The Mexican fruit fly regulations, contained in 7 CFR 301.64 through 301.64-10 (referred to below as the regulations) were established to prevent the spread of the Mexican fruit fly to noninfested areas of the United States. The regulations impose restrictions on the interstate movement of regulated articles from regulated areas.

On February 18, 2004, we published in the Federal Register (69 FR 7607-7611, Docket No. 03-059-1) a proposal to amend the regulations by removing a provision that allows regulated articles to be moved interstate from a regulated area without a certificate or limited permit if they are moved into States other than commercial citrus-producing States. Additionally, we proposed to amend the regulations to remove references to quarantined States and to refer to regulated areas as quarantined areas. We also proposed to make other changes to the regulations, including clarifying that an entity requiring the services of an inspector is responsible for the costs of services performed outside of normal business hours.

We solicited comments concerning our proposal for 60 days ending April 19, 2004. We subsequently extended the deadline for comments until May 17, 2004, in a document published in the Federal Register on April 15, 2004 (69 FR 19950, Docket No. 03-059-2). We received 10 comments by the close of the extended comment period. They were from State government officials, growers, industry associations, and an attorney. One commenter strongly supported the proposal, while the remaining nine commenters raised specific issues or objections. They are discussed below by topic.

Three commenters stated that a pest risk assessment should first be prepared relative to the potential spread of Mexican fruit fly from Texas into States other than commercial citrus-producing States.

We do not believe a pest risk assessment is necessary in this case since Mexican fruit fly hosts are well known and known to be present in States other than commercial citrus-producing States. For these reasons, we did not find that a specific pest risk assessment was necessary to support our proposal.

In 2001, we prepared a document entitled “Identification of Susceptible Areas for the Establishment of Anastrepha spp. Fruit Flies in the United States and Analysis of Selected Pathways” (Sequeira, R., L. Millar, and D. Bartels 2001) in connection with another rule. In that document, we thoroughly catalogue and analyze the risks associated with the shipment of potential Mexican fruit fly hosts, including citrus, from infested areas. The document is available on the Internet at http://www.aphis.usda.gov/ppq/avocados/ISA.pdf.

One commenter said that northern States are not at risk for Mexican fruit fly infestation because of their cooler climates. The commenter further stated that the State of Texas is located at the northernmost extreme of the Mexican fruit fly's potential habitat.

While it is true that the Mexican fruit fly cannot exist year-round in northern States, there is potential for Mexican fruit fly survival in all States, particularly during the spring and summer months. Further, fruit found on the list of regulated articles at § 301.64-2 may be present in all States between April 15 and October 30. If infested regulated articles are shipped during this timeframe from a quarantined area into a State other than a commercial citrus-producing State where alternate Mexican fruit fly hosts are grown, those other host fruits could potentially become infested and subsequently be shipped to any State, including commercial citrus-producing States, without restriction, thereby increasing the risk of Mexican fruit fly being spread to an area with a climate more favorable to the year-round establishment of that pest.

The quarantined area in the State of Texas is located in the Rio Grande Valley, in the southern portion of the State. Conditions exist that could support damaging populations of Mexican fruit fly in the southern parts of Alabama, Arizona, California, Florida, Georgia, Louisiana, and Mississippi as well. With the exception of certain portions of Florida, all of these susceptible areas lie north of the quarantined area in Texas. Further, the States of Alabama, Georgia, and Mississippi, where conditions are such that Mexican fruit fly could become established, are not listed as commercial citrus-producing States at § 301.64(b).

One commenter stated that the Animal and Plant Health Inspection Service (APHIS) needs to fully develop scientifically based lists of Mexican fruit fly hosts before proposing such a change to the regulations.

There is a comprehensive list of Mexican fruit fly hosts at § 301.64-2(a). This represents our most complete and scientific determination of the various Mexican fruit fly host fruits.

Two commenters stated that the proposed change to the treatment and shipping requirements will cause sizable economic harm to producers and treatment facilities as a result of the inability of fumigation facilities to expand sufficiently to meet demand for their services.

We agree that this is a legitimate concern; however, methyl bromide fumigation is not the only treatment option available to producers of citrus and other regulated articles located in quarantined areas. The regulations at § 301.64-10 list several approved treatment options for citrus and other regulated articles from quarantined areas. They are as follows:

• Cold treatment in accordance with 7 CFR part 305;

• A field, grove, or area located within the quarantined area but outside the infested core area must receive regular treatments with either malathion or spinosad bait spray. These treatments must take place at 6- to 10-day intervals, starting a sufficient time before harvest (but not less than 30 days before harvest);

• High temperature forced air in accordance with 7 CFR part 305; or

• Irradiation, carried out in accordance with the provisions listed at § 301.64-10(g).

We are aware that facilities for cold treatment, forced air treatment, and irradiation are not currently available in the three Texas counties currently quarantined because of Mexican fruit fly ( i.e. , Cameron, Hidalgo, and Willacy Counties), however the option of premises treatments with malathion or spinosad bait spray is available and serves to relieve the citrus industry of the economic burden of building additional fumigation chambers.

One commenter questioned why, in discussing the amount of citrus that may require treatment from year to year, APHIS assumes an average infestation rate instead of considering each infestation individually.

It is impossible to predict the amount of citrus that will require treatment from year to year due to the variability of Mexican fruit fly infestations. We acknowledge that this infestation rate may differ from year to year, but historical data shows that, on average, 5 to 10 percent of citrus will require treatment due to Mexican fruit fly infestation. Treatments based on the average infestation rate could cost the citrus industry $40,000 to $80,000, which is less than 0.5 percent of the value of the $20 million worth of citrus that will require treatment. The worst case scenario, or 100 percent infestation, would cost the citrus industry $806,000 in treatment costs. This amount represents less than 4 percent of the value of the $20 million worth of citrus that would require treatment.

The commenter also stated that there was a need to investigate the potential impacts of the rule on the organic citrus industry in Texas.

We have already considered these impacts to organic citrus producers. They are included in our estimation of the total impact to the Texas citrus industry ($40,000 to $80,000 annually). Since fumigation is not an available treatment option for organic producers and we assume the average infestation rate of 5 to 10 percent, treatment of organic citrus would cost approximately $12,000 to $25,000 annually for premises treatment using spinosad bait spray.

We consider “significant impact” to mean that the cost of a given action is equal to or greater than the small business's profit margin (5 to 10 percent of annual sales). By these standards, given the size and profitability of the citrus industry in Texas, this action does not represent a significant impact on a substantial number of small entities.

Two commenters added that, apart from the associated economic issues, Texas packinghouses will not be able to expand their operations adequately to fumigate citrus moving interstate, as prescribed in the regulations, because many of these entities are located near urban areas where air quality standards prohibit such expansion. One commenter additionally stated that fumigation degrades the quality of the fruit, thus affecting its marketability, and that some markets will not accept fruit that has undergone fumigation.

As previously stated, methyl bromide fumigation is not the only treatment option available to producers of citrus and other regulated articles located in quarantined areas. The alternative treatments available are listed above.

One commenter said that changes should not be made to the regulations solely in response to possible infestation of other hosts or transshipment. The commenter pointed out that no past infestations have occurred in commercial citrus-producing States as a result of regulated articles that originated in Texas.

The changes we are making to the regulations are precautionary in nature. As stated in the proposed rule, all of our other fruit fly regulations in 7 CFR part 301 ( e.g. , Mediterranean fruit fly [§§ 301.78-301.78-10], Oriental fruit fly [§§ 301.93-301.93-10], etc.), have interstate shipment requirements identical to those listed in this document for Mexican fruit fly. In the past several years, infestations of Mexican fruit fly in California and Florida have emphasized the need for revision to the regulations.

One commenter stated that the current practice of marking containers as non-eligible for shipment to commercial citrus-producing States is sufficient to prevent transshipment.

We disagree with this assessment. According to the California Department of Food and Agriculture, fruit repacked in Nevada is routinely intercepted at border inspection stations in California. Mexican fruit fly larvae have also been discovered in grapefruit that had been purchased in Oregon and moved into California. We are also concerned with mailed containers of potentially infested fruits, particularly those used in gourmet and specialty fruit packages, since our regulations have not covered some fruits shipped by such retailers. The amended regulations are intended to eliminate those potential pest pathways.

One commenter pointed out that different regulatory processes are necessary given the differing circumstances in the growing areas within quarantined areas in Texas. The commenter argued that the regulatory system in Texas must necessarily differ from those in other States such as California, Florida, and Arizona where temporary infestations of Mexican fruit fly have historically occurred given that the quarantined areas in Texas are adjacent to areas in Mexico that are continually infested with many types of fruit fly, including Mexican fruit fly.

As previously stated in this document and in the proposed rule, the aim of this action is to make our Mexican fruit fly regulations equivalent to our other fruit fly regulations. The pest risk associated with the movement of regulated articles from those areas of Texas where Mexican fruit fly is established is equivalent to the pest risk associated with the movement of regulated articles from areas in California, Florida, or other States where Mexican fruit fly or other fruit flies may have been introduced. We have found that a uniform approach to quarantine and treatment is most effective in preventing the spread of various types of injurious fruit flies to noninfested areas of the United States.

One commenter said that the APHIS-approved preventative release program using sterile insect technique that is being used within the quarantined areas in Texas is sufficient to prevent the spread of Mexican fruit fly to those States that are not commercial citrus-producing States.

The preventative release programs (PRP) described by the commenter are important tools in our efforts to protect noninfested areas from Mexican fruit fly infestation. The current PRP in Texas is part of a systems approach that is designed to mitigate the risk associated with the movement of host commodities. However, at the current sterile fly release levels, the PRP alone does not provide sufficient protection against the spread of the Mexican fruit fly. APHIS has submitted a request for increased funding for these sterile release programs as part of the Agency's 2006 budget in an effort to increase the sterile release rates in order to eradicate the Mexican fruit fly from Texas. The procedure outlined in this document provides necessary and immediate protection against the spread of Mexican fruit fly to noninfested areas of the United States.

Two commenters stated that we should focus our efforts primarily on bringing Mexico's fruit fly programs into equivalency with U.S. programs. An additional commenter said that no importation of citrus from Mexico or any other country should be allowed unless the phytosanitary programs in the country of origin are equivalent to those used in quarantined areas of the United States.

We have developed a preventative release program with sterile insect technique in Mexico. The United States Department of Agriculture (USDA), in cooperation with the Mexican Government, has initiated a sterile fly release program along the Rio Grande River as well as in nearby urban areas. The program features consolidated U.S./Mexican recordkeeping, which will enable us to more effectively synchronize our Mexican fruit fly programs on both sides of the U.S./Mexico border.

In addition, we have drafted a series of foreign fruit fly systems approach guidelines that are based primarily on our domestic fruit fly programs. This document is a draft intended for broad ranging international consideration. It is available on the Internet at http://www.aphis.usda.gov/ppq/manuals/pdf_files/FF%20Guidelines.pdf.

Further, available treatment options make it possible for fruit to be exported to the United States from countries without equivalent eradication programs where fruit flies are present. Those importation standards and procedures are described in our regulations governing the importation of fruits and vegetables at 7 CFR 319.56-2(e) through (h) and 319.56-2(j) through (k).

One commenter objected to our proposal as a result of his understanding of consideration we may be giving to proposals from Argentina, Chile, and Mexico to ship untreated citrus to States other than citrus-producing States, as well as his understanding that we are poised to grant these requests.

When fruit flies are the only pest of concern, shipments of citrus from any citrus-producing country or area could be eligible for importation in two ways: Fruit from non-fruit-fly-free areas may be imported subject to approved treatments, as mentioned previously, and fruit from areas that we have determined to be free of a number of fruit flies, including Mexican fruit fly, may be imported without treatment. Under our import regulations at 7 CFR 319.56-2(e) through (g), fruits and vegetables, except those restricted to certain countries and districts by special quarantine, may be imported under a permit issued once the Administrator determines that certain conditions in the country of origin have been met. Among other things, the Administrator must determine that the fruit or vegetable is being imported from an area that is free of the pest or pests in accordance with the criteria for establishing freedom found in International Standard for Phytosanitary Measures Publication No. 4, “Requirements for the Establishment of Pest Free Areas,” which is incorporated by reference into the regulations at 7 CFR 300.5. APHIS must approve the survey protocol used to determine freedom from the pests of concern.

We are considering no such proposals as described by the commenter from Argentina or Chile. However, we are considering a proposal that would allow untreated citrus from specified areas in Mexico to enter into areas of the United States that are quarantined because of Mexican fruit fly for processing. However, under the proposal we are considering, those areas in Mexico would be required to be operating under a systems approach for Mexican fruit fly that is the same as our domestic programs. Any action on this proposal would come only after we published a proposed rule for public comment in the Federal Register .

One commenter characterized the changes we proposed as “removing restrictions” and stated that there is a need instead for additional restrictions, including more quarantine stations.

We disagree with the commenter's characterization of the changes we are making in this final rule. These changes will provide more, not less, protection against the interstate spread of the Mexican fruit fly.

Although we are making no changes in this final rule in response to the comments discussed above, this final rule does not include two editorial changes that had been part of the proposed rule. Specifically, we had proposed to update an address that appeared in two places in § 301.64-10(g); because that address has been changed in another final rule, it is not necessary to follow through with the proposed change in this final rule.

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule with the changes discussed in this document.

This rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

We are amending the Mexican fruit fly regulations by removing a provision that allows regulated articles to be moved interstate from a regulated area without a certificate or limited permit if they are moved into States other than commercial citrus-producing States. Additionally, we are amending the regulations to remove references to quarantined States and to refer to regulated areas as quarantined areas. We are also making other changes to the regulations, including clarifying that an entity requiring the services of an inspector is responsible for the costs of services performed outside of normal business hours. These actions are necessary to prevent the interstate spread of Mexican fruit fly and make the Mexican fruit fly regulations more consistent with our other domestic fruit fly regulations.

The Regulatory Flexibility Act requires that agencies specifically consider the economic effects of their rules on small entities. We expect that the entities most likely to be affected by the changes will be citrus growers and packinghouses located within quarantined areas. Currently, only Cameron, Hidalgo, and Willacy Counties in Texas are designated as quarantined areas in the regulations. In 2002, the latest census year, citrus fruit was produced on 1,053 farms in Texas. Approximately 98 percent of citrus farms had gross sales of less than $750,000 and thus are considered small entities according to the size standards set by the Small Business Administration (SBA).

As noted previously, three counties in the Lower Rio Grande Valley of Texas—Cameron, Hidalgo, and Willacy—are designated as quarantined areas. The Mexican fruit fly protocol for Texas calls for a trapping program to monitor those areas; under the protocol, the detection of one wild Mexican fruit fly triggers the application of bait sprays or the aerial release of sterile flies around the fly capture. Fruit destined for shipment to commercial citrus-producing States must be certified as free of the Mexican fruit fly, either through inspection or following the application of an authorized post-harvest treatment.

