under Executive Order 13175, dated November 6, 2000, and believes that it will not have substantial direct effects on one or more Indian tribes; will not impose substantial direct compliance costs on Indian tribal governments; and will not preempt tribal law. This action merely adds guidance and supporting information for the decisionmaking process concerning whether or not to install accessible pedestrian signals. Therefore, a tribal summary impact statement is not required.

Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et seq. ), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct, sponsor, or require through regulations. The FHWA has determined that this action does not contain a collection of information requirement for the purposes of PRA.

This action meets applicable standards in Sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, to eliminate ambiguity, and to reduce burden.

The FHWA has analyzed this action under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This is not an economically significant action and does not concern an environmental risk to health or safety that may disproportionately affect children.

This action would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

We have analyzed this final rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a significant regulatory action under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects under Executive Order 13211 is not required.

The agency has analyzed this action for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ) and has determined that it will not have any effect on the quality of the environment.

A regulation identification number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross reference this action with the Unified Agenda.

Coast Guard District Commanders and Captains of the Port (COTP) must be immediately responsive to the safety and security needs of the waters within their jurisdiction; therefore, District Commanders and COTPs have been delegated the authority to issue certain local regulations. Safety zones may be established for safety or environmental purposes. A safety zone may be stationary and described by fixed limits or it may be described as a zone around a vessel in motion. Security zones limit access to prevent injury or damage to vessels, ports, or waterfront facilities. Drawbridge operation regulations authorize changes to drawbridge schedules to accommodate bridge repairs, seasonal vessel traffic, and local public events. Special local regulations are issued to enhance the safety of participants and spectators at regattas and other marine events.

Timely publication of these rules in the Federal Register is often precluded when a rule responds to an emergency, or when an event occurs without sufficient advance notice. The affected public is, however, informed of these rules through Local Notices to Mariners, press releases, and other means. Moreover, actual notification is provided by Coast Guard patrol vessels enforcing the restrictions imposed by the rule. Because Federal Register publication was not possible before the beginning of the effective period, mariners were personally notified of the contents of these special local regulations, drawbridge operation regulations, security zones, or safety zones by Coast Guard officials on-scene prior to any enforcement action. However, the Coast Guard, by law, must publish in the Federal Register notice of all substantive rules adopted. To meet this obligation without imposing undue expense on the public, the Coast Guard periodically publishes a list of these temporary special local regulations, drawbridge operation regulations, security zones, and safety zones.

Permanent rules are not included in this list because they are published in their entirety in the Federal Register . Temporary rules may also be published in their entirety if sufficient time is available to do so before they are placed in effect or terminated. The safety zones, special local regulations, drawbridge operation regulations, and security zones listed in this notice have been exempted from review under Executive Order 12866, Regulatory Planning and Review, because of their emergency nature, or limited scope and temporary effectiveness.

The following rules were place in effect temporarily during the period from April 1, 2002, through June 30, 2002, unless otherwise indicated. This notice also includes rules that were not received in time to be included on the quarterly notice for the second, third and fourth quarters of 2001 and the first quarter of 2002.

The Coast Guard published a notice of proposed rulemaking (NPRM) on May 10, 2002, entitled Drawbridge Operations Regulations, Saginaw River, Michigan, in the Federal Register (67 FR 31745). No letters or comments were received in response to the NPRM. No public hearing was requested, and none was held.

The current bridge operating regulations for drawbridges over Saginaw River are found in 33 CFR § 117.647. The current regulation does not contain an operating schedule for the Liberty Street bridge, which was constructed in 1987, and is located between the Independence and Veterans Memorial bridges. The new rule establishes drawbridge regulations for Liberty Street drawbridge. The former Sixth Avenue bridge at mile 17.1 was removed in 1985 and is still listed as a regulated drawbridge. The new rule removes the bridge from the regulation.

The railroad bridges listed at miles 2.5 and 4.4, respectively, have changed ownership and are updated through this final rule.

The mile marker designations for the bridges listed in this rulemaking have been revised to reflect the mile markers used in the United States Coast Pilot for proper cross-reference.

No comments were received from the public in response to the NPRM. The Coast Guard did receive a correction from the City of Bay City. The NPRM incorrectly stated that the City of Bay City operated all highway drawbridges over Saginaw River. The City of Bay City operates the Liberty Street and Independence drawbridges, and the Michigan Department of Transportation operates the Lafayette and Veterans Memorial drawbridges. This information does not affect the operating schedule of the drawbridges, nor does it alter or affect the purpose of this rulemaking.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040; February 26, 1979).

The Coast Guard expects the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary due to the relatively minor adjustments to the current regulation. There are no additional limitations placed on navigation, and the proper sequencing of bridge openings is expected to improve service to navigation and vehicular traffic.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), the Coast Guard must consider whether this rule will have a significant impact on a substantial number of small entities. “Small entities” may include small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000 people.

This rule is not expected to place any additional limitations on passing vessel traffic. No identified entities would be unable to pass the bridges, as needed. Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule would call for no new collection of information requirement under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. The Coast Guard has analyzed this rule under that order and has determined that this rule does not implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Although this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibility between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The Coast Guard has considered the environmental impact of this rule and concluded that, under figure 2-1, paragraph 32(e) of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation.

Bridges.

Pursuant to 5 U.S.C. 553, a notice of proposed rulemaking (NPRM) was not published for this rule. On May 15, 2002, we published in the Federal Register a temporary final rule entitled “Safety Zone; Chelsea River Safety Zone for McArdle Bridge Repairs, Chelsea River, East Boston, Massachusetts” (67 FR 34612). That rule expired on July 13, 2002. This rule establishes a safety zone in the same location as the expired safety zone established by the previous rule, to ensure the safety of mariners and vessels in the vicinity of the bridge during repairs. Good cause exists for not publishing an NPRM and for making this rule effective in less than 30 days after Federal Register publication. The bridge repairs are taking longer than originally anticipated, and repairs are currently ongoing, making it impossible to draft or publish an NPRM or a final rule 30 days in advance of its effective date. In order to protect the safety of mariners and vessels in the vicinity of the bridge during repairs, this rule is immediately necessary.

The McArdle Bridge repairs were determined necessary as a result of recent inspections by the Massachusetts Highway Department, during which steel grating and support failures on the McArdle Bridge were discovered. Waterway closures in the vicinity of and beneath the bridge are needed because repair equipment and portions of the bridge deck are extending over the waterway, and hotwork (welding and grinding) that shoots sparks over the waterway in the vicinity of the bridge is being conducted. Delaying this work for sufficient time to conduct a public notice rulemaking and advanced publication would be contrary to the public interest for the reasons outlined below.

Preventing the repair work from proceeding places the future operability of the bridge for waterway and roadway use at risk. It would also place at risk the ability of the marine terminals on the Chelsea River to continue to receive vessels. Also, the Massachusetts Highway Department will need to restrict road traffic over the bridge to a certain tonnage if the all repairs are not completed. If the repairs are not completed, road traffic may be completely restricted from the bridge, causing unmanageable traffic situations in Chelsea and East Boston, MA. Thus, it is in the best interest of maintaining safe marine commerce and avoiding significant road traffic problems that the safety zone be enacted to allow for the work to be completed. For these same reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register .

This temporary safety zone is only effective for evening periods and will have a minimal impact on vessel transits due to the fact that the zone will be in effect only during night time when recreational boaters do not typically use the waterway, night time commercial vessel transits are already limited by the constraints of the Chelsea Street Bridge under 33 CFR 165, and the commercial users of the Chelsea River have stated that restricting night time use of the waterway during this time of the year will place the least burden on their operations.

This rule establishes a safety zone on all waters of the Chelsea River 100-yards upstream and downstream of the McArdle Bridge. The safety zone is in effect from July 18, until August 16, 2002, and will be enforced from sunset until sunrise each day during this period. This safety zone prohibits entry into or movement within this portion of the Chelsea River and is needed to provide the Middlesex Corporation sufficient time to safely complete the necessary repairs, painting, steel support, and grating work. The work is needed to ensure the continued safe operability of the McArdle Bridge. The Captain of the Port does anticipate minimal negative impact on vessel traffic due to this repair work. Public notifications will be made prior to the effective period via local notice to mariners and marine information broadcasts.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT)(44 FR 11040, February 26, 1979).

The Coast Guard expects the economic impact of this rule to be minimal enough that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary.

Although this rule prevents traffic from transiting a portion of the Chelsea River during the prescribed periods, the effect of this rule will not be significant for several reasons: the channel will be closed during night time when recreational boaters do not typically use the waterway; many of the commercial vessels are already limited by size to daylight only transits due to the regulations governing the Chelsea Street Bridge under 33 CFR 165.120; and the commercial users of the Chelsea River have stated that restricting night time use of the waterway during this time of the year will not burden their operations.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), the Coast Guard considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit a portion of the Chelsea River from July 18 until August 16, 2002, during sunset to sunrise each day of this period. This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: The bridge will be closed during night time when recreational boaters do not typically use the waterway; most night time commercial traffic is already limited by the constraints of the regulations governing the Chelsea Street Bridge under 33 CFR 165.120; the commercial users of the Chelsea River have stated that restricting night time use of the waterway during this time of the year will not burden their operations; and the Coast Guard will issue maritime advisories widely available to users of Boston Harbor and the Chelsea River, before the effective period, via marine information broadcasts.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

The Coast Guard analyzed this rule under Executive Order 13132, Federalism, and has determined that this rule does not have implications for federalism under that Order.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This rule would not impose an unfunded mandate.

This rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

The Coast Guard analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not pose an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Coast Guard considered the environmental impact of this rule and concluded that, under figure 2-1, (34)(g), of Commandant Instruction M16475.1C, this rule is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available in the docket where indicated under ADDRESSES.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that Order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

This is a summary of the Commission's Declaratory Ruling in WT Docket No. 01-316 released on July 3, 2002. The full text of this document is available on the Commission's website in the Electronic Comment Filing System and for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC 20554.

In 1998, Sprint PCS, a CMRS provider, began sending invoices to AT&T, an IXC, asking that AT&T compensate Sprint PCS for the costs of terminating interexchange traffic bound for Sprint PCS's CMRS customers. Sprint PCS charged AT&T 2.8 cents per minute, the rate in the NECA tariff. AT&T refused to pay. As of September 1, 2001, the amount in dispute exceeded $60 million. In August 2000, Sprint PCS filed suit in state court in Missouri seeking recovery of the amount allegedly owed by AT&T. AT&T removed the case to the federal district court for the Western District of Missouri, and then requested that the court refer the issues to this Commission under the doctrine of primary jurisdiction. The court granted AT&T's request.

Both parties filed petitions for declaratory ruling on October 22, 2001, and the Commission sought comment on the petitions. In its petition, Sprint PCS asked the Commission to find that there is no federal law or Commission policy that bars Sprint PCS from recovering its call termination costs from AT&T. Sprint PCS also asked the Commission to find that AT&T's refusal to pay access charges to Sprint PCS is unreasonably discriminatory under section 202(a) of the Communications Act of 1934, as amended (the Act), and unjust and unreasonable under section 201(b) of the Act. In its petition, AT&T asked the Commission to find that CMRS carriers should continue to recover their costs from their end users, not by imposing access charges on IXCs. If CMRS carriers are permitted to impose access charges, AT&T asked that those charges be capped at the reciprocal compensation rate for local traffic and assessed only prospectively.

Sprint PCS is correct that neither the Communications Act nor any Commission rule prohibits a CMRS carrier from attempting to collect access charges from an interexchange carrier. In 1994, in the CMRS Second Report and Order, the Commission addressed the question of which Title II requirements it should impose on CMRS carriers. The Commission decided that the market for retail CMRS services was sufficiently competitive that it was not necessary to regulate the retail rates of CMRS carriers, or to require (or permit) CMRS carriers to file tariffs for retail services. The Commission also decided temporarily to forbear from requiring or permitting the filing of tariffs for interstate access services offered by CMRS carriers. In a detariffed, deregulated environment such as this one, carriers are free to arrange whatever compensation arrangement they like for the exchange of traffic. Thus, for example, Sprint PCS and AT&T could agree that AT&T would pay Sprint PCS for the traffic exchange, that Sprint PCS would pay AT&T for the exchange, or that neither party would pay anything.

That Sprint PCS may seek to collect access charges from AT&T does not, however, resolve the question whether Sprint PCS may unilaterally impose such charges on AT&T. There are three ways in which a carrier seeking to impose charges on another carrier can establish a duty to pay such charges: pursuant to (1) Commission rule; (2) tariff; or (3) contract. As noted above, CMRS access services are subject to mandatory detariffing, and it is therefore undisputed that Sprint PCS could not have imposed access charges on AT&T pursuant to any tariff. Consequently, we need only consider whether Sprint PCS can impose access charges on AT&T pursuant to Commission rules or a contract between the parties.

We find that there is no Commission rule that enables Sprint PCS unilaterally to impose access charges on AT&T. In the LEC-CMRS Interconnection NPRM, the Commission specifically addressed the question whether CMRS carriers should be able to impose access charges on IXCs for calls that are exchanged through LEC facilities. The Commission tentatively concluded that CMRS carriers should be able to recover access charges from IXCs for the completion of interexchange calls in the same manner as LECs and competitive access providers ( i.e., by setting a rate to be paid by the IXC). The Commission noted, however, that some form of price regulation might be necessary if it adopted this tentative conclusion because CMRS carriers “may have some market power over IXCs that need to terminate calls to a particular CMRS provider's customer.” The Commission has never adopted a final decision adopting or implementing this tentative conclusion, nor has it resolved the question of the appropriate form of price regulation for CMRS access charges. Accordingly, our rules do not enable Sprint PCS unilaterally to impose access charges on AT&T.

We disagree with Sprint PCS that the forbearance policy adopted in the CMRS Second Report and Order enables Sprint PCS to impose unilaterally whatever rate it wishes, subject only to AT&T's right to file a complaint under section 208 of the Act. Our policy of forbearing from regulating CMRS access rates means that we will not regulate rates pursuant to the tariffing process set forth in sections 203, 204, and 205 of the Act. Our forbearance policy does not, however, mean that a detariffed carrier unilaterally can impose a charge merely by billing an IXC, as Sprint PCS has attempted to do here. This interpretation of the CMRS Second Report and Order is consistent with our general policies on detariffing, which are premised on the expectation that carriers will establish a contractual relationship with customers to whom they sell service. Even in a competitive situation, where the customer has a choice of carriers, a contract is beneficial to both the carrier and the customer because it makes clear the rights and obligations of both parties. A contract is particularly important in the case of terminating access services because, as Sprint PCS acknowledges, CMRS carriers possess market power with respect to termination of calls to their subscribers.

We also do not agree with Sprint PCS's argument that the 1987 Cellular Interconnection Order entitles it to collect access charges in the absence of an agreement with AT&T. The Cellular Interconnection Order established a principle of “mutual switching compensation” between CMRS carriers and LECs. The Commission stated that “the principle of mutual switching compensation should apply to Type 2 but not Type 1 service. Cellular carriers and telephone companies are equally entitled to just and reasonable compensation for their provision of access, whether through tariff or by a division of revenues agreement.” This statement regarding compensation for the “provision of access” clarified how the mutual switching compensation principle would apply to Type 1 and Type 2 interconnection, and the mechanism for compensation when it does apply (tariff or agreement). Following the CMRS Second Report and Order, tariffs no longer were available to CMRS carriers; therefore compensation is available only through an agreement.

There being no authority under the Commission's rules or a tariff for Sprint PCS unilaterally to impose access charges on AT&T, Sprint PCS is entitled to collect access charges in this case only to the extent that a contract imposes a payment obligation on AT&T. While it is preferable for carriers to memorialize such contracts in a written agreement, the parties here agree that there is no written agreement or any express contract between AT&T and Sprint PCS. Nevertheless, the law recognizes—as has the Commission—that an agreement may exist even absent an express contract. Turning to the question whether there was such an agreement here, we believe that it is an issue that should be resolved by the Court. We interpret the Court's primary jurisdiction referral as seeking our input on the federal communications law questions related to this dispute. Because the existence of a contract is a matter to be decided under state law, we defer to the court to answer this question.

We offer the court two important observations regarding the regulatory regimes applicable to both IXCs and CMRS carriers during the period in dispute. First, CMRS carriers have never operated under the same calling party's network pays (CPNP) compensation regime as wireline LECs. Under a CPNP regime, LECs are compensated for terminating calls by the carrier of the customer that originates the call, not by the customer receiving the call. In contrast, since the advent of commercial wireless service, and continuing today, CMRS carriers have charged their end users both to make and to receive calls. Until 1998, when Sprint PCS first approached AT&T and other IXCs about payment for terminating access service, all CMRS carriers recovered the cost of terminating long distance calls from their end users, and not from interexchange carriers.

Second, there is a benefit to customers of both IXCs and CMRS carriers when CMRS carriers terminate IXC traffic. Because both carriers charge their customers for the service they provide, it does not necessarily follow that IXCs receive a windfall in situations where no compensation is paid for access service provided by a CMRS carrier. Nor do we believe that terminating access charges to CMRS carriers are necessarily imputed in IXCs' retail rates. The fact that the industry practice for 15 years has been for CMRS carriers to recover costs from their end users, together with the highly competitive nature of the interexchange market, makes it unlikely that an IXC that does not pay access charges to CMRS carriers somehow “overcharges” its customers.

We need not address Sprint PCS's claims under sections 201(b) or 202(a) at this time. Until the court determines the respective obligations of the parties, in particular whether AT&T has any obligation to pay Sprint PCS under a contract, the Commission has no basis on which to assess whether AT&T is subject to sections 201(b) or 202(a) in these circumstances and, if so, whether its actions violate those statutory provisions.

