Discussion

We received a report of an improper structural modification that resulted in excessive gaps in the wing-to-fuselage attachment fittings on a number of airplanes. The modification specified in Gulfstream Model G-1159A (also known as (aka) G-III) and G-1159B (aka G-IIB) Aircraft Service Change (ASC) 229 and G-1159 (aka G-II) ASC 426 installs a new three-piece box fitting on the left and right side wing-to-fuselage installations, including new part number 1159SB30175-11/-12 doublers.

During a routine corrosion inspection on a Model G-1159A (G-III) airplane, it was observed that the aft wing-to-fuselage attach fitting had an assembly gap exceeding the gap allowed by type design. This condition results in a transfer of wing loads through a different load path resulting in negative margins of safety in the upper bolt and lower bolt in bearing.

A records review revealed that this condition was the result of an improper structural modification. This records search also revealed that six other Model G-1159 (G-II) and G-1159A (G-III) airplanes incorporated the modification. All seven airplanes have been inspected, and four airplanes were found not to be in conformity with the type design, two are in conformity to the type design, and no data are available on the other. A further search has revealed that a similar nonconforming condition was found on a total of six airplanes. Of those, one airplane does not conform to type design, and no further information is available for the other five airplanes. Based on this information, it is possible that other Model G-1159 (G-II), G-1159B (G-IIB), and G-1159A (G-III) airplanes could potentially exhibit the same condition.

The excessive clearance between the structural members results in a change in load path and reduced structural strength of the assembly below certified limits. This condition, if not corrected, could result in reduced structural integrity at the wing-to-fuselage attachment and consequent separation of the wing from the airplane.

We reviewed Gulfstream III Alert Customer Bulletin 21, including Service Reply Card, dated May 18, 2012 (for Model G-1159A airplanes); and Gulfstream II/IIB Alert Customer Bulletin 36, including Service Reply Card, dated May 18, 2012 (for Model G-1159 and G-1159B airplanes). This service information describes procedures for a measurement to determine the clearance (gap) of the exposed rounded portion of the doubler and clothespin fitting at the wing-to-fuselage attachment, and contacting Gulfstream if necessary.

We have also reviewed Gulfstream III Alert Customer Bulletin 22, including Service Reply Card, dated May 18, 2012 (for Model G-1159A airplanes); and Gulfstream II/IIB Alert Customer Bulletin 37, including Service Reply Card, dated May 18, 2012 (for Model G-1159 and G-1159B airplanes). This service information describes procedures for determining if a certain airplane service change has been incorporated, and, for affected airplanes, a measurement to determine the clearance (gap) of the exposed rounded portion of the doubler and clothespin fitting at the wing-to-fuselage attachment, and contacting Gulfstream if necessary.

We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of these same type designs.

This AD requires accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between the AD and the Service Information.” The AD also requires sending the measurement results to Gulfstream.

Although the service information specifies that operators may contact the manufacturer for disposition of certain repair conditions, this AD requires operators to repair those conditions in accordance with a method approved by the FAA.

We consider this AD interim action. The manufacturer is currently developing a modification intended to address the unsafe condition identified in this AD. Once this modification is developed, approved, and available, we might consider additional rulemaking.

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because of the discovery of an improper structural modification that had excessive gaps in the wing-to-fuselage attachment fittings. We are issuing this AD to detect and correct excessive gaps in the wing-to-fuselage attachment fittings, which could result in reduced structural integrity at the wing-to-fuselage attachment. Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number FAA-2012-0494 and Directorate Identifier 2012-NM-088-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

We estimate that this AD affects 223 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary measurements and repairs that would be required based on the results of the measurement. We have no way of determining the number of aircraft that might need these actions:

We have received no definitive data that would enable us to provide cost estimates for the on-condition repair specified in 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.

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),

(3) Will not affect intrastate aviation in Alaska, and

(4) 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.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, “* * * a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of the Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to the Act.” 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Virginia program on December 15, 1981. You can find background information on the Virginia program, including the Secretary's findings, the disposition of comments, and conditions of approval of the Virginia program in the December 15, 1981, Federal Register (46 FR 61088). You can also find later actions concerning Virginia's program and program amendments at 30 CFR 946.12, 946.13, and 946.15.

By letter dated June 11, 2008, the Virginia Department of Mines, Minerals, and Energy (Virginia) sent us an informal proposed amendment to its program for a pre-submission review (VA-126-INF). We reviewed the pre-submission and responded to Virginia, with comments, via electronic mail on July 2, 2008. By letter dated July 17, 2008, Virginia formally submitted the proposed amendments to its program (Administrative Record No. VA-1089).

We announced receipt of the proposed amendment in the August 29, 2008, Federal Register (73 FR 50915). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on the amendment's adequacy. We did not hold a public hearing or meeting because no one requested one. The public comment period ended on September 29, 2008. No comments were received.

OSM's review of the July 17, 2008, submittal identified several issues that we presented to Virginia. The first discussion occurred by telephone on September 4, 2008. As a result of that discussion, Virginia submitted on the same date, via electronic mail, Memorandum #13-86 which specifies application processing time limits for new permits and revision applications (Administrative Record No. VA-1093). The complete text of the Memorandum can be found at http://www.Virginia.virginia.gov/DMLR/docs/operatormemos . A subsequent meeting was held on October 16, 2008 (Administrative Record No. VA-1099). In an electronic mail message dated October 29, 2008 (Administrative Record No. VA-2000), Virginia provided its position in response to OSM's comments and agreed to expeditiously submit additional changes. On November 3, 2008, Virginia responded by submitting regulation changes via electronic mail (Administrative Record No. VA-2001). OSM provided additional comments on the regulation changes on November 13, 2008 (Administrative Record No. VA-2002), and Virginia responded to these comments on November 20, 2008, by electronic mail (Administrative Record No. VA-2003). We announced receipt of the additional revisions in the April 17, 2009, Federal Register (74 FR 17806). The public comment period ended on May 4, 2009. Public comments were filed jointly by the Southern Appalachian Mountain Stewards (SAMS) and the Sierra Club. These comments have been addressed at the section titled SUMMARY AND DISPOSITION OF COMMENTS.

On March 25, 2011, OSM sent a letter (Administrative Record No. VA-2007) to Virginia informing them that their provisions at 4 VAC25-130-761.16(d)(1)(vii) and 4VAC25-130-761.16(d)(3), were inconsistent with the Federal counterparts. The language proposed by Virginia would have required that an applicant provide reasons for requesting an initial 30 day extension to the comment period.

The federal counterpart provisions, at 30 CFR 761.16(d)(1)(vii) and 761.16(d)(3), are clear that the initial 30-day extension will be granted, without cause, upon request.

Subsequent to several extensions (Administrative Record numbers VA-2008, VA-2009, VA-2010), Virginia submitted, by electronic mail, on June 13, 2011 (Administrative Record No. VA-2012), revised language that is substantially identical to the corresponding federal counterparts.

The following are the findings we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are approving the amendment. Any revisions that we do not specifically discuss below concern non-substantive wording or editorial changes.

Virginia proposed minor wording changes to the following previously-approved rules:

Because these changes are minor, we find that they will not make Virginia's regulations less effective than the corresponding Federal regulations and can be approved.

Because the proposed rules contain language that is substantively identical to the corresponding Federal regulations, we find that they are no less effective than the corresponding Federal regulations and can be approved.

1. At 4VAC25-130-773.15—Review of Permit Applications:

(a) At subsection (a)(1) Virginia proposes to require that the Division review the application for a permit, revision, or renewal; written comments and objections; information from AVS; and records of any informal conference or hearing held on the application—and issue a written decision, within a reasonable time, either granting, requiring modification of, or denying the application. If an informal conference is held, the decision will be made within 60 days of the close of the conference.

The Federal regulations at 30 CFR 773.7(a) require that the regulatory authority must specify a reasonable time (set by the regulatory authority) for decisions in those cases where no informal conference has been requested. Virginia's Memorandum to Operators #13-86 (Administrative Record No. VA-1093) provides time limits for permit and revision applications, but does not specifically address renewal applications.

By electronic mail on November 20, 2008 (Administrative Record No. VA-2003), Virginia clarified its permit renewal review process. It stated in part, “A permit renewal is different than a new permit or revision application, in that there is a set date in which it must be submitted to the Division * * * at least 120 days before the existing permit's expiration date. Failure to do so would subject the operation to cessation of mining operations on the expiration date if a renewal application was not timely submitted and the permittee was not acting diligently and in good faith with regard to the permit application. For timely submitted applications, the Division's decision on the renewal application is, for the most part, rendered by the existing permit's expiration date.”

In effect, Virginia must render a decision on a permit renewal application by the expiration date of the existing permit. Virginia requires that a renewal application be submitted 120 days prior to the expiration of the existing permit to accommodate the required filing and public notice procedures. Therefore, the time period for decisions is the aforementioned 120-day application timeframe. For these reasons, we find that the proposed revisions are no less effective than the corresponding Federal regulations at 30 CFR 773.7(a) and can be approved.

(b) At subsection (b)(4)(i)(C), Virginia proposes to revise its violation review procedures to delete the remining exclusion for those permits, or renewals, issued before September, 2004. We find that these revisions are no less stringent than the provisions of section 510(e) of SMCRA, as modified by the Tax Relief and Health Care Act of 2006, which address permit approval or denial and therefore can be approved.

2. At 4VAC25-130-773.21—Improvidently Issued Permits; Rescission, Virginia proposes to make the requirements of this section applicable to permit suspensions, as well as permit rescissions. Virginia is also requiring that the notice of permit suspension or rescission be posted at its offices and on its internet home page. It also provides the procedures for the challenge and review of a person's ownership and control listing. Additionally, if a permittee files for an administrative review of the notice or decision pertaining to ownership and control, Virginia is requiring that the notice of public hearing be posted at the division office located nearest to the permit.

We find that the proposed revisions are no less effective than the Federal regulations at 30 CFR 773.23(a)-(d), which address the administrative review and notification requirements for the suspension or rescission of improvidently issued permits, and can be approved.

3. At 4VAC25-130-840.14(c)(2)—Availability of Records, Virginia proposes to post a notice that specifies how and where it will maintain records pertaining to records, reports, inspection materials, permit applications, and other information for public inspection and copying. The notice will be sent to Circuit Court Clerks of coal-producing counties and will be posted at all Virginia Division of Mined Land Reclamation offices. Virginia will maintain the records at its principal office and the information will also be made available, upon request, at its field office as well as any Federal, State, or local government office(s) located in the county where the mining is, or may be proposed to occur.

Virginia is complying with the Federal regulations at 30 CFR 840.14(b) and (c) that require that all pertinent permit information be made available for public inspection by either maintaining said information at Federal, State, or local government offices in the county where mining is occurring or proposed to occur, or mailing or electronically mailing said information to a requestor based on a description maintained at the locations named above. We find that the proposed revisions are no less effective than the Federal regulations at 30 CFR 840.14(b) and (c) and therefore can be approved.

1. At 4 VAC 25-130-700.5—Definitions, Virginia proposes to delete the term and definition of Cognovit Note. It is replaced by Indemnity Agreement in 4 VAC25-130-801.13. There is no Federal counterpart to either the definition of Cognovit Note or Indemnity Agreement. However, the term Indemnity Agreement is used in the definitions of Surety Bond, Collateral Bond, and Self-Bond, in 30 CFR 800.5, whereas the term Cognovit Note does not appear in the Federal regulations. Moreover, the term Indemnity Agreement is defined in a manner that is consistent with its usage in the aforementioned Federal regulatory definitions. Therefore, we find that these changes are not inconsistent with the requirements of SMCRA and the Federal regulations and can be approved.

2. At 4 VAC25-130-773.15(a)(3)-(4)—Review of Permit Applications, Virginia proposes to require its review of information regarding the permit applicant's and/or operator's permit histories, business structure, and ownership and control relationships. Virginia may also conduct other ownership and control reviews, as necessary, in those cases where the applicant has no previous mining history. While there is no direct Federal counterpart to the proposed revisions, we find that the revisions are consistent with the general Federal provisions pertaining to permit application review at 30 CFR 773.7 and therefore can be approved.

3. At 4 VAC25-130-774.12(b), (c)—Post-Permit Issuance Requirements, Virginia proposes to specify the permittee's required actions in the event: (1) Said permittee fails to comply with the remedial measures of an enforcement action, or (2) the identification of interests information in the permit application changes. While there is no direct Federal counterpart to the proposed revisions, we find that the revisions are consistent with the general Federal provisions pertaining to post-permit issuance at 30 CFR 774.11 and therefore can be approved.

4. At 4 VAC25-130-778.13(e), (f), (g)—Identification of Interests:

(a) At subsection (e), Virginia proposes to require that a permit application include a list of all names under which the applicants et al operate or previously operated a surface coal mining operation within a 5-year period preceding the submission date of the application.

(b) At subsection (f), Virginia proposes to require that a permit application include a list of any pending permit applications with identifying information for the applicant and operator (if different from the applicant).

(c) At subsection (g), Virginia proposes to require that a permit application include certain identifying information for the permittee and operator. This includes name, address, tax identification numbers, permits numbers, and ownership relationship.

While there are no direct Federal counterparts to the proposed revisions, we find that the revisions are consistent with the general Federal provisions pertaining to permit application review at 30 CFR 778.11 and therefore can be approved.

5. At 4 VAC 25-130-800.52—Bond Forfeiture Reinstatement Procedures:

(a) Subsection (a), Virginia proposes to delete the reference to the Board of Conservation and Economic Development, as the entity no longer exists.

(b) Subsection (a)(5), Virginia proposes to replace the term civil penalty with reinstatement fee. This revision will differentiate the fee from the civil penalty that may be assessed under 4 VAC25-130-845. Virginia also proposes to allow the use of the reinstatement fees for other investigations, research, or abatement actions relating to lands and waters affected by coal surface mining activities.

There are no Federal counterpart regulations. We find that the revisions are not inconsistent with the requirements of SMCRA and the Federal regulations and can be approved.

6. At 4 VAC 25-130-801.12(d)—Entrance Fee and Bond, Virginia proposes to require the annual certification of the financial solvency of a permittee during the term of the permit. There is no Federal counterpart regulation. We find that the revision is not inconsistent with the requirements of SMCRA and the Federal regulations and can be approved.

7. At 4 VAC 25-130-801.13—Self-Bonding:

(a) Subsection (a), Virginia proposes to allow self-bonds from applicants of proposed surface coal mining operations in the form of an indemnity agreement. Virginia also proposes to change “paragraph” to “subdivision” in subsections (a)(3), (a)(7), and (b).

(b) Subsection (a)(1)(iv), Virginia proposes to require that an applicant of a proposed surface coal mining operation provide evidence indicating a history of satisfactory continuous operation.

(c) Subsection (a)(3), Virginia proposes to require that an applicant of a proposed surface mining operation or associated facility submit evidence substantiating the applicant's financial solvency, with appropriate financial documentation.

(d) Virginia proposes to replace cognovits note with indemnity agreement (agreement) throughout the section.

(e) Virginia proposes to delete existing subsection (b) pertaining to self-bonding provisions for surface coal mining operations. The surface coal mining permit requirements for self-bonding are addressed in subsection (a).

While there are no direct Federal counterparts to the proposed revisions, we find that the revisions are consistent with the general Federal provisions pertaining to self-bonding at 30 CFR 800.23 and therefore can be approved.

We asked for public comments on the amendment (Administrative Record No. VA- 1090). The Virginia Department of Historic Resources commented that no historic properties will be affected by the provisions of the proposed amendment (Administrative Record No.VA-1095). We received several comments filed jointly by the Southern Appalachian Mountain Stewards (SAMS) and the Sierra Club (Administrative Record No.VA-2006). Responses to those comments follow. The joint commenters are referred to as “SAMS/Sierra Club” or “the commenters.” SAMS/Sierra Club contend that OSM must disapprove the portion of the amendment that, according to them, “would effectively require any person who disputes the property rights assertion at the root of a [valid existing rights] VER claim either to commence litigation against the permit applicant prior to the expiration of the comment period on the VER request or else allow [the Virginia Department of Mines, Minerals & Energy] DMME to `evaluate the merits of the information in the record' with respect to disputed property rights and then to `determine whether the [permit applicant] has demonstrated that the requisite property rights exist.' ” The Virginia proposed provision SAMS/Sierra Club refer to is at 4 VAC 25-130-130-761.16(e)(3). They argue that this provision is “fundamentally flawed in at least two respects.” SAMS/Sierra Club Comment #1: First, SAMS/Sierra Club state that the amendment would unlawfully shift the burden of commencing property rights dispute litigation to persons who oppose approval of the permit application, rather than placing the burden on the permit applicant, which, according to SAMS/Sierra Club, is mandated by SMCRA at 30 U.S.C. 1260(a). This statutory provision states that “[t]he applicant for a permit, or revision of a permit, shall have the burden of establishing that his application is in compliance with all the requirements of the applicable State or Federal program.” Thus, according to the commenters, a permit applicant must seek judicial resolution of a property rights dispute in order to satisfy the property rights component of a VER determination; SMCRA does not, they contend, allow a State regulatory authority to undertake such an adjudication. For these reasons, SAMS/Sierra Club insist that OSM is required, pursuant to 30 CFR 732.17(h)(10), to disapprove 4 VAC 25-130-130-761.16(e)(3)(i) and clarify that “federal law does not permit DMME to adopt any regulation that would relieve permit applicants of the obligation to obtain a valid adjudication of any property rights dispute pertinent to the `right to mine' demonstration that each permit applicant must make, including any claim to VER that may be a part of the applicant's `right to mine' demonstration. Permit applicants must commence and complete such proceedings in order to submit a complete application; state regulatory authorities may not shift that burden to persons who dispute the applicant's right to mine, including any property-rights based claim to VER that an applicant may make.”

OSM's Response: We disagree with SAMS/Sierra Club. The Virginia provision is identical in substance to the counterpart Federal regulation at 30 CFR 761.16(e)(3)(i), which states as follows:

The VER regulations published by OSM on December 17, 1999 (64 FR 70766-70838), which include the provision quoted above, were challenged by the National Mining Association and upheld by the United States Court of Appeals for the District of Columbia Circuit in Nat'l Mining Ass'n v. Kempthorne, 512 F.3d 702 (D. C. Cir. 2008), cert. denied 172 L. Ed. 2d 639 (U.S. Dec. 1, 2008). Thus, as noted in Finding III(b) above, the Virginia provision at 4 VAC 25-130-130-761.16(e)(3)(i) is substantively identical to, and no less effective than, its Federal counterpart, and is therefore approved.

SAMS/Sierra Club Comment #2: Second, the commenters assert that the Virginia regulation at 4 VAC 25-130-130-761.16(e)(3)(ii), which would permit the DMME “to evaluate the merits of the information in the record and determine whether the person has demonstrated that the requisite property rights exist under subdivision (a), (c)(1), or (c)(2) of the valid existing rights definition * * *, as appropriate,” is “flatly inconsistent with SMCRA's dictate that `nothing in this Act shall be construed to authorize the regulatory authority to adjudicate property rights disputes.” 30 U.S.C. 1260(b)(6). Instead, SAMS/Sierra Club argues, SMCRA requires the regulatory authority to “withhold approval of the pertinent permit application unless and until the permit applicant obtains a favorable adjudication of that dispute in accordance with pertinent state law[.]” For this reason, they contend, the DMME may not “evaluate the merits of information in the record” to “determine whether the [permit applicant] has demonstrated that requisite property rights exist, as provided for in paragraph (e)(3)(ii), because to do so would “constitute an administrative adjudication of property rights that SMCRA flatly prohibits a regulatory authority from undertaking.” Therefore, the commenters conclude, OSM must disapprove 4 VAC 25-130-130-761.16(e)(3)(ii), and “make clear that federal law does not permit DMME to adopt any regulation that would empower it to adjudicate any property rights dispute pertinent to any of its activities under the approved Virginia state program.”

OSM's Response: We disagree with SAMS/Sierra Club, based precisely on the rationale set forth in our response to SAMS/Sierra Club Comment #1, above. The Virginia provision is substantively identical to, and therefore no less effective than, its Federal counterpart addressing valid existing rights claims at 30 CFR 761.16(e)(3)(ii), which states:

This Federal provision was part of the same VER challenge that resulted in the upholding of all of the Federal VER regulations promulgated by OSM on December 17, 1999 (64 FR 70766-70838). Nat'l Mining Ass'n v. Kempthorne, supra. The Federal regulation provides, if there is no pending litigation in a court or administrative agency of competent jurisdiction on the question of property rights, the regulatory agency must evaluate the merits of the information submitted and determine if the applicable regulatory provisions for demonstrating requisite property rights under the definition of valid existing rights have been satisfied. As indicated, the Virginia provision is substantively identical to the Federal provision. For these reasons, we approve the Virginia regulation at 4 VAC 25 130 130 761.16(e)(3)(ii).

SAMS/Sierra Club Comment #3: The commenters also objected to the comment period provided for by 4 VAC 25-130-761.16(d)(3). The commenters contend that the 30 day comment period for a VER determination, which may be expanded to 60 days at the DMME's discretion, “establishes an unreasonably brief period within which coalfield citizens who wish to challenge a VER claim must commence litigation to resolve an underlying property rights dispute,” as set forth in 4 VAC 25-130-130-761.16(e)(3)(ii). The comment period would, according to SAMS/Sierra Club, “have the effect of limiting citizen access to necessary legal services, or even foreclosing such access altogether, due to the likely refusal of attorneys to accept matters on such an emergency footing [.]” Thus, according to the commenters, even if it were lawful to require citizens to commence property rights dispute litigation (which the commenters say is certainly not the case), “OSM's duty to foster participation in the Virginia program would require * * * [it] to withhold approval of DMME's proposed permit amendment unless and until DMME provides at least a 90-day public comment period * * *, together with provision for mandatory extension * * * for an additional 30 days if an attorney representing a person who intends to file a property rights dispute establishes a good faith need for additional time to prepare and file litigation.”

OSM's Response: SAMS/Sierra Club provides no rationale for requiring DMME to establish a minimum comment period of 90 days for a VER determination, with a mandatory 30 day extension based upon a good faith need for more time by an attorney representing the would-be plaintiff in a property rights dispute. Indeed, the Federal regulation at 30 CFR 761.16(d)(3), which is now settled law, establishes a 30 day period, with an additional 30 days upon request, followed by the possibility of further extensions at the discretion of the regulatory authority, based upon a showing of good cause by the requestor; it does not, however, mandate a comment period longer than 60 days, as requested by SAMS/Sierra Club. Therefore, we disagree with the commenters that Virginia must provide a longer comment period than is allowed under the Federal regulatory counterpart.

SAMS/Sierra Club Comment #4: Finally, the commenters request that, if it has not done so, OSM must submit the proposed amendment to Virginia's State Historic Preservation Officer (SHPO) and to the Advisory Council on Historic Preservation (ACHP) for comment, pursuant to 30 CFR 732.17(h)(4).

OSM's Response: We sent letters to both the Virginia SHPO and the ACHP on August 12, 2008 (Administrative Record No.VA-1090). By letter dated September 9, 2008, the SHPO notified us that no impacts to historic properties were anticipated if we were to approve this amendment (Administrative Record No.VA-1095).

Under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, on August 12, 2008, we requested comments on the amendments from various Federal agencies with an actual or potential interest in the Virginia program (Administrative Record No. VA-1090). The United States Department of the Interior, Bureau of Land Management responded and stated that they found no inconsistencies with the proposed changes and the Federal Laws, which govern mining (Administrative Record No. 1067). The United States Department of Agriculture, Natural Resources Conservation Services responded and stated that they did not object to the amendment and deemed the changes appropriate.

Under 30 CFR 732.17(h)(11)(i), we requested comments on the amendment from the EPA (Administrative Record No. VA-1090). No comments were received.

Under 30 CFR 732.17(h)(11)(ii), we are required to get a written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq. ) or the Clean Air Act (42 U.S.C. 7401 et seq. ). None of the revisions that Virginia proposed to make in this amendment pertain to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment.

Based on the above findings, we are approving the amendment sent to us by Virginia on July 17, 2008. To implement this decision, we are amending the Federal regulations at 30 CFR part 946, which codify decisions concerning the Virginia program. Pursuant to 5 U.S.C. 553(d)(3), an agency may, upon a showing of good cause, waive the 30 day delay of the effective date of a substantive rule following publication in the Federal Register , thereby making the final rule effective immediately.

We find that good cause exists under 5 U.S.C. 553(d)(3) to make this final rule effective immediately. Because Section 503(a) of SMCRA requires that the State's program demonstrate that the State has the capability of carrying out the provisions of the Act and meeting its purposes, making this regulation effective immediately will expedite that process.

The provisions in the rule based on counterpart Federal regulations do not have takings implications. This determination is based on the analysis performed for the counterpart Federal regulations. The revisions made at the initiative of the State that do not have Federal counterparts have also been reviewed and a determination made that they do not have takings implications. This determination is based on the fact that the provisions are administrative and procedural in nature and are not expected to have a substantive effect on the regulated industry.

This rule is exempt from review by the Office of Management and Budget under Executive Order 12866.

The Department of the Interior has conducted the reviews required by section 3 of Executive Order 12988 and has determined that this rule meets the applicable standards of subsections (a) and (b) of that section. However, these standards are not applicable to the actual language of State regulatory programs and program amendments because each program is drafted and promulgated by a specific State, not by OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State regulatory programs and program amendments submitted by the States must be based solely on a determination of whether the submittal is consistent with SMCRA and its implementing Federal regulations and whether the other requirements of 30 CFR parts 730, 731, and 732 have been met.

This rule does not have Federalism implications. SMCRA delineates the roles of the Federal and State governments with regard to the regulation of surface coal mining and reclamation operations. One of the purposes of SMCRA is to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” Section 503(a)(1) of SMCRA requires that State laws regulating surface coal mining and reclamation operations be “in accordance with” the requirements of SMCRA, and section 503(a)(7) requires that State programs contain rules and regulations “consistent with” regulations issued by the Secretary pursuant to SMCRA.

In accordance with Executive Order 13175, we have evaluated the potential effects of this rule on Federally-recognized Indian tribes and have determined that the rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. The basis for this determination is that our decision is on a State regulatory program and does not involve Federal regulations involving Indian lands.

On May 18, 2001, the President issued Executive Order 13211 which requires agencies to prepare a Statement of Energy Effects for a rule that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not expected to have a significant adverse effect on the supply, distribution, or use of energy, a Statement of Energy Effects is not required.

This rule does not require an environmental impact statement because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency decisions on proposed State regulatory program provisions do not constitute major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C)).

This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3507 et seq. ).

The Department of the Interior certifies that the provisions in this rule that are based on counterpart Federal regulations 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. ). This determination is based on an analysis prepared for the counterpart Federal regulations and the certification made that such regulations would not have a significant economic impact upon a substantial number of small entities. The Department of the Interior also certifies that the provisions in this rule that are not based upon counterpart Federal regulations 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. ). This determination is based on the fact that the provisions are administrative and procedural in nature and are not expected to have a substantive effect on the regulated industry.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based upon the fact that a portion of the State provisions are based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulation was not considered a major rule. For the portion of the State provisions that is not based upon counterpart Federal regulations, this determination is based upon the fact that the State provisions are administrative and procedural in nature and are not expected to have a substantive effect on the regulated industry.

This rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of $100 million or more in any given year. This determination is based upon the fact that a portion of the State submittal, which is the subject of this rule, is based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulation did not impose an unfunded mandate. For the portion of the State provisions that is not based upon counterpart Federal regulations, this determination is based upon the fact that the State provisions are administrative and procedural in nature and are not expected to have a substantive effect on the regulated industry.

For the reasons set out in the preamble, 30 CFR part 946 is amended as set forth below:

On June 1 and June 2, 2012, the Coast Guard will enforce the Special Local Regulation in 33 CFR 100.801, Table 1, Table No. 99 and Sector Mobile No. 12, and the Safety Zone in 33 CFR 165.801, Table 1, Table No. 144 and Sector Mobile No. 3 for the annual Billy Bowlegs Pirate Festival.

Under the provisions of 33 CFR 100.801, all persons and vessels not registered with the sponsor as participants or official patrol vessels are considered spectators. The “official patrol vessels” consist of any Coast Guard, state or local law enforcement and sponsor provided vessels assigned or approved by the Commander, Eighth Coast Guard District, to patrol the event. Spectator vessels desiring to transit the regulated area listed in § 100.801 Table 1, Table No. 99 and Sector Mobile No. 12 may do so only with prior approval of the Patrol Commander and when so directed by that officer and will be operated at a no wake speed in a manner which will not endanger participants in the event or any other craft. No spectator shall anchor, block, loiter, or impede the through transit of participants or official patrol vessels in the regulated area during the effective dates and times, unless cleared for entry by or through an official patrol vessel. The Patrol Commander may forbid and control the movement of all vessels in the regulated area. When hailed or signaled by an official patrol vessel, a vessel shall come to an immediate stop and comply with the directions given. Failure to do so may result in expulsion from the area, citation for failure to comply, or both. Any spectator vessel may anchor outside the regulated area, but may not anchor in, block, or loiter in a navigable channel. The Patrol Commander may terminate the event or the operation of any vessel at any time it is deemed necessary for the protection of life or property. The Patrol Commander will terminate enforcement of the special regulations at the conclusion of the event.

Under the provisions of 33 CFR 165.801, entry into the safety zone listed in Table 1, Table No. 144 and Sector Mobile No. 3 is prohibited unless authorized by the Captain of the Port or a designated representative. Persons or vessels desiring to enter into or passage through the safety zone must request permission from the Captain of the Port or a designated representative. If permission is granted, all persons and vessels shall comply with the instructions of the Captain of the Port or designated representative.

This notice is issued under authority of 5 U.S.C. 552(a). In addition to this notice in the Federal Register , the Coast Guard will provide the maritime community with advance notification of this enforcement period via Local Notice to Mariners and Marine Information Broadcasts.

If the Captain of the Port Mobile or Patrol Commander determines that the regulated area need not be enforced for the full duration stated in this notice of enforcement, he or she may use a Broadcast Notice to Mariners to grant general permission to enter the regulated area.

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the Coast Guard did not receive necessary information regarding the fireworks displays until April 30, 2012. As a result, the Coast Guard did not have sufficient time to publish an NPRM and to receive public comments prior to the fireworks displays. Any delay in the effective date of this rule would be contrary to the public interest because immediate action is needed to minimize potential danger to the public during the fireworks displays.

The legal basis for the rule is the Coast Guard's authority to establish regulated navigation areas and other limited access areas: 33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Public Law 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.

The purpose of the rule is to protect the public from the hazards associated with launching fireworks over navigable waters of the United States.

Multiple fireworks displays are planned for Fourth of July celebrations throughout the Captain of the Port Charleston Zone. The fireworks will be launched from land, piers, or barges. The fireworks will explode over navigable waters of the United States.

The Coast Guard is establishing five temporary safety zones for Fourth of July Fireworks Displays on navigable waters of the United States within the Captain of the Port Charleston Zone. The five safety zones, with the specific enforcement period for each safety zone, are listed below.

1. Hilton Head Island, South Carolina. All waters within a 500 yard radius around the barge from which the fireworks will be launched, located on the Atlantic Intracoastal Waterway. This safety zone will be enforced from 8:30 p.m. until 10:30 p.m. on July 4, 2012.

2. Mount Pleasant, South Carolina. All waters within a 500 yard radius around the barge from which the fireworks will be launched, located on the Cooper River. This safety zone will be enforced from 8:30 p.m. until 9:50 p.m. on July 4, 2012.

3. Murrells Inlet, South Carolina. All waters within a 1,000 yard radius around Veterans Pier, from which the fireworks will be launched, located on the Atlantic Intracoastal Waterway. This safety zone will be enforced from 8:30 p.m. until 10:30 p.m. on July 4, 2012.

4. North Charleston, South Carolina. All waters within a 500 yard radius around the barge from which the fireworks will be launched, located on the Cooper River. This safety zone will be enforced from 8:30 p.m. until 10 p.m. on July 4, 2012.

5. North Myrtle Beach, South Carolina. All waters within a 500 yard radius around Cherry Grove Pier, from which the fireworks will be launched, located on the Atlantic Ocean. This safety zone will be enforced from 9 p.m. until 10:30 p.m. on July 4, 2012.

Persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within any of the safety zones unless authorized by the Captain of the Port Charleston or a designated representative. Persons and vessels desiring to enter, transit through, anchor in, or remain within any of the safety zones may contact the Captain of the Port Charleston via telephone at (843) 740-7050, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, anchor in, or remain within any of the safety zones is granted by the Captain of the Port Charleston or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Charleston or a designated representative. The Coast Guard will provide notice of the safety zones by Broadcast Notice to Mariners, Marine Safety Information Bulletins, and on-scene designated representatives.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

Executive Orders 13563, Improving Regulation and Regulatory Review, and 12866, Regulatory Planning and Review, direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a significant regulatory action under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget has not reviewed this regulation under Executive Order 12866.

The economic impact of this rule is not significant for the following reasons: (1) Each safety zone will be enforced for a maximum of 2 hours; (2) vessel traffic in the areas is expected to be minimal during the enforcement periods; (3) although persons and vessels will not be able to enter, transit through, anchor in, or remain within any of the safety zones without authorization from the Captain of the Port Charleston or a designated representative, they may operate in the surrounding areas during the enforcement periods; (4) persons and vessels may still enter, transit through, anchor in, or remain within the safety zones if authorized by the Captain of the Port Charleston or a designated representative; and (5) the Coast Guard will provide advance notification of the safety zones to the local maritime community by Broadcast Notice to Mariners and Marine Safety Information Bulletins.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: the owners or operators of vessels intending to enter, transit through, anchor in, or remain within any of the safety zones described in this rule during the respective enforcement periods. For the reasons discussed in the Regulatory Planning and Review section above, this rule will not have a significant economic impact on a substantial number of small entities.

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

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

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

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

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

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

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

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

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves establishing five temporary safety zones that will be enforced for no more than two hours. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES .

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

Organization of this document. The following outline is provided to aid in locating information in this preamble.

EPA is making three separate and independent final determinations for the Boston-Lawrence-Worcester (Eastern Massachusetts), MA-NH serious one-hour ozone nonattainment area, and the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone nonattainment area.

First, EPA is determining that the Boston-Lawrence-Worcester (Eastern Massachusetts), MA-NH serious one-hour ozone nonattainment area has attained the one-hour ozone NAAQS, by the area's applicable attainment date of November 15, 2007 based upon complete, quality-assured and certified ambient air monitoring data for the 2005-2007 monitoring period. The Boston-Lawrence-Worcester, MA-NH one-hour ozone nonattainment area consists of Barnstable, Bristol, Dukes, Essex, Middlesex, Nantucket, Norfolk, Plymouth, Suffolk and Worcester Counties in Massachusetts; along with parts of Hillsborough and Rockingham Counties in southern New Hampshire. (See 40 CFR 81.322, and 81.330.)

Second, EPA is determining, under section 181(b)(2)(A) of the Clean Air Act (CAA), that the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone nonattainment area attained the 1997 eight-hour ozone NAAQS by its applicable attainment date (June 15, 2010). The Eastern Massachusetts 1997 eight-hour ozone nonattainment area consists of Barnstable, Bristol, Dukes, Essex, Middlesex, Nantucket, Norfolk, Plymouth, Suffolk and Worcester Counties, in Massachusetts.

Finally, EPA is determining that the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone nonattainment area has attained the 1997 eight-hour ozone NAAQS, based upon complete, quality-assured and certified ambient air monitoring data for the 2008-2010 and 2009-2011 monitoring periods.

On December 14, 2011 (76 FR 77739), EPA published in the Federal Register a Notice of Proposed Rulemaking (NPR) proposing its determination under section 181(b)(2) that the Boston-Lawrence-Worcester (Eastern Massachusetts), MA-NH serious one-hour ozone nonattainment area attained the one-hour ozone NAAQS by November 15, 2007, the area's applicable attainment deadline. The rationale and bases for EPA's proposed determination are set forth in the December 14, 2011 NPR, and need not be restated here. EPA received no comments on the NPR.

On March 13, 2012 (77 FR 14712), EPA published in the Federal Register an NPR proposing its determinations that the Boston-Lawrence-Worcester (Eastern Massachusetts), MA moderate eight-hour ozone nonattainment area attained the 1997 eight-hour ozone NAAQS by June 15, 2010, the area's applicable attainment deadline, and that the area continues to attain the 1997 8-hour ozone NAAQS. The rationale and bases for EPA's proposed determinations are set forth in the March 13, 2012 NPR, and need not be restated here. EPA received no comments on the NPR.

After revocation of the one-hour ozone standard, EPA must continue to provide a mechanism to give effect to the one-hour anti-backsliding requirements. See SCAQMD v. EPA, 472 F.3d 882, at 903 (DC Cir. 2006). In keeping with this responsibility, EPA has determined that the Boston-Lawrence-Worcester, MA-NH serious one-hour ozone nonattainment area attained the one-hour ozone standard by the area's applicable attainment date of November 15, 2007. In this context, EPA has also determined that there are no additional obligations under the revoked one-hour standard, including those relating to one-hour ozone contingency measures, for the Boston-Lawrence-Worcester, MA-NH one-hour ozone nonattainment area.

In accordance with CAA section 181(b)(2)(A), EPA is determining that the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone nonattainment area attained the 1997 ozone NAAQS by its applicable attainment date of June 15, 2010. The effect of this determination of attainment by the area's attainment date is to discharge EPA's obligation under section 181(b)(2)(A), and to establish that, in accordance with that section, the area will not be reclassified for failure to attain by its applicable attainment date.

EPA is also determining that the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone nonattainment area has attained the 1997 eight-hour ozone NAAQS, based upon the most recent complete, quality-assured and certified ambient air monitoring data, for the 2008-2010 and 2009-2011 monitoring periods. Under the provisions of EPA's ozone implementation rule (see 40 CFR 51.918), a determination that the area is attaining the 1997 eight-hour ozone standard suspends the requirements for the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone nonattainment area to submit an attainment demonstration, a reasonable further progress plan, section 172(c)(9) contingency measures, and any other planning State Implementation Plans (SIPs) related to attainment of the 1997 eight-hour ozone NAAQS for so long as the area continues to attain the 1997 ozone NAAQS.

EPA's determination that the area has attained the 1997 eight-hour ozone standard does not constitute a redesignation to attainment for that standard under CAA section 107(d)(3), because EPA has not yet approved a maintenance plan for the area, as required under section 175A of the CAA, nor determined that the area has met the other requirements for redesignation. Thus, the classification and designation status of the area remains moderate nonattainment for the 1997 eight-hour ozone NAAQS until such time as EPA determines that it meets the CAA requirements for redesignation to attainment. If EPA subsequently determines, after notice-and-comment rulemaking in the Federal Register , that the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone area's basis for the suspension of these requirements no longer exists, then the area would thereafter have to address the pertinent requirements.

EPA is making three separate and independent determinations. First, EPA is determining that the Boston-Lawrence-Worcester, MA-NH one-hour ozone nonattainment area met its applicable one-hour ozone attainment date of November 15, 2007, based on 2005-2007 complete, certified, quality-assured ozone monitoring data. Second, EPA is determining, pursuant to CAA section 181(b)(2)(A), that the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone nonattainment area met the applicable eight-hour ozone attainment date of June 15, 2010, based on 2007-2009 complete, certified, quality-assured ozone monitoring data. Third, EPA is determining that the Boston-Lawrence-Worcester (Eastern Massachusetts) moderate 1997 eight-hour ozone nonattainment area has attained the applicable eight-hour ozone standard based on complete, certified, quality-assured ozone monitoring data for 2008-2010 and 2009-2011.

These actions make determinations of attainment based on air quality, result in the suspension of certain Federal requirements, and/or would not impose additional requirements beyond those imposed by state law. For that reason, these actions:

• Are not “significant regulatory actions” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Do not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Are certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Do 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);

• Do not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Are not economically significant regulatory actions based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Are not significant regulatory actions subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Are not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Do not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

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

Under section 307(b)(1) of the 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 July 30, 2012. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:

In the direct final rule published at 77 FR 16676, EPA stated that if we received adverse comments by April 23, 2012, the rule would be withdrawn and not take effect. EPA subsequently received an adverse comment. EPA will address the comment received in a subsequent final action based upon the proposed action also published on March 22, 2012 (77 FR 16795). EPA will not institute a second comment period on this action.

I. Background

In FR Doc. 2012-6125 of March 27, 2012, (77 FR 18310) there were technical and typographical errors that are identified and corrected in the “Correction of Errors” section below. The provisions in this correction notice are effective as if they had been included in the document published on March 27, 2012. Accordingly, the corrections are effective on May 29, 2012.

On page 18327, in the preamble discussion of standards for consumer assistance tools, there are errors in references to the regulations text. The cross references to § 155.200(a) and § 155.200(b) are incorrect, and are being corrected to read § 155.205(a) and § 155.205(b), respectively, which are the provisions discussing the Exchange call center and Web site.

On page 18331, the preamble explains that Exchanges cannot require Navigators to have agent and broker licenses. However, one sentence implies that any licensure standards for Navigators would cause Navigators to be agents and brokers, which is inaccurate. The sentence also incorrectly implies that establishing any licensure standards would not be allowed, which would conflict with § 155.210(c)(1)(iii). Therefore, we are adding the word “such” to the following sentence to refer specifically to agent and broker licensure. We are also adding the word “in,” immediately preceding the citation, which was accidentally omitted before. The revised sentence will read as follows: “Thus, establishing such licensure standards for Navigators would mean that all Navigators would be agents and brokers, and would violate the standard set forth in § 155.210(c)(2) of the final rule that at least two types of entities must serve as Navigators.”

On page 18336, the preamble discusses the potential for future standards related electronic notices and coordination of notices between Medicaid, CHIP, and the Exchanges. We indicate that future rulemaking will be issued for these standards. We are correcting these references to state that future guidance will be released to provide more information on electronic notices and notices coordination.

On page 18341, in preamble discussion of privacy and security standards, we are correcting two errors. First, the definition of personally identifiable information in § 155.260(a) of the proposed rule published on July 15, 2011, was not included in the final rule in order to align the definition with a memorandum released by the Office of Management and Budget. In the preamble, the cross reference to § 155.260(a), which does not exist in the final rule, is replaced with “as defined in the Office of Management and Budget Memorandum M-07-16.”

Second, on page 18341, the preamble uses the term “personally identifiable health information.” The privacy and security section of the final rule applies to “personally identifiable information.” Personally identifiable health information is a subset of this term, and is not the focus of the rule, as stated in the preamble. The word “health” was accidentally included, because the privacy and security principles from which the rule derives its language applies specifically to personally identifiable health information. However, the Exchanges final rule applies to the broader set of all personally identifiable information. We are making the correction in the preamble and also in the regulations text.

On page 18344, in the preamble discussion of privacy and security standards, we are correcting two cross references that were not updated from the references in the proposed rule regarding the codification of section 1413(c) of the Affordable Care Act. To align the cross references with the correct final rule provisions, the reference to § 155.260(b)(3) is being changed to § 155.260(a)(6) and the reference to § 155.260(c) is being changed to § 155.260(e). We are also removing the word “section,” which was used in addition to the symbol “§ ,” thus removing the redundancy.

On page 18396, in the preamble discussion of the Small Business Health Options Program, the text incorrectly states that “…a SHOP must provide a premium calculator to qualified employers.” The premium calculator should be made available to the employees; therefore, we are correcting “qualified employers” to “qualified employees.”

On pages 18413 and 18414, in the preamble discussion of decertifying qualified health plans, the text refers twice to the special enrollment period in the case of QHP decertification in § 155.410, but should reference § 155.420, which is the section outlining special enrollment periods.

On page 18429, the preamble discusses the effective date of termination at the end of the 3-month grace period for individuals receiving advance payments of the premium tax credit. The regulations text states that a QHP issuer must terminate the individual's coverage at the end of the first month of the 3-month grace period. However, the preamble is inconsistent in stating that the QHP issuer “can” terminate coverage on the first day of the second month of the grace period. The regulations text accurately reflects the policy stating that QHP issuers must terminate on the last day of the first month of the grace period. Therefore, we are correcting the preamble to be consistent with the regulations text by changing the word “can” to “must” and by aligning the termination date with the regulations text.

On page 18450, we presented regulatory changes to § 155.260(d), which outlines specifics for Exchanges in developing written policies and procedures regarding the collection, use, and disclosure of personally identifiable information. This paragraph was intended to be consistent with paragraph (a) of § 155.260, which also applies to the creation of personally identifiable information. In this notice, we are adding the word “creation” to § 155.260(d).

On page 18456, we presented regulatory changes to § 155.315(f)(5)(i). Due to changes during drafting, the reference to paragraph (i) is incorrect, and was intended to refer to paragraph (g) of that section. We are correcting this reference.

On page 18461, we presented regulatory changes to § 155.345(g)(3), which states that an Exchange cannot request “information of documentation” that an individual already provided to a different insurance affordability program. This was a typographical error that should read “information or documentation,” to be consistent with preamble text and accurately communicate the standard.

On page 18464, we presented our regulatory changes to § 155.430(c)(2), which directs Exchanges to send termination information to the QHP issuer and HHS “promptly and without undue delay.” This timeliness standard is consistent with the reporting of enrollment established in § 155.400(b)(1). However, we mistakenly added another qualification in § 155.430(c)(2) that such information be reported “at such time and in such manner as HHS may specify.” The latter phrase is not necessary in light of the more specific standard that such information be reported promptly and without undue delay.

On page 18467, we presented our regulatory changes to § 155.1020(a) with respect to rate increase justifications. We inadvertently left out the word “increase,” and are adding it to the regulations text to be consistent across provisions and aligned with the preamble, and to more clearly communicate our intent.

On page 18468, in § 155.1080(b), we inadvertently used the word “meet” instead of “meets,” which results in incorrect subject-verb agreement, and are amending this to be correct.

On page 18469, in § 156.20, in the definition of “Level of coverage”, we mistakenly defined the term “level of coverage” by referring to section 1302(d)(2) of the Affordable Care Act. The bronze, silver, gold, and platinum levels of coverage are defined in section 1302(d)(1) of the Affordable Care Act; therefore, we are correcting this error.

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a rule take effect in accordance with section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)) and section 553(d) of the APA ordinarily requires a 30-day delay in the effective date of final rules after the date of their publication in the Federal Register . These requirements may be waived if an agency finds for good cause that the delay is impracticable, unnecessary, or contrary to the public interest, and the agency incorporates a statement of the findings and its reasons in the rule issued.

This notice merely corrects technical and typographic errors in the Exchanges final rule that was published on March 27, 2012 and becomes effective on May 29, 2012. The changes are not substantive to the Exchanges policy. Therefore, we believe that undertaking further notice and comment procedures to incorporate these corrections and delaying the effective date of these changes is unnecessary. In addition, we believe it is important for the public to have the correct information as soon as possible, and believe it is contrary to the public interest to delay the dissemination of it. For the reasons stated above, we find there is good cause to waive notice and comment procedures and the 30-day delay in the effective date for this correction notice.

In FR Doc. 2012-6125 of March 27, 2012, (77 FR 18310), make the following corrections:

1. On page 18327, in the third column—

A. In the first full paragraph, in line 6, the cross reference to “§ 155.200(a)” is corrected to “§ 155.205(a)”.

B. In the second full paragraph, in line 2, the cross reference to “§ 155.200(b)” is corrected to “§ 155.205(b)”.

2. On page 18331, in the third column; in the second full paragraph, in line 12, add the word “such” before the word “licensure” and the word “in” before “§ 155.210(c)(2)”.

3. On page 18336, in the second column; in the last paragraph—

A. In lines 7 and 8, the phrase “future rulemaking” is corrected to read “future guidance.”

B. In line 10, the phrase, “Future rulemaking” is corrected to read “Future guidance”.

4. On page 18341—

A. In the second column; in the third paragraph, in lines 26 and 27, the term “personally identifiable health information” is corrected to read “personally identifiable information.”

B. In the third column; in the first partial paragraph, in line 4, the reference to “§ 155.260(a)” is replaced with “the Office of Management and Budget Memorandum M-07-16.”

5. On page 18344, in the second column; in the third paragraph, in lines 11 and 12, the references to “§ 155.260(b)(3) and § 155.260(c)” are corrected to “§ 155.260(a)(6) and § 155.260(e)”.

6. On page 18396, in the third column; in the second to last paragraph, in lines 9 and 10, the term “qualified employers” is corrected to “qualified employees.”

7. On page 18413, in the third column; in the last paragraph, in the first line, the cross reference to “§ 155.410” is corrected to “§ 155.420”.

8. On page 18414, in the first column; in the first partial paragraph, in the first line, the reference to “§ 155.410” is corrected to “§ 155.420.”

9. On page 18429, in the first column; in the first paragraph, the first sentence is corrected to read, “We clarify in final § 156.270(g) that if an individual exhausts the grace period without settling all outstanding premium payments, then the QHP issuer must terminate coverage retroactively to the last day of the first month of the grace period.”

On June 16, 2011, we published a notice of intent with request for comments titled “Validation of Merchant Mariners' Vital Information and Issuance of Coast Guard Merchant Mariner's Licenses and Certificates of Registry (MMLs)” in the Federal Register (76 FR 35169). We received no comments on the notice. No public meeting was requested and none was held.

On January 13, 2006, the Coast Guard published in the Federal Register (71 FR 2154) an interim rule with request for comments. The interim rule amended maritime personnel licensing rules to include new security requirements when mariners apply for original, renewal, and raise-of-grade licenses and certificates of registry. However, subsequent rulemakings have revised or revoked the majority of the interim rule provisions. The Coast Guard is now finalizing the single remaining section that has not been addressed in subsequent rulemakings.

The most recent significant rulemaking documents addressing the interim rule provisions are as follows  1 : (1) Implementation of the 1995 Amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, Supplemental Notice of Proposed Rulemaking [Docket No. USCG-2004-17914] (75 FR 13715); (2) Large Passenger Vessel Crew Requirements, Final Rule [USCG-2007-27761] (74 FR 47729); (3) Crewmember Identification Documents, Final Rule [Docket No. USCG-2007-28648] (74 FR 19135); (4) Transportation Worker Identification Credential (TWIC) Implementation in the Maritime Sector; Hazardous Materials Endorsement for a Commercial Driver's License, Final Rule, [Docket Nos. TSA-2006-24191; USCG-2006-24196] (74 FR 13114); (5) Consolidation of Merchant Mariner Qualification Credentials, Final Rule [Docket No. USCG-2006-24371] (74 FR 11196); (6) Maritime Identification Credentials, Notice of acceptable identification credentials; phased cancellation [Docket No. USCG-2006-24189] (74 FR 2865); and (7) Training and Service Requirements for Merchant Marine Officers, Final Rule [Docket No. USCG-2006-26202] (73 FR 52789).

The one section of the January 13, 2006, interim rule that has remained unfinalized is the definition of “dangerous drug” for subchapter B at 46 CFR 10.107(b). That provision defines “Dangerous drug” to mean a narcotic drug, a controlled substance, or a controlled-substance analogue (as defined in section 102 of the Comprehensive Drug Abuse and Control Act of 1970 (21 U.S.C. 802)). This definition was originally published in the January 13, 2006, interim rule as part of 46 CFR 10.103. A subsequent rulemaking, Consolidation of Merchant Mariner Qualification Credentials, redesignated definitions in subchapter B to 46 CFR 10.107(b) (74 FR 11216) and implemented changes to the other definitions listed within the section. The Coast Guard is finalizing this one remaining definition from the interim rule in its current designation, 46 CFR 10.107(b).

No comments were received. As a result, no changes are being made.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 14 of these statutes or executive orders.

Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

This final rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

This final rule is intended to finalize the definition of a dangerous drug in § 10.107(b). It does not impose any additional impacts or costs on the marine industry or the public.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. This rulemaking, which finalizes a lawfully promulgated interim rule, does not require a general notice of proposed rulemaking and, therefore, is exempt from the analysis requirements of the Regulatory Flexibility Act. 5 U.S.C. 604.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult Gerald P. Miante, Personnel Qualifications Division, Coast Guard, telephone 202-372-1407, email Gerald.P.Miante@uscg.mil . The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

A rule has federalism implications under Executive Order 13132, Federalism, if it has 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.

We have evaluated this rule under Executive Order 13132 and have determined that although the rule is preemptive of state law or regulation, it does 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. It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration, repair, maintenance, operation, equipping, personnel qualification, and manning of vessels) are within fields foreclosed from regulation by the States. See United States v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000). Congress granted to the Coast Guard the authority to regulate the issuance of merchant mariners' documents, including the process by which a mariner's qualifications are determined and verified for specific ratings. Because States may not promulgate rules within this category, this rule does not have federalism implications under Executive Order 13132.

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

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

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

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

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

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

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded under section 2.B.2, figure 2-1, paragraphs (34)(a) and (c) of the Instruction. This rule involves regulations that are editorial and concern qualification and certification of maritime personnel. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES .

For the reasons discussed in the preamble, the Coast Guard amends 46 CFR part 10 as follows:

On June 16, 2011, we published a notice of intent with request for comments titled “Validation of Merchant Mariners' Vital Information and Issuance of Coast Guard Merchant Mariner's Documents (MMDs)” in the Federal Register (76 FR 35173). We received no comments on the notice. No public meeting was requested and none was held.

On January 6, 2004, the Coast Guard published in the Federal Register (69 FR 526) an interim rule with request for comments. The interim rule described enhancements to the application procedures for the Merchant Mariner Licensing and Documentation program, which were necessary to improve maritime safety and promote the national security interests of the United States. However, subsequent rulemakings have consolidated the majority of the application procedures within Coast Guard regulations and therefore have either revoked or revised the majority of the 2004 interim rule's provisions. As a result, the Coast Guard is finalizing the single remaining section that has not been addressed in subsequent rulemakings.

The most recent significant rulemaking documents addressing the interim rule provisions are as follows  1 : ((1) Implementation of the 1995 Amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, Supplemental Notice of Proposed Rulemaking [Docket No. USCG-2004-17914] (75 FR 13715); (2) Large Passenger Vessel Crew Requirements, Final Rule [USCG-2007-27761] (74 FR 47729); (3) Crewmember Identification Documents, Final Rule [Docket No. USCG-2007-28648] (74 FR 19135); (4) Transportation Worker Identification Credential (TWIC) Implementation in the Maritime Sector; Hazardous Materials Endorsement for a Commercial Driver's License, Final Rule, [Docket Nos. TSA-2006-24191; USCG-2006-24196] (74 FR 13114); (5) Consolidation of Merchant Mariner Qualification Credentials, Final Rule [Docket No. USCG-2006-24371] (74 FR 11196); (6) Maritime Identification Credentials, Notice of acceptable identification credentials; phased cancellation [Docket No. USCG-2006-24189] (74 FR 2865); and (7) Training and Service Requirements for Merchant Marine Officers, Final Rule [Docket No. USCG-2006-26202] (73 FR 52789).

The one section of the January 6, 2004, interim rule that has remained unfinalized is 46 CFR 12.01-1(a)(1): Purpose of rules in this part. This paragraph sets forth the purpose of the rules in Part 12 as a means for determining and verifying the identity, citizenship, nationality, and professional qualifications an applicant must possess to be eligible for certification to serve on merchant vessels of the United States. The Coast Guard is finalizing this one remaining section of the interim rule.

No comments were received. As a result, no changes were made.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 14 of these statutes or executive orders.

Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

This final rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

This final rule is intended to finalize 46 CFR 12.01-1(a)(1), which is the one remaining section of regulations previously published as an interim rule on January 6, 2004, that has not already been finalized. That section is a statement of the purpose of the rules in part 12. Since this final rule does not actually modify the statement of the purpose in the referenced part, there are no costs to the merchant marine industry and in particular the mariners.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. This rulemaking, which finalizes a lawfully promulgated interim rule and changes prefatory text only, does not require a general notice of proposed rulemaking and, therefore, is exempt from the analysis requirements of the Regulatory Flexibility Act. 5 U.S.C. 604.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult Gerald P. Miante, Personnel Qualifications Division, Coast Guard, telephone 202-372-1407, email Gerald.P.Miante@uscg.mil. The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

A rule has federalism implications under Executive Order 13132, Federalism, if it has 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.

We have evaluated this rule under Executive Order 13132 and have determined that although the rule is preemptive of state law or regulation, it does 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. It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration, repair, maintenance, operation, equipping, personnel qualification, and manning of vessels) are within fields foreclosed from regulation by the States. See United States v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000). Congress granted to the Coast Guard the authority to regulate the issuance of merchant mariners' documents, including the process by which a mariner's qualifications are determined and verified for specific ratings. Because States may not promulgate rules within this category, this rule does not have federalism implications under Executive Order 13132.

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

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

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

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

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

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

The National Technology Transfer and Advancement Act (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have concluded that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded under section 2.B.2, figure 2-1, paragraphs (34)(a) and (c) of the Instruction. This final rule involves regulations that are editorial and concern qualification of maritime personnel. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES .

For the reasons discussed in the preamble, the Coast Guard amends 46 CFR part 12 as follows:

This is a summary of the Commission's in WC Docket Nos. 10-90, 07-135, 05-337, 03-109; GN Docket No. 09-51; CC Docket Nos. 01-92, 96-45; WT Docket No. 10-208; FCC 12-47, released on April 25, 2012. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street SW., Washington, DC 20554, and at the following Internet address: The complete text may be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc. (BCPI), Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 20554, (202) 488-5300, facsimile (202) 488-5563, or via email at fcc@bcpiweb.com http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0425/FCC-12-47A1.pdf .

1. In this Order, we address several issues raised in petitions for reconsideration of certain aspects of the USF/ICC Transformation Order . The USF/ICC Transformation Order represents a careful balancing of policy goals, equities, and budgetary constraints. This balance was required in order to advance the fundamental goals of universal service and intercarrier compensation reform within a defined budget while simultaneously providing sufficient transitions for stakeholders to adapt. While reconsideration of a Commission's decision may be appropriate when a petitioner demonstrates that the original order contains a material error or omission, or raises additional facts that were not known or did not exist until after the petitioner's last opportunity to present such matters, if a petition simply repeats arguments that were previously considered and rejected in the proceeding, due to the balancing involved in this proceeding, we are likely to deny it.

2. With this standard in mind, in this Order we take several limited actions stemming from reconsideration petitions. We grant a request to permit carriers accepting incremental support in Phase I of the Connect America Fund (CAF) to receive credit for deploying broadband to certain unserved locations in partially served census blocks, and deny a number of other requests to modify the rules governing CAF Phase I. In addition, we also grant in part a request by Frontier-Windstream and the Rural Associations to reconsider the VoIP intercarrier compensation rules adopted in the USF/ICC Transformation Order . Specifically, we modify our rules to permit LECs, prospectively, to tariff a transitional default rate equal to their intrastate originating access rates when they originate intrastate toll VoIP traffic until June 30, 2014. This targeted modification is intended to be transitional and temporary and does not alter the overall, uniform, national framework for comprehensive intercarrier compensation reform which was established in the USF/ICC Transformation Order.

3. In the USF/ICC Transformation Order, the Commission adopted a framework for the Connect America Fund that would provide support in price cap territories based on a combination of competitive bidding and a forward-looking cost model. But, as the Commission observed, developing and implementing a new cost model could be expected to take some time. So, in order to immediately accelerate broadband deployment in such areas, the Commission established Phase I of the CAF to begin the process of transitioning high-cost support for price cap carriers to the CAF. In Phase I, the Commission froze current high-cost support for price cap carriers, and, in addition, committed up to $300 million in incremental support to promote deployment of broadband to unserved areas within price cap carriers' service territories and their rate of return affiliates' service territories. The $300 million in incremental support will be allocated among price cap carriers by the use of a simplified forward-looking cost estimate based on the prior high cost proxy model.

4. Participation in CAF Phase I is optional: That is, carriers will be able to choose how much of their allocated incremental support to accept based on the broadband obligations that accompany the support. Each carrier will be required to deploy broadband to a number of locations equal to the amount of incremental support it accepts divided by $775. As the Commission explained, that standard was designed to reach as many locations as possible as cost-effectively as possible—to “spur immediate broadband deployment to as many unserved locations as possible” with the limited funds available by “encourag[ing] carriers to use the support in lower-cost areas where there is [nevertheless] no private sector business case for deployment of broadband.” And, to ensure that these deployments reach those who are otherwise unserved and are unlikely to be served in the near future, the Commission required carriers to certify, among other things, that the locations they would deploy to are shown as unserved by fixed broadband with a minimum speed of 768 kbps downstream and 200 kbps upstream on the National Broadband Map; that, to the best of the carrier's knowledge, the location is not in fact served; and that incremental support would not be used to satisfy merger commitments or similar regulatory obligations.

5. Various parties ask us to reconsider aspects of these rules. Below, we grant in part a request by the Independent Telephone & Telecommunications Alliance (ITTA) that we modify the rules and permit carriers, in certain circumstances, to receive credit in CAF Phase I for deploying to unserved locations based on a certification that they are unserved, even though such locations are identified as served on the National Broadband Map. In addition, we deny requests from Frontier and Windstream, along with the United States Telecom Association (US Telecom), that we reconsider the $775 per-location deployment requirement. We also deny their request that we permit carriers to receive credit in CAF Phase I for improving broadband service to underserved locations—locations where broadband is available, but does not meet the requirements for new CAF Phase I deployments. We also deny Windstream's request, in the alternative, that we permit carriers to use CAF Phase I incremental support to deploy second-mile fiber facilities. Finally, we deny a request by Frontier and Windstream that the $300 million in incremental support be allocated among carriers by calculating distributions “as if” the incremental support mechanism were distributing both incremental support and frozen high-cost support, rather than only incremental support.

6. First, ITTA asks us to reconsider the rule that carriers receiving CAF Phase I incremental support must deploy broadband to locations shown on the National Broadband Map as unserved by fixed broadband. ITTA argues that the National Broadband Map in some cases “overstates fixed broadband coverage” and that excluding unserved areas from eligibility for CAF Phase I deployment because they appear as served on the Map would mean that consumers in those areas would not benefit from CAF Phase I. ITTA, in an ex parte letter joined by several carriers, elaborates on its proposal, asking that we modify the rules to permit carriers to serve additional locations in three different situations.

7. Our analysis of ITTA's petition is informed by a balancing of considerations. On the one hand, CAF Phase I is an interim measure intended to accelerate deployment to those unserved locations that can be reached in the near term. Given our goal of deploying new funding quickly, we believe it is reasonable to focus deployment on areas where it is clear that no broadband exists, rather than to create a potentially burdensome and time-consuming process to identify other areas without service. On the other hand, we do believe that, where adjustments can be made in a way that will not create undue delays, modifying the rules to permit carriers to accept as much incremental support as possible—and thus deploy broadband to more unserved locations—would serve the public interest.

8. ITTA first notes that in some census blocks, the incumbent local exchange provider is the only provider shown by the National Broadband Map as offering fixed broadband services. But, as ITTA explains, the reporting methodology used to create the Map “indicates that an entire census block is served by the [incumbent] LEC even if only a single location in that census block is able to receive broadband.” In such situations, ITTA observes, the incumbent LEC knows which locations are actually served and which are actually unserved, and it proposes that the carrier should be able to receive credit in CAF Phase I for deploying broadband to locations that it certifies were not, in fact, already served.

9. We conclude that modifying our rule to provide additional flexibility in this situation will promote the goals of CAF Phase I. Accordingly, we will permit carriers accepting CAF Phase I support to satisfy their deployment requirement by deploying to locations identified on the National Broadband Map as served if the Map reflects that the only provider of fixed broadband to the location is the incumbent carrier itself, the locations are in fact unserved by broadband, and the carrier makes the certifications required by § 54.312(b)(3) of our rules.

10. ITTA also argues that some census blocks are shown in some of the tools available on the National Broadband Map Web site as being served by a carrier other than the incumbent LEC, but that the data underlying the Map “clearly identifies that the non-ILEC provider serves only a part of the census block.” This situation can arise in certain situations when, for example, the data underlying the Map show that a cable operator offers broadband to only certain locations within a census block. ITTA proposes that a carrier receiving CAF Phase I support be able to receive credit in CAF Phase I for deploying to locations in such blocks to the extent that the data underlying the Map confirms that the non-ILEC provider does not serve the location.

11. We conclude that no change to the rules is necessary to address this concern. Section 54.312(b)(3) of our rules requires that a carrier certify that the locations to be served to satisfy its deployment requirement “are shown as unserved by fixed broadband on the then-current version of the National Broadband Map.” We take this opportunity to clarify that if the data underlying the Map show that a location is not served by a particular provider, then, for the purposes of this rule, the location is “shown as unserved” by that provider.

12. In addition, ITTA claims that there are locations which the National Broadband Map indicates are served by a carrier other than the incumbent LEC, but which the incumbent LEC reasonably believes are not, in fact, served by that other provider. ITTA proposes that carriers receive credit for deploying to such areas, if they provide evidence that there are unserved locations in the area. Specifically, ITTA proposes a CAF Phase I support recipient be permitted to provide a certification that, to the best of the carrier's knowledge, there are unserved locations in a census block notwithstanding that the Map indicates that those locations are served. ITTA proposes that the recipient be permitted to—but not required to—provide “consumer declarations or other supporting evidence” supporting its certification. If it does, the certification would not be subject to rebuttal. On the other hand, if the carrier does not provide any declarations or other supporting evidence, other broadband providers in the area would have up to 30 days to respond to the certification. To rebut the CAF Phase I recipient's certification, ITTA proposes that those other providers would be required to certify that they can provide service throughout the relevant area and would be required to provide one or more consumer declarations from customers who either currently or in the past have subscribed to the provider's service within the relevant area. If no provider rebutted the CAF Phase I recipient's certification, the CAF Phase I recipient would be permitted to deploy to unserved locations in the census block at issue.

13. We decline to adopt this aspect of ITTA's proposal. ITTA does not explain how a CAF Phase I recipient would know which locations—other than any locations for which it has obtained a consumer's declaration—in a census block are actually unserved by any other carrier. In addition, we observe that ITTA's proposal would require a provider wishing to challenge the CAF Phase I recipient's certification to provide a declaration within 30 days from a customer or former customer in the census block. That task might be quite time consuming given limited resources. Worse, it might not be possible, because a provider may have no customers in a particular census block, even though it offers service there. Yet ITTA would apparently have us provide CAF Phase I incremental support to incumbents to deploy in such locations. On balance, we cannot conclude on the record before us that adopting ITTA's proposed process, which may not significantly increase the number of locations that are likely to receive new broadband, would serve the public interest.

14. ITTA, joined by several carriers, also asks that we permit carriers receiving CAF Phase I incremental support to deploy broadband to locations that are served by another broadband provider but where the service offered by that other provider does not meet defined service characteristics. They propose that the other provider offer service of at least 768 kbps sustained download speed, with a usage limit no lower than 53 gigabytes per month, all at a price no higher than the month-to-month price of the highest price for a similar product from a wireline provider in the state.

15. We decline to adopt this proposal for several reasons. We acknowledge that some consumers may live in areas ineligible for CAF Phase I support even though the broadband available to them does not currently meet our goals. The Commission chose in CAF Phase I, however, to focus limited resources on deployments to extend broadband to some of the millions of unserved Americans who lack access to broadband entirely, rather than to drive faster speeds to those who already have service. We are not persuaded that the decision about the more pressing need was unreasonable. Moreover, we are not persuaded that permitting CAF Phase I recipients to overbuild other broadband providers represents the most efficient use of limited CAF Phase I support. In addition, we conclude that we do not have an adequate record at this time to make a determination about how high a competitor's price must be—either alone or in combination with usage limits—before we would support overbuilding that competitor, a critical component of petitioners' request.

16. Second, Frontier, Windstream and USTelecom seek reconsideration of the requirement that a carrier accepting incremental support in CAF Phase I deploy broadband to a number of unserved locations equal to the amount each carrier accepts divided by $775. In particular, these parties take issue with the use of $775 as a nationwide estimate for the appropriate amount of per-location support.

17. In adopting the $775 figure, the Commission recognized that, in the absence of a fully developed cost model, the choice of a per-location support amount necessarily involved an exercise of judgment. The Commission weighed a variety of considerations, including the fact that resources for this interim mechanism were limited and the goal to “spur immediate broadband deployment to as many unserved locations as possible.” The Commission also considered several sources of data, including deployment projects undertaken by a mid-size price cap carrier under the Rural Utilities Service's Broadband Initiatives Program, data from analysis done as part of the National Broadband Plan, and an analysis performed using the ABC plan cost model, submitted by a group of price cap carriers.

18. Petitioners argue that the comparison with the BIP deployments (which showed an average per-location cost of $557) was faulty, because, “[a]s the Commission acknowledges in the Order, BIP was aimed at improving service to underserved locations as well as deploying to unserved locations” and only deployments to the unserved count toward satisfaction of the CAF Phase I requirement. But as petitioners concede, the Commission acknowledged this concern in the Order, and took it into account. Petitioners also complain that the analysis based on the National Broadband Plan and the ABC plan cost model focuses on deployment costs and fails to account for the cost of maintaining and operating existing networks. That complaint misses the mark, however, because the goal of CAF Phase I is to provide one-time support to spur broadband deployment, not to create a new source of ongoing support. Moreover, as the Commission explained in the Order, one part of the analysis Commission staff performed suggested that there were approximately 1.75 million unserved locations served by price cap carriers with costs below $765. Even if all $300 million available in Phase I were accepted, carriers would be required to deploy to only 387,096 locations in total. In other words, the Commission's analysis indicates that, nationwide, there are far more unserved locations with costs below our deployment requirement than will be reached in Phase I. No party disputed the Commission's analysis on this point. In sum, nothing in the petitions for reconsideration calls the Commission's conclusion into question or suggests that any other nationwide number would be more appropriate.

19. In any event, the heart of Frontier, Windstream and USTelecom's argument is that the Commission should adopt carrier-specific deployment requirements for CAF Phase I rather than use a nationwide figure for the per-location support offered. As Frontier and Windstream explain: “The fact that some locations within another carrier's territory might be served for $400 or less does nothing for another carrier's consumers when that carrier's least-expensive unserved locations would cost $1,000 or more to serve.” They assert that they are in the latter situation: because of their history of aggressively deploying broadband, “there are relatively few, if any, unserved areas left in Petitioners' service areas that can be reached for $775 or less.” Petitioners propose that we develop a carrier-specific requirement by using the CostQuest Broadband Analysis Tool (CQBAT), a cost model submitted as part of a proposal by several large carriers for reform of the high-cost universal service support mechanism.

20. We decline to adopt the proposed carrier-by-carrier approach. Petitioners may have deployed to many or all of the locations in their territories for which $775 represents an adequate subsidy, but CAF Phase I incremental support, as established in the USF/ICC Transformation Order, was designed to reach a significant number of relatively low-cost locations, not to ensure that the entire $300 million offered for Phase I is accepted. Indeed, the Commission recognized that some incremental support would likely be declined, and explained that declined support “may be used in other ways to advance our broadband objectives pursuant to our statutory authority.” To the extent carriers have already deployed to the low-cost areas in their territories, then those carriers' remaining unserved areas may be better candidates for CAF Phase II, which will be identified, using an updated model, along with the appropriate ongoing subsidy amounts for areas with costs above a specified benchmark. Further, we note that in the Order, the Commission expressly declined to adopt the CQBAT model, explaining that it would be premature to rely on it in light of the limited opportunity the public had then had to review it. Instead, the Commission initiated an open process to develop a robust cost model for the Connect America Fund, a process that is now underway. We are not persuaded that we should, at this early stage in that ongoing process, prejudge the merits of the CQBAT model and adopt it for use in CAF Phase I. Accordingly, we decline to relax the nationwide deployment requirement and decline to establish carrier-specific requirements.

21. Third, several parties ask us to modify the broadband deployment requirement for CAF Phase I to permit carriers to meet their obligations not just by deploying broadband to previously unserved locations, but also by upgrading service to locations that are “underserved”—locations, for example, that are served by broadband at speeds less than the 4 megabits downstream required for new deployments in CAF Phase I. Frontier and Windstream argue that underserved areas should be eligible for support in CAF Phase I because, in order to deploy broadband to unserved locations, “facility upgrades in underserved areas may be required,” and, what is more, those investments may be “very significant.” As explained above, however, the Commission's focus in CAF Phase I was to spur broadband deployment to consumers who lack access to broadband, not to improve service for those who already have access to some form of high-speed Internet access. We recognize that as they extend broadband to previously unserved areas, carriers may need to upgrade network facilities shared by both served and unserved locations. However, we believe the $775 per newly served location appropriately takes account of the cost of these upgrades. That is, we conclude it is only appropriate to support such shared investments through CAF Phase I to the extent that they do not drive the required subsidy per unserved location above $775.

22. Fourth, in an ex parte letter, Windstream offers a further alternative to the nationwide deployment requirement. Windstream proposes that carriers should be permitted to use CAF Phase I support to deploy second-mile fiber in areas not currently served by fiber. Windstream argues that the existing rules will penalize the customers of those carriers, like Windstream, that have already deployed Digital Subscriber Line Access Multiplexers (DSLAMs) fed by existing copper facilities to provide at least some level of broadband service in some of their most rural areas, even where there is no business case to deploy fiber to the DSLAM. As Windstream observes, residential broadband bandwidth demand has increased substantially in recent years. Providing support for fiber in such areas, Windstream argues, is essential to maintain existing service levels for their consumers; driving fiber deeper into the network would also reduce the cost of connecting rural wireless cell sites to fiber facilities.

23. We decline to adopt Windstream's proposal for second-mile fiber support. While we agree with Windstream that deploying second-mile fiber facilities is a worthwhile endeavor, we reiterate that the focus of CAF Phase I is a relatively narrow one: to spur deployment of broadband to relatively low-cost locations that nevertheless currently have no service at all, while we implement CAF Phase II. It is not intended to be a long-term program or to serve all broadband deployment needs, such as the need to eventually replace existing broadband facilities to meet projected demand. Instead, the need for such investments is more appropriately considered in the broader context of the CAF Phase II mechanism.

24. Finally, Frontier and Windstream request that we clarify or reconsider how the $300 million allocated to CAF Phase I will be distributed among carriers. The USF/ICC Transformation Order freezes existing high cost support and uses the CAF Phase I incremental support mechanism to allocate an additional $300 million. Frontier and Windstream assert that there are two different ways that this $300 million could be distributed through the incremental support mechanism. In the first, the incremental support allocation mechanism could be applied only to the $300 million in incremental support. In the second, preferred by petitioners, all high-cost support, both frozen support and the $300 million incremental support, would be distributed “as if” it were allocated using the new mechanism, subject to a “hold harmless” rule that would ensure no carrier would receive less support than it previously received.

25. According to Frontier and Windstream, the two approaches “differ markedly in how they allocate the incremental $300 million.” That is so because the CAF Phase I incremental support allocation mechanism allocates support “from the top down.” Specifically, a per-location cost is calculated for each wire center; support is then calculated for the carrier serving that wire center based on the amount by which that per-location cost exceeds a funding threshold, multiplied by the total number of locations in the wire center. The funding threshold is set so that the specified amount of support, either $300 million or $1.3 billion, is allocated. Setting the funding threshold to distribute $1.3 billion would of course result in a lower threshold than setting it to distribute $300 million, and a lower threshold would mean that more wire centers have per-location costs above the threshold. Petitioners argue that spreading incremental support based on a broader range of high-cost wire centers (those above the threshold set with $1.3 billion) “would be far more equitable” than the alternative approach. In addition, they argue, their proposal is more consistent with the support framework that will be in place during CAF Phase II, when the very highest-cost census blocks will likely be served through satellite, fixed wireless, or other technologies rather than wireline broadband provided by incumbent carriers. CenturyLink opposes these petitioners' proposal, arguing that the Commission's “straightforward calculation” was “sensible and justified,” as compared to the multi-stage, more complex calculation advocated by Frontier and Windstream.

26. We decline to change the CAF Phase I support calculation as advocated by Frontier and Windstream. We remain unconvinced that it would be reasonable to allocate the $300 million in incremental CAF Phase I support “as-if” a different amount of support were being allocated. CAF Phase I is an interim support mechanism, designed to be a simple, easily administered tool to provide a boost to broadband deployment in the near term while the Wireline Competition Bureau develops a support model for CAF Phase II. We acknowledge that there were other ways the Commission could have established the amounts of support each carrier would be eligible for in this interim mechanism. But Frontier and Windstream have not shown that their proposed methodology, which would add a degree of complexity for an uncertain benefit, would likely serve the goals of CAF Phase I more effectively than the methodology adopted in the Order, and we decline to adopt it.

27. Background. The USF/ICC Transformation Order comprehensively reformed the intercarrier compensation system. Significantly, the Commission launched long-term intercarrier compensation reform by adopting a bill-and-keep methodology as the ultimate uniform, national methodology for all telecommunications traffic exchanged with a local exchange carrier (LEC). The USF/ICC Transformation Order began this transition to bill-and-keep with terminating switched access rates. In addition, the Commission addressed specific intercarrier compensation issues involving commercial mobile radio service (CMRS)-LEC compensation and made clear the prospective payment obligations for certain “VoIP” traffic, referred to in the USF/ICC Transformation Order as “VoIP-PSTN” traffic.

28. In light of new evidence in the record, we reconsider an aspect of the transitional intercarrier compensation framework adopted for originating VoIP traffic. For purposes of the USF/ICC Transformation Order, VoIP-PSTN traffic “is `traffic exchanged over PSTN facilities that originates and/or terminates in IP format.' In this regard, we focus specifically on whether the exchange of traffic between a LEC and another carrier occurs in Time-Division Multiplexing (TDM) format (and not in IP format), without specifying the technology used to perform the functions subject to the associated intercarrier compensation charges.” As with the USF/ICC Transformation Order more broadly, the VoIP intercarrier compensation framework weighed the benefits of “a more measured transition away from carriers' reliance on intercarrier compensation as a significant revenue source.” The Commission also found, however, that VoIP traffic had been a particular source of intercarrier compensation disputes and litigation. As a result, “carriers may receive some intercarrier compensation payments at something less than the full intercarrier compensation rates charged in the case of traditional telephone service” or, in some cases, no payment at all. Balancing these and additional considerations led the Commission to adopt a middle ground that, prospectively, neither “subject[ed] VoIP traffic to the pre-existing intercarrier compensation regime that applies in the context of traditional telephone service, including full interstate and intrastate access charges,” nor “immediately adopt[ed] a bill-and-keep methodology for VoIP traffic” or a very low rate. Instead, the Commission's approach permitted LECs, starting December 29, 2011, to tariff default intercarrier compensation for both originating and terminating toll VoIP traffic at rates equal to interstate access rates, with default intercarrier compensation for other VoIP traffic at the otherwise-applicable reciprocal compensation rates. The Commission also adopted measures to ensure that its approach to VoIP intercarrier compensation was symmetrical to minimize marketplace distortions. This symmetrical approach seeks to provide all LECs the opportunity to collect intercarrier compensation under the same VoIP intercarrier compensation framework for the functions they (and/or their retail VoIP provider partner) perform in originating and/or terminating VoIP traffic.

29. Frontier and Windstream and certain rural associations filed petitions, seeking, among other things, clarification that originating intrastate toll VoIP traffic was subject to default rates equal to intrastate originating access under the USF/ICC Transformation Order. If the Commission instead concludes that default rates equal to interstate originating access rates applied to all originating toll VoIP traffic under the USF/ICC Transformation Order, those petitioners advocate that the Commission reconsider that decision. In light of both Petitions' focus on VoIP traffic that originates in TDM format, some commenters expressed concern that the resulting approach would undermine the symmetry of the VoIP intercarrier compensation framework adopted in the USF/ICC Transformation Order. Other commenters opposed the Petitions more broadly, arguing that the USF/ICC Transformation Order established default rates equal to interstate originating access for originating intrastate toll VoIP traffic, and that the Commission should not deviate from the policy balance underlying that approach.

30. Discussion. As discussed below, we do not adopt the Frontier-Windstream Petition's and Rural Associations Petition's interpretation of the VoIP intercarrier compensation rules adopted in the USF/ICC Transformation Order. However, arguments and evidence from those parties and supporting commenters, persuade us to modify the VoIP ICC rules on reconsideration in one respect: we permit LECs to tariff default charges equal to intrastate originating access for originating intrastate toll VoIP traffic (including traffic that originates in IP, terminates in IP, or both) at intrastate rates until June 30, 2014. For all interstate toll VoIP traffic, interstate access rates continue to apply consistent with the default rates adopted in the USF/ICC Transformation Order.

31. The record reveals that there has been some uncertainty regarding the default origination charges for intrastate toll VoIP traffic under the framework adopted in the USF/ICC Transformation Order. However, we ultimately are unpersuaded by the Frontier-Windstream Petition's and Rural Associations Petition's rationales for interpreting the USF/ICC Transformation Order to apply default origination charges equal to intrastate— rather than interstate—originating access for intrastate toll VoIP traffic. We disagree with claims that statements in other sections of the USF/ICC Transformation Order discussing, for example, the Commission's general intent to address reductions to originating access in the FNPRM, imply that the Commission took a particular approach to origination charges for VoIP traffic. The USF/ICC Transformation Order adopted a distinct prospective intercarrier compensation framework for VoIP traffic based on its findings specific to that traffic. Contrary to the Petitions' claims, the USF/ICC Transformation Order' s treatment or discussion of originating access charges in other contexts do not constrain the interpretation of permissible origination charges for toll VoIP traffic. In addition, although the USF/ICC Transformation Order cites illustrative examples of the operation of the VoIP intercarrier compensation framework for termination charges, the text and the implementing rules demonstrate that the intercarrier compensation framework for toll VoIP traffic limits both default origination and termination charges to the level of interstate access rates. Further, although the Commission built upon the ABC Plan in adopting a VoIP intercarrier compensation framework, the Commission did not adopt the ABC Plan, and as a result, individual commenters' interpretations of the ABC Plan do not dictate a different interpretation of the USF/ICC Transformation Order.

32. More fundamentally, these arguments reflect a mistaken understanding of key elements of the USF/ICC Transformation Order. Arguments that setting default rates equal to intrastate originating access are necessary to avoid “flash cuts” or “reductions” in intercarrier compensation assume that LECs were receiving intrastate originating access for intrastate toll VoIP traffic under the status quo prior to that Order. Although the marketplace evidence in the record on reconsideration demonstrates the accuracy of that position in many cases, that assumption is not reflected in the USF/ICC Transformation Order itself. Rather, based on the available record evidence, the Commission found as a practical matter that compensation for VoIP traffic was widely subject to dispute and varied outcomes, and that “the record is clear that many providers did not pay the same intercarrier compensation rates for VoIP traffic that would have applied to traditional telephone service traffic.” The Commission did not reach a different conclusion in the case of originating access. Consequently, the USF/ICC Transformation Order itself does not provide a basis for interpreting the requirements of that Order against a baseline assumption that intrastate originating access historically had been received for intrastate toll VoIP traffic.

33. The record on reconsideration, however, indicates that prior to the USF/ICC Transformation Order, here were fewer disputes and instances of non-payment or under-payment of origination charges billed at intrastate originating access rates for intrastate toll VoIP traffic than was the case for terminating charges for such traffic, particularly for calls that originated in TDM format. Consequently, several commenters present evidence that they will experience annual reductions in originating access revenues under the VoIP intercarrier compensation framework adopted in the USF/ICC Transformation Order.

34. This new evidence regarding the status quo prior to the USF/ICC Transformation Order persuades us to reconsider the balancing of policy interests underlying the Order' s approach to VoIP traffic, consistent with Petitioners' request in the alternative to reconsider those rules. In light of this new evidence, we conclude that an appropriate, measured transition for these revenues is somewhat different from the transition that the Commission anticipated based on its findings in the USF/ICC Transformation Order. Consequently, on reconsideration we find it appropriate to permit LECs, prospectively, to tariff a rate equal to their intrastate originating access rates when they originate intrastate toll VoIP traffic, albeit for a finite period of time.

35. In particular, consistent with Frontier's proposal, we amend part 51 of our rules to permit LECs to tariff default rates equal to their intrastate originating access rates when they originate intrastate toll VoIP traffic from the effective date of our the revised rules until June 30, 2014—effective July 1, 2014, LECs will be permitted to tariff default rates for such traffic equal to their interstate originating access rates. This is to be considered a transitional rate. We do not find it appropriate to permit default origination charges equal to intrastate access rates indefinitely, consistent with the Commission's recognized need to “reduce disputes and provide greater certainty to the industry regarding intercarrier compensation revenue streams while also reflecting the Commission's move away from the pre-existing, flawed intercarrier compensation regimes that have applied to traditional telephone service” under the framework adopted in the USF/ICC Transformation Order. We are mindful that some providers were receiving compensation for originating VoIP traffic, however, we consider the transition of origination charges for intrastate toll VoIP traffic in the context of the Commission's overall VoIP intercarrier compensation framework. Under this framework, most providers will receive, either via negotiated agreements or via tariffed charges, additional revenues for previously disputed terminating VoIP calls and will also realize savings associated with reduced litigation and disputes. In light of these benefits, indefinitely permitting origination charges at the level of intrastate access for prospective intrastate toll VoIP traffic is not necessary to ensure a measured transition and is indeed in tension with our overall policy goal of encouraging a migration to all IP networks and moving away from reliance on ICC revenues.

36. Indeed, the USF/ICC Transformation Order makes clear the Commission's goal of promoting migration to IP services. As VoIP providers observe, actions that may benefit some providers through a more measured transition away from reliance on intercarrier compensation also burden other providers that are required to bear those costs. Other providers likewise explain that these costs flow through to their services and, in turn, the services their customers provide. In light of these considerations, we believe that a measured transition with a time limit on the use of intrastate access charges as a default for that time period is necessary to ensure that migration to IP services is adequately promoted. The time limit we adopt falls well within our uniform, national framework for comprehensive intercarrier compensation reform which set forth the overall transition for intercarrier compensation rates established in the USF/ICC Transformation Order. Within this time period, we predict that carriers will have had the opportunity to make significant progress transitioning their business plans away from extensive reliance on intercarrier compensation.

37. As with the national VoIP intercarrier compensation framework adopted in the USF/ICC Transformation Order, the Commission here is specifying rates applicable to LECs' origination of intrastate toll VoIP traffic as an exercise of the same legal authority that enables the Commission to specify transitional rates for comprehensive intercarrier compensation reform under the basic framework of section 251(b)(5). In the USF/ICC Transformation Order, the Commission asserted authority to allow transitional origination charges for toll VoIP traffic, and our action here relies on that authority. In the USF/ICC Transformation Order the Commission noted that “[t]he legal authority that enables us to specify transitional rates for comprehensive intercarrier compensation reform also enables us to adopt our transitional VoIP-PSTN intercarrier compensation framework pending the transition to bill-and-keep.” The Commission also noted that it “has authority to adopt * * * [a] transitional framework for toll VoIP-PSTN traffic based on our rulemaking authority to implement section 251(b)(5),” and that “interpreting our rulemaking authority in this manner is consistent with court decisions recognizing that `avoiding market disruptions pending broader reforms is, of course, a standard and accepted justification for a temporary rule.' ” Our actions here likewise do not alter states' roles or preexisting Commission decisions regarding the treatment of VoIP more generally. In particular, nothing in this Order impacts the holding of the Vonage Order. Other than specifying a new transitional default rate that LECs are permitted to tariff in the context of originating intrastate toll VoIP traffic, we leave the USF/ICC Transformation Order' s transitional national VoIP intercarrier compensation framework completely unaltered.

38. We disagree with commenters who argue that the Commission has not sufficiently justified its legal authority to permit transitional origination charges for toll VoIP traffic consistent with sections 251(b)(5) and 251(g) of the Act. As the Commission explained in the USF/ICC Transformation Order, traffic previously was not subject to compensation under section 251(b)(5) if “such traffic [was] subject to pre-1996 Act obligations regarding `exchange access,' ” and thus grandfathered under section 251(g). The Commission concluded that “[r]egardless of whether particular VoIP services are telecommunications services or information services, there [were] pre-1996 Act obligations regarding LECs' compensation for the provision of exchange access to an IXC or an information service provider”—namely, either intercarrier access charges or, if subject to the ESP exemption, special access or subscriber line charges. Contrary to some claims, it was not necessary for the Commission to resolve which of those exchange access charge frameworks applied in particular circumstances previously—so long as they were exchange access regulations involving the exchange of traffic between a LEC and an interexchange carrier or information service provider, they were subject to grandfathering under section 251(g) until superseded by the Commission. Moreover, we agree with parties arguing that “the grandfathering provision of section 251(g) does not require pre-Act compensation regulations to be frozen in time” but allows the Commission “to `modify LECs' pre-Act `restrictions' or `obligations' pending full implementation of relevant sections of the Act.” Thus, in exercising its authority to adopt a transitional framework for VoIP intercarrier compensation, the Commission was not restricted to adopting precisely the same charges that might have applied previously. As commenters observe, “[t]o find otherwise would remove any ability of the Commission to adopt a reasonable transition away from pre-Act compensation obligations.” Thus, regardless of whether the ESP exemption framework historically applied to VoIP traffic, the Commission had authority to eliminate the potential application of that framework to VoIP traffic and adopt transitional intercarrier compensation rules, including origination charges for toll VoIP traffic, that seek to limit marketplace disruptions pending the ultimate transition to bill-and-keep under section 251(b)(5).

39. We also make clear that the new default rate for originating intrastate toll VoIP traffic applies regardless of whether the VoIP traffic originates in TDM or IP format. The VoIP intercarrier compensation rules adopted in the USF/ICC Transformation Order included a “symmetry” principle that all VoIP traffic will be subject to the same intercarrier compensation requirements, regardless of whether TDM or IP technology was used to originate or terminate the call. The Commission thus “decline[d] to adopt an asymmetric approach that would apply VoIP-specific rates for only IP-originated or only IP-terminated traffic.” Rather, the Commission “adopt[ed] rules making clear that origination and termination charges may be imposed under our transitional [VoIP] intercarrier compensation framework, including when an entity `uses Internet Protocol facilities to transmit such traffic to [or from] the called party's premises.' ”

40. This “VoIP symmetry rule” was incorporated in the codified intercarrier compensation rules for toll VoIP traffic. Section 51.913(a) of the Commission's rules specifies the rate applicable to all “Access Reciprocal Compensation subject to this subpart exchanged between a local exchange carrier and another telecommunications carrier in Time Division Multiplexing (TDM) format that originates and/or terminates in IP format,” without distinguishing among classes of VoIP traffic depending upon whether they originate in TDM or IP. In addition, § 51.913(b) of the rules makes clear that a LEC “shall be entitled to assess and collect the full Access Reciprocal Compensation charges prescribed by this subpart that are set forth in a local exchange carrier's interstate or intrastate tariff for the access services defined in § 51.903” even if the relevant origination or termination functions are performed by the LEC's retail VoIP provider partner—which, of necessity, would be performing these functions in IP, rather than TDM. Likewise, the rules make clear that “functions provided by a LEC as part of transmitting telecommunications between designated points using, in whole or in part, technology other than TDM transmission” count equally as access services for purposes of § 51.903 of the Commission's rules as those performed in TDM.

41. The Petitions focus on the factual scenario of TDM-originated VoIP traffic, and do not request reconsideration of the VoIP symmetry rule nor state that interstate rates should continue to apply to IP-originated VoIP traffic. Precisely because the Petitions did not ask the Commission to reconsider the VoIP symmetry rule, however, they necessarily implicate the rate regulations for all originating intrastate VoIP traffic, because all such traffic would have to be considered for the Petitions to be accommodated within the framework of the VoIP symmetry rule. As commenters observe, the Petitions would be inconsistent with the symmetrical rules adopted in the USF/ICC Transformation Order if interpreted as implicating only TDM-originated VoIP traffic. Indeed, Frontier and Windstream subsequently joined with a number of other stakeholders in advocating that the Commission act on their Petition “by stating that all originating access charges are subject to the same treatment pending further reform.” Consequently, we interpret the Petitions as implicating the rate regulations for all originating intrastate VoIP traffic, consistent with the rules we adopt on reconsideration.

42. Notably, we would not grant the requests for reconsideration of our VoIP intercarrier compensation rules if the symmetry rule were not applicable here. The Commission adopted the symmetry requirement in the USF/ICC Transformation Order to avoid “marketplace distortions that give one category of providers an artificial regulatory advantage in costs and revenues relative to other market participants.” As commenters recognized, reconsidering the rules only for intrastate toll VoIP traffic originated in TDM could lead to the outcome the Commission's symmetry rule sought to avoid, for instance by creating artificial incentives for parties to send traffic using TDM technology simply to increase their revenues, which likewise would provide competitive advantages to such providers relative to providers relying on IP networks. The symmetry rule avoids these outcomes, enabling us to grant reconsideration on this issue.

43. This Second Order on Reconsideration contains no new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13, so no review nor approval from the Office of Management and Budget (OMB) is required.

44. The Regulatory Flexibility Act (RFA) requires that agencies prepare a regulatory flexibility analysis for notice-and-comment rulemaking proceedings, unless the agency certifies that “the rule will not have a significant economic impact on a substantial number of small entities.” The RFA generally defines “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).

45. This Second Order on Reconsideration adopts revisions to 47 CFR parts 51 and 54. We hereby certify that the revision to part 54 will not have a significant economic impact on a substantial number of small entities. Previously, our rules governing Phase I of the Connect America Fund required, among other things, that carriers accepting incremental support deploy only to locations shown as unserved on the National Broadband Map. In this Order, we revise our rules to expand the areas to which such carriers may deploy, by permitting them to also deploy to unserved locations that are shown as served by the carrier itself, a change we make in recognition of the fact that the Map generally shows wireline coverage on a census-block-by-census-block basis, and thus shows an entire census block as served by the incumbent carrier even when there may be many locations in the block that are, in fact, not served. We conclude that this change to our rules will not have a significant impact on a substantial number of small entities. The Commission will send a copy of this Order, including this certification, to the Chief Counsel for Advocacy of the Small Business Administration. In addition, the Order (or a summary thereof) and certification will be published in the Federal Register .

46. The Commission will send a copy of this Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act.

47. As required by the Regulatory Flexibility Act of 1980 (RFA), as amended, Initial Regulatory Flexibility Analyses (IRFAs) were incorporated in the Notice of Proposed Rule Making and Further Notice of Proposed Rulemaking ( USF/ICC Transformation NPRM ), in the Notice of Inquiry and Notice of Proposed Rulemaking ( USF Reform NOI/NPRM ), and in the Notice of Proposed Rulemaking ( Mobility Fund NPRM ) for this proceeding. The Commission sought written public comment on the proposals in the USF/ICC Transformation NPRM, including comment on the IRFA. The Commission only received comments on the USF/ICC Transformation NPRM IRFA. The comments received were discussed in the USF/ICC Transformation Order, and are not discussed further here. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

48. Need for, and Objectives of the Order. In the USF/ICC Transformation Order, the Commission adopted policies to transition outdated universal service and intercarrier compensation (ICC) systems to the Connect America Fund (CAF). In the present order, in addition to revising some rules related to universal service, which revisions we certify will not have a significant economic impact on a substantial number of small entities, we revise the rules adopted in the USF/ICC Transformation Order governing intercarrier compensation for Voice over Internet Protocol (VoIP). In that Order, the Commission permitted LECs, starting December 29, 2011, to tariff default intercarrier compensation rates for both originating and terminating toll VoIP traffic at rates equal to interstate access rates, with default intercarrier compensation for other VoIP traffic at the otherwise-applicable reciprocal compensation rates.

49. In this Second Order on Reconsideration, the Commission reconsidered the transitional intercarrier compensation framework adopted in the USF/ICC Transformation Order for originating VoIP traffic. Specifically, the Commission modified the VoIP ICC rules to permit LECs to tariff default charges equal to intrastate originating access for originating intrastate toll VoIP traffic at intrastate rates until June 30, 2014.

50. Summary of Significant Issues Raised by Public Comments in Response to the IRFA. No comments relating to any of the IRFAs have been filed since the Commission released the USF/ICC Transformation Order. In making the determinations reflected in the Order, we have considered the impact of our actions on small entities.

51. Description and Estimate of the Number of Small Entities to which the Proposed Rules Will Apply. 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 SBA.

52. Small Businesses. Nationwide, there are a total of approximately 27.5 million small businesses, according to the SBA.

53. Wired Telecommunications Carriers. The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees. According to Census Bureau data for 2007, there were 3,188 firms in this category, total, that operated for the entire year. Of this total, 3,144 firms had employment of 999 or fewer employees, and 44 firms had employment of 1,000 employees or more. Thus, under this size standard, the majority of firms can be considered small.

54. Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 1,307 carriers reported that they were incumbent local exchange service providers. Of these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and 301 have more than 1,500 employees. Consequently, the Commission estimates that most providers of local exchange service are small entities that may be affected by the rules and policies proposed in the Order.

55. Incumbent Local Exchange Carriers (incumbent LECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to incumbent local exchange services. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 1,307 carriers reported that they were incumbent local exchange service providers. Of these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and 301 have more than 1,500 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by rules adopted pursuant to the Order.

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

57. Competitive Local Exchange Carriers (competitive LECs), 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, 1,442 carriers reported that they were engaged in the provision of either competitive local exchange services or competitive access provider services. Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees and 186 have more than 1,500 employees. In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees. In addition, 72 carriers have reported that they are Other Local Service Providers. Of the 72, seventy have 1,500 or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities that may be affected by rules adopted pursuant to the Order.

58. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to interexchange services. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services. Of these 359 companies, an estimated 317 have 1,500 or fewer employees and 42 have more than 1,500 employees. Consequently, the Commission estimates that the majority of interexchange service providers are small entities that may be affected by rules adopted pursuant to the Order.

59. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for prepaid calling card providers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 193 carriers have reported that they are engaged in the provision of prepaid calling cards. Of these, an estimated all 193 have 1,500 or fewer employees and none have more than 1,500 employees. Consequently, the Commission estimates that the majority of prepaid calling card providers are small entities that may be affected by rules adopted pursuant to the Order.

60. Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 213 carriers have reported that they are engaged in the provision of local resale services. Of these, an estimated 211 have 1,500 or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by rules adopted pursuant to the Order.

61. Toll Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services. Of these, an estimated 857 have 1,500 or fewer employees and 24 have more than 1,500 employees. Consequently, the Commission estimates that the majority of toll resellers are small entities that may be affected by rules adopted pursuant to the Order.

62. Other Toll Carriers. Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 284 companies reported that their primary telecommunications service activity was the provision of other toll carriage. Of these, an estimated 279 have 1,500 or fewer employees and five have more than 1,500 employees. Consequently, the Commission estimates that most Other Toll Carriers are small entities that may be affected by the rules and policies adopted pursuant to the Order.

63. 800 and 800-Like Service Subscribers. Neither the Commission nor the SBA has developed a small business size standard specifically for 800 and 800-like service (toll free) subscribers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. The most reliable source of information regarding the number of these service subscribers appears to be data the Commission collects on the 800, 888, 877, and 866 numbers in use. According to our data, as of September 2009, the number of 800 numbers assigned was 7,860,000; the number of 888 numbers assigned was 5,588,687; the number of 877 numbers assigned was 4,721,866; and the number of 866 numbers assigned was 7,867,736. We do not have data specifying the number of these subscribers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small businesses under the SBA size standard. Consequently, we estimate that there are 7,860,000 or fewer small entity 800 subscribers; 5,588,687 or fewer small entity 888 subscribers; 4,721,866 or fewer small entity 877 subscribers; and 7,867,736 or fewer small entity 866 subscribers.

64. Wireless Telecommunications Carriers (except Satellite). Since 2007, the SBA has recognized wireless firms within this new, broad, economic census category. Prior to that time, such firms were within the now-superseded categories of Paging and Cellular and Other Wireless Telecommunications. Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees. For this category, census data for 2007 show that there were 1,383 firms that operated for the entire year. Of this total, 1,368 firms had employment of 999 or fewer employees and 15 had employment of 1000 employees or more. Similarly, according to Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) Telephony services. Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees. Consequently, the Commission estimates that approximately half or more of these firms can be considered small. Thus, using available data, we estimate that the majority of wireless firms can be considered small.

65. Broadband Personal Communications Service. The broadband personal communications service (PCS) spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission defined “small entity” for Blocks C and F as an entity that has average gross revenues of $40 million or less in the three previous calendar years. For Block F, an additional classification for “very small business” was added and is defined as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. These standards defining “small entity” in the context of broadband PCS auctions have been approved by the SBA. No small businesses, within the SBA-approved small business size standards bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 small and very small business bidders won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F. In 1999, the Commission re-auctioned 347 C, E, and F Block licenses. There were 48 small business winning bidders. In 2001, the Commission completed the auction of 422 C and F Broadband PCS licenses in Auction 35. Of the 35 winning bidders in this auction, 29 qualified as “small” or “very small” businesses. Subsequent events, concerning Auction 35, including judicial and agency determinations, resulted in a total of 163 C and F Block licenses being available for grant. In 2005, the Commission completed an auction of 188 C block licenses and 21 F block licenses in Auction 58. There were 24 winning bidders for 217 licenses. Of the 24 winning bidders, 16 claimed small business status and won 156 licenses. In 2007, the Commission completed an auction of 33 licenses in the A, C, and F Blocks in Auction 71. Of the 14 winning bidders, six were designated entities. In 2008, the Commission completed an auction of 20 Broadband PCS licenses in the C, D, E and F block licenses in Auction 78.

66. Advanced Wireless Services. In 2008, the Commission conducted the auction of Advanced Wireless Services (“AWS”) licenses. This auction, which as designated as Auction 78, offered 35 licenses in the AWS 1710-1755 MHz and 2110-2155 MHz bands (“AWS-1”). The AWS-1 licenses were licenses for which there were no winning bids in Auction 66. That same year, the Commission completed Auction 78. A bidder with attributed average annual gross revenues that exceeded $15 million and did not exceed $40 million for the preceding three years (“small business”) received a 15 percent discount on its winning bid. A bidder with attributed average annual gross revenues that did not exceed $15 million for the preceding three years (“very small business”) received a 25 percent discount on its winning bid. A bidder that had combined total assets of less than $500 million and combined gross revenues of less than $125 million in each of the last two years qualified for entrepreneur status. Four winning bidders that identified themselves as very small businesses won 17 licenses. Three of the winning bidders that identified themselves as a small business won five licenses. Additionally, one other winning bidder that qualified for entrepreneur status won 2 licenses.

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

68. Paging (Private and Common Carrier). In the Paging Third Report and Order, we developed a small business size standard for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. The SBA has approved these small business size standards. According to Commission data, 291 carriers have reported that they are engaged in Paging or Messaging Service. Of these, an estimated 289 have 1,500 or fewer employees, and two have more than 1,500 employees. Consequently, the Commission estimates that the majority of paging providers are small entities that may be affected by our action. An auction of Metropolitan Economic Area licenses commenced on February 24, 2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985 were sold. Fifty-seven companies claiming small business status won 440 licenses. A subsequent auction of MEA and Economic Area (“EA”) licenses was held in the year 2001. Of the 15,514 licenses auctioned, 5,323 were sold. One hundred thirty-two companies claiming small business status purchased 3,724 licenses. A third auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses in all but three of the 51 MEAs, was held in 2003. Seventy-seven bidders claiming small or very small business status won 2,093 licenses. A fourth auction, consisting of 9,603 lower and upper paging band licenses was held in the year 2010. Twenty-nine bidders claiming small or very small business status won 3,016 licenses..

69. 220 MHz Radio Service—Phase I Licensees. The 220 MHz service has both Phase I and Phase II licenses. Phase I licensing was conducted by lotteries in 1992 and 1993. There are approximately 1,515 such non-nationwide licensees and four nationwide licensees currently authorized to operate in the 220 MHz band. The Commission has not developed a small business size standard for small entities specifically applicable to such incumbent 220 MHz Phase I licensees. To estimate the number of such licensees that are small businesses, we apply the small business size standard under the SBA rules applicable to Wireless Telecommunications Carriers (except Satellite). Under this category, the SBA deems a wireless business to be small if it has 1,500 or fewer employees. The Commission estimates that nearly all such licensees are small businesses under the SBA's small business size standard that may be affected by rules adopted pursuant to the Order.

70. 220 MHz Radio Service—Phase II Licensees. The 220 MHz service has both Phase I and Phase II licenses. The Phase II 220 MHz service is subject to spectrum auctions. In the 220 MHz Third Report and Order, we adopted a small business size standard for “small” and “very small” businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. This small business size standard indicates that a “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. A “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that do not exceed $3 million for the preceding three years. The SBA has approved these small business size standards. Auctions of Phase II licenses commenced on September 15, 1998, and closed on October 22, 1998. In the first auction, 908 licenses were auctioned in three different-sized geographic areas: three nationwide licenses, 30 Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693 were sold. Thirty-nine small businesses won licenses in the first 220 MHz auction. The second auction included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies claiming small business status won 158 licenses.

71. Specialized Mobile Radio. The Commission awards small business bidding credits in auctions for Specialized Mobile Radio (“SMR”) geographic area licenses in the 800 MHz and 900 MHz bands to entities that had revenues of no more than $15 million in each of the three previous calendar years. The Commission awards very small business bidding credits to entities that had revenues of no more than $3 million in each of the three previous calendar years. The SBA has approved these small business size standards for the 800 MHz and 900 MHz SMR Services. The Commission has held auctions for geographic area licenses in the 800 MHz and 900 MHz bands. The 900 MHz SMR auction was completed in 1996. Sixty bidders claiming that they qualified as small businesses under the $15 million size standard won 263 geographic area licenses in the 900 MHz SMR band. The 800 MHz SMR auction for the upper 200 channels was conducted in 1997. Ten bidders claiming that they qualified as small businesses under the $15 million size standard won 38 geographic area licenses for the upper 200 channels in the 800 MHz SMR band. A second auction for the 800 MHz band was conducted in 2002 and included 23 BEA licenses. One bidder claiming small business status won five licenses.

72. The auction of the 1,053 800 MHz SMR geographic area licenses for the General Category channels was conducted in 2000. Eleven bidders won 108 geographic area licenses for the General Category channels in the 800 MHz SMR band qualified as small businesses under the $15 million size standard. In an auction completed in 2000, a total of 2,800 Economic Area licenses in the lower 80 channels of the 800 MHz SMR service were awarded. Of the 22 winning bidders, 19 claimed small business status and won 129 licenses. Thus, combining all three auctions, 40 winning bidders for geographic licenses in the 800 MHz SMR band claimed status as small business.

73. In addition, there are numerous incumbent site-by-site SMR licensees and licensees with extended implementation authorizations in the 800 and 900 MHz bands. We do not know how many firms provide 800 MHz or 900 MHz geographic area SMR pursuant to extended implementation authorizations, nor how many of these providers have annual revenues of no more than $15 million. One firm has over $15 million in revenues. In addition, we do not know how many of these firms have 1,500 or fewer employees. We assume, for purposes of this analysis, that all of the remaining existing extended implementation authorizations are held by small entities, as that small business size standard is approved by the SBA.

74. Broadband Radio Service and Educational Broadband Service. Broadband Radio Service systems, previously referred to as Multipoint Distribution Service (“MDS”) and Multichannel Multipoint Distribution Service (“MMDS”) systems, and “wireless cable,” transmit video programming to subscribers and provide two-way high speed data operations using the microwave frequencies of the Broadband Radio Service (“BRS”) and Educational Broadband Service (“EBS”) (previously referred to as the Instructional Television Fixed Service (“ITFS”)). In connection with the 1996 BRS auction, the Commission established a small business size standard as an entity that had annual average gross revenues of no more than $40 million in the previous three calendar years. The BRS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (“BTAs”). Of the 67 auction winners, 61 met the definition of a small business. BRS also includes licensees of stations authorized prior to the auction. At this time, we estimate that of the 61 small business BRS auction winners, 48 remain small business licensees. In addition to the 48 small businesses that hold BTA authorizations, there are approximately 392 incumbent BRS licensees that are considered small entities. After adding the number of small business auction licensees to the number of incumbent licensees not already counted, we find that there are currently approximately 440 BRS licensees that are defined as small businesses under either the SBA or the Commission's rules. The Commission has adopted three levels of bidding credits for BRS: (i) A bidder with attributed average annual gross revenues that exceed $15 million and do not exceed $40 million for the preceding three years (small business) is eligible to receive a 15 percent discount on its winning bid; (ii) a bidder with attributed average annual gross revenues that exceed $3 million and do not exceed $15 million for the preceding three years (very small business) is eligible to receive a 25 percent discount on its winning bid; and (iii) a bidder with attributed average annual gross revenues that do not exceed $3 million for the preceding three years (entrepreneur) is eligible to receive a 35 percent discount on its winning bid. In 2009, the Commission conducted Auction 86, which offered 78 BRS licenses. Auction 86 concluded with ten bidders winning 61 licenses. Of the ten, two bidders claimed small business status and won 4 licenses; one bidder claimed very small business status and won three licenses; and two bidders claimed entrepreneur status and won six licenses.

75. In addition, the SBA's Cable Television Distribution Services small business size standard is applicable to EBS. There are presently 2,032 EBS licensees. All but 100 of these licenses are held by educational institutions. Educational institutions are included in this analysis as small entities. Thus, we estimate that at least 1,932 licensees are small businesses. Since 2007, Cable Television Distribution Services have been defined within the broad economic census category of Wired Telecommunications Carriers; that category is defined 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.” The SBA defines a small business size standard for this category as any such firms having 1,500 or fewer employees. The SBA has developed a small business size standard for this category, which is: all such firms having 1,500 or fewer employees. According to Census Bureau data for 2007, there were a total of 955 firms in this previous category that operated for the entire year. Of this total, 939 firms had employment of 999 or fewer employees, and 16 firms had employment of 1000 employees or more. Thus, under this size standard, the majority of firms can be considered small and may be affected by rules adopted pursuant to the Order.

76. Lower 700 MHz Band Licenses. The Commission previously adopted criteria for defining three groups of small businesses for purposes of determining their eligibility for special provisions such as bidding credits. The Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years. A “very small business” is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. Additionally, the Lower 700 MHz Band had a third category of small business status for Metropolitan/Rural Service Area (“MSA/RSA”) licenses, identified as “entrepreneur” and defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. The SBA approved these small size standards. The Commission conducted an auction in 2002 of 740 Lower 700 MHz Band licenses (one license in each of the 734 MSAs/RSAs and one license in each of the six Economic Area Groupings (EAGs)). Of the 740 licenses available for auction, 484 licenses were sold to 102 winning bidders. Seventy-two of the winning bidders claimed small business, very small business or entrepreneur status and won a total of 329 licenses. The Commission conducted a second Lower 700 MHz Band auction in 2003 that included 256 licenses: 5 EAG licenses and 476 Cellular Market Area licenses. Seventeen winning bidders claimed small or very small business status and won 60 licenses, and nine winning bidders claimed entrepreneur status and won 154 licenses. In 2005, the Commission completed an auction of 5 licenses in the Lower 700 MHz Band, designated Auction 60. There were three winning bidders for five licenses. All three winning bidders claimed small business status.

77. In 2007, the Commission reexamined its rules governing the 700 MHz band in the 700 MHz Second Report and Order. The 700 MHz Second Report and Order revised the band plan for the commercial (including Guard Band) and public safety spectrum, adopted services rules, including stringent build-out requirements, an open platform requirement on the C Block, and a requirement on the D Block licensee to construct and operate a nationwide, interoperable wireless broadband network for public safety users. An auction of A, B and E block licenses in the Lower 700 MHz band was held in 2008. Twenty winning bidders claimed small business status (those with attributable average annual gross revenues that exceed $15 million and do not exceed $40 million for the preceding three years). Thirty three winning bidders claimed very small business status (those with attributable average annual gross revenues that do not exceed $15 million for the preceding three years). In 2011, the Commission conducted Auction 92, which offered 16 Lower 700 MHz band licenses that had been made available in Auction 73 but either remained unsold or were licenses on which a winning bidder defaulted. Two of the seven winning bidders in Auction 92 claimed very small business status, winning a total of four licenses.

78. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and Order, the Commission revised its rules regarding Upper 700 MHz band licenses. In 2008, the Commission conducted Auction 73 in which C and D block licenses in the Upper 700 MHz band were available. Three winning bidders claimed very small business status (those with attributable average annual gross revenues that do not exceed $15 million for the preceding three years).

79. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order, we adopted a small business size standard for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. An auction of 52 Major Economic Area (MEA) licenses commenced on September 6, 2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 96 licenses were sold to nine bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of 700 MHz Guard Band licenses commenced on February 13, 2001 and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses.

80. Cellular Radiotelephone Service. Auction 77 was held to resolve one group of mutually exclusive applications for Cellular Radiotelephone Service licenses for unserved areas in New Mexico. Bidding credits for designated entities were not available in Auction 77. In 2008, the Commission completed the closed auction of one unserved service area in the Cellular Radiotelephone Service, designated as Auction 77. Auction 77 concluded with one provisionally winning bid for the unserved area totaling $25,002.

81. Private Land Mobile Radio (“PLMR”). PLMR systems serve an essential role in a range of industrial, business, land transportation, and public safety activities. These radios are used by companies of all sizes operating in all U.S. business categories, and are often used in support of the licensee's primary (non-telecommunications) business operations. For the purpose of determining whether a licensee of a PLMR system is a small business as defined by the SBA, we use the broad census category, Wireless Telecommunications Carriers (except Satellite). This definition provides that a small entity is any such entity employing no more than 1,500 persons. The Commission does not require PLMR licensees to disclose information about number of employees, so the Commission does not have information that could be used to determine how many PLMR licensees constitute small entities under this definition. We note that PLMR licensees generally use the licensed facilities in support of other business activities, and therefore, it would also be helpful to assess PLMR licensees under the standards applied to the particular industry subsector to which the licensee belongs.

82. As of March 2010, there were 424,162 PLMR licensees operating 921,909 transmitters in the PLMR bands below 512 MHz. We note that any entity engaged in a commercial activity is eligible to hold a PLMR license, and that any revised rules in this context could therefore potentially impact small entities covering a great variety of industries.

83. Rural Radiotelephone Service. The Commission has not adopted a size standard for small businesses specific to the Rural Radiotelephone Service. A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio System (“BETRS”). In the present context, we will use the SBA's small business size standard applicable to Wireless Telecommunications Carriers (except Satellite), i.e., an entity employing no more than 1,500 persons. There are approximately 1,000 licensees in the Rural Radiotelephone Service, and the Commission estimates that there are 1,000 or fewer small entity licensees in the Rural Radiotelephone Service that may be affected by the rules and policies proposed herein.

84. Air-Ground Radiotelephone Service. The Commission has not adopted a small business size standard specific to the Air-Ground Radiotelephone Service. We will use SBA's small business size standard applicable to Wireless Telecommunications Carriers (except Satellite), i.e., an entity employing no more than 1,500 persons. There are approximately 100 licensees in the Air-Ground Radiotelephone Service, and we estimate that almost all of them qualify as small under the SBA small business size standard and may be affected by rules adopted pursuant to the Order.

85. Aviation and Marine Radio Services. Small businesses in the aviation and marine radio services use a very high frequency (VHF) marine or aircraft radio and, as appropriate, an emergency position-indicating radio beacon (and/or radar) or an emergency locator transmitter. The Commission has not developed a small business size standard specifically applicable to these small businesses. For purposes of this analysis, the Commission uses the SBA small business size standard for the category Wireless Telecommunications Carriers (except Satellite), which is 1,500 or fewer employees. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Most applicants for recreational licenses are individuals. Approximately 581,000 ship station licensees and 131,000 aircraft station licensees operate domestically and are not subject to the radio carriage requirements of any statute or treaty. For purposes of our evaluations in this analysis, we estimate that there are up to approximately 712,000 licensees that are small businesses (or individuals) under the SBA standard. In addition, between December 3, 1998 and December 14, 1998, the Commission held an auction of 42 VHF Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz (coast transmit) bands. For purposes of the auction, the Commission defined a “small” business as an entity that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not to exceed $15 million dollars. In addition, a “very small” business is one that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not to exceed $3 million dollars. There are approximately 10,672 licensees in the Marine Coast Service, and the Commission estimates that almost all of them qualify as “small” businesses under the above special small business size standards and may be affected by rules adopted pursuant to the Order.

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

87. Offshore Radiotelephone Service. This service operates on several UHF television broadcast channels that are not used for television broadcasting in the coastal areas of states bordering the Gulf of Mexico. There are presently approximately 55 licensees in this service. The Commission is unable to estimate at this time the number of licensees that would qualify as small under the SBA's small business size standard for the category of Wireless Telecommunications Carriers (except Satellite). Under that SBA small business size standard, a business is small if it has 1,500 or fewer employees. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus, under this category and the associated small business size standard, the majority of firms can be considered small.

88. 39 GHz Service. The Commission created a special small business size standard for 39 GHz licenses—an entity that has average gross revenues of $40 million or less in the three previous calendar years. An additional size standard for “very small business” is: an entity that, together with affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. The SBA has approved these small business size standards. The auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The 18 bidders who claimed small business status won 849 licenses. Consequently, the Commission estimates that 18 or fewer 39 GHz licensees are small entities that may be affected by rules adopted pursuant to the Order.

89. Local Multipoint Distribution Service. Local Multipoint Distribution Service (“LMDS”) is a fixed broadband point-to-multipoint microwave service that provides for two-way video telecommunications. The auction of the 986 LMDS licenses began and closed in 1998. The Commission established a small business size standard for LMDS licenses as an entity that has average gross revenues of less than $40 million in the three previous calendar years. An additional small business size standard for “very small business” was added as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. The SBA has approved these small business size standards in the context of LMDS auctions. There were 93 winning bidders that qualified as small entities in the LMDS auctions. A total of 93 small and very small business bidders won approximately 277 A Block licenses and 387 B Block licenses. In 1999, the Commission re-auctioned 161 licenses; there were 32 small and very small businesses winning that won 119 licenses.

90. 218-219 MHz Service. The first auction of 218-219 MHz spectrum resulted in 170 entities winning licenses for 594 Metropolitan Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by entities qualifying as a small business. For that auction, the small business size standard was an entity that, together with its affiliates, has no more than a $6 million net worth and, after federal income taxes (excluding any carry over losses), has no more than $2 million in annual profits each year for the previous two years. In the 218-219 MHz Report and Order and Memorandum Opinion and Order, we established a small business size standard for a “small business” as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and their affiliates, has average annual gross revenues not to exceed $15 million for the preceding three years. A “very small business” is defined as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and its affiliates, has average annual gross revenues not to exceed $3 million for the preceding three years. These size standards will be used in future auctions of 218-219 MHz spectrum.

91. 2.3 GHz Wireless Communications Services. This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (“WCS”) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these definitions. The Commission auctioned geographic area licenses in the WCS service. In the auction, which was conducted in 1997, there were seven bidders that won 31 licenses that qualified as very small business entities, and one bidder that won one license that qualified as a small business entity.

92. 1670-1675 MHz Band. An auction for one license in the 1670-1675 MHz band was conducted in 2003. The Commission defined a “small business” as an entity with attributable average annual gross revenues of not more than $40 million for the preceding three years and thus would be eligible for a 15 percent discount on its winning bid for the 1670-1675 MHz band license. Further, the Commission defined a “very small business” as an entity with attributable average annual gross revenues of not more than $15 million for the preceding three years and thus would be eligible to receive a 25 percent discount on its winning bid for the 1670-1675 MHz band license. One license was awarded. The winning bidder was not a small entity.

93. 3650-3700 MHz band. In March 2005, the Commission released a Report and Order and Memorandum Opinion and Order that provides for nationwide, non-exclusive licensing of terrestrial operations, utilizing contention-based technologies, in the 3650 MHz band ( i.e., 3650-3700 MHz). As of April 2010, more than 1270 licenses have been granted and more than 7433 sites have been registered. The Commission has not developed a definition of small entities applicable to 3650-3700 MHz band nationwide, non-exclusive licensees. However, we estimate that the majority of these licensees are Internet Access Service Providers (ISPs) and that most of those licensees are small businesses.

94. 24 GHz—Incumbent Licensees. This analysis may affect incumbent licensees who were relocated to the 24 GHz band from the 18 GHz band, and applicants who wish to provide services in the 24 GHz band. For this service, the Commission uses the SBA small business size standard for the category “Wireless Telecommunications Carriers (except satellite),” which is 1,500 or fewer employees. To gauge small business prevalence for these cable services we must, however, use the most current census data. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small. The Commission notes that the Census' use of the classifications “firms” does not track the number of “licenses”. The Commission believes that there are only two licensees in the 24 GHz band that were relocated from the 18 GHz band, Teligent and TRW, Inc. It is our understanding that Teligent and its related companies have less than 1,500 employees, though this may change in the future. TRW is not a small entity. Thus, only one incumbent licensee in the 24 GHz band is a small business entity.

95. 24 GHz—Future Licensees. With respect to new applicants in the 24 GHz band, the size standard for “small business” is an entity that, together with controlling interests and affiliates, has average annual gross revenues for the three preceding years not in excess of $15 million. “Very small business” in the 24 GHz band is an entity that, together with controlling interests and affiliates, has average gross revenues not exceeding $3 million for the preceding three years. The SBA has approved these small business size standards. These size standards will apply to a future 24 GHz license auction, if held.

96. Satellite Telecommunications. Since 2007, the SBA has recognized satellite firms within this revised category, with a small business size standard of $15 million. The most current Census Bureau data are from the economic census of 2007, and we will use those figures to gauge the prevalence of small businesses in this category. Those size standards are for the two census categories of “Satellite Telecommunications” and “Other Telecommunications.” Under the “Satellite Telecommunications” category, a business is considered small if it had $15 million or less in average annual receipts. Under the “Other Telecommunications” category, a business is considered small if it had $25 million or less in average annual receipts.

97. The first category of Satellite Telecommunications “comprises establishments primarily engaged in providing point-to-point telecommunications services to other establishments in the telecommunications and broadcasting industries by forwarding and receiving communications signals via a system of satellites or reselling satellite telecommunications.” For this category, Census Bureau data for 2007 show that there were a total of 512 firms that operated for the entire year. Of this total, 464 firms had annual receipts of under $10 million, and 18 firms had receipts of $10 million to $24,999,999. Consequently, we estimate that the majority of Satellite Telecommunications firms are small entities that might be affected by rules adopted pursuant to the Order.

98. The second category of Other Telecommunications “primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing Internet services or voice over Internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry.” For this category, Census Bureau data for 2007 show that there were a total of 2,383 firms that operated for the entire year. Of this total, 2,346 firms had annual receipts of under $25 million. Consequently, we estimate that the majority of Other Telecommunications firms are small entities that might be affected by our action.

99. Cable and Other Program Distribution. Since 2007, these services have been defined within the broad economic census category of Wired Telecommunications Carriers; that category is defined 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.” The SBA has developed a small business size standard for this category, which is: all such firms having 1,500 or fewer employees. According to Census Bureau data for 2007, there were a total of 955 firms in this previous category that operated for the entire year. Of this total, 939 firms had employment of 999 or fewer employees, and 16 firms had employment of 1000 employees or more. Thus, under this size standard, the majority of firms can be considered small and may be affected by rules adopted pursuant to the Order.

100. Cable Companies and Systems. The Commission has 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. Industry data indicate that, of 1,076 cable operators nationwide, all but eleven are small under this size 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, of 7,208 systems nationwide, 6,139 systems have under 10,000 subscribers, and an additional 379 systems have 10,000-19,999 subscribers. Thus, under this second size standard, most cable systems are small and may be affected by rules adopted pursuant to the Order.

101. Cable System Operators. The Act also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” The Commission has determined that an operator serving fewer than 677,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. Industry data indicate that, of 1,076 cable operators nationwide, all but ten are small under this size standard. 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, and therefore we are unable to estimate more accurately the number of cable system operators that would qualify as small under this size standard.

102. Open Video Services. The open video system (“OVS”) framework was established in 1996, and is one of four statutorily recognized options for the provision of video programming services by local exchange carriers. 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 small business size standard covering cable services, which is “Wired Telecommunications Carriers.” The SBA has developed a small business size standard for this category, which is: all such firms having 1,500 or fewer employees. According to Census Bureau data for 2007, there were a total of 955 firms in this previous category that operated for the entire year. Of this total, 939 firms had employment of 999 or fewer employees, and 16 firms had employment of 1000 employees or more. Thus, under this second size standard, most cable systems are small and may be affected by rules adopted pursuant to the Order. In addition, we note that the Commission has certified some OVS operators, with some now providing service. Broadband service providers (“BSPs”) are currently the only significant holders of OVS certifications or local OVS franchises. The Commission does not have financial or employment information regarding the entities authorized to provide OVS, some of which may not yet be operational. Thus, again, at least some of the OVS operators may qualify as small entities.

103. Internet Service Providers. Since 2007, these services have been defined within the broad economic census category of Wired Telecommunications Carriers; that category is defined 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.” The SBA has developed a small business size standard for this category, which is: All such firms having 1,500 or fewer employees. According to Census Bureau data for 2007, there were 3,188 firms in this category, total, that operated for the entire year. Of this total, 3144 firms had employment of 999 or fewer employees, and 44 firms had employment of 1000 employees or more. Thus, under this size standard, the majority of firms can be considered small. In addition, according to Census Bureau data for 2007, there were a total of 396 firms in the category Internet Service Providers (broadband) that operated for the entire year. Of this total, 394 firms had employment of 999 or fewer employees, and two firms had employment of 1000 employees or more. Consequently, we estimate that the majority of these firms are small entities that may be affected by rules adopted pursuant to the Order.

104. Internet Publishing and Broadcasting and Web Search Portals. Our action may pertain to interconnected VoIP services, which could be provided by entities that provide other services such as email, online gaming, web browsing, video conferencing, instant messaging, and other, similar IP-enabled services. The Commission has not adopted a size standard for entities that create or provide these types of services or applications. However, the Census Bureau has identified firms that “primarily engaged in (1) publishing and/or broadcasting content on the Internet exclusively or (2) operating Web sites that use a search engine to generate and maintain extensive databases of Internet addresses and content in an easily searchable format (and known as Web search portals).” The SBA has developed a small business size standard for this category, which is: All such firms having 500 or fewer employees. According to Census Bureau data for 2007, there were 2,705 firms in this category that operated for the entire year. Of this total, 2,682 firms had employment of 499 or fewer employees, and 23 firms had employment of 500 employees or more. Consequently, we estimate that the majority of these firms are small entities that may be affected by rules adopted pursuant to the Order.

105. Data Processing, Hosting, and Related Services. Entities in this category “primarily * * * provid[e] infrastructure for hosting or data processing services.” The SBA has developed a small business size standard for this category; that size standard is $25 million or less in average annual receipts. According to Census Bureau data for 2007, there were 8,060 firms in this category that operated for the entire year. Of these, 7,744 had annual receipts of under $24,999,999. Consequently, we estimate that the majority of these firms are small entities that may be affected by rules adopted pursuant to the Order.

106. All Other Information Services. The Census Bureau defines this industry as including “establishments primarily engaged in providing other information services (except news syndicates, libraries, archives, Internet publishing and broadcasting, and Web search portals).” Our action pertains to interconnected VoIP services, which could be provided by entities that provide other services such as email, online gaming, web browsing, video conferencing, instant messaging, and other, similar IP-enabled services. The SBA has developed a small business size standard for this category; that size standard is $7.0 million or less in average annual receipts. According to Census Bureau data for 2007, there were 367 firms in this category that operated for the entire year. Of these, 334 had annual receipts of under $5.0 million, and an additional 11 firms had receipts of between $5 million and $9,999,999. Consequently, we estimate that the majority of these firms are small entities that may be affected by our action.

107. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements. Under the revised VoIP pricing rules we adopt, carriers may tariff default intercarrier compensation charges for intrastate originating toll VoIP-PSTN traffic in the absence of an agreement for different intercarrier compensation. Service providers may need to revise their interstate and intrastate tariffs to account for these changes.

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

109. We did not identify any feasible alternatives that would have lessened the economic impact on small entities. In the absence of an agreement, there is no other way than through a tariff filing to effectuate the new default rates where increased rates may be allowed.

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

111. Accordingly, it is ordered, pursuant to the authority contained in sections 1, 2, 4(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403 of the Communications Act of 1934, as amended, and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151, 152, 154(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, 1302, and §§ 1.1 and 1.429 of the Commission's rules, 47 CFR 1.1 and 1.429, that this Second Order on Reconsideration is adopted.

112. It is further ordered that the Petition for Reconsideration of the United States Telecom Association is denied to the extent provided herein.

113. It is further ordered that the Petition for Reconsideration and/or Clarification of Frontier Communications Corp. and Windstream Communications, Inc., is granted to the extent provided herein and denied to the extent provided herein.

114. It is further ordered that the Petition for Reconsideration and Clarification of the National Exchange Carrier Association, Inc., Organization for the Promotion and Advancement of Small Telecommunications Companies and Western Telecommunications Alliance, is granted to the extent provided herein.

115. It is further ordered that the Petition for Reconsideration of the Independent Telephone & Telecommunications Alliance is granted to the extent provided herein and denied to the extent provided herein.

116. It is further ordered that part 51 of the Commission's rules, 47 CFR part 51, is amended, and such rule amendments shall be effective 45 days after the date of publication of the rule amendments in the Federal Register .

117. It is further ordered that Part 54 of the Commission's rules, 47 CFR part 54, is amended, and such rule amendments shall be effective 30 days after the date of publication of the rule amendments in the Federal Register .

For the reasons discussed in the Second Order on Reconsideration, the Federal Communications Commission amends 47 CFR parts 51 and 54 as follows:

DFARS Case 2012-D032 was published in the Federal Register as an interim rule on May 22, 2012 (77 FR 30359), requesting public comments be submitted on or before July 23, 2012. The interim rule amends DFARS part 252 to implement the United States-Colombia Trade Promotion Agreement Implementation Act (Pub. L. 112-42) (19 U.S.C. 3805 note) by adding Colombia to the definition of “Free Trade Agreement country” in multiple locations in the DFARS. This document makes editorial changes to the interim rule. The date for receipt of comments in response to the interim rule is unchanged by this amendment.

Therefore, 48 CFR part 252 is amended as follows:

Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361 et seq. ) direct the Secretary of Commerce to allow, upon request, the incidental, but not intentional, taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region if certain findings are made and either regulations are issued or, if the taking is limited to harassment, a notice of a proposed authorization is provided to the public for review.

Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth. NMFS has defined `negligible impact' in 50 CFR 216.103 as “* * * an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.”

Except with respect to certain activities not pertinent here, the MMPA defines `harassment' as: “any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [“Level A harassment”]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [“Level B harassment”].”

On April 28, 2011, NMFS received a complete application from MBNMS requesting authorization for take of two species of marine mammals incidental to coastal fireworks displays conducted at MBNMS under authorizations issued by MBNMS. NMFS first issued an incidental harassment authorization (IHA) under section 101(a)(5)(D) of the MMPA to MBNMS on July 4, 2005 (70 FR 39235; July 7, 2005), and subsequently issued 5-year regulations governing the annual issuance of Letters of Authorization (LOAs) under section 101(a)(5)(A) of the MMPA (71 FR 40928; July 19, 2006). Upon expiration of those regulations, NMFS issued MBNMS an IHA (76 FR 29196; May 20, 2011), which expires on July 3, 2012. During the effective period of this final rule (July 4, 2012 until July 3, 2017), MBNMS may authorize as many as 20 fireworks displays in designated areas per year and, as a result, marine mammals will be exposed to elevated levels of sound as well as increased human activity associated with those displays. Because the specified activities have the potential to take marine mammals present within the action area, MBNMS may be authorized to take, by Level B harassment only, California sea lions ( Zalophus californianus ) and harbor seals ( Phoca vitulina ).

The MBNMS adjoins 276 mi (444 km), or approximately 25 percent, of the central California coastline, and encompasses ocean waters from mean high tide to an average of 25 mi (40 km) offshore between Rocky Point in Marin County and Cambria in San Luis Obispo County. Fireworks displays have been conducted over current MBNMS waters for many years as part of national and community celebrations (e.g., Independence Day, municipal anniversaries), and to foster public use and enjoyment of the marine environment. In central California, marine venues are the preferred setting for fireworks in order to optimize public access and avoid the fire hazard associated with terrestrial display sites. Many fireworks displays occur at the height of the dry season in central California, when area vegetation is particularly prone to ignition from sparks or embers.

In 1992, the MBNMS was the first national marine sanctuary (NMS) to be designated along urban shorelines and therefore has addressed many regulatory issues previously not encountered by the NMS program. Authorization of professional fireworks displays has required a steady refinement of policies and procedures related to this activity. Fireworks displays, and the attendant increase in human activity, are known to result in the behavioral disturbance of pinnipeds, typically in the form of temporary abandonment of haul-outs. As a result, pinnipeds hauled out in the vicinity of authorized fireworks displays may exhibit behavioral responses that indicate incidental take by Level B harassment under the MMPA. Numbers of California sea lions and harbor seals, the species that may be subject to harassment, have been recorded extensively at four regions where fireworks displays are authorized in MBNMS. Based on these data and MBNMS's estimated maximum number of fireworks displays, MBNMS may be authorized to incidentally harass up to 4,219 California sea lions and 230 harbor seals annually over the 5-year time span of this final rule, from July 4, 2012, to July 3, 2017.

Since 1993, the MBNMS, a component of NOAA's Office of National Marine Sanctuaries, has processed requests for the professional display of fireworks that affect MBNMS. The MBNMS has determined that debris fallout (i.e., spent pyrotechnic materials) from fireworks events may constitute a discharge into the sanctuary and thus violate sanctuary regulations, unless an authorization is issued by the superintendent. Therefore, sponsors of fireworks displays conducted in the MBNMS are required to obtain sanctuary authorization prior to conducting such displays (see 15 CFR 922.132).

Professional pyrotechnic devices used in fireworks displays can be grouped into three general categories: Aerial shells (paper and cardboard spheres or cylinders ranging from 2-12 in (5-30 cm) diameter and filled with incendiary materials), low-level comet and multi-shot devices similar to over-the-counter fireworks (e.g., roman candles), and ground-mounted set piece displays that are mostly static in nature. Fireworks displays were described in detail in the Federal Register notice announcing the proposed rule (77 FR 19976; April 3, 2012); please see that document for more information.

The MBNMS issued 91 authorizations for professional fireworks displays from 1993-2011. However, the MBNMS staff projects that as many as twenty coastal displays per year may be conducted in, or adjacent to, MBNMS boundaries in the future. Thus, the number of displays will be limited to not more than twenty events per year in four specific areas along 276 mi (444 km) of coastline. Fireworks displays will not exceed 30 minutes (with the exception of up to two displays per year, each not to exceed 1 hour) in duration and will occur with an average frequency of less than or equal to once every 2 months within each of the four prescribed display areas. NMFS believes—and extensive monitoring data indicates—that incidental take resulting from fireworks displays will be, at most, the short-term flushing and evacuation of non-breeding haul-out sites by California sea lions and harbor seals.

A more detailed description of the fireworks displays authorized by MBNMS may be found in MBNMS' application, in MBNMS' Assessment of Pyrotechnic Displays and Impacts within the MBNMS 1993-2001 (2001), or in the report of Marine Mammal Acoustic and Behavioral Monitoring for the MBNMS Fireworks Display, 4 July 2007 (2007), which are available at: http://www.nmfs.noaa.gov/pr/permits/incidental.htm.

The Monterey Bay area is located in the Oregonian province subdivision of the Eastern Pacific Boreal Region. The six types of habitats found in the bay area are: (1) Submarine canyon habitat, (2) nearshore sublittoral habitat, (3) rocky intertidal habitat, (4) sandy beach intertidal habitat, (5) kelp forest habitat, and (6) estuarine/slough habitat. Monterey Bay supports a wide array of temperate cold-water species with occasional influxes of warm-water species, and this species diversity is directly related to the diversity of habitats.

Pyrotechnic displays within the sanctuary are conducted from a variety of coastal launch sites (e.g., beaches, bluff tops, piers, offshore barges, golf courses). Authorized fireworks displays will be confined to only four general prescribed areas (with seven total sub-sites) within the sanctuary, while displays along the remaining 95 percent of sanctuary coastal waters will be prohibited. These sites were approved for fireworks events based on their proximity to urban areas and pre-existing high human use patterns, seasonal considerations such as the abundance and distribution of marine wildlife, and the acclimation of wildlife to human activities and elevated ambient noise levels in the area.

The four conditional display areas are located, from north to south, at Half Moon Bay, the Santa Cruz/Soquel area, the northeastern Monterey Peninsula, and Cambria (Santa Rosa Creek) (see Maps A-J in MBNMS' application). The number of displays will be limited to not more than 20 total events per year within these four specific areas combined, along the whole 276 mi (444 km) of coastline. The display areas were described in detail in the Federal Register document announcing the proposed rule (77 FR 19976; April 3, 2012); please see that document for more information.

NMFS published the proposed rule in the Federal Register on April 3, 2012 (77 FR 19976). During the 30-day comment period, NMFS received a letter from the Marine Mammal Commission (MMC). The MMC recommended that NMFS issue the final rule but condition it to require the MBNMS to conduct monitoring for at least 30 minutes on the evening of each fireworks display and the morning after each display. The MMC believes that monitoring (1) is essential to estimating the number of actual takes and to document any injuries or deaths and (2) should occur as close to the fireworks detonation time as possible. The proposed rule did not specify a minimum time for pre- or post-event monitoring. NMFS concurs with the recommendation and will stipulate that pre-event monitoring shall take place on the day prior to the scheduled display for as long as is required (but for no less than 30 minutes) to record the presence of marine mammals in the vicinity of the display, and that post-event monitoring for dead or injured marine mammals shall occur the morning following the display for as long as is required (but for no less than 30 minutes) to investigate the vicinity of the display. No other public comments were received. All measures proposed in the initial Federal Register document are included within the authorization and NMFS has determined that they will effect the least practicable impact on the species or stocks and their habitats.

There are 26 known species of marine mammals within the Monterey Bay area. However, only six of these species are likely to be present in the acute impact area (the area where sound, light, and debris effects may have direct impacts on marine organisms and habitats) during a fireworks display. These species include the California sea lion, harbor seal, southern sea otter ( Enhydra lutris ), bottlenose dolphin ( Tursiops truncatus ), harbor porpoise ( Phocoena phocoena ), and gray whale. The northern elephant seal is rarely seen in the area.

Though the three aforementioned cetaceans are known to frequent nearshore areas within the sanctuary, they have never been reported in the vicinity of a fireworks display, nor have there been any reports to the MBNMS of stranding events or of injured/dead animals discovered after any display. Because sound attenuates rapidly across the air-water interface, these animals would likely not encounter the effects of fireworks except when surfacing for air. NMFS does not anticipate any take of cetaceans and they are not addressed further in this document.

Past sanctuary observations have not detected any disturbance to sea otters as a result of the fireworks displays; however, past observations have not included specific surveys for this species. Sea otters do frequent all general display areas. Sea otters and other species may temporarily depart the area prior to the beginning of the fireworks display due to increased human activities. Some sea otters in Monterey harbor have become well-acclimated to very intense human activity, often continuing to feed undisturbed as boats pass simultaneously on either side and within 20 ft (6 m) of the otters. It is therefore possible that select individual otters may have a higher tolerance level than others to fireworks displays. Otters in residence within the Monterey harbor display a greater tolerance for intensive human activity than their counterparts in more remote locations. However, otters are not under NMFS' jurisdiction. The MBNMS consulted with the U.S. Fish and Wildlife Service (USFWS) pursuant to section 7 of the Endangered Species Act (ESA) regarding effects on southern sea otters. The USFWS issued a biological opinion on June 22, 2005, which concluded that the authorization of fireworks displays is not likely to jeopardize the continued existence of endangered and threatened species within the sanctuary or to destroy or adversely modify any listed critical habitat. The USFWS further found that MBNMS would be unlikely to take any southern sea otters, and therefore issued neither an incidental take statement under the ESA nor an IHA.

The northern elephant seal is seen so infrequently in the areas with fireworks displays that they are not likely to be impacted by fireworks displays. Therefore, the only species likely to be harassed by the fireworks displays are the California sea lion and the harbor seal. Detailed species accounts of the California sea lion and harbor seal were provided in the Federal Register notice announcing the proposed rule (77 FR 19976; April 3, 2012); please see that document for more information.

The potential effects of the specified activity, including physiological effects, behavioral disturbance, the effects of sound and light, and increased boat traffic, were described in detail in the Federal Register notice announcing the proposed rule (77 FR 19976; April 3, 2012); please see that document for more information.

The anticipated effects of the specified activity on marine mammal habitat, including those from fireworks debris and chemical residue, were described in detail in the Federal Register document announcing the proposed rule (77 FR 19976; April 3, 2012); please see that document for more information.

The MBNMS has monitored commercial fireworks displays for potential impacts to marine life and habitats since 1993. In July 1993, the MBNMS performed its initial field observations of professional fireworks at the annual Independence Day fireworks display conducted by the City of Monterey. Subsequent documented field observations were conducted in Monterey by the MBNMS staff on seven occasions between 1994 and 2002. Documented field observations were also made at Aptos each October from 2000 to 2005, and have been made for all authorized fireworks under NMFS-issued MMPA authorizations, beginning in 2005. Though monitoring techniques and intensity have varied over the years and visual monitoring of wildlife abundance and behavioral responses to nighttime displays is challenging, observed impacts have been consistent. Wildlife activity nearest to disturbance areas returns to normal (pre-display species distribution, abundance, and activity patterns) within 12-15 hours, and no signs of wildlife injury or mortality have ever been discovered as a result of managed fireworks displays.

Sea lions are generally more tolerant of noise and visual disturbances than harbor seals. In addition, pups and juveniles of either species are more likely to be harassed when exposed to disturbance than are older animals. Adult sea lions have likely habituated to many sources of disturbance and are therefore much more tolerant of human activities nearby. Of all the display sites in the sanctuary, California sea lions are only present in significant concentrations at Monterey. Nearly two decades of observing sea lions at the City of Monterey's Fourth of July celebration provides the following general observations: Sea lions (1) begin leaving the breakwater as soon as the fireworks begin; (2) clear completely off after an aerial salute or quick succession of loud effects; (3) usually begin returning within a few hours of the end of the display; and (4) are present on the breakwater at pre-firework numbers by the following morning.

The same surveys have noted that the small numbers of harbor seals that are typically present usually do not haul out after the initial fireworks detonation, but remain in the water around the haul-out. The observed behavior of the seals after the initial disturbance and during the fireworks display is similar to responses observed during rocket launches at Vandenberg Air Force Base (VAFB), where harbor seals loitered in the water adjacent to their haul-out site during the launch and returned to shore within 2 to 22 minutes after the launch disturbance.

A private environmental consultant monitored the Aptos fireworks display each October from 2001 through 2005 (per California Coastal Commission permit conditions) and concluded that harbor seal activity returned to normal at the site by the day following the display. Surveys have detected no evidence of injury or mortality in harbor seals as a result of the annual 30-minute fireworks display at the site.

Since harbor seals are smaller than sea lions and are less vocal, their movements and behavior are often more difficult to observe at night. In general, harbor seals are more timid and easily disturbed than California sea lions. Thus, based on past observations of sea lion disturbance thresholds and behavior, it is very likely that harbor seals evacuate exposed haul-outs in the acute impact area during fireworks displays, though they may loiter in adjacent surface waters until the fireworks have concluded. In conclusion, fireworks displays likely result in temporary displacement from haul-outs, constituting a short-term disruption in behavior, and pinnipeds are likely to resume normal behavior and full utilization of haul-outs within approximately 12 hours.

In 2007, MBNMS conducted acoustic monitoring in conjunction with in-depth behavioral monitoring for the City of Monterey Independence Day fireworks display. MBNMS was required to: (1) Conduct counts of marine mammals present within the fireworks impact area immediately before and one day after the event; (2) conduct behavioral observations of marine mammals present during the display; and (3) conduct NMFS-approved acoustic monitoring of sound levels for the duration of the event. The full report (Marine Mammal Acoustic and Behavioral Monitoring for the Monterey Bay National Marine Sanctuary Fireworks Display 4 July 2007) is available at http://www.nmfs.noaa.gov/pr/permits/incidental.htm.

Acoustic monitoring began approximately 3 hours prior to the beginning of the fireworks display. During those 3 hours, the average 1-hour sound level (L eq 1 hour) was approximately 59 dB, and included sea lion vocalizations, private fireworks in the local area, and recreational boat traffic. The fireworks display began with two sets of fireworks detonations and ended with a grand finale of multiple explosions after 20 minutes. The average sound level measured during the hour containing the fireworks display was 72.9 dB, approximately 14 dB greater than ambient levels recorded before the display. The loudest sound recorded during the event was associated with the detonation of a 10-in shell, and was measured at 133.9 dB re: 20 µPa (peak). The second loudest sound recorded was associated with detonation of an 8-in shell, measured at 127 dB re: 20 µPa (peak). Overall, sound generated during the display was low- to mid-frequency and ranged from 97 to 107 dB re: 20 µPa, while the majority of the fireworks detonations ranged from 112 to 124 dB re: 20 µPa.

From 2006-2011, under the regulations in effect from July 4, 2006, through July 3, 2011 (71 FR 40928; July 19, 2006), and a subsequent 1-year IHA, 24 fireworks events were authorized in the MBNMS. For each display, observers conducted a pre-event census to document abundance of marine mammals and post-event surveys to record any injured or dead wildlife species. Pre-event censuses were assumed to be a reasonable proxy for the number of incidental takes, as all animals present within the vicinity of the display area would be expected to temporarily abandon haul-outs prior to or during fireworks displays. Table 1 summarizes these monitoring efforts. In all cases, no pinnipeds other than those authorized for taking were observed, and post-event monitoring revealed no injured or dead marine mammals.

In order to issue an incidental take authorization under section 101(a)(5)(A) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to the specified activity, and other means of effecting the least practicable impact on each species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of each species or stock for taking for certain subsistence uses (where relevant). The MBNMS and NMFS worked to craft a set of mitigation measures designed to minimize fireworks impacts on the marine environment, as well as to outline the locations, frequency, and conditions under which the MBNMS will authorize marine fireworks displays. These mitigation measures, which were successfully implemented under NMFS-issued ITAs from 2005-2011, include four broad approaches for managing fireworks displays:

• Establish a sanctuary-wide seasonal prohibition to safeguard pinniped reproductive periods. Fireworks events will not be authorized between March 1 and June 30 of any year, i.e., the primary reproductive season for pinnipeds.

• Establish four conditional display areas and prohibit displays along the remaining 95 percent of sanctuary coastal areas. Traditional display areas are located adjacent to urban centers where wildlife has often become habituated to frequent human disturbances. Remote areas and areas where professional fireworks have not traditionally been conducted will not be considered for fireworks approval. The conditional display areas (described previously in this document) are located at Half Moon Bay, the Santa Cruz/Soquel area, the northeastern Monterey Peninsula, and Cambria (Santa Rosa Creek).

• Create a per-annum limit on the number of displays allowed in each display area. If properly managed, a limited number of fireworks displays conducted in areas already heavily impacted by human activity can occur with sufficient safeguards to prevent any long-term or chronic impacts upon local natural resources. There is a per-annum limit of 20 displays along the entire sanctuary coastline in order to prevent cumulative negative environmental effects from fireworks proliferation. Additionally, displays will be authorized at a frequency equal to or less than one every 2 months in each area.

• Retain authorization requirements and general and special restrictions for each event. Fireworks displays will not exceed 30 minutes with the exception of two longer displays per year that will not exceed 1 hour. Standard requirements include the use of a ramp-up period, wherein salutes are not allowed in the first 5 minutes of the display; the removal of plastic and aluminum labels and wrappings; and post-show reporting and cleanup. The sanctuary will continue to assess displays and restrict the number of aerial salute effects on a case-by-case basis, and will implement general and special restrictions unique to each fireworks event as necessary.

These measures are designed to prevent an incremental proliferation of fireworks displays and disturbance throughout the sanctuary and minimize area of impact by confining displays to primary traditional use areas. They also effectively remove fireworks impacts from 95 percent of the sanctuary's coastal areas, place an annual quota and multiple conditions on the displays authorized within the remaining 5 percent of the coast, and impose a sanctuary-wide seasonal prohibition on all fireworks displays. These measures were developed in order to assure that protected species and habitats are not jeopardized by fireworks activities. They have been well received by local fireworks sponsors who have pledged their cooperation in protecting sanctuary resources.

NMFS has carefully evaluated the applicant's mitigation measures in the context of ensuring that NMFS prescribes the means of effecting the least practicable adverse impact on the affected marine mammal species and stocks and their habitat. Our evaluation of potential measures included consideration of the following factors in relation to one another: (1) The manner in which, and the degree to which, the successful implementation of the measure is expected to minimize adverse impacts to marine mammals; (2) the proven or likely efficacy of the specific measure to minimize adverse impacts as planned; and (3) the practicability of the measure for applicant implementation.

Based on our evaluation of the applicant's measures and their efficacy over the past 6 years of authorizing fireworks, NMFS has determined that these mitigation measures provide the means of effecting the least practicable impact on marine mammal species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.

In order to issue an ITA for an activity, section 101 (a)(5)(A) of the MMPA states that NMFS must, where applicable, set forth “requirements pertaining to the monitoring and reporting of such taking”. The MMPA implementing regulations at 50 CFR 216.104(a)(13) indicate that requests for ITAs must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the action area.

In order to increase the long-term understanding of the effects of fireworks displays on pinnipeds, described previously in Summary of Previous Monitoring, as well as to estimate levels of incidental take and ensure compliance with MMPA authorizations, MBNMS will require its applicants to conduct a pre-event census of local marine mammal populations within the acute fireworks impact area. Each applicant will also be required to conduct post-event monitoring in the acute fireworks impact area to record injured or dead marine mammals. The pre-event census shall occur no earlier than the day prior to the fireworks display, and observations will be conducted for no less than 30 minutes. The post-event monitoring shall take place no later than the morning following the display, and will be conducted for no less than 30 minutes.

MBNMS must submit a draft annual monitoring report to NMFS within 60 days after the conclusion of the calendar year. MBNMS must submit a final annual monitoring report to the NMFS within 30 days after receiving comments from NMFS on the draft report. If no comments are received from NMFS, the draft report will be considered to be the final report. In addition, the MBNMS will continue to make its information available to other marine mammal researchers upon request.

This final rule governing the take of marine mammals incidental to the specified activities at MBNMS contains an adaptive management component. In accordance with 50 CFR 216.105(c), these regulations are based on the best available information. As new information is developed, through monitoring, reporting, or research, the regulations may be modified, in whole or in part, after notice and opportunity for public review. The use of adaptive management will allow NMFS to consider new information from different sources to determine if mitigation or monitoring measures should be modified (including additions or deletions) if new data suggest that such modifications are appropriate.

The following are some of the possible sources of applicable data:

• Results from MBNMS's monitoring from the previous year;

• Results from general marine mammal research; or

• Any information which reveals that marine mammals may have been taken in a manner, extent or number not authorized by these regulations or subsequent LOAs.

If, during the effective dates of the regulations, new information is presented from monitoring, reporting, or research, these regulations may be modified, in whole or in part, after notice and opportunity of public review, as allowed for in 50 CFR 216.105(c). In addition, LOAs will be withdrawn or suspended if, after notice and opportunity for public comment, the Assistant Administrator finds, among other things, that the regulations are not being substantially complied with or that the taking allowed is having more than a negligible impact on the species or stock, as allowed for in 50 CFR 216.106(e). That is, should substantial changes in marine mammal populations in the project area occur or monitoring and reporting show that MBNMS actions are having more than a negligible impact on marine mammals, then NMFS reserves the right to modify the regulations and/or withdraw or suspend the LOA after public review.

With respect to the activities described here, the MMPA defines `harassment' as: “any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].”

All anticipated takes would be by Level B harassment, involving temporary changes in behavior. The mitigation and monitoring measures are expected to minimize the possibility of injurious or lethal takes such that take by Level A harassment, serious injury or mortality, is considered remote. However, there is no specific information demonstrating that injurious or lethal takes would occur even in the absence of the planned mitigation and monitoring measures.

The two marine mammal species likely to be taken by Level B harassment incidental to fireworks displays authorized within the sanctuary are the California sea lion and the harbor seal, due to the temporary evacuation of usual and accustomed haul-out sites. Both of these species are protected under the MMPA, while neither is listed under the ESA. Numbers of animals that may be taken by Level B harassment are expected to vary due to factors such as tidal state, seasonality, shifting prey stocks, climatic phenomenon (such as El Niño events), and the number, timing, and location of future displays. The estimated take of sea lions and harbor seals was determined using the monitoring data from 2006-2011, presented earlier in this document, except as described in the footnotes to Table 2. Numbers of animals that are likely to be present were analyzed for the four prescribed areas described previously in this document: Half Moon Bay (HMB), Santa Cruz/Soquel (SC; including Capitola and Aptos), Monterey Bay (MB; including Pacific Grove), and Cambria (C). Please see Table 2 for more information. Table 2 of NMFS' proposed rule (77 FR 19976; April 3, 2012) contained several errors; those errors are corrected here.

At all four designated display sites combined, twenty fireworks events per year could likely disturb an estimated maximum total of 4,219 California sea lions out of a total estimated population of 238,000. This number is small relative to the population size (1.8 percent). For harbor seals, an estimated maximum of 230 animals out of a total estimated population of 34,233 could be disturbed within the sanctuary as a result of twenty fireworks events per year at all four designated display sites combined. These numbers are small relative to the population size (0.7 percent).

With the incorporation of mitigation measures described previously in this document, only Level B incidental harassment associated with authorized coastal fireworks displays is likely to occur, and these events are unlikely to result in any detectable impact on marine mammal species or stocks or their habitats.

NMFS has defined `negligible impact' in 50 CFR 216.103 as “* * *an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.” In making a negligible impact determination, NMFS considers a variety of factors, including but not limited to: (1) The number of anticipated mortalities; (2) the number and nature of anticipated injuries; (3) the number, nature, intensity, and duration of Level B harassment; and (4) the context in which the take occurs.

Past monitoring by the MBNMS has identified only a short-term behavioral disturbance of animals by fireworks displays, with the primary causes of disturbance being sound effects and light flashes from exploding fireworks. Additionally, a VAFB study of the effects of rocket-launch noise, which is more intense than fireworks noise, on California sea lions and harbor seals indicated only short-term behavioral impacts. With the mitigation measures described herein, any takes would be limited to the temporary incidental harassment of California sea lions and harbor seals due to evacuation of usual and accustomed haul-out sites for as little as 15 minutes and as much as 15 hours following any fireworks event. Most animals depart affected haul-out areas at the beginning of the display and return to previous levels of abundance within 4 to 15 hours following the event. This information is based on observations made by sanctuary staff over an 8-year period (1993-2001), in-depth surveys conducted in 2001 and 2007, and pre- and post-event monitoring conducted under MMPA authorizations from 2005-2011. Empirical observations have focused on impacts to water quality and selected marine mammals in the vicinity of the displays.

NMFS has determined that the fireworks displays will result in no more than Level B harassment of small numbers of California sea lions and harbor seals. The effects of coastal fireworks displays are typically limited to short term and localized changes in behavior, including temporary departures from haul-outs to avoid the sight and sound of commercial fireworks. Fireworks displays are limited in duration by MBNMS authorization requirements and will not occur on consecutive days at any fireworks site in the sanctuary. MBNMS' mitigation measures—implemented as a component of NMFS' incidental take authorizations since 2005—will further reduce potential impacts. As described previously, these measures ensure that authorized fireworks displays avoid times of importance for breeding, as well as limiting displays to the 5 percent of sanctuary coastline that is already heavily used by humans, and generally limiting the overall amount and intensity of activity. No take by injury, serious injury, or mortality is anticipated, and takes by Level B harassment will be at the lowest level practicable due to incorporation of the mitigation measures described previously in this document.

Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the mitigation and monitoring measures, NMFS finds that MBNMS' authorization of coastal fireworks displays will result in the incidental take of small numbers of marine mammals, by Level B harassment only, and that the total taking from coastal fireworks displays will have a negligible impact on the affected species or stocks.

There are no relevant subsistence uses of marine mammals implicated by this action. Endangered Species Act (ESA)

As mentioned earlier, the Steller sea lion and several species of ESA-listed cetaceans may be present at MBNMS at different times of the year and could potentially swim through the fireworks impact area during a display. In a 2001 consultation with MBNMS, NMFS concluded that this action is not likely to adversely affect ESA-listed species under NMFS' jurisdiction. There is no designated critical habitat in the area. This action will not have effects beyond those analyzed in that consultation.

The USFWS is responsible for regulating incidental take of the southern sea otter. The MBNMS consulted with the USFWS pursuant to section 7 of the ESA regarding impacts to that species. The USFWS issued a biological opinion on June 22, 2005, which concluded that the authorization of fireworks displays is not likely to jeopardize the continued existence of endangered and threatened species within the sanctuary or to destroy or adversely modify any listed critical habitat. The USFWS further found that MBNMS would be unlikely to take any southern sea otters, and therefore issued neither an incidental take statement under the ESA nor an IHA.

In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ), as implemented by the regulations published by the Council on Environmental Quality (40 CFR parts 1500-1508), and NOAA Administrative Order 216-6, NMFS and MBNMS prepared an Environmental Assessment (EA) on the Issuance of Regulations Authorizing Incidental Take of Marine Mammals and Issuance of National Marine Sanctuary Authorizations for Coastal Commercial Fireworks Displays within the Monterey Bay National Marine Sanctuary, to consider the direct, indirect and cumulative effects to the human environment resulting from issuance of sanctuary authorizations for fireworks displays and issuance of an IHA to MBNMS. NMFS signed a Finding of No Significant Impact (FONSI) on June 21, 2006. NMFS has reviewed MBNMS's application and determined that there are no substantial changes to the action, no significant new information, and that there are no new direct, indirect, or cumulative effects to the human environment resulting from issuance of an IHA to MBNMS. Therefore, NMFS has determined that a new or supplemental EA or Environmental Impact Statement is unnecessary, and reaffirms the existing FONSI for this action. The existing EA and FONSI for this action are available for review at http://www.nmfs.noaa.gov/pr/permits/incidental.htm.

The Office of Management and Budget (OMB) has determined that this rule is not significant for purposes of Executive Order 12866.

At the proposed rule stage, the Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule, if adopted, would not have a significant economic impact on a substantial number of small entities. MBNMS is a component of the Office of National Marine Sanctuaries within NOAA, which is a federal agency. Because this rule impacts only the activities of MBNMS, which is not considered to be a small entity within SBA's definition, the Chief Counsel for Regulation certified that this rule will not have a significant economic impact on a substantial number of small entities. No comments were received on this certification. As a result, a regulatory flexibility analysis is not required and none has been prepared.

Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act (PRA) unless that collection of information displays a currently valid OMB control number. This rule contains collection-of-information requirements subject to the provisions of the PRA. These requirements have been approved by OMB under control number 0648-0151 and include applications for regulations, subsequent LOAs, and reports. Send comments regarding any aspect of this data collection, including suggestions for reducing the burden, to NMFS and the OMB Desk Officer (see ADDRESSES ).

For reasons set forth in the preamble, 50 CFR part 217 is amended as follows:

Regulations implemented under the authority of the Atlantic Tunas Convention Act (16 U.S.C. 971 et seq. ) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq. ) governing the harvest of BFT by persons and vessels subject to U.S. jurisdiction are found at 50 CFR part 635. Section 635.27(a) subdivides the U.S. BFT quota recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) among the various domestic fishing categories, consistent with the allocations established in the 2006 Consolidated Atlantic Highly Migratory Species Fishery Management Plan (Consolidated HMS FMP) (71 FR 58058, October 2, 2006) and subsequent rulemaking.

Under § 635.27(a)(3), the total amount of large medium and giant BFT (measuring 73 inches (185 cm) curved fork length (CFL) or greater) that may be caught incidentally and retained, possessed, or landed by vessels that possess Longline category Atlantic Tunas permits is 8.1 percent of the baseline annual U.S. BFT quota. No more than 60 percent of the Longline category incidental BFT quota may be allocated for landing in the area south of 31°00' N. lat. (i.e., the “southern area”). The current Longline category baseline BFT quota is 74.8 mt, with 44.9 mt allocated to the southern area.

NMFS is required, under § 635.28(a)(1), to file a closure notice with the Office of the Federal Register for publication when a BFT quota is reached or is projected to be reached. On and after the effective date and time of such notification, for the remainder of the fishing year, or for a specified period as indicated in the notification, fishing for, retaining, possessing, or landing BFT under that quota category is prohibited until the opening of the subsequent quota period or until such date as specified in the notice.

Based on the best available BFT landings information for the incidental Longline category southern area BFT fishery (i.e., 46.9 mt of the available 44.9 mt landed as of May 16, 2012), NMFS has determined that the Longline category southern area BFT subquota has been reached. Therefore, through December 31, 2012, landing large medium or giant BFT south of 31°00′ N. lat. by vessels permitted in the Atlantic tunas Longline category must cease at 11:30 p.m. local time on May 29, 2012. This action is taken consistent with the regulations at §§ 635.27(a)(3) and 635.28(a)(1). The intent of this closure is to prevent any further overharvest of the Longline category southern area BFT subquota.

NMFS will continue to monitor incidental Longline category BFT landings north of 31°00' N. lat. against the available Longline category northern area BFT subquota for the 2012 fishing year and may take further action, if necessary. Any subsequent adjustments to the Longline category fishery for 2012 would be published in the Federal Register . In addition, fishermen may call (978) 281-9260, or access www.hmspermits.gov, for fishery updates.

The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:

The closure of the Longline category southern area BFT fishery, i.e., prohibiting further BFT landings against the Longline category southern area is necessary to prevent any further overharvest of the 2012 Longline southern area BFT subquota. NMFS provides notification of closures by publishing the notice in the Federal Register , emailing individuals who have subscribed to the Atlantic HMS News electronic newsletter, and updating the information posted on the Atlantic Tunas Information Line and on www.hmspermits.gov .

These fisheries are currently underway, and delaying this action would be contrary to the public interest as it could result in excessive BFT landings, which could have adverse effects on the stock and/or may result in future potential quota reductions for the Longline category. NMFS must close the Longline category southern area fishery to landings before large medium and giant BFT further exceed the available subquota for that area. Therefore, the AA finds good cause under 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment. For all of the above reasons, there is good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.

This action is being taken under §§ 635.27(a)(3) and 635.28(a)(1), and is exempt from review under Executive Order 12866.