Within the quarantined area of Texas there are approximately 540 citrus growers operating on 30,000 acres producing $31 million worth of citrus annually, and 5 packinghouses. 1 Seventy five percent of the citrus growers produce grapefruit while the remaining 25 percent produce oranges. Approximately 80 percent of all citrus growers use one of the five packinghouses, while the remaining 20 percent sell their citrus locally. The five packinghouses currently ship approximately 35 percent of the citrus to California and 65 percent to States that are not commercial citrus-producing States. 2 Currently only 5 to 10 percent of all citrus shipped annually to citrus-producing regions (mainly California) are treated for Mexican fruit flies using methyl bromide fumigation. The cost of treatment generally comprises less than 4 percent of the citrus wholesale value. 3

This rule requires that all citrus and other host crops moved interstate to States that are not commercial citrus-producing States be accompanied by a limited permit or certificate issued by an APHIS inspector, just as is currently required for host crops moved to commercial citrus-producing States. The provisions of this rule will primarily affect the packinghouses in the quarantined area in that any overtime cost that is incurred by APHIS inspectors for supervising post-harvest treatments at the packinghouses will now have to be paid for by owners of the facilities. Currently, as a result of the small number of inspectors working overtime, this cost is borne by APHIS. It is estimated that one APHIS inspector will be required at each of the five Texas packinghouses for approximately 16 weeks during the citrus harvest period. APHIS has estimated that each of these inspectors will work approximately 53 hours in overtime supervision during this 16-week period. At $28.11 per hour, each citrus packinghouse will be responsible for, on average, $1,500 in overtime charges for the inspectors. Assuming these charges stay constant with more stringent interstate movement requirements, we estimate that the five Texas packinghouses will incur approximately $7,500 per year in total overtime charges for citrus fruits moving to commercial citrus-producing States.

Similarly, additional charges may also be incurred by producers or packinghouses for the services of an APHIS inspector in monitoring the post-harvest treatment of citrus for shipment to States other than commercial citrus-producing States if services are provided beyond the normal working hours. If, as estimated above, the overtime costs associated with the interstate movement of the 35 percent of fruit moving to commercial citrus-producing States would be $7,500, then a rough estimate of the overtime charges that may be incurred in connection with the interstate movement of the remaining 65 percent of fruit would be $14,000. The total overtime cost to the producers or packinghouses for APHIS supervision will be approximately $21,500 per year.

Producers of host crops may also incur additional costs for post-harvest treatment if they wish to send their fruit to States other than commercial citrus-producing States and their fruit is found to be infested. Under the rule, host crops moving interstate to such States, like fruit moved to commercial citrus-producing States, will be subject to treatment if found to be infested with Mexican fruit flies. The current fumigation facilities in place can treat approximately 5 to 20 percent of the citrus moving interstate. The amount of fruit that may require treatment as a condition of movement to States other than commercial citrus-producing States is not known and will vary with the infestation levels. However, assuming that (1) 65 percent of the $31 million worth of citrus is shipped to these States, (2) that the proportion of these fruits that would require treatment would be the same percentage as that of fruits currently shipped to commercial citrus-producing States (about 5-10 percent), and (3) that treatment costs comprise less than 4 percent of the wholesale value of citrus, the additional cost of treatment to producers is estimated to be $40,000 to $80,000. In sum, based on past infestation rates, the impact of this rule on the Texas citrus industry could range between $61,500 and $101,500 in additional yearly treatment costs and APHIS overtime costs for pre- and post-harvest monitoring (table 1).

On September 30, 2002, the Grain Inspection, Packers and Stockyards Administration (GIPSA) published in the Federal Register (67 FR 61249) a direct final rule that revised the United States Standards for Milled Rice to establish a new level of milling degree, “hard milled,” to the existing milling requirements and to eliminate reference to “lightly milled” from the milling requirements of U.S. Standards for Milled Rice.

As published, the direct final rule contains errors which may prove to be confusing and needs to be clarified. In Section 868.310(f) U.S. Sample grade, the word “re” should read “or”; in § 868.311, the correct wording for that section should read “Grades and grade requirements for the class Second Head Milled Rice. (See also § 868.315)”, instead of “Grades and grade requirements for the class Second Head Milled Rice. (See also § 868.305.)”; and in § 868.312, the correct wording for that section should read “Grades and grade requirements for the class Screenings Milled Rice. (See also § 868.315.)”, instead of “Grades and grade requirements for the class Brewers Milled Rice. (See also § 868.315).”

In a notice published in the Federal Register of August 21, 2003 (68 FR 50541), FDA announced that a food additive petition (FAP 3A4746) had been filed by Unilever United States, Inc., 390 Park Ave., New York, NY 10022-4698. The petition proposed that the food additive regulations be amended in § 172.380 Vitamin D 3 (21 CFR 172.380) to provide for the safe use of vitamin D 3 as a nutrient supplement in certain foods for special dietary use, such as meal replacement products and snack replacement products. Foods specifically identified in the petition were meal replacement bars, other-type bars, and soy-protein based meal replacement beverages that are represented for special dietary use in reducing or maintaining body weight.

Vitamin D 3 currently is approved for use as a nutrient supplement in calcium-fortified fruit juice and fruit juice drinks under § 172.380. Vitamin D 1 , including vitamin D 3 , also is affirmed as generally recognized as safe (GRAS) for use in food under § 184.1950 (21 CFR 184.1950) with the following limitations:

Additionally, under § 184.1950(c)(2) and (c)(3) vitamin D is affirmed as GRAS for use in infant formula and margarine, respectively.

Vitamin D 3 , also known as cholecalciferol, is the chemical 9,10-seco(5Z,7E)-5,7,10(19)-cholestatrien-3-ol. Humans synthesize vitamin D 3 in skin from its precursor, 7-dehydrocholesterol under exposure to ultraviolet B radiation in sunlight. Vitamin D 3 does not accumulate significantly in the body as a result of sun exposure because it is metabolized and removed during normal skin cell turnover. Other sources of naturally occurring vitamin D are foods such as butter, buttermilk, cheese, cream, eggs, fish, goat milk, meat fats and organ meats, and mushrooms.

Vitamin D is essential for human health. The major function of vitamin D is the maintenance of blood serum concentrations of calcium and phosphorus by enhancing the absorption of these minerals in the small intestine. Vitamin D deficiency can lead to abnormalities in calcium and bone metabolism such as rickets in children or osteomalacia in adults. At high levels, vitamin D may be toxic. Excessive intake of vitamin D elevates blood plasma calcium levels by increased intestinal absorption and/or mobilization from the bone.

To ensure that vitamin D is not added to the U.S. food supply at levels that could raise safety concerns, FDA affirmed vitamin D as GRAS with specific limitations, as listed in § 184.1950. Under 21 CFR 184.1(b)(2), an ingredient affirmed as GRAS with specific limitations may be used in food only within such limitations, including the category of food(s), functional use(s), and level(s) of use. Any addition of vitamin D to food beyond those limitations set out in § 184.1950 requires either a food additive regulation or an amendment of § 184.1950.

To support the safety of the proposed uses of vitamin D 3 , Unilever submitted dietary intake estimates from current and proposed uses and naturally occurring sources of vitamin D and compared these exposure estimates to the tolerable upper intake level (UL) for vitamin D established by the Institute of Medicine (IOM) of the National Academies. The petitioner also submitted a number of publications pertaining to human clinical studies on vitamin D. Based on this information, which is discussed in section II of this document, the petitioner concluded that the proposed use of vitamin D 3 in meal replacement bars and other-type bars represented for special dietary use in reducing or maintaining body weight at levels not to exceed 100 IU per 40 g product is safe. The petitioner also concluded that the proposed use of vitamin D 3 in soy-protein based meal replacement beverages represented for special dietary use in reducing or maintaining body weight at levels not to exceed 140 IU per 240 milliliter product is safe.

To establish with reasonable certainty that a food additive is not harmful under its intended conditions of use, FDA considers the projected human dietary exposure to the additive, the additive's toxicological data, and other relevant information (such as published literature) available to the agency. FDA compares an individual's estimated daily intake (EDI) of the additive from all sources to an acceptable intake level established by toxicological data. The EDI is determined by projections based on the amount of the additive proposed for use in particular foods and on data regarding the consumption levels from all sources of the additive.

In 1997, the Standing Committee on the Scientific Evaluation of Dietary Reference Intakes of the Food and Nutrition Board at IOM conducted an extensive review of toxicology and metabolism studies on vitamin D published through 1996. The IOM published a detailed report that included a UL for vitamin D for infants, children, and adults. The IOM UL for vitamin D for children 1 to 18 years of age and adults is 2,000 IU per person per day (IU/p/d). The UL for infants is 1,000 IU/p/d.

The IOM considers the UL as the highest usual intake level of a nutrient that poses no risk of adverse effects when the nutrient is consumed over long periods of time. The UL is determined using a risk assessment model developed specifically for nutrients and considers intake from all sources: Food, water, nutrient supplements, and pharmacological agents. The dose-response assessment, which concludes with an estimate of the UL, is built upon three toxicological concepts commonly used in assessing the risk of exposures to chemical substances: No-observed-adverse-effect level, lowest-observed-effect level, and an uncertainty factor.

The petitioner provided average and 90th percentile vitamin D intake estimates for consumers of meal replacement bars, other-type bars, and soy-protein based meal replacement beverages represented for special dietary use from the following: (1) The proposed food uses, (2) current food uses (including naturally occurring sources of vitamin D), (3) current and proposed food uses, and (4) current and proposed food uses and dietary supplements. The proposed uses are for foods intended for use by adults as part of a weight control diet. Although these special dietary foods are not intended for use by children, the petitioner acknowledged that some sporadic use by children may occur, especially among older children. Therefore, intake estimates for adults and children over the age of 9 years were provided. The agency has determined that the methodology used to calculate these estimates is appropriate.

For the proposed food uses, dietary intake of vitamin D 3 for 90th percentile consumers of meal replacement bars, other-type bars, and soy-protein based meal replacement beverages was estimated to be 215 IU/p/d for consumers 9 years of age and older. The corresponding mean intake was estimated to be 127 IU/p/d.

For currently regulated uses in conventional foods (under § 184.1950 and § 172.380) and naturally occurring sources, mean dietary exposure to vitamin D for consumers of meal replacement bars, other-type bars, and soy-protein based meal replacement beverages was estimated to be 470 IU/p/d for consumers 9 years of age and older. Intake at the 90th percentile was estimated to be 957 IU/p/d. For consumers 9 years of age and older, mean and 90th percentile dietary intakes from current (including naturally occurring sources) and proposed food uses of vitamin D were estimated to be 565 IU/p/d and 995 IU/p/d, respectively.

The petitioner also considered the intake of vitamin D from dietary supplements. The National Health and Nutrition Examination Survey III (NHANES III) data indicate that approximately 40 percent of the U.S. population 2 months of age and older take dietary supplements. The NHANES III data also show that, when vitamin D is taken as a dietary supplement, the most frequent level is 400 IU/p/d. As a conservative estimate of intake of vitamin D from dietary supplements and food uses, the petitioner assumed that all consumers of meal replacement bars, other-type bars, and soy-protein based meal replacement beverages represented for special dietary use would take dietary supplements containing 400 IU of vitamin D. They then added this value to the mean and 90th percentile intake estimates from current and proposed food uses. For consumers of meal replacement bars, other-type bars, and soy-protein based meal replacement beverages, mean and 90th percentile dietary intakes from current and proposed food uses and dietary supplements were estimated to be 965 IU/p/d and 1,395 IU/p/d for consumers 9 years of age and older, respectively. FDA concurs with these exposure estimates.

To support the safety of their proposed uses for vitamin D 3 , Unilever submitted 16 scientific articles published subsequent to the IOM report and issuance of the 2003 final rule permitting the use of vitamin D 3 in calcium-fortified fruit juices and fruit juice drinks within the prescribed limitations (68 FR 9000, February 27, 2003). Unilever concluded that the recent publications continue to support the safe use of vitamin D supplementation in both animals and humans. FDA concurs with Unilever's conclusions.

FDA considered the UL established by IOM for children and adults relative to the intake estimates provided by the petitioner as the primary basis for assessing the safety of the proposed use of vitamin D 3 in meal replacement bars, other-type bars, and soy-protein based meal replacement beverages represented for special dietary use. For all children and adults 9 years of age and older, mean and 90th percentile intake estimates from current and proposed food uses of vitamin D are well below the IOM UL of 2,000 IU/p/d. Additionally, when dietary supplements are included in the calculations, intake estimates remain below the UL.

Because the EDI of vitamin D from all sources is less than the UL, the agency concludes that dietary exposure of vitamin D 3 from its use as a nutrient supplement in meal replacement bars, other-type bars, and soy-protein based meal replacement beverages represented for special dietary use in reducing or maintaining body weight will not pose a safety concern.

Based on all data relevant to vitamin D 3 reviewed by the agency, FDA concludes that there is a reasonable certainty that no harm will result from the use of vitamin D 3 as a nutrient supplement in meal replacement bars, other-type bars, and soy-protein based meal replacement beverages represented for special dietary use in reducing or maintaining body weight. Thus, vitamin D 3 is safe for its proposed use and the agency concludes that the food additive regulations should be amended as set forth in this document. To ensure that only food grade vitamin D 3 is used in food, the additive must meet the specifications set forth in this document.

Based on a request by the petitioner, FDA also is updating § 172.380 by citing the 5th edition of the Food Chemicals Codex rather than the 4th edition. Section 172.380(b) currently states that vitamin D 3 must meet the specifications of the Food Chemicals Codex , 4th ed., 1996. The agency compared specifications for vitamin D 3 in the 4th and 5th editions and found them to be identical. Therefore, the agency is making this requested editorial change. In addition, the agency is making an editorial update to § 172.380(b) to reflect the new address for the National Academy Press. The agency also is making editorial changes to § 172.380(c) for clarification.

In accordance with § 171.1(h) (21 CFR 171.1(h)), the petition and the documents that FDA considered and relied upon in reaching its decision to approve the petition are available for inspection at the Center for Food Safety and Applied Nutrition by appointment with the information contact person (see FOR FURTHER INFORMATION CONTACT ). As provided in § 171.1(h), the agency will delete from the documents any materials that are not available for public disclosure before making the documents available for inspection.

The agency has previously considered the environmental effects of this rule as announced in the notice of filing for FAP 3A4746 (68 FR 50541). No new information or comments have been received that would affect the agency's previous determination that there is no significant impact on the human environment and that an environmental impact statement is not required.