In addition to questions presented by the district court regarding our present policy on CMRS access charges, the pleadings filed in response to the declaratory ruling petitions raise a number of issues that relate either to the prospective treatment of CMRS-IXC interconnection or to issues beyond the scope of those presented for Commission resolution in the primary jurisdiction referral. Our order today clarifies requirements under our existing rules. Suggestions for changes to those rules will be addressed in our pending Intercarrier Compensation proceeding. Our goal in the Intercarrier Compensation proceeding is to move toward a unified compensation regime that eliminates the opportunity for arbitrage due to different regulatory treatment of different types of traffic. At that time we will address CMRS carriers' requests to be placed on equal footing with wireline carriers, whether through bill-and-keep or some other compensation mechanism.

In the interim, IXCs and CMRS carriers remain free to negotiate the rates, terms and conditions under which they will exchange traffic. Given the mutual benefit that CMRS and IXC customers realize when CMRS carriers terminate calls from IXCs, we anticipate that these negotiations will be conducted in good faith and prove fruitful for both sets of carriers. To the extent that carriers encounter problems with this regime, we encourage them to raise any concerns in the pending Intercarrier Compensation proceeding so that we may consider those concerns in any future compensation regime we may adopt.

Accordingly, it is ordered that, pursuant to the authority contained in sections 4(i), 201, and 332 of the Communications Act, as amended, 47 U.S.C. 154(i), 201, and 332, and section 1.2 of the Commission's rules, 47 CFR 1.2, the Petitions for Declaratory Ruling filed by AT&T and Sprint PCS are denied to the extent set forth herein.

This is a summary of the Commission's Third Memorandum Opinion and Order (MO&O) in WT Docket No. 99-168; FCC 02-204, adopted July 2, 2002, and released July 12, 2002. The complete text of this M O&O is available for inspection and copying during normal business hours in the FCC Reference Information Center, Courtyard Level, 445 12th Street, SW., Washington, DC, and also may be purchased from the Commission's copy contractor, Qualex International, Portals II, 445 12th Street, SW, Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail at qualexint@aol.com. Alternative formats (computer diskette, large print, audio cassette, and Braille) are available to persons with disabilities by contacting Brian Millin at 202-418-7426, TTY 202-418-7365, or at bmillin@fcc.gov.

1. The Commission, in this Third Memorandum Opinion and Order (MO&O) continues its efforts to ensure the capabilities and responsiveness of both public safety and commercial wireless services in emergency situations. The MO&O responds to two petitions for reconsideration of the Second Memorandum Opinion and Order (66 FR 4035, February 6, 2001) filed by the National Public Safety Telecommunications Council (NPSTC) and the Public Safety Wireless Network.

2. Specifically, the MO&O establishes “mandatory coordination zones” near public safety base stations, within which commercial base station operators will be required to coordinate their facility decisions with public safety licensees. This will establish an anticipatory, rather than reactive process for controlling interference to public safety operators in the upper 700 MHz band. The MO&O also reflects the Commission's interest in exploring measures that would approach the other side of the interference issue, providing for more robust public safety signals rather than simply constraining Commercial Mobile Radio Service (CMRS) signals.

3. NTPSC requests that the Commission restore the original 700 MHz band plan's limitation of commercial base stations to the lower band, and argues in favor of substantially more stringent out-of-band emission (OOBE) limits. The MO&O concludes that commercial base station transmitters should continue to be permitted in the upper band and that more stringent OOBE limits are not required to protect public safety operations. This discussion may be found in paragraphs 10 through 23 of the full text of the MO&O.

4. The Commission does, however, recognize the public safety community's concern over the substantially greater burdens of resolving, rather than preventing, instances of problematic interference. The Commission determines, therefore, that additional anticipatory protections should be adopted to minimize the possibility for base-to-base interference. The Commission, in the MO&O, thus establishes a “mandatory coordination zone” surrounding 700 MHz public safety base stations, and will require any commercial 700 MHz carrier to coordinate with the public safety community any base stations planned within that zone. If a commercial carrier has already begun operating a base station within the “mandatory coordination zone” of a future public safety base station, the carrier must coordinate the operation of its base station with the licensee of any such public safety base station and relocate or modify the CMRS base station if necessary. Details of the “mandatory coordination zone” may be found in paragraphs 17 through 19 of the MO&O and in the “Rule Changes” section of this summary.

5. NPTSC also recommends that the Commission adopt a position of “zero tolerance of interference to public safety.” The Commission, as discussed in paragraphs 24 through 27 of the MO&O, declines to revise the 700 MHz service rules to adopt a “zero tolerance” approach as a means for limiting the effects of out-of-band interference, because the present 700 MHz band service rules establish a much more stringently protected environment for public safety operations than the service rules applicable to other bands. The “zero tolerance” approach would replace the Commission's traditional reliance on actual interference as a basis for mitigation measures with an anticipatory standard that would be both overbroad in concept and imprecise in application.

6. Finally, the MO&O expresses the Commission's interest in exploring proposals to increase public safety signal strength levels in the upper 700 MHz band. As indicated in paragraph 30 of the MO&O, should the public safety community wish to consider revising public safety signal strength standards governing public safety operators in the Upper 700 MHz band, the Commission would be receptive to considering such proposals.

7. The MO&O adopts a coordination regulation which constitutes a “third party contact” burden as defined by the Paperwork Reduction Act of 1995. Section 213 of the Consolidated Appropriation Act, 2000 states that the Regulatory Flexibility Act (as well as certain provisions of the Contract with America Advancement Act of 1996 and the Paperwork Reduction Act of 1995) shall not apply to the rules and competitive bidding procedures governing the frequencies in the 746-806 MHz band (currently used for television broadcasts on channels 60-69). In particular, this exemption extends to the requirements imposed by Chapter 6 of Title 5, United States Code, Section 3 of the Small Business Act (15 U.S.C. 632) and section 3507 and 3512 of Title 44 United States Code. Consolidated Appropriations Act, 2000. Public Law 106-113, 113 Stat. 2502, Appendix E, section 213(a)(4)(A)-(B); See 145 Cong. Rec. H12493-94 (November 17, 1999); 47 U.S.C.A section 337, note at section 213(a)(4)(A)-(B).

8. Authority. This action is taken pursuant to Sections 1, 4(i), 7, 10, 201, 202, 208, 214, 301, 303, 307, 308, 309(j), 309(k), 310, 311, 315, 316, 317, 319, 324, 331, 332, 336, 337 and 614 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 157, 160, 201, 202, 208, 214, 301, 303, 307, 308, 309(j), 309(k), 310, 311, 315, 316, 317, 319, 324, 331, 332, 336, 337, and 534, and the Consolidated Appropriations Act, 2000, Public Law 106-113, 113 Stat. 1501, Section 213.

9. Part 27 of the Commission's Rules is revised as set forth in the Rule Changes section of this summary, and, in accordance with Section 213 of the Consolidated Appropriations Act, 2000, Public Law 106-113, 113 Stat. 1501 (1999), these rules shall be effective July 30, 2002.

10. The Petitions for Reconsideration filed by the National Public Safety Telecommunications Council and the Public Safety Wireless Network are denied as indicated in this summary.

11. The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this MO&O, to the Chief Counsel for Advocacy of the Small Business Administration.

Radio.

This is a synopsis of a Memorandum Opinion and Second Order on Reconsideration adopted on June 27, 2002 and released on July 5, 2002. The Memorandum Opinion and Second Order is also available during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street, SW., Washington, DC, and also may be purchased from the Commission's copy contractor, Qualex International, 445 12th Street, SW., Washington, DC 20554, Room CY-B402. It also appears on the internet at www.fcc.gov/mb in the headlines section.

In February 2000 and April 2001 the Commission adopted new procedures for comparing mutually exclusive applications to construct noncommercial educational broadcast stations on channels reserved for such use. For FM and FM translator applications the procedures begin with a preliminary analysis of fair distribution of service (FM) or fill-in service (FM translator). If the preliminary analysis is not determinative, the applicants are compared using a point system, which selects the applicant receiving the highest score. The point system also is used to compare applicants for noncommercial educational television stations. The reserved channel selection rules are published at 47 CFR 73.7000 through 47 CFR 73.7005. The Memorandum Opinion and Second Order denies petitions for further reconsideration, leaving unchanged the reserved channel selection rules, related rules and procedures announced earlier in this proceeding. Specifically, the Commission declined to adopt a suggestion to count, in the reserved channel fair distribution of service analysis, certain longstanding NCE stations operating on nonreserved channels. Also unchanged is use of a June 4, 2001 “look back” date for all pending applicants in closed groups to establish their non-technical qualifications for the point system. The Commission rejected a suggestion that, without a change in the look back date, older organizations might qualify for points as “established local applicants” even if the organization existed only on paper. It has never been the Commission's intent to award such points to organizations engaged in virtually no activities in the community of interest. The Commission also affirmed its requirement that the organization itself, not only its governing board, must be local for two years to be considered “established.” Finally, the Commission declined to modify its rules concerning the applicability of attribution standards in NCE contexts.

