Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on September 28, 2007 (72 FR 55122). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are highlighted in a NOTE within the AD.

We estimate that this AD will affect about 1 product of U.S. registry. We also estimate that it will take about 2 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $160, or $160 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket on the Internet at http://www.regulations.gov ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

Discussion

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that supersedes AD 2004-23-14, amendment 39-13869 (69 FR 67043, November 16, 2004). The existing AD applies to certain Boeing Model 767-200, -300, and -300F series airplanes. That NPRM was published in the Federal Register on November 19, 2007 (72 FR 64964). That NPRM proposed to require reworking the surface of the ground stud bracket of the left and right transformer rectifier units (TRUs) and the airplane structure mounting surface, and measuring the resistance from the bracket to the structure and the ground lugs to the bracket using a bonding meter. That NPRM also proposed revising the applicability of the existing AD to include additional airplanes and to require, among other actions, installation of a new ground stud bracket using faying surface bonding.

We provided the public the opportunity to participate in the development of this AD. We considered the comment that has been received on the NPRM. Boeing, the single commenter, supports the NPRM.

We have carefully reviewed the available data, including the comment that has been received, and determined that air safety and the public interest require adopting the AD as proposed.

There are 932 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs for U.S. operators to comply with this AD.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866;

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation.

The FAA proposed to amend 14 CFR part 39 with a proposed AD. The proposed AD applies to GE CF34-8C1/-8C5/-8C5B1/-8E5/-8E5A1, and CF34-10E series turbofan engines with certain P/N and SN fuel metering units installed. We published the proposed AD in the Federal Register on September 7, 2007 (72 FR 51384). That action proposed to require a onetime test of the FMU for a miswired (reversed polarity) condition of the input wires to the overspeed solenoid.

You may examine the AD docket on the Internet at http://www.regulations.gov ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is provided in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We provided the public the opportunity to participate in the development of this AD. We have considered the comments received.

One commenter, GE, requests that we reference the latest GE service bulletin (SB) revisions, which are SB No. CF34-8C-AL S/B 73-0030, Revision 3, dated November 1, 2007, SB No. CF34-8E-AL S/B 73-0015, Revision 3, dated November 1, 2007, and SB No. CF34-10E S/B 72-0067, Revision 2, dated August 28, 2007.

We agree. We made that change in the AD.

One commenter, Woodward Governor Company, requests that we modify the Discussion paragraph of the proposed AD by deleting the statement “If the solenoid is miswired, the engine will fail to shut down as commanded”. The commenter interprets this statement as meaning that if the engine can be shut down normally, the AD is not required.

We partially agree. The statement is needed to explain that the AD is required by stating that shutdown failure is tied to overspeed in the unsafe condition statement in this AD. However, we deleted “as commanded” from the unsafe condition statements in the AD.

Woodward Governor Company requests that we include 13 additional FMU serial numbers, that were discovered to be affected since we issued the NPRM.

We agree. We changed the SN range of WYG94939 through WYGB4222 to WYG89156 through WYGB4222 in the AD and added the costs for them to the Cost section.

Woodward Governor Company requests that in the Costs of Compliance paragraph we clarify the statement “We estimate that about 2 percent of the inspected solenoids are defective, and it will cost about $5,000 to replace each FMU” to “We estimate that about 2 percent of the inspected solenoids are defective, and it will cost about $5,000 to replace each FMU solenoid.”

We agree. We clarified the Cost statement in the AD.

One commenter, Mesa Airlines, requests that we extend the compliance time from 2,200 flight hours to 4,000 flight hours, due to potentially longer repair turn around times of failed FMUs from the manufacturer.

We do not agree. Our compliance interval includes anticipated repair turn-around times. We did not change the AD.

We removed the reporting requirement from the AD, since we determined it was unnecesary.

We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

We estimate that this AD will affect 1,055 engines installed on airplanes of U.S. registry. We also estimate that it will take about 0.25 work-hour per engine to perform the FMU inspections, and that the average labor rate is $80 per work-hour. We estimate that about 2 percent of the inspected solenoids are defective. Replacement solenoids will cost about $5,000 each. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $126,600. Our cost estimate is exclusive of possible warranty coverage.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866;

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary at the address listed under ADDRESSES .

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an airworthiness directive (AD) that would apply to certain Boeing Model 737-300, -400, and -500 series airplanes. That NPRM was published in the Federal Register on November 26, 2007 (72 FR 65901). That NPRM proposed to require repetitive inspections for cracking of the body buttock line 0.07 floor beam between body station (BS) 651 and BS 676 and between BS 698 and BS 717, and related investigative and corrective actions if necessary.

We gave the public the opportunity to participate in developing this AD. We considered the comment received. Boeing supports the NPRM.

We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting the AD as proposed.

There are 1,961 airplanes of the affected design in the worldwide fleet. This AD affects 599 airplanes of U.S. registry. The required inspections take about 4 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the required AD for U.S. operators is $191,680, or $320 per airplane, per inspection cycle.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979), and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

You can find our regulatory evaluation and the estimated costs of compliance in the AD Docket.

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on December 11, 2007 (72 FR 70249). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are highlighted in a NOTE within the AD.

We estimate that this AD will affect about 12 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $960, or $80 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket on the Internet at http://www.regulations.gov ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on September 28, 2007 (72 FR 55113). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

The corrective action is revising the Airworthiness Limitations Section of the Instructions for Continued Airworthiness to incorporate new limitations for fuel tank systems. You may obtain further information by examining the MCAI in the AD docket.

For standardization purposes, we have revised paragraph (f)(4) of this AD to specify that no alternative inspections, inspection intervals, or CDCCLs may be used unless they are part of a later approved revision of ATR 42-200/-300/-320 Maintenance Review Board Report (MRBR), Revision 7, dated March 31, 2006; ATR 42-400/-500 MRBR, Revision 6, dated March 26, 2007; or ATR 72 MRBR, Revision 8, dated March 26, 2007; as applicable; or unless they are approved as an alternative method of compliance. Inclusion of this paragraph in the AD is intended to ensure that the AD-mandated airworthiness limitations changes are treated the same as the airworthiness limitations issued with the original type certificate.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed with the change described previously. We determined that this change will not increase the economic burden on any operator or increase the scope of the AD.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are highlighted in a NOTE within the AD.

We estimate that this AD will affect about 84 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $6,720, or $80 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on October 23, 2007 (72 FR 59967). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

For standardization purposes, we have revised this AD in the following ways:

• We revised the language in Note 1 of this AD to correspond to the language contained in the same note in similar ADs.

• We revised paragraph (f)(4) of this AD to specify that no alternative inspections, inspection intervals, or CDCCLs may be used unless they are part of a later approved revision of certain documents specified in this AD, or unless they are approved as an alternative method of compliance (AMOC). Inclusion of this paragraph in the AD is intended to ensure that the AD-mandated airworthiness limitations changes are treated the same as the airworthiness limitations issued with the original type certificate.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are highlighted in a NOTE within the AD.

We estimate that this AD will affect about 109 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $8,720, or $80 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket on the Internet at http://www.regulations.gov ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on November 21, 2007 (72 FR 65476). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are highlighted in a NOTE within the AD.

We estimate that this AD will affect about 186 products of U.S. registry. We also estimate that it will take about 3 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Required parts will cost about $0 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these parts. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $44,640, or $240 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket on the Internet at http://www.regulations.gov ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on December 17, 2007 (72 FR 71284). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are highlighted in a NOTE within the AD.

We estimate that this AD will affect about 103 products of U.S. registry. We also estimate that it will take about 4 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $32,960, or $320 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket on the Internet at http://www.regulations.gov ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

The FAA Drug Enforcement Assistance Act of 1988 (Pub. L. 100-690) (the DEA Act) amended 49 U.S.C. 44703 to direct the FAA to modify the system for issuing airman certificates to pilots to make the system more effective in serving the needs of pilots and officials responsible for enforcement of laws relating to the regulation of controlled substances. The DEA Act identified a number of deficiencies and abuses that the modifications must address, including the use of counterfeit and stolen airman certificates by pilots and the submission of unidentifiable names of individuals on applications for registration of aircraft. The DEA Act also amended section 44703 to require the FAA to prescribe regulations to address the abuses and deficiencies. Additional background information appears in the notice of proposed rulemaking (72 FR 489, Jan. 5, 2007).

In 2002, the FAA revised the pilot certificate requirements of part 61 to require a person to carry photo identification when exercising the privileges of the pilot certificate and to present photo identification when requested by law enforcement officials. See 67 FR 65858, October 28, 2002. These changes address security and law enforcement concerns regarding the identification of pilots. Also, in July 2003, the Civil Aviation Registry (the Registry) discontinued issuing paper airman certificates and began issuing permanent airman certificates that incorporate a number of security features. The new certificates are made of high-quality plastic card stock and include micro printing, a hologram, and an ultraviolet-sensitive layer that contains certain words and phrases. These new certificates greatly reduce the ability to create counterfeit airman certificates.

This final rule provides that the holder of a paper pilot certificate, other than a temporary pilot certificate or a student pilot certificate, may not exercise the privileges of the paper certificate after two years from the date of adoption of this final rule. After the two-year period, only an FAA-issued plastic pilot certificate may be used to exercise piloting privileges. The final rule does not revoke or otherwise cancel a paper certificate. It simply requires, after this final rule becomes effective, that the pilot have the plastic certificate to exercise the attendant privileges.

Two years is a reasonable time to allow for the replacement of pilot certificates by those who want to act as a pilot after the two-year period without interruption. (A person who holds an older-style paper pilot certificate may apply for a plastic certificate after the two-year period, but he or she would not be able to exercise piloting privileges until he or she obtained the plastic certificate.) We are assuming that applications for the plastic replacement certificate would be evenly spread out through the two-year period. If all pilots wait until close to the end of the two-year period to apply for the replacement certificate, there would undoubtedly be delays in processing and receipt of the new certificate. The two-year period balances our ability to receive and process applications for replacement certificates, to maintain our existing range of services, and to reduce the risk of counterfeiting of paper certificates.

To effect this change, we are adopting new paragraph (h) in 14 CFR 61.19 “Duration of pilot certificates,” as proposed. Readers should note that this final rule does not require a holder of a paper pilot certificate to surrender the certificate when getting the new plastic certificate. The paper certificate would not authorize the holder to exercise piloting privileges, but those who wish to retain it may do so. Currently, the fee for replacing an existing paper certificate is $2.00. This nominal fee defrays part of the Registry's cost of replacing the existing paper pilot certificates. At the same time, the $2.00 fee will not be an undue burden on individuals. To make the replacement process as quick and easy as possible, the Registry has recently set up a system that allows a certificate holder to request a replacement certificate using the Internet. Certificate holders may access this system by going to the following address: https://amsrvs.registry.faa.gov/amsrvs.

This final rule does not apply to student pilot certificates or flight instructor certificates. Under existing regulations, these certificates expire 24 calendar months from the month in which they are issued or renewed. See 14 CFR 61.19(b) and (d).

This final rule also provides that ground instructors, flight crewmembers other than pilots (regulated under 14 CFR part 63), and airmen other than flight crewmembers (regulated under 14 CFR part 65) who hold paper airmen certificates (other than temporary certificates) may not exercise the privileges of the paper certificates after five years from the effective date of the final rule. After the five-year period, only an FAA-issued plastic airmen certificate could be used to exercise these privileges. This rule does not revoke or otherwise cancel a paper certificate. It simply requires the airman to have the plastic certificate to exercise the attendant privileges.

Although the DEA Act only addressed pilot certificates, we are adopting a parallel change for these other airmen certificates under the FAA's general rulemaking authority. Ground instructors and part 63 and part 65 airmen play an essential role in the functioning of the civil aviation system. We must address any potential problems associated with accurate identification of these airman certificate holders. A mechanic or flight engineer would have access to aircraft and have opportunities to participate in drug smuggling activities, such as concealment of drugs on the aircraft.

To effect these changes, we are adopting the revisions to existing 14 CFR 61.19(e) and new 14 CFR 63.15(d) and 65.15(d) as proposed. Replacement of these certificates will cost the holder $2.00. To make the replacement process as quick and easy as possible, the Registry has recently set up a system that allows a certificate holder to request a replacement certificate using the Internet. Certificate holders may access this system by going to the following address: https://amsrvs.registry.faa.gov/amsrvs. Readers should note that a plastic airman certificate issued under this final rule to replace a paper certificate will also contain the language proficiency endorsement needed for international operations under the International Civil Aviation Organization's Annex 1.

The DEA Act authorizes the FAA to modify the system for registering and recording conveyances to make the system more effective in serving the needs of buyers and sellers of aircraft and of officials responsible for enforcement of laws relating to the regulation of controlled substances. See 49 U.S.C. 44111. The DEA Act identified a number of deficiencies, including the submission of unidentifiable names of individuals on applications for registration of aircraft. The DEA Act also authorized the FAA to prescribe regulations to address the deficiencies. The FAA has undertaken a number of non-regulatory actions to address the deficiencies outlined in the DEA Act. A discussion of these actions appears in the notice of proposed rulemaking (72 FR 489, Jan. 5, 2007) and the notice withdrawing the 1990 notice of proposed rulemaking (70 FR 72403, Dec. 5, 2005).

Notwithstanding the many improvements made by the Registry, we still have a concern about the accuracy of ownership information contained in the Registry. Those who transfer ownership of U.S.-registered aircraft do not always notify the Registry of the transfer in a timely fashion. The effectiveness of the Registry's document index and aircraft registry database depends on the accuracy and timeliness of the information they contain. For this reason, we are amending 14 CFR 47.41(b) to require the person selling, or otherwise transferring ownership of, a U.S.-registered aircraft to return the certificate of aircraft registration to the Registry within 21 days of sale or transfer.