This final rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

Any person who will be adversely affected by this regulation may file with the Division of Dockets Management (see ADDRESSES ) written or electronic objections. Each objection shall be separately numbered, and each numbered objection shall specify with particularity the provisions of the regulation to which objection is made and the grounds for the objection. Each numbered objection on which a hearing is requested shall specifically so state. Failure to request a hearing for any particular objection shall constitute a waiver of the right to a hearing on that objection. Each numbered objection for which a hearing is requested shall include a detailed description and analysis of the specific factual information intended to be presented in support of the objection in the event that a hearing is held. Failure to include such a description and analysis for any particular objection shall constitute a waiver of the right to a hearing on the objection. Three copies of all documents are to be submitted and are to be identified with the docket number found in brackets in the heading of this document. Any objections received in response to the regulation may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

Background

The final regulations (TD 9207) that is the subject of this correction are under sections 358, 704, 705, 737 and 752 of the Internal Revenue Code.

As published, TD 9207 contains an error that may prove to be misleading and is in need of clarification.

The collection of information contained in these final regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-1892.

The collection of information in these final regulations is in § 26.2632-1(b)(2)(iii) and (b)(3). This information is required by the IRS for taxpayers who elect to have the automatic allocation rules not apply to the current transfer and/or to future transfers to the trust or to terminate such election. This information is also required by the IRS for taxpayers who elect to treat trusts described in section 2632(c)(3)(B)(i) through (vi) as GST trusts or to terminate such election.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

Books or records relating to this collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

This document contains amendments to 26 CFR part 26 under section 2632-1 pertaining to the election under section 2632(c)(5)(A)(i) of the Internal Revenue Code to not have the deemed allocation of unused generation-skipping transfer (GST) tax exemption under section 2632(c)(1) apply with regard to certain transfers to a GST trust, as defined in section 2632(c)(3)(B) and the election under section 2632(c)(5)(A)(ii) to treat a trust as a GST trust.

On July 13, 2004, the IRS published (REG-153841-02) in the Federal Register a notice of proposed rulemaking (69 FR 42000). The IRS received written and oral comments responding to the notice of proposed rulemaking. No public hearing was requested or held. After consideration of all the comments, the proposed regulations are adopted as amended by this Treasury decision, and the corresponding proposed regulations are removed. The comments and revisions to the proposed regulations are discussed below.

The proposed regulations generally permitted transferors only two options for electing out of the automatic allocation rules. Transferors could elect out with respect to a current transfer only, or with respect to a current-year transfer and all future transfers to the same trust. Several commentators suggested that the final regulations provide transferors additional options. In response to these comments, the final regulations include the options provided in the proposed regulations and, in addition, give transferors the option of electing out with respect to (1) only certain designated future transfers to a trust, or (2) all future transfers made by the transferor to any trust (regardless of whether the trust exists at the time of the election out). Under the final regulations, the transferor may elect out with respect to future transfers even if the transferor has not made a current-year transfer and is not otherwise required to file a Federal gift tax return. Examples have been added illustrating language that may be used in the election out statement to satisfy the requirements for the various election out options.

One commentator suggested that the statements required by the regulations to elect out of the automatic GST allocation or to treat a trust as a GST trust should not require a citation to the specific regulation section that authorizes the election. The final regulations adopt this suggestion.

In response to comments, the final regulations have been clarified to specifically confirm that an election out of the automatic allocation rules for future years is limited to automatic allocations under section 2632(c) (automatic allocations to indirect skips made during the transferor's lifetime) and has no effect on the automatic allocation rules that apply after the transferor's death under section 2632(e).

One commentator recommended that the IRS clarify whether the effective date of an automatic allocation is changed if the transfer is reported on a late filed Federal gift tax return. For indirect skips made after December 31, 2000, to which section 2642(f) does not apply, the transferor's unused GST exemption is automatically allocated to the property transferred. Section 26.2632-1(b)(1)(ii) generally provides that in the case of direct skips, unless the transferor elects out of the automatic allocation rules, the automatic allocation becomes irrevocable on the due date for filing the Federal gift tax return, and the allocation is effective as of the date of the transfer. Thus, even if the Federal gift tax return reporting the transfer is filed late, or no Federal gift tax return is filed, the automatic allocation nevertheless is irrevocable on the due date of that return and takes effect as of the date of the transfer. The final regulations clarify that the same rules apply in the case of an automatic allocation to an indirect skip under section 2632(c). The automatic allocation is effective as of the date of the transfer, and becomes irrevocable on the due date for filing the Form 709 for the calendar year in which the transfer is made, whether or not a gift tax return is filed reporting the transfer.

Commentators suggested that, if a transferor makes an indirect skip and affirmatively allocates GST exemption in an amount that is less than the value of the property transferred, the transaction should be treated as an allocation of the amount that was affirmatively allocated and an election out of the automatic allocation rules for the value of the property not covered by the exemption amount affirmatively allocated. Treasury and the IRS agree with the commentators that this treatment would give effect to the transferor's most likely intent to limit the allocation of exemption to the amount that was affirmatively allocated. Accordingly, under the final regulations, an affirmative partial allocation of GST exemption is treated as an election out of the automatic allocation rules with regard to the balance of that specific transfer.

In response to comments, the rules regarding the automatic allocation to an indirect skip subject to an estate tax inclusion period (ETIP) have been revised in conformance with section 2632(c)(4) to provide that the automatic allocation to a direct skip or an indirect skip is deemed to be made at the close of the ETIP. Therefore, under the final regulations, a transferor may elect out of the automatic allocation rules for transfers subject to an ETIP that are either direct skips or indirect skips at any time prior to the due date of the Federal gift tax return for the calendar year during which the ETIP closes. Thus, transferors may elect out of the automatic allocation rules on the gift tax return reporting the transfer to the trust, or on a gift tax return filed for any calendar year subsequent to the year of the transfer up to and including the calendar year in which the ETIP closes. It should be noted that an election out of the automatic allocation for “all current transfers” or for “all transfers in the current year” includes an election out for a transfer subject to an ETIP that was made during that year, but an election out of the automatic allocation rules for “all future transfers” to a trust will not apply with respect to any previous transfer to a trust subject to an ETIP that is to close in the future. To apply the election out to prior-year transfers that are subject to an ETIP, the election out statement must specifically describe the prior-year transfers to be covered by the election out, state that those transfers are subject to an ETIP, and state that the transferor wishes to elect out of the automatic allocation to those prior-year transfers. Except in that limited circumstance, the final regulations provide that an election out does not apply to any prior-year transfer to a trust, including a transfer subject to an ETIP, even if the ETIP closes after the election has been made. It should be noted also that, once an affirmative allocation of GST exemption has been made (including to a transfer subject to an ETIP), the allocation may not be revoked.

One commentator recommended that transferors who made indirect skips after December 31, 2000, and before the proposed regulations become final, should be allowed to elect out of the automatic allocation rules on or before April 15th of the calendar year after the year in which the final regulations are published. The Treasury Department and the IRS believe, however, that this extension of the time to elect out of the automatic allocation rules is unnecessary. Notice 2001-50 (2001-2 C.B. 189) (see § 601.601(d)(2)(ii)(b) of this chapter) alerted transferors that regulations would provide that an election under section 2632(c)(5) is to be made on a timely filed Federal gift tax return reporting the transfer. Further, the preamble to the proposed regulations provided that any election made on or before the date of publication of the proposed regulations will be recognized if the election was made on a timely filed Federal gift tax return in a manner that provided adequate notice to the Commissioner that the transferor made the election. Accordingly, this suggestion was not adopted.

Commentators suggested that the regulations include an example addressing the application of the automatic allocation rules for indirect skips in a situation in which a trust subject to an ETIP terminates upon the expiration of the ETIP, at which time the trust assets are distributed to other trusts that may be GST trusts. The Treasury Department and the IRS believe, however, that this issue is outside the scope of this regulation, and will consider whether to address the issue in separate guidance.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and, because these regulations do not impose on small entities, a collection of information requirement, the Regulatory Flexibility Act (5 U.S.C. chapter 6), does not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the Notice of Proposed Rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

The principal author of these final regulations is Mayer R. Samuels, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department also participated in their development.

We (MSHA) first consolidated our listing of OMB control numbers in a final rule published on June 29, 1995 (60 FR 33719). This action codified the OMB control numbers for our standards and regulations in one location to assist the public in quickly determining whether a specific information collection requirement was approved by OMB. Table 1 in 30 CFR 3.1 displays the OMB control number for each section containing a requirement for the collection, reporting, recordkeeping, or dissemination of information.

We are prohibited from conducting a collection of information unless it displays a currently valid OMB control number, and we inform the potential responders that they are not required to respond unless the collection of information displays a currently valid OMB control number. By publishing this list, we are following the recommendation of OMB pursuant to 5 CFR 1320.3(f)(3) and 1320.5(b)(2)(ii)(C) that, even where we have already provided the above information “in a manner reasonably calculated to inform the public,” that we also “publish such information along with a table or codified section of OMB control numbers to be included in the Code of Federal Regulations .”

This revision updates our current list of OMB control numbers to include new control numbers approved by OMB for standards and regulations completed since the last update and any changes made through the renewal of previously issued OMB control numbers. There are no substantive changes or renewals made to information collection requirements by this technical amendment.

Information collection requirements go through the public review process, including notice and comment, as part of the rule to which they apply. Likewise, the renewal of an OMB control number also requires public review, including notice and comment. As a result, we find that it is unnecessary to have further public notice and comment and that, therefore, there is “good cause” under 5 U.S.C. 553(b)(B) of the Administrative Procedure Act (APA) to issue this technical amendment to Table 1 in 30 CFR part 3 without prior public notice and comment.

We also determined that it is unnecessary to delay the effective date. The technical amendment contains no new requirements for which the public would need time, beyond that provided for in the regulation itself, to plan compliance. We find, therefore, there is “good cause” to except this action from the 30-day delayed effective date requirement under 5 U.S.C. 553(d)(3) of the APA.

On April 2, 2004, the Mine Safety and Health Administration (MSHA) published a final rule (69 FR 17480) revising underground coal mine ventilation standards to allow the use of air traveling in the belt entry (belt air) to ventilate working sections or to areas where mechanized mining equipment is being installed or removed. In response to the belt air rule's publication, the International Union, United Mine Workers of America (“the Union”) and Jim Walter Resources, Inc. (“JWR”) filed petitions with the Court of Appeals for the DC Circuit challenging the rule on separate grounds. The court consolidated both petitions and issued a decision, International Union, United Mine Workers of America v. Mine Safety and Health Administration , 407 F.3d 1250 (DC Cir. 2005). The Court denied the Union's petition for review. In the petition of JWR, the coal mining company challenged the Secretary's promulgation of 30 Code of Federal Regulations (CFR) 75.350(a)(2), which states that “[t]he maximum air velocity in the belt entry must be no greater than 500 feet per minute unless otherwise approved in the mine ventilation plan.” JWR contended that the 500 feet per minute velocity cap referenced in the section was invalid because the Secretary failed to comply with the notice-and-comment requirements of section 101(a) of the Federal Mine Safety and Health Act of 1977, 30 United States Code (U.S.C.) 811(a), and the Administrative Procedure Act, 5 U.S.C. 553(b).

The Court of Appeals granted JWR's petition; vacated paragraph (a)(2) of § 75.350(a)(2); and remanded the matter to the Secretary of Labor. In compliance with the Court's opinion the provision is removed from 30 CFR and the remaining provision is renumbered.

Experience indicates that substantial lumber market declines that would warrant a market-related contract term addition generally coincide with substantial economic distress in the wood products industry. Such economic distress broadly affects community stability, the ability of the wood products industry to supply construction lumber and other wood products from domestic sources, and threatens the existence of wood manufacturing plants needed to meet future demands for wood products.

The softwood lumber market decline in 1980-1982 resulted in large numbers of defaults on timber sale contracts. The market-related contract term addition policy was developed in order to establish procedures under the Federal Timber Contract Payment Modification Act or “Buyout Act” for extending contract termination dates in response to severely declining wood products markets. The Buyout Act was considered an extraordinary measure to respond to a crisis, but also recognized the need to prevent such a crisis from occurring in the future. Accordingly, on December 7, 1990, the Department published a final rule (55 FR 50643) to establish procedures at 36 CFR 223.52 for extending contract termination dates to avoid another crisis like the crisis which occurred in the early 1980s due to severe adverse conditions in the wood products markets. The rule provides that if the Chief finds that adverse wood products market conditions have resulted in a drastic reduction in wood product prices and the purchaser of a qualifying contract makes a written request, additional time may be added to the contract term.

A finding that a drastic reduction in wood product prices has occurred constitutes a finding that the substantial overriding public interest justifies extension of certain timber sale contracts, in accordance with the National Forest Management Act of 1976 (16 U.S.C. 72a(c)) and existing regulations at 36 CFR 223.115(b).

Since adoption of the rule, a drastic reduction in wood product prices has occurred in 1991, 1995, 1998, and 2000. As a result, the Forest Service notified purchasers and, upon the purchasers' written request, added an additional year to timber sale contract terms for qualifying contracts.

The rule required the use of various wood product Producer Price Indices (PPI), prepared by the Department of Labor, Bureau of Labor Statistics (BLS), to determine whether a drastic reduction in wood product prices has occurred.

Appearing before the House Appropriations Subcommittee on Interior and Related Agencies, on April 28, 1992 (Testimony Report number, T-RCED-92-58), the General Accountability Office (GAO) testified that in implementing the regulation in 1991, the Forest Service used a formula with inappropriate data to reach a determination that prices for wood products from the Pacific Northwest had drastically declined. Specifically, GAO testified that the Forest Service used a formula developed with price data that were not adjusted to account for seasonal fluctuations. GAO noted that if the Forest Service had used the BLS' seasonally adjusted price data, the formula would not have indicated a drastic price reduction and would not have triggered contract extensions on the west side of the Pacific Northwest.

GAO further testified that the BLS advises use of seasonally adjusted data are designed to eliminate the effects of normal market fluctuations that occur at about the same time, and in about the same magnitude, each year, such as price movements resulting from normal weather patterns and regular production and marketing cycles. GAO recommended that the Secretary of Agriculture direct the Chief of the Forest Service to stop using the BLS' unadjusted indices in reaching determinations that wood product prices have drastically declined.

The Secretary of Agriculture agreed to re-examine the use of the BLS' unadjusted PPI to determine whether wood product prices showed a drastic decline. Subsequently, the Forest Service concurred that seasonally adjusted PPI, adjusted to a constant dollar base, could be used to determine whether a drastic reduction in wood product prices has occurred and, therefore, whether a market-related contract term addition should be granted. However, after December 1994, the BLS stopped applying seasonal adjustments to the monitored PPI, since they found insufficient statistical evidence to demonstrate a need to continue adjusting these indices.

The initial PPI from the BLS used by the Forest Service were from the commodity series and included lumber indices for Douglas Fir, Dressed (081101); Southern Pine, Dressed (081102); Other Species, Dressed (081103); and Hardwood Lumber (0812). However, on May 1, 1998, the Department published a final rule (63 FR 24110) requiring the use of Industry Series PPI from the BLS, rather than the previously required indices in the commodity series. In addition to changing the index series, the final rule made a number of other technical changes. The Industry Series PPI used were Western Softwood (SIC 24214), Eastern Softwood (SIC 24213), and Hardwood Lumber (SIC 24211), which were considered more representative of the sawmill industry than the prior indices in the commodity series. The Forest Service also added the Industry Series Wood Chips (SIC 24215) PPI to measure market changes in the price of chips and to address the volatility of the wood chip market. In order to increase the utilization of small diameter material, many contracts include or consist primarily of chipable material.

However, after December 2003, the BLS discontinued publishing the following three lumber PPI: Western Softwood Lumber (SIC 24214), Eastern Softwood Lumber (SIC 24213), and Hardwood Lumber (SIC 24211), which were used by the Forest Service. The BLS also changed the Wood Chips PPI number from SIC 24215 to NAICS 3211135. In lieu of the three discontinued PPI, the Forest Service plans to use, effective retroactively to January, 2004, the following two lumber PPI: Softwood Lumber (0811) and Hardwood Lumber (0812). The Forest Service will continue to use the Wood Chips PPI ( reference number NAICS 3211135).

A review of other readily available indices, such as Random Lengths indices and Western Wood Products Association indices, representing the same wood product markets shows that indices comparable to these PPI do not exist. Some regional indices are available; however, the timing, frequency, and procedure for collection of information for these indices varies. Some index services or associations use previous month invoice prices that are provided by their members, while other services use current month negotiated bid prices or sale prices. Wood product price indices, prepared nationally and consistently, are not available.

The BLS discontinued publishing seasonally adjusted versions of the Softwood Lumber (0811) and Hardwood Lumber (0812) PPI after December 2003. None of the three indices to be implemented in this interim final rule are seasonally adjusted. Each PPI is adjusted to a constant dollar base by dividing it by the PPI for All Commodities (00000000) to eliminate changes due to inflation and deflation.

A drastic reduction in wood product prices has occurred when, for 2 or more consecutive quarters after contract award, the applicable adjusted PPI is less than 85 percent of the average of such adjusted indices for the 4 highest of the 8 calendar quarters immediately prior to the qualifying quarter.

Forest supervisors determine which of the PPI that the Forest Service monitors is used for each contract. The selected PPI is representative of the predominant species and product, by volume, included in the contract.

The Forest Service is issuing this interim final rule implementing the use of three alternative PPI to be able to continue providing contract term additions due to drastic reductions in wood products markets, prior to publishing a final rule. By using the three alternative PPI, the Forest Service will be able to continue providing market-related contract term additions during drastic reductions in wood products market prices.

This interim final rule has been reviewed under USDA procedures and Executive Order 12866 on Regulatory Planning and Review. OMB has determined that this is not a significant rule. This rule will not have an annual effect of $100 million or more on the economy nor adversely affect productivity, competition, jobs, the environment, public health or safety, nor State or local governments. This rule will not interfere with an action taken or planned by another agency nor raise new legal or policy issues. In short, little or no effect on the national economy will result from this rule change. This action consists of administrative changes to regulations affecting timber sale contract length. The PPI selected reflect the cyclic nature of wood products markets and help the agency determine whether a drastic decline has occurred in these particular markets.

Finally, this action will not alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients of such programs. Accordingly, this interim final rule is not subject to OMB review under Executive Order 12866.

Moreover, this interim final rule has been considered in light of the Regulatory Flexibility Act (5 U.S.C. 610 et seq. ), and it is hereby certified that this action will not have a significant economic impact on a substantial number of small entities as defined by that act. Failure to adopt the PPI selected for measuring drastic reductions in wood product prices may result in both small purchasers and large purchasers not getting additional time to complete their contracts. Modifications to timber sale contract price indices have the intended effect of allowing purchasers additional time to complete contracts when severe adverse conditions have occurred in the wood products markets.

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, which the President signed into law on March 22, 1995, the Department has assessed the effects of this rule on State, local, and tribal governments and the private sector. This rule does not compel the expenditure of $100 million or more by any State, local, or tribal governments or anyone in the private sector. Therefore, a statement under section 202 of the act is not required.

This interim final rule deals with business practices related to timber sale contracts and, as such, has no direct effect on the amount, location, or manner of timber offered for purchase. Section 31.1b of Forest Service Handbook 1909.15 (57 FR 43180; September 18, 1992) excludes from documentation in an environmental assessment or impact statement “rules, regulations, or policies to establish Service-wide administrative procedures, program processes, or instructions.” The Department's preliminary assessment is that this rule falls within this category of actions and that no extraordinary circumstances exist which would require preparation of an environmental assessment or environmental impact statement. A final determination will be made upon adoption of the final rule.

This interim final rule does not contain any recordkeeping or reporting requirements or other information collection requirements as defined in 5 CFR 1320 and, therefore, imposes no paperwork burden on the public. Accordingly, the review provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq. ) and implementing regulations at 5 CFR part 1320 do not apply.

The Forest Service invites comments on this interim final rule implementing the use of selected Commodity and Industry Series PPI from the BLS to apply market-related contract term additions to timber sale contracts. Comments received will be considered in the development of the final rule, which will be published in the Federal Register .

Throughout this document, wherever “we,” “us,” or “our” is used, we mean the EPA. Information is organized as follows:

A. Submitting Confidential Business Information (CBI). Do not submit this information to EPA through EDOCKET, regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

B. Tips for Preparing Your Comments. When submitting comments, remember to:

i. Identify the rulemaking by docket ID number and other identifying information (subject heading, Federal Register date and page number).

ii. Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

iii. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

iv. Describe any assumptions and provide any technical information and/or data that you used.

v. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

vi. Provide specific examples to illustrate your concerns, and suggest alternatives.

vii. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

viii. Make sure to submit your comments by the comment period deadline identified.

EPA is approving the Spokane CO maintenance plan and redesignating the Spokane Nonattainment Area from nonattainment to attainment for CO as requested by the State of Washington on November 29, 2004. The maintenance plan demonstrates that Spokane will be able to remain in attainment for the next 10 years. The Spokane, Washington CO nonattainment area is eligible for redesignation to attainment because air quality data shows that it has not recorded a violation of the primary or secondary CO air quality standards since 1996.

Areas meeting the requirements of section 107(d) of the Clean Air Act (the Act) were designated nonattainment for CO by operation of law. Under section 186(a) of the Act, each CO nonattainment area was also classified by operation of law as either moderate or serious depending on the severity of the area's air quality problems. Spokane was classified as a moderate CO nonattainment area. Moderate CO nonattainment areas were expected to attain the CO NAAQS as expeditiously as practicable but no later than December 31, 1995. If a moderate CO nonattainment area was unable to attain the CO NAAQS by December 31, 1995, the area was reclassified as a serious CO nonattainment area by operation of law. Spokane was unable to meet the CO NAAQS by December 31, 1995, and was reclassified as a serious nonattainment area effective April 13, 1998.

EPA made a determination based on air quality data that the Spokane CO nonattainment area in Washington attained the NAAQS for CO as of December 31, 2000, effective September 21, 2001 (66 FR 44060, August 22, 2001).

On September 20, 2001, and November 22, 2004, the Washington Department of Ecology (Ecology) submitted the Spokane CO attainment plan as a revision to the Washington SIP. We reviewed and subsequently approved the plan effective June 13, 2005. (See 70 FR 24991, May 12, 2005.)

Section 107(d)(3)(E) of the Act states that EPA can redesignate an area to attainment if the following conditions are met:

1. The State must attain the applicable NAAQS.

2. The area must have a fully approved SIP under section 110(k) of the Act and the area must meet all the relevant requirements under section 110 and part D of the Act.

3. The air quality improvement must be permanent and enforceable.

4. The area must have a fully approved maintenance plan pursuant to section 175A of the Act.

EPA has reviewed the State's maintenance plan and redesignation request. EPA believes the Ecology submittal meets the requirements of section 107(d)(3)(E). The following is a summary of EPA's evaluation and a description of how each of the above requirements is met.

To attain the CO NAAQS, an area must have complete quality-assured data showing no more than one exceedance of the standard per year at any monitoring site in the nonattainment area for at least two consecutive years. The redesignation of Spokane is based on air quality data that shows that the CO standard was not violated from 1997 through 2004, or since. These data were collected by Ecology in accordance with 40 CFR 50.8, and entered in the EPA Air Quality System database following EPA guidance on quality assurance and quality control. Since the Spokane, Washington area has complete quality-assured monitoring data showing attainment with no violations after 1996, the area has met the statutory criterion for attainment of the CO NAAQS. EPA has already found the Spokane area attained the NAAQS.

Yes. Spokane was classified as a moderate nonattainment area upon enactment of the Clean Air Act in 1990. Spokane was unable to meet the CO NAAQS by December 31, 1995, and was reclassified a serious nonattainment area effective April 13, 1998. Therefore, the requirements applicable to the Spokane nonattainment area for inclusion in the Washington SIP included an attainment demonstration, 1996 base year emission inventory with periodic updates, low enhanced motor vehicle inspection/maintenance (I/M) program, oxygenated gasoline program, contingency measures, conformity procedures, and a permit program for new or modified major stationary sources. EPA has previously approved all of these required elements into the Washington SIP (70 FR 24991, May 12, 2005).

Yes. Emissions reductions were achieved through a number of permanent and enforceable control measures including the Federal Motor Vehicle Control Program establishing emission standards for new motor vehicles; a low enhanced I/M program; an Oxygenated Gasoline Program; a Washington Wood Stove Curtailment Program; and Transportation Control Measures.

Ecology has demonstrated that permanent and enforceable emission reductions are responsible for the air quality improvement and that the CO emissions in the base year are not artificially low due to a local economic downturn or unusual or extreme weather patterns. We believe the combination of certain existing EPA-approved SIP and Federal measures result in permanent and enforceable reductions in ambient CO levels that have allowed the area to attain the NAAQS.

Section 175A sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. The plan must demonstrate continued attainment of the applicable NAAQS for at least ten years after the Administrator approves a redesignation to attainment. Probabilistic rollback modeling conducted by Spokane indicated that no additional emission reductions must be achieved to ensure attainment of the NAAQS for the maintenance period. Eight years after the redesignation, the State must submit a revised maintenance plan which demonstrates attainment for the ten years following the initial ten-year period. The maintenance plan must contain contingency measures to be implemented if future NAAQS violations occur. The Spokane CO maintenance plan meets the requirements of 175A.

Yes. Ecology submitted comprehensive inventories of CO emissions from point, area and mobile sources using 2002 as the base year. Since air monitoring recorded attainment of CO in 2002, this is an acceptable year for the base year inventory. This data was then used in calculations to demonstrate that the CO standard will be maintained in future years. Ecology calculated inventories for 2010 and 2015. Future emission estimates are based on forecast assumptions of reductions due to control measures, growth of the regional economy, and vehicle miles traveled.

Mobile sources are the greatest source of CO. Although vehicle use is expected to increase in the future, more stringent Federal automobile standards and removal of older, less efficient cars over time will still result in an overall decline in CO emissions. The projections in the maintenance plan demonstrate that future emissions, assuming no oxygenated gasoline program, are not expected to exceed base year levels.

Total CO emissions were projected from the 2002 base year out to 2010 and 2015. These projected inventories were prepared according to EPA guidance. Because compliance with the 8-hour CO standard is linked to average daily emissions, emission estimates reflecting a typical winter season day (tons of CO per day) were used for the maintenance demonstration. The following table summarizes the 2002 base year actual emissions and the 2010 and 2015 projected emissions. The on-road mobile emissions were modeled for 2010 and 2015 using MOBILE6.2.

In accordance with 40 CFR part 58 and EPA's Redesignation Guidance, Ecology has committed to continue monitoring in this area in accordance with 40 CFR part 58. Ecology will also conduct a comprehensive review of plan implementation and air quality status eight years after redesignation. The State will then submit a SIP revision that includes a full emissions inventory update and provides for the continued maintenance of the standard ten years beyond the initial ten-year period.

Section 175A(d) of the CAA requires that a maintenance plan include contingency provisions. Spokane County Air Pollution Control Agency (SCAPCA) will drop the winter oxygenated fuels requirement for Spokane after redesignation. One of the contingencies in the maintenance plan is that SCAPCA will re-adopt this requirement if the CO standard is violated. In addition, violation of the standard will initiate a local process by SCAPCA, Spokane Regional Transportation Council (SRTC), Ecology and EPA to identify and evaluated potential contingency measures other than or in addition to the oxygenated fuels requirement. SCAPCA will initiate a subcommittee process in coordination with SRTC, Ecology, and EPA to begin evaluating potential contingency measures no more than 60 days after being notified by Ecology that a violation has occurred. The maintenance plan requires that the necessary contingency measures will be implemented within one year of the date of the CO NAAQS violation.

In accordance with section 175A(b) of the Act, the State has agreed to submit a revised maintenance SIP eight years after the area is redesignated to attainment. That revised SIP must provide for maintenance of the standard for an additional ten years. It will include a full emissions inventory update and projected emissions demonstrating continued attainment for ten additional years.

Yes. Section 176(c)(2)(A) of the Act requires regional transportation plans to be consistent with the motor vehicle emissions budget contained in the applicable air quality plan for the Spokane area. The 2002 motor vehicle emissions budget that is established for the Spokane first ten-year CO maintenance plan is 279 tons of CO.

The TSD summarizes how the CO motor vehicle emissions budget meets the criteria contained in the conformity rule.

EPA is approving the Spokane CO Maintenance Plan and redesignating the Spokane CO nonattainment area to attainment. This redesignation is based on validated monitoring data and projections made in the maintenance demonstration. EPA believes the area will continue to meet the NAAQS for CO for at least ten years beyond this redesignation, as required by the Act. Washington has demonstrated compliance with the requirements of section 107(d)(3)(E) based on information provided by Ecology and contained in the Washington SIP and Spokane, Washington CO maintenance plan. A Technical Support Document on file at the EPA Region 10 office contains a detailed analysis and rationale in support of the redesignation of Spokane's CO nonattainment area to attainment.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4).

This rule also does not have tribal implications because it will 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). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Act. 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. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 29, 2005. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

This is a summary of the Commission's First Report and Order (Order) in WC Docket No. 04-36, FCC 05-116, adopted May 19, 2005, and released June 3, 2005. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC, 20554. This document 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 (800) 378-3160 or (202) 863-2893, facsimile (202) 863-2898, or via e-mail at www.bcpiweb.com . It is also available on the Commission's website at http://www.fcc.gov .

In addition to filing comments with the Office of the Secretary, a copy of any comments on the Paperwork Reduction Act information collection requirements contained herein should be submitted to Judith B. Herman, Federal Communications Commission, Room 1-C804, 445 12th Street, SW, Washington, DC 20554, or via the Internet to Judith-B.Herman@fcc.gov.

1. Background. In the Notice of Proposed Rulemaking (NPRM) (69 FR 16193, March 29, 2004), we asked, among other things, about the potential applicability of “basic 911,” “enhanced 911,” and related critical infrastructure regulation to VoIP and other Internet Protocol (IP)-enabled services. Specifically, after noting that the Commission previously found in the E911 Scope Order (69 FR 6578, February 11, 2004) that it has statutory authority under sections 1, 4(i), and 251(e)(3) of the Communications Act of 1934, as amended (Act), to determine what entities should be subject to the Commission's 911 and E911 rules, the Commission sought comment on whether it should exercise its regulatory authority in the context of IP-enabled services. The Commission further sought comment on the appropriate criteria for determining whether and to what extent IP-enabled services should fall within the scope of its 911 and E911 regulatory framework, and whether IP-enabled services are technically and operationally capable of meeting the Commission's basic and/or E911 rules or of providing analogous functionalities that would meet the intent of the 911 Act and the Commission's regulations.

2. Discussion. In this Order, we define “interconnected VoIP service” and require providers of this type of VoIP service to incorporate E911 service into all such offerings within the period of time specified below. We commit ourselves to swift and vigorous enforcement of the rules we adopt today. Because we have not decided whether interconnected VoIP services are telecommunications services or information services, we analyze the issues addressed in this Order primarily under our Title I ancillary jurisdiction to encompass both types of service. We decline to exempt providers of interconnected VoIP services from liability under state law related to their E911 services.

3. Scope. Our first task is to determine what IP-enabled services should be the focus of our concern. We begin by limiting our inquiry to VoIP services, for which some type of 911 capability is most relevant. The Commission previously has determined that customers today lack any expectation that 911 will function for non-voice services like data services. The record clearly indicates, however, that consumers expect that VoIP services that are interconnected with the PSTN will function in some ways like a “regular telephone” service. At least regarding the ability to provide access to emergency services by dialing 911, we find these expectations to be reasonable. If a VoIP service subscriber is able to receive calls from other VoIP service users and from telephones connected to the PSTN, and is able to place calls to other VoIP service users and to telephones connected to the PSTN, a customer reasonably could expect to be able to dial 911 using that service to access appropriate emergency services. Thus, we believe that a service that enables a customer to do everything (or nearly everything) the customer could do using an analog telephone, and more, can at least reasonably be expected and required to route 911 calls to the appropriate destination.

4. The E911 rules the Commission adopts today apply to those VoIP services that can be used to receive telephone calls that originate on the PSTN and can be used to terminate calls to the PSTN—“interconnected VoIP services.” Although the Commission has not adopted a formal definition of “VoIP,” we use the term generally to include any IP-enabled services offering real-time, multidirectional voice functionality, including, but not limited to, services that mimic traditional telephony. Thus, an interconnected VoIP service is one we define for purposes of the present Order as bearing the following characteristics: (1) The service enables real-time, two-way voice communications; (2) the service requires a broadband connection from the user's location; (3) the service requires IP-compatible customer premise equipment (CPE); and (4) the service offering permits users generally to receive calls that originate on the PSTN and to terminate calls to the PSTN. We make no findings today regarding whether a VoIP service that is interconnected with the PSTN should be classified as a telecommunications service or an information service under the Act.

5. While the rules we adopt today apply to providers of all interconnected VoIP services, we recognize that certain VoIP services pose significant E911 implementation challenges. For example, the mobility enabled by a VoIP service that can be used from any broadband connection creates challenges similar to those presented in the wireless context. These “portable” VoIP service providers often have no reliable way to discern from where their customers are accessing the VoIP service. The Commission's past experience with setting national rules for 911/E911 service is informative, and we expect that our adoption today of E911 service obligations for providers of interconnected VoIP service will speed the further creation and adoption of such services, similar to the manner in which the Commission's adoption of E911 service obligations in the wireless context helped foster the widespread availability of E911 services for mobile wireless users, where it formerly was not possible for wireless carriers automatically to determine the precise geographic location of their customers. We recognize and applaud the progress that has already been made to ensure that VoIP customers have E911 services. We stress, however, that should the need arise, we stand ready to expand the scope or substance of the rules we adopt today if necessary to ensure that the public interest is fully protected.

6. Authority. We conclude that we have authority under Title I of the Act to impose E911 requirements on interconnected VoIP providers, and commenters largely agree. In addition, we conclude that we have authority to adopt these rules under our plenary numbering authority pursuant to section 251(e) of the Act. We find that regardless of the regulatory classification, the Commission has ancillary jurisdiction to promote public safety by adopting E911 rules for interconnected VoIP services. This Order, however, in no way prejudges how the Commission might ultimately classify these services. To the extent that the Commission later finds these services to be telecommunications services, the Commission would have additional authority under Title II to adopt these rules.

7. Ancillary jurisdiction may be employed, in the Commission's discretion, when Title I of the Act gives the Commission subject matter jurisdiction over the service to be regulated and the assertion of jurisdiction is “reasonably ancillary to the effective performance of [its] various responsibilities.” Both predicates for ancillary jurisdiction are satisfied here.

8. First, based on sections 1 and 2(a) of the Act, coupled with the definitions set forth in section 3(33) (“radio communication”) and section 3(52) (“wire communication”), we find that interconnected VoIP is covered by the Commission's general jurisdictional grant. Specifically, section 1 states that the Commission is created “[f]or the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States * * * a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges,” and that the agency “shall execute and enforce the provisions of th[e] Act.” Section 2(a), in turn, confers on the Commission regulatory authority over all interstate communication by wire or radio. In the NPRM, the Commission adopted no formal definition of “VoIP” but used the term generally to include “any IP-enabled services offering real-time, multidirectional voice functionality, including, but not limited to, services that mimic traditional telephony.” Recently, in the Vonage Order , the Commission found that Vonage's DigitalVoice service—an interconnected VoIP service—is subject to the Commission's interstate jurisdiction. Consistent with that conclusion, we find that interconnected VoIP services are covered by the statutory definitions of “wire communication” and/or “radio communication” because they involve “transmission of [voice] by aid of wire, cable, or other like connection * * *” and/or “transmission by radio * * *” of voice. Therefore, these services come within the scope of the Commission's subject matter jurisdiction granted in section 2(a) of the Act.

9. Second, our analysis requires us to evaluate whether imposing a E911 requirement is reasonably ancillary to the effective performance of the Commission's various responsibilities. Based on the record in this matter, we find that the requisite nexus exists. The Act charges the Commission with responsibility for making available “a rapid, efficient, Nation-wide, and world-wide wire and radio communication service * * * for the purpose of promoting safety of life and property through the use of wire and radio communication.” In light of this statutory mandate, promoting an effective nationwide 911/E911 emergency access system has become one of the Commission's primary public safety responsibilities under the Act. As the Commission has recognized, “[i]t is difficult to identify a nationwide wire or radio communication service more immediately associated with promoting safety of life and property than 911.” Indeed, the Commission has previously relied on Title I to satisfy both prongs of the standard for asserting ancillary jurisdiction: (1) Subject matter jurisdiction; and (2) the statutory goal furthered by the regulation. For example, in Rural Telephone Coalition v. FCC , the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) upheld the Commission's assertion of ancillary jurisdiction to establish a funding mechanism to support universal service in the absence of specific statutory authority as ancillary to its responsibilities under section 1 of the Act to “further the objective of making communications service available to all Americans at reasonable charges.” Thus, we conclude that as more consumers begin to rely on interconnected VoIP services for their communications needs, the action we take here ensures that the Commission continues to “further the achievement of long-established regulatory goals” to “promot[e] safety of life and property.”

10. Our actions today are consistent with, and a necessary extension of, our prior exercises of authority to ensure public safety. Since 1996, the Commission has acted to impose 911/E911 rules on providers of new technologies. Since that time, the Commission has affirmed and expanded on those efforts by exercising jurisdiction over other services to impose 911/E911 requirements, relying primarily on its Title I authority. That exercise of authority has been ratified, not rebuked, by Congress.

11. Further, we note that our actions here are consistent with other provisions of the Act. For example, we are guided by section 706, which directs the Commission (and state commissions with jurisdiction over telecommunications services) to encourage the deployment of advanced telecommunications capability to all Americans by using measures that “promote competition in the local telecommunications market” and removing “barriers to infrastructure investment.” Internet-based services such as interconnected VoIP are commonly accessed via broadband facilities ( i.e. , advanced telecommunications capabilities under the 1996 Act). The uniform availability of E911 services may spur consumer demand for interconnected VoIP services, in turn driving demand for broadband connections, and consequently encouraging more broadband investment and deployment consistent with the goals of section 706. Indeed, the Commission's most recent Fourth Section 706 Report to Congress recognizes the nexus between VoIP services and accomplishing the goals of section 706.

12. Moreover, as stated above, in recognition of the critical role 911/E911 services play in achieving the Act's goal of promoting safety of life and property, Congress passed the 911 Act, which among other things made 911 the universal emergency telephone number for both wireline and wireless telephone service for the nation. In the 911 Act, Congress made a number of findings regarding wireline and wireless 911 services, including that “improved public safety remains an important public health objective of Federal, State, and local governments and substantially facilitates interstate and foreign commerce,” and that “emerging technologies can be a critical component of the end-to-end communications infrastructure connecting the public with emergency [services].” Thus, we believe that our action here to impose E911 obligations on interconnected VoIP providers is consistent with Congress' public safety policy objectives.

13. Finally, as an additional and separate source of authority for the requirements we impose on providers of interconnected VoIP service in this Order, we rely on the plenary numbering authority over U.S. North American Numbering Plan (NANP) numbers Congress granted this Commission in section 251(e) of the Act and, in particular, Congress' direction to use its plenary numbering authority to designate 911 as the universal emergency telephone number within the United States, which “shall apply to both wireline and wireless telephone service.” We exercise our authority under section 251(e) of the Act because interconnected VoIP providers use NANP numbers to provide their services.

14. When the Commission initially implemented the 911 Act, it took actions similar to those we take today under its numbering authority. For instance, in the order implementing the 911 Act, the Commission exercised federal jurisdiction over the establishment of the deadlines by when all carriers had to provide 911 functionality, and adopted various deadlines depending on such things as whether a local community had established a public safety answering point (PSAP). The Commission also required carriers to implement certain switching and routing changes to their networks. Specifically, the Commission required all carriers to “implement a permissive dialing period, during which emergency calls will be routed to the appropriate emergency response point using either 911 or the seven-or ten-digit number.” In order to achieve this, carriers had to “prepare and modify switches to ‘translate’ the three-digit 911 dialed emergency calls at the appropriate network points to the seven-or ten-digit emergency number in use by those PSAPs, and, subsequently, route the calls to them.” The Commission also recognized that the transition to 911 in general required more network changes than required by translation.

15. The Commission's authority to require network changes to provide the E911 features that have long been central to the nation's 911 infrastructure is included within Congress' directive to the Commission to require the establishment of 911 as a “universal emergency telephone number * * * for reporting an emergency to appropriate authorities and requesting assistance.”

16. Requirements. In this Order, we adopt an immediate E911 solution that applies to all interconnected VoIP services. We find that this requirement most appropriately discharges the Commission's statutory obligation to promote an effective nationwide 911/E911 emergency access system by recognizing the needs of the public safety community to get call back and location information and balancing those needs against existing technological limitations of interconnected VoIP providers. With regard to portable interconnected VoIP services, however, we intend to adopt in a future order an advanced E911 solution for interconnected VoIP that must include a method for determining a user's location without assistance from the user as well as firm implementation deadlines for that solution.

17. Enhanced 911 Service. We require that, within 120 days of the effective date of this Order, an interconnected VoIP provider must transmit all 911 calls, as well as a call back number and the caller's “Registered Location” for each call, to the PSAP, designated statewide default answering point, or appropriate local emergency authority that serves the caller's Registered Location and that has been designated for telecommunications carriers under section 64.3001 of the Commission's rules. These calls must be routed through the use of ANI and, if necessary, pseudo-ANI, via the dedicated Wireline E911 Network, and the Registered Location must be available from or through the ALI Database. As explained infra, however, an interconnected VoIP provider need only provide such call back and location information as a PSAP, designated statewide default answering point, or appropriate local emergency authority is capable of receiving and utilizing. While 120 days is an aggressively short amount of time in which to comply with these requirements, the threat to public safety if we delay further is too great and demands near immediate action.

18. Interconnected VoIP providers may satisfy this requirement by interconnecting indirectly through a third party such as a competitive local exchange carrier (LEC), interconnecting directly with the Wireline E911 Network, or through any other solution that allows a provider to offer E911 service as described above. As an example of the first type of arrangement, Level 3 offers a wholesale product that allows certain interconnected VoIP providers to provide E911 service to their customers. 8x8, Inc. recently announced that it is utilizing Level 3's service to provide E911 service to its Packet8 service subscribers in 2,024 rate centers covering 43 U.S. states. Likewise, Intrado has indicated that it is prepared to operate as a competitive LEC in a number of states to provide indirect interconnection to interconnected VoIP providers, and Pac-West Telecom is offering a similar service in “virtually 100%” of the state of California. We note that the Commission currently requires LECs to provide access to 911 databases and interconnection to 911 facilities to all telecommunications carriers, pursuant to sections 251(a) and (c) and section 271(c)(2)(B)(vii) of the Act. We expect that this would include all the elements necessary for telecommunications carriers to provide 911/E911 solutions that are consistent with the requirements of this Order, including NENA's I2 or wireless E911-like solutions.

19. At the same time, the record indicates that incumbent LECs are increasingly offering E911 solutions that allow VoIP providers to interconnect directly to the Wireline E911 Network through tariff, contract, or a combination thereof. For example, Qwest has tariffed E911 offerings that are currently available to VoIP providers and can be coupled with third party service offerings to enable the provision of E911 service to portable interconnected VoIP services, including those that allow their end users to use non-native NPA-NXX numbers. Verizon is developing an E911 solution for interconnected VoIP providers that is comparable to the solution it offers for wireless E911. Verizon has announced that it will offer this solution in New York City beginning in summer 2005 and will roll it out in other locations if the New York City model succeeds. BellSouth currently offers tariffed services similar to those that Qwest uses to provide its VoIP E911 solution and recently announced that it is offering interconnected VoIP providers access to 911 facilities equivalent to that which it offers commercial mobile radio service (CMRS) carriers. SBC has offered to negotiate commercial agreements with VoIP providers for direct connection to Selective Routers and ALI databases, comparable to the E911 access that SBC provides to competitive LECs. SBC further has established a new commercial offering that “will enable VoIP providers to offer customers who use their service at a fixed location, such as their home” full E911 service and has stated that it is “willing to develop a wireless-like VOIP 911 capability for VOIP providers” pending receipt of necessary technical information.

20. We are requiring that all interconnected VoIP 911 calls be routed through the dedicated Wireline E911 Network because of the importance of protecting consumers who have embraced this new technology. We recognize that compliance with this obligation is necessarily dependent on the ability of the interconnected VoIP providers to have access to trunks and selective routers via competitive LECs that have negotiated access with the incumbent LECs, through direct connections to the incumbent LECs, or through third-party providers. We expect and strongly encourage all parties involved to work together to develop and deploy VoIP E911 solutions and we point out that incumbent LECs, as common carriers, are subject to sections 201 and 202 of the Act. The Commission will closely monitor these efforts within the industry and will not hesitate to take further action should that be necessary.

21. By requiring that all 911 calls be routed via the dedicated Wireline E911 Network, we are requiring interconnected VoIP service providers to provide E911 service only in those areas where Selective Routers are utilized. We expect that few VoIP 911 calls will be placed in areas that are not interconnected with a dedicated Wireline E911 Network. We further note that nothing in this Order prevents interconnected VoIP providers from entering into mutually acceptable 911 call termination arrangements with PSAPs that are not interconnected with a dedicated Wireline E911 Network.

22. Service Level Obligation. For the purposes of these requirements, the phrase “all 911 calls” is defined as “any voice communication initiated by an interconnected VoIP user dialing 911.” We recognize that not all PSAPs will immediately be capable of receiving and utilizing the call back number and Registered Location information associated with the E911 requirements outlined above. By way of example, NENA estimates that approximately 26.6 percent of all PSAPs are not currently capable of receiving and utilizing wireless E911 Phase I data. We therefore hold that the E911 requirements set forth above shall be applicable when an interconnected VoIP provider provides service to a Registered Location only to the extent that the PSAP, designated statewide default answering point, or appropriate local emergency authority designated to serve that Registered Location is capable of receiving and utilizing the data, such as Automatic Location Identification (ALI) or Automatic Numbering Information (ANI), associated with those requirements. Even in those areas where the PSAP is not capable of receiving or processing location or call back information, however, we conclude that interconnected VoIP providers must transmit all 911 calls to the appropriate PSAP via the Wireline E911 Network. To be clear, this means that interconnected VoIP providers are always required to transmit all 911 calls to the appropriate PSAP, designated statewide default answering point, or appropriate local emergency authority utilizing the Selective Router, the trunk line(s) between the Selective Router and the PSAP, and such other elements of the Wireline E911 Network as are necessary in those areas where Selective Routers are utilized.

23. We further hold that the obligation to determine what type of information, such as ALI or ANI, each PSAP is capable of receiving and utilizing rests with the provider of interconnected VoIP services. There is no limit to the number of entities that may engage in the provision of interconnected VoIP services in a given geographic area. It would be unreasonable to require PSAPs to attempt to inform every provider of interconnected VoIP services when the PSAP is prepared to receive and utilize the information associated with E911 service.

24. We decline at this time to adopt performance standards regarding how much time may elapse after an end user updates the Registered Location before the provider has taken such actions as are necessary to provide that end user with the level of E911 service specified in this Order.

25. We also require interconnected VoIP providers to take certain additional steps to minimize the scope of the 911 issues associated with their service and to facilitate their compliance with our new VoIP E911 rules, as explained below. First, we require interconnected VoIP providers to obtain, and facilitate updating of, customer location information. Second, we preclude interconnected VoIP providers from requiring subscribers to “opt-in” or allowing subscribers to “opt-out” of 911 services and expect that VoIP providers will notify their customers of the limitations of their 911 service offerings.

26. Registered Location Requirement. We recognize that it currently is not always technologically feasible for providers of interconnected VoIP services to automatically determine the location of their end users without end users' active cooperation. We therefore require providers of interconnected VoIP services to obtain location information from their customers. Specifically, interconnected VoIP providers must obtain from each customer, prior to the initiation of service, the physical location at which the service will first be utilized. Furthermore, providers of interconnected VoIP services that can be utilized from more than one physical location must provide their end users one or more methods of updating information regarding the user's physical location. Although we decline to specify any particular method, we require that any method utilized allow an end user to update his or her Registered Location at will and in a timely manner, including at least one option that requires use only of the CPE necessary to access the interconnected VoIP service. We caution interconnected VoIP providers against charging customers to update their Registered Location, as this would discourage customers from doing so and therefore undermine this solution. The most recent location provided to an interconnected VoIP provider by a customer is the “Registered Location.” Interconnected VoIP providers can comply with this requirement directly or by utilizing the services of a third party.

27. Customer Requirements. In light of the recent incidents involving problems with 911 access from interconnected VoIP services, it is clear that not all providers of interconnected VoIP are including E911 as a standard feature of their services. We find that allowing customers of interconnected VoIP providers to opt-in to or, for that matter, opt-out of E911 service is fundamentally inconsistent with our obligation to “encourage and support efforts by States to deploy comprehensive end-to-end emergency communications infrastructure and programs.” Thus, interconnected VoIP providers must, as a condition of providing that service to a consumer, provide that consumer with E911 service as outlined in the requirements above.

28. Further, although many VoIP providers include explanations of the limitations of their 911-like service (or lack thereof) in the Frequently Asked Questions sections on their web sites or in their terms of service, recent incidents make clear that consumers in many cases may not understand that the reasonable expectations they have developed with respect to the availability of 911/E911 service via wireless and traditional wireline telephones may not be met when they utilize interconnected VoIP services. In order to ensure that consumers of interconnected VoIP services are aware of their interconnected VoIP service's actual E911 capabilities, by the effective date of this Order, we require that all providers of interconnected VoIP service specifically advise every subscriber, both new and existing, prominently and in plain language, the circumstances under which E911 service may not be available through the interconnected VoIP service or may be in some way limited by comparison to traditional E911 service. VoIP providers shall obtain and keep a record of affirmative acknowledgement by every subscriber, both new and existing, of having received and understood this advisory. In addition, in order to ensure to the extent possible that the advisory is available to all potential users of an interconnected VoIP service, interconnected VoIP service providers shall distribute to all subscribers, both new and existing, warning stickers or other appropriate labels warning subscribers if E911 service may be limited or not available and instructing the subscriber to place them on and/or near the CPE used in conjunction with the interconnected VoIP service.

29. Additional customer education efforts may well be necessary for users of portable interconnected VoIP, for whom E911 service requires that they notify their service provider affirmatively of their location. For example, customers of portable interconnected VoIP services likely will need to be instructed on how to register their locations with their providers, the need to update that information promptly when they relocate, and how to confirm that the registration is effective.

30. Compliance Letter. We require all interconnected VoIP providers to submit a letter to the Federal Communications Commission detailing their compliance with our rules no later than 120 days after the effective date of this Order. The letter and all other filings related to this Order should be filed with the Commission's Secretary in WC Docket No. 05-196 on a going-forward basis.

31. Because of the vital public safety interests at stake in this proceeding, we are committed to ensuring compliance with the rules we adopt in this Order. Failure to comply with these rules cannot and will not be tolerated, as noncompliance may have a direct effect on the lives of those customers who choose to obtain service from the interconnected VoIP providers covered by this Order. Interconnected VoIP providers who do not comply fully with the requirements set forth in this Order will be subject to swift enforcement action by the Commission, including substantial proposed forfeitures and, in appropriate cases, cease and desist orders and proceedings to revoke any Commission licenses held by the interconnected VoIP provider.

32. 911 Funding. We believe that the requirements we establish today will significantly expand and improve interconnected VoIP 911 service while substantially reducing the threat to 911 funding that some VoIP services currently pose. First, we recognize that while some state laws today may already require 911 funding contributions from providers of interconnected VoIP, interconnected VoIP providers may not be covered by existing state 911 funding mechanisms in other states. But even in the latter circumstance, the record does not indicate that states are receiving no 911 funding contributions from interconnected VoIP providers. On the contrary, the record indicates that many interconnected VoIP providers currently are contributing to state 911 funding mechanisms. In addition, states have the option of collecting 911 charges from wholesale providers with whom interconnected VoIP providers contract to provide E911 service, rather than assessing those charges on the interconnected VoIP providers directly. For example, we have explained that interconnected VoIP providers often enlist a competitive LEC partner in order to obtain interconnection to the Wireline E911 Network, and we believe that as a result of this Order, many more will do so. In that situation, states may impose 911 funding obligations on the competitive LEC partners of interconnected VoIP providers, regardless of whether the VoIP providers themselves are under any obligation to contribute. Similarly, states may be able to impose funding obligations on systems service providers, such as incumbent LECs, that provide direct interconnection to interconnected VoIP providers. We believe that the ability to assess 911 funds on interconnected VoIP providers indirectly should narrow any gap in 911 funding attributable to consumers switching to interconnected VoIP service.

33. Second, the record indicates that the network components that have been developed to make wireless E911 possible can also be used for VoIP E911, which should make the implementation process simpler and far less expensive than the initial upgrades necessary for wireless E911. For that reason, we do not expect the rules we adopt today to impose substantial implementation costs on PSAPs. In short, we believe that the rules we adopt today will neither contribute to the diminishment of 911 funding nor require a substantial increase in 911 spending by state and local jurisdictions.

34. Liability. We decline to exempt providers of interconnected VoIP service from liability under state law related to their E911 services. Although the NPRM did not directly address the issue, Intrado, among others, requests that the Commission insulate these VoIP providers from liability to the same extent that Congress insulated wireless carriers from liability related to the provision of 911/E911 service in the wireless context. In the 911 Act, Congress gave wireless carriers providing 911 service liability protection equal to that available to wireline carriers for 911 calls. Congress has enacted no similar protection for providers of interconnected VoIP service. As the Commission has said in an analogous context, before we would consider taking any action to preempt liability under state law, the Commission would need to demonstrate that limiting liability is essential to achieving the goals of the Act.

35. No commenter has identified a source of authority for the Commission to limit liability in this way. Limiting liability related to the use or provision of E911 services is not necessary to the creation or use of E911 services, and we are not persuaded that absent the liability protection sought by Intrado and others, interconnected VoIP providers will be unwilling or unable to provide E911 services. Rather, the record shows that some interconnected VoIP providers have already begun deploying E911 services. In addition, to the extent individual interconnected VoIP providers believe they need this type of liability protection, they may seek to protect themselves from liability for negligence through their customer contracts and through their agreements with PSAPs, as some interconnected VoIP providers have done.

36. This document contains new information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public to comment on the information collection requirements contained in this Report and Order as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due August 29, 2005.

37. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the NPRM. The Commission sought written public comment on the proposals in the NPRM, including comment on the IRFA. We received comments specifically directed toward the IRFA from three commenters. These comments are discussed below. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

38. The Order establishes rules requiring providers of interconnected VoIP—meaning VoIP service that allows a user generally to receive calls originating from and to terminate calls to the PSTN—to provide E911 capabilities to their customers as a standard feature of service. The Order requires providers of interconnected VoIP service to provide E911 service no matter where the customer is using the service, whether at home or away.

39. The Order is in many ways a necessary and logical follow-up to the Vonage Order issued late last year. In that order, the Commission determined that Vonage's DigitalVoice service—an interconnected VoIP service—cannot be separated into interstate and intrastate communications and that this Commission has the responsibility and obligation to decide whether certain regulations apply to DigitalVoice and other IP-enabled services having similar capabilities. The Vonage Order also made clear that questions regarding what regulatory obligations apply to providers of such services would be addressed in the pending IP-Enabled Services proceeding. In accord with that statement, the Order takes critical steps to advance the goal of public safety by imposing E911 obligations on certain VoIP providers.

40. In this section, we respond to comments filed in response to the IRFA. A more detailed FRFA is contained in the Order. In addition, to the extent we received comments raising general small business concerns during this proceeding, those comments are discussed throughout the Order.

41. We disagree with SBA and Menard that the Commission should postpone acting in this proceeding—thereby postponing imposing E911 obligations on interconnected VoIP service providers—and instead should reevaluate the economic impact and the compliance burdens on small entities and issue a further notice of proposed rulemaking in conjunction with a supplemental IRFA identifying and analyzing the economic impacts on small entities and less burdensome alternatives. We believe the additional steps suggested by SBA and Menard are unnecessary because, as described below, small entities already have received sufficient notice of the issues addressed in the Order and because the Commission, as requested by the VON Coalition, has considered the economic impact on small entities and what ways are feasible to minimize the burdens imposed on those entities, and, to the extent feasible, has implemented those less burdensome alternatives.

42. The NPRM specifically sought comment on what 911/E911 obligations should apply in the context of IP-enabled services, and discussed the criteria the Commission previously has used to determine the scope of its existing 911/E911 rules. While the NPRM did not specify particular rules the Commission might adopt—and the IRFA therefore did not catalogue the effects that such particular rules might have on small businesses—the Commission provided notice to parties regarding the range of policy outcomes that might result from the Order. A summary of the NPRM was published in the Federal Register (69 FR 16193, March 29, 2004) and we believe that such publication constitutes appropriate notice to small businesses subject to this Commission's regulation.

43. Moreover, we note that we have attempted to balance the economic interests of small businesses with the public's great interest in access to E911 services when using interconnected VoIP services. The Order discusses how E911 service is critical to our nation's ability to respond to a host of crises and that the public has come to rely on the life-saving benefits of such services in emergency situations. While the Commission sought comment on, and considered, ways that the public safety could be protected through access to E911 services that are less burdensome to small businesses than the imposition of E911 obligations, the Commission concluded that it was important for all interconnected VoIP service providers to participate in protecting the public safety. As SBA notes, many VoIP providers are likely to be small businesses. SBA claims that “[t]hese small providers are developing a nascent technology and are especially vulnerable to disproportionate regulatory costs.” Nevertheless, as discussed in the Order, we believe it is reasonable to expect any business electing to interconnect with the PSTN to the extent required to provide interconnected VoIP service also to provide E911 service in order to protect the public interest. Small businesses may still offer VoIP service without being subject to the rules adopted in the Order by electing not to provide an interconnected VoIP service. We therefore have provided alternatives for small entities.

44. We disagree with Menard's contention that the Commission did not meet its obligations under the RFA because it failed to list as a significant alternative to the proposed rulemaking imposing economic regulation on the underlying facilities of cable carriers. The rules we adopted in the Order apply to cable operators that provide interconnected VoIP service. Moreover, we reject the above contention as insufficient to achieve our goal of ensuring that users of interconnected VoIP service have access to E911, as well as rejecting it for the reasons already provided generally. As discussed in the Order, there currently is no way for portable VoIP providers reliably and automatically to provide location information to PSAPs without the customer's active cooperation. Not only is the provider of an interconnected VoIP service the entity actively involved in routing the calls of users of interconnected VoIP service, but it is the entity that has the relationship with the customer who currently plays an essential role in providing accurate location information; hence, it is reasonable to impose E911 rules on that interconnected VoIP service provider. In addition, although the Commission determined that it was necessary to impose E911 obligations on all providers of interconnected VoIP service in order to ensure the ubiquitous availability of E911 service for users of interconnected VoIP service, the Commission minimized the burdens of this regulation by, for example, by requiring straightforward reporting requirements and by setting reasonable timetables for implementation of the rules adopted in the Order. The Commission minimized the burdens of this regulation by not mandating any particular technical solution; interconnected VoIP providers may connect directly to the Wireline E911 Network, connect indirectly through a third party, such as a competitive local exchange carrier, or through any other solution that allows a provider to offer E911 service.

45. We also disagree with Menard's contention that the Commission inappropriately failed to “weigh the impact on non-affiliated regional Internet Service Providers of the consequence for the removal of all forms of economic regulation for broadband services provided by incumbent carriers.” The Order does not remove “all forms of economic regulation for broadband services provided by incumbent carriers,” and would be an inappropriate forum for reconsideration of any such decision the Commission has made in other proceedings. The Commission reached its decision in the Order in full awareness and consideration of the Commission's other rules and to that extent satisfied Menard's request and SBA's request to consider how the requirements imposed in the Order overlap with other requirements imposed on small entities.

46. Finally, we reject claims that the present proceeding is not the appropriate docket in which to address what E911 obligations should be imposed on providers of interconnected VoIP service. The Commission provided proper notice that these issues would be addressed in this proceeding, and in the Vonage Order made clear that questions regarding what regulatory obligations apply to providers of a type of interconnected VoIP service would be addressed in this proceeding. Therefore, we do not accede to the preferences of some small businesses that the Commission resolve various other proceedings, including proceedings involving E911 requirements, prior to addressing issues in the IP-Enabled Services docket. We reject Menard's claim that the Commission is using the present rulemaking as a way of by-passing its statutory obligations under section 10 of the Telecommunications Act of 1996 (section 10) because that statutory section is not applicable to the present situation. Section 10 sets forth the Commission's obligation to forbear from existing regulation to a telecommunications carrier or a telecommunications service, or class of telecommunications carriers or telecommunications services, if certain criteria are satisfied. Prior to the Order, the Commission had not imposed E911 obligations on interconnected VoIP service providers. In addition, the Commission to date has not classified interconnected VoIP service as a telecommunications service.

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

48. Small Businesses . Nationwide, there are a total of approximately 22.4 million small businesses, according to SBA data.

49. Small Organizations . Nationwide, there are approximately 1.6 million small organizations.

50. Small Governmental Jurisdictions . The term “small governmental jurisdiction” is defined as “governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” As of 1997, there were approximately 87,453 governmental jurisdictions in the United States. This number includes 39,044 county governments, municipalities, and townships, of which 37,546 (approximately 96.2%) have populations of fewer than 50,000, and of which 1,498 have populations of 50,000 or more. Thus, we estimate the number of small governmental jurisdictions overall to be 84,098 or fewer.

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

52. Incumbent Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange 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. The Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by our action.

53. Competitive Local Exchange Carriers (CLECs), 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. 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 action.

54. Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. The Commission estimates that the majority of local resellers are small entities that may be affected by our action.

55. Toll Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. The Commission estimates that the majority of toll resellers are small entities that may be affected by our action.

56. Payphone Service Providers (PSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for payphone services 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. The Commission estimates that the majority of payphone service providers are small entities that may be affected by our action.

57. 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. The Commission estimates that the majority of IXCs are small entities that may be affected by our action.

58. Operator Service Providers (OSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for operator 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. The Commission estimates that the majority of OSPs are small entities that may be affected by our action.

59. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for prepaid calling card providers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. The Commission estimates that all or the majority of prepaid calling card providers are small entities that may be affected by our action.

60. 800 and 800-Like Service Subscribers. Neither the Commission nor the SBA has developed a small business size standard specifically for 800 and 800-like service (“toll free”) subscribers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. We estimate that there are 7,692,955 or fewer small entity 800 subscribers; 7,706,393 or fewer small entity 888 subscribers; and 1,946,538 or fewer small entity 877 subscribers.

61. International Service Providers. The Commission has not developed a small business size standard specifically for providers of international service. The appropriate size standards under SBA rules are for the two broad categories of Satellite Telecommunications and Other Telecommunications. Under both categories, such a business is small if it has $12.5 million or less in average annual receipts. The majority of Satellite Telecommunications firms can be considered small.

62. The second category—Other Telecommunications—includes “establishments primarily engaged in * * * providing satellite terminal stations and associated facilities operationally connected with one or more terrestrial communications systems and capable of transmitting telecommunications to or receiving telecommunications from satellite systems.” Under this second size standard, the majority of firms can be considered small.

63. Wireless Telecommunications Service Providers. Below, for those services subject to auctions, 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. Also, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated.

64. 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. Under both categories and associated small business size standards, the majority of firms can be considered small.

65. Cellular Licensees. The SBA has developed a small business size standard for wireless firms within the broad economic census category “Cellular and Other Wireless Telecommunications.” Under this SBA category, a wireless business is small if it has 1,500 or fewer employees. Under this category and size standard, the great majority of firms can be considered small. We have estimated that 245 of the entities engaged in the provision of cellular service, Personal Communications Service (PCS), or Specialized Mobile Radio (SMR) Telephony services are small under the SBA small business size standard.

66. Common Carrier Paging. The SBA has developed a small business size standard for wireless firms within the broad economic census category, “Cellular and Other Wireless Telecommunications.” Under this SBA category, a wireless business is small if it has 1,500 or fewer employees. Under this category and associated small business size standard, the majority of firms can be considered small. In the Paging Third Report and Order , we developed a small business size standard 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” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 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 $3 million for the preceding three years. The SBA has approved these small business size standards. An auction of Metropolitan Economic Area licenses commenced on February 24, 2000, and closed on March 2, 2000. Of the 985 licenses auctioned, 440 were sold. Fifty-seven companies claiming small business status won. Also, according to Commission data, 346 carriers reported that they were engaged in the provision of paging and messaging services. Of those, we estimate that 341 are small, under the SBA-approved small business size standard.

67. Wireless Communications Services. This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission established small business size standards for the wireless communications services (WCS) auction. A “small business” is an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” is an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these small business size standards. The Commission auctioned geographic area licenses in the WCS service. In the auction, there were seven winning bidders that qualified as “very small business” entities, and one that qualified as a “small business” entity.

68. Wireless Telephony. Wireless telephony includes cellular, personal communications services (PCS), and specialized mobile radio (SMR) telephony carriers. As noted earlier, the SBA has developed a 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. We have estimated that 245 of the carriers who reported to us that they were engaged in the provision of wireless telephony are small under the SBA small business size standard.

69. Broadband Personal Communications Service. The broadband Personal Communications Service (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 35, including judicial and agency determinations, resulted in a total of 163 C and F Block licenses being available for grant.

70. Narrowband Personal Communications Services. To date, two auctions of narrowband personal communications services (PCS) licenses have been conducted. For purposes of the two auctions that have already been held, “small businesses” were entities with average gross revenues for the prior three calendar years of $40 million or less. Through these auctions, the Commission has awarded a total of 41 licenses, out of which 11 were obtained by small businesses. To ensure meaningful participation of small business entities in future auctions, the Commission has 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. In the future, the Commission will auction 459 licenses to serve Metropolitan Trading Areas (MTAs) and 408 response channel licenses. There is also one megahertz of narrowband PCS spectrum that has been held in reserve and that the Commission has not yet decided to release for licensing. The Commission cannot predict accurately the number of licenses that will be awarded to small entities in future auctions. However, four of the 16 winning bidders in the two previous narrowband PCS auctions were small businesses, as that term was defined. The Commission assumes, for purposes of this analysis, that a large portion of the remaining narrowband PCS licenses will be awarded to small entities. The Commission also assumes that at least some small businesses will acquire narrowband PCS licenses by means of the Commission's partitioning and disaggregation rules.

71. 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 small business size standard for 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. Under this second category and size standard, the majority of firms can be considered small. Assuming 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 size standard.

72. 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 “small” and “very small” businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. This small business size 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 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 business 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 licenses in the first 220 MHz auction. The second auction included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies claiming small business status won 158 licenses.

73. 800 MHz and 900 MHz Specialized Mobile Radio Licenses. The Commission awards “small entity” and “very 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, or that had revenues of no more than $3 million in each of the previous calendar years, respectively. These bidding credits apply to SMR providers in the 800 MHz and 900 MHz bands that either hold geographic area licenses or have obtained extended implementation authorizations. The Commission does not know how many firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to extended implementation authorizations, nor how many of these providers have annual revenues of no more than $15 million. One firm has over $15 million in revenues. The Commission assumes, for purposes here, that all of the remaining existing extended implementation authorizations are held by small entities, as that term is defined by the SBA. The Commission has held auctions for geographic area licenses in the 800 MHz and 900 MHz SMR bands. There were 60 winning bidders that qualified as small or very small entities in the 900 MHz SMR auctions. Of the 1,020 licenses won in the 900 MHz auction, bidders qualifying as small or very small entities won 263 licenses. In the 800 MHz auction, 38 of the 524 licenses won were won by small and very small entities.

74. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order , we adopted a small business size standard 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” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 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 $3 million for the preceding three years. 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.

75. 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 Basic Exchange Telephone Radio System (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.

76. 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.

77. 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.

78. 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 is 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 adopted herein. We noted, however, that the common carrier microwave fixed licensee category includes some large entities.

79. Offshore Radiotelephone Service. This service operates on several 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.

80. 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 polices adopted herein.

81. Multipoint Distribution Service, Multichannel Multipoint Distribution Service, and ITFS. 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 established a small business size standard as an entity that had annual average gross revenues of less than $40 million in the previous three calendar years. The MDS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 auction winners, 61 met the definition of a small business. MDS also includes licensees of stations authorized prior to the auction. 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 rules and policies adopted herein. This SBA small business size standard also appears applicable to ITFS. There are presently 2,032 ITFS licensees. All but 100 of these licenses are held by educational institutions. Educational institutions are included in this analysis as small entities. Thus, we tentatively conclude that at least 1,932 licensees are small businesses.

82. 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 1,030 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. We conclude that the number of small LMDS licenses consists of the 93 winning bidders in the first auction and the 40 winning bidders in the re-auction, for a total of 133 small entity LMDS providers.

83. 218-219 MHz Service. The first auction of 218-219 MHz spectrum resulted in 170 entities winning licenses for 594 Metropolitan Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by entities qualifying as a small business. For that auction, the small business size standard was 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 established a small business size standard for 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 to exceed $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 to exceed $3 million for the preceding three years. We cannot estimate, however, 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.

84. 24 GHz—Incumbent 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. Under this size standard, the great majority of firms can be considered small.

85. 24 GHz—Future Licensees. With respect to new applicants in the 24 GHz band, the small business size standard for “small business” is an entity that, together with controlling interests and affiliates, has average annual gross revenues for the three preceding years not in excess of $15 million. “Very small business” in the 24 GHz band is 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 small business size standards. These size standards will apply to the future auction, if held.

86. Cable and Other Program Distribution. This category includes cable systems operators, closed circuit television services, direct broadcast satellite services, multipoint distribution systems, satellite master antenna systems, and subscription television services. The SBA has developed small business size standard for this census category, which includes all such companies generating $12.5 million or less in revenue annually. The Commission estimates that the majority of providers in this service category are small businesses that may be affected by the rules and policies adopted herein.

87. Cable System Operators (Rate Regulation Standard). The Commission has developed its own small business size standard for cable system operators, for purposes of rate regulation. Under the Commission's rules, a “small cable company” is one serving fewer than 400,000 subscribers nationwide. The Commission estimates that there currently are fewer than 1,439 small entity cable system operators that may be affected by the rules and policies adopted herein.

88. Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as amended, also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” The Commission has determined that there are 67,700,000 subscribers in the United States. Therefore, an operator serving fewer than 677,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. Based on available data, the Commission estimates that the number of cable operators serving 677,000 subscribers or fewer, totals 1,450. The Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million, and therefore are unable, at this time, to estimate more accurately the number of cable system operators that would qualify as small cable operators under the size standard contained in the Communications Act of 1934.

89. Open Video Services. Open Video Service (OVS) systems provide subscription services. The SBA has created a small business size standard for Cable and Other Program Distribution. This standard provides that a small entity is one with $12.5 million or less in annual receipts. The Commission concludes that up to 24 OVS operators might qualify as small businesses that may be affected by the rules and policies adopted herein.

90. Internet Service Providers. The SBA has developed a small business size standard for Internet Service Providers (ISPs). ISPs “provide clients access to the Internet and generally provide related services such as web hosting, web page designing, and hardware or software consulting related to Internet connectivity.” 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. We estimate that the majority of these firms are small entities that may be affected by our action.

91. Web Search Portals. Our action pertains to VoIP services, which could be provided by entities that provide other services such as email, online gaming, web browsing, video conferencing, instant messaging, and other, similar IP-enabled services. The Commission has not adopted a size standard for entities that create or provide these types of services or applications. However, the census bureau has identified firms that “operate web sites that use a search engine to generate and maintain extensive databases of Internet addresses and content in an easily searchable format. Web search portals often provide additional Internet services, such as e-mail, connections to other web sites, auctions, news, and other limited content, and serve as a home base for Internet users.” The SBA has developed a small business size standard for this category; that size standard is $6 million or less in average annual receipts. We estimate that the majority of these firms are small entities that may be affected by our action.

92. Data Processing, Hosting, and Related Services. Entities in this category “primarily “ provid[e] infrastructure for hosting or data processing services.” The SBA has developed a small business size standard for this category; that size standard is $21 million or less in average annual receipts. We estimate that the majority of these firms are small entities that may be affected by our action.

93. All Other Information Services. “This industry comprises establishments primarily engaged in providing other information services (except new syndicates and libraries and archives).” Our action pertains to VoIP services, which could be provided by entities that provide other services such as email, online gaming, web browsing, video conferencing, instant messaging, and other, similar IP-enabled services. The SBA has developed a small business size standard for this category; that size standard is $6 million or less in average annual receipts. We estimate that the majority of these firms are small entities that may be affected by our action.

94. Internet Publishing and Broadcasting. “This industry comprises establishments engaged in publishing and/or broadcasting content on the Internet exclusively. These establishments do not provide traditional (non-Internet) versions of the content that they publish or broadcast.” The SBA has developed a small business size standard for this new (2002) census category; that size standard is 500 or fewer employees. To assess the prevalence of small entities in this category, we will use 1997 Census Bureau data for a relevant, now-superseded census category, “All Other Information Services.” The SBA small business size standard for that prior category was $6 million or less in average annual receipts. We estimate that the majority of the firms in this current category are small entities that may be affected by our action.

95. Software Publishers. These companies may design, develop or publish software and may provide other support services to software purchasers, such as providing documentation or assisting in installation. The companies may also design software to meet the needs of specific users. The SBA has developed a small business size standard of $21 million or less in average annual receipts for all of the following pertinent categories: Software Publishers, Custom Computer Programming Services, and Other Computer Related Services. We estimate that the majority of the firms in each of these three categories are small entities that may be affected by our action.

96. Equipment Manufacturers. The equipment manufacturers described in this section are merely indirectly affected by our current action, and therefore are not formally a part of this FRFA analysis. We have included them, however, to broaden the record in this proceeding and to alert them to our decisions. These manufacturers may include: Wireless Communications Equipment Manufacturers; Telephone Apparatus Manufacturing; Electronic Computer Manufacturing; Computer Terminal Manufacturing; Other Computer Peripheral Equipment Manufacturing; Fiber Optic Cable Manufacturing; Other Communication and Energy Wire Manufacturing; Audio and Video Equipment Manufacturing; Electron Tube Manufacturing; Bare Printed Circuit Board Manufacturing; Semiconductor and Related Device Manufacturing; Electronic Capacitor Manufacturing; Electronic Resistor Manufacturing; Electronic Coil, Transformer, and Other Inductor Manufacturing; Electronic Connector Manufacturing; Printed Circuit Assembly (Electronic Assembly) Manufacturing; Other Electronic Component Manufacturing; and Computer Storage Device Manufacturing.

97. We are requiring interconnected VoIP service providers to collect certain information and take other actions to comply with our rules requiring interconnected VoIP service providers to supply E911 capabilities to their customers. The Order requires collection of information in four instances. First, interconnected VoIP providers must obtain from each customer, prior to the initiation of service, the physical location at which the service will first be utilized, and must provide customers a way to update this information ( i.e. , the “Registered Location”). Second, interconnected VoIP providers must place the Registered Location information for their customers into, or make that information available through, ALI Databases maintained by local exchange carriers (and, in at least one case, a state government) across the country. Third, the Order requires all providers of interconnected VoIP service specifically to advise new and existing subscribers of the circumstances under which E911 service may not be available through the interconnected VoIP service or may be in some way limited by comparison to traditional E911 service, and to obtain and keep a record of affirmative acknowledgement by every subscriber of having received and understood this advisory. Fourth, the Order requires all interconnected VoIP providers to submit a letter to the Commission detailing their compliance with the rules set forth in the Order no later than 120 days after the effective date of the Order.

98. We also impose other requirements on providers of interconnected VoIP service. Specifically, the Order requires that, within 120 days of the effective date of the Order, an interconnected VoIP provider must transmit all 911 calls, as well as a call back number and the caller's Registered Location for each call, to the PSAP, designated statewide default answering point, or appropriate local emergency authority that serves the caller's Registered Location and that has been designated for telecommunications carriers under section 64.3001 of the Commission's rules. These calls must be routed through the use of ANI or pseudo-ANI via the dedicated Wireline E911 Network, and the Registered Location must be available from or through the ALI Database. As explained in the Order, however, an interconnected VoIP provider need only provide such call back and location information as a PSAP, designated statewide default answering point, or appropriate local emergency authority is capable of receiving and utilizing. The obligation to determine what type of information, such as ALI or ANI, each PSAP is capable of receiving and utilizing rests with the provider of interconnected VoIP services.

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

100. The NPRM invited comment on a number of alternatives to the imposition of 911/E911 obligations on providers of interconnected VoIP service. For instance, the NPRM specifically sought comment on the effectiveness of alternatives to direct regulation to achieve the Commission's public policy goals of ensuring the availability of 911 and E911 capability. The Commission also sought comment on whether voluntary agreements among public safety trade associations, commercial IP-stakeholders, consumers, and state and local E911 coordinators and administrators could lead to VoIP subscribers receiving enhanced 911 functionality, and what the Commission could do to facilitate such agreements. The Commission also asked whether “promulgation of best practices or technical guidelines [would] promote the provision of effective IP-based E911 services.” The Commission also asked how it could provide for technological flexibility so that our rules allow for the development of new and innovative technologies in the event it concluded that mandatory requirements would be necessary.

101. In addition, the Commission sought comment on more general issues surrounding the possible imposition of a 911/E911 requirement for IP-enabled services, which could have prompted commenters to suggest other alternatives to the rules adopted in the Order. For instance, the Commission sought comment on what ways IP-enabled service providers currently seek to provide emergency services to their customers. The Commission also noted that the development and deployment of IP-enabled services is in its early stages, that these services are fast-changing and likely to evolve in ways that it cannot anticipate, and that imposition of regulatory mandates should be undertaken with caution. In this regard, the Commission sought comment on how to weigh the potential public benefits of requiring emergency calling and other public safety capabilities against the risk that regulation could slow technical and market development.

102. The Commission has considered each of the alternatives described above, and in the Order, imposes minimal regulation on small entities to the extent consistent with our goal of ensuring that users of interconnected VoIP service have access to appropriate emergency services when they dial 911. As an initial matter, the Commission limited the scope of the Order to interconnected VoIP service providers. As a result, certain VoIP service providers are not subject to the E911 obligations imposed in the Order. Specifically, the Order does not apply to those entities not fully interconnected with the PSTN. Because interconnecting with the PSTN can impose substantial costs, we anticipate that many of the entities that elect not to interconnect with the PSTN, and which therefore are not subject to the rules adopted in the Order, are small entities. Small entities that provide VoIP services therefore also have some control over whether they will be subject to the E911 obligations adopted in the Order. Small businesses may still offer VoIP service without being subject to the rules adopted in the Order by electing not to provide an interconnected VoIP service.

103. However, as stated above, we must assess the interests of small businesses in light of the overriding public interest in access to E911 services when using interconnected VoIP services. The Order discusses that E911 service is critical to our nation's ability to respond to a host of crises and that the public has come to rely on the life-saving benefits of such services in emergency situations. Therefore, the Commission concluded that it was important for all interconnected VoIP service providers to participate in protecting the public safety, regardless of their size. The Commission therefore rejected solutions that would rely on the voluntary agreement of VoIP service providers. The record indicated that this alternative had not resulted in, and was not likely soon to result in, ubiquitous access to E911 among users of interconnected VoIP service, which is the Commission's goal.

104. While the rules adopted in the Order apply to all providers of interconnected VoIP service, the Commission attempted to minimize the impact of the new rules on all entities, including small entities. For instance, while it is essential that interconnected VoIP service providers interconnect with the Wireline E911 Network, the Commission employed performance rather than design standards to achieve this result. Thus, rather than mandating a particular technical solution, the Order allows interconnected VoIP providers to connect directly to the Wireline E911 Network, or connect indirectly through a third party, such as a competitive LEC, or through any other solution that allows a provider to offer E911 service, which thereby allows for technological and commercial flexibility, and leaves room under the new rules for the development of new and innovative technologies. The Commission also declined to specify any particular method by which interconnected VoIP service providers must enable their customers to provide and update their Registered Location. The Commission also declined to specify any particular method by which interconnected VoIP service providers must advise new and existing subscribers of the E911 service limitations of their interconnected VoIP service and declined to specify any particular method by which acknowledgments of such limitations must be gathered and stored. The Commission expects these decisions will help small entities comply with the rules adopted in the Order in the most practical means possible. In addition, the Commission in the Order imposes straightforward and limited reporting requirements, and sets reasonable timetables. For example, regarding reporting requirements, the Commission simply requires providers of interconnected VoIP service to file a letter detailing their compliance with our rules no later than 120 days after the effective date of the Order. In addition, while the Commission's review of the record in this proceeding convinces us that ensuring reliable E911 service for users of interconnected VoIP service is essential, and therefore that the location information of such users who dial 911 should automatically be sent to the relevant PSAP, the Commission did not impose the obligation in the Order automatically to locate the interconnected VoIP service user in light of record evidence of the current state of technological development and the costs, including on small entities, of such an obligation. The Commission fully expects this situation to change in the near future, helped in part by the present Order.

105. We also note that by adopting E911 rules for providers of interconnected VoIP service at the present time, the Commission likely has saved small entities providing these services resources in the long run. For instance, in light of the importance of E911 service to the public, providers of interconnected VoIP service likely eventually would have been required by the Commission or Congress to provide E911 service. This could have involved “costly and inefficient ‘retrofitting’ of embedded IP infrastructure” for any interconnected VoIP service provider that had already adopted a E911 solution.

106. Report to Congress: The Commission will send a copy of the Order, including this FRFA, in a report to be sent to Congress and the Government Accountability Office 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 SBA. (A copy of this present summarized Order and FRFA is also hereby published in the Federal Register .)

107. Accordingly, it is ordered that pursuant to sections 1, 4(i), 4(j), 251(e) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i)-(j), 251(e), 303(r), the Report and Order in WC Docket No. 04-36 IS adopted , and that part 9 of the Commission's rules, 47 CFR part 9, is added as set forth in the rule changes. The Order shall become effective July 29, 2005 subject to OMB approval for new information collection requirements. Accordingly, subject to such OMB approval: (i) Compliance within the customer notification requirements set forth in 47 CFR 9.5(e) is required by July 29, 2005; (ii) the compliance letter required by 47 CFR 9.5(f) must be submitted to the Commission no later than November 28, 2005; and (iii) compliance with the requirements in 47 CFR 9.5(b) through (d) is required by November 28, 2005.

108. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this First Report and Order, 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 , MB Docket Nos. 04-370, 04-371, 04-388, 04-390, and 04-391, adopted June 8, 2005, and released June 10, 2005. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The complete text of this decision also may be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, (800) 378-3160, or via the company's Web site, 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 U.S.C. 801(a)(1)(A).

The Audio Division further, at the request of Results Broadcasting of Iron Mountain, Inc., allots Channel 272C3 at Laona, Wisconsin, as the community's first local FM service. Channel 272C3 can be allotted to Laona, Wisconsin, in compliance with the Commission's minimum distance separation requirements with a site restriction of 11.1 km (6.9 miles) north of Laona. The coordinates for Channel 272C3 at Laona, Wisconsin, are 45-39-30 North Latitude and 88-43-20 West Longitude. Concurrence in the allotment is required because the proposed allotment is located within 320 kilometers (199 miles) of the U.S.-Canadian border. Although Canadian concurrence has been requested, notification has not been received. If a construction permit for Channel 272C3 at Laona, Wisconsin, is granted prior to receipt of formal concurrence by the Canadian government, the authorization will include the following condition: “Operation with the facilities specified herein for Laona, Wisconsin, is subject to modification, suspension, or termination without right to hearing, if found by the Commission to be necessary in order to conform to the Canada-United States FM Broadcast Agreement, or if specifically objected to by Industry Canada.”

The Audio Division, at the request of Linda A. Davidson, allots Channel 239B at Blythe, California, as the community's second local FM service. Channel 239B can be allotted to Blythe, California, in compliance with the Commission's minimum distance separation requirements without site restriction at center city reference coordinates. The coordinates for Channel 239B at Blythe, California, are 33-37-02 North Latitude and 114-35-20 West Longitude. Concurrence in the allotment is required because the proposed allotment is located within 320 kilometers (199 miles) of the U.S.-Mexican border. Although Mexican concurrence has been requested, notification has not been received. If a construction permit for Channel 239B at Blythe, California, is granted prior to receipt of formal concurrence by the Mexican government, the authorization will include the following condition: “Operation with the facilities specified herein for Blythe, California, is subject to modification, suspension, or termination without right to hearing, if found by the Commission to be necessary in order to conform to the Mexico-United States FM Broadcast Agreement, or if specifically objected to by the Government of Mexico.”

The Audio Division, at the request of Dana J. Puopolo, Inc., allots Channel 237A at Celoron, New York, as the community's first local FM service. Channel 237A can be allotted to Celoron, New York, in compliance with the Commission's minimum distance separation requirements with a site restriction of 0.4 km (0.2 miles) southeast of Celoron. The coordinates for Channel 237A at Celoron, New York, are 42-06-24 North Latitude and 79-16-53 West Longitude. Concurrence in the allotment is required because the proposed allotment is located within 320 kilometers (199 miles) of the U.S.-Canadian border. Although Canadian concurrence has been requested, notification has not been received. If a construction permit for Channel 237A at Celoron, New York, is granted prior to receipt of formal concurrence by the Canadian government, the authorization will include the following condition: “Operation with the facilities specified herein for Celoron, New York, is subject to the modification, suspension, or termination without right to hearing, if found by the Commission to be necessary in order to conform to the Canada-United States FM Broadcast Agreement, or if specifically objected to by Industry Canada.”

The Audio Division, at the request of Charles Crawford, allots Channel 254A at Wells, Texas, as the community's second local FM service. Channel 254A can be allotted to Wells, Texas, in compliance with the Commission's minimum distance separation requirements with a site restriction of 1.6 km (1.0 miles) west of Wells. The coordinates for Channel 254A at Wells, Texas, are 31-29-35 North Latitude and 94-57-20 West Longitude.

This is a synopsis of the Commission's Report and Order , MB Docket No. 04-427 adopted June 8, 2005, and released June 10, 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 20054, 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).

This is a synopsis of the Commission's Report and Order , MB Docket No. 04-402, adopted June 8, 2005, and released June 10, 2005. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The document may also 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 or http://www.BCPIWEB.com. This document is not subject to the Congressional Review Act. (The Commission is, therefore, not required to submit a copy of this Report and Order to GAO pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), because the proposed rule is dismissed.)

Channel 260A should not be listed in 47 CFR 73.202(b), FM Table of Allotments under Cheyenne, Wyoming. The referenced channel was upgraded to Channel 260C2 on February 14, 1997 (File No. BPH-19961031IB). Accordingly, 47 CFR 73.202, FM Table of Allotments under Cheyenne, Wyoming, should be amended to reflect the fact that Channel 260C2 has been added to Cheyenne and Channel 260A has been removed from Cheyenne.