This Memorandum Opinion and Second Order on Reconsideration promulgates no additional final rules, and we received no petitions for reconsideration of the Final Regulatory Flexibility Certification. Therefore, no additional Regulatory Flexibility Analysis is required by the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. The previous final certification made in this proceeding remains unchanged. The actions taken in this Memorandum Opinion and Second Order on Reconsideration have been analyzed with respect to the Paperwork Reduction Act of 1995, and found to impose no new or modified reporting and recordkeeping requirements or burdens on the public.

This is a summary of the Commission's Report and Order in Docket No. 01-290, FCC 02-176. The complete text of this Report and Order is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, Courtyard Level, 445 12th Street, SW., Washington, DC, 20554. This document may also be purchased from the Commission's copy contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com. It is also available on the Commission's website at http://www.fcc.gov.

1. The Report and Order is issued in accordance with section 628(c)(5) of the Communications Act of 1934, as amended. Section 628(c)(2)(D), enacted through the 1992 Cable Act, generally prohibits, in areas served by a cable operator, exclusive contracts for satellite cable programming or satellite broadcast programming between vertically integrated programming vendors and cable operators. Section 628(c)(5) directs that the prohibition on exclusive contracts contained in section 628(c)(2)(D) shall cease to be effective on October 5, 2002, ten years after its enactment, unless the Commission finds that such prohibition “continues to be necessary to preserve and protect competition and diversity in the distribution of video programming.” The Commission issued a Notice of Proposed Rulemaking, 66 FR 54972, October 31, 2001, seeking comment on the possible sunset of Section 628(c)(2)(D). The Report and Order finds that the exclusivity prohibition should be retained for five years, until October 5, 2007.

2. In examining whether the exclusivity prohibition “continues to be necessary,” the Commission sought guidance in the concerns Congress expressed in 1992, however, the Commission's analysis places substantial weight on whether, in the absence of the exclusivity prohibition, vertically integrated programmers would currently have the incentive and ability to favor their affiliated cable operators over nonaffiliated cable operators and program distributors using other technologies and, if they would, whether such behavior would result in a failure to protect and preserve competition and diversity in the distribution of video programming. The Report and Order recognizes that enforcement of the exclusivity prohibition against all vertically integrated programmers may not always serve the public interest and notes that retention of the prohibition does not foreclose all exclusive arrangements between vertically integrated programmers and cable operators. The Report and Order finds that Congress explicitly recognized the existence of such programming by creating a public interest exception to the prohibition. The Report and Order acknowledges that significant changes have taken place in the multichannel video programming distribution (“MVPD”) market over the past ten years, and yet finds that vertically integrated programmers generally retain the incentive and ability to favor their cable affiliates over nonaffiliated cable operators and other competitive MVPDs to such a degree that, in the absence of the prohibition, competition and diversity in the distribution of video programming would not be preserved and protected.

3. In addressing the ability of programmers to favor their cable affiliates over other MVPDs, the Report and Order finds that access to vertically integrated programming continues to be necessary in order for competitive MVPDs to remain viable in the marketplace. In that regard, an MVPD's ability to provide service that is competitive with an incumbent cable operator is significantly harmed if denied access to “must have” vertically integrated programming for which there are no good substitutes. The Report and Order also finds that vertically integrated programmers retain the incentive to favor their affiliated cable operators over competitive MVPDs such that competition and diversity in the distribution of video programming would not be preserved and protected. In that regard, the Report and Order finds that cable operators today continue to dominate the MVPD marketplace and that horizontal consolidation and clustering combined with affiliation with regional programming, have contributed to cable's overall market dominance. In addition, the Report and Order determines that an economic basis for denial of access to vertically integrated programming to competitive MVPDs continues, and that such denial would harm such competitors' ability to compete for subscribers. The Report and Order further finds that a partial sunset of the exclusivity prohibition is not warranted at this time.

4. The Report and Order also finds that the scope of the exclusivity prohibition should not be narrowed to apply to particular types of programming or specified geographic areas. The Report and Order also rejects expanding the prohibition to terrestrially delivered programming or non-vertically integrated programming. Finally, during the year before the expiration of the exclusivity prohibition on October 5, 2007, the Commission will undertake a review to again determine whether the prohibition continues to be necessary. During the five-year period, the Commission will continue to evaluate petitions for exclusivity, under the public interest factors established by Congress. If, however, a dramatic shift in the competitive landscape should occur before five years, the Commission may initiate its review earlier on its own motion or in response to a petition.

5. Although the Notice of Proposed Rulemaking (NPRM) indicated that some of the issues on which we sought comment might entail a modified information collection subject to the Paperwork Reduction Act of 1995 (“PRA”), Public Law 104-13, the rule change adopted herein does not affect the information collection previously approved by the Office of Management and Budget (“OMB”) under Control Number: 3060-0551.

6. As required by the Regulatory Flexibility Act of 1980, as amended, (“RFA”), an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities was incorporated in the Notice of Proposed Rulemaking in CS Docket No. 01-290. The Commission sought written public comment on the proposals in the NPRM, including comment on the IRFA. The comments received are discussed below. This present Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

7. The purpose of section 628 of the Communications Act is to promote the public interest, convenience, and necessity by increasing competition and diversity in the multichannel video market, to increase the availability of satellite cable programming and satellite broadcast programming to persons in rural and other areas not currently able to receive such programming, and to spur the development of communications technologies, for example new MVPDs. Specifically, this proceeding involves section 628(c)(2)(D), which prohibits, in areas served by a cable operator, exclusive contracts for satellite cable programming or satellite broadcast programming between vertically integrated programming vendors and cable operators unless the Commission determines that such exclusivity is in the public interest. The exclusivity prohibition set forth in section 628(c)(2)(D) ceases to be effective after a 10-year period ending October 5, 2002. Section 628(c)(5) of the Communications Act requires that restriction on exclusive contracts, within areas served by cable, are to sunset unless the Commission finds, in a proceeding conducted during the last year of such 10-year period, that such prohibition continues to be necessary to preserve and protect competition and diversity in the distribution of video programming. Pursuant to this statutory mandate, we have concluded that the exclusivity prohibition set forth in section 628(c)(2)(D) continues to be necessary to preserve and protect competition and diversity in the distribution of video programming because cable MSOs continue to possess significant market power and continue to control a significant proportion of programming, to the detriment of DBS and other competitive MVPDs, some of which are smaller entities. Retention of the exclusivity prohibition in this proceeding addresses the competitive imbalance that continues to exist in the marketplace by maintaining and securing the ability of competitive MVPDs to access vertically integrated programming.

8. The American Cable Association (“ACA”) filed comments and states that access to satellite programming is essential for smaller cable systems and a sunset of the prohibition could result in small cable companies losing access to over one-third of their satellite programming services. To remedy the situation, the ACA urges the Commission to extend the sunset of the prohibition on exclusive contracts, as the loss of access rights to particular programming would have a significant impact on the continuing viability of many small cable businesses. The Commission considered the potential economic impact on small entities because this issue was pertinent to our determination whether to retain or sunset the exclusivity prohibition and it was a central concern raised in some comments. Cable operators control a formidable share of the market with 78 percent of MVPD subscribers receiving their video programming from a cable operator. DBS has made competitive strides to the point where its share of total MVPD subscribers has grown to 18 percent. But other competitive MVPDs, such as SMATV providers, OVS operators, MMDS, and cable overbuilders, to name a few of the competitive alternatives to cable, have not made similar inroads into cable's market dominance. In general, comments filed by competitive MVPDs, many of which are smaller entities, assert that the market is dominated by cable and not fully competitive. In enacting the exclusivity prohibition in 1992, Congress concluded that because cable MSOs dominated the video environment vertically integrated program suppliers had the incentive and ability to favor their affiliated cable operators over other multichannel programming distributors. Competitive MVPDs assert that the market dominance of cable has not significantly changed in the years since the enactment of the provision. They contend that there is a likelihood that access to particular programming affiliated with cable operators will be threatened and compromised if the prohibition against exclusivity contracts were allowed to sunset. Individual proposals as to how to address this problem generally support the position that the exclusivity prohibition should be retained. If the prohibition were not retained, these entities will not have access to significant programming that is vital to their subscribers. Comments from competitive MVPDs regarding the importance of the prohibition to their economic viability and survival and the Commission's decision and justification to continue to retain the exclusivity prohibition are discussed in the Section entitled Incentive and Ability in this Report and Order.

9. The RFA directs the Commission to provide a description of and, where feasible, an estimate of the number of small entities that will be affected by the proposed rules. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (“SBA”).

10. Small MVPDs. The SBA has developed a small business size standard for cable and other program distribution services, “which includes all such companies generating $11 million or less in revenue annually. This category includes, among other, cable operators, closed circuit television services, direct broadcast satellite services, multipoint distribution services, open video systems (“OVS”). Satellite master antenna television (“SMATV”) systems, and subscription television services. According to the Census Bureau data from 1992, there were 1,788 total cable and other pay television services and 1,423 had less than $11 million in revenue. We address below each service individually to provide a more precise estimate of small entities.

