On December 15, 2004 (69 FR 74949), the NRC published in the Federal Register a direct final rule that would have amended NRC's regulations to broaden the scope of the regulations (10 CFR Part 25) applicable to persons who may require access to classified information, to include persons who may need access in connection with licensing and regulatory activities under the regulations that govern the disposal of high-level radioactive waste in geologic repositories, and persons who may need access in connection with other activities as the Commission may determine, such as vendors of advanced reactor designs. This direct final rule would also have broadened the scope of the regulations applicable to procedures for obtaining facility security clearances (10 CFR Part 95). The direct final rule was to become effective on February 28, 2005. The NRC concurrently published an identical proposed rule on December 15, 2004 (69 FR 75007).

In the direct final rule, NRC stated that if any significant adverse comments were received, a notice of timely withdrawal of the direct final rule would be published in the Federal Register . As a result, the direct final rule would not take effect.

The NRC received significant adverse comments on the direct final rule; therefore, the NRC is withdrawing the direct final rule. As stated in the December 15, 2004, direct final rule, NRC will address the comments received on the companion proposed rule in a subsequent final rule. The NRC will not initiate a second comment period on this action.

The Federal Credit Union Act (the FCU Act) generally limits an FCU's authority on matters of loan maturity, rates of interest, security and prepayment penalties. 12 U.S.C. 1757(5). As permitted under the FCU Act, the NCUA Board (the Board) has promulgated lending regulations allowing loan maturities of 20 years for mobile home loans and up to 40 years, or more with specific Board approval, on residential real estate loans. 12 CFR 701.21(f) and (g). NCUA's lending regulations also address loans secured by a state or federal government insurance or guarantee. 12 CFR 701.21(e). The OGC had recently issued several legal opinions addressing loan guarantees and loan maturities. In the course of the agency's annual review of regulations, the Board determined that the rules on loan guarantees and maturities should be updated to reflect the OGC opinions. Accordingly, on November 18, 2004, the Board issued a proposal to amend the lending regulations to incorporate the recent OGC opinions. 69 FR 68829, Nov. 26, 2004.

NCUA received eleven comments: five from state credit union leagues, two from national credit union trade organizations, three from individual credit unions, and one from a banking trade association. The comments were generally positive and supported the proposal to amend the regulation.

All of the comments that specifically addressed the proposed changes to § 701.21(e) of the rule regarding loan guarantees were favorable and supported the change. The final amendment to the rule, which is unchanged from the proposed, clarifies that a partial government guarantee, insurance, or commitment to purchase a loan is sufficient to effect the application of the regulation.

The majority of comments supported the proposed changes to § 701.21(f) and (g) regarding loan maturities for mobile homes, recreational vehicles and boats, and loan maturities for manufactured homes.

The banking trade association opposed the changes regarding loan maturities in whole, describing them as inconsistent with the credit union industry's specified mission of meeting the credit and savings needs of persons of modest means and arguing that they encourage unsafe lending practices. The Board disagrees. Rather, the Board finds that these amendments to the lending rule enhance an FCU's ability to meet the credit needs of its members. This rule allows FCUs to offer credit products that are more affordable to lower income members. Improvements in the quality and standards of construction of manufactured housing, for example, have resulted in increased values that may put the cost of shorter term loans out of the financial reach of individuals of modest means. The Board also disagrees that the longer maturities will encourage unsafe lending practices. To the contrary, as stated in the preamble to the proposed rule, NCUA encourages FCUs to take appropriate steps to ensure their liens are fully protected. Further, these changes to the regulation merely codify what OGC opinions have permitted for several years, and the Board is unaware of any evidence that the longer loan maturities have resulted in unsafe lending practices.

Two commenters raised issues revealing some confusion about the difference between mobile homes, which may have loan maturities up to 20 years, and manufactured homes, which are eligible for longer maturities. One FCU commented about a particular state law and local practices regarding the titling of manufactured housing as real or personal property, ground-leasing, and what constitutes “permanently affixed,” which, the commenter contended, could cause confusion and result in risks to FCUs making manufactured housing loans. In part, some confusion may result if the terms manufactured home and mobile home have a different meaning under a state law. In reviewing the FCU's letter, it became apparent that there may be issues under a state law that FCUs will need to address in their lending agreements with borrowers to ensure compliance with NCUA's lending regulation. One trade association suggested clarifying that manufactured housing that is not permanently affixed to the land constitutes a mobile home. The Board notes that, while this will generally be correct because a mobile home does not have to be permanently affixed to land, which is required for a manufactured home loan, a mobile home still must meet certain regulatory criteria to qualify for a maturity of up to 20 years.

The regulation distinguishes between mobile homes and manufactured homes. First, in using the term “permanently affixed” to describe manufactured homes as a type of manufactured housing distinguished from mobile homes, the Board intends to limit long-term loans to manufactured homes that are intended to remain in place permanently. In its opinion letter on this topic, the OGC stated:

Legal Opinion OGC 03-0934, dated November 17, 2003. In order for a loan to qualify for the longer maturities of residential mortgage loans under § 701.21(g), a manufactured home must be designed and intended to remain in place permanently.

The same FCU noted above also commented about two issues regarding manufactured home loans discussed in the preamble to the proposed rule. Regarding the statement in the preamble that a manufactured home must qualify as real property and be titled as real property, the FCU contends the requirement is unnecessary and that state law and local titling practices could cause problems. The Board notes that, for a loan to be eligible for a 30-year or more maturity term, the FCU Act requires that it be a “residential real estate loan.” 12 U.S.C. 1757(5)(A)(i) (emphasis added). Loans secured by some type of manufactured housing that is titled as personal property are not eligible for 30-year mortgages under the FCU Act but may be able to qualify as 20-year mobile home loans, assuming the criteria of § 701.21(f) are met. To the extent that a particular state law raises questions of how an FCU can ensure its loans comply with NCUA's lending regulation, an FCU may seek interpretive guidance from OGC.

Second, the FCU commented about the Board's suggestion that, for safety and soundness reasons, FCUs engaging in long-term loans for manufactured homes under § 701.21(g) should ensure, if the member is leasing the land where the manufactured home is located, that the term of the lease should be at least as long as the term of the loan. The FCU commented that this requirement is unnecessary and unreasonable, stating that, in practice, most manufactured housing communities permit leases of no longer duration than six months. First, the Board notes its statement in the preamble is not a regulatory requirement but is a statement of guidance. Second, the FCU's reference to a local practice of having short term leases of six months or less is a practice associated with mobile home parks rather than manufactured home locations. A manufactured home, as opposed to a mobile home, is designed and intended to stay in place permanently rather than be moved. The Board's understanding is that, in purchases of manufactured homes, the manufactured home is most often located on land the borrower already owns or is purchasing in conjunction with the purchase of the manufactured home. As noted in the preamble for the proposed rule, as a matter of safety and soundness, an FCU making a manufactured home loan where the land is leased should ensure that the lease is as long as the term of the loan. There may be some rare set of circumstances that would support an FCU making a 30-year loan on a manufactured home located on property that is leased for some lesser period of time. However, where the lease on land is of such a short duration that it places the loan security at a high risk of loss or waste, safety and soundness considerations would weigh against making a 30-year or more loan.

For these reasons, the Board has determined to adopt the proposed rule as a final rule with no changes.

The Regulatory Flexibility Act (RFA) requires NCUA to prepare an analysis to describe any significant economic impact any regulation may have on a substantial number of small entities. NCUA considers credit unions having less than ten million in assets to be small for purposes of RFA. Interpretive Ruling and Policy Statement (IRPS) 87-2 as amended by IRPS 03-2. The rule clarifies and expands the lending rules to incorporate recent OGC opinions. NCUA has determined and certifies that this rule will not have a significant economic impact on a substantial number of small credit unions. Accordingly, NCUA has determined that a Regulatory Flexibility Analysis is not required.

NCUA has determined that the rule would not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget (OMB). NCUA currently has OMB clearance for § 701.21's collection requirements (OMB No. 3133-0139).

Executive Order 12612 requires NCUA to consider the effect of its actions on state interests. This rule applies to only federally chartered credit unions. NCUA has determined that the final rule does not constitute a “significant regulatory action” for purposes of the Executive Order.

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The rule applies only to federal credit unions. NCUA has determined that the amendments to the rule will not have a substantial direct effect on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this rule does not constitute a policy that has federalism implications for purposes of the executive order.

The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the Administrative Procedures Act. 5 U.S.C. 551. NCUA submitted the rule to the Office of Management and Budget, which has determined that it is not major for purposes of the Small Business Regulatory Enforcement Fairness Act of 1996.

On May 5, 2004, the U.S. Small Business Administration (SBA or Agency) published in the Federal Register , 69 FR 25261, an interim final rule to implement that section of the Veterans Benefits Act of 2003 (VBA), which addressed procurement programs for small business concerns (SBCs) owned and controlled by service-disabled veterans. Specifically, the interim final rule defined the term service-disabled veterans, explained when competition may be restricted to SDVO SBCs, and established procedures for protesting and appealing the status of an SDVO SBC. SBA received 45 comments on the interim final rule. The majority of the commenters fully supported the regulatory amendments. SBA explained these comments in a final rule concerning the SDVO SBC regulations that is being issued simultaneously with this interim rule.

SBA received one comment asking for a clarification of the appeal procedures discussed in part 134. SBA has reviewed the OHA appeal procedures set forth in the interim final rule and agrees that further clarification is necessary. Consequently, SBA has amended the rule to include a separate subpart in 13 CFR part 134 to specifically address appeals of SDVO SBC protest determinations. SBA believes the procedures set forth in this subpart will be easier to follow and provide the necessary due process to protested SDVO SBCs and protesters.

As a result of this amendment to part 134, however, SBA has decided to issue the rule with respect to the OHA appeal procedures as an interim final rule with a request for comments. Thus, interested parties can comment on these new changes to the appeal procedures.

In general, SBA publishes a rule for public comment before issuing a final rule, in accordance with the Administrative Procedure Act and SBA regulations, 5 U.S.C. 553 and 13 CFR 101.108. The Administrative Procedure Act provides an exception to this standard rulemaking process, however, where an agency finds good cause to adopt a rule without prior public participation. 5 U.S.C. 553(b)(3)(B). The good cause requirement is satisfied when prior public participation is impracticable, unnecessary, or contrary to the public interest. Under such circumstances, an agency may publish an interim final rule without soliciting public comment.

In enacting the good cause exception to standard rulemaking procedures, Congress recognized that emergency situations arise where an agency must issue a rule without prior public participation. In this present case, the Agency notes that this procurement program for service-disabled veterans became effective upon enactment of the VBA. The purpose of this procurement program is to assist agencies in achieving the statutorily mandated 3% government-wide goal for procurement from service-disabled veteran-owned SBCs. When drafting the VBA, Congress found that agencies were falling far short of reaching this goal. Consequently, in the legislative history for that Act, Congress specifically urges SBA and the Office of Federal Procurement Policy to expeditiously and transparently implement this procurement program.

Thus, SBA and the Federal Acquisition Regulations (FAR) Council have issued final rules governing the SDVO SBC Program. These final rules address SDVO SBC protest procedures. Because there are now protest procedures in place with respect to SDVO SBCs, it is necessary for SBA to have appeal procedures established as well.

Accordingly, SBA finds that good cause exists to publish this rule as an interim final rule in light of the urgent need to provide a mechanism to appeal the status of a SDVO SBC. Advance solicitation of comments for this rulemaking would be impracticable and contrary to the public interest, as it would delay the delivery of critical assistance to the Federal procurement community by a minimum of three to six months and would require SDVO SBCs to go to another tribunal ( e.g. , district court) for an SDVO SBC appeal. This could be a financial burden for SDVO SBCs. Although this rule is being published as an interim final rule, comments are hereby solicited from interested members of the public. SBA will then consider these comments in making any necessary revisions to these regulations.

The APA requires that “publication or service of a substantive rule shall be made not less than 30 days before its effective date, except * * * as otherwise provided by the agency for good cause found and published with the rule.” 5 U.S.C. 553(d)(3). SBA finds that good cause exists to make this final rule effective the same day it is published in the Federal Register .

The purpose of the APA provision is to provide interested and affected members of the public sufficient time to adjust their behavior before the rule takes effect. For the reasons set forth above in Paragraph I, Justification of Publication of Interim Final Status Rule, SBA finds that good cause exists for making this interim final rule effective immediately, instead of observing the 30-day period between publication and effective date.

SBA also believes, based on its contacts with interested members of the public, that there is strong interest in immediate implementation of this rule. SBA is aware of many procuring activities and business concerns that will be assisted by the immediate adoption of this rule.

SBA has amended part 134 to add a new subpart E, which will specifically address SDVO SBC appeals from protest determinations issued by the Associate Administrator for Government Contracting (AA/GC). According to § 134.501, this will include appeals from determinations by the AA/GC that the protest was premature, untimely, nonspecific, or not based upon protestable allegations.

Section 134.501 also explains that except where inconsistent, the provisions in subparts A and B apply to SDVO SBC appeals. This means, for example, that the provisions relating to a requirement for a signature on all submissions and representations in cases before OHA that apply to other types of appeals will also apply to SDVO SBC appeals.

In § 134.502, SBA explains that the protested concern, the protester or the contracting officer (CO) may appeal a protest determination to OHA. SBA has limited the appeal process to those parties that were involved in the protest.

Section 134.503 states that such appeals must be filed within 10 business days after the appellant receives the SDVO SBC protest determination. As explained in § 134.204(b), filing is the receipt of pleadings and other submissions at OHA. SBA believes that 10 business days is ample time for an appeal to be filed, yet still allows for an expeditious appeal process.

In § 134.504, the regulation explains the effects of the appeal on the procurement at issue. For example, the filing of an appeal stays the procurement; however, the CO may award the contract after receipt of the appeal if the CO determines in writing that an award must be made to protect the public interest. SBA believes that this provision is necessary. If COs did not stay the procurement pending the outcome of the appeal, the appeal process could lose its force and effect.

Section 134.505 sets forth the requirements for an appeal petition as well as who must be served the appeal petition. For example, the petition must state the basis of the appeal as well as other information relating to the procurement. This information is necessary so that the OHA Judge can decide whether the appeal is nonspecific or untimely.

Section 134.506 explains that the service and filing of all pleadings and submissions must meet the requirements of § 134.204, unless otherwise indicated. This keeps the filing and service requirements for OHA proceedings consistent with other appeals, such as size and NAICS appeals.

According to § 134.507, upon receipt of the appeal petition, the AA/GC will transmit the entire protest file to OHA. The protest file will generally contain the CO's referral letter, the protest, SBA's request to the protested concern for a response to the protest, the protested concern's response, and the final determination. The AA/GC will certify and authenticate the protest file. SBA believes that this is the information necessary for the OHA Judge to determine whether the AA/GC's decision was erroneous. SBA notes that the protest file will not be sent to the parties to the appeal because it typically contains confidential information that cannot be disclosed to other parties.

According to § 134.508, the standard of review is whether the AA/GC's protest determination was based on clear error of law or fact. SBA has decided to utilize this standard of review because it is the same standard used for size and North American Industry Classification System (NAICS) appeals and SBA believes that such appeals are similar to SDVO SBC appeals. For example, with respect to status determinations, the AA/GC will review documents from the U.S. Department of Veterans Affairs (VA), U.S. Department of Defense (DoD) and the U.S. National Archives and Records Administration (NARA) to determine whether the SBC owner meets the definition of service-disabled veteran set forth in 13 CFR 125.8. The AA/GC does not question the determination made by either the VA or DoD concerning an individual's status as a service-disabled veteran; rather, the AA/GC will ensure the owner has the appropriate documents from those agencies. The protest file will contain any such documentation provided by the protested concern. Upon review, the OHA Judge will also look to see if the AA/GC reviewed the appropriate documents, and will not question the determinations made by the VA or DoD. Consequently, the clear error standard is more appropriate for this type of appeal.

Section 134.509 sets forth those instances when a dismissal of an appeal is warranted. That section provides that the OHA Judge will dismiss an appeal when it fails to allege facts that if proven to be true would warrant reversal of the protest determination; when the appeal petition does not contain all of the information required by § 134.505; the appeal has not been filed on time; or the matter has been decided or is the subject of adjudication before a court of competent jurisdiction.