We had proposed to require reporting of aircraft sale within five days of sale or transfer, but are adopting a 21-day period in response to comments, discussed below. Twenty-one days is a reasonable amount of time to complete the reverse side of the certificate and ensure its arrival at the Registry. It achieves a balance between the need to have accurate, up-to-date information in the Registry for the use of law enforcement agencies and our desire not to unduly burden individuals.

To address the problem of the submission of illegible names of individuals on applications for registration of aircraft, we are requiring each applicant to provide a printed or typed name with his or her signature. The Registry has already included this requirement in the instructions for completing the aircraft registration application. We are adding it to our regulations to bolster our authority to reject applications that contain illegible names. To effect this change, we are adopting changes to a previously undesignated portion of 14 CFR 47.31 that appeared between paragraphs (a) and (b) as proposed. Currently, the FAA rejects an application if it is not completed or if the name and signature on the application are not the same throughout. Under this final rule, the currently undesignated provision becomes new 14 CFR 47.31(b) and includes the requirement for a printed or typed name under the signature. Existing paragraphs (b) and (c) are redesignated as paragraphs (c) and (d).

The FAA did not specifically address in the NPRM temporary certificates issued under §§ 61.17, 63.13, and 65.13. The process of temporary certification was not addressed in the proposal, and we received no comments on this issue. The FAA will continue to issue paper temporary certificates as part of the FAA's established certification process. The final rule includes language in §§ 61.19, 63.15, and 65.15 to clarify that temporary certificates are not required to be plastic to allow the individual to exercise the privileges of these certificates.

The limited duration (120 days) of the temporary certificates is one reason that the FAA does not believe that the issuance of paper temporary certificates is a significant issue. Moreover, in the case of a pilot airman, the additional privilege accorded by a temporary certificate typically is attached to an existing pilot certificate. For example, adding a category, class, instrument or type rating to an existing pilot certificate means that the individual already holds a pilot certificate. At the point that the rule requires that the pilot certificate be plastic, the temporary paper certificate covering the new privileges will be associated with an existing plastic certificate. In addition, the FAA recognizes that airmen who have earned an additional privilege have a justifiable interest in immediately exercising that privilege.

There are two other paper documents, one issued under part 61 and the other issued under part 65, that provide authority to engage in certain aeronautical activities. These documents are not issued by the Civil Aviation Registry. The first document is a special purpose pilot authorization issued under § 61.77. This limited authorization is issued by letter to an individual to permit acting as a pilot aboard an aircraft of U.S. registry in foreign air commerce, subject to a variety of limitations and requirements. The FAA will continue to issue § 61.77 authorizations in letter format.

The second document is the inspection authorization issued under § 65.92. An inspection authorization is not an airman certificate per se, and to hold and exercise the privileges of the authorization, the individual must hold a current mechanics certificate with both an airframe rating and a powerplant rating. Thus, like temporary certificates that are related to an underlying pilot certificate, an inspection authorization will always be based on an FAA airman certificate. At the point under this rule when a plastic certificate is required for airmen other than pilots, the holder of an inspection authorization also will have to hold a plastic mechanics certificate that supports the inspection authorization authority.

Finally, the FAA will continue the practice of issuing paper student pilot certificates in the context of obtaining a medical certificate from an aviation medical examiner. This is consistent with the NPRM where we specifically excluded student pilot certificates from the proposed change. For the purposes of addressing the concerns of the DEA Act, the FAA concluded that changes to the student pilot certification process are not necessary.

This final rule addresses issues related to the FAA Drug Enforcement Assistance Act. The FAA will address the requirements of the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA) (Pub. L. 108-458) in a future rulemaking. IRTPA requires, among other things, the inclusion of a digital photograph on pilots' certificates. The FAA is currently evaluating its options with regard to the best method to meet this requirement while continuing to evaluate other changes to improve data quality of the Registry. The FAA is actively considering whether to propose a rule to require the periodic registration of aircraft. In a post-9/11 environment, there are important security and other benefits that would result from a more up-to-date and accurate aircraft Registry.

The notice of proposed rulemaking (NPRM) was published on January 5, 2007, and the comment period closed on March 6, 2007 (72 FR 489). A total of 48 comments were received from commenters representing air transportation operators and their associations, pilots and pilot associations, aircraft owners and aircraft owners associations, and other individuals.

Several commenters opposed the proposals based on the incorrect notion that additional fees would be part of the rule. Some commenters were generally supportive of the changes proposed by the NPRM, but others did not see benefits from the proposed changes. With regard to the 5-day sale reporting proposal, some commenters objected to the short time period (5 days), but not to the concept of establishing a time certain.

The following discussion of comments includes the substantive issues raised by commenters.

Of the 48 comments, there were 15 that opposed the NPRM because of their belief that the NPRM contained new user fees. These commenters thought that this NRPM would implement additional fees for aircraft registration and the submission of the Form 337 that is used to report major repairs and alterations to aircraft. There were also some comments that establishing a user-fee system would add significant overhead costs.

These commenters read the NPRM incorrectly. We did not propose and are not adopting new or increased fees for aircraft registration and the submission of the Form 337. Nor does this final rule establish a user-fee system. The only fee associated with this final rule is the existing $2 fee for replacing an airman certificate. Under the final rule, this is a one-time fee incurred when the paper certificate is replaced by plastic.

Some opposition to the NPRM centered on the proposed requirement that a person selling or otherwise transferring ownership of a U.S.-registered aircraft return the certificate of aircraft registration to the Registry within 5 days of sale or transfer. One commenter felt that the FAA should consider the fact that business transfers of ownership may involve securing of financial interests and financing and recommended increasing the time period to 14 business days. The National Air Transportation Association stated that aircraft transactions are complicated and frequently occur at sites away from the principals' primary residence or place of business and proposed a 10-day period. It also requested that the deadline be measured against the postmark or shipment date, not the delivery date. The National Business Aviation Association suggested a more reasonable time frame would be 14 days given the complex nature of most business aircraft transactions and the global travels of those involved in the transactions. Northwest Airlines requested we allow up to 21 days to return the old registration because the owner of an aircraft may not have immediate access to the old registration at the time of sale.

After considering the comments, we find that we do not disagree with the idea of allowing more than 5 days to report an aircraft sale or transfer. Although 5 days may be sufficient in relatively simple transactions, we do not wish to promulgate a regulation that may ensnare otherwise law-abiding entities in a violation. For this reason, of the alternatives proposed by the commenters, 10 days measured from shipping date, 14 “business” days, 14 days, and 21 days, we have chosen to adopt a 21-day period. Thus, the final rule requires reporting of aircraft sale or transfer within 21 days from the date of sale to the date we receive the aircraft registration certificate. This is fair to the commenter who requested we measure the 10-day time interval from the shipping date since a 21-day interval should easily encompass any lag between the shipping date and the delivery date. We chose not to express the time interval in “business” days because none of our other regulatory time frames make a distinction between “business” days and other days. See, for example, existing 14 CFR 47.15(f), 47.31(b), and 47.41(a)(6). We also note that 21 days (3 weeks) essentially corresponds to 14 “business” days.

The National Business Aviation Association recommended that we create a reasonable alternate means of compliance for fractional aircraft programs due to the potential increased volume of changes for aircraft in fractional programs.

Fractional aircraft programs can involve situations where there are large numbers of aircraft owners and where the ownership is constantly changing. Whenever an owner enters or leaves a fractional program, the event must be reported to the Registry through an application for an updated aircraft registration. The NPRM did not propose any change to the requirement to report changes in aircraft ownership; it simply proposed to establish a time frame in which the return of the registration certificate must be accomplished. For this reason, the change recommended by the National Business Aviation Association is beyond the scope of this rulemaking.

A number of individual commenters expressed the view that the change from paper to plastic certificates will have no benefit on drug enforcement or improving aviation security. They opposed the expense, however modest, as an additional fee without a benefit. A smaller number of individual commenters supported the enhanced certificates, as did the Airline Pilots Association and the Aircraft Owners and Pilots Association.

The FAA is convinced that the plastic certificates provide a significantly higher level of integrity. The security features of the plastic certificates are significant. The out-of-pocket costs of two dollars coupled with the ability to easily obtain the new certificate through the Internet, makes this a significant improvement with minimal impact.

Some individual commenters, as well as the National Air Transportation Association and the Regional Airlines Association, suggested that this rulemaking be held in abeyance until such time that the FAA moves forward to address the requirement of IRTPA to add photographs to pilot certificates. They objected to the cost and inconvenience of obtaining a plastic certificate only to have to take another action related to a later rulemaking soon thereafter to implement IRTPA.

The initiative to address IRTPA, including requiring photographs on pilot certificates, will require additional rulemaking. It typically takes several years to complete a rulemaking project, and in the case of the photo ID requirement, we have not yet issued a proposal for public comment. Meanwhile, we have already issued plastic certificates to nearly 60 percent of pilots. The replacement of the remaining paper certificates with new plastic ones is a low-cost, easy way to improve the quality of certificates in the near term. In addition, the FAA currently has in place regulations that require pilots to provide a form of third-party photo identification to exercise the privileges of the airman certificate.

We are currently evaluating our options with regard to the best method of complying with the remaining IRTPA mandates, including putting a digital photo on pilot certificates. The FAA does intend ultimately to establish a digital photo requirement for pilot certificates. The rulemaking to implement additional security features on pilot certificates will give interested parties an opportunity to comment.

There were comments that the current plastic certificates would be as easy to counterfeit as the paper certificates.

The FAA disagrees with these comments as there a number of features of the new certificates that make them difficult to duplicate. Some of these features are the use of micro-printing, holograms, and an ultraviolet layer.

There were also comments that the printing on the plastic certificates could be easily rubbed off and replaced with false information.

The plastic certificates currently being issued have been enhanced with a protective layer on top of the printing that precludes this possibility. The FAA believes that the properties of the current plastic certificates make them difficult to counterfeit.

An individual commenter asked if the proposed change would have the same impact for repairmen as for certificated mechanics. In the commenter's view, the proposal did not address certificates issued under part 65 for repairmen.

The commenter must have misunderstood the proposal. The proposal included new § 65.15(d), which would apply to the holder of a paper certificate issued under part 65. Part 65 applies to airmen other than flight crew members, including air traffic control tower operators, aircraft dispatchers, mechanics, repairmen, and parachute riggers. However, § 65.15(d) does not apply to inspection authorizations issued under § 65.91 since an inspection authorization is not a certificate under § 61.15(d).

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. An agency may not collect or sponsor the collection of information, nor may it impose an information requirement unless it displays a currently valid Office of Management and Budget (OMB) control number.

As required by the Act, we submitted a copy of the new information requirements to OMB for their review when we published the NPRM. Additionally, in the NPRM, we solicited comments from the public on the proposed new information collection requirements. No comments relating to the proposed new information collection requirements were received. Affected parties, however, do not have to comply with the information collection requirements of this rule until the OMB approves the FAA's request for this information collection requirement. The FAA will publish a separate document notifying you of the OMB Control Number and the compliance date(s) for the information collection requirements of this rule.

Under this final rule, two years after the final rule becomes effective, paper pilot certificates may no longer be used to exercise piloting privileges. Five years after the final rule becomes effective, certain other paper airmen certificates, such as those of flight engineers and mechanics, may no longer be used to exercise the privileges authorized by those certificates. To exercise the privileges after those respective dates, the airmen would have to replace their paper certificates with upgraded, counterfeit-resistant plastic certificates. The FAA estimates that there are 900,000 active airmen, of which 450,000 are pilots.

Each airman having a paper certificate would need to provide the FAA, the Airmen Certification Branch at the Civil Aviation Registry, with the appropriate paperwork. This can be done either through the mail or electronically. The fee for this new replacement certificate is $2. The FAA assumes that it will take no more than five minutes for each airman to process the paperwork; the total cost to each airman would be about $5. Five-year costs range from $1.51 million ($1.31 million, discounted) for the low-cost scenario to $3.45 million ($2.96 million, discounted) for the high-cost scenario.

In keeping with U.S. obligations under the Convention on International Civil Aviation, FAA's policy is to comply with International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA determined that there are no ICAO Standards and Recommended Practices that correspond to these proposed regulations.

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this final rule. We suggest readers seeking greater detail read the full regulatory evaluation, a copy of which we have placed in the docket for this rulemaking.

In conducting these analyses, FAA has determined that this rule: (1) Has benefits that justify its costs, (2) is not an economically “significant regulatory action” as defined in section 3(f) of Executive Order 12866, (3) is not “significant” as defined in DOT's Regulatory Policies and Procedures; (4) would not have a significant economic impact on a substantial number of small entities; (5) would not create unnecessary obstacles to the foreign commerce of the United States; and (6) would not impose an unfunded mandate on state, local, or tribal governments, or on the private sector by exceeding the threshold identified above. These analyses are summarized below.

The FAA assumes that an equal number of paper airmen certificates will be replaced each year. The FAA projects that there will be about 335,800 pilots who still hold paper certificates, so the FAA assumes that about 167,900 will get their new plastic certificate in 2008 and in 2009. Excluding the certified flight instructors, about 399,600 other individuals with airman certificates will need to replace their certificates over a 5 year period, or about 79,900 a year.

The FAA has considered two cost scenarios. The first, low cost scenario, assumes that since some airmen have been replacing their paper certificates with the new plastic certificates, either because they have requested replacement certificates or because they have received new certificates after attaining additional ratings, they will continue to do so without the rule. The cost that these pilots will incur to replace their certificates cannot be considered a cost of the final rule, since they would have replaced their certificates without the rule. The second, high cost scenario, assumes that no pilots or airmen will replace their paper certificates with plastic certificates unless the rule required them to do so.

Each airman having a paper certificate will need to provide the FAA's Airmen Certification Branch at the Civil Aviation Registry with the appropriate paperwork. This can be done either through the mail or electronically. The fee for this new replacement certificate is $2. The FAA assumes that it will take no more than 5 minutes for each airman to process the paperwork; the total cost to each airman will be about $5. Five-year costs range from $1.51 million ($1.31 million, discounted) for the low-cost scenario to $3.45 million ($2.96 million, discounted) for the high-cost scenario.