11. Cable Systems. The Commission has developed, with SBA's approval, our own definition of a small cable system operator for the purposes of rate regulation. Under the Commission's rules, a “small cable company” is one serving fewer than 400,000 subscribers nationwide. We last estimated that there were 1439 cable operators that qualified as small cable companies. Since then, some of those companies may have grown to serve over 400,000 subscribers, and others may have been involved in transactions that caused them to be combined with other cable operators. Consequently, we estimate that there are fewer than 1439 small entity cable system operators that may be affected by the decisions and rules adopted in this Report and Order.

12. The Communications Act, as amended, also contains a size standard for a small cable system operator, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1% of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” The Commission has determined that there are 67,700,000 subscribers in the United States. Therefore, an operator serving fewer than 677,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all of its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that the number of cable operators serving 677,000 subscribers or less totals approximately 1450. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

13. Open Video Systems. Because OVS operators provide subscription services OVS falls within the SBA-recognized definition of “Cable and Other Pay Television Services. This definition provides that a small entity is one with $ 11 million or less in annual receipts. The Commission has certified 25 OVS operators with some now providing service. Affiliates of Residential Communications Network, Inc. (“RCN”) received approval to operate OVS systems in New York City, Boston, Washington, D.C. and other areas. RCN has sufficient revenues to assure us that they do not qualify as small business entities. Little financial information is available for the other entities authorized to provide OVS that are not yet operational. Given that other entities have been authorized to provide OVS service but have not yet begun to generate revenues, we conclude that at least some of the OVS operators qualify as small entities.

14. Program Producers and Distributors. The Commission has not developed a definition of small entities applicable to producers or distributors of cable television programs. Therefore, we will use the SBA classifications of Motion Picture and Video Tape Production (NAICS Code 51211), Motion Picture and Video Tape Distribution (NAICS Code 42199), and Theatrical Producers (Except Motion Pictures) and Miscellaneous Theatrical Services (NAICS Codes 56131, 71111, 71141, 561599, 71151, 71112, 71132, 51229, 53249). These SBA definitions provide that a small entity in the cable television programming industry is an entity with $21.5 million or less in annual receipts for NAICS Codes 56131, 51211, 42199, and 51212, and $5 million or less in annual receipts for NAICS Codes 56131, 71111, 71141, 561599, 71151, 71112, 71131, 71132, 51229, and 53249. Census Bureau data indicate the following: (a) There were 7,265 firms in the United States classified as Motion Picture and Video Production (NAICS Code 51211), and that 6,987 of these firms had $16.999 million or less in annual receipts and 7,002 of these firms had $24.999 million or less in annual receipts; (b) there were 1,139 firms classified as Motion Picture and Video Tape Distribution (NAICS Codes 42199 and 51212), and 1007 of these firms had $16.999 million or less in annual receipts and 1013 of these firms had $24.999 million or less in annual receipts; and (c) there were 5,671 firms in the United States classified as Theatrical Producers and Services (NAICS Codes 56131, 71111, 71141, 561599, 71151, 51229, and 53249), and 5627 of these firms had $4.999 million or less in annual receipts.

15. Each of these NAICS categories is very broad and includes firms that may be engaged in various industries, including cable programming. Specific figures are not available regarding how many of these firms exclusively produce and/or distribute programming for cable television or how many are independently owned and operated. Thus, we estimate that our rules may affect approximately 6,987 small entities primarily engaged in the production and distribution of taped cable television programs and 5,627 small producers of live programs that may be affected by the rules adopted in this proceeding.

16. Direct Broadcast Satellite Service (“DBS”). Because DBS provides subscription services, DBS falls within the SBA-recognized definition of “Cable and Other Pay Television Services.” This definition provides that a small entity is one with $11 million or less in annual receipts. There are four licensees of DBS services under part 100 of the Commission's rules. Three of those licensees are currently operational. Two of the licensees that are operational have annual revenues that may be in excess of the threshold for a small business. The Commission, however, does not collect annual revenue data for DBS and, therefore, is unable to ascertain the number of small DBS licensees that could be impacted by these proposed rules. DBS service requires a great investment of capital for operation, and we acknowledge, despite the absence of specific data on this point, that there are entrants in this field that may not yet have generated $11 million in annual receipts, and therefore may be categorized as a small business, if independently owned and operated.

17. Home Satellite Dish Service (“HSD”). Because HSD provides subscription services, HSD falls within the SBA-recognized definition of “Cable and Other Pay Television Services.” This definition provides that a small entity is one with $11 million or less in annual receipts. The market for HSD service is difficult to quantify. Indeed, the service itself bears little resemblance to other MVPDs. HSD owners have access to more than 265 channels of programming placed on C-band satellites by programmers for receipt and distribution by MVPDs, of which 115 channels are scrambled and approximately 150 are unscrambled. HSD owners can watch unscrambled channels without paying a subscription fee. To receive scrambled channels, however, an HSD owner must purchase an integrated receiver-decoder from an equipment dealer and pay a subscription fee to an HSD programming package. Thus, HSD users include: (1) Viewers who subscribe to a packaged programming service, which affords them access to most of the same programming provided to subscribers of other MVPDs; (2) viewers who receive only non-subscription programming; and (3) viewers who receive satellite programming services illegally without subscribing. Because scrambled packages of programming are most specifically intended for retail consumers, these are the services most relevant to this discussion.

18. According to the most recently available information, there are approximately four program packagers nationwide offering packages of scrambled programming to retail consumers. These program packagers provide subscriptions to approximately 1,476,700 subscribers nationwide. This is an average of about 370,000 subscribers per program package. This is smaller than the 400,000 subscribers used in the commission's definition of a small MSO. Furthermore, because this is an average, it is likely that some program packagers may be substantially smaller.

19. Multipoint Distribution Service (“MDS”), Multichannel Multipoint Distribution Service (“MMDS”) and Local Multipoint Distribution Service (“LMDS”). MMDS systems, often referred to as “wireless cable,” transmit video programming to subscribers using the microwave frequencies of the Multipoint Distribution Service (“MDS”) and Instructional Television Fixed Service (“ITFS”). LMDS is a fixed broadband point-to-multipoint microwave service that provides for two-way video telecommunications.

20. In connection with the 1996 MDS auction, the Commission defined small businesses as entities that had annual average gross revenues of less than $40 million in the previous three calendar years. This definition of a small entity in the context of MDS auctions has been approved by the SBA. The MDS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (“BTAs”). Of the 67 auction winners, 61 met the definition of a small business. MDS also includes licensees of stations authorized prior to the auction. As noted, the SBA has developed a definition of small entities for pay television services, which includes all such companies generating $11 million or less in annual receipts. This definition includes multipoint distribution services, and thus applies to MDS licensees and wireless cable operators that did not participate in the MDS auction. Information available to us indicates that there are approximately 850 of these licensees and operators that do not generate revenue in excess of $11 million annually. Therefore, for purposes of the IRFA, we find there are approximately 850 small MDS providers as defined by the SBA and the Commission's auction rules.

21. The SBA definition of small entities for pay television services, which includes such companies generating $11 million in annual receipts, seems reasonably applicable to ITFS. There are presently 2,032 ITFS licensees. All but 100 of these licenses are held by educational institutions. Educational institutions are included in the definition of a small business. However, we do not collect annual revenue data for ITFS licensees, and are not able to ascertain how many of the 100 non-educational licensees would be categorized as small under the SBA definition. Thus, we tentatively conclude that at least 1,932 licensees are small businesses.

22. Additionally, the auction of the 1,030 LMDS licenses began on February 18, 1998 and closed on March 25, 1998. The Commission defined “small entity” for LMDS licenses as an entity that has average gross revenues of less than $40 million in the three previous calendar years. An additional classification for “very small business” was added and is defined as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding calendar years. These regulations defining “small entity” in the context of LMDS auctions have been approved by the SBA. There were 93 winning bidders that qualified as small entities in the LMDS auctions. A total of 93 small and very small business bidders won approximately 277 A Block licenses and 387 B Block licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; there were 40 winning bidders. Based on this information, we conclude that the number of small LMDS licenses will include the 93 winning bidders in the first auction and the 40 winning bidders in the re-auction, for a total of 133 small entity LMDS providers as defined by the SBA and the Commission's auction rules.

23. In sum, there are approximately a total of 2,000 MDS/MMDS/LMDS stations currently licensed. Of the approximate total of 2,000 stations, we estimate that there are 1,595 MDS/MMDS/LMDS providers that are small businesses as deemed by the SBA and the Commission's auction rules.

