The preamble below is designed to assist readers in understanding these proposed amendments to the Commission's Rules. This preamble provides background information, a regulatory analysis of the proposed amendments, and a section-by-section explanation of the proposed amendments. The Commission encourages members of the public to comment on the proposed amendments as well as on whether the language of the proposed amendments is sufficiently clear for users to understand.

Section 335 of the Tariff Act of 1930 (19 U.S.C. 1335) authorizes the Commission to adopt such reasonable procedures, rules, and regulations as it deems necessary to carry out its functions and duties. This rulemaking seeks to improve provisions of the Commission's existing Rules of Practice and Procedure. The Commission proposes amendments to its rules covering proceedings such as investigations and reviews conducted under title VII of the Tariff Act of 1930, and sections 202, 406, 421, 422 of the Trade Act of 1974 and sections 302 and 312 of the North American Free Trade Agreement Implementation Act (19 U.S.C. 2252, 2436, 2451, 2451a, 3352, 3372). The Commission invites the public to comment on all of these proposed rules amendments. In any comments, please consider addressing whether the language of the proposed amendments is sufficiently clear for users to understand. In addition please consider addressing how the proposed rules amendments could be improved, and/or offer specific constructive alternatives where appropriate.

Consistent with its ordinary practice, the Commission is issuing these proposed amendments in accordance with provisions of section 553 of the Administrative Procedure Act (“APA”) (5 U.S.C. 553), although such provisions are not mandatory with respect to this rulemaking. The APA procedure entails the following steps: (1) Publication of a notice of proposed rulemaking; (2) solicitation of public comments on the proposed amendments; (3) Commission review of public comments on the proposed amendments; and (4) publication of final amendments at least thirty days prior to their effective date.

(1) The Commission proposes to require that all paper copies of electronic submissions exceeding fifty (50) pages in length must be securely bound and must have a divider page and an identifying tab preceding each exhibit and/or attachment. The divider page and/or tab must be labeled with a letter or number that corresponds to a more fully descriptive index. Examples of secure binding include spiral binding, velo binding, and stapling for documents close to the 50-page threshold. These new requirements, however, may be waived upon a showing of good cause.

During the course of many proceedings, in particular Title VII investigations and reviews, the Commission receives a significant number of large submissions with associated exhibits and attachments. These amendments will facilitate Commission review of lengthy submissions and will allow the Commission more readily to refer to discrete portions of these documents. Petitions, which are not electronic filings, will also be subject to these requirements, with the exception that one copy of the petition must be filed unbound to facilitate its scanning into the Commission's Electronic Document Information System.

(2) In addition to current information requirements, the Commission proposes to require that petitioners provide the email address, street address, city, state, and 5-digit zip code for each purchaser/contact with respect to each lost sales or lost revenue allegation. Requiring petitioners to provide this specific information should facilitate the Commission's ability to contact purchasers concerning these allegations. Under current practice, the Commission collects this information from non-petitioning U.S. producers in its questionnaires. Requiring petitioners to provide the same information in the petition as non-petitioning U.S. producers are required to provide in questionnaires should allow for the orderly collection and verification of lost sales and lost revenue data by the agency.

(3) The Commission proposes to require that petitioners must file any lost sales or revenue allegation(s) identified in the petition via a separate electronic data entry process in a manner to be specified in the Commission's Handbook on Filing Procedures. The Commission is contemplating various technology options and is soliciting comment prior to developing the specific filing instructions.

Commission staff members currently use facsimile as the primary method for contacting purchasers to verify lost sales and lost revenue allegations. Two significant problems exist with the use of facsimiles for this purpose. First, the process of sending facsimiles to purchasers and verifying their receipt is time-consuming and inefficient. Additionally, obtaining responses from purchasers via facsimile is becoming increasingly difficult as facsimile machines are more often perceived as a “legacy” technology that has been superseded by electronic mail or other electronic communication technologies.

Current options under consideration, for which the Commission is seeking comment, include (1) submission of lost sales and lost revenue data in an electronic spreadsheet document provided by the Commission or (2) direct entry of all allegations into a secure Web-based portal. Additional options may be contemplated based on information received from public comments or as a result of evolving technological capabilities. The Commission intends to develop additional details to be included in the Commission's Handbook on Filing Procedures after receiving and considering comments on the proposed changes, and once the process and system are finalized.

Requiring that all petitioners file lost sales and revenue allegations via a separate electronic data entry process will facilitate the use of email as a vehicle for contacting purchasers. Email communication will only be used to direct purchasers to a secure Web site where they can access the lost sales and/or lost revenue allegations specific to each purchaser, and respond to the allegations. This should provide faster and more efficient dissemination and verification of lost sales and lost revenue information while maintaining current levels of security. Requiring submission of the data via this separate electronic data entry process should not present an undue burden on petitioners since these data are already required to be in the petition.

(4) The Commission proposes to require petitioners to provide email addresses for all U.S. producers and U.S. importers identified in the petition. The current rules specify that petitioners are required to provide contact information for U.S. producers and U.S. importers, including street addresses, phone numbers, and contact person(s). Requiring petitioners also to provide email addresses for U.S. producers and U.S. importers should facilitate the process of contacting these firms, thereby streamlining agency proceedings.

(5) The Commission proposes that all requests for collecting new information should be presented at the draft questionnaire stage in final phase investigations. The intent of the current provision in Commission rule 207.20 was to direct parties to make information requests, particularly concerning domestic like product, domestic industry, and cumulation issues, in questionnaire comments rather than later in the investigation. 61 FR 37818, 37826 (July 22, 1996). Notwithstanding this, the Commission has found that parties occasionally include in briefs information requests that could have been made in questionnaire comments. Commission staff does not have sufficient time or resources during the latter stage of final phase investigations to embark upon major data collection efforts.

Consequently, the current information collection provisions of section 207.63(b) concerning five-year reviews will be incorporated in section 207.20(b). This provision requires that all requests for collecting new information should be presented in comments on draft questionnaires, and states that the Commission will disregard subsequent requests for additional information absent a showing of compelling need and that the information could not have been requested in the comments on draft questionnaires. These provisions pertaining to new information requests have worked effectively in five-year reviews and the Commission believes their adoption in final phase investigations will also be effective.

(6) The Commission proposes to extend the deadlines currently specified in the rule for instituting and completing changed circumstances reviews. The statutory provisions in 19 U.S.C. 1675(b)(1) and (b)(2) do not provide any deadline for the Commission to initiate or complete a changed circumstance review. Moreover, in prior changed circumstance reviews under 19 U.S.C. 1675(b), the Commission has extended the deadlines specified in the rule in a not insubstantial number of instances in order to analyze extensive record data or to collect additional data. The deadline for institution is being extended in order to provide the Commission with additional time to analyze issues pertaining to complex or contested requests. Extension will also provide the agency with greater scheduling flexibility, which is particularly needed because the Commission's antidumping and countervailing duty docket is larger now than when the rule was first promulgated. However, the Commission intends to make its decisions with respect to institution and completion of such reviews expeditiously.

The Commission has determined that the final rules do not meet the criteria described in section 3(f) of Executive Order 12866 (58 FR 51735, Oct. 4, 1993) and thus do not constitute a significant regulatory action for purposes of the Executive Order.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) is inapplicable to this rulemaking because it is not one for which a notice of final rulemaking is required under 5 U.S.C. 553(b) or any other statute. Although the Commission has chosen to publish a notice of proposed rulemaking, these proposed regulations are “agency rules of procedure and practice,” and thus are exempt from the notice requirement imposed by 5 U.S.C. 553(b).

These proposed rules do not contain federalism implications warranting the preparation of a federalism summary impact statement pursuant to Executive Order 13132 (64 FR 43255, Aug. 4, 1999).

No actions are necessary under the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 et seq.) because the proposed rules will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and will not significantly or uniquely affect small governments.

The proposed rules are not major rules as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.). Moreover, they are exempt from the reporting requirements of the Contract With America Advancement Act of 1996 (Pub. L. 104-121) because they concern rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties.

The amendments are not subject to section 3504(h) of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), because the amendments would impose no new collection of information under the statute.

Section 201.8 generally provides the requirements for filing documents with the Commission. The Commission proposes to amend paragraph (d) of § 201.8 to require that all paper copies of electronic submissions exceeding fifty (50) pages in length must be securely bound and must have a divider page and an identifying tab preceding each exhibit and/or attachment. The divider page and/or tab must be labeled with a letter or number that corresponds to a more fully descriptive index.

Section 207.10 addresses petition filings with the Commission. The Commission proposes to require petitioners to file one unbound copy of petitions.

Section 207.11 addresses the contents of petitions in Title VII proceedings. The Commission proposes to revise the language of § 207.11(b)(2)(ii) and (iii) to require that petitioners provide email addresses for all U.S. producers and U.S. importers identified in the petition. The Commission further proposes to revise the language of § 207.10(b)(2)(v) to specify that petitioners must submit all lost sales and lost revenue allegations in electronic format. The Commission also proposes to revise the language of § 207.10(b)(2)(v) to specify that petitioners also must provide the email address(es), street address(es), city, state, and 5-digit zip code for each purchaser/contact with respect to all lost sales and lost revenue allegations.

Section 207.20 addresses the Commission's investigative activities in final phase investigations. The Commission proposes that all requests for collecting new information should be presented at the draft questionnaire stage in final phase investigations unless there is a compelling showing that a later request is justified.

Section 207.45 addresses the Commission's procedures for initiating and conducting section 751(b) changed circumstances reviews. The Commission proposes to extend the deadlines specified in the rule.

For the reasons stated in the preamble, the United States International Trade Commission proposes to amend 19 CFR parts 201 and 207 as follows:

The preamble to this notice of proposed rulemaking is organized as follows:

State Long-Term Care Ombudsman programs (Ombudsman programs) serve as advocates for residents of nursing homes, board and care homes, assisted living facilities and similar adult care facilities. They work to resolve problems of individual residents and to bring about improvements to residents' care and quality of life at the local, state and national levels.

Begun in 1972 as a demonstration program, Ombudsman programs today exist in all States, the District of Columbia, Puerto Rico and Guam, under the authorization of, and appropriations to implement, the Older Americans Act (the Act). These States and territories have an Office of the State Long-Term Care Ombudsman (the Office), headed by a full-time State Long-Term Care Ombudsman (the Ombudsman). Nationally, in FY 2011 there were nearly 1,200 full-time equivalent staff ombudsmen; more than 9,000 certified volunteer ombudsmen, and more than 3,300 other volunteers working with Ombudsman offices.

This NPRM is proposed under the authority of sections 201(e), 307(a), 712 and 713 of the Older Americans Act (OAA or the Act) (42 U.S.C. 3011(e), 3027, 3058g, and 3058h, respectively). These provisions authorize the Assistant Secretary for Aging to prescribe regulations regarding coordination of elder justice activities, the development of State plans on aging, and Long-Term Care Ombudsman programs.

In addition to its statutory authority, AoA received a 2011 inquiry from the Senate Special Committee on Aging regarding regulations for Ombudsman programs. AoA responded that regulations for the Older Americans Act were last promulgated in 1988 and are found at 45 CFR Parts 1321, 1326 and 1328. Part 1321 constitutes the regulations for Title III of the Act, which at that time included the Long-Term Care Ombudsman Program. In the 1992 reauthorization of the Older Americans Act, Congress created Title VII, Allotments for Vulnerable Elder Rights Protection Activities. While regulations for Title VII programs, which includes the Long-Term Care Ombudsman program, were proposed and published in the Federal Register by the Administration on Aging (AoA) in 1994, final regulations were not adopted. AoA indicated its intent to issue regulations for the Long-Term Care Ombudsman Program in order to provide clear and consistent guidance.

In its evaluation of State Long-Term Care Ombudsman programs, the Institute of Medicine identified the lack of Federal guidance as a challenge for state implementation that contributed to an absence of fully-implemented state programs. The Institute of Medicine recommended that the Assistant Secretary for Aging “issue clearly stated policy and program guidance that sets forth the federal government's expectations of state long-term care ombudsman programs. . . .” 1

In December, 2011, a stakeholder workgroup consisting of long-term care, elder abuse and Ombudsman program experts; national association representatives; and consumer advocates met to discuss issues impacting Ombudsman programs and requested guidance from the Assistant Secretary for Aging in areas related to:

1. The roles, responsibilities and relationship of the State agency on aging and the Office of the State Long-Term Care Ombudsman;

2. Conflicts of interest between a State's Ombudsman program and other programs or services (such as survey and certification) provided by the agency in which Ombudsman program is located at the State or local levels;

3. Conflicts of interest between the individual roles and responsibilities of the Ombudsman (or representatives of the Office) and other personal or professional interests (such as financial interest in a long-term care facility);

4. Ability of the Office to provide public policy recommendations as required by statute;

5. Ombudsman services to residents (including recommendations related to Ombudsman records, resident records, and services to individuals under age sixty); and

6. Training and certification/designation of representatives of the Office.2

In its 1992 Older Americans Act reauthorization, Congress created Title VII—Allotments for Vulnerable Elder Rights Protection Activities, and incorporated the provisions related to the activities of Long-Term Care Ombudsman programs into Title VII. Previously some of these provisions had been within Title III. Therefore, the rule governing Title III of the Act (i.e. 45 CFR 1321) and last updated in 1988, includes some minimal provisions which govern the Long-Term Care Ombudsman Program. Since its creation in 1992, Title VII has included the provisions related to Ombudsman program activities. These proposed changes update 42 CFR part 1321 to reflect the most recent (2006) reauthorization of the Act.

There has been significant variation in the interpretation and implementation of the provisions of the Act among States. This has resulted in residents of long-term care facilities receiving inconsistent services from Ombudsman programs in some states compared to other states. An example of this inconsistency in approach is the way that various States respond to complaints to the Ombudsman program that a facility has abused a resident:

• In most States, the Ombudsman program is available to assist and resolve the complaint to the satisfaction of the resident, working with the resident to assure his or her well-being. In those States, the Ombudsman program explains to the complainant that another agency represents the State as the official finder of fact, but that the Ombudsman serves as a victim advocate to support the resident through the official investigation process and to assist the resident in voicing and realizing his or her goals.

• However, in some States, the same abuse complaint gets the same response that the Ombudsman program is not the official finder of fact for abuse complaints, and the complainant is immediately referred to another State or local agency. However, in some cases, the resident receives no additional assistance from the Ombudsman program related to the abuse allegation.

• In still other States, the Ombudsman program is designated by the State as the official finder of fact to determine whether the abuse is substantiated. It refers substantiated cases to law enforcement, at times without (or even in violation of) the wishes of the resident.

• In still other States, the Ombudsman is designated by the State as the official finder of fact, but in order to not violate the wishes of the resident or the disclosure provisions of the Act, it does not refer substantiated cases to law enforcement without resident consent.

• The Act requires that Ombudsman programs both assist residents in protecting their health, safety, welfare and rights as well as to provide the resident with the option to consent to disclosure of information about his or her complaint. This proposed rule is intended to provide the clarity and consistency needed to ensure that residents receive needed protections, and, at the same time, that resident choice is honored, regardless of the State in which a resident lives.

Long-Term Care Ombudsman programs were designed by Congress to have several features which are uncharacteristic of other programs created by and funded under the Act. Among those features are independence (a characteristic of any type of ombudsman program), unusually stringent disclosure requirements, a public policy advocacy function, and the Ombudsman responsibility to designate local staff and volunteers to serve as representatives of the Office even if they do not report to the Ombudsman for personnel management purposes. These distinct features often create confusion in implementation which this rule is designed to address.

The State Long-Term Care Ombudsman program was originally created within Title III of the Older Americans Act, and there are regulations affecting this program in Part 1321, Grants to State and Community Programs on Aging. This rule proposes to amend the following section of Part 1321:

In addition, the proposed rule develops new regulations for the Ombudsman program where it currently resides in Subtitle A, Chapter 2, of Title VII of the OAA, Allotments for Vulnerable Elder Rights Protection Activities. AoA proposes a new Part 1327 in order to provide States with clarity regarding the operation of the Ombudsman program.

Topics addressed in the newly proposed Part 1327 include definitions of:

• Immediate family,

• Office of the State Long-Term Care Ombudsman, and

• Representative of the Office of the State Long-Term Care Ombudsman.

Other topics addressed in proposed Part 1327 include:

• Establishment of the Office of the State Long-Term Care Ombudsman,

• Functions and Responsibilities of the State Long-Term Care Ombudsman,

• State Agency Responsibilities Related to the Long-Term Care Ombudsman Program,

• Functions and Duties of the Office of the State Long-Term Care Ombudsman, and

• Conflicts of Interest.

Currently, federal regulations require State agencies to monitor the performance of programs and activities, including, but not limited to, Long-Term Care Ombudsman programs.

With respect to disclosure of Ombudsman program files and records, Section 712(d) of the Act requires that the State agency on aging (also referred to as “State unit on aging” and, for purposes of these regulations, “State agency”) establish procedures for disclosure and indicates that these procedures provide that the files and records “may be disclosed only at the discretion of the Ombudsman (or the person designated by the Ombudsman to disclose the files and records).” Further, they must prohibit disclosure of the identity of any complainant or resident with the limited exceptions set forth in the Act. See Section 712(d)(2)(B) of the Act. AoA proposes revising section 1321.11 to reflect this provision of the Act.

AoA proposes revising the current regulation with respect to State agency access to the files, records and other information maintained by the Ombudsman program in order to accommodate the increased use of digital information and incorporate information obtained verbally and by other means while maintaining protections for residents. AoA proposes use of the term “files, records, and other information” in these regulations rather than “files” as used in the current regulation. The term “files, records, and other information” more clearly indicates that the disclosure provision of Section 712(d) of the Act is not dependent on any particular format of the files and not limited to information contained in case files. For example, information collected during individual consultation activities which are not part of case files also would be subject to this provision.

AoA proposes replacing the following provisions in the current regulation at 45 CFR 1321.11(b) with the following provision:

“The State Long-Term Care Ombudsman and his or her designee shall be responsible for monitoring the files, records, and other information maintained by the Office, and shall not disclose the identity of any complainant or long-term care facility resident to individuals outside of the Office, except as otherwise specifically provided in section 712(d)(2)(B) of the Act.”

This proposal more closely reflects the provisions of the Act. However, we are aware that State agencies need certain information from the Ombudsman program in order to fulfill their responsibilities related to oversight of Ombudsman program operations and personnel and/or contract management. Aggregate data on Ombudsman program activities and complaint processing may be sufficient for this purpose and do not reveal the identities of any complainants or residents. We invite comments for the final rule that will help us identify an appropriate balance between Ombudsman protection of confidential information and State oversight responsibilities.

In addition, AoA proposes to omit from 45 CFR 1321.11, the reference to Section 307(a)(12). The provision numbers have changed in subsequent reauthorizations of the Act, and this statutory reference is no longer necessary within the context of the proposed revision.

The term “immediate family” is used repeatedly in Section 712(f) of the Act but is not defined in the statute. Absent a definition, this term has created uncertainty and inconsistency among States related to the scope of conflicts that are required to be identified and removed under Section 712(f)(4) of the Act.

AoA proposes to describe relationships that could impair the judgment or give the appearance of bias on the part of an individual who is responsible to objectively designate an individual as the Ombudsman (under Section 712(f)(1) of the Act) or on the part of the Ombudsman or officers, employees or representatives of the Office (under section 712(f)(2) of the Act). Therefore, AoA proposes the definition of “Immediate family” pertaining to conflicts of interest as used in section 712 of the Act, means a member of the household or a relative with whom there is a close personal or significant financial relationship.

The proposed regulation is adapted from the federal standards of ethical conduct which prohibit federal executive branch employees from participating in a matter where the circumstances would raise a question regarding the employee's impartiality. Federal regulations indicate that it would be difficult for a federal employee to be impartial regarding “a person who is a member of the employee's household or who is a relative with whom the employee has a close personal relationship” or where the matter is likely to have a “direct and predictable effect on the financial interest of a member of his household.” 5 CFR Section 2635.502(a),(b).

The Older Americans Act requires that State Offices of the State Long-Term Care Ombudsman make certain determinations. These Offices and their responsibilities are referenced in Section 712, as well as in Sections 207(b)(3)(E) and 307(a)(9), of the Act. Section 711(1) of the Act defines “Office” as “the office established in section 712(a)(1)(A). There is a need for further clarification of the scope of the definition of “Office of the State Long-Term Care Ombudsman” due to inconsistencies among States and confusion regarding the interpretation of which individual or individuals constitute the “Office.” For example, States would benefit from clarification regarding who is responsible for making determinations specifically required of the Office by the Act.

With respect to several functions, the statute indicates that determinations must be made by the Office. Interference with these determinations could constitute interference with the Office, which is prohibited under Section 712(j) of the Act.

States have repeatedly requested that AoA provide clarification on the question of which individual or individuals constitute the “Office.” Some States have interpreted the “Office” to mean the Ombudsman and representatives of the Office; others have interpreted “Office” to mean the State agency on aging.

A 2011 State compliance review revealed that AoA's provision of technical assistance and education on this question may not have provided sufficient clarity to States regarding the decision-making authority expected of the Office of the State Long-Term Care Ombudsman, and more specifically of the State Long-Term Care Ombudsman, as the head of that Office. Thus, this proposed rule clarifies and codifies the definition.

Section 712(a)(2) of the Act states that the Office of the State Long-Term Care Ombudsman shall be “headed by an individual, to be known as the State Long-Term Care Ombudsman.” In addition, under Section 712(a)(5) of the Act, the State Long-Term Care Ombudsman has the authority to designate local Ombudsman entities and employees and/or volunteers to represent these entities. The proposed definition seeks to clarify for States that the State Long-Term Care Ombudsman and his or her representatives shall constitute the “Office.” Therefore, AoA proposes the definition of “Office of the State Long-Term Care Ombudsman” as set forth at section 1327.1, which includes the organizational unit headed by the State Long-Term Care Ombudsman, including representatives of the Office.

The term “representatives of the Office of the State Long-Term Care Ombudsman” is used throughout Section 712 of the Act. For purposes of Subtitle A, Chapter 2, of Title VII, Section 711(5) of the Act. The term `representative' includes an employee or volunteer who represents an entity designated under section 712(a)(5)(A) and who is individually designated by the Ombudsman.

Section 712(a)(5)(A) of the Act further indicates that the Ombudsman “may designate an employee or volunteer to represent the [local Ombudsman] entity.” These provisions of the Act have created confusion in States' operation of the Ombudsman Program because it is unclear whether the “representatives of the Office” are to represent the Office of the State Long-Term Care Ombudsman or to represent the local Ombudsman entity or both.

AoA intends to clarify that the representatives of the Office, including local staff and volunteers designated by the Ombudsman, indeed represent the Office (as opposed to the entity by which they may be employed or managed) when they are carrying out duties of the Office. These duties of the representatives of the Office are set forth in Section 712(a)(5)(B) of the statute. For convenience, ACL has included this statutory definition of duties at section 1327.17(a) of the proposed rule. The inclusion of these duties into the proposed rule does not and is not intended to amend the statutory language.

The practical implication of this clarification is that the “representatives of the Office” are accountable to the head of the Office, which is the State Long-Term Care Ombudsman under Section 712(a)(2) of the Act, for purposes of Ombudsman program operations. For all programmatic operations, the representative represents the Office (for example, they must follow the policies, procedures and guidance of the Ombudsman regarding complaint processing and other Ombudsman program activities). Simultaneously, representatives represent the entity (i.e. the “local Ombudsman entity”) that employs or oversees them for personnel management matters (for example, they must follow the entity's personnel policies so long as those policies do not conflict with Ombudsman program law and policy).

Therefore, AoA proposes the definition of “Representatives of the Office of the State Long-Term Care Ombudsman” set forth at section 1327.1 to clarify that designated employees and volunteers serve as representatives of the Office.

Proposed section 1327.11 governs the establishment of the Office pursuant to Section 712(a)(1) of the Act and as defined in proposed regulation 1327.1. See section “D, Definition of Office of the State Long-Term Care Ombudsman,” above.

The Act requires that certain determinations be made by the Office. As proposed in section 1327.11(c)(4), AoA clarifies which determinations are the responsibilities of the Office, and by logical extension, by the head of the Office, the Ombudsman, pursuant to Section 712(h) of the Act. Because these determinations are frequently outside the scope of the authority of most State employees (most, though not all, State Ombudsmen are State employees), clarification would assist States in full implementation of the Act.

Specifically, these determinations include:

• Determinations regarding disclosure of information maintained by the program within the limitations as set forth in Section 712(d) of the Act;

• Recommendations to changes in Federal, State and local laws, regulations, policies and actions pertaining to the health, safety, welfare, and rights of residents as set forth in Section 712(h)(2) of the Act; and

• Provision of information to public and private agencies, legislators, and other persons, regarding the problems and concerns of residents and recommendations related to the problems and concerns as set forth in Section 712(h)(3) of the Act.

The Act indicates that the recommendations made by and the information provided by the Office are limited to issues impacting residents of long-term care facilities and services. See, e.g., 712(a)(3)(G), 712(h)(2). In order to reduce confusion at the State level where the recommendations of an Ombudsman might be mistaken for the position of the Governor or the State agency, another agency carrying out the Ombudsman program, or any other State agency, AoA proposes the provision in section 1327.11(c)(4) to indicate determinations are those of the Office of the State Long-Term Care Ombudsman and do not represent other state governmental entities.

AoA proposes clarification regarding the appropriate role and responsibilities of the Ombudsman, as the “head of the Office.” The functions of the Ombudsman are set forth in Section 712(a)(3) of the statute. For convenience, ACL has included this statutory text at section 1327.13(a) of the proposed rule. The inclusion of these functions into the proposed rule does not and is not intended to amend the statutory language.

AoA has indicated in a letter to a State that the State Unit on Aging (SUA) and the Office of the State Long-Term Care Ombudsman are distinct entities within the OAA. Section 305(a) of the OAA, requires the State to designate a single State agency to carry out the requirements of the Act. Whether the Long-Term Care Ombudsman is placed within the single State agency, or by contract with an entity outside the State agency, the OAA is explicit that the Long-Term Care Ombudsman is to be established in, and is to carry out his or her functions in, a separate `Office.' 42 U.S.C. 3058f(1); 3058g(a)(1)(A).

Some States have indicated the need for more clarification about who has authority to de-designate ombudsman employees and volunteers so that a formerly designated individual is no longer authorized to act as a representative of the Office. Other States have established policies and procedures to clarify that the Ombudsman has the sole authority to designate and, consistent with that authority, also the sole authority to de-designate representatives of the Office.

Since the Ombudsman is the individual solely authorized to designate representatives pursuant to Section 712(a)(5) of the Act, the Ombudsman has sole authorization to de-designate representatives of the Office. Without such authority, the Ombudsman would have significant limitations in his or her ability to determine the individuals qualified to represent the Office and to remove such designation where a representative fails to adhere to program requirements. In order to respond to this inconsistency among States in the understanding of the authority of the Ombudsman to de-designate, AoA proposes to clarify that the Ombudsman has the sole authority both to designate and de-designate in section 1327.13(c). This provision is not intended to limit the authority of the Ombudsman to delegate certification training and examination processes or to receive recommendations of designation or de-designation from representatives of the Office, but clarifies that the Ombudsman is responsible to make the final determination of designation and de-designation of representatives of the Office.

Although the Ombudsman has statutory authority to designate local Ombudsman entities, the involvement of the Ombudsman in the planning of Ombudsman program operations by such local Ombudsman entities is not directly addressed in the Act. In many States, local Ombudsman entities include area agencies on aging (AAAs) and/or AAAs subcontract to non-profit agencies to serve as local Ombudsman entities. In these States, area plans include fiscal and programmatic provisions related to the operation of the Ombudsman program by the local Ombudsman entity. Those individuals working for the local Ombudsman entity and designated by the Ombudsman serve as representatives of the Ombudsman and, therefore, are within the definition of the “Office” as set forth in section 1327.1. AoA proposes that the Ombudsman, as head of the Office, be held responsible to review and approve the portions of area plans, submitted pursuant to section 306 of the Act, which are related to the Ombudsman program so that the work of Office is coordinated by—and the local Ombudsman entities are held accountable to—the Ombudsman. In addition, given the State agency role in reviewing and approving area plans pursuant to section 306 of the Act, the Ombudsman should conduct such review and approval in coordination with the State agency. These requirements are set forth at section 1327.13(d).

Section 712(d)(2)(A) of the Act indicates that “files and records [maintained by the Ombudsman program] may be disclosed only at the discretion of the Ombudsman (or the person designated by the Ombudsman to disclose the files and records).”

Many of the files, records, and other information maintained by the representatives of the Office are physically maintained at the offices of the designated local Ombudsman entities (including, but not limited to, AAAs). This can create confusion about who has the authority to make determinations about the disclosure and maintenance of the files, records, and other information of the Office even though the Act clearly gives the sole discretion for their disclosure to the Ombudsman or his or her designee. Therefore, AoA proposes to clarify that the files, records, and other information of the Office shall be controlled by the Ombudsman and are the property of the Office, including when such files, records, and other information are maintained by a local Ombudsman entity or representatives of the Office.

AoA uses the term “files, records, and other information” to indicate that the disclosure provision of Section 712(d) of the Act should not be dependent upon any particular format of the files. In addition, because the Act does not limit the disclosure of files, records and other information to paper copies—and since electronic recordkeeping is increasingly the norm—AoA proposes that the requirements related to files, records and other information apply to physical, electronic, or other formats.

AoA proposes the provision regarding the responsibility of the Ombudsman to manage Ombudsman program information at section 1327.13(e).

AoA proposes, at section 1327.13(f), to include within the responsibility of the Ombudsman, decisions related to disclosure of information in the possession of the Office in addition to information contained within case files (for example, information obtained during consultations with individuals or facilities). See also section “A. State Agency Policies,” above, and section “H. State Agency Responsibilities Related to the Long-Term Care Ombudsman Program,” below.

In its evaluation of Long-Term Care Ombudsman programs, the Institute of Medicine recommended to the Assistant Secretary for Aging:

“6.4 The committee recommends that the Assistant Secretary for Aging issue program guidance to states that stresses the importance of delegating to the Office of the State Long-Term Care Ombudsman responsibility for managing all of the human and fiscal resources earmarked for the state ombudsman program within the boundaries of what is permitted by state budget policy and procedures and required by federal mandates for compliance. . . .” 3 .

AoA agrees with the recommendation that the head of the Office should be responsible for managing the fiscal resources of the Office. AoA proposes that the Ombudsman be held responsible for determining the use of fiscal resources appropriated or otherwise designated for the Office, subject to applicable Federal and State laws and policies, as set forth at section 1327.13(i).

The Ombudsman, as head of the Office, has responsibility for designating local Ombudsman entities pursuant to section 712(a)(5) of the Act. So that the work of Office is coordinated by and the local Ombudsman entities are accountable to the Ombudsman, AoA proposes that, where an Ombudsman designates local Ombudsman entities, the Ombudsman be held responsible to monitor the Ombudsman program performance of such entities as set forth in section 1327.13(j).

The Act requires that the State agency require the Office to coordinate with protection and advocacy systems, legal assistance, State and local law enforcement agencies, and courts of competent jurisdiction. Section 712(h)(6)-(8) of the Act. In another part of the Act, the Ombudsman program is listed among the programs and services which protect elder rights or promote elder justice and for which coordination of efforts is required by the Act. See Section 721(d) of the Act.

In section 1327.13(l), AoA proposes a list of the relevant entities covered by the Act, including AAA programs, adult protective services programs, protection and advocacy systems, facility and long-term care provider licensure and certification programs, State Medicaid fraud control units, etc. The proposal also establishes the statewide leadership role of the Ombudsman in coordinating the activities of the Office with those of these elder rights and elder justice programs.

The proposed rule defines the appropriate role and responsibilities of the State agency on aging (also referred to as “State unit on aging” or, for purposes of these regulations, “State agency”) related to the establishment and operation of the Ombudsman program. A primary responsibility of the State agency related to the operation of the Ombudsman program is to establish the policies and procedures which enable the Ombudsman program to operate in accordance with the Act. The Act requires that the State agency establish, in accordance with the Office, policies and procedures regarding how the Office will fulfill its functions. Section 712(a)(5)(D). AoA proposes consolidating the State agency responsibilities related to the Ombudsman that are included in the Act into section 1327.15.

In its 1999 report, the HHS Inspector General recommended that AoA work with States to develop guidelines for complaint response and resolution times. . . .” While numerous States have developed such standards, others have not yet done so. Through section 1327.15(a)(2)(B), AoA proposes that States develop standards related to complaint response times and further requires standards to assure prompt response that prioritize abuse, gross neglect, exploitation and time-sensitive complaints. AoA believes that States are best suited to establish these standards due to the wide variation among States in terms of resources available to the Ombudsman program, density of population centers, geographic distribution of facilities, and similar State-specific factors which would make a national standard difficult to implement.

Under Section 712(d) of the Act, States must ensure that the Ombudsman and representatives of the Office are prohibited from disclosing the identity of any complainant or resident, except as specifically authorized in the statute.

This requirement also applies to situations of reporting abuse, gross neglect or exploitation notwithstanding State laws to the contrary. This is consistent with AoA's long-standing position.

AoA proposes that the disclosure procedures must comply with the “Complaint Processing” provisions of the proposed regulations, section 1327.17(b), in which AoA clarifies exceptions (specifically related to suspected abuse, gross neglect and exploitation complaints), when disclosure of the identity of a resident by the Ombudsman may be permitted to appropriate entities. These include circumstances when the Ombudsman or representative of the Office is processing a complaint related to the resident, and:

(a) The resident is unable to communicate informed consent to the Ombudsman or representative of the Office, has no guardian or other legal representative, and the Ombudsman or representative of the Office has reason to suspect that the resident is a victim of abuse, gross neglect, or exploitation; or

(b) The resident is unable to communicate informed consent to the Ombudsman or representative of the Office, and the resident has a guardian or other legal representative who the Ombudsman or representative of the Office has reasonable cause to believe is a perpetrator of abuse, gross neglect, or exploitation of the resident.

In addition, AoA proposes that the Ombudsman must disclose the identity of a resident where the Ombudsman or representative of the Office personally witnesses suspected abuse, gross neglect or exploitation of a resident, so long as (1) the resident at issue does not request the Ombudsman or representative to not make a report of the suspected activity witnessed by the Ombudsman or representative and (2) the Ombudsman determines it to be in the best interest of the resident.

In both of these circumstances, the proposed rule requires that such disclosure only be permitted where the Ombudsman or representative of the Office has reasonable cause to believe that it is in the best interest of the resident to make a referral and the representative obtains the approval of the Ombudsman.

AoA intends the proposed regulations to address areas where clarification is needed regarding access to files, records, and other information maintained by the Office. First, this provision addresses questions regarding whether State units on aging, area agencies on aging or any other entities with monitoring responsibility have access to Ombudsman information. See also section “A. State Agency Policies,” above. Note that this proposed regulation does not limit the disclosure of aggregate information, performance measures, and similar performance data to monitoring agencies. Instead, it implements the statutory provision that the Ombudsman is prohibited from disclosing the identities of residents or complainants without obtaining appropriate consent or unless required by court order, pursuant to Section 712(d) of the Act.

Second, the proposed regulation clarifies that the requirements related to files, records and information apply regardless of funding source, including funds from Title VII, Chapter 3, of the Act. The provision in Chapter 3 of the Act which has created confusion on this issue states:

While Title VII of the Act does provide for an exception which permits the release of otherwise confidential information with respect to the programs funded through Chapter 3, Chapter 2 (the chapter related to the Ombudsman Program) contains no similar exception for the release of confidential information to law enforcement and similar agencies absent appropriate consent or a court order. See Section 712 (d)(2) of the Act.

AoA proposes use of the term “files, records, and other information” in these regulations rather than “files and records” as used in Section 712(d) of the Act. See section “G, Functions and Responsibilities of the State Long-Term Care Ombudsman,” above. The proposed rule clarifies that the State, in providing for Ombudsman program procedures for appropriate disclosure, shall develop procedures related to at least the following types of files, records, and information (each of which is specifically referenced within Section 712 of the Act): medical and social records of residents; administrative records, policies, and documents of long-term care facilities; licensing and certification records maintained by the State with respect to long-term care facilities; and data collected in the statewide uniform reporting system of the Ombudsman program.

This proposed regulation uses the term “communication of informed consent” to describe the manner in which Ombudsmen and representatives of the Office obtain consent from residents (or complainants or legal representatives, where applicable) for purposes of disclosure. The Act prohibits disclosure of the identity of any complainant or resident without appropriate “consent.” Section 712(d)(2)(B) of the Act. Since the Ombudsman and representatives of the Office provide an advocacy service, but do not perform clinical assessments or make legal determinations related to ability to consent, the Ombudsman or representatives of the Office must rely on the ability of the individual to communicate consent (whether verbally or written, including through the use of assistive technology). In addition, the Ombudsman and representatives of the Office will want to be assured that the resident (or complainant or legal representative) appears to understand that to which he or she is consenting. Therefore, the proposed rule requires the State agency to maintain the confidentiality and protection of identifying information of residents or complainants and only allow disclosure consistent with the proposed rule.

To be eligible for Older Americans Act funding, the State agency must require that the Office perform certain activities, set forth in section 1327.15(h). These activities are identified in statute and required of entities receiving federal funding under the OAA. They include recommending changes in laws, regulations and policy and providing information to public and private agencies and legislators as the Office determines to be appropriate. These provisions must be carried out notwithstanding any State laws or regulations, such as restrictions on lobbying, which may be in conflict with such provisions. Section 1327.15(a)(2)(E) establishes the State agency's responsibilities with respect to excluding the Ombudsman and representatives of the Ombudsman Office from state lobbying prohibitions.

Questions have arisen from States regarding whether it is permissible for a State agency to require consultation regarding the determinations of the Office. AoA has long maintained that consultation, so long as it does not interfere with the functions of the Office, is not prohibited and has provided such guidance to States. The OAA does not prohibit States from seeking comments or in-put, including from the State Unit on Aging, provided that in the end the Ombudsman retains the absolute right to decide what finally should be presented by the Office. Such cooperation ensures that the SUA and the Ombudsman's office would not needlessly duplicate their efforts. The SUA may also have valuable information as well as recommendations to contribute which the Ombudsman might decide to accept. Even where the SUA and Ombudsman's Office ultimately disagree, such advance notice and consultation permit both entities to coordinate their reports to the State legislature, thereby furthering a truly informed debate to the benefit of the legislature and other policy makers.

The Act places the Ombudsman in a unique position within States. To eliminate confusion, the proposed rule seeks to clarify that States may appropriately coordinate with Ombudsman programs while, at the same time, the rule reaffirms that the Office makes independent determinations. Therefore, AoA proposes the provision clarifying that the State agency is not prohibited from consulting on Ombudsman determinations at section 1327.15(a)(2)(E)(ii). The proposed rule further indicates that policies which promote consultation may not limit the ability of the Office to fulfill its functions and duties. Therefore, in circumstances in which advanced communication is impractical or would interfere with the independent determination of the Ombudsman, a State policy could not require advanced communication of the determinations of the Office.

In response to questions from States regarding appropriate uses of Title III-B and Title VII, Subtitle A, Chapter 2 funds, AoA proposes to clarify that a State agency may appropriately utilize, these funds to meet the State agency responsibility with respect to the training needs of the Ombudsman. In addition, Section 301(c) of the Act requires the Assistant Secretary for Aging (ASA) to provide training and technical assistance to State Ombudsman programs. In some cases, Ombudsmen are prevented from attending training provided by the AoA-funded National Ombudsman Resource Center because of limits on State administrative funds. Representatives of the Office may have difficulty accessing other necessary training to perform their duties without access to these resources.

AoA has previously issued guidance saying that States may use Title III, Part B funds to fund any aspect of the statewide Ombudsman Program, as the program is defined in Section 712 of the Act. It has also said that States may not include any Title VII funding in their calculation of funds available for State plan administration. The programs under Title VII, unlike most of the programs under Title III, are established and operated as direct advocacy services by the State Agency on Aging and/or agencies with which the State Agency contracts or provides grants to operate the programs.4

Since the Title III-B and Title VII funds used for the Ombudsman program are considered service dollars, States may use these funds to carry out Ombudsman services. Adequate training in order to provide this service is a reasonable cost of providing the service. Through this proposed rule, AoA clarifies for States that Title III-B and/or Title VII-2 (i.e. Ombudsman service) funds may be used for the purposes of the Ombudsman and representatives of the Office accessing and/or providing service-related training and, in fact, may be used in lieu of “administrative funds” provided to States under Title III-A. Therefore, AoA proposes the provision regarding responsibility of the State agency to provide Ombudsman and representatives of the Office access to training at section 1327.15(a)(3).

Where the Ombudsman and any representatives of the Office are employed by the State agency, AoA expects the State agency, as the employer, to provide supervision and management of Ombudsman program personnel, while respecting the limits on access to resident or complainant-identifying information, as included in the proposed rule. In addition, State agencies have a responsibility to establish policies for monitoring the performance of all programs and activities initiated under the Act for quality and effectiveness. Therefore, where the Office is outside of the State agency, the State agency has a responsibility to monitor the contract or other arrangement through which the Ombudsman program is carried out, while respecting the limits on access to information, as included in the proposed rule.

In both its personnel management and program monitoring responsibilities, the State is subject to limits on its access to the files, records and other information of the Ombudsman program. While the State agency may review aggregate data and analyze reports of Ombudsman program performance, it may not have access to information that is prohibited to be shared outside of the Ombudsman program by the Act. The proposed regulation clarifies the State agency responsibility regarding personnel supervision and management and regarding program monitoring, including with respect to prohibitions related to disclosure of files and records in Section 712(d) in the Act. See also sections “A. State Agency Policies,” and “G. Functions and Responsibilities of the State Long-Term Care Ombudsman,” above. Therefore, AoA proposes the provision regarding the responsibilities of the State agency with respect to personnel management and program monitoring at section 1327.15(a)(4),(5).

The Act requires the Assistant Secretary to “provide Federal leadership to support State efforts in carrying out elder justice program and activities.” Section 201(e)(2)(A)(ii) of the Act. This duty includes “promoting collaborative efforts and diminishing duplicative efforts in the development and carrying out of elder justice programs at the Federal, State and local levels.” Section 201(e)(2)(A)(ix) of the Act. In addition, the Act requires State agencies to “coordinate the programs [to address elder abuse, neglect and exploitation] with other State and local program and services for the protection of vulnerable adults. . . .” Section 721(d) of the Act. Among the programs specifically listed for coordination, are State Long-Term Care Ombudsman programs. Section 721(d)(3) of the Act.

The proposed rule emphasizes the importance of States' coordinating role being integrated into the State plan process. It also requires coordination of Title VII program activities to promote State-level alignment with the duties of the Assistant Secretary as set forth in Section 201(e)(2) of the Act. Therefore, AoA proposes the provision regarding responsibility of the State agency to coordinate elder rights, disability rights, and elder justice programs at section 1327.15(a)(6)-(7).

States are required by the Act to ensure that willful interference with representatives of the Office in the performance of their official duties shall be unlawful. Section 712(j)(1) of the Act. These duties are set forth in section 1327.17(a). Proposed section 1327.15(a)(8) clarifies that interference is not limited to interference by facilities or other third parties, but that State agencies on aging and local Ombudsman entities are also subject to the prohibition on interference. In fulfilling their statutory duty to protect the Ombudsman program from interference, State agencies may not themselves interfere with the Ombudsman program's ability to perform its official duties.

The Act requires that the State agency ensure that representatives of the Office have access to facilities, residents, and resident records pursuant to Section 712(b) of the Act. With respect to access to resident records, the Act states:

The State shall ensure that representatives of the Office shall have * * *

(i) appropriate access to review the medical and social records of a resident, if—

(I) The representative has the permission of the resident, or the legal representative of the resident; or

(II) the resident is unable to consent to the review and has no legal representative; or

(ii) Access to the records as is necessary to investigate a complaint if—

(I) A legal guardian of the resident refuses to give the permission;

(II) A representative of the Office has reasonable cause to believe that the guardian is not acting in the best interests of the resident; and

(III) The representative obtains the approval of the Ombudsman. * * *

AoA has received reports of long-term care facilities, state government agencies, and other entities denying Ombudsmen or representatives of the Office access to resident records due to concerns that the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule does not permit the disclosure. AoA has previously provided program guidance to States that the HIPAA Privacy Rule, 45 CFR Part 160 and Subparts A and E of Part 164, does not preclude release of residents' medical and social records to the Office. AoA Information Memorandum 03-01, February 4, 2003 (available at http://www.aoa.gov/AOARoot/AoA_Programs/OAA/Aging_Network/im/docs/Info_Memoradum_%20HIPAA.pdf). Proposed section 1327.15(b)(1) clarifies that the State agency has a responsibility to establish policies and procedures consistent with this HIPAA guidance in order to provide representatives of the Office with appropriate access to resident records.

The Act sets forth specified activities that States must require of the Office in the administration of the Ombudsman program. Section 712(h) of the Act. For convenience, ACL has included this statutory text at section 1327.15(c) of the proposed rule. The inclusion of these requirements into the proposed rule does not and is not intended to amend the statutory language.

Section 1327.17 includes provisions related to both the functions that may be performed by the State Long-Term Care Ombudsman (the “Ombudsman”) and/or the duties which may be performed by the representatives of the Office, as opposed to solely by the Ombudsman. (The functions which are the sole responsibility of the Ombudsman are found under section “G, Functions and Responsibilities of the State Long-Term Care Ombudsman,” above.)

Proposed section 1327.17(a) sets forth the duties of the representatives of the Office as set forth in Section 712(a)(5)(B) of the statute. For convenience, ACL included this statutory text at section 1327.17(a) of the proposed rule. The inclusion of these duties into the proposed rule does not and is not intended to amend the statutory language. The complete list of functions statutorily required of the Ombudsman is found above at section 1327.13(a).

For convenience, AoA proposes compiling regulations which relate to both the functions of Ombudsman and the duties of the Office (i.e. those which may be performed by either the Ombudsman and/or the representatives of the Office) into this section.

The requirement to “identify, investigate, and resolve complaints made by or on behalf of residents” is a required function of the Ombudsman under Section 712(a)(3)(A) of the Act and a required duty of representatives of the Office under Section 712(a)(5)(B)(iii) of the Act. While facilities, family members, agencies, or other individuals may indirectly benefit from the complaint resolution work of the Office, complaint processing by the Office must focus on seeking an outcome that satisfies the resident. Therefore, section 1327.17(b)(1) of the proposed rule defines the resident as the primary recipient of Ombudsman program services and sets forth the purposes of the Ombudsman program complaint process as follows:

(1) Resolving the complaint to the resident's satisfaction, and

(2) assisting residents in protecting their health, safety, welfare, and rights.

The Act provides that the resolution of complaints made by, or on behalf of, residents is a function of the Ombudsman and a duty of representatives of the Office. Sections 712(a)(3)(A); 712(a)(5)(B)(iii) of the Act. Through its National Ombudsman Reporting System (NORS) 5 instructions, States report on resolved complaints only if they meet the following definition: “Definition of resolved complaint: The complaint/problem was addressed to the satisfaction of the resident or complainant.” 6

In proposed section 1327.17(b)(2)(A), AoA describes how this person-centered focus is implemented into complaint processing activities. The proposed rule indicates that, regardless of the source of the complaint, the Ombudsman or representative of the Office shall discuss the complaint with the resident in order to determine the perception of the resident, request consent in order to investigate the complaint, determine the wishes of the resident, advise the resident of his or her rights, work with the resident to develop a plan of action, investigate the complaint, and determine whether the complaint is resolved to the satisfaction of the resident.

The Act also requires as a function of the Ombudsman: “provide services to assist the residents in protecting the health, safety, welfare, and rights of the residents;” and as a duty of the representatives of the Office: “provide services to protect the health, safety, welfare, and rights of residents.” Sections 712(a)(3)(B); 712(a)(5)(B)(i) of the Act.

Minimal new burden will be placed on the States, State agencies on aging, AAAs, Ombudsmen, or the Office because these proposed regulations in section 1327.17(b) are largely consistent with the present practice as set forth in the National Ombudsman Reporting System (NORS) instructions which States currently follow in submitting Ombudsman program performance reports annually to AoA.

At several places in the Act, the Ombudsman and representatives of the Office must rely on the “permission” (see, e.g., Section 712(b) of the Act) or “consent” (see, e.g., Section 712(d)(2)(B) of the Act) of the resident, (or legal representative, where applicable). Since the Ombudsman and representatives of the Office provide an advocacy service, but do not perform clinical assessments or make legal determinations related to ability to consent, the