There are several steps involved with the FAA processing a request for a duplicate airman certificate. These steps include federal employees at two different grade levels as well as several contractors, including those who will preprocess and scan the images, index the image, review the certificate for accuracy, and print and mail the certificates. The total costs per new certificate sum to about $4.50; 5-year costs range from $1.45 million ($1.26 million, discounted) for the low-cost scenario to $3.30 million ($2.83 million discounted) for the high-cost scenario. The lower cost represents the low cost scenario, while the higher cost represents the high cost scenario.

Total costs, over 5 years, to replace the existing paper certificates range from $2.96 million ($2.57 million, discounted), the low cost scenario, to $6.75 million ($5.79 million, discounted), the high cost scenario.

Congress has determined that the smuggling of drugs into the United States by general aviation aircraft is a major contributing factor in the illegal drug crisis facing the nation. As a result of that determination, the Congress expanded the mission of the FAA to include assisting law enforcement agencies in the enforcement of laws regulating controlled substances, to the extent consistent with aviation safety.

The Congress has stated in the Drug-Free America Policy of the Drug Enforcement Assistance Act of 1988 that the total cost of drug use to the economy is estimated to be over $100 billion annually. Were this rule to reduce society's economic cost of drug use by approximately 1/74,000th for the high cost scenario or 1/169,000th for the low cost scenario over 5 years, that achievement will more than equal the estimated cost to society of these regulatory changes. The FAA believes that such a reduction is achievable. Congress, which reflects the will of the American public, has determined that this action is in the best interest of the nation.

The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.

Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.

However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

This rule affects aircraft owners, through part 47, and pilots, through parts 61, 63, and 65. The change to part 47 will affect all aircraft owners. However, as stated above, they have always been required to send in the registration package upon purchase of a new aircraft; this rule does not impose any new requirements on new aircraft owners. Accordingly, there are no additional costs for these owners.

The changes to parts 61, 63, and 65 will impose an estimated $5 in compliance costs on pilots applying for certificate reissuances. This cost covers the costs for the postage, applicant's time, and the $2 reissuance fee charged to pilots. However, pilots are not small entities and are not covered by the Regulatory Flexibility Act. The FAA recognizes that there are one-man businesses that provide aviation services; however, the cost of this final rule to them will be negligible and, therefore, not significant.

Therefore as the FAA Administrator, I certify that this rule will not have a significant economic impact on a substantial number of small entities.

The Trade Agreements Act of 1979 (Pub. L. 96-39) prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this final rule and has determined that it will have only a domestic impact and therefore no affect on international trade.

The Unfunded Mandates Reform Act of 1995 (the Act) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of the Act requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $128.1 million in lieu of $100 million.

This final rule does not contain such a mandate. The requirements of Title II do not apply.

The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. We determined that this action will not have a substantial direct effect on the States, the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, we determined that this final rule does not have federalism implications.

FAA Order 1050.1E identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this final rule qualifies for the categorical exclusion identified in paragraph 312d and involves no extraordinary circumstances.

The FAA has analyzed this final rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 18, 2001). We have determined that it is not a “significant energy action” under the executive order because it is not a “significant regulatory action” under Executive Order 12866, and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

You can get an electronic copy of this final rule using the Internet by:

(1) Searching the Federal eRulemaking portal at http://www.regulations.gov;

(2) Visiting the Office of Rulemaking's Web page at http://www.faa.gov/avr/arm/index.cfm; or

(3) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.

You can also get a copy by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make sure to identify the docket number, notice number, or amendment number of this rulemaking.

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. If you are a small entity and you have a question regarding this document, you may contact your local FAA official, or the person listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. You can find out more about SBREFA on the Internet at http://www.faa.gov/regulations_policies/rulemaking/sbre_act/ .

Section 740.9 of the Export Administration Regulations provides inter alia an exception to export and reexport license requirements for certain temporary exports and reexports. One category of such exports and reexports is entitled “tools of trade.” In February 2005, BIS revised § 740.9 to allow temporary exports, but not reexports, to Sudan of certain computers, communications devices, and global satellite positioning devices by employees and staff of certain organizations engaged in humanitarian work in Sudan (70 FR 8257, February 18, 2005 and 70 FR 9703, February 28, 2005). The experiences of the organizations using this provision, the increase in computer performance levels since that rule was published, the implementation of the Comprehensive Peace Agreement and the Darfur Peace Agreement, the passage of the Darfur Peace and Accountability Act, the issuance of Executive Order 13412, the implementation of that Act and that Executive Order by the Department of the Treasury, and the changing nature of the assistance being provided in Sudan by non-governmental organizations have led BIS to conclude that changes to this provision are warranted.

This rule modifies § 740.9(a)(2)(i)(B) of the EAR, which sets forth the provisions that apply specifically to Sudan for temporary exports and reexports of tools of trade under License Exception TMP. This rule breaks that paragraph into further subparagraphs to make the provisions easier to follow and cite.

This rule adds reexports to the types of transactions authorized by § 740.9(a)(2)(i)(B).

This rule adds certain support activities to relieve human suffering or to implement the Darfur Peace Agreement or the Comprehensive Peace Agreement by an organization authorized by the Department of the Treasury, and certain support activities to relieve human suffering in Sudan in areas that are exempt from the Sudanese Sanctions Regulations by virtue of the Darfur Peace and Accountability Act and Executive Order 13412, to the purposes for which § 740.9(a)(2)(1)(B) authorizes sending tools of trade under License Exception TMP to Sudan.

This rule allows exports and reexports to an eligible user in Sudan by a method reasonably calculated to assure delivery to the permissible user. Prior to publication of this rule, § 740.9(a)(2)(i)(B) required that shipments accompany a traveler to Sudan.

This rule raises the adjusted peak performance (APP) of computers controlled under Export Control Classification Number (ECCN) 4A994.b eligible under § 740.9(a)(2)(1)(B) from 0.0015 weighted teraFLOPS (WT) to 0.008 WT.

This rule makes disk drives controlled under ECCN 4A991.d, input/output control units controlled under ECCN 4A994.e (other than industrial controllers for chemical processing), graphics accelerators controlled under 4A994.g and color displays and monitors controlled under 4A994.h eligible for export and reexport under § 740.9(a)(2)(i)(B).

This rule authorizes export or reexport of software to be used solely for servicing or in-kind replacement of software legally exported or reexported pursuant to § 740.9(a)(2)(i)(B). Prior to this rule all such software had to be loaded on to the hardware prior to sending the hardware to Sudan.

BIS is making these changes for several reasons. The increase in the performance level of the computers authorized by this rule is needed because few, if any, computers with an APP of 0.0015 WT level are easily available at retail outlets. The additional commodities are peripheral equipment to computers that are used for routine business tasks such as word processing, spreadsheets and Web browsing. Allowing reexports of such items and removing the requirements that the items accompany a traveler to Sudan and that software be loaded prior to arrival of the hardware in Sudan will allow persons working for non-governmental organizations engaged in humanitarian or development efforts in Sudan to procure items subject to the EAR outside the United States and send them to Sudan more easily. Since 2005, when BIS last amended § 740.9(a)(2)(1)(B), the nature of the activities of U.S.-supported NGOs in Sudan has evolved from humanitarian assistance and efforts to relieve human suffering to include not only those goals but some development assistance as well. This rule allows support of that broader scope of activities consistent with the Darfur Peace Agreement, the Comprehensive Peace Agreement, the Darfur Peace and Accountability Act and Executive Order 13412.

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

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation contains a collection previously approved by the OMB under control numbers 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. BIS believes that this rule will have no material effect on the burden imposed by that collection.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

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

On September 28, 2006, the Commonwealth of Virginia submitted a revision to its State Implementation Plan. The revision consists of administrative amendments to Virginia's Regulation A99 pertaining to RACT for the control of NO X emissions from major stationary sources. The amendments consist of administrative wording changes, removal of surplus definitions, and the paragraph renumbering of a particular section.

These SIP revisions consist of the following changes:

1. Administrative wording changes to Regulations 9 VAC 5-40-240, 9 VAC 5-40-250, and 9 VAC 5-40-311B.

2. Removal of definitions “Combustion unit,” “Fuel burning equipment installation,” and “Total capacity” in section 9 VAC 5-40-311B.3. Section 9 VAC 5-40-311B.1 establishes that the definitions in section 9 VAC 5-40-311B.3 apply only to section 9 VAC 5-40-311. Although EPA had approved these revisions on April 28, 1999 (64 FR 22789), these three terms are used only in regulatory provisions which are not part of the approved Virginia SIP.

3. Renumbering of 9 VAC 5-40-311C.3.b., d., e., f., and g. to 9 VAC 5-40-311C.3.a., through e. respectively.

EPA views the revisions to 9 VAC 5-40-240, 9 VAC 5-40-250, and 9 VAC 5- 40-311B., as administrative changes. EPA also views the renumbering of 9 VAC 5-40-311C.3.b., d., e., f., and g. to 9 VAC 5-40-311C.3.a., through e. as an administrative re-codification. EPA considers these revisions non-substantive, as they do not affect the scope of the currently approved Virginia SIP, and consequently, cannot interfere with timely attainment or progress toward attainment of a national ambient air quality standard (NAAQS), nor interfere with any other provision of the Clean Air Act (CAA).

In 1995, Virginia adopted legislation that provides, subject to certain conditions, for an environmental assessment (audit) “privilege” for voluntary compliance evaluations performed by a regulated entity. The legislation further addresses the relative burden of proof for parties either asserting the privilege or seeking disclosure of documents for which the privilege is claimed. Virginia's legislation also provides, subject to certain conditions, for a penalty waiver for violations of environmental laws when a regulated entity discovers such violations pursuant to a voluntary compliance evaluation and voluntarily discloses such violations to the Commonwealth and takes prompt and appropriate measures to remedy the violations. Virginia's Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-1198, provides a privilege that protects from disclosure documents and information about the content of those documents that are the product of a voluntary environmental assessment. The Privilege Law does not extend to documents or information (1) that are generated or developed before the commencement of a voluntary environmental assessment; (2) that are prepared independently of the assessment process; (3) that demonstrate a clear, imminent and substantial danger to the public health or environment; or (4) that are required by law.

On January 12, 1998, the Commonwealth of Virginia Office of the Attorney General provided a legal opinion that states that the Privilege law, Va. Code Sec. 10.1-1198, precludes granting a privilege to documents and information “required by law,” including documents and information “required by Federal law to maintain program delegation, authorization or approval,” since Virginia must “enforce Federally authorized environmental programs in a manner that is no less stringent than their Federal counterparts. * * *” The opinion concludes that “[r]egarding § 10.1-1198, therefore, documents or other information needed for civil or criminal enforcement under one of these programs could not be privileged because such documents and information are essential to pursuing enforcement in a manner required by Federal law to maintain program delegation, authorization or approval.”

Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that “[t]o the extent consistent with requirements imposed by Federal law,” any person making a voluntary disclosure of information to a state agency regarding a violation of an environmental statute, regulation, permit, or administrative order is granted immunity from administrative or civil penalty. The Attorney General's January 12, 1998 opinion states that the quoted language renders this statute inapplicable to enforcement of any Federally authorized programs, since (no immunity could be afforded from administrative, civil, or criminal penalties because granting such immunity would not be consistent with Federal law, which is one of the criteria for immunity.”

Therefore, EPA has determined that Virginia's Privilege and Immunity statutes will not preclude the Commonwealth from enforcing its program consistent with the Federal requirements. In any event, because EPA has also determined that a state audit privilege and immunity law can affect only state enforcement and cannot have any impact on Federal enforcement authorities, EPA may at any time invoke its authority under the CAA, including, for example, sections 113, 167, 205, 211 or 213, to enforce the requirements or prohibitions of the state plan, independently of any state enforcement effort. In addition, citizen enforcement under section 304 of the CAA is likewise unaffected by this, or any, state audit privilege or immunity law.

EPA is approving the Commonwealth of Virginia SIP revision to make the administrative changes to 9 VAC 5-40-240, 9 VAC 5-40-250, and 9 VAC 5-40-311, which was submitted on September 28, 2006. EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's Federal Register , EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective on April 28, 2008 without further notice unless EPA receives adverse comment by March 31, 2008. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

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 (Pub. L. 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 requirement, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. 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 approves a state rule implementing a Federal standard.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. 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 CAA. 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 . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 28, 2008. 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 pertaining to amendments to the Commonwealth of Virginia regulations governing source-specific NO X RACT may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

I. Summary of SIP Revisions

On October 24, 2007, the State of Maryland submitted a formal revision (#07-11) to its SIP. The SIP revision consists of a revised reference to the Federal definition of “Volatile organic compounds (VOC)” at 40 CFR 51.100(s) which is found at COMAR 26.11.01.01B(53), Maryland's definition for “Volatile organic compound (VOC)”. These regulatory revisions became effective on October 8, 2007.

Maryland has revised COMAR 26.11.01.01B(53) to incorporate by reference the EPA definition of VOC found at 40 CFR 51.100(s), as amended. Maryland's current SIP definition of VOC specifically references the 2004 edition of 40 CFR 51.100(s). This wording change allows Maryland to incorporate by reference the current and all future revisions of 40 CFR 51.100(s) into COMAR 26.11.01.01B(53) without requiring a regulatory change to the Maryland rule. Maryland states that it can incorporate this Federal rule prospectively as a result of a change to section 7-207(a)(3)(iii)2, State Government Article, Annotated Code of Maryland, which the State enacted in 2005.

EPA is approving the amendment to COMAR 26.11.01.01B(53) as a revision to the Maryland SIP. EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment since the revisions are administrative changes to the state regulations. However, in the “Proposed Rules” section of today's Federal Register , EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective on April 28, 2008 without further notice unless EPA receives adverse comment by March 31, 2008. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.