24. Satellite Master Antenna Television (“SMATV”) Systems. The SBA definition of small entities for “Cable and Other Pay Television Services” specifically includes SMATV services and, thus, small entities are defined as all such companies generating $11 million or less in annual receipts. Industry sources estimate that approximately 5,200 SMATV operators were providing service as of December 1995. Other estimates indicate that SMATV operators serve approximately 1.5 million residential subscribers as of June 2000. The best available estimates indicate that the largest SMATV operators serve between 15,000 and 55,000 subscribers each. Most SMATV operators serve approximately 3,000-4,000 customers. Because these operators are not rate regulated, they are not required to file financial data with the Commission. Furthermore, we are not aware of any privately published financial information regarding these operators. Based on the estimated number of operators and the estimated number of units served by the largest ten SMATVs, we believe that a substantial number of SMATV operators qualify as small entities.

25. In this Report and Order the Commission concludes that section 628(c)(2)(D) of the Communications Act continues to be necessary to preserve and protect competition and diversity in the video programming marketplace. The Report and Order does not present any specific reporting, recordkeeping or other compliance requirements adopted herein, other than complying with the prohibition against engaging in exclusive contracting between cable operators and vertically integrated program suppliers. Thus, the classes of small entities that potentially will be affected and required to comply with the continuing prohibition includes entities conducting business in these areas.

26. The RFA requires an agency to describe any significant alternatives that it has considered in proposing regulatory approaches, which may include the following four alternatives: (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.

27. In the NPRM the Commission sought comment on whether section 628(c)(2)(D) should cease to be effective, pursuant to the sunset provision in section 628(c)(5), or whether section 628(c)(2)(D) should be retained. Thus, the NPRM invited comments on a number of issues that may significantly impact small entities. In this Report and Order, the Commission discusses the effect that section 628(c)(2)(D) has had on the video programming marketplace and provides justification for retention of the provision. In enacting the exclusivity prohibition contained in section 628(c)(2)(D), the underlying rationale was that vertically integrated programming suppliers had the incentive and ability to favor in an unfair manner, affiliated cable operators in programming arrangements. Thus, the prohibition served to guard against such a practice and helped to encourage competition and diversity. While the provision has succeeded to a certain extent in achieving its objectives, the video landscape has not changed markedly since the inception of the exclusivity protection provision. Cable MSOs continue to hold market power, and while DBS has increased its subscribership levels in recent years, the levels do not compare to cable. Other smaller video competitors, such as MMDS, OVS, SMATV and HDS, have not fared as well and represent a small percentage of MVPD subscribership. These competitive MVPDs argue that they continue to face hurdles in seeking access to critical programming because cable MSOs continue to control essential video programming services and are concerned about the potential loss of such programming absent the section 628(c)(2)(D) prohibition. In its Initial Regulatory Flexibility Analysis Comments, while it supports extending the exclusivity prohibition, ACA suggests that an additional alternative that would achieve the objective of the statute and minimize the impact on small entities is exemption from coverage of the rule, or any part thereof, for small entities.

28. In this Report and Order we discuss the present state of competition among MVPDs and the availability of vertically integrated programming in the section entitled Incentive and Ability. We conclude that while there is a wide variety of programming services available from non-vertically integrated providers in recent years, nevertheless the market dominance of cable remains a concern because of the threat that cable MSOs will engage in exclusive arrangements and deprive competitive MVPDs and their subscribers of “must have,” vertically integrated programming.

29. We considered the possibility of sunsetting section 628(c)(2)(D). However, we recognized that the marketplace had not progressed to the point where there were assurances that there is significant enough competition in the cable industry to forestall the domination by cable of “must have” programming. Therefore, we retain section 628(c)(2)(D) because it prohibits, in areas served by a cable operator, exclusive contracts for satellite cable programming or satellite broadcast programming between vertically integrated programming vendors and cable operators. The decision reached in this Report and Order to retain the prohibition against engaging in exclusive contracts allows for greater competition and diversity, which provides for increased participation by various competitive MVPDs and programming suppliers, a number of which are smaller entities. Therefore we conclude that our decision to retain section 628(c)(2)(D) benefits smaller entities as well as larger entities.

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

31. Accordingly, it is ordered that, pursuant to authority found in sections 4(i), 303(r) and 628 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r) and 548, the Commission's rules are hereby amended as set forth in the rule changes.

32. It is further ordered that the rule adopted herein will become effective August 14, 2002.

33. It is further ordered that the Commission's Consumer and Government Affairs Bureau shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel of the Small Business Administration.

This rule implements Section 549 of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65). Section 549 amends 10 U.S.C. 983 to prohibit DoD from providing funds by contract or grant to an institution of higher education (including any subelement of that institution) if the Secretary of Defense determines that the institution (or any subelement of the institution) has a policy or practice that prohibits, or in effect prevents, Senior ROTC units or military recruiting on campus.

DoD published an interim rule at 65 FR 2056 on January 13, 2000. Sixty-one sources submitted comments on the interim rule. After evaluating all comments, DoD converted the interim rule to a final rule with minor editorial changes. A summary of the comments and the DoD response is provided below:

Comment: The greatest concern expressed by respondents pertained to the extension of the prohibition to subelements of educational institutions. The respondents stated that Section 549 of Public Law 106-65 was intended to recodify prior legislation, which did not require extension of the prohibition to subelements; prior legislative history did not support extension to subelements; and the fact that the subelement language was contained in the Senate report but not in the House report, and that the Senate had receded to the House version of the bill, meant that DoD could not rely upon the Senate report as a basis for extending the rule to subelements of an institution.

DoD Response: Senate and House Committee reports generally are taken into consideration to determine legislative intent only when the statutory language is unclear. The final language of Section 549 of Public Law 106-65 clearly states that the policy applies to any subelement of an institution. A comparison of the previous and current legislation shows that the subelement language was a new addition to the statute resulting from the enactment of Section 549.

Comment: Several respondents believed that DoD did not have sufficient cause to issue an interim rule without prior opportunity for public comment. DoD Response: Section 549 of Public Law 106-65 became effective upon enactment, on October 5, 1999. DoD issued a rule before receipt of public comments to promptly comply with the new statutory requirement.

Comment: One respondent stated that the rule calls for suspension and debarment without due process and asked what procedure exists for an educational institution to challenge a determination. DoD Response: This DFARS rule merely prescribes the action to be taken after an institution is determined to be ineligible for DoD contract awards. The procedures used to make that determination are addressed separately in the regulations at 32 CFR part 216.

Comment: One respondent stated that the requirements for stopping payments and terminating existing contracts go far beyond traditional suspension and debarment. DoD Response: These requirements are not new. They were added to the DFARS in 1995 to comply with Section 558 of Public Law 103-337, which prohibited DoD from providing funds to educational institutions that prevented military recruiting on campus. The current legislation contains a similar prohibition.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the rule applies only to institutions of higher education that do not permit Senior ROTC units or military recruiting on campus.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

A. Background

DoD published a final rule in the Federal Register on April 26, 2002 (67 FR 20688), under DFARS Case 2000-D018. That rule amended policy for computation of profit objectives by reducing the value assigned to facilities capital employed for equipment, eliminating the values assigned to facilities capital employed for buildings, increasing the values for performance risk, and adding a special factor for cost efficiency.

This final rule amends DD Form 1547, Record of Weighted Guidelines Application, and corresponding completion instructions, to reflect the changes to profit policy published on April 26, 2002.

DD Form 1547, and other forms prescribed by the DFARS, are not included in the Code of Federal Regulations. The forms are available electronically via the Internet at http://web1.whs.osd.mil/icdhome/ddeforms.htm.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment is not required. However, DoD will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2002-D012.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

Government procurement.

DoD published an interim rule at 67 FR 11435 on March 14, 2002, to implement a partnership agreement between DoD and SBA. The partnership agreement permits DoD to award 8(a) contracts directly to 8(a) concerns, on behalf of SBA. DoD received one comment on the interim rule, and that comment was in support of the rule. Therefore, DoD is adopting the interim rule as a final rule with only minor editorial changes.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the rule affects only the administrative procedures used for award of contracts under the 8(a) Program.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

Government procurement.

On March 27, 2002 (67 FR 14763), the U.S. Trade Representative published a determination that decreased the threshold for application of the Trade Agreements Act to construction contracts from $6,806,000 to $6,481,000; and increased the threshold for application of NAFTA to construction contracts from $7,068,419 to $7,304,733. This final rule amends the prescriptions for use of the clauses at DFARS 252.225-7044, Balance of Payments Program—Construction Material, and 252.225-7045, Balance of Payments Program—Construction Material Under Trade Agreements, to reflect the new dollar thresholds.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment is not required. However, DoD will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2002-D011.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

On September 27, 2001, we published in the Federal Register (66 FR 49331) a proposed rule to amend the Department of Veterans Affairs Acquisition Regulation to make changes to part 836, Construction and Architect-Engineer Contracts, and related parts. Comments were solicited concerning the proposed rule for 60 days, ending November 26, 2001. We did not receive any comments.

Based on the rationale set forth in the proposed rule, we are adopting the provision of the proposed rule as a final rule with nonsubstantive changes discussed below.