Section 134.510 explains who may file a response to the appeal petition. The regulation provides that any person served with an appeal petition may file a response. This regulation does not require such parties to file a response; rather, it gives them the discretion to do so. However, if a party does decide to file a response, it must be filed within 7 business days after the service of the appeal petition. This 7-day deadline is necessary to expedite the appeal process. In addition, SBA believes that further time for the filing of a response is unnecessary because most of the issues will have already been addressed at the protest level.

Section 134.511 provides that an OHA Judge will not permit discovery and no oral hearings will be held. In a similar vein, § 134.512 provides that the Judge may not admit evidence beyond the written protest file. SBA believes that the appeal procedures should be quick, since the protest and appeal trigger a stay of the procurement. If discovery and further evidence were permitted, this would lengthen the appeal process. In addition, because the standard of review is clear error of fact or law, the OHA Judge only needs to review only the written protest file to make his or her determination on appeal.

Section 134.513 explains that the record will close when all pleadings have been submitted. This means the record closes when all responses to the appeal have been filed in accordance with § 134.510. This is important because according to § 134.514, the Judge will issue a decision within 15 business days after the close of the record.

Section 134.515 explains the effects of the Judge's decision. All decisions by the OHA Judge are final and binding on the parties. In addition, in accordance with § 125.28, if the contract has already been awarded and on appeal the OHA Judge affirms that the SDVO SBC does not meet a status or ownership and control requirement set forth in these regulations, then the procuring agency cannot count the award as an award to an SDVO SBC and therefore must revise the contract award data to reflect the appropriate status of the awardee. Further, the protested concern cannot self-represent its status as an SDVO SBC for another procurement until it has cured the eligibility issue. If a contract has not yet been awarded and on appeal the OHA Judge affirms that the protested concern does not meet the status or ownership and control requirement set forth in these regulations, then the protested concern is ineligible for that specific SDVO SBC contract award.

Section 134.515 also provides that the Judge may reconsider his or her decision and any party who has appeared in the proceeding ( e.g. , submitted a protest or other pleading to OHA) or SBA (even if SBA has not appeared in the proceeding) may request a reconsideration. The request for reconsideration must show an error of fact or law material to the decision. SBA has allowed for a reconsideration process because one exists for other types of appeals and SBA believes that it provides SBCs another opportunity for administrative recourse.

In addition, § 134.515 explains that the Judge may remand a proceeding to the AA/GC for a new SDVO SBC status protest determination if the latter fails to address issues of decisional significance sufficiently, does not address all the relevant evidence provided during the protest procedures or does not identify specifically the evidence upon which it relied. Once remanded, OHA no longer has jurisdiction over the matter, unless a new appeal is filed.

SBA has determined that this final rule does not impose additional reporting or recordkeeping requirements under the Paperwork Reduction Act, 44 U.S.C., chapter 35.

This action meets applicable standards set forth in §§ 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or preemptive effect.

This regulation will not have substantial direct effects on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, for the purposes of Executive Order 13132, SBA determines that this final rule has no federalism implications warranting preparation of a federalism assessment.

Because the rule is an interim final rule, there is no requirement for SBA to prepare an Initial Regulatory Flexibility Act analysis.

OMB has determined that this rule constitutes a “significant regulatory action” under Executive Order 12866. The regulatory impact analysis is set forth below.

Yes. SBA is statutorily authorized to administer the Service-Disabled Veteran-Owned Small Business Concern (SDVO SBC) Program. The SDVO SBC Program is established pursuant to Public Law 108-183, the Veterans Benefits Act of 2003. Section 308 of that law amended the Small Business Act to establish a procurement program for SBCs owned and controlled by service-disabled veterans. This procurement program provides that contracting officers may award a sole source or set-aside contract to SDVO SBCs if certain conditions are met. The VBA also provides that SBA may verify the eligibility of any SDVO SBC.

SBA has issued regulations implementing this procurement program for service-disabled veterans. Those regulations address protest procedures, which is how SBA has decided to verify eligibility for SDVO SBCs. The regulations issued today will implement the appeal procedures to provide protesters and protested concerns an administrative avenue in which to appeal a protest determination. Consequently, SBA believes that this regulation is necessary and that it must be implemented as quickly as possible.

SBA must implement this appeal procedures program through regulations. There are no practical alternatives to the implementation of this rule. Issuance of policy directives, for example, which are not generally published material like regulations, would hinder a SBC's access to this needed information. In addition, all of SBA's appeal procedures are set forth by regulation in part 134 and there is no reason why appeals for SDVO SBCs should be located in any other place.

One alternative SBA did consider for SDVO SBCs was proposing a certification program, similar to its 8(a) Business Development and HUBZone Programs. The statute implementing those programs discusses certain certification and program procedures. SBA did not believe such a certification program was necessary to implement the VBA or was required by the VBA. Rather, the SDVO SBC will be able to self-represent its status to the contracting activity as part of its offer. The contracting officer, SBA, or other SDVO SBCs may protest this representation. If the protest is specific, SBA will review the protested firm to determine whether it meets the program's requirements. SBA uses a similar protest procedure for small business set-asides. SBA believes that it is necessary to provide the parties with the appeal process set forth in this rule. This appeal process will allow for an administrative means to appeal the protest decision. The alternative to not having an administrative appeal process is to have the parties appeal the decision to a court of competent jurisdiction. However, because it is typically less costly to use the administrative appeal process rather than going to court, SBA has issued regulations on an appeal process for SDVO SBCs.

SBA does not have sufficient data to establish a baseline to measure the costs and benefits of their rule. SDVO SBCs will be the primary beneficiaries of this rule. Specifically, 15 U.S.C. 664(g), (502(b), Pub. L. 106-50, August 17, 1999), established a 3 percent prime contracting and subcontracting goal for SDVO SBCs for Federal contracting. This statutory provision did not, however, establish a procurement mechanism to encourage contracting activities to award contracts to SDVO SBCs. On December 16, 2003, Pub. L. 108-183, the VBA, was signed into law by the President. Section 308 of the VBA revised the Small Business Act to add new section 36 (15 U.S.C. 657f), a procurement program for SDVO SBCs. This program provides that contracting officers may award a sole source or set-aside contract to SDVO SBCs if certain conditions are met. SBA cannot accurately determine how many concerns will be competing for SDVO SBC contract awards because there is insufficient data on SDVO SBCs ready and able to perform on a government contract to support a reasonable estimate. However, a review of the data available from several different sources evidences the following.

According to the VA, there were 2.5 million veterans with a service connected disability. ( See http://www.va.gov/vetdata/demographics/index.htm. ) However, the data does not tell us how many of those veterans own a small business concern that would qualify for the program. Thus, SBA looked at data available from the state of California, the only state that has a similar SDVO SBC Program. ( See http://www.ca.gov. ) In Fiscal Year (FY) 2001, California awarded contracts to 832 Disabled Veteran Business Enterprises (DVBEs). In FY 2002, California awarded 2.8% of all State contract actions to 973 DVBEs. The dollar value of contract awards for 2001 and 2002 was not readily available. In FY 2003, California awarded $142,670,222, or 2.7% of all State contract actions to DVBEs. California requires DVBE Program participants to be a disabled veteran. SBA could not determine how many DVBEs were small business concerns. SBA welcomes comments discussing other State-level DVBE Programs.

In addition, SBA reviewed the 1992 Economic Census data reported under “Characteristics of Business Owners,” the most recent data available. ( See http://www.census.gov. ) This data revealed that disabled veterans represented 1.8% of all businesses, or approximately 310,557 businesses. The U.S. Bureau of the Census did not distinguish between small and large businesses or whether the veteran's disability status was based on a “service-connected” disability as defined in 38 U.S.C. 101. Therefore, SBA also reviewed information contained in the U.S. Department of Defense's Central Contractor Registration (CCR) database. There are 4,825 SDVO SBCs registered in CCR. This represents a small portion, 15.9% of the 30,434 veteran-owned businesses registered in CCR. Again, it is not known what percentage of the service-disabled veterans based their representation on the “service-connected” disability as defined by 38 U.S.C. 101.

Finally, SBA reviewed data from the Federal Procurement Data System. In FY 2001, there were 9,142 contract actions awarded to SDVO SBCs in the amount of $554,167,000. This represented .25% of all Federal contracts awarded. In FY 2002, 7,131 contract actions were awarded to SDVO SBCs in the amount of $298,901,000. This represented .13% of all Federal contracts awarded. Although there are over 2 million service-disabled veterans, only a small portion own small businesses. However, it is assumed that the establishment of a sole source and set-aside procurement vehicle for SDVO SBCs will attract more of these entities to the Federal procurement arena. In addition, according to the data set forth above, few contracts were awarded to SDVO SBCs in the Federal and State arenas. This number could increase as a result of the implementation of the VBA through this regulation. Thus, there is a relatively small percentage of SDVO SBCs (2.4%) registered in the CCR (4,852), as compared to the total number of SBCs (201,742). Consequently, SBA believes that this rule concerning appeal procedures for SDVO SBCs will not have a major impact on SBCs in the Federal procurement arena.

SBA welcomes comments discussing the potential number of concerns that could become eligible under this rule and which could protest and appeal the SDVO SBC status of an apparent awardee.

With respect to who will benefit from this regulation, SBA notes that it believes currently eligible SDVO SBCs will benefit immediately since they are ready and able to tender an offer for a Federal procurement and can therefore protest and appeal an awardee's SDVO SBC status.

SBA estimates that the Federal government will require no additional appropriations for agencies to implement this program. SBA's Office of Government Contracting will handle the protests and SBA's Office of Hearings and Appeals will handle the appeals.

Med-Pharmex, Inc., 2727 Thompson Creek Rd., Pomona, CA 91767-1861, filed ANADA 200-280 that provides for use of EUTHANASIA III (pentobarbital sodium and phenytoin sodium) Solution for humane, painless, and rapid euthanasia of dogs. Med-Pharmex, Inc.'s EUTHANASIA-III Solution is approved as a generic copy of Schering-Plough Animal Health Corp.'s BEUTHANASIA-D Special, approved under NADA 119-807. The ANADA is approved as of February 3, 2005, and the regulations are amended in 21 CFR 522.900 to reflect the approval. The basis of approval is discussed in the freedom of information summary.

In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

The agency has determined under 21 CFR 25.33(a)(1) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

The Board of Veterans' Appeals (Board) is the component of the Department of Veterans Affairs, in Washington, DC, that decides appeals from denials of claims for veterans' benefits. The Board is under the administrative control and supervision of a Chairman directly responsible to the Secretary of Veterans Affairs. 38 U.S.C. 7101. This document amends the Board's Appeals Regulations and Rules of Practice concerning delegations of authority exercised by the Chairman.

Under 38 CFR 19.14 and 20.102, certain authorities exercised by the Chairman of the Board are delegated to certain other employees of the Board. The sources of these authorities are 38 U.S.C. 7101(a), 7102, 7103, and 7104.

In 1994, 38 U.S.C. 7102 was amended to authorize the deciding of appeals by individual Board members, as well as by panels of at least three Board members. The amendment also prohibited a proceeding before the Board from being assigned to the Chairman as an individual member. Board of Veterans' Appeals Administrative Procedures Improvement Act of 1994, Public Law 103-271, § 6(a), 108 Stat. 740, 741. In May 1996, the Secretary amended the Board's Appeals Regulations and Rules of Practice to incorporate these statutory changes. See 61 FR 20447, May 7, 1996. However, certain provisions governing the Chairman's delegation of authority in the appeals regulations and rules of practice were not amended to reflect the statutory and regulatory changes. Therefore, we are now amending 38 CFR 19.14 and 20.102 to reflect those prior statutory and regulatory changes.

The 1996 rulemaking included amendments to 38 CFR 19.3, 19.11, 20.606, 20.608, and 20.900. The amendments reflected, in addition to the statutory amendments, administrative changes in the Board's organization from sections to teams. The versions of 38 CFR 19.14 and 20.102 in effect until February 24, 2005, refer to paragraphs in the previously amended regulations that were removed, redesignated, or revised by the 1996 rulemaking.

We are removing references to § 19.3(c) and (d) from 38 CFR 19.14 because the 1996 amendments revised § 19.3 so that it has no paragraph (c) or (d).

We are also removing paragraph (a) of 38 CFR 20.102 and redesignating paragraphs (b) and (c) of § 20.102 as paragraphs (a) and (b), respectively. The provisions of paragraph (a) of 38 CFR 20.102 in effect until February 24, 2005 permitted the Vice Chairman of the Board to exercise the same authority the Chairman may exercise under 38 CFR 20.900(c). However, § 20.900(c), itself authorizes the Vice Chairman to exercise that authority as well as to delegate such authority to a Deputy Vice Chairman. Therefore, paragraph (a) of § 20.102 is not necessary.

In addition, we are removing the references to Rule 608(b) and § 20.608(b) from § 20.102(b). The provisions of paragraph (b) of § 20.102 in effect until February 24, 2005, permitted the Vice Chairman of the Board and the Deputy Vice Chairmen to exercise the same authority the Chairman may exercise under 38 CFR 20.608(b). However, the 1996 amendments removed that authority from § 20.608(b) to conform with the statutory amendments. Therefore, the references in § 20.102(b) to Rule 608(b) and § 20.608(b) are inappropriate.

Finally, in 38 CFR 20.102(c), we are replacing the references to Rule 606(e) and § 20.606(e) with references to Rule 606(d) and § 20.606(d). The provisions of paragraph (c) of § 20.102 in effect until February 24, 2005 permitted the Vice Chairman of the Board, the Deputy Vice Chairmen, or members of the Board to exercise the same authority the Chairman may exercise under 38 CFR 20.606(e). However, that authority is now in § 20.606(d). Thus, a reference to paragraph (d) instead of paragraph (e) is the appropriate reference.

Because this final rule concerns agency organization, procedure, or practice, pursuant to 5 U.S.C. 553(b), it is exempt from notice and comment requirements. Further, we have concluded that, because this final rule only brings 38 CFR 19.14 and 20.102 into conformity with existing regulations in Parts 19 and 20 of title 38, there is good cause for dispensing with a delayed effective date as unnecessary.

The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more in any given year. This final rule would have no such effect on State, local, or tribal governments, or the private sector.

This document contains no provisions constituting a new collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Because this final rule is not a “rule” as defined in 5 U.S.C. 601(2), it is not subject to the Regulatory Flexibility Act, 5 U.S.C. 601-612. Nevertheless, the Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The changes made by this rule will not have a significant economic impact on any small entities. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The supplementary information is organized in the following order:

Description of a SIP —Each state has a SIP containing the control measures and strategies used to attain and maintain the National Ambient Air Quality Standards (NAAQS). The SIP is extensive, containing elements covering a variety of subjects, such as air pollution control regulations, emission inventories, monitoring networks, attainment demonstrations, and enforcement mechanisms.

How EPA Enforces SIPs —Each state must formally adopt the control measures and strategies in the SIP after the public has had an opportunity to comment on them. They are then submitted to EPA as SIP revisions on which EPA must formally act.

Once these control measures and strategies are approved by EPA, after notice and comment rulemaking, they are incorporated into the federally approved SIP and are identified in Title 40 of the Code of Federal Regulations part 52 (Approval and Promulgation of Implementation Plans), (40 CFR part 52). The actual state regulations approved by EPA are not reproduced in their entirety in 40 CFR part 52, but are “incorporated by reference,” which means that EPA has approved a given state regulation with a specific effective date. This format allows both EPA and the public to know which measures are contained in a given SIP and ensures that the state is enforcing the regulations. It also allows EPA and the public to take enforcement action, should a state not enforce its SIP-approved regulations.

How the State and EPA Update the SIP —The SIP is a living document which can be revised as necessary to address the unique air pollution problems in the state. Therefore, EPA must, from time to time, take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference federally approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR).