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 (Pub. L. 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 Clean Air 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 Clean Air 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 Clean Air 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 . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 28, 2008. 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 to approve Maryland's revised definition of “Volatile organic compound (VOC)” may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

This is a synopsis of the Commission's Memorandum Opinion and Order, MB Docket No. 02-376, adopted January 30, 2008 and released February 1, 2008. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Information Center (Room CY-A257), 445 12th Street, SW., Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's copy 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 .

The Memorandum Opinion and Order agreed that the Report and Order had properly applied the Commission's policy of not permitting “backfill” vacant allotments to the facts of this case. See 69 FR 71386 (December 9, 2004). Specifically, the proposed relocation of Lakeshore's station KWCX-FM would result in the loss of all radio service for 2,846 persons ( i.e. , a “white” area) and the reduction from two to one full-time reception service for 1,022 persons ( i.e. , a “gray” area). Although Lakeshore argued that its counterproposal does not create “white” area, as a matter of law, because the Commission considers a vacant allotment to prevent the creation of “white” area, the Memorandum Opinion and Order disagreed, finding that the policy of no longer permitting “backfill” allotments has necessarily modified, to some extent, the calculation of “white” or “gray” areas in cases of operating, as opposed to unbuilt, stations. As a result, the potential service from new “backfill” allotments, existing vacant allotments, or unbuilt construction permits will no longer be considered in calculating the loss of service by the reallotment of operating stations. By way of contrast, the traditional test of considering the potential service from “backfill” or existing vacant allotments would continue to apply in cases involving reallotments and changes of community of license for unbuilt stations because existing on-air service is not being lost.

This document is not subject to the Congressional Review Act. (The Commission, is, therefore, not required to submit a copy of this Memorandum Opinion and Order to GAO, pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A) because the petition for reconsideration was denied.)

This is a summary of the Commission's Report and Order (“ Order ”), FCC 07-208, adopted on November 27, 2007, and released on February 1, 2008. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW., CY-A257, Washington, DC 20554. This document will also be available via ECFS ( http://www.fcc.gov/cgb/ecfs/ ). (Documents will be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) The complete text may be purchased from the Commission's copy contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. To request this document in accessible formats (computer diskettes, large print, audio recording, and Braille), send an e-mail to fcc504@fcc.gov or call the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

In addition to filing comments with the Office of the Secretary, a copy of any comments on the proposed information collection requirements contained herein should be submitted to Cathy Williams, Federal Communications Commission, 445 12th St., SW., Room 1-C823, Washington, DC 20554, or via the Internet at PRA@fcc.gov.

This document contains new and modified information collection requirements. The Commission will send the requirements to OMB for review. The Commission, as part of its continuing effort to reduce paperwork burdens, will invite the general public to comment on the information collection requirements as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we sought specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” In this present document, we have assessed the potential effects of the various policy changes with regard to information collection burdens on small business concerns, and we find that these requirements will benefit many companies with fewer than 25 employees by facilitating the use of leased access channels and by promoting the fair and expeditious resolution of leased access complaints.

1. In this Report and Order, we modify the Commission's leased access rules. With respect to leased access, we modify the leased access rate formula; adopt customer service obligations that require minimal standards and equal treatment of leased access programmers with other programmers; eliminate the requirement for an independent accountant to review leased access rates; and require annual reporting of leased access statistics. We also adopt expedited time frames for resolution of complaints and improve the discovery process. Finally, we seek comment in a Further Notice of Proposed Rulemaking on whether we should apply our new rate methodology to programmers that predominantly transmit sales presentations or program length commercials.

2. The commercial leased access requirements are set forth in Section 612 of the Communications Act of 1934, as amended (“Communications Act”). The statute and corresponding leased access rules require a cable operator to set aside channel capacity for commercial use by unaffiliated video programmers. In implementing the statutory directive to determine maximum reasonable rates for leased access, the Commission adopted a maximum rate formula for full-time carriage on programming tiers based on the “average implicit fee” that other programmers are implicitly charged for carriage to permit the operator to recover its costs and earn a profit. The Commission also adopted a maximum rate for a la carte services based on the “highest implicit fee” that other a la carte services implicitly pay, and a prorated rate for part-time programming.

3. In this Order, we adopt uniform customer service standards to address the treatment of leased access programmers and potential leased access programmers by cable system operators. In order to make the leased access carriage process more efficient, we adopt new customer service standards, in addition to the existing standards. These standards are designed to ensure that leased access programmers are not discouraged from pursuing their statutory right to the designated commercial leased access channels, to facilitate communication of these rights and obligations to potential programmers, and to ensure a smooth process for gaining information about a cable system's available channels. We require cable system operators to maintain a contact name, telephone number and e-mail address on its website, and make available by telephone, a designated person to respond to requests for information about leased access channels. We also require cable system operators to maintain a brief explanation of the leased access statute and regulations on its website. Within three business days of a request for information, a cable system operator shall provide the prospective leased access programmers with the following information: (1) The process for requesting leased access channels; (2) The geographic levels of service that are technically possible; (3) The number and location and time periods available for each leased access channel; (4) Whether the leased access channel is currently being occupied; (5) A complete schedule of the operator's statutory maximum full-time and part-time leased access rates; (6) A comprehensive schedule showing how those rates were calculated; (7) Rates associated with technical and studio costs; (8) Electronic programming guide information; (9) The available methods of programming delivery and the instructions, technical requirements and costs for each method; (10) A comprehensive sample leased access contract that includes uniform terms and conditions such as tier and channel placement, contract terms and conditions, insurance requirements, length of contract, termination provisions and electronic guide availability; and (11) Information regarding prospective launch dates for the leased access programming. In addition to the customer service standards, we adopt penalties for ensuring compliance with these standards. We emphasize that the leased access customer service standards adopted herein are “minimum” standards. We cannot anticipate each and every instance of interaction between cable operators and leased access programmers.

4. Maintenance of Contact Information. We require every cable system operator to maintain, on its website, a contact name, telephone number, and e-mail of an individual designated by the cable system operator to respond to requests for information about leased access channels. One of the more basic elements necessary to permit potential programmers reasonable access to cable systems is ready availability of a contact name, telephone number, and e-mail address of a cable system operator that the programmer can use to reach the appropriate person in the cable system to begin the process for requesting access to the system. While the physical location of a person designated as the leased access contact should not be critical in the relationship between the potential programmer and the cable system operator, the identity of that person and the ease of access to him are critical. Other aspects of the rules we adopt here deal with expeditious and full responses to leased access requests. The fact that the designated person is located some distance away should not affect the timeliness and substance of responses.

5. Timing for Response. We amend our rules to require a cable system operator to respond to a request for information from a leased access programmer within three business days. We retain the 30-day response period currently provided in Section 76.970(i)(2) of the Commission's rules for cable systems that have been granted small system special relief. The identity of a designated person by the cable system operator who the potential programmer can contact is important only if that person replies quickly and fully to the requests of the programmer. Our current rules provide for a 15 day response by cable system operators to a request by a potential programmer. That response must include information on channel capacity available, the applicable rates, and a sample contract if requested. That response time is unnecessarily long and, as discussed below, the information is inadequate. Cable operators must have leased access channel information available in order to be able to comply with the statute and our rules. It does not take 15 days to provide a copy of that information to a potential leased access programmer. Three business days to reply to a request for such information is more than adequate. Accordingly, we are amending the response time permitted a cable system operator to three business days. We are also providing a more detailed list of information the operator must provide upon request within that time period. All of the information required to be provided is necessary for a potential leased access programmer to be able to file a bona fide request for carriage. There is no reason to delay providing the leased access programmer with the information it needs to take the necessary steps to obtain access.

6. Process for Requesting Leased Access Channels. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with the process for requesting leased access channels. One element of the information the cable system operator must make available to the potential programmer within three business days of a request is an explanation of the cable system operator's process for requesting leased access channels. Accordingly, we are requiring that the cable system operator include an explanation of the operator's process and procedures for requesting leased access channels.

7. Geographic Levels of Service that Are Technically Possible. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with the geographic levels of service that are technically possible. Commenters complain that cable system operators make available only limited levels of service. Typically, the service offered is defined by the size of the headend. We will not require, at this time, the operator to allow the leased access programmer to serve discrete communities smaller than the area served by a headend if they are not doing the same with other programmers. We acknowledge that with the consolidation of headends, programmers may be forced to purchase larger areas at higher costs than they would prefer. We will monitor developments in this area, and may revisit this issue if circumstances warrant. However, we will require cable system operators to clearly set out in their responses to programmers what geographic and subscriber levels of service they offer.

8. Number, Location, and Time Periods Available for Each Leased Access Channel. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with the number, location, and time periods available for each leased access channel. Our current leased access channel placement standards provide that programmers be given access to tiers that have subscriber penetration of more than 50 percent. 47 CFR 76.971(a)(1) We will not change that requirement, but we will expand on the current requirement relating to capacity in Section 76.970(i) to require cable system operators to provide, in their replies to requests from programmers, the specific number and location and time periods available for each leased access channel. This greater degree of certainty should assist programmers in their evaluations.

9. Explanation of Currently Available and Occupied Leased Access Channels. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with an explanation of currently available and occupied leased access channels. Section 612 of the Communications Act imposes specific requirements on cable operators with regard to leased access. 47 U.S.C. 532. It is inherent in these obligations to be able to provide timely and accurate information to prospective leased access programmers. Within three business days of a request by a current or potential leased access programmer, a cable operator shall provide information documenting: (1) The number of channels that the cable operator is required to designate for commercial leased access use pursuant to Section 612(b)(1); (2) the current availability of those channels for leased access programming on a full- or part-time basis; (3) the tier on which each leased access channel is located; (4) the number of customers subscribing to each tier containing leased access channels; (5) whether those channels are currently programmed with non-leased access programming; and (6) how quickly leased access channel capacity can be made available to the prospective leased access programmer. We believe this information is vital to enable leased access programmers to make an informed decision regarding whether to pursue leased access negotiations with a cable operator. Provision of this information will also benefit cable operators by timely informing leased access programmers of current leased access timing and availability, and thereby eliminating leased access requests that cannot be accommodated by existing leased access availability.

10. Schedule and Calculation of Leased Access Rates. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with a schedule and calculation of its leased access rates. As with information regarding available and occupied leased access channels, we believe Section 612 imposes on cable operators the obligation to provide a timely and accurate explanation of its leased access rates to prospective leased access programmers. Accordingly, within three business days of a request by a current or potential leased access programmer, a cable operator shall provide information documenting the schedule of all leased access rates (full- and part-time) available on the cable system. Cable operators must attach to this schedule a separate calculation detailing how each rate was derived pursuant to the revised rate formula adopted herein. This information will assist leased access programmers in determining whether leased access capacity on a given cable system is economically feasible. In addition, the rate calculations will further assist leased access programmers in determining whether particular cable operators are complying with their leased access obligations.

11. Explanation of Any Rates Associated with Technical or Studio Costs. Included in the customer standards we are adopting today is a requirement that a cable operator provide a prospective leased access programmer, within three business days of a request, with a list of fees for providing technical support or studio assistance to the leased access programmer along with an explanation of such fees and how they were calculated. We note that our rules require leased access providers to reimburse cable operators “for the reasonable cost of any technical support the operators actually provide.” 47 CFR 76.971(c) Further, our rate calculation includes technical costs common to all programmers so that cable operators may not impose a separate charge for technical support they already provide to non-leased access programmers. Second Report and Order, 12 FCC Rcd at 5324, para. 114. At this time, we will not prescribe an hourly rate for technical support, but instead will monitor the effectiveness of the new customer standards that require that cable operators list up front any technical fees along with an explanation of the fee calculation. If leased access programmers have continued problems with high technical or studio cost, we will consider implementing a more specific solution.

12. Programming Guide Information. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with all relevant information for obtaining carriage on the program guide(s) provided on the operator's system. Moreover, we expressly require that, if a cable operator does not charge non-leased access programmers for carriage of their program information on a programming guide, the cable operator cannot charge leased access programmers for such service. Because of the dynamic nature of leased access programming, we believe that it would be impracticable to impose a requirement on cable operators to include all leased access listings in their programming guides. However, we believe that, in situations where time permits and the leased access programming information is submitted as reasonably required by the cable operators, cable operators must ensure that leased access programming information is incorporated in its program guide to the same extent that it does so for non-leased access programmers. In order to accomplish this, cable operators are required to provide potential leased access programmers with all relevant information for obtaining carriage on the program guide(s) provided on the operator's system. This information shall include the requirements necessary for a leased access programmer to have its programming included in the programming guide(s) that serve the tier of service on which the leased access provider contracts for carriage. At a minimum, the cable operator must provide: (1) The format in which leased access programming information must be provided to the cable operator for inclusion in the appropriate programming guide; (2) the content requirements for such information; (3) the time by which such programming information must be received for inclusion in the programming guide; and (4) the additional cost, if any, related to carriage of the leased access programmer's information on the programming guide. We expressly require that, if a cable operator does not charge non-leased access programmers for carriage of their program information on a programming guide, the cable operator cannot charge leased access programmers for such service.

13. Methods of Programming Delivery. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with available information regarding all acceptable, standard methods for delivering leased access programming to the cable operator. Because of the variable circumstances experienced by each cable system, we cannot establish a list of acceptable, standard delivery methods for leased access programming applicable to all cable systems. However, we believe that it incumbent upon a cable operator to provide prospective leased access programmers with sufficient information to be able to gauge the relative difficulty and expense of delivering its programming for carriage by the cable operator. A cable operator must make available information to leased access programmers regarding all acceptable, standard methods for delivering leased access programming to the cable operator. For each method of acceptable, standard delivery, the cable operator shall provide detailed instructions for the timing of delivery, the place of delivery, the cable operator employee(s) responsible for receiving delivery of leased access programming, all technical requirements and obligations imposed on the leased access programmer, and the total cost involved with each acceptable, standard delivery method that will be assessed by the cable operator. We clarify, however, that cable operators must give reasonable consideration to any delivery method suggested by a leased access programmer. A leased access programmer that is denied the opportunity to deliver its programming via a reasonable method may file a complaint with the Commission. In such complaint proceeding, the burden of proof shall be on the cable operator to demonstrate that its denial was reasonable given the unique circumstances of its cable system.

14. Comprehensive Sample Leased Access Carriage Contract. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with a comprehensive sample leased access carriage contract. We also require a cable system operator in its leased access carriage contract to apply the same uniform standards, terms, and conditions to leased access programmers as it applies to its other programmers.

15. We do not intend by this requirement to infringe the freedom of contract of either party and expressly clarify that neither the cable operator nor the prospective leased access programmer need abide by any of the terms and conditions set forth in the sample contract. Instead, we believe that the provision of such agreements by cable operators serve to inform leased access programmers of terms and conditions that are generally acceptable to the cable operator and will be a useful first step in the initiation of leased access negotiations. Accordingly, within three business days of a request by a current or potential leased access programmer, a cable operator shall provide a copy of a sample leased access carriage contract setting forth what the cable operator considers to be the standard terms and conditions for a leased access carriage agreement.

16. As discussed below, we also require cable system operators to apply the same uniform standards, terms, and conditions to leased access programmers as it applies to its other programmers. Rather than dictate specific reasonable terms and conditions, we require that cable system operators apply the same uniform standards, terms, and conditions to leased access programmers as it applies to its other programmers.

17. The Commission has stated in the past that the reasonableness of specific terms and conditions will be determined on a case-by-case basis, but set broad guidelines for tier placement and a general standard of reasonableness for contract terms and conditions.

18. We will continue to address complaints about specific contract terms and conditions on a case-by-case basis. We emphasize that in all cases, the Commission will evaluate any complaints pursuant to a reasonableness standard. We also clarify that a cable system operator may not continue to include terms and conditions in new contracts that previously have been held to be unreasonable by the Commission. Not only are our orders binding on the affected parties to a leased access complaint, but unless and until an order is stayed or reversed by the Commission, a cable system operator is under an obligation to follow the Commission's rules and precedent in setting its practices, terms, and conditions.

19. Because we do not think that every potential leased access programmer should be required to file a complaint to determine if every term in its contract is reasonable, we will require the cable operator to provide, along with its standard leased access contract, an explanation and justification, including a cost breakdown, for any terms and conditions that require the payment or deposit of funds. This includes insurance and deposit requirements, any fees for handling or delivery, and any other technical or equipment fees, such as tape insertion fees. This will allow the leased access programmer to determine whether the cost is reasonable and expedite any review by the Commission. We believe that requiring a cable operator to provide an explanation and justification for such a fee will encourage cable operators to impose only reasonable fees or, at least, facilitate the filing of a leased access complaint demonstrating that such a fee is unreasonable.

20. With regard to non-monetary terms and conditions, such as channel and tier placement, targeted programming, access to electronic program guides, VOD, etc., we similarly require the cable operator to provide, along with its standard leased access contract, an explanation and justification of its policy. For example, with regard to the geographic scope of carriage, if a leased access programmer requests to have its programming targeted to a finite group of subscribers based on community location, unless the operator agrees to the request, it must not provide such limited carriage to other programmers or channels. To the extent the cable operator denies the request for limited carriage, the cable operator must provide an explanation as to why it is technically infeasible to provide such carriage. If limited carriage is technically feasible, the cable operator must provide a fee and cost breakdown for such carriage for comparison with similar coverage provided for non-leased access programmers.

21. Similarly, with regard to tier placement and channel location, we require the cable operator to provide, along with its standard leased access contract, an explanation and justification of its policy regarding placement of a leased access programmer on a particular channel as well as an explanation and justification for the cable operator's policy for relocating leased access channels. To the extent a request for a particular channel is denied, the cable operator must provide a detailed explanation and justification for its decision.

22. Launch Date. We require a cable system operator within three business days of a request to provide a prospective leased access programmer with information regarding prospective launch dates for the leased access programmer. Moreover, we require cable operators to launch leased access programmers within a reasonable amount of time. We consider 35-60 days after the negotiation is finalized to be a reasonable amount of time for launch of a programmer, unless the parties come to a different agreement. We note that this time frame affords cable operators sufficient time to satisfy the requirement, if applicable, to provide subscribers with 30-days written notice in advance of any changes in programming services or channel positions.

23. We adopt rules to ensure that cable system operators respond to proposals for leased access in a timely manner and do not unreasonably delay negotiations for leased access. To address this concern, after the cable system operator provides the information requested above, in order to be considered for carriage on a leased access channel, we require a leased access programmer to submit a proposal for carriage by submitting a written proposal that includes the following information: (1) The desired length of a contract term; (2) The tier, channel and time slot desired; (3) The anticipated commencement date for carriage; (4) The nature of the programming; (5) The geographic and subscriber level of service requested; and (6) Proposed changes to the sample contract. The cable system operator must respond to the proposal by accepting the proposed terms or offering alternative terms within 10 days. This same response deadline will apply until an agreement is reached or negotiations fail.

24. Failure to provide the requested information will result in the issuance of a notice of apparent liability (“NAL”) including a forfeiture in the amount of $500.00 per day. A potential leased access programmer need not file a formal leased access complaint pursuant to Section 76.975 of the Commission's rules in order to bring a violation of our customer service standards to our attention. Rather, the programmer may notify the Commission either orally or in writing, and where necessary the Commission will submit a Letter of Inquiry (“LOI”) to the cable operator to obtain additional information. A cable system which is found to have failed to respond on time with the required information will be issued an NAL. The same process and forfeiture amount will apply for the failure to timely respond to a proposal as for the failure to comply with an information request. We rely on our general enforcement authority under Section 503 of the Communications Act to impose forfeitures in appropriate cases. See 47 U.S.C. 503

25. Background . The Commission's current rules calculate leased access rates for all tiers that have subscriber penetration of more than 50 percent. Upon request, cable operators generally must place leased access programmers on such a tier. To determine the average implicit fee for a full-time channel on a tier with a subscriber penetration over 50 percent, an operator first calculates the total amount it receives in subscriber revenue per month for the programming on all such tiers, and then subtracts the total amount it pays in programming costs per month for such tiers (the “implicit fee calculation”). A weighting scheme that accounts for differences in the number of subscribers and channels on all such tier(s) is used to determine how much of the total will be recovered from a particular tier. To calculate the average implicit fee per channel, the implicit fee for the tier is divided by the number of channels on the tier. The final result is the rate per month that the operator may charge the leased access programmer for a full-time channel on that tier. Where the leased access programmer agrees to carriage on a tier with less than 50 percent penetration, the average implicit fee is determined using subscriber revenues and programming costs for only that tier. The implicit fee for full-time channel placement as an a la carte service is based upon the revenue received by the cable operator for non-leased access a la carte channels on its system.

26. In this Order we modify the method for determining the leased access rate for full-time carriage on a tier. We harmonize the rate methodology for carriage on tiers with more than 50% subscriber penetration and carriage on tiers with lower levels of penetration by calculating the leased access rate based upon the characteristics of the tier on which the leased access programming will be placed. Cable operators will calculate a leased access rate for each cable system on a tier-by-tier basis which will adequately compensate the operator for the net revenue that is lost when a leased access programmer displaces an existing program channel on the cable system. In addition, the Order sets a maximum allowable leased access rate of $0.10 per subscriber per month to ensure that leased access remains a viable outlet for programmers. At this time we leave the method for calculating rates for a la carte carriage unchanged.

27. As an initial matter, we conclude that we will not apply this new rate methodology to programmers that predominantly transmit sales presentations or program length commercials. These programmers often “pay” for carriage—either directly or through some form of revenue sharing with the cable operator. In our previous Order, we set the leased access rate for a la carte programmers at the “highest implicit fee” partly out of a concern that lower rates would simply lead these programmers to migrate to leased access if it were less expensive than what they are currently “paying” for carriage. Such a migration would not add to the diversity of voices and would potentially financially harm the cable system. Similarly, we do not wish to set the leased access rates at a point at which programmers that predominantly transmit sales presentations or program length commercials simply migrate to leased access because it is less expensive than their current commercial arrangements. We will seek comment in the Further Notice of Proposed Rulemaking on whether leased access is affordable at current rates to programmers that predominantly transmit sales presentations or program length commercials and whether reduced rates would simply cause migration of existing services to leased access.

28. The purposes of Section 612 are “to promote competition in the delivery of diverse sources of video programming and to assure that the widest possible diversity of information sources are made available to the public from cable systems in a manner consistent with growth and development of cable systems.” Because Section 612 also requires that the price, terms and conditions for leased access be “at least sufficient to assure that such use will not adversely affect the operation, financial condition or market development of the cable system,” the Commission is faced with balancing the interests of leased access programmers with those of cable operators. We believe that our method provides a cable operator with a leased access rate that will allow the operator to replace an existing channel from its cable system with a leased access channel without experiencing a loss in net revenue. While we do not believe that our method for determining leased access rates will result in cable operators experiencing any loss in net revenue, the relevant statutory provision does not require such a finding. As explained above, Section 612(c)(1) provides that the “prices, terms and conditions” of use must be “at least sufficient to assure that such use will not adversely affect the operation, financial condition, or market development of the cable system.” We interpret this provision to restrict “prices, terms, and conditions” of leased access use that materially affect the financial health of a cable system. We do not interpret the provision to require that cable operators experience no loss in revenue whatsoever as a result of leased access use. Thus, even if we were to conclude that our method for determining leased access rates would have some impact on cable operators’ revenue, we would still adopt this method because we are confident that any impact on operators” revenue would not be of sufficient magnitude to materially affect the financial health of cable systems. In addition, since we are required to balance the revenue requirement of cable operators and that of leased access programmers, we will assume that the cable operator will elect to replace a channel which does not generate a significant amount of the total net revenue of the system. We refer to this channel as the marginal channel and use the marginal implicit fee to determine leased access rates. Our method was intended to promote the goals of competition and diversity of programming sources while doing so in a manner consistent with growth and development of cable systems.

29. Based on the wide variance between the actual use of leased access and the goals stated in the law, it appears that the current “average implicit fee” formula for tiered leased access channels yields fees that are higher than the statute mandates, resulting in an underutilization of leased access channels. According to the Commission's most recent annual cable price survey, cable systems on average carry only 0.7 leased access channels. Because our Rules are not achieving their intended purpose, we are revisiting decisions made in the Second Report and Order establishing the maximum leased access rates in order to make the leased access channels a more viable outlet for programming. Throughout its implementation of Section 612, the Commission has recognized that the Rules adopted would need refinement as specifics regarding how the leased access rules were functioning became available.

30. Due to the variances in channel line-ups and tier prices of cable systems, in most instances, a flat rate would either over- or undercompensate cable operators. As discussed below, however, we will set a cap on the maximum rate that cable operators may charge in order to prevent the construction of tiers in a manner that makes leased access rates excessively high.

31. We agree with Shop NBC's assertion that the average implicit fee overcompensates cable operators because it reflects the average value of a channel to the cable operator instead of the value of the channel replaced. We will make adjustments to the rate calculations that should lower prices by using the marginal implicit fee rather than the average. The result is intended to promote the goals of leased access by providing more affordable opportunities for programmers without creating an artificially low rate.

32. The legislative history provides that the leased access provisions are “aimed at assuring that cable channels are available to enable program suppliers to furnish programming when the cable operator may elect not to provide that service as part of the program offerings he makes available to subscribers” To promote this legislative purpose the Commission should set the leased access rates as low as possible consistent with the requirement to avoid any negative financial impact on the cable operator. One may assume that the cable operator, faced with a requirement to free up a channel for leased access, would have its own incentives to elect to replace one of the channels with the lowest implicit fee. But even if this is not the case, the discussion above suggests that the Commission should set its rules to encourage such a result. This dictates, at least in principle, the use of the lowest implicit fee, which we refer to as the “marginal implicit fee.” And it supports the conclusion that the current “average implicit fee” criterion for tiered channels is higher than warranted by the statute and may be impeding, rather than promoting, the goals of competition and diversity of programming sources. These rules provide cable operators a higher return for lost channel capacity than the value the cable operator would have received if the channel was not used for leased access programming. The “average implicit fee” is calculated based on the average value of all of the channels in a tier instead of the value of the channels most likely to be replaced. We will adopt a method which eliminates this excess recovery. This method remains faithful to the statutory requirements while more appropriately balancing the interests of cable operators and leased access programmers.

33. Cable channels are sold in bundles of channels known as tiers. It is therefore not possible to directly observe the revenue per subscriber a cable operator earns from carrying an individual channel included in a tier. We therefore approximate the revenue earned by those channels on the tier. To do so we assume that the revenue generated by each channel is directly proportional to the per subscriber affiliation fee paid by the cable operator to the programmer. The first step in the calculation is to determine this factor of proportionality which we refer to as the mark-up. To do so, the cable operator will take the total subscriber revenue for the programming tier at issue and divide by the total of the affiliation fees that the cable operator pays to the programmers for the channels on that tier. For the purposes of defining the price of a tier and the channels on the tier we adopt the incremental approach in cases where the cost and channels of one tier are implicitly incorporated into larger tiers. For example, when the expanded basic tier incorporates the basic tier, the expanded basic tier price is the retail price of the expanded basic tier less the retail price of the basic tier and the channels on the expanded basic tier are those that are not available on the basic tier. A similar adjustment is required of other tiers which are not sold on an incremental basis. This calculation will generate the mark-up of channels that are sold on the tier. The gross revenue per subscriber due to carriage of a specific channel on the tier is then simply the per subscriber affiliation fee paid to the programmer for the specific channel multiplied by the mark-up. It is our understanding that some programming contracts specify a single rate for a group, or bundle, of channels. In these cases, for the purposes of determining the per subscriber affiliation fee for one of the bundled channels, the fee in the contract shall be allocated in its entirety to the highest rated network in the bundle. The net revenue per subscriber earned by the cable operator from the channel is the difference between the gross revenue per subscriber and the per subscriber affiliation fee paid by the cable operator. This value represents the implicit fee for the channel.

34. The net revenue per subscriber is the reduction in profit a cable operator would experience if it did not carry the channel in question. In our previous method for calculating leased access rates the calculation was based the average net revenue of all channels carried by the cable operator. In our new method, we base the leased access rate on the net revenue of the least profitable channels voluntarily carried by the cable operators on the tier where the leased access programming will be carried. We do so because this represents an approximation of the minimum net revenue a network must generate in order for the cable operator to consider carrying it on the tier. As mentioned, we examine the net revenue of channels that are voluntarily carried by the cable operator. From this calculation we exclude channels whose carriage is mandated by statute, regulation, or franchise agreement. These mandated channels consist of broadcast stations that are subject to the must-carry rules as well as public, educational, and governmental (“PEG”) channels that are carried pursuant to a franchise agreement. In addition, broadcaster's multi-cast channels are also excluded from the marginal channels. Our goal is to base the leased access rate on the net revenue of channels which are subject to free market negotiations over the carriage decision and affiliation fee. It is the net revenue of these types of channels which provides an indication of the net revenue that would be forgone when a cable operator devotes channel capacity to a leased access programmer since the cable operator would be unable to displace a broadcast station or PEG channel.

35. We identify the least profitable, or marginal, channels using the fraction of activated channels that a cable operator is statutorily required to make available for commercial leased access. The leased access rate is the mean value of net revenue earned by the lowest earning channels on the tier, up to the designated leased access fraction of qualifying channels on the tier. For example, in the case of a cable system with 100 activated channels and 40 channels on the expanded basic tier, the mean value of the net revenue of the 6 channels with the lowest net revenue will be the leased access rate for carriage on the expanded basic tier. We use the mean rather than the minimum value because use of the minimum would undercompensate the cable operator if more than one leased access channel was carried because, presumably, all channels other than the minimum earn higher net revenues. Use of the mean ensures that if the cable operator carries the statutory maximum number of leased access channels by displacing the lowest earning channels on its system, the cable operator will be fully compensated for lost revenue.

36. Appendix B of this Order presents an example of the calculation of the leased access rates for a hypothetical cable system.

37. We recognize that our tier-based calculation method may lead to inequitable results in situations when a tier carries only a few non-mandated programming networks in combination with a large amount of mandated programming. This may create incentives among cable operators to design programming tiers that are unaffordable for leased access programmers. Such an outcome would contravene our statutory directive. Therefore we institute a maximum allowable rate based upon industry-wide cable operator programming costs and revenues. This will ensure that leased access programmers can reach consumers in all areas of the country. We will permit cable operators to seek a waiver of the maximum allowable rate to ensure no unreasonable financial burden is put on any cable operator. The maximum allowable leased access rate will apply to carriage on any tier in which the operator-specific leased access rate for the tier exceeds the maximum allowable rate.

38. We take several approaches to calculating this maximum rate. For example, we calculate the maximum rate utilizing a methodology based on per-subscriber affiliation fees that compensates systems that must vacate a channel in order to provide capacity to a commercial leased access programmer. We also calculate the maximum allowable leased access rate using a method that follows the one used to calculate the system-specific rates. In both cases, maximum rates for each of the analog and digital tiers are no greater than $0.10 per subscriber per month. The methods are detailed in Appendix B. Therefore, the maximum leased access rate will not exceed $0.10 per subscriber per month for any cable system.

39. Cable operators may petition the Commission to exceed the maximum allowable leased access rates. A petition for relief must present specific facts justifying the system's specific leased access rate and provide an alternative rate which equitably balances the revenue requirements of the cable operator with the public interest goals of the leased access statute. Our presumption is that the mean value of the net revenue of the marginal networks, including those currently earning no license fee, provides the most reasonable approximation of the revenue which is forgone when a cable operator carries leased access programming.

40. We recognize that the industry should receive an appropriate amount of time to review and to take steps to comply with the new rate regulations set forth above. Section 76.970(j)(3), which contains new or modified information collection requirements that have not been approved by the Office of Management and Budget (OMB), is effective upon OMB approval. Section 76.970 is effective May 28, 2008 or upon OMB approval of § 76.970(j)(3), whichever is later. After OMB approval is received, the Commission will publish a document in the Federal Register announcing the effective date of the rules requiring OMB approval and those whose effective date was delayed pending OMB approval of other rules.

41. As explained below, we do not change the current pleading cycle for leased access complaints set forth in Section 76.975 of the Commission's rules, which requires the complaint to be filed with the Commission within 60 days of any alleged violation and the cable operator to submit a response within 30 days from the date of the complaint. The Media Bureau will resolve all leased access complaints within 90 days of the close of the pleading cycle, obtaining additional discovery from the parties as necessary to quickly resolve complaints. Finally, we eliminate the requirement that a complainant alleging that a leased access rate is unreasonable must first receive a determination of the cable operator's maximum permitted rate from an independent accountant.

42. Discussion. We retain our existing pleading cycle for resolution of leased access complaints set forth in Section 76.975 of the Commission's rules, which requires the complaint to be filed with the Commission within 60 days of any alleged violation and the cable operator to submit a response within 30 days from the date of the complaint. We find that our current pleading cycle is not too lengthy, as it is imperative that we receive all the necessary information to resolve the dispute. Although we retain the existing time limits on filing of complaints, we add an exception that the time limit on filing complaints will be suspended if the complainant files a notice with the Commission prior to the expiration of the filing period, stating that it seeks an extension of the filing deadline in order to pursue active negotiations with the cable operator. The cable operator must agree to the extension.

43. The Media Bureau will resolve all leased access complaints within 90 days of the close of the pleading cycle, obtaining additional discovery from the parties as necessary to quickly resolve complaints. As part of the remedy phase of the leased access complaint process, the Media Bureau will have discretion to request that the parties file their best and final offer proposals for the prices, terms, or conditions in dispute. The Commission will have the discretion to adopt one of the proposals or choose to fashion its own remedy. We believe that this expedited process will help to resolve leased access disputes quickly and efficiently and create a body of precedent to encourage private negotiations and the settlement of disputes. If the Media Bureau concludes that the complainant is entitled to access a leased access channel, the Media Bureau's resolution of the complaint will include a launch date for the programming.

44. Elimination of Independent Accountant Requirement. We eliminate the requirement for a complainant alleging that a leased access rate is unreasonable to first obtain a determination of the cable operator's maximum permitted rate from an independent accountant prior to filing a petition for relief with the Commission. While the Commission adopted the independent accountant requirement as a means to “streamline” the leased access complaint process, the record reflects that this requirement has not worked as intended. We conclude that the expense, delay, and uncertainty for leased access programmers resulting from the requirement to obtain a determination from an independent accountant are not what the Commission envisioned in attempting to “streamline” the leased access complaint process. Furthermore, we believe the new rate methodology we have adopted, along with the requirement to provide rate information and an explanation of how rates were calculated, will result in a simpler and transparent process for leased access rates. We also believe the expedited complaint process and expanded discovery we adopt herein provide leased access programmers with a more efficient process for challenging the commercial leased access rates charged by cable operators. While cable operators argue that the use of an independent accountant is important to protect commercially sensitive financial information, the Protective Order we adopt below will sufficiently safeguard such information.

45. As discussed below, we adopt expanded discovery rules for leased access complaints to improve the quality and efficiency of the Commission's resolution of these complaints. We amend our discovery rules pertaining to leased access complaints to require respondents to attach to their answers copies of any documents that they rely on in their defense; find that in the context of a complaint proceeding, it would be unreasonable for a respondent not to produce all the documents either requested by the complainant or ordered by the Commission, provided that such documents are in its control and relevant to the dispute, subject to the protection of confidential material. We emphasize that the Commission will use its authority to issue default orders granting a complaint if a respondent fails to comply with reasonable discovery requests. The respondent shall have the opportunity to object to any request for documents. Such request shall be heard, and determination made, by the Commission. The respondent need not produce the disputed discovery material until the Commission has ruled on the discovery request. Any party who fails to timely provide discovery requested by the opposing party to which it has not raised an objection may be deemed in default and an order may be entered in accordance with the allegations contained in the complaint, or the complaint may be dismissed with prejudice.

46. Under the current rules, a leased access complainant is entitled, either as part of its complaint or through a motion filed after the respondent's answer is submitted, to request that Commission staff order discovery of any evidence necessary to prove its case. See 47 CFR 76.7(e), (f). Respondents are also free to request discovery. We believe that expanded discovery will improve the quality and efficiency of the Commission's resolution of leased access complaints. Accordingly, we find that it would be unreasonable for a respondent not to produce all the documents either requested by the complainant or ordered by the Commission, provided that such documents are in its control and relevant to the dispute. In reaching this finding, we agree that evidence detailing how the cable operator calculated its leased access rate, as well as the availability of certain contracts for carriage of leased access programming, subject to confidential treatment, are essential for determining whether the cable operator has violated the Commission's leased access rules. The Commission's Rules allow the Commission staff to order production of any documents necessary to the resolution of a leased access complaint. See 47 CFR 76.7(e), (f). The subject discovery may require the production of confidential material, including evidence detailing how the cable operator calculated its leased access rate as well as carriage contracts, subject to our confidentiality rules. While we retain this process for the Commission to order the production of documents and other discovery, we will also allow parties to a leased access complaint to serve requests for discovery directly on opposing parties.

47. Parties to a leased access complaint may serve requests for discovery directly on opposing parties, and file a copy of the request with the Commission. As discussed above, the respondent shall have the opportunity to object to any request for documents that are not in its control or relevant to the dispute. Such request shall be heard, and determination made, by the Commission. Until the objection is ruled upon, the obligation to produce the disputed material is suspended. Any party who fails to timely provide discovery requested by the opposing party to which it has not raised an objection as described above may be deemed in default and an order may be entered in accordance with the allegations contained in the complaint, or the complaint may be dismissed with prejudice.

48. We reiterate that respondents to leased access complaints must produce in a timely manner the contracts and other documentation that are necessary to resolve the complaint, subject to confidential treatment. In order to prevent abuse, the Commission will strictly enforce its default rules against respondents who do not answer complaints thoroughly or do not respond in a timely manner to permissible discovery requests with the necessary documentation attached. Respondents that do not respond in a timely manner to all discovery ordered by the Commission will risk penalties, including having the complaint against them granted by default. Likewise, a complainant that fails to respond promptly to a Commission order regarding discovery will risk having its complaint dismissed with prejudice. Finally, a party that fails to respond promptly to a request for discovery to which it has not raised a proper objection will be subject to these sanctions as well.

49. We understand that this approach requires the submission of confidential and extremely competitively-sensitive information. Accordingly, in order to appropriately safeguard this confidential information we believe it is necessary to utilize the protective order adopted for use in our program access proceedings (“Protective Order”), which we attach hereto as Appendix A.

50. A Protective Order constitutes both an Order of the Commission and an agreement between the party executing the declaration and the submitting party. The Commission has full authority to fashion appropriate sanctions for violations of its protective orders, including but not limited to suspension or disbarment of attorneys from practice before the Commission, forfeitures, cease and desist orders, and denial of further access to confidential information in Commission proceedings. We intend to vigorously enforce any transgressions of the provisions of our protective orders.

51. We adopt an annual reporting requirement for cable operators to submit information pertaining to leased access rates, usage, channel placement, and complaints, among other leased access matters. In the NPRM, we sought comment on various questions regarding the status of commercial leased access, such as the extent to which programmers are making use of commercial leased access channels, whether cable operators have denied requests for commercial leased access, whether cable operators use commercial leased access channels for their own purposes, and the effectiveness of the complaint process.

52. We did not receive a large number of comments containing industry-wide data regarding use of leased access. As described below, to ensure that we have sufficient up-to-date information on the status of leased access programming in the future, we adopt an annual reporting requirement for cable operators.

53. Discussion. We adopt an annual reporting requirement for cable operators pertaining to leased access rates, usage, channel placement, and complaints, among other leased access matters. We find that gathering up-to-date information and statistics on an annual basis pertaining to leased access is critical to our efforts to track trends in commercial leased access rates and usage as well as to monitor any efforts by cable operators to impede use of commercial leased access channels. This information will allow us to determine whether further modifications to the commercial leased access rules we adopt herein are needed based on a more concrete factual setting. The Annual Report will require each cable system to provide the following information:

• List the number of commercial leased access channels provided by the cable system.

• List the channel number and tier applicable to each commercial leased access channel.

• Provide the rates the cable system charges for full-time and part-time leased access on each leased access channel.

• Provide the calculated maximum commercial leased access rate and actual rates.

• List programmers using each commercial leased access channel and state whether each programmer is using the channel on a full-time or part-time basis.

• List number of requests received for information pertaining to commercial leased access and the number of bona fide proposals received for commercial leased access.

• Describe whether you have denied any requests for commercial leased access and, if so, explain the basis for the denial.

• Describe whether a complaint has been filed against the cable system with the Commission or with a Federal district court regarding a commercial leased access dispute.

• Describe whether any entity has sought arbitration with the cable system regarding a commercial leased access dispute.

• Describe the extent to which and for what purposes the cable system uses commercial leased access channels for its own purposes.

• Describe the extent to which the cable system impose different rates, terms, or conditions on commercial leased access programmers (such as with respect to security deposits, insurance, or termination provisions). Explain any differences.

• List and describe any instances of the cable system requiring an existing programmer to move to another channel or tier.

54. Each cable system must submit this report with the Commission by April 30th of each year. The report will request information for the preceding calendar year. We anticipate that any burdens associated with this annual reporting requirement will be limited, as the information requested should be readily available to cable operators.

55. We provide leased access programmers and other interested parties with an opportunity to file comments on a voluntary basis with the Commission responding to the cable operators' annual leased access reports. These comments should be filed by May 15th of each year. We invite commercial leased access programmers to provide information such as the following in these comments:

• List the number of commercial leased access channels leased on each cable system. Indicate the channel number and tier applicable to each commercial leased access channel.

• Describe whether a cable operator has denied any request for commercial leased access and, if so, explain the basis for the denial.

• Describe whether cable operators have responded to requests for information pertaining to leased access within three business days, as required by the Commission's rules.

• Describe whether the programmer has filed any complaints with the Commission or a Federal district court against a cable operator regarding a commercial leased access dispute.

• Describe whether the programmer has sought arbitration with a cable operator regarding a commercial leased access dispute.

• Describe any difficulties the programmer has faced in trying to obtain access to a commercial leased access channel.

56. The revisions to the leased access rules we adopt herein withstand constitutional scrutiny. The leased access provision of the 1992 Cable Act has survived a facial First Amendment challenge in Time Warner Entertainment Co., L.P. v. FCC, 93 F.3d 957 (DC Cir. 1996) (“Time Warner”). The DC Circuit has already decided that the leased access provision of the 1992 Cable Act is not content-based. The leased access provision does not favor or disfavor speech on the basis of the ideas contained therein; rather, it regulates speech based on affiliation with a cable operator. The court held in Time Warner that the provisions of the Cable Act that regulate speech based on affiliation with a cable operator are subject to intermediate scrutiny and are constitutional if the government's interest is important or substantial and the means chosen to promote that interest do not burden substantially more speech than necessary to achieve the aim. The Time Warner court found that there is a substantial government interest in promoting diversity and competition in the video programming marketplace. We find that this substantial government interest remains today. While MVPDs argue that there are more outlets today for independent programmers, such as the Internet, they fail to demonstrate that these alternative outlets can be considered sufficient to conclude that Congress's goals of promoting competition and diversity in passing the leased access provisions of the 1992 Cable Act have been achieved. The rules we adopt today simply implement the statutory requirements enacted by Congress.

57. We also reject the claim that the leased access rules deprive cable operators of the value of their property ( i.e. , channel capacity) without just compensation in violation of the Fifth Amendment. The Fifth Amendment “takings” clause requires “just compensation” for a government “taking” of private property. Moreover, the leased access provision of the 1992 Cable Act, as well as our rules implementing that provision, provide just compensation to cable operators for use of their channel capacity. We conclude that leased access rules satisfy requirements that there must be an “essential nexus” between the taking and a legitimate state interest as well as a “rough proportionality” between the taking and the magnitude of the government objective. As the DC Circuit previously held, there is a substantial government interest in promoting competition and diversity in the video programming marketplace, and the provisions of the 1992 Cable Act regulating cable-affiliated programming are narrowly tailored to achieve those goals. Thus, there is no “taking” within the meaning of the Fifth Amendment.

58. We also reject the argument that the NPRM failed to provide the specificity required under the Administrative Procedure Act (“APA”) and that the Commission must issue another notice before adopting final rules. Section 553(b) and (c) of the APA requires agencies to give public notice of a proposed rule making that includes “either the terms or substance of the proposed rule or a description of the subjects and issues involved” and to give interested parties an opportunity to submit comments on the proposal. See 5 U.S.C. 553(b), (c). The notice “need not specify every precise proposal which [the agency] may ultimately adopt as a rule”; it need only “be sufficient to fairly apprise interested parties of the issues involved.” See Nuvio Corp. v. FCC, 473 F.3d 302, 310 (DC Cir. 2006) (internal quotations omitted). In particular, the APA's notice requirements are satisfied where the final rule is a “logical outgrowth” of the actions proposed. See Public Service Commission of the District of Columbia v. FCC, 906 F.2d 713, 717 (DC Cir. 1990). The questions raised in the NPRM, as well as the concerns mentioned in the Adelphia Order which resulted in the NPRM, regarding the adequacy of the current leased access regimes, including the complaint process, were sufficient to put interested parties on notice that the Commission was considering how to revise the leased access rules to effectuate the intent of Congress. See NPRM, 22 FCC Rcd 11222, para. 1 (citing Adelphia Order, 21 FCC Rcd 8203, 8277, para. 165; 8367 (Statement of Commissioner Copps); 8371 (Statement of Commissioner Adelstein)); See also Adelphia Order, 21 FCC Rcd at paras. 99, 109, 114, 165, 190-91, 298. Because parties could have anticipated that the rules ultimately adopted herein were possible, it is a “logical outgrowth” of the original proposal, and adequate notice was provided under the APA. See Northeast Maryland Waste Disposal Authority v. EPA, 358 F.3d 936, 951 (DC Cir. 2004) (discussing APA notice requirements and the “logical outgrowth” test).

59. Congressional Review Act. 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).

60. Effective Date. Sections 76.975(h)(1),(2) and (3) and (i) are effective March 31, 2008. Sections 76.970(j)(3), 76.972(a), (b), (c), (d), (e), and (g); 76.975(d), (e), (g) and (h)(4); and 76.978, which contain new or modified information collection requirements that have not been approved by the Office of Management and Budget (OMB), are effective upon OMB approval. Section 76.970 is effective May 28, 2008 or upon OMB approval of § 76.970(j)(3), whichever is later. The effective date of Sections 76.972 (f) and 76.975 (b), (c) and (f) is delayed until OMB approval of the aforementioned rule sections. After OMB approval is received, the Commission will publish a document in the Federal Register announcing the effective date of the rules requiring OMB approval and those whose effective date was delayed pending OMB approval of other rules.

61. Final Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”), an Initial Regulatory Flexibility Analysis (“IRFA”) was incorporated in the Notice of Proposed Rulemaking (“NPRM”) in MB Docket No. 07-42. The Commission sought written public comment on the proposals in the Notice of Proposed Rulemaking, including comment on the IRFA. This present Final Regulatory Flexibility Analysis (“FRFA”) conforms to the RFA.

62. The commercial leased access requirements set forth in Section 612 of the Communications Act of 1934 require a cable operator to set aside channel capacity for commercial use by video programmers unaffiliated with the cable operator. The purposes of Section 612 are “to promote competition in the delivery of diverse sources of video programming and to assure that the widest possible diversity of information sources are made available to the public from cable systems in a manner consistent with growth and development of cable systems.”

63. In the Order, the Commission concludes that its rules governing commercial leased access have impeded the use of leased access channels by programmers, including smaller entities, thereby undermining the goals of Section 612. The Order adopts several rules to address this concern. Regarding commercial leased access rates, the Commission concludes that its current formula for calculating leased access rates yields fees charged by cable operators that are higher than the statute mandates, resulting in an underutilization of leased access channels. To address this concern, the Order modifies the Commission's formula used to calculate commercial leased access rates, which will result in making these channels a more viable outlet for leased access programming. The Order also provides that the maximum leased access rate will not exceed $0.10 per subscriber per month for any cable system. Cable operators may petition the Commission to exceed the maximum allowable leased access rates. A petition for relief must present specific facts justifying the system's specific leased access rate and provide an alternative rate which equitably balances the revenue requirements of the cable operator with the public interest goals of the leased access statute. The Order does not apply the new rate methodology or the maximum allowable leased access rate of $0.10 per subscriber to programmers that predominantly transmit sales presentations or program length commercials.

64. To address poor customer service practices of cable system operators with regard to potential leased access programmers, the Order requires a cable system operator to meet uniform customer service standards; to maintain a contact name, telephone number, and e-mail address on its website; to make available by telephone a designated person to respond to requests for information about leased access channels; and to maintain a brief explanation of the leased access statute and regulations on its website. In response to concerns raised by commercial leased access programmers that contract terms and conditions imposed by cable operators are often unfair, unreasonable, onerous, and overly burdensome, the Order requires cable operators to apply the same uniform standards, terms, and conditions for all of its leased access programmers as it applies to its other programmers. The Order also specifies the information that a leased access programmer must provide to a cable system operator in order to be considered for carriage, and requires the cable system operator to respond to the proposal by accepting the proposed terms or offering alternative terms within 10 days.

65. Regarding leased access complaint procedures, the Order adopts an expedited process which requires the Media Bureau to resolve leased access complaints within 90 days of the close of the pleading cycle and eliminates the requirement for a leased access complainant alleging that a rate is unreasonable to first obtain a determination of the cable operator's maximum permitted rate from an independent accountant. The Order revises rules to provide that, as part of the remedy phase of a leased access complaint process, the Media Bureau will have the discretion to request that the parties file their best and final offer for the prices, terms, or conditions in dispute, and the Media Bureau will have the discretion to adopt one of the best and final offers or to choose to fashion its own remedy. The Order also amends the Commission's discovery rules pertaining to leased access complaints by requiring respondents to attach to their answers copies of any documents that they rely on in their defense; finding that in the context of a complaint proceeding, it would be unreasonable for a respondent not to produce all the documents either requested by the complainant or ordered by the Commission, provided that such documents are in its control and relevant to the dispute, subject to the protection of confidential material; and emphasizing that the Commission will use its authority to issue default orders granting a complaint if a respondent fails to comply with its discovery requests.

66. Moreover, in order to ensure that the Commission has sufficient up-to-date information on the status of leased access programming in the future, the Order adopts a reporting requirement for cable operators that requires cable operators to file annual reports on leased access rates, channel usage, and complaints, among other matters pertaining to leased access. Leased access programmers will have an opportunity to file comments with the Commission in response to these reports.

67. There were no comments filed specifically in response to the IRFA.

68. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” 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”).

69. Wired Telecommunications Carriers. The 2007 North American Industry Classification System (“NAICS”) defines “Wired Telecommunications Carriers” (2007 NAISC code 517110) to include the following three classifications which were listed separately in the 2002 NAICS: Wired Telecommunications Carriers (2002 NAICS code 517110), Cable and Other Program Distribution (2002 NAICS code 517510), and Internet Service Providers (2002 NAISC code 518111). The 2007 NAISC defines this category as follows: “This industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services; wired (cable) audio and video programming distribution; and wired broadband Internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.” The SBA has developed a small business size standard for Wired Telecommunications Carriers, which is all firms having 1,500 employees or less. According to Census Bureau data for 2002, there were a total of 27,148 firms in the Wired Telecommunications Carriers category (2002 NAISC code 517110) that operated for the entire year; 6,021 firms in the Cable and Other Program Distribution category (2002 NAISC code 517510) that operated for the entire year; and 3,408 firms in the Internet Service Providers category (2002 NAISC code 518111) that operated for the entire year. Of these totals, 25,374 of 27,148 firms in the Wired Telecommunications Carriers category (2002 NAISC code 517110) had less than 100 employees; 5,496 of 6,021 firms in the Cable and Other Program Distribution category (2002 NAISC code 517510) had less than 100 employees; and 3,303 of the 3,408 firms in the Internet Service Providers category (2002 NAISC code 518111) had less than 100 employees. Thus, under this size standard, the majority of firms can be considered small.

70. Cable and Other Program Distribution. The 2002 NAICS defines this category as follows: “This industry comprises establishments primarily engaged as third-party distribution systems for broadcast programming. The establishments of this industry deliver visual, aural, or textual programming received from cable networks, local television stations, or radio networks to consumers via cable or direct-to-home satellite systems on a subscription or fee basis. These establishments do not generally originate programming material.” This category includes, among others, cable operators, direct broadcast satellite (“DBS”) services, home satellite dish (“HSD”) services, satellite master antenna television (“SMATV”) systems, and open video systems (“OVS”). The SBA has developed a small business size standard for Cable and Other Program Distribution, which is all such firms having $13.5 million or less in annual receipts. According to Census Bureau data for 2002, there were a total of 1,191 firms in this category that operated for the entire year. Of this total, 1,087 firms had annual receipts of under $10 million, and 43 firms had receipts of $10 million or more but less than $25 million. Thus, under this size standard, the majority of firms can be considered small.

71. Cable System Operators (Rate Regulation Standard). The Commission has also developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. As of 2006, 7,916 cable operators qualify as small cable companies under this standard. In addition, under the Commission's rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Industry data indicate that 6,139 systems have under 10,000 subscribers, and an additional 379 systems have 10,000-19,999 subscribers. Thus, under this standard, most cable systems are small.

72. 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.” There are approximately 65.4 million cable subscribers in the United States today. Accordingly, an operator serving fewer than 654,000 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, we find that the number of cable operators serving 654,000 subscribers or less totals approximately 7,916. We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

73. Direct Broadcast Satellite (“DBS”) Service. DBS service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic “dish” antenna at the subscriber's location. Because DBS provides subscription services, DBS falls within the SBA-recognized definition of Cable and Other Program Distribution. This definition provides that a small entity is one with $13.5 million or less in annual receipts. Currently, three operators provide DBS service, which requires a great investment of capital for operation: DIRECTV, EchoStar (marketed as the DISH Network), and Dominion Video Satellite, Inc. (“Dominion”) (marketed as Sky Angel). All three currently offer subscription services. Two of these three DBS operators, DIRECTV and EchoStar Communications Corporation (“EchoStar”), report annual revenues that are in excess of the threshold for a small business. The third DBS operator, Dominion's Sky Angel service, serves fewer than one million subscribers and provides 20 family and religion-oriented channels. Dominion does not report its annual revenues. The Commission does not know of any source which provides this information and, thus, we have no way of confirming whether Dominion qualifies as a small business. Because DBS service requires significant capital, we believe it is unlikely that a small entity as defined by the SBA would have the financial wherewithal to become a DBS licensee. Nevertheless, given the absence of specific data on this point, we recognize the possibility that there are entrants in this field that may not yet have generated $13.5 million in annual receipts, and therefore may be categorized as a small business, if independently owned and operated.

74. Private Cable Operators (PCOs) also known as Satellite Master Antenna Television (SMATV) Systems. PCOs, also known as SMATV systems or private communications operators, are video distribution facilities that use closed transmission paths without using any public right-of-way. PCOs acquire video programming and distribute it via terrestrial wiring in urban and suburban multiple dwelling units such as apartments and condominiums, and commercial multiple tenant units such as hotels and office buildings. The SBA definition of small entities for Cable and Other Program Distribution Services includes PCOs and, thus, small entities are defined as all such companies generating $13.5 million or less in annual receipts. Currently, there are approximately 150 members in the Independent Multi-Family Communications Council (IMCC), the trade association that represents PCOs. Individual PCOs often serve approximately 3,000-4,000 subscribers, but the larger operations serve as many as 15,000-55,000 subscribers. In total, PCOs currently serve approximately one million subscribers. Because these operators are not rate regulated, they are not required to file financial data with the Commission. Furthermore, we are not aware of any privately published financial information regarding these operators. Based on the estimated number of operators and the estimated number of units served by the largest ten PCOs, we believe that a substantial number of PCOs may qualify as small entities.

75. Home Satellite Dish (“HSD”) Service. Because HSD provides subscription services, HSD falls within the SBA-recognized definition of Cable and Other Program Distribution, which includes all such companies generating $13.5 million or less in revenue annually. HSD or the large dish segment of the satellite industry is the original satellite-to-home service offered to consumers, and involves the home reception of signals transmitted by satellites operating generally in the C-band frequency. Unlike DBS, which uses small dishes, HSD antennas are between four and eight feet in diameter and can receive a wide range of unscrambled (free) programming and scrambled programming purchased from program packagers that are licensed to facilitate subscribers' receipt of video programming. There are approximately 30 satellites operating in the C-band, which carry over 500 channels of programming combined; approximately 350 channels are available free of charge and 150 are scrambled and require a subscription. HSD is difficult to quantify in terms of annual revenue. HSD owners have access to program channels placed on C-band satellites by programmers for receipt and distribution by MVPDs. Commission data shows that, between June 2004 and June 2005, HSD subscribership fell from 335,766 subscribers to 206,358 subscribers, a decline of more than 38 percent. The Commission has no information regarding the annual revenue of the four C-Band distributors.

76. Broadband Radio Service and Educational Broadband Service. Broadband Radio Service comprises Multichannel Multipoint Distribution Service (MMDS) systems and Multipoint Distribution Service (MDS). MMDS systems, often referred to as “wireless cable,” transmit video programming to subscribers using the microwave frequencies of MDS and Educational Broadband Service (EBS) (formerly known as Instructional Television Fixed Service (ITFS)). We estimate that the number of wireless cable subscribers is approximately 100,000, as of March 2005. The SBA definition of small entities for Cable and Other Program Distribution, which includes such companies generating $13.5 million in annual receipts, appears applicable to MDS and ITFS.

77. The Commission has also defined small MDS (now BRS) entities in the context of Commission license auctions. For purposes of the 1996 MDS auction, the Commission defined a small business as an entity that had annual average gross revenues of less than $40 million in the previous three calendar years. This definition of a small entity in the context of MDS auctions has been approved by the SBA. In the MDS auction, 67 bidders won 493 licenses. Of the 67 auction winners, 61 claimed status as a small business. At this time, the Commission estimates that of the 61 small business MDS auction winners, 48 remain small business licensees. In addition to the 48 small businesses that hold BTA authorizations, there are approximately 392 incumbent MDS licensees that have gross revenues that are not more than $40 million and are thus considered small entities. MDS licensees and wireless cable operators that did not receive their licenses as a result of the MDS auction fall under the SBA small business size standard for Cable and Other Program Distribution, which includes all such entities that do not generate revenue in excess of $13.5 million annually. Information available to us indicates that there are approximately 850 of these licensees and operators that do not generate revenue in excess of $13.5 million annually. Therefore, we estimate that there are approximately 850 small entity MDS (or BRS) providers, as defined by the SBA and the Commission's auction rules.

78. Educational institutions are included in this analysis as small entities; however, the Commission has not created a specific small business size standard for ITFS (now EBS). We estimate that there are currently 2,032 ITFS (or EBS) licensees, and all but 100 of the licenses are held by educational institutions. Thus, we estimate that at least 1,932 ITFS licensees are small entities.

79. 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 SBA definition of small entities for Cable and Other Program Distribution, which includes such companies generating $13.5 million in annual receipts, appears applicable to LMDS. The Commission has also defined small LMDS entities in the context of Commission license auctions. In the 1998 and 1999 LMDS auctions, the Commission defined a small business as an entity that had annual average gross revenues of less than $40 million in the previous three calendar years. Moreover, the Commission added an additional classification for a “very small business,” which was defined as an entity that had annual average gross revenues of less than $15 million in the previous three calendar years. These definitions of “small business” and “very small business” in the context of the LMDS auctions have been approved by the SBA. In the first LMDS auction, 104 bidders won 864 licenses. Of the 104 auction winners, 93 claimed status as small or very small businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based on this information, we believe that the number of small LMDS licenses will include the 93 winning bidders in the first auction and the 40 winning bidders in the re-auction, for a total of 133 small entity LMDS providers as defined by the SBA and the Commission's auction rules.

80. Open Video Systems (“OVS”). The OVS framework provides opportunities for the distribution of video programming other than through cable systems. Because OVS operators provide subscription services, OVS falls within the SBA-recognized definition of Cable and Other Program Distribution Services, which provides that a small entity is one with $ 13.5 million or less in annual receipts. The Commission has approved approximately 120 OVS certifications with some OVS operators now providing service. Broadband service providers (BSPs) are currently the only significant holders of OVS certifications or local OVS franchises, even though OVS is one of four statutorily-recognized options for local exchange carriers (LECs) to offer video programming services. As of June 2005, BSPs served approximately 1.4 million subscribers, representing 1.49 percent of all MVPD households. Among BSPs, however, those operating under the OVS framework are in the minority. As of June 2005, RCN Corporation is the largest BSP and 14th largest MVPD, serving approximately 371,000 subscribers. RCN received approval to operate OVS systems in New York City, Boston, Washington, DC and other areas. The Commission does not have financial information regarding the entities authorized to provide OVS, some of which may not yet be operational. We thus believe that at least some of the OVS operators may qualify as small entities.

81. Cable and Other Subscription Programming. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis * * *. These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers.” The SBA has developed a small business size standard for firms within this category, which is all firms with $13.5 million or less in annual receipts. According to Census Bureau data for 2002, there were 270 firms in this category that operated for the entire year. Of this total, 217 firms had annual receipts of under $10 million and 13 firms had annual receipts of $10 million to $24,999,999. Thus, under this category and associated small business size standard, the majority of firms can be considered small.

82. Motion Picture and Video Production. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in producing, or producing and distributing motion pictures, videos, television programs, or television commercials.” The SBA has developed a small business size standard for firms within this category, which is all firms with $27 million or less in annual receipts. According to Census Bureau data for 2002, there were 7,772 firms in this category that operated for the entire year. Of this total, 7,685 firms had annual receipts of under $24,999,999 and 45 firms had annual receipts of between $25,000,000 and $49,999,999. Thus, under this category and associated small business size standard, the majority of firms can be considered small. Each of these NAICS categories is very broad and includes firms that may be engaged in various industries, including cable programming. Specific figures are not available regarding how many of these firms exclusively produce and/or distribute programming for cable television or how many are independently owned and operated.

83. Motion Picture and Video Distribution. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in acquiring distribution rights and distributing film and video productions to motion picture theaters, television networks and stations, and exhibitors.” The SBA has developed a small business size standard for firms within this category, which is all firms with $27 million or less in annual receipts. According to Census Bureau data for 2002, there were 377 firms in this category that operated for the entire year. Of this total, 365 firms had annual receipts of under $24,999,999 and 7 firms had annual receipts of between $25,000,000 and $49,999,999. Thus, under this category and associated small business size standard, the majority of firms can be considered small. Each of these NAICS categories is very broad and includes firms that may be engaged in various industries, including cable programming. Specific figures are not available regarding how many of these firms exclusively produce and/or distribute programming for cable television or how many are independently owned and operated.

84. Small Incumbent Local Exchange Carriers. We have included small incumbent local exchange carriers in this present RFA analysis. 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, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts.

85. 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. According to Commission data, 1,307 carriers have reported that they are engaged in the provision of incumbent local exchange services. Of these 1,307 carriers, an estimated 1,019 have 1,500 or fewer employees and 288 have more than 1,500 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses.

86. Competitive Local Exchange Carriers, Competitive Access Providers (CAPs), “Shared-Tenant Service Providers,” and “Other Local Service Providers.” Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 859 carriers have reported that they are engaged in the provision of either competitive access provider services or competitive local exchange carrier services. Of these 859 carriers, an estimated 741 have 1,500 or fewer employees and 118 have more than 1,500 employees. In addition, 16 carriers have reported that they are “Shared-Tenant Service Providers,” and all 16 are estimated to have 1,500 or fewer employees. In addition, 44 carriers have reported that they are “Other Local Service Providers.” Of the 44, an estimated 43 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that most providers of competitive local exchange service, competitive access providers, “Shared-Tenant Service Providers,” and “Other Local Service Providers” are small entities.

87. Electric Power Generation, Transmission and Distribution. The Census Bureau defines this category as follows: “This industry group comprises establishments primarily engaged in generating, transmitting, and/or distributing electric power. Establishments in this industry group may perform one or more of the following activities: (1) Operate generation facilities that produce electric energy; (2) operate transmission systems that convey the electricity from the generation facility to the distribution system; and (3) operate distribution systems that convey electric power received from the generation facility or the transmission system to the final consumer.” The SBA has developed a small business size standard for firms in this category: “A firm is small if, including its affiliates, it is primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.” According to Census Bureau data for 2002, there were 1,644 firms in this category that operated for the entire year. Census data do not track electric output and we have not determined how many of these firms fit the SBA size standard for small, with no more than 4 million megawatt hours of electric output. Consequently, we estimate that 1,644 or fewer firms may be considered small under the SBA small business size standard.

88. The rules adopted in the Report and Order will impose additional reporting, recordkeeping, and other compliance requirements on cable system operators and leased access programmers. The Order requires a respondent in a leased access complaint proceeding that expressly relies upon a document in asserting a defense to include the document as part of its answer. The Order finds that in the context of a leased access complaint proceeding, it would be unreasonable for a respondent not to produce all the documents either requested by the complainant or ordered by the Commission, provided that such documents are in its control and relevant to the dispute. The Order requires the parties to a leased access complaint proceeding to enter into a Protective Order to protect pleading or discovery material that is deemed by the submitting party to contain confidential information. The Order requires cable system operators to submit annual reports on leased access rates, channel usage, and complaints. The Order requires cable system operators to provide prospective leased access programmers with certain information within three business days of the date on which a request for leased access information is made. A longer period for small systems to respond has been retained. The Order requires cable system operators to meet uniform customer service standards with respect to their dealings with leased access programmers and to apply uniform contract terms and conditions to all leased access programmers as applied to other programmers. The Order requires cable systems to maintain a contact name, telephone number, and e-mail address on their Web site and to make available by telephone a designated person to respond to requests for information about leased access channels. The Order requires a cable system operator to maintain a brief explanation of the leased access statute and regulations on its Web site. The Order specifies the information that a leased access programmer must provide to a cable system operator in order to be considered for carriage and requires the cable system operator to respond to the proposal by accepting the proposed terms or offering alternative terms within 10 days.

89. The RFA requires an agency to describe any significant alternatives that it has considered in proposing regulatory approaches, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities. The Notice invited comment on issues that had the potential to have significant economic impact on some small entities.

90. As discussed in Section A, the decision to modify the leased access rules will facilitate the goals of Section 612 of the Communications Act “to promote competition in the delivery of diverse sources of video programming and to assure that the widest possible diversity of information sources are made available to the public from cable systems in a manner consistent with growth and development of cable systems.” The decision confers benefits upon the variety of leased access programmers, most of which are smaller entities. Thus, the decision to modify the leased access rules benefits smaller entities as well as larger entities. The alternative of retaining the current leased access rules would hinder achieving the goals of competition and diversity as envisioned by Congress. Moreover, the alternative of requiring only certain cable operators to comply with these new rules, such as only large cable operators, would similarly impede achieving the goals of competition and diversity as envisioned by Congress. However, a longer period for small systems to respond to certain requests for information has been retained.

91. The Commission will send a copy of the Report and 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 Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Report and Order and FRFA (or summaries thereof) will also be published in the Federal Register .

92. Accordingly, it is ordered, pursuant to the authority found in Sections 4(i), 303, and 612 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303, and 532, this Report and Order and Further Notice of Proposed Rulemaking is adopted.

93. It is ordered that, pursuant to the authority found in Sections 4(i), 303, and 612 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303, and 532, the Commission's Rules are hereby amended as set forth in the Rule Changes.

94. It is further ordered that, Sections 76.975(h)(1), (2) and (3) and (i) are effective March 31, 2008. Sections 76.970(j)(3), 76.972(a), (b), (c), (d), (e), and (g); 76.975(d), (e), (g) and (h)(4); and 76.978, which contain new or modified information collection requirements that have not been approved by the Office of Management and Budget (OMB), are effective upon OMB approval. Section 76.970 is effective May 28, 2008 or upon OMB approval of § 76.970(j)(3), whichever is later. The effective date of Sections 76.972 (f) and 76.975 (b), (c) and (f) is delayed until OMB approval of the aforementioned rule sections. After OMB approval is received, the Commission will publish a document in the Federal Register announcing the effective date of the rules requiring OMB approval and those whose effective date was delayed pending OMB approval of other rules.

95. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order and Further Notice of Proposed Rulemaking, including the Initial and Final Regulatory Flexibility Analyses, to the Chief Counsel for Advocacy of the Small Business Administration.

96. It is further ordered that the Commission shall send a copy of this Report and Order and Further Notice of Proposed Rulemaking 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).