The proposed rule included collections of information regarding clauses and provisions for use in both commercial and non-commercial item, service, and construction solicitations and contracts. The Office of Management and Budget (OMB) has approved the information collections under OMB Control Numbers 2900-0622 and 2900-0623.

The intent of the proposed rule was to update the VAAR to match the FAR regarding the requirement for submission of certificates of current cost or pricing data, but the proposed rule referenced an incorrect dollar threshold of $500,000. The FAR threshold for submission of certificates of current cost or pricing data has been revised to $550,000 and will be adjusted in the future to account for inflation. Therefore, to match the FAR, § 836.578(b) has been revised to clarify when cost or pricing data is required and § 836.578(c) has been revised to reference the FAR threshold for submission of cost of pricing data rather than a specific dollar amount and for clarity. In addition, the FAR requires the approval of the head of the contracting activity prior to requiring submission of cost or pricing data for pricing actions below this threshold, so a reference to this approval requirement has been added to § 836.578(c).

The intent of the proposed rule was to update the VAAR to correspond to the FAR regarding the acceptance of foreign construction materials and to comply with the Trade Agreements Act (TAA) and the North American Free Trade Agreement (NAFTA). The proposed rule designated Alternate I to the clause at 852.236-89 for use when NAFTA applied to a solicitation. This was incorrect. Under the current dollar thresholds in the FAR, Alternate I should reference the TAA rather than NAFTA, since the dollar threshold for application of the TAA is less than the dollar threshold for the application of NAFTA. Therefore, Alternate I has been revised to apply to the TAA to correspond with the FAR.

Also, we revised § 832.111 for purposes of clarity and §§ 836.209, 836.602-2, 836.602-4, and 836.603 to update titles and/or for purposes of clarity.

This document contains provisions constituting a collection of information that have been approved by the Office of Management and Budget (OMB) under OMB Control Numbers 2900-0622 and 2900-0623.

This document has been reviewed by the Office of Management and Budget under Executive Order 12866.

The Secretary hereby certifies that this rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612. The changes are small-business neutral and will not have a significant economic impact on a substantial number of small businesses. Therefore, pursuant to 5 U.S.C. 605(b), this rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

In FR Doc. 02-17103, 67 FR 45822, July 10, 2002, the National Highway Traffic Safety Administration (NHTSA) inadvertently omitted its assessment of the applicability of the Unfunded Mandates Reform Act from Section X of the preamble, titled “Regulatory Analyses.” This document provides that assessment.

The Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditures by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted annually for inflation with base year of 1995). Adjusting this amount by the implicit gross domestic product price deflator for the year 2000 results in $109 million (106.99/98.11 = 1.09). The assessment may be included in conjunction with other assessments.

The final rule (67 FR 45822 at 45872-45883) is not estimated to result in expenditures by State, local or tribal governments of more than $109 million annually. It is not estimated to result in the expenditure by motor vehicle and motor vehicle equipment manufacturers, child restraint system manufacturers, and tire manufacturers of more than $109 million annually.

The Coastal Wetlands Planning, Protection and Restoration Act (16 U.S.C. 3951-3956) authorizes the Director of the Service to make matching grants to coastal States for acquisition, restoration, enhancement, management, and preservation of coastal wetlands. Grants are available annually on a competitive basis to coastal States. Funding for this Program comes from the Sport Fish Restoration Account, which is supported by excise taxes on fishing equipment, and motorboat and small engine fuels.

The primary goal of the National Coastal Wetlands Conservation Grant Program is the long-term conservation of coastal wetland ecosystems. It accomplishes this goal by helping States in their efforts to protect, restore, and enhance their coastal habitats. The Program's accomplishments are primarily on-the-ground and measured in acres.

Coastal wetlands provide essential fish and wildlife habitat. Coastal ecosystems comprise less than 10 percent of the Nation's land area, but support a much higher proportion of our living resources. Specifically, coastal areas support a high percentage of our threatened and endangered species, fishery resources, migratory songbirds, and migrating and wintering waterfowl.

In addition to wildlife benefits, wetlands provide substantial flood and storm control values and can reduce the need to construct expensive flood control structures. They make an important contribution to water quality by recharging groundwater, filtering surface runoff, and treating waste, and they provide natural areas important for recreational and aesthetic purposes. Uplands associated with wetlands provide food and cover to wildlife and buffer wetlands from soil erosion and contaminants. In the coterminous United States, more than half of the estimated original 221 million acres of American wetlands have been destroyed since European settlement. The concentration of the U.S. population in coastal areas is a continuing source of development pressure on the remaining coastal wetlands.

Since the Service began awarding grants in 1992, we have awarded about $105 million to 25 States and 1 U.S. territory to protect and/or restore about 130,000 acres of coastal wetland ecosystems. The Program's emphasis on encouraging partnerships, supporting watershed planning, and leveraging ongoing projects has helped stretch program funds. The resource benefits of this Program have included habitat protection and restoration for migratory birds, shorebirds, waterfowl, endangered and threatened species, and fish and shellfish.

The National Coastal Wetlands Conservation Grant Program is currently being administered using internal interim program guidance and the standard grant administration policies of our Federal Aid Program. We believe administration of the Program could be improved through regulations specifically tailored to meet the needs of the Program. Accordingly, the rule uses a plain English style, provides examples to illustrate concepts, and combines current guidance in one place. It should result in a streamlined proposal preparation, review and grant administration process.

Currently, we evaluate grant requests received from the State agencies on an annual schedule. In the last few years, the number of proposals received annually by the Service National Office has ranged from 29 to 36. A review panel consisting of Service personnel representing the coastal Regions of the Service and specific program areas (for example, the Fisheries and Habitat Conservation, Endangered Species, and Refuges Programs) reviews and ranks all proposals. Based on the rankings of the panel, recommendations are sent to the Director of the Service, who makes the final determination of which projects will receive grants. The basic schedule and procedures will not change significantly with this rule.

The criteria for selecting proposals in this final rule have been modified from the interim guidance. For example, a new criterion has been added to give credit to projects that provide benefits to migratory birds. Also, we have expanded the discussion of each criterion to clarify project scoring. The changes were based on comments provided by Service personnel who have reviewed National Coastal Wetlands Conservation Grant proposals. These criteria can be found in the rule portion of this document.

In the proposed rule that was published August 20, 2001 (66 FR 43555), we requested that interested parties submit any comments they might have. We particularly sought comments from the affected State agencies. The comment period was from August 20, 2001, to October 4, 2001.

We received comments from nine State government agencies. These comment letters provided suggestions and comments on a wide range of topics. We have considered all the comment letters received during the comment period and have made minor changes to improve and clarify the rule in response. Summaries of the major comments or issues follow.

Issue 1: Do we need to extend the period for the development of the grant agreement?

Response: We agree that a longer period for development of the grant agreement is appropriate. Resolving all the compliance issues that need to be addressed before a grant agreement is signed can be difficult. We are revising § 84.42 so that funds allocated for a grant will be held until December 31 of the following year.

Issue 2: What is the relationship between the goals of the National Coastal Wetlands Conservation Grant program and the Long-term and Annual Performance Goals of the Service?

Response: Long-term conservation of coastal wetlands is the primary goal of the Program. The results can be quantified in terms of acres enhanced, protected, and/or restored. (See § 84.10 for the goal statement.) When States conserve their wetlands resources using this program we all achieve benefits to habitat and wildlife. The discussion of performance measures in the rule in § 84.30(a)(2)(v) has been clarified to explain where to find the Service's Long-term and Annual Performance Goals and the relationship of these goals to the Grants Program.

Issue 3: Should the annual grant schedule be changed?

Response: The schedule in the rule reflects the current operating schedule for the Grants Program. We examined the effects of moving deadlines but have decided to maintain the current schedule.

Issue 4: Is the definition of ineligible activities too restrictive? Do we need to distinguish between planning activities for stand-alone grants, and planning as a minimal part of a grant objective?

Response: The focus of this Grant Program has always been on-the-ground accomplishments—through land acquisitions, easements, restoration and enhancement activities—and its accomplishments are measured in acres. We have modified the description of ineligible activities in § 84.20(b) to clarify that planning activities of a minimal nature and necessary to complete the project could be allowable.

Issue 5: The definition of a “substantial proposal” should include that it is consistent with State and Regional watershed plans. Consistency should be encouraged and rewarded in the grant scoring process.

Response: We agree that project proposals should take into account watershed plans. One of the ranking criteria in § 84.32 is specifically designed to give credit to proposals that demonstrate the value of the proposal in connection with wider planning efforts.

Issue 6: For the purposes of this rule, how should we define maritime forests?

Response: The current definition is not intended to include all kinds of maritime forests that might be included from a strictly biological perspective. It is, instead, focused on protection of the maritime forests characteristic of the southeastern United States. This area was considered to be, when the Coastal Wetlands Planning, Protection and Restoration Act was passed, extremely beneficial in protecting the coast and also under severe development pressure.