EPA began the process of developing: (1) A revised SIP document for each state that would be incorporated by reference under the provisions of title 1 CFR part 51; (2) a revised mechanism for announcing EPA approval of revisions to an applicable SIP and updating both the IBR document and the CFR; and (3) a revised format of the “Identification of plan” sections for each applicable subpart to reflect these revised IBR procedures. The description of the revised SIP document, IBR procedures, and “Identification of plan” format are discussed in further detail in the May 22, 1997, Federal Register document.

How EPA Compiles the SIP —The federally approved regulations, source-specific requirements, and nonregulatory provisions (entirely or portions of) submitted by each state agency have been organized by EPA into a “SIP compilation.” The SIP compilation contains the updated regulations, source-specific requirements, and nonregulatory provisions approved by EPA through previous rulemaking actions in the Federal Register . The compilation is contained in three-ring binders and will be updated, primarily on an annual basis. The nonregulatory provisions are available by contacting Christos Panos at the Regional Office.

How EPA Organizes the SIP Compilation —Each compilation contains three parts. Part one contains the regulations, part two contains the source-specific requirements that have been approved as part of the SIP, and part three contains nonregulatory provisions that have been approved by EPA. Each part consists of a table of identifying information for each SIP-approved regulation, each SIP-approved source-specific requirement, and each nonregulatory SIP provision. In this action, EPA is publishing the tables summarizing the applicable SIP requirements for Minnesota. The effective dates in the tables indicate the date of the most recent revision of each regulation. The EPA Regional Offices have the primary responsibility for updating the compilation and ensuring its accuracy.

Where You Can Find a Copy of the SIP Compilation —EPA's Region 5 Office developed and will maintain the compilation for Minnesota. A copy of the full text of Minnesota's regulatory and source-specific compilation will also be maintained at NARA and EPA's Air Docket and Information Center.

The Format of the New Identification of Plan Section —In order to better serve the public, EPA revised the organization of the “Identification of plan” section and included additional information to clarify the enforceable elements of the SIP.

The revised Identification of plan section contains five subsections: (a) Purpose and scope, (b) Incorporation by reference, (c) EPA approved regulations, (d) EPA approved source specific permits, and (e) EPA approved nonregulatory and quasi-regulatory provisions such as transportation control measures, statutory provisions, control strategies, monitoring networks, etc.

When a SIP Revision Becomes Federally Enforceable —All revisions to the applicable SIP become federally enforceable as of the effective date of the revisions to paragraphs (c), (d), or (e) of the applicable Identification of plan section found in each subpart of 40 CFR part 52.

The Historical Record of SIP Revision Approvals —To facilitate enforcement of previously approved SIP provisions and provide a smooth transition to the new SIP processing system, EPA retains the original Identification of plan section, previously appearing in the CFR as the first or second section of part 52 for each state subpart. After an initial two-year period, EPA will review its experience with the new system and enforceability of previously approved SIP measures and will decide whether or not to retain the Identification of plan appendices for some further period.

Today's rule constitutes a “housekeeping” exercise to ensure that all revisions to the state programs that have occurred are accurately reflected in 40 CFR oprt 52. State SIP revisions are controlled by EPA regulations at 40 CFR part 51. When EPA receives a formal SIP revision request, the Agency must publish the proposed revision in the Federal Register and provide for public comment before approval.

EPA has determined that today's rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). Today's rule simply codifies provisions which are already in effect as a matter of law in Federal and approved state programs.

Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866. Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the Administrative Procedure Act or any other statute as indicated in the Supplementary Information section above, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule also 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, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. This rule does not involve technical standards; thus the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1998) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). EPA's compliance with these statutes and Executive Orders for the underlying rules are discussed in previous actions taken on the State's rules.

The Congressional Review Act (5 U.S.C. 801 et seq. ), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. Today's action simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. 5 U.S.C. 808(2). As stated previously, EPA has made such a good cause finding, including the reasons therefore, and established an effective date of February 24, 2005. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

EPA has also determined that the provisions of section 307(b)(1) of the Clean Air Act pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Minnesota SIP compilation had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for these “Identification of plan” reorganization actions for Minnesota.

This is a summary of the Commission's Order on Remand in WC Docket No. 04-313 and CC Docket No. 01-338, adopted December 15, 2004 , and released February 4, 2005 . The full text of this document may be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160. It is also available on the Commission's Web site at http://www.fcc.gov .

1. Background. The Commission took several steps to avoid excessive disruption of the local telecommunications market while it wrote new rules following the D.C. Circuit's decision in United States Telecom Association v. FCC , 359 F.3d 554 (D.C. Cir. 2004), cert. denied , 160 L. Ed 2d 223 (2004), which vacated and remanded significant portions of the unbundling rules set forth in the Commission's Triennial Review Order , 68 FR 52276 (Sept. 2, 2003), CC Docket Nos. 01-338, 96-98, 98-147, Report and Order and Order on Remand and Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978 (2003). One of these steps included the release, on August 20, 2004, of Unbundled Access to Network Elements; Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers , 69 FR 55111, 69 FR 55128 (Sept. 13, 2004), CC Docket No. 01-338, WC Docket No. 04-313, Order and Notice of Proposed Rulemaking, 19 FCC Rcd 16783, 16785-87, paras. 3-7 (2004) ( Interim Order and Triennial Remand NPRM ). The Interim Order required carriers to adhere to the commitments they made in their interconnection agreements, applicable statements of generally available terms (SGATs), and relevant state tariffs that were in effect on June 15, 2004 for an “interim period” beginning on the effective date of the Interim Order and NPRM and ending on the earlier of (1) six months after that effective date or (2) the effective date of final rules issued in this proceeding. The Commission also set forth and sought comment on a transition plan to govern the period following the interim period. The associated Triennial Remand NPRM sought comment on how to respond to the USTA II decision in its revised final rules. In this Order on Remand, the Commission promulgates those final rules based on guidance from the courts and comment received in response to the Triennial Remand NPRM .

2. Unbundling Framework. In the USTA II decision, the D.C. Circuit upheld the general impairment framework the Commission established in the Triennial Review Order , but sought several clarifications and, in several cases, criticized the manner in which the Commission applied that framework to particular elements. In response to those criticisms, the Commission clarifies the impairment standard adopted in the Triennial Review Order in one respect and modifies its unbundling framework in three other respects. First, the Commission clarifies that it evaluates impairment with regard to the capabilities of a reasonably efficient competitor. Second, it sets aside the Triennial Review Order 's “qualifying service” interpretation of section 251(d)(2), but prohibits the use of UNEs for the exclusive provision of telecommunications services in the mobile wireless and long-distance markets, which the Commission previously has found to be competitive. Third, the Commission notes that in applying its impairment test, it draws reasonable inferences regarding the prospects for competition in one geographic market based on the state of competition in other, similar markets. Fourth, it considers the appropriate role of tariffed incumbent LEC services in its unbundling framework, and determines that in the context of the local exchange market, a general rule prohibiting access to UNEs whenever a requesting carrier is able to compete using an incumbent LEC's tariffed offering would be inappropriate.

3. Dedicated Interoffice Transport. In this Order, the Commission tailors its unbundling requirements regarding dedicated interoffice transport narrowly to ensure that unbundling obligations apply only where competitive deployment of these facilities is not economic. The Commission finds that competing carriers are impaired without access to DS1 transport except on routes connecting a pair of wire centers, where both wire centers contain either at least four fiber-based collocators or at least 38,000 business access lines. The Commission also finds that competing carriers are impaired without access to DS3 or dark fiber transport except on routes connecting a pair of wire centers, each of which contains at least three fiber-based collocators or at least 24,000 business lines. Finally, the Commission finds that competing carriers are not impaired without access to entrance facilities connecting an incumbent LEC's network with a competitive LEC's network in any instance. In addition to these findings, the Commission adopts a 12-month plan for competing carriers to transition away from use of DS1- and DS3-capacity dedicated transport where they are not impaired, and an 18-month plan to govern transitions away from dark fiber transport. These transition plans apply only to the embedded customer base, and do not permit competitive LECs to add new dedicated transport UNEs in the absence of impairment. The Commission also requires that during the transition periods, competitive carriers retain access to unbundled dedicated transport at a rate equal to the higher of (1) 115% of the rate the requesting carrier paid for the transport element on June 15, 2004, or (2) 115% of the rate the state commission has established or establishes, if any, between June 16, 2004 and the effective date of this Order.

4. High-Capacity Loops. The Commission finds that competitive LECs are impaired without access to DS3-capacity loops except in any building within the service area of a wire center containing 38,000 or more business lines and four or more fiber-based collocators. In addition, the Commission finds that competitive LECs are impaired without access to DS1-capacity loops except in any building within the service area of a wire center containing 60,000 or more business lines and four or more fiber-based collocators. Finally, the Commission finds that competitive LECs are not impaired without access to dark fiber loops in any instance. In addition to these findings, the Commission adopts a 12-month plan for competing carriers to transition away from use of DS1- and DS3-capacity loops where they are not impaired, and an 18-month plan to govern transitions away from dark fiber loops. These transition plans apply only to the embedded customer base, and do not permit competitive LECs to add new high-capacity loop UNEs in the absence of impairment. The Commission requires that during the transition periods, competitive carriers retain access to unbundled facilities at a rate equal to the higher of (1) 115% of the rate the requesting carrier paid for the high-capacity loop element on June 15, 2004, or (2) 115% of the rate the state commission has established or establishes, if any, between June 16, 2004 and the effective date of this Order.

5. Mass Market Local Circuit Switching. In this Order, the Commission finds that incumbent LECs have no obligation to provide competitive LECs with unbundled access to mass market local circuit switching. The Commission concludes that competitive LECs have deployed a significant, growing number of their own switches, often using new, more-efficient technologies such as packet switches, and could do so in areas they do not yet serve as well. Thus, the Commission concludes that requesting carriers in most cases are not impaired without access to local circuit switching. Moreover, the Commission finds that regardless of any limited potential impairment requesting carriers may still face, the continued availability of unbundled mass market switching would impose significant costs in the form of decreased investment incentives. It therefore determines, pursuant to section 251(d)(2)'s “at a minimum” authority, not to require unbundled access to mass market switching even in those areas where competitive LECs might face impairment. In addition, the Commission adopts a 12-month plan for competing carriers to transition away from use of unbundled mass market local circuit switching. This transition plan applies only to the embedded customer base, and does not permit competitive LECs to add new mass market switching UNEs. During the transition period, the Commission states that competitive carriers will retain access to the unbundled network element platform ( i.e. , the combination of an unbundled loop, unbundled local circuit switching, and shared transport) at a rate equal to the higher of (1) the rate at which the requesting carrier leased that combination of elements on June 15, 2004, plus one dollar, or (2) the rate the state public utility commission establishes, if any, between June 16, 2004, and the effective date of this Order, for this combination of elements, plus one dollar.

6. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Interim Order and NPRM in this proceeding. The Commission sought written comment on the proposals in the Interim Order and NPRM , including comment on the IRFA. The present Final Regulatory Flexibility Analysis (FRFA) addresses comments received on the IRFA and conforms to the RFA.

7. This Order responds to the United States Court of Appeals for the District of Columbia's USTA II decision, which vacated and remanded significant portions of the Triennial Review Order 's unbundling rules. Based on the record compiled in response to the Interim Order and NPRM , the Commission adopted, in the Triennial Review Order , new unbundling rules implementing section 251 of the 1996 Act. The Triennial Review Order reinterpreted the statute's “impair” standard and reevaluated incumbent LECs' unbundling obligations with regard to particular elements. Various parties appealed the Triennial Review Order , and on March 2, 2004, the D.C. Circuit decided USTA II , vacating and remanding several of the Triennial Review Order 's unbundling rules. In this Order, we address the remanded issues and take additional steps to encourage the innovation and investment that results from facilities-based competition.

8. Specifically, this Order clarifies the Triennial Review Order 's impairment standard in one respect and modifies its application in three respects. First, we clarify that we evaluate impairment with regard to the capabilities of a reasonably efficient competitor. Second , we set aside the Triennial Review Order 's “qualifying service” interpretation of section 251(d)(2), but prohibit the use of UNEs for the provision of telecommunications services in the mobile wireless and long-distance markets, which we previously have found to be competitive. Third , in applying our impairment test, we draw reasonable inferences regarding the prospects for competition in one geographic market based on the state of competition in other, similar markets. Fourth , we consider the appropriate role of tariffed incumbent LEC services in our unbundling framework, and determine that in the context of the local exchange markets, a general rule prohibiting access to UNEs whenever a requesting carrier is able to compete using an incumbent LEC's tariffed offering would be inappropriate. We then apply this revised unbundling framework to the dedicated transport network element, the high-capacity loop network element, and the mass market local circuit switching network element. In each case, we adopt a result that will promote the deployment of competitive facilities wherever possible, spreading the benefits of facilities-based competition to market entrants and end-user customers alike, including small businesses falling into each category.

9. In this section, we respond to comments filed in response to the IRFA. To the extent we received comments raising general small business concerns during this proceeding, those comments are discussed throughout the Order and are summarized in part E, below.

10. First, we reject TeleTruth's contention that the Commission fails to assess the impact of its unbundling rules on small Internet Service Providers (ISPs), and that this failure violates the RFA. Although we understand that our rules will have an economic impact in many sectors of the economy, including the ISP market, the RFA only requires the Commission to consider the impact on entities directly subject to our rules. The RFA is not applicable to ISPs because, as we previously noted, ISPs are only indirectly affected by our unbundling actions and were not formally included in the IRFA or formally included in this FRFA. In the interest of ensuring notice to all interested parties and out of an abundance of caution, we have previously included ISPs among the entities potentially indirectly affected by our unbundling rules, although we have been explicit in emphasizing that ISPs are only indirectly affected by these rules. On this subject, we note that the D.C. Circuit “has consistently held that the RFA imposes no obligation to conduct a small entity impact analysis of effects on entities which [the agency conducting the analysis] does not regulate.” Thus, we emphasize that the RFA imposes no independent obligation to examine the effects an agency's action will have on the customers, clients, or end users of the companies it regulates—including ISPs—unless such entities are, themselves, subject to regulation by the agency. In any event, we have considered the needs of small business customers of competitive (and incumbent) LECs throughout this Order and previous Orders, in each case choosing the outcome that will foster facilities-based competition and the benefits such competition will bring to small businesses and other consumers of telecommunications.

11. We also reject TeleTruth's argument that the Commission violates the RFA by relying on outdated 1997 Census Bureau data to identify the number of ISPs potentially affected by our final rules in the IRFA. The 1997 Census Bureau data were and still are the most current data available. According to TeleTruth, data compiled by both the SBA and Boardwatch/ISP-Planet, an ISP-focused periodical, indicate that the number of ISPs is close to 7,000, rather than the 2,751 ISPs identified by the IRFA. Although TeleTruth cites to higher numbers, the Census Bureau has not released the more recent (2002) results for telecommunications providers or for ISPs. Thus, the IRFA in this proceeding and this FRFA appropriately rely on the most up-to-date 1997 Census Bureau data and therefore comply with the RFA.

12. We disagree with TeleTruth's claim that by relying on 1997 Census Bureau data in the IRFA, the Commission violates the Data Quality Act (DQA). We conclude that the IRFA's description of the ISP marketplace based on 1997 Census Bureau data was consistent with the Commission's DQA guidelines. As an initial matter, the DQA requires federal agencies to issue information quality guidelines ensuring the quality, utility, objectivity and integrity of information that they disseminate, and to provide mechanisms by which affected persons can take action to correct any errors reflected in such information. In 2002, the Commission adopted guidelines implementing the DQA stating that it is dedicated to ensuring that all data that it disseminates reflect a level of quality commensurate with the nature of the information. Specifically, these guidelines require the Commission to review and substantiate the quality of information before it is disseminated to the public and describe the administrative mechanisms allowing affected persons to seek and obtain correction of information that does not comply with the guidelines. By relying on the most recent Census Bureau data, the Commission complied with DQA guidelines as the Census Bureau is the leading source of high-quality data of the sort set forth in the IRFA—and a source on which we have consistently relied. In this regard, we note that the Census Bureau data and SBA generic small business size standards track each other precisely, as intended by both the Census Bureau and SBA. Moreover, as indicated above, we have updated this FRFA based on the recent preliminary 2002 Census Bureau Industry Series data, mitigating the concern that the data set out in the IRFA was too old to be of use in assessing the impact our conclusions might have on small entities.

13. We also reject TeleTruth's argument that the Commission violates the RFA by failing to conduct proper outreach to small businesses for purposes of compiling a comprehensive record in this proceeding. The Commission has satisfied its RFA obligation to assure that small companies were able to participate in this proceeding. Specifically, the RFA requires the Commission to “assure that small entities have been given an opportunity to participate in the rulemaking,” and proposes as example five “reasonable techniques” that an agency might employ to do so. In this proceeding, the Commission has complied with the RFA by employing several of these techniques: it (1) has published a “notice of proposed rulemaking in publications likely to be obtained by small entities”; (2) has “inclu[ded] * * * a statement that the proposed rule may have a significant economic effect on a substantial number of small entities” in the Interim Order and NPRM ; (3) has solicited comments over its computer network; and (4) has acted “to reduce the cost or complexity of participation in the rulemaking by small entities” by, among other things, facilitating electronic submission of comments.

14. We also disagree with commenters that claim that the Commission did not specifically consider the impact of eliminating UNEs on small businesses or describe alternatives to minimize any impact in the IRFA. Although the Small Business Administration Office of Advocacy (SBA Advocacy) recommends that we issue a revised IRFA to account for the impact our rules might have on small competitive LECs, we believe it is not necessary since the Interim Order and NPRM explained in detail the ruling of the D.C. Circuit in USTA II, which gave rise to this proceeding; posed specific questions to commenters regarding the proper implementation of that decision; and solicited comment from all parties. While the NPRM did not specify particular results the Commission would consider—and the IRFA therefore did not catalogue the effects that such particular results might have on small businesses—the Commission provided notice to parties regarding the range of policy outcomes that might result from this order. As indicated above, a summary of the Interim Order and NPRM was published in the Federal Register , and we believe that such publication constitutes appropriate notice to small businesses subject to this Commission's regulation. Indeed, far from discouraging small entities from participating, the Interim Order and NPRM and the associated IRFA elicited extensive comment on issues affecting small businesses. These comments have enabled us to consider the concerns of competitive LECs throughout this order. Moreover, in Part C, below, we attempt to estimate the number of competitive LECs that will be affected by the rules we adopt herein. We therefore reject arguments that small entities were prejudiced by any lack of specificity regarding specific results potentially resulting from this proceeding.

15. The RFA directs agencies to provide a description of, and, where feasible, an estimate of, the number of small entities that may be affected by the rules adopted herein. 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).

16. In this section, we further describe and estimate the number of small entity licensees and regulatees that may be affected by our action. The most reliable source of information regarding the total numbers of certain common carrier and related providers nationwide, as well as the number of commercial wireless entities, appears to be the data that the Commission publishes in its Trends in Telephone Service report. The SBA has developed small business size standards for wireline and wireless small businesses within the three commercial census categories of Wired Telecommunications Carriers, Paging, and Cellular and Other Wireless Telecommunications. Under these categories, a business is small if it has 1,500 or fewer employees. Below, using the above size standards and others, we discuss the total estimated numbers of small businesses that might be affected by our actions.

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

18. Wired Telecommunications Carriers. The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees. According to Census Bureau data for 1997, there were 2,225 firms in this category, total, that operated for the entire year. Of this total, 2,201 firms had employment of 999 or fewer employees, and an additional 24 firms had employment of 1,000 employees or more. Thus, under this size standard, the great majority of firms can be considered small.

19. Incumbent Local Exchange Carriers. Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services (LECs). The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 1,310 carriers have reported that they are engaged in the provision of incumbent local exchange services. Of these 1,310 carriers, an estimated 1,025 have 1,500 or fewer employees and 285 have more than 1,500 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by our proposed action.

20. Competitive Local Exchange Carriers, Competitive Access Providers (CAPs), “Shared-Tenant Service Providers,” and “Other Local Service Providers.” Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 563 carriers have reported that they are engaged in the provision of either CAP services or competitive LEC services. Of these 563 carriers, an estimated 472 have 1,500 or fewer employees and 91 have more than 1,500 employees. In addition, 14 carriers have reported that they are “Shared-Tenant Service Providers,” and all 14 are estimated to have 1,500 or fewer employees. In addition, 37 carriers have reported that they are “Other Local Service Providers.” Of the 37, an estimated 36 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that most providers of competitive local exchange service, competitive access providers, “Shared-Tenant Service Providers,” and “Other Local Service Providers” are small entities that may be affected by our proposed action.

21. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a small business size standard specifically for providers of interexchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 281 carriers have reported that they are engaged in the provision of interexchange service. Of these, an estimated 254 have 1,500 or fewer employees and 27 have more than 1,500 employees. Consequently, the Commission estimates that the majority of IXCs are small entities that may be affected by our proposed action.

22. Operator Service Providers (OSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for OSPs. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 23 carriers have reported that they are engaged in the provision of operator services. Of these, an estimated 22 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that the majority of OSPs are small entities that may be affected by our proposed action.

23. Prepaid Calling Card Providers. The SBA has developed a size standard for a small business within the category of Telecommunications Resellers. Under that SBA size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 32 companies reported that they were engaged in the provision of prepaid calling cards. Of these 32 companies, an estimated 31 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that the great majority of prepaid calling card providers are small entities that may be affected by the rules and policies adopted herein.

24. Other Toll Carriers. Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to “Other Toll Carriers.” This category includes toll carriers that do not fall within the categories of interexchange carriers, OSPs, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission's data, 65 companies reported that their primary telecommunications service activity was the provision of other toll services. Of these 65 companies, an estimated 62 have 1,500 or fewer employees and three have more than 1,500 employees. Consequently, the Commission estimates that most “Other Toll Carriers” are small entities that may be affected by the rules and policies adopted herein.

25. Wireless Service Providers. The SBA has developed a small business size standard for wireless firms within the two broad economic census categories of “Paging” and “Cellular and Other Wireless Telecommunications.” Under both SBA categories, a wireless business is small if it has 1,500 or fewer employees. For the census category of Paging, Census Bureau data for 1997 show that there were 1,320 firms in this category, total, that operated for the entire year. Of this total, 1,303 firms had employment of 999 or fewer employees, and an additional 17 firms had employment of 1,000 employees or more. Thus, under this category and associated small business size standard, the great majority of firms can be considered small. For the census category Cellular and Other Wireless Telecommunications, Census Bureau data for 1997 show that there were 977 firms in this category, total, that operated for the entire year. Of this total, 965 firms had employment of 999 or fewer employees, and an additional 12 firms had employment of 1,000 employees or more. Thus, under this second category and size standard, the great majority of firms can, again, be considered small.

26. Broadband PCS. The broadband PCS spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission defined “small entity” for Blocks C and F as an entity that has average gross revenues of $40 million or less in the three previous calendar years. For Block F, 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 three calendar years.” These standards defining “small entity” in the context of broadband PCS auctions have been approved by the SBA. No small businesses, within the SBA-approved small business size standards bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 small and very small business bidders won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F. On March 23, 1999, the Commission re-auctioned 347 C, D, E, and F Block licenses. There were 48 small business winning bidders. On January 26, 2001, the Commission completed the auction of 422 C and F Broadband PCS licenses in Auction No. 35. Of the 35 winning bidders in this auction, 29 qualified as “small” or “very small” businesses. Subsequent events, concerning Auction 305, including judicial and agency determinations, resulted in a total of 163 C and F Block licenses being available for grant. In addition, we note that, as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. In addition, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated.

27. Narrowband Personal Communications Services (PCS). The Commission held an auction for Narrowband PCS licenses that commenced on July 25, 1994, and closed on July 29, 1994. A second auction commenced on October 26, 1994 and closed on November 8, 1994. For purposes of the first two Narrowband PCS auctions, “small businesses” were entities with average gross revenues for the prior three calendar years of $40 million or less. Through these auctions, the Commission awarded a total of 41 licenses, 11 of which were obtained by four small businesses. To ensure meaningful participation by small business entities in future auctions, the Commission adopted a two-tiered small business size standard in the Narrowband PCS Second Report and Order. A “small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $40 million. A “very small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $15 million. The SBA has approved these small business size standards. A third auction commenced on October 3, 2001 and closed on October 16, 2001. Here, five bidders won 317 (Metropolitan Trading Areas and nationwide) licenses. Three of these claimed status as a small or very small entity and won 311 licenses.

28. 220 MHz Radio Service—Phase I Licensees. The 220 MHz service has both Phase I and Phase II licenses. Phase I licensing was conducted by lotteries in 1992 and 1993. There are approximately 1,515 such non-nationwide licensees and four nationwide licensees currently authorized to operate in the 220 MHz band. The Commission has not developed a definition of small entities specifically applicable to such incumbent 220 MHz Phase I licensees. To estimate the number of such licensees that are small businesses, we apply the small business size standard under the SBA rules applicable to “Cellular and Other Wireless Telecommunications” companies. This category provides that a small business is a wireless company employing no more than 1,500 persons. According to the Census Bureau data for 1997, only twelve firms out of a total of 1,238 such firms that operated for the entire year in 1997, had 1,000 or more employees. If this general ratio continues in the context of Phase I 220 MHz licensees, the Commission estimates that nearly all such licensees are small businesses under the SBA's small business standard.

29. 220 MHz Radio Service—Phase II Licensees. The 220 MHz service has both Phase I and Phase II licenses. The Phase II 220 MHz service is a new service, and is subject to spectrum auctions. In the 220 MHz Third Report and Order, we adopted a small business size standard for defining “small” and “very small” businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. This small business standard indicates that a “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. A “very small business” is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that do not exceed $3 million for the preceding three years. The SBA has approved these small size standards. Auctions of Phase II licenses commenced on September 15, 1998, and closed on October 22, 1998. In the first auction, 908 licenses were auctioned in three different-sized geographic areas: three nationwide licenses, 30 Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693 were sold. Thirty-nine small businesses won 373 licenses in the first 220 MHz auction. A second auction included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies claiming small business status won 158 licenses. A third auction included four licenses: 2 BEA licenses and 2 EAG licenses in the 220 MHz Service. No small or very small business won any of these licenses.

30. Specialized Mobile Radio. The Commission awards “small entity” bidding credits in auctions for Specialized Mobile Radio (SMR) geographic area licenses in the 800 MHz and 900 MHz bands to firms that had revenues of no more than $15 million in each of the three previous calendar years. The Commission awards “very small entity” bidding credits to firms that had revenues of no more than $3 million in each of the three previous calendar years. The SBA has approved these small business size standards for the 900 MHz Service. The Commission has held auctions for geographic area licenses in the 800 MHz and 900 MHz bands. The 900 MHz SMR auction began on December 5, 1995, and closed on April 15, 1996. Sixty bidders claiming that they qualified as small businesses under the $15 million size standard won 263 geographic area licenses in the 900 MHz SMR band. The 800 MHz SMR auction for the upper 200 channels began on October 28, 1997, and was completed on December 8, 1997. Ten bidders claiming that they qualified as small businesses under the $15 million size standard won 38 geographic area licenses for the upper 200 channels in the 800 MHz SMR band. A second auction for the 800 MHz band was held on January 10, 2002 and closed on January 17, 2002 and included 23 BEA licenses. One bidder claiming small business status won five licenses.

31. Common Carrier Paging. The SBA has developed a small business size standard for wireless firms within the broad economic census categories of “Cellular and Other Wireless Telecommunications.” Under this SBA category, a wireless business is small if it has 1,500 or fewer employees. For the census category of Paging, Census Bureau data for 1997 show that there were 1,320 firms in this category, total, that operated for the entire year. Of this total, 1,303 firms had employment of 999 or fewer employees, and an additional 17 firms had employment of 1,000 employees or more. Thus, under this category and associated small business size standard, the great majority of firms can be considered small.

32. In the Paging Second Report and Order, the Commission adopted a size standard for “small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A small business is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. The SBA has approved this definition. An auction of Metropolitan Economic Area (MEA) licenses commenced on February 24, 2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985 were sold. Fifty-seven companies claiming small business status won 440 licenses. An auction of MEA and Economic Area (EA) licenses commenced on October 30, 2001, and closed on December 5, 2001. Of the 15,514 licenses auctioned, 5,323 were sold. One hundred thirty-two companies claiming small business status purchased 3,724 licenses. A third auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses in all but three of the 51 MEAs commenced on May 13, 2003, and closed on May 28, 2003. Seventy-seven bidders claiming small or very small business status won 2,093 licenses. Currently, there are approximately 74,000 Common Carrier Paging licenses. According to the most recent Trends in Telephone Service, 379 private and common carriers reported that they were engaged in the provision of either paging or “other mobile” services. Of these, we estimate that 373 are small, under the SBA-approved small business size standard. We estimate that the majority of common carrier paging providers would qualify as small entities under the SBA definition.

33. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, we adopted size standards for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A small business in this service is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years. Additionally, a very small business is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. SBA approval of these definitions is not required. An auction of 52 Major Economic Area (MEA) licenses commenced on September 6, 2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 96 licenses were sold to nine bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of 700 MHz Guard Band licenses commenced on February 13, 2001, and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses.

34. Rural Radiotelephone Service. The Commission has not adopted a size standard for small businesses specific to the Rural Radiotelephone Service. A significant subset of the Rural Radiotelephone Service is the BETRS. The Commission uses the SBA's small business size standard applicable to “Cellular and Other Wireless Telecommunications,” i.e. , an entity employing no more than 1,500 persons. There are approximately 1,000 licensees in the Rural Radiotelephone Service, and the Commission estimates that there are 1,000 or fewer small entity licensees in the Rural Radiotelephone Service that may be affected by the rules and policies adopted herein.

35. Air-Ground Radiotelephone Service. The Commission has not adopted a small business size standard specific to the Air-Ground Radiotelephone Service. We will use SBA's small business size standard applicable to “Cellular and Other Wireless Telecommunications,” i.e. , an entity employing no more than 1,500 persons. There are approximately 100 licensees in the Air-Ground Radiotelephone Service, and we estimate that almost all of them qualify as small under the SBA small business size standard.

36. Aviation and Marine Radio Services. Small businesses in the aviation and marine radio services use a very high frequency (VHF) marine or aircraft radio and, as appropriate, an emergency position-indicating radio beacon (and/or radar) or an emergency locator transmitter. The Commission has not developed a small business size standard specifically applicable to these small businesses. For purposes of this analysis, the Commission uses the SBA small business size standard for the category “Cellular and Other Telecommunications,” which is 1,500 or fewer employees. Most applicants for recreational licenses are individuals. Approximately 581,000 ship station licensees and 131,000 aircraft station licensees operate domestically and are not subject to the radio carriage requirements of any statute or treaty. For purposes of our evaluations in this analysis, we estimate that there are up to approximately 712,000 licensees that are small businesses (or individuals) under the SBA standard. In addition, between December 3, 1998 and December 14, 1998, the Commission held an auction of 42 VHF Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz (coast transmit) bands. For purposes of the auction, the Commission defined a “small” business as an entity that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not to exceed $15 million dollars. In addition, a “very small” business is one that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not to exceed $3 million dollars. There are approximately 10,672 licensees in the Marine Coast Service, and the Commission estimates that almost all of them qualify as “small” businesses under the above special small business size standards.

37. Fixed Microwave Services. Fixed microwave services include common carrier, private operational-fixed, and broadcast auxiliary radio services. At present, there are approximately 22,015 common carrier fixed licensees and 61,670 private operational-fixed licensees and broadcast auxiliary radio licensees in the microwave services. The Commission has not created a size standard for a small business specifically with respect to fixed microwave services. For purposes of this analysis, the Commission uses the SBA small business size standard for the category “Cellular and Other Telecommunications,” which is 1,500 or fewer employees. The Commission does not have data specifying the number of these licensees that have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of fixed microwave service licensees that would qualify as small business concerns under the SBA's small business size standard. Consequently, the Commission estimates that there are up to 22,015 common carrier fixed licensees and up to 61,670 private operational-fixed licensees and broadcast auxiliary radio licensees in the microwave services that may be small and may be affected by the rules and policies proposed herein. We noted, however, that the common carrier microwave fixed licensee category includes some large entities.

38. Offshore Radiotelephone Service. This service operates on several ultra high frequencies (UHF) television broadcast channels that are not used for television broadcasting in the coastal areas of states bordering the Gulf of Mexico. There are presently approximately 55 licensees in this service. We are unable to estimate at this time the number of licensees that would qualify as small under the SBA's small business size standard for “Cellular and Other Wireless Telecommunications” services. Under that SBA small business size standard, a business is small if it has 1,500 or fewer employees.

39. Wireless Communications Services. This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (WCS) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these definitions. The Commission auctioned geographic area licenses in the WCS service. In the auction, which commenced on April 15, 1997 and closed on April 25, 1997, there were seven bidders that won 31 licenses that qualified as very small business entities, and one bidder that won one license that qualified as a small business entity. An auction for one license in the 1670-1674 MHz band commenced on April 30, 2003 and closed the same day. One license was awarded. The winning bidder was not a small entity.

40. 39 GHz Service. The Commission created a special small business size standard for 39 GHz licenses—an entity that has average gross revenues of $40 million or less in the three previous calendar years. An additional size standard for “very small business” is: an entity that, together with affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. The SBA has approved these small business size standards. The auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The 18 bidders who claimed small business status won 849 licenses. Consequently, the Commission estimates that 18 or fewer 39 GHz licensees are small entities that may be affected by the rules and policies proposed herein.

41. Multipoint Distribution Service, Multichannel Multipoint Distribution Service, and Instructional Television Fixed Service. Multichannel Multipoint Distribution Service (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). In connection with the 1996 MDS auction, the Commission defined “small business” as an entity that, together with its affiliates, has average gross annual revenues that are not more than $40 million for the preceding three calendar years. The SBA has approved of this standard. The MDS auction resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 auction winners, 61 claimed status as a small business. At this time, we estimate that of the 61 small business MDS auction winners, 48 remain small business licensees. In addition to the 48 small businesses that hold BTA authorizations, there are approximately 392 incumbent MDS licensees that have gross revenues that are not more than $40 million and are thus considered small entities.

42. In addition, the SBA has developed a small business size standard for Cable and Other Program Distribution, which includes all such companies generating $12.5 million or less in annual receipts. According to Census Bureau data for 1997, there were a total of 1,311 firms in this category, total, that had operated for the entire year. Of this total, 1,180 firms had annual receipts of under $10 million, and an additional 52 firms had receipts of $10 million or more but less than $25 million. Consequently, we estimate that the majority of providers in this service category are small businesses that may be affected by the proposed rules and policies.

43. Finally, while SBA approval for a Commission-defined small business size standard applicable to ITFS is pending, educational institutions are included in this analysis as small entities. There are currently 2,032 ITFS licensees, and all but 100 of these licenses are held by educational institutions. Thus, we tentatively conclude that at least 1,932 ITFS licensees are small businesses.

44. Local Multipoint Distribution Service. Local Multipoint Distribution Service (LMDS) is a fixed broadband point-to-multipoint microwave service that provides for two-way video telecommunications. The auction of the 986 Local Multipoint Distribution Service (LMDS) licenses began on February 18, 1998 and closed on March 25, 1998. The Commission established a small business size standard for LMDS licenses as an entity that has average gross revenues of less than $40 million in the three previous calendar years. An additional small business size standard for “very small business” was added as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. The SBA has approved these small business size standards in the context of LMDS auctions. 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 32 small and very small business winners that won 119 licenses.

45. 218-219 MHz Service. The first auction of 218-219 MHz (previously referred to as the Interactive and Video Data Service or IVDS) spectrum resulted in 178 entities winning licenses for 594 Metropolitan Statistical Areas (MSAs). Of the 594 licenses, 567 were won by 167 entities qualifying as a small business. For that auction, we defined a small business as an entity that, together with its affiliates, has no more than a $6 million net worth and, after federal income taxes (excluding any carry over losses), has no more than $2 million in annual profits each year for the previous two years. In the 218-219 MHz Report and Order and Memorandum Opinion and Order, we defined a small business as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and their affiliates, has average annual gross revenues not exceeding $15 million for the preceding three years. A very small business is defined as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and its affiliates, has average annual gross revenues not exceeding $3 million for the preceding three years. The SBA has approved of these definitions. At this time, we cannot estimate the number of licenses that will be won by entities qualifying as small or very small businesses under our rules in future auctions of 218-219 MHz spectrum. Given the success of small businesses in the previous auction, and the prevalence of small businesses in the subscription television services and message communications industries, we assume for purposes of this analysis that in future auctions, many, and perhaps all, of the licenses may be awarded to small businesses.

46. Incumbent 24 GHz Licensees. This analysis may affect incumbent licensees who were relocated to the 24 GHz band from the 18 GHz band, and applicants who wish to provide services in the 24 GHz band. The applicable SBA small business size standard is that of “Cellular and Other Wireless Telecommunications” companies. This category provides that such a company is small if it employs no more than 1,500 persons. According to Census Bureau data for 1997, there were 977 firms in this category, total, that operated for the entire year. Of this total, 965 firms had employment of 999 or fewer employees, and an additional 12 firms had employment of 1,000 employees or more. Thus, under this size standard, the great majority of firms can be considered small. These broader Census data notwithstanding, we believe that there are only two licensees in the 24 GHz band that were relocated from the 18 GHz band, Teligent and TRW, Inc. It is our understanding that Teligent and its related companies have less than 1,500 employees, though this may change in the future. TRW is not a small entity. Thus, only one incumbent licensee in the 24 GHz band is a small business entity.

47. Future 24 GHz Licensees. With respect to new applicants in the 24 GHz band, we have defined “small business” as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the three preceding years not exceeding $15 million. “Very small business” in the 24 GHz band is defined as an entity that, together with controlling interests and affiliates, has average gross revenues not exceeding $3 million for the preceding three years. The SBA has approved these definitions. The Commission will not know how many licensees will be small or very small businesses until the auction, if required, is held.

48. Internet Service Providers. While ISPs are only indirectly affected by our present actions, and ISPs are therefore not formally included within this present FRFA, we have addressed them informally to create a fuller record and to recognize their participation in this proceeding. The SBA has developed a small business size standard for ISPs. This category comprises establishments “primarily engaged in providing direct access through telecommunications networks to computer-held information compiled or published by others.” Under the SBA size standard, such a business is small if it has average annual receipts of $21 million or less. According to Census Bureau data for 1997, there were 2,751 firms in this category that operated for the entire year. Of these, 2,659 firms had annual receipts of under $10 million, and an additional 67 firms had receipts of between $10 million and $24,999,999. Thus, under this size standard, the great majority of firms can be considered small entities.

49. Pursuant to sections 251(c) and (d) of the Act, incumbent LECs, including those that qualify as small entities, are required to provide nondiscriminatory access to UNEs to requesting telecommunications carriers in certain circumstances. In this Order, we modify our unbundling rules, as described above. Specifically, we conclude, except as set forth in other Commission orders, that requesting carriers: (1) Shall be afforded unbundled access to DS1-capacity dedicated transport except on routes connecting a pair of wire centers, where both wire centers contain at least four fiber-based collocators or at least 38,000 business access lines; (2) shall be afforded unbundled access to DS3-capacity dedicated transport except on routes connecting a pair of wire centers, each of which contains at least three fiber-based collocators or at least 24,000 business lines; (3) shall be afforded unbundled access to dark fiber dedicated transport except on routes connecting a pair of wire centers, each of which contains at least three fiber-based collocators or at least 24,000 business lines; (4) shall not be afforded unbundled access to entrance facilities in any instance; (5) shall be afforded unbundled access to DS1-capacity loops except in any building within the service area of wire centers with 60,000 or more business lines and 4 or more fiber-based collocators; (6) shall be afforded unbundled access to DS3-capacity loops except in any building within the service area of wire centers with 38,000 or more business lines and 4 or more fiber-based collocators; (7) shall not be afforded unbundled access to dark fiber loops in any instance; and (8) shall not be afforded unbundled access to mass market local circuit switching in any instance. We also set forth specific transition plans to govern competitive carriers' migration from UNEs to alternative arrangements, where necessary. The various compliance requirements contained in this Order will require the use of engineering, technical, operational, accounting, billing, and legal skills. The carriers that are affected by these requirements already possess these skills.

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

51. In this Order, we adopt rules implementing section 251(c)(3) of the Communications Act, which requires that incumbent LECs make elements of their networks available on an unbundled basis to new entrants at cost-based rates, pursuant to standards set out in section 251(d)(2). As noted above, these rules respond to the D.C. Circuit's decision in USTA II. Particularly, we focus on those items that the court remanded for our consideration. Our actions will affect both telecommunications carriers that request access to UNEs and the incumbent LECs that must provide access to UNEs under section 251(c)(3).

52. In arriving at the conclusions described above, the Commission considered various alternatives, which it rejected or accepted for the reasons set forth in the body of this Order, and made certain changes to the rules to reduce undue regulatory burdens, consistent with the Communications Act and with guidance received from the courts. These efforts to reduce regulatory burden will affect both large and small carriers. The significant alternatives that commenters discussed and that we considered are as follows.

53. Reasonably Efficient Competitor. In this Order, we clarify that, in assessing impairment pursuant to the standard set forth in the Triennial Review Order, we presume a reasonably efficient competitor. Specifically, we presume that a requesting carrier will use reasonably efficient technology and we consider all the revenue opportunities that such a competitor can reasonably expect to gain over the facilities, taking into account limitations on entrants' ability to provide multiple services. This clarification, we conclude, will encourage facilities-based competitors, including small businesses, to deploy efficient technologies so as to maximize quality of service and minimize costs. Thus, while we recognize that our approach might prevent inefficient small entities from using UNEs to compete ( i.e. , in those cases where a reasonably efficient small entity would not require access to UNEs), we believe that the alternative approach, which would reward inefficiency and produce overbroad unbundling rules, would be inconsistent with the Communications Act.

54. Service Considerations. In response to the USTA II court's guidance, we revise our approach to unbundling for the exclusive provision of long distance and mobile wireless services. Specifically, we abandon the “qualifying services” approach set forth in the Triennial Review Order, which limited the section 251(d)(2) inquiry to a subset of telecommunications services and which was rejected by the D.C. Circuit. Based on the record, the court's guidance, and the Commission's previous findings, we find that the mobile wireless services market and long distance services market are markets where competition has evolved without access to UNEs. We have therefore determined, pursuant to our “at a minimum” authority to consider factors other than impairment when assessing unbundling obligations, to prohibit access to UNEs for exclusive provision of service to those markets. We also considered, but declined to adopt, an approach also barring use of UNEs for provision of other services specified in the Act—namely, telephone exchange service and exchange access service, the two services LECs provide. We recognize that the use restrictions adopted in this Order may prevent small providers of mobile wireless and long distance service from using UNEs to compete. We conclude, however, that given the court's guidance, and the generally competitive state of the mobile wireless and long distance markets, the benefits associated with unbundling would not be commensurate with the costs imposed on incumbent LECs, and would potentially depress deployment of new facilities that would ultimately redound to the benefit of all carriers and end-user customers of every size.

55. Reasonable Inferences. In this Order, we adopt an approach that relies, to a far greater degree than our previous analyses, on the inferences that can be drawn from one market regarding the prospects for competitive entry in another. As described in detail in the Order, we rely, where possible, on correlations between business line counts and/or fiber collocations in a particular wire center, on the one hand, and the deployment of competitive dedicated transport or high-capacity loops, on the other. We have considered and rejected the alternative of relying only actual deployment in assessing unbundling obligations. As described more fully in the Order, we have concluded that the “actual deployment” approach would be impracticable to administer, would be inconsistent with the USTA II decision, and would overstate requesting carriers' UNE needs.

56. Relevance of Tariffed Alternatives. In this Order, we address the relevance of special access tariffed offerings to the unbundling inquiry in the local exchange markets where we find UNE access to be appropriate. We find that statutory concerns, administrability concerns, and concerns about anticompetitive price squeeze preclude a rule foreclosing UNE access when carriers are able to compete using special access or other tariffed alternatives. We also find that a competitor's current use of special access does not, on its own, demonstrate that that carrier is not impaired without access to UNEs. We note that to reach a different result would be inconsistent with the Act's text and its interpretation by various courts, would be impracticable, and would create a significant risk of abuse by incumbent LECs. This decision is consistent with the interests of many small businesses, who claim, for example, that they cannot compete against incumbent LECs in the local exchange markets using tariffed alternatives to UNEs.

57. Dedicated Transport. In this Order, we limit unbundled access to dedicated transport to those routes on which competitive deployment at a particular capacity level is not economic. Specifically, we find that competing carriers are impaired without access to DS1 transport except on routes connecting a pair of wire centers, where both wire centers contain at least four fiber-based collocators or at least 38,000 business access lines, and that competing carriers are impaired without access to DS3 or dark fiber transport except on routes connecting a pair of wire centers, each of which contains at least three fiber-based collocators or at least 24,000 business lines. Finally, we find that competing carriers are not impaired without access to entrance facilities connecting an incumbent LEC's network with a competitive LEC's network in any instance.

58. In reaching our decisions concerning dedicated transport, we considered the comments by small competitive LECs, which generally sought broader unbundled access to dedicated transport links. We rejected these arguments, finding that they failed to account adequately for the prospects of competitive deployment and for the advantages held out by such deployment, where feasible, for consumers and carriers alike. Similarly, we also rejected a “matched pair” approach that would require the existence of actual competitive transport links (whether direct or indirect) before relieving an incumbent's unbundling obligations, because that approach failed to draw reasonable inferences regarding potential deployment. Alternatively, we also considered and rejected arguments that we should employ higher business line and fiber-based collocator thresholds in assessing impairment. While these higher thresholds might have minimized unbundling obligations and thus benefited small (and large) incumbent LECs, we believed that higher thresholds would understate the need for unbundling, and would prohibit UNE access on routes where competitive deployment was not economic. Finally, we considered but rejected alternative proposals to adopt conclusions regarding transport that would apply to entire MSAs. A single MSA can encompass urban, suburban, and rural areas, each of which presents different challenges to competitive LECs seeking to self-deploy facilities. Thus, while we recognize that MSA-wide determinations might confer administrability-related efficiencies on small entities, we believe that our more specific route-based approach is also easily administered, and permits a greater degree of nuance in assessing unbundling obligations.

59. High-Capacity Loops. We find that competitive LECs are impaired without access to DS3-capacity loops except in any building within the service area of a wire center containing 38,000 or more business lines and 4 or more fiber-based collocators. Furthermore, competitive LECs are impaired without access to DS1-capacity loops except in any building within the service area of a wire center containing 60,000 or more business lines and 4 or more fiber-based collocators. Finally, we determine that competitive LECs are not impaired without access to dark fiber loops in any instance.

60. As with dedicated transport, we have considered and rejected proposals to adopt either more restrictive or less restrictive unbundling rules, which we recognize might benefit small incumbent LECs or small competitive LECs, respectively. For reasons explained in the Order, we believe our choice of thresholds properly assesses the prospects for competitive duplication of loops at the DS1 and DS3 capacity, incorporating reasonable inferences regarding potential deployment of such facilities from the areas in which competitors actually have deployed high-capacity loops. We have also considered, and rejected as unadministrable, a building-specific approach to loop impairment. While the building-specific approach might allow more nuance than the approach we have chosen, we believe that it would be impracticable to administer, and would invite protracted conflict between carriers as to whether or not unbundling was permitted in each particular building. Such disputes would benefit no party, and might in fact impose disproportionate costs on small incumbent LECs and competitive LECs. Finally, we have considered, and rejected, proposals that we evaluate impairment for high-capacity loops not by wire center, but by broader geographic areas, such as MSAs. As noted above, a single MSA can encompass wide areas presenting a range of topographies and customer densities, and thus a variety of distinct circumstances with regard to the prospects for competitive deployment. As explained in the Order, we believe that our wire-center approach to evaluating impairment with regard to high-capacity loops strikes the proper balance between administrability and case-specificity.

61. Mass Market Local Circuit Switching. We find that incumbent LECs have no obligation to provide competitive LECs with unbundled access to mass market local circuit switching. Many commenters suggested a variety of alternatives to this rule, several of which were intended to mitigate the rule's effect on small competitive LECs. Specifically, we considered and rejected arguments that small competitive LECs are impaired in specific circumstances due to unique characteristics of the particular customer markets or geographic markets they seek to serve or because of the competitive carrier's size. For instance, some commenters argued that competitive LECs are uniquely impaired when seeking to serve rural areas. We concluded that these commenters' claims were at odds with our impairment standard, which evaluates impairment based on a “reasonably efficient competitor,” not based on the individualized circumstances of a particular requesting carrier, and “consider[s] all the revenue opportunities that such a competitor can reasonably expect to gain over the facilities, from providing all possible services that an entrant could reasonably expect to sell.” Moreover, to the extent that small competitive LECs are harmed by our decision not to permit unbundled access to mass market local circuit switching, we believe that the attendant increase in incentives to deploy facilities justify a bar on unbundling even where the competitive carrier might be “impaired,” and thus believe it is appropriate to invoke our “at a minimum” authority to prohibit unbundling in these cases. Although we recognize that some small carriers might find it more difficult to compete without unbundled access to switching, we believe that the corresponding increase in deployment incentives—for incumbent LECs and competitive LECs alike—justifies our approach here.

62. We have also considered comments that ask the Commission to minimize the impact of our decision on small businesses by imposing particular requirements regarding the incumbent LEC hot cut process. However, as explained above, the record demonstrates that the incumbent LECs from whom competitive carriers are receiving unbundled switching in almost all cases— i.e. , the BOCs—have a record of providing hot cuts on a timely basis and have made significant improvements in their hot cut processes that should enable them to perform larger volumes of hot cuts to the extent necessary. We believe that the improvements in the hot cut process will ultimately benefit small businesses and should ensure a smooth transition away from mass market switching UNEs.

63. Transition Plans. The Order also sets out transition plans to govern the migration away from UNEs where a particular element is no longer available on an unbundled basis. We have considered various comments indicating that many small businesses have built their business plans on the basis of continued access to UNEs and have worked to ensure that the transition plans will give competing carriers a sufficient opportunity to transition to alternative facilities or arrangements. This alternative represents a reasonable accommodation for small entities and others, which we believe will ultimately result in an orderly and efficient transition. Therefore, as set forth in the Order, we have adopted plans to retain unbundled access to dark fiber loops and dark fiber dedicated transport for 18 months, at rates somewhat higher than those at which a carrier had access to those UNEs on June 15, 2004, and to retain unbundled access to DS1 loops, DS3 loops, DS1 dedicated transport, DS3 dedicated transport, and mass market local circuit switching for 12 months, again at rates somewhat higher than those at which a carrier had access to those UNEs on June 15, 2004. We believe that these plans offer sufficient time in which a competitive LEC can determine which specific arrangements must be transitioned and establish alternative means of serving customers currently served using those arrangements. We therefore reject proposals that we adopt longer transitions, which we believe would be unnecessary and therefore inappropriate in the face of a Commission declining to unbundle the element at issue.

64. The Commission will send a copy of the Order, including this FRFA, in a report to be sent to Congress and the Comptroller General pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Order, including this FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. In addition, the Report and Order including the FRFA (or summaries thereof) will be published in the Federal Register .

65. This document does not contain proposed information collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified “information collection burden for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

66. Accordingly, it is ordered that pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 157 nt, the Order on Remand in CC Docket No. 01-338 and WC Docket No. 04-313 is adopted, and that part 51 of the Commission's Rules, 47 CFR part 51, is amended as set forth in the rule changes. The requirements of this Order shall become effective on March 11, 2005, pursuant to 5 U.S.C. 553(d)(3).

67. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Emergency Joint Petition for Stay filed in CC Docket Nos. 01-338, 96-98 and 98-147 by the Coalition for High-Speed Online Internet Competition and Enterprise on August 27, 2003; the Joint Petition for Stay filed in CC Docket Nos. 01-338, 96-98 and 98-147 by BellSouth Corporation, Qwest Communications International, Inc., SBC Communications Inc., the United States Telecom Association, and the Verizon telephone companies on September 4, 2003; the Emergency Petition for Stay filed in CC Docket Nos. 01-338, 96-98 and 98-147 by Sage Telecom, Inc. on September 22, 2003; the Emergency Stay Petition filed in CC Docket Nos. 01-338, 96-98 and 98-147 by DCSI Corporation et al. on September 22, 2003; the Emergency Petition for Stay filed in CC Docket Nos. 01-338, 96-98 and 98-147 by NuVox Communications, Inc. on September 25, 2003; and the Petition for Emergency Stay filed in CC Docket Nos. 01-338, 96-98 and 98-147 by Allegiance Telecom, Inc., Cbeyond Communications, LLC, El Paso Global Networks, Focal Communications Corporation, McLeodUSA Telecommunications Services, Inc., Mpower Communications Corp. and TDS Metrocom, LLC on September 26, 2003 are dismissed as moot.

68. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Petition for Clarification or Reconsideration filed in CC Docket Nos. 01-338, 96-98 and 98-147 by AT&T Wireless on October 2, 2003; the Petition for Reconsideration or Clarification filed in CC Docket Nos. 01-338, 96-98 and 98-147 by the Cellular Telecommunications & Internet Association on October 2, 2003; the Petition for Reconsideration or Clarification filed in CC Docket Nos. 01-338, 96-98 and 98-147 by Nextel Communications, Inc. on October 2, 2003; and the Petition for Reconsideration filed in CC Docket Nos. 01-338, 96-98 and 98-147 by T-Mobile USA, Inc. on October 2, 2003 are dismissed as moot.

69. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Petition for Reconsideration filed in CC Docket Nos. 01-338, 96-98 and 98-147 by the National Association of State Utility Consumer Advocates (NASUCA) on October 2, 2003 is dismissed as moot.

70. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Petition for Clarification and/or Partial Reconsideration filed in CC Docket Nos. 01-338, 96-98 and 98-147 by BellSouth Corporation on October 2, 2003 is dismissed as moot to the extent indicated herein.

71. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Petition for Reconsideration filed in CC Docket No. 01-338 by TSI Telecommunication Services, Inc. on October 3, 2003 is dismissed as moot.

72. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Petition for Waiver filed in CC Docket Nos. 01-338, 96-98 and 98-147 by the Telecommunications Regulatory Board of Puerto Rico on December 30, 2003 is dismissed.

73. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Petition for Waiver filed in CC Docket Nos. 01-338, 96-98 and 98-147 by BellSouth Corporation on February 11, 2004 is dismissed as moot.

74. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Petition for Rulemaking filed by Qwest Communications International, Inc. on March 29, 2004 is dismissed as moot.

75. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Petition for Emergency Clarification and/or Errata filed in WC Docket No. 04-313 and CC Docket No. 01-338 by the Association for Local Telecommunications Services, Alpheus Communications, LP, Cbeyond Communications, LLC, Conversent Communications, LLC, GlobalCom, Inc., Mpower Communications Corp., New Edge Networks, Inc., OneEighty Communications, Inc., TDS Metrocom, LLC on August 27, 2004 is dismissed as moot.

76. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that the Emergency Petition for Expedited Determination that Competitive Local Exchange Carriers are Impaired Without DS1 UNE Loops filed in WC Docket No. 04-313 and CC Docket No. 01-338 by XO Communications, Inc. on September 29, 2004 is denied.

77. It is further ordered, pursuant to sections 1, 3, 4, 201-205, 251, 252, 256, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 153, 154, 201-205, 251, 252, 256, 303(r) and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt, that as of the effective date of this Order, the interim period described in the Interim Order and NPRM, WC Docket No. 01-338 and CC Docket No. 01-338, and all requirements associated with that period, shall terminate and be superseded by the transition periods described in this Order.

78. It is further ordered, that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Order on Remand , including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

This is a synopsis of the Commission's Report and Order, MM Docket No. 02-63, adopted February 2, 2005, and released February 4, 2005. The full text of this Commission decision is available for inspection and copying during regular business hours at the FCC's Reference Information Center, Portals II, 445 Twelfth Street, SW., Room CY-A257, Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160 or http://www.BCPIWEB.com. The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

On March 25, 2003, the Research and Special Programs Administration (RSPA, the predecessor agency of the Pipeline and Hazardous Materials Safety Administration (PHMSA)) published a final rule under this docket (68 FR 14341) amending the Hazardous Materials Regulations (HMR) to require an aircraft operator to: (1) Place on the notification of pilot-in-command (NOPC) or in the cockpit of the aircraft a telephone number that can be contacted during an in-flight emergency to obtain information about any hazardous materials aboard the aircraft; (2) retain and provide upon request a copy of the NOPC, or the information contained in it, at the aircraft operator's principal place of business, or the airport of departure, for 90 days, and at the airport of departure until the flight leg is completed; and (3) make readily accessible, and provide upon request, a copy of the NOPC, or the information contained in it, at the planned airport of arrival until the flight leg is completed. The March 25, 2003, rule which became effective October 1, 2003, required compliance on October 1, 2004.

On June 22, 2004, the Air Transport Association (ATA) requested that RSPA extend the compliance date from October 1, 2004, to April 1, 2005, to allow its member air carriers additional time to prepare for and implement these new requirements. In response to this request, RSPA published an interim final rule (IFR) on September 1, 2004, delaying the compliance date to April 1, 2005. We invited interested parties to participate in this rulemaking by submitting comments on the IFR.

We received two comments. Neither comment addressed the issue of delayed compliance discussed in this IFR. One commenter submitted comments dealing with issues discussed in the NPRM; the other commenter questioned the length of the retention period for the NOPC ( see § 175.33(c)) in comparison to the retention period for shipping papers in § 172.201. Both comments are outside the scope of this rulemaking, and are not addressed here. PHMSA is adopting the amendments as presented in the IFR.

This interim final rule is published under the authority of Federal hazardous materials transportation law (Federal hazmat law; 49 U.S.C. 5101 et seq. ) and 49 U.S.C. 44701. Section 5103(b) of Federal hazmat law authorizes the Secretary of Transportation to prescribe regulations for the safe transportation, including security, of hazardous material in intrastate, interstate, and foreign commerce. Title 49 United States Code § 44701 authorizes the Administrator of the Federal Aviation Administration to promote safe flight of civil aircraft in air commerce by prescribing regulations and minimum standards for practices, methods, and procedures the Administrator finds necessary for safety in air commerce and national security. Under 49 U.S.C. 40113, the Secretary of Transportation has the same authority to regulate the transportation of hazardous material by air, in carrying out § 44701, that he has under 49 U.S.C. 5103.

This final rule is not a significant regulatory action under section 3(f) of Executive Order 12866 and was not reviewed by the Office of Management and Budget (OMB). This final rule is not considered significant under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034). This final rule adopts without change a compliance date adopted in an interim final rule published on September 1, 2004. The compliance date extension adopted in this final rule does not alter the cost-benefit analysis and conclusions contained in the Regulatory Evaluation prepared for the March 25, 2003, final rule.

This final rule was analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This rulemaking preempts State, local and Indian tribe requirements but does not impose any regulation that has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

Federal hazardous material transportation law, 49 U.S.C. 5101-5127, contains an express preemption provision (49 U.S.C. 5125(b)) preempting State, local, and Indian tribe requirements on the following subjects:

(1) The designation, description, and classification of hazardous material;

(2) The packing, repacking, handling, labeling, marking, and placarding of hazardous material;

(3) The preparation, execution, and use of shipping documents related to hazardous material and requirements related to the number, contents, and placement of those documents;

(4) The written notification, recording, and reporting of the unintentional release in transportation of hazardous material; or

(5) The design, manufacture, fabrication, marking, maintenance, reconditioning, repair, or testing of a packaging or container represented, marked, certified, or sold as qualified for use in transporting hazardous material.

This final rule addresses subject item (3) above and preempts State, local, or Indian tribe requirements not meeting the “substantively the same” standard. Federal hazardous materials transportation law provides at 49 U.S.C. 5125(b)(2) that, if PHMSA issues a regulation concerning any of the covered subjects, PHMSA must determine and publish in the Federal Register the effective date of Federal preemption. The effective date may not be earlier than the 90th day following the date of issuance of this final rule and not later than two years after the date of issuance. This final rule does not change the effective date of Federal preemption of the March 25, 2003, final rule, which was October 1, 2003.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”). Because this final rule does not have tribal implications, does not impose substantial direct compliance costs on Indian tribal governments, and does not preempt tribal law, the funding and consultation requirements of Executive Order 13175 do not apply.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires an agency to review regulations to assess their impact on small entities. An agency must conduct a regulatory flexibility analysis unless it determines and certifies that a rule is not expected to have a significant impact on a substantial number of small entities. This final rule applies to businesses, some of whom are small entities, that transport hazardous materials by air. This final rule provides an extension of the compliance date for notification and record retention requirements for air carriers. The compliance date extension assures that air carriers have sufficient time to reprogram their systems to meet the new requirements, test the reprogrammed system, develop training materials and train their employees. Therefore, I certify this rule will not have a significant economic impact on a substantial number of small entities.

This final rule has been developed in accordance with Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”) and DOT's procedures and policies to promote compliance with the Regulatory Flexibility Act to ensure that potential impacts of draft rules on small entities are properly considered.

This final rule does not impose new information collection requirements. We currently have an approved information collection under OMB No. 2137-0034, “Hazardous Materials Shipping Papers & Emergency Response Information.” The March 25, 2003, final rule resulted in an increase in the annual paperwork burden and costs. These revisions regarding the maintenance of copies of notification of pilot-in-command were submitted under the NPRM to OMB for review and approval.

PHMSA estimated that the new total information collection and recordkeeping burden for OMB No. 2137-034 would be as follows: “Hazardous Materials Shipping Papers & Emergency Response Information” OMB No. 2137-0034.

Total Annual Number of Respondents: 250,000.

Total Annual Responses: 260,000,000.

Total Annual Burden Hours: 6,523,611.

Total Annual Burden Cost: $6,925,000.

Under the Paperwork Reduction Act of 1995, no person is required to respond to a collection of information unless it displays a valid OMB control number. OMB approved the revised information collection requirement on February 27, 2003.

A regulation identifier 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 number contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

This final rule does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It does not result in costs of $120.7 million or more, in the aggregate, to any of the following: State, local or tribal governments, or to the private sector.

This final rule will improve emergency response to hazardous materials incidents involving aircraft by ensuring information on the hazardous materials involved in an emergency is readily available. Improving emergency response to aircraft incidents will reduce environmental damage associated with such incidents. There are no significant environmental impacts associated with this final rule.

Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the document (or signing the document, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000, (65 FR 19477) or you may visit http://dms.dot.gov .

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

The 2005 Pacific cod interim TAC specified for catcher/processor vessels using hook-and-line gear in the BSAI is established as a directed fishing allowance of 44,695 metric tons by the 2005 interim harvest specifications for groundfish in the BSAI (69 FR 76870, December 23, 2004). See § 679.20(c)(2)(ii)(A), § 679.20(c)(5), and § 679.20(a)(7)(i)(A) and (C)(1)(i).

In accordance with § 679.20(d)(1)(iii), the Administrator, Alaska Region, NMFS, has determined that the 2005 Pacific cod interim TAC allocated to catcher/processor vessels using hook-and-line gear in the BSAI has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by catcher/processor vessels using hook-and-line gear in the BSAI.

After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of the fisheries under the 2005 Pacific cod interim TAC specified for catcher/processor vessels using hook-and-line gear in the BSAI.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.

NMFS manages the groundfish fisheries in the exclusive economic zone (EEZ) of the GOA under the FMP. The North Pacific Fishery Management Council (Council) prepared the FMP under the authority of the Magnuson-Stevens Act, 16 U.S.C. 1801, et seq. Regulations governing U.S. fisheries and implementing the FMP appear at 50 CFR parts 600 and 679.

Amendments 48/48 to the FMP and to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (BSAI) were approved by NMFS on October 12, 2004. The final rule implementing Amendments 48/48 was published November 8, 2004 (69 FR 64683). Amendments 48/48 revise the administrative process used to establish annual specifications for the groundfish fisheries of the GOA and the BSAI. The goals of Amendments 48/48 in revising the specifications process are to: (1) Manage fisheries based on the best scientific information available, (2) provide for adequate prior public review and comment on Council recommendations, (3) provide for additional opportunity for Secretarial review, (4) minimize unnecessary public confusion and disruption to fisheries, and (5) promote administrative efficiency.

Based on the approval of Amendments 48/48, the Council recommended 2005 and 2006 proposed specifications for GOA groundfish. These proposed specifications were based on the 2003 SAFE report. The 2004 SAFE report, dated November 2004, was used to develop the final 2005 and 2006 groundfish acceptable biological catch (ABC) and overfishing level (OFL) amounts. The 2006 specifications will be updated in early 2006, when final specifications for 2006 and new specifications for 2007 are implemented.

In October 2004, the Council also recommended a biennial harvest specifications process for certain long-lived species and for species for which little new management information is available on other than a biennial basis. Based on current survey schedules, the GOA species for which biennial harvest specifications process would be used are deep water flatfish, rex sole, shallow water flatfish, flathead sole, arrowtooth flounder, slope rockfish, northern rockfish, Pacific ocean perch, shortraker rockfish, rougheye rockfish, pelagic shelf rockfish, thornyhead rockfish, demersal shelf rockfish, skates, and Atka mackerel. Stock assessment surveys are conducted biennially in the GOA for these species. Because new information is currently updated every two years and harvest amounts are fairly stable from year to year, the harvest specification process for these species is anticipated every two years. If new management information becomes available for any of those species on a more frequent basis, an annual harvest specifications process could still be used. Amendment 48 to the GOA FMP allows harvest specifications to be established for up to two fishing years, and the administrative process to establish these biennial harvest specifications will be done every other year, concurrent with the annual harvest specifications process used for other species.

Allowing for up to two years of specifications during the specification process recognizes the time period of projections that must be used for establishing harvest specifications that will allow for rulemaking in the following year and provides the Council and NMFS the flexibility to conduct either an annual or biennial specification process in response to potential changes in the frequency of stock assessment surveys or in other data or administrative issues. Based on current survey schedules and available information, pollock, trawl sablefish, Pacific cod, and “other species” category fisheries in the GOA will be managed using an annual harvest specification process. However, this process will provide specifications for two years. The second year's specifications will be replaced by the new harvest specifications through rulemaking based on the annual harvest specification process. Any proposed changes from using either an annual process or a biennial process for a particular target species will be analyzed during the harvest specification process.

The Council recommended that specifications for the hook-and-line gear and pot gear sablefish individual fishing quota (IFQ) fisheries continue to be limited to one year to ensure that those fisheries are conducted concurrent with the halibut IFQ fishery and are based on the most recent survey information (69 FR 44634, July 27, 2004). Having the sablefish IFQ fisheries concurrent with the halibut IFQ fishery will reduce the potential for discards of halibut and sablefish in these fisheries. Because of the high value of this fishery, the Council recommended the setting of TAC be based on the most recent survey information. Under the current IFQ fishery season start date, sablefish stock assessments based on the most recent survey are available before the beginning of the fishery to allow for rulemaking each year. The sablefish IFQ fisheries remain closed at the beginning of each fishing year, until the final specifications for the sablefish IFQ fisheries are in effect. The trawl sablefish fishery will be managed using specifications for up to a 2-year period, similar to GOA pollock, Pacific cod, and the “other species” category.

The FMP and its implementing regulations require NMFS, after consultation with the Council, to specify the total allowable catch (TAC) for each target species and for the “other species” category, the sum of which must be within the optimum yield (OY) range of 116,000 to 800,000 metric tons (mt). Section 679.20(c)(1) further requires NMFS to publish and solicit public comment on proposed annual TACs, halibut PSC amounts, and seasonal allowances of pollock and inshore/offshore Pacific cod. The final specifications set forth in Tables 1 through 16 of this document satisfy these requirements. For 2005, the sum of the TAC amounts is 291,298 mt. For 2006, the sum of the TAC amounts is 284,023 mt.

The proposed GOA groundfish specifications and Pacific halibut PSC allowances for 2005 and 2006 were published in the Federal Register on December 7, 2004 (69 FR 70605). Comments were invited and accepted through January 6, 2005. NMFS received two letters of comment on the proposed specifications. These letters of comment are summarized in the “Response to Comments” section of this action. NMFS consulted with the Council during the December 2004 Council meeting in Anchorage, AK. After considering public comments received, as well as biological and economic data that were available at the Council's December 2004 meeting, NMFS is implementing the final 2005 and 2006 groundfish specifications as recommended by the Council.

Regulations at § 679.20(c)(2)(i) establish interim amounts of each proposed TAC and allocations, and proposed PSC allowances established under § 679.21 that become available at 0001 hrs, A.l.t., January 1, and remain available until superceded by the final specifications. NMFS published the interim 2005 harvest specifications in the Federal Register on December 17, 2004 (69 FR 74455). With the implementation of Amendment 48 to the GOA FMP, the publication of interim specifications will not be necessary beyond 2005. The final 2005 groundfish specifications, apportionments, and halibut PSC allowances contained in this action supercede the interim 2005 groundfish harvest specifications.

In June 2004, the Council unanimously recommended revisions to the Steller sea lion protection measures in the GOA to alleviate part of the economic burden on coastal communities while maintaining protection for Steller sea lions and their critical habitat. NMFS published a final rule to implement these revisions on December 20, 2004 (69 FR 75865) with the effective date of January 19, 2005. These revisions adjust pollock and Pacific cod fishing closures near four Steller sea lion haulouts and revise seasonal management of pollock harvest. The revised pollock harvest management measures would affect the annual specifications by extending the A and C season dates for pollock and provide clarification as to how the Regional Administrator, Alaska Region, NMFS (Regional Administrator), would rollover unharvested amounts of pollock between seasons.

The final rule extends the pollock A season dates from January 20 through February 25 to January 20 through March 10 (§ 679.23(d)(2)(i)) and extends the pollock C season dates from August 25 through September 15 to August 25 through October 1 (§ 679.23(d)(2)(iii)) in the Western and Central Regulatory Areas of the GOA. The final action also changes regulatory provisions for the rollover of a statistical area's unharvested pollock apportionment into the subsequent season. The rollover amount is limited to 20 percent of the seasonal apportionment for the statistical area. Any unharvested pollock above the 20 percent limit could be further distributed to the other statistical areas, in proportion to the estimated biomass in the subsequent season in those statistical areas (§ 679.20(a)(5)(iii)(B)).

The final ABC levels are based on the best available biological and socioeconomic information, including projected biomass trends, information on assumed distribution of stock biomass, and revised methods used to calculate stock biomass. The FMP specifies the formulas, or tiers, to be used in computing ABCs and OFLs. The formulas applicable to a particular stock or stock complex are determined by the level of reliable information available to fisheries scientists. This information is categorized into a successive series of six tiers with tier one representing the highest level of information and tier six the lowest level of information.

The Council, its Advisory Panel (AP), and its Scientific and Statistical Committee (SSC) reviewed current biological and harvest information about the condition of groundfish stocks in the GOA in December 2004. This information was compiled by the Council's GOA Plan Team and was presented in the final 2004 SAFE report for the GOA groundfish fisheries, dated November 2004.

The SAFE report contains a review of the latest scientific analyses and estimates of each species' biomass and other biological parameters, as well as summaries of the available information on the GOA ecosystem and the economic condition of the groundfish fisheries off Alaska. From these data and analyses, the Plan Team estimates an ABC for each species or species category.

The SSC, AP, and Council adopted the Plan Team's ABC recommendations for all groundfish species categories. The final ABCs, as adopted by the Council for the 2005 and 2006 fishing years, are listed in Tables 1 and 2.

As in 2004, the SSC and Council recommended that the method of apportioning the sablefish ABC among management areas in 2005 and 2006 include commercial fishery and survey data. NMFS stock assessment scientists believe that the use of unbiased commercial fishery data reflecting catch-per-unit effort provides a desirable input for stock distribution assessments. The use of commercial fishery data is evaluated annually to ensure that unbiased information is included in stock distribution models. The Council's recommendation for sablefish area apportionments also takes into account the prohibition on the use of trawl gear in the Southeast Outside (SEO) District of the Eastern GOA and makes available 5 percent of the combined Eastern GOA ABCs to trawl gear for use as incidental catch in other directed groundfish fisheries in the West Yakutat District (see § 679.20(a)(4)(i)).

The AP and Council recommended that the ABC for Pacific cod in the GOA be apportioned among regulatory areas based on the three most recent NMFS' summer trawl surveys. As in previous years, the Plan Team, AP, SSC, and Council recommended that total removals of Pacific cod from the GOA not exceed ABC recommendations. Accordingly, the Council recommended that the 2005 and 2006 TACs be adjusted downward from the ABCs by amounts equal to the 2005 guideline harvest levels (GHL) established for Pacific cod by the State of Alaska (State) for fisheries that occur in State waters in the GOA. The effect of the State's GHL on the Pacific cod TAC is discussed in greater detail below. As in 2004, NMFS will establish for 2005 and 2006 an A season directed fishing allowance (DFA) for the Pacific cod fisheries in the GOA based on the management area TACs less the recent average A season incidental catch of Pacific cod in each management area before June 10 (see § 679.20(d)(1)). The DFA and incidental catch before June 10 will be managed such that total harvest in the A season will be no more than 60 percent of the annual TAC. Incidental catch taken after June 10 will continue to be taken from the B season TAC. This action meets the intent of the Steller Sea Lion Protection Measures by achieving temporal dispersion of the Pacific cod removals and by reducing the likelihood of harvest exceeding 60 percent of the annual TAC in the A season (January 1 through June 10).

The final TAC recommendations were based on the ABCs as adjusted for other biological and socioeconomic considerations, including maintaining the total TAC within the required OY range of 116,000 to 800,000 mt. The Council adopted the AP's TAC recommendations. None of the Council's recommended TACs for 2005 and 2006 exceeds the final ABC for any species or species category. NMFS finds that the recommended ABCs and TACs are consistent with the biological condition of the groundfish stocks as described in the 2004 SAFE report and approved by the Council.

Tables 1 and 2 list the final 2005 and 2006 OFL, ABC, TAC, and area apportionments of groundfish in the GOA. The sum of 2005 and of 2006 ABCs for all assessed groundfish are 539,263 and 542,456 mt respectively, which are higher than the 2004 ABC total of 507,092 mt (69 FR 26320, May 12, 2004). The apportionment of TAC amounts among gear types, processing sectors, and seasons is discussed below.

The Council recommended TACs for 2005 and 2006 that are equal to ABCs for pollock, deep-water flatfish, rex sole, sablefish, Pacific ocean perch, shortraker rockfish, rougheye rockfish, northern rockfish, pelagic shelf rockfish, thornyhead rockfish, demersal shelf rockfish, big skate, longnose skate, other skates, and Atka mackerel. The Council recommended TACs that are less than the ABCs for Pacific cod, flathead sole, shallow-water flatfish, arrowtooth flounder, and other rockfish.

The apportionment of annual pollock TAC among the Western and Central Regulatory Areas of the GOA reflects the seasonal biomass distribution and is discussed in greater detail below. The annual pollock TAC in the Western and Central Regulatory Areas of the GOA is apportioned among Statistical Areas 610, 620, and 630, as well as equally among each of the following four seasons: the A season (January 20 through March 10), the B season (March 10 through May 31), the C season (August 25 through October 1), and the D season (October 1 through November 1) (see §§ 693.23(d)(2)(i) through (iv) and 679.20(a)(5)(iii)(B)).

The 2005 and 2006 Pacific cod TACs are affected by the State's developing fishery for Pacific cod in State waters in the Central and Western GOA, as well as in Prince William Sound (PWS). The SSC, AP, and Council recommended that the sum of all State and Federal water Pacific cod removals not exceed the ABC. Accordingly, the Council recommended the 2005 and 2006 Pacific cod TACs be reduced from ABC levels to account for State GHLs in each regulatory area of the GOA. Therefore, the 2005 TACs are reduced from ABCs as follows: (1) Eastern GOA, 407 mt; (2) Central GOA, 8,031 mt; and (3) Western GOA, 5,229 mt. Similarly, the 2006 TACs are reduced from ABCs as follows: (1) Eastern GOA, 358 mt; (2) Central GOA, 7,063 mt; and (3) Western GOA, 4,599 mt. These amounts reflect the sum of the State's 2005 GHLs in these areas, which are 10 percent, 24.25 percent, and 25 percent of the Eastern, Central, and Western GOA ABCs, respectively. The percentages of ABC used to calculate the GHLs for the State managed Pacific cod fisheries are unchanged from 2004.

NMFS also is establishing seasonal apportionments of the annual Pacific cod TAC in the Western and Central Regulatory Areas. Sixty percent of the annual TAC is apportioned to the A season for hook-and-line, pot and jig gear from January 1 through June 10, and for trawl gear from January 20 through June 10. Forty percent of the annual TAC is apportioned to the B season for hook-and-line, pot and jig gear from September 1 through December 31, and for trawl gear from September 1 through November 1 (see §§ 679.23(d)(3) and 679.20(a)(11)). These seasonal apportionments of the annual Pacific cod TAC are discussed in greater detail below.

The FMP specifies that the TAC amount for the “other species” category is calculated as 5 percent of the combined TAC amounts for target species. The 2005 GOA-wide “other species” TAC is 13,871 mt, and the 2006 TAC is 13,525 mt, which is 5 percent of the sum of the combined TAC amounts (277,427 mt for 2005 and 270,498 mt for 2006) for the target species. The sum of the TACs for all GOA groundfish is 291,298 mt for 2005 and 284,023 mt for 2006, which is within the OY range specified by the FMP. The sums of the 2005 and 2006 TACs are higher than the 2004 TAC sum of 271,776 mt (69 FR 26320, May 12, 2004).

NMFS finds that the Council's recommendations for OFL, ABC, and TAC amounts are consistent with the biological condition of groundfish stocks as adjusted for other biological and socioeconomic considerations, including maintaining the total TAC within the required OY range of 116,000 to 800,000 mt. NMFS has reviewed the Council's recommended TAC specifications and apportionments and hereby approves these specifications under § 679.20(c)(3)(ii). The final 2005 and 2006 ABCs, TACs, and OFLs are shown in Tables 1 and 2.

In October 2004, the Council's recommendations for the proposed 2005 and 2006 harvest specifications (69 FR 70605, December 7, 2004) were based largely upon information contained in the final 2003 SAFE report for the GOA groundfish fisheries, dated November 2003. The Council recommended that OFLs and ABCs for stocks in tiers 1 through 3, except for pollock, be based on biomass projections as set forth in the 2003 SAFE report and estimates of groundfish harvests through the 2004 and 2005 fishing years. For stocks in tiers 4 through 6, for which projections could not be made, the Council recommended that OFL and ABC levels be unchanged from 2004 until the final 2004 SAFE report could be completed.

The final 2004 SAFE report (dated November 2004), which was not available when the Council made its recommendations in October 2004, contains the best and most recent scientific information on the condition of the groundfish stocks and was considered in December by the Council in making its recommendations for the final 2005 and 2006 harvest specifications. Based on the final 2004 SAFE report, the sum of the 2005 recommended final TACs for the GOA (291,298 mt) is 27,033 mt more than the proposed sum of TACs (264,265 mt), representing a 10-percent increase overall. The largest increases occurred for pollock, from 71,260 mt to 91,710 mt (29 percent increase); for sablefish, from 13,392 mt to 15,940 mt (19 percent increase); and for deep-water flatfish, from 6,070 mt to 6,820 mt (12 percent increase). The largest decrease occurred for demersal shelf rockfish, from 450 mt to 410 mt (9 percent decrease). Other increases or decreases in both 2005 and 2006 are within these ranges.

The 2005 and 2006 final TAC recommendations for the GOA are within the OY range established for the GOA and do not exceed ABCs for any single species or complex. Compared to the proposed 2005 and 2006 harvest specifications, the Council's final 2005 and 2006 TAC recommendations increase fishing opportunities for species for which the Council had sufficient information to raise TAC levels. These include, pollock, sablefish, and deep-water flatfish. Conversely, the Council reduced TAC levels to provide greater protection for several species; these include Pacific cod, shortraker rockfish, rougheye rockfish, demersal shelf rockfish, and skates. The Council also further divided the TACs of two species categories among individual species (shortraker and rougheye rockfish and big and longnose skates). The intent of this action is to provide greater protection for those individual species that are most sought after within their species categories, most notably shortraker rockfish and big skates. The changes recommended by the Council for the 2005 and 2006 fishing years were based on the best scientific information available, consistent with National Standard 2 of the Magnuson-Stevens Act, and within a reasonable range of variation from the proposed TAC recommendations so that the affected public was fairly apprized and could have made meaningful comments.

These footnotes also apply to Table 2.

The footnotes in Table 2 are identical to those presented in Table 1.

Regulations at § 679.20(b)(2) require 20 percent of each TAC for pollock, Pacific cod, flatfish, and the “other species” category be set aside in reserves for possible apportionment at a later date. In 2004, NMFS reapportioned all of the reserves in the final harvest specifications. NMFS proposed reapportionment of all the reserves for 2005 and 2006 in the proposed GOA groundfish specifications published in the Federal Register on December 7, 2004 (69 FR 70605). NMFS received no public comments on the proposed reapportionments. For the final 2005 and 2006 GOA harvest specifications, NMFS has reapportioned all of the reserves for pollock, Pacific cod, flatfish, and “other species.” Specifications of TAC shown in Tables 1 and 2 reflect apportionment of reserve amounts for these species and species groups.

Under § 679.20(a)(4)(i) and (ii), sablefish TACs for each of the regulatory areas and districts are allocated to hook-and-line and trawl gear. In the Western and Central Regulatory Areas, 80 percent of each TAC is allocated to hook-and-line gear, and 20 percent of each TAC is allocated to trawl gear. In the Eastern Regulatory Area, 95 percent of the TAC is allocated to hook-and-line gear, and 5 percent is allocated to trawl gear. The trawl gear allocation in the Eastern Regulatory Area may only be used to support incidental catch of sablefish in directed fisheries for other target species (see § 679.20(a)(1)). In recognition of the trawl ban in the SEO District of the Eastern Regulatory Area, the Council recommended and NMFS concurs that 5 percent of the combined Eastern GOA sablefish TAC be allocated to trawl gear in the WYK District and the remainder to vessels using hook-and-line gear. In the SEO District, 100 percent of the sablefish TAC is allocated to vessels using hook-and-line gear. The Council recommended that only trawl sablefish TAC be established biennially. This recommendation results in an allocation of 307 mt to trawl gear and 2,273 mt to hook-and-line gear in the WYK District and 3,570 mt to hook-and-line gear in the SEO District in 2005, and 291 mt to trawl gear in the WYK District in 2006. Tables 3 and 4 show the allocations of the final 2005 and 2006 sablefish TACs between hook-and-line and trawl gear.

Federal regulations at 50 CFR part 679 implement the FMP and govern the groundfish fisheries in the BSAI. The Council prepared the FMP, and NMFS approved it under the Magnuson-Stevens Act. General regulations governing U.S. fisheries also appear at 50 CFR part 600.

The FMP and its implementing regulations require NMFS, after consultation with the Council, to specify annually the total allowable catch (TAC) for each target species and for the “other species” category, the sum of which must be within the optimum yield range of 1.4 million to 2.0 million metric tons (mt) (see § 679.20(a)(1)(i)). Also specified are apportionments of TACs, and Community Development Quota (CDQ) reserve amounts, PSC allowances, and prohibited species quota (PSQ) reserve amounts. Regulations at § 679.20(c)(3) further require NMFS to consider public comment on the proposed annual TACs and apportionments thereof and the proposed PSC allowances, and to publish final harvest specifications in the Federal Register . The final harvest specifications set forth in Tables 1 through 17 of this action satisfy these requirements. For 2005 and 2006, the sum of TACs for each year is 2 million mt.

The 2005 and 2006 proposed harvest specifications and PSC allowances for the groundfish fishery of the BSAI were published in the Federal Register on December 8, 2004 (69 FR 70974). Comments were invited and accepted through January 7, 2005. NMFS received three letters of comment on the proposed harvest specifications. These letters of comment are summarized and responded to in the Response to Comments section. NMFS consulted with the Council during the December 2004 Council meeting in Anchorage, AK. After considering public comments, as well as biological and economic data that were available at the Council's December meeting, NMFS is implementing the 2005 and 2006 final harvest specifications as recommended by the Council.

Regulations at § 679.20(c)(2)(ii) establish the interim amounts of each proposed initial TAC (ITAC) and allocations thereof, of each CDQ reserve established by § 679.20(b)(1)(iii), and of the proposed PSC allowances and PSQ reserves established by § 679.21 that become available at 0001 hours, A.l.t., January 1, and remain available until superseded by the final harvest specifications. NMFS published the 2005 interim harvest specifications in the Federal Register on December 23, 2004 (69 FR 76870). Regulations at § 679.20(c)(2)(ii) do not provide for an interim harvest specification for either the hook-and-line or pot gear sablefish CDQ reserve or for sablefish managed under the Individual Fishing Quota (IFQ) program. The 2005 final harvest specifications, PSC allowances and PSQ reserves contained in this action supersede the 2005 interim harvest specifications.

The final ABC levels are based on the best available biological and socioeconomic information, including projected biomass trends, information on assumed distribution of stock biomass, and revised technical methods used to calculate stock biomass. In general, the development of ABCs and overfishing levels (OFLs) involves sophisticated statistical analyses of fish populations and is based on a successive series of six levels, or tiers, of reliable information available to fishery scientists. Tier one represents the highest data quality and tier six the lowest level of data quality available.

In December 2004, the Scientific and Statistical Committee (SSC), Advisory Panel (AP), and Council reviewed current biological information about the condition of groundfish stocks in the BSAI. This information was compiled by the Council's Plan Team and is presented in the final 2004 SAFE report for the BSAI groundfish fisheries, dated November 2004. The SAFE report contains a review of the latest scientific analyses and estimates of each species' biomass and other biological parameters, as well as summaries of the available information on the BSAI ecosystem and the economic condition of groundfish fisheries off Alaska. The SAFE report is available for public review (see ADDRESSES ). From these data and analyses, the Plan Team estimates an ABC for each species or species category.

In December 2004, the SSC, AP, and Council reviewed the Plan Team's recommendations. Except for pollock, atka mackerel, rock sole, and the “other species” category, the SSC, AP, and Council endorsed the Plan Team's ABC recommendations. For the 2006 OFL and ABC recommendations for Atka mackerel, rock sole and Bering Sea pollock the SSC used a downward revised projection of catch that results in higher OFLs and ABCs. For Aleutian Islands pollock, the SSC recommended using tier 5 management that calculates a lower ABC than the Plan Team's recommendation using tier 3 management. For Bogoslof pollock, the SSC recommended using a procedure that reduces the ABC proportionately to the ratio of current stock biomass to target stock biomass. For “other species”, the SSC recommended using tier 6 management for the sharks and octopus species, that calculated lower ABCs, instead of the Plan Team's recommended tier 5 management. The Plan Team also recommended separate OFLs and ABCs for the species in the “other species” category, however, the current FMP specifies management at the group level. Since 1999, the SSC has recommended a procedure that moves gradually to a higher ABC for “other species” over a 10-year period instead of a large increase in one year. The 2005 and 2006 ABC amounts reflect the 7th and 8th years incremental increase in the ABC for “other species.” For all species, the AP endorsed the ABCs recommended by the SSC, and the Council adopted them.

The final TAC recommendations were based on the ABCs as adjusted for other biological and socioeconomic considerations, including maintaining the total TAC within the required optimum yield (OY) range of 1.4 million to 2.0 million mt. The Council adopted the AP's 2005 and 2006 TAC recommendations, except for the 2005 rock sole, flathead sole, “other flatfish”, yellowfin sole, Alaska plaice, Bering Sea pollock and”other species”category. The Council increased TAC amounts for rock sole, flathead sole, “other flatfish” by 500 mt each and the yellowfin sole TAC by 3,200 mt. It decreased the Bering Sea subarea pollock TAC by 2,500 mt, the Alaska plaice TAC by 2,000 mt, and the “other species” TAC by 200 mt. None of the Council's recommended TACs for 2005 or 2006 exceed the final 2005 or 2006 ABC for any species category. NMFS finds that the recommended OFLs, ABCs, and TACs are consistent with the biological condition of groundfish stocks as described in the 2004 SAFE report that was approved by the Council.

Amendments 48/48 to the FMP and to the Fishery Management Plan for Groundfish of the Gulf of Alaska (GOA) were approved by NMFS on October 12, 2004. The final rule implementing Amendments 48/48 was published November 8, 2004, (69 FR 64683). Amendments 48/48 revise the administrative process used to establish annual specifications for the groundfish fisheries of the GOA and the BSAI. The goals of Amendments 48/48 in revising the harvest specifications process are to (1) manage fisheries based on the best scientific information available, (2) provide for adequate prior public review and comment on Council recommendations, (3) provide for additional opportunity for Secretarial review, (4) minimize unnecessary disruption to fisheries and public confusion, and (5) promote administrative efficiency.

Based on the approval of Amendments 48/48, the Council recommended 2005 and 2006 final harvest specifications for BSAI groundfish. The 2006 harvest specifications will be updated in early 2006, when final harvest specifications for 2006 and new harvest specifications for 2007 are implemented.

In June 2004, the Council adopted Amendment 82 to the FMP. This amendment would establish a program for management of the Aleutian Islands (AI) directed pollock fishery. Section 803 of the Consolidated Appropriations Act of 2004 (CAA), Public Law (Pub. L.) No. 108-199, requires the AI directed pollock fishery to be allocated to the Aleut Corporation for economic development in Adak, Alaska. Prior to the CAA, the AI directed pollock fishery was managed pursuant to the American Fisheries Act (AFA), Pub. L. No. 105-277, Title II of Division C. The AFA allocated the AI directed pollock fishery to specific harvesters and processors named in the AFA. The CAA supersedes that portion of the AFA. Together, the CAA and the AFA effectively allocated the AI directed pollock fishery to the Aleut Corporation after subtraction of the CDQ directed fishing allowance and incidental catch allowance (ICA) from the AI pollock TAC. The implementation of section 803 of the CAA requires amending AFA provisions in the FMP and in the regulations at 50 CFR part 679. This would be accomplished by Amendment 82 which was approved by the Secretary of Commerce on February 9, 2005.

Until the regulations for Amendment 82 are effective, NMFS will prohibit the non-CDQ AI directed pollock fishery in the final harvest specifications for 2005 and 2006 based on statutory language of section 803 of the CAA. The AI pollock TAC recommended by the Council under provisions of proposed Amendment 82 are included in the 2005 and 2006 final harvest specifications to allow the Administrator, Alaska Region, NMFS, (Regional Administrator), to open the AI directed pollock fishery if and when the regulations for Amendment 82 are effective. As stated above, this prohibition is authorized by section 803 of the CAA, which prohibits fishing or processing of any part of the AI non-CDQ pollock allocation except with permission of the Aleut Corporation or its designated agent. For additional information, see the November 16, 2004, notice of availability (69 FR 67107) and the December 7, 2004, proposed rule for Amendment 82 (69 FR 70589).

In October 2004, the Council's recommendations for the 2005 and 2006 proposed harvest specifications (69 FR 70974, December 8, 2004) were based largely upon information contained in the final 2003 SAFE report for the BSAI groundfish fisheries, dated November 2003. The Council recommended that OFLs and ABCs for stocks in tiers 1 through 3 be based on biomass projections as set forth in the 2003 SAFE report and estimates of groundfish harvests through the 2004 fishing year. For stocks in tiers 4 through 6, for which projections could not be made, the Council recommended that OFL and ABC levels be unchanged from 2004 until the final 2004 SAFE report could be completed. The final 2004 SAFE report (dated November 2004), which was not available when the Council made its recommendations in October 2004, contains the best and most recent scientific information on the condition of the groundfish stocks and was considered in December by the Council in making its recommendations for the 2005 and 2006 final harvest specifications. Based on the final 2004 SAFE report, the sum of the 2005 recommended final TACs for the BSAI (2,000,000 mt) is the same as the sum of the 2005 proposed TACs. The sum of the 2006 recommended final TACs for the BSAI (2,000,000 mt) is 1,577 mt higher than the 2006 proposed TACs (1,998,423 mt). This represents a .08-percent increase overall. Those species for which the final 2005 TAC is lower than the proposed 2005 TAC are Bogoslof pollock (decreased to 10 mt from 50 mt), Pacific cod (decreased to 206,000 mt from 215,952 mt), AI sablefish (decreased to 2,620 mt from 2,790 mt), Alaska plaice (decreased to 8,000 mt from 10,000 mt), and AI “other rockfish” (decreased to 590 mt from 634 mt). Those species for which the final 2005 TAC is higher than the proposed 2005 TAC are Bering Sea pollock (increased to 1,478,500 from 1,474,450 mt), Bering Sea sablefish (increased to 2,440 mt from 2,418 mt), rock sole (increased to 41,500 mt from 41,450 mt), flathead sole (increased to 19,500 mt from 19,000 mt), “other flatfish” (increased to 3,500 mt from 3,000 mt), yellowfin sole (increased to 90,686 mt from 86,075 mt), Pacific ocean perch (increased to 12,600 mt from 12,020 mt), shortraker rockfish (increased to 596 mt from 526 mt), rougheye rockfish (increased to 223 from 195 mt), and “other species” (increased to 29,000 mt from 27,205 mt). Those species for which the final 2006 TAC is lower than the proposed 2006 TAC are Bogoslof pollock (decreased to 10 mt from 50 mt), Pacific cod (decreased to 195,000 mt from 215,500 mt), AI sablefish (decreased to 2,480 mt from 2,589 mt), Bering Sea greenland turbot (decreased to 2,500 mt from 2,700 mt), and AI “other rockfish” (decreased to 590 mt from 634). Those species for which the final 2006 TAC is higher than the proposed 2006 TAC are Bering Sea pollock (increased to 1,487,756 from 1,474,000 mt), Bering Sea sablefish (increased to 2,310 mt from 2,244 mt), rock sole (increased to 42,000 mt from 41,000 mt), flathead sole (increased to 20,000 mt from 19,000 mt), yellowfin sole (increased to 90,000 mt from 86,075 mt), Pacific ocean perch (increased to 12,600 mt from 12,170 mt), shortraker rockfish (increased to 596 mt from 526 mt), rougheye rockfish (increased to 223 from 195 mt), and “other species” (increased to 29,200 mt from 27,205 mt). As mentioned in the 2005 and 2006 proposed harvest specifications, NMFS is apportioning the amounts shown in Table 2 from the non-specified reserve to increase the ITAC of several target species.

The 2005 and 2006 final TAC recommendations for the BSAI are within the OY range established for the BSAI and do not exceed ABCs for any single species/complexes. Compared to the 2005 proposed harvest specifications, the Council's 2005 final TAC recommendations increase fishing opportunities for fishermen and economic benefits to the nation for species for which the Council had sufficient information to raise TAC levels. These include Bering Sea pollock, Bering Sea sablefish, yellowfin sole, AI Pacific ocean perch, shortraker rockfish, rougheye rockfish, and “other species.” Conversely, the Council reduced TAC levels to provide greater protection for several species, these include Bogoslof pollock, Pacific cod, AI sablefish, Bering Sea Pacific ocean perch, AI “other rockfish.” The changes recommended by the Council were based on the best scientific information available, consistent with National Standard 2 of the Magnuson-Stevens Act, and within a reasonable range of variation from the proposed TAC recommendations so that the affected public was fairly apprized and could have made meaningful comments.

Table 1 lists the 2005 and 2006 final OFL, ABC, TAC, ITAC and CDQ reserve amounts of groundfish in the BSAI. The apportionment of TAC amounts among fisheries and seasons is discussed below.