Issue 7: Should regionally threatened wetland types be given the same priority as nationally decreasing wetland types?

Response: The Coastal Wetlands Planning, Protection and Restoration Act states that the Director of the Service should give priority to coastal wetlands conservation projects that are consistent with the National Wetlands Priority Conservation Plan developed under Section 301 of the Emergency Wetlands Resources Act (16 U.S.C. 3921). This Conservation Plan, which was published in 1991, categorized wetland types into declining, stable, and increasing. Types that were declining nationally do need to receive priority under the National Coastal Wetlands Conservation Grant Program scoring system.

We recognize that certain important wetland types can be declining regionally even if they are not declining nationally. For this reason, we included in this rule the possibility of regionally decreasing types receiving credit in the scoring system if the case for regionally declining types is well-documented (see § 84.32(a)(1)(i)).

Issue 8: How should we define long-term conservation? Should we handle restoration and acquisition differently?

Response: Long-term conservation is a requirement established by the Act for this program. This rule requires that projects provide conservation for at least 20 years. In selecting this number we looked at the requirements of other programs. For this one criterion, acquisition projects may have some advantage over restoration projects, but this is one criterion among many and we do not want to establish separate ranking criteria for acquisition and restoration.

This rule is effective upon publication. In accordance with 5 U.S.C. 553(d)(3), we believe that we have good cause for making this rule effective upon publication to ensure that the rule is in effect during the next funding cycle for the National Coastal Wetlands Conservation Grant Program. This rule will benefit those entities seeking grants under this Program. This rule provides helpful information to grant applicants in preparing their applications and will help ensure that the Service applies fair and consistent standards in reviewing the grant applications.

This final rule is a regulation of an administrative and financial nature. Therefore, the action is categorically excluded under 516 DM 2, Appendix 1.10 from any environmental documentation pursuant to the National Environmental Policy Act (NEPA). However, subsequent actions involved with acquisition, restoration, or enhancement will require further compliance with NEPA on a case-by-case basis.

Compliance with NEPA and other environmental laws and Executive Orders such as the Endangered Species Act, Coastal Barrier Resources Act, Coastal Barrier Improvement Act, Coastal Zone Management Act, Executive Orders on Floodplains (E.O. 11988) and Wetlands (E.O. 11990), other applicable executive orders on historic/cultural resources, prime and unique farmlands, and the Clean Water Act will be satisfied before we approve grant agreements for any project.

This rule's information collection requirements include those necessary to fulfill applicable requirements of 43 CFR part 12, and these have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et. seq. ). This section of the Code of Federal Regulations provides the uniform administrative requirements for grants and cooperative agreements to States and local governments. The required forms include a grant agreement form, USFWS Form 3-1552 (OMB control number 1018-0049); an amendment to the grant agreement form, USFWS Form 3-1591 (OMB control number 1018-0049); the Federal Aid Grant Application Booklet, which was approved by OMB on January 18, 2001, (OMB control number 1018-0109); the NEPA Compliance Checklist, USFWS Form 3-2185 (OMB control number 1018-0110); and the Summary Information for Ranking National Coastal Wetlands Grant Program Proposals, USFWS Form 3-2179 (OMB Control Number 1018-0111). An agency 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.

In accordance with the criteria in Executive Order 12866, this rule is a significant regulatory action. OMB makes the final determination of significance under Executive Order 12866.

This rule will not have an annual effect of $100 million or adversely affect an economic sector, productivity, jobs, the environment, or other units of government. A cost-benefit and economic analysis is not required. The entities affected by this final rule are State natural resource agencies. The primary intended effect is to augment State efforts to conserve their coastal wetland resources. The program is completely voluntary; States choose whether to submit proposals for matching grants. New funds available each year are determined as a percentage of monies received by the Sport Fish Restoration Fund. However, the total receipts for a given year for this program are limited by the Coastal Wetlands Planning, Protection and Restoration Act to $15 million. Receipts for the last few years have been in the $10 million to $13 million range. This last grant cycle included $13 million in new money and $1.5 million available as carryover from previous years.

This rule will not create inconsistencies with other agencies' actions. The Service is charged with administering the National Coastal Wetlands Conservation Program by the Coastal Wetlands Planning, Protection and Restoration Act. This Program supports and augments State efforts to conserve their resources. States voluntarily choose to participate, and no other Federal agencies have responsibilities associated with this Grant Program. Some Federal agencies have participated voluntarily on specific projects as cooperators with the State agencies.

This rule will not affect entitlements, user fees, loan programs, or the rights and obligations of their recipients. It will affect this specific grant program. The Service has been giving out matching grants to States under the National Coastal Wetlands Conservation Grant Program since 1992. If we continue to operate with interim procedures and general Federal Aid grant administration, the same amount of grant assistance will be given to coastal States. The main effect that we expect from this rulemaking is a streamlined proposal preparation and review and grant administration process.

This rule will not raise novel legal or policy issues. As stated above, the Service has been awarding grants to States and administering this Program under the authority of the Coastal Wetlands Planning, Protection and Restoration Act since 1992. However, the purpose of this new rule is to improve the process.

This final rule will not have a significant economic effect on a substantial number of small entities as defined under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). By law, the only eligible recipients of this grant program are coastal State and territory government agencies. Operating with interim guidance, we have given out grants since 1992. This rule should not result in a major change to the Program. The Coastal Wetlands Planning, Protection and Restoration Act specifies an annual cap of $15 million that can be allocated to this program. An initial Regulatory Flexibility Analysis is not required. Accordingly, a Small Entity Compliance Guide is also not required.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This final rule will not have an annual effect on the economy of $100 million or more; will not cause a major increase in costs or prices for consumers, individual industries, Federal, State or local government agencies, or geographic regions; and will 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.

As stated above, the maximum amount, by law, that can be directed to this Grant Program is $15 million per year. This Program is directed exclusively at State governments. This rule might provide some contracting work at a local level for restoration projects, creating a minor positive effect on the local economy. All land purchased under this Program is paid at fair market value from willing sellers. The land involved is a relatively small amount spread over the 10 to 15 States and territories that typically receive grants in a given year. All lands acquired will be put under long-term conservation protection by the States. Some of the grants are for restoration work on lands already owned by the States.

In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq. ), this final rule will not significantly or uniquely affect small governments and will not produce a Federal mandate of $100 million or greater in any year, i.e., it is not a “significant regulatory action” under the Act. A Small Government Agency Plan is not required. As stated above, this rule pertains to a grant program directed at State governments. In a few cases, local governments have chosen to partner in a grant project proposed by the State. Participation in the Program is entirely voluntary. The Program income is limited to $15 million per year by the Coastal Wetlands Planning, Protection and Restoration Act.

In accordance with Executive Order 12630, this final rule does not have significant takings implications. A takings implication assessment is not required. The rule specifies that all acquisitions under this Program are from willing sellers. No private property will be taken from unwilling owners for the furtherance of this Program, and just compensation will be provided to willing owners.

In accordance with Executive Order 13132, the final rule does not have significant Federalism effects. The rule allows eligible coastal States to make decisions regarding the selection of properties for acquisition, plan restoration projects, and take protective measures.

In accordance with Executive Order 12988, the Office of the Solicitor has determined that this rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order. To the extent of our knowledge, no legal cases have ever been associated with this grant program. The rule should actually serve to reduce the possibility of litigation by establishing specific requirements for participation in the National Coastal Wetlands Conservation Grant Program and guidance for its administration by the Service. The rule will establish a clear legal standard for affected conduct.

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), E.O. 13175, and part 512, chapter 2 of the Department of the Interior Manual, we have evaluated potential effects on federally recognized Indian tribes and have determined that the effects are minimal. The Coastal Wetlands Planning, Protection and Restoration Act specifies the States that can participate in this Grant Program. The Act does not provide for grants directly to Indian tribes. Tribes have, in a few cases, participated as cooperators on projects.

On May 18, 2001, the President issues Executive Order 13211 on regulations that significantly affect energy supply, distribution, and use. Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. While this rule is a significant action under Executive Order 12866, it is not expected to significantly affect energy supplies, distribution, and use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required.

This National Coastal Wetlands Conservation Grant Program is covered under Executive Order (Order) 12372 “Intergovernmental Review of Federal Programs” and 43 CFR Part 9 “Intergovernmental Review of Department of the Interior Programs and Activities.” Under the Order, States may design their own processes for reviewing and commenting on proposed Federal assistance under covered programs.

Coastal States and territories that have chosen to participate in the Executive Order process have established Single Points of Contact (SPOCs). Applicants from jurisdictions that do not participate do not need to take any action regarding E.O. 12372. All other applicants should alert their SPOCs early in the application process. This step will insure that applicants find out about any SPOC requirements. If you as an applicant are required to submit materials to the SPOC, indicate the date of this submittal (or the date of contact if no submittal is required) on the Standard Form 424.

For the reasons discussed in the supplementary information, we are amending subchapter F of chapter I, title 50 of the Code of Federal Regulations, by adding a new part 84, to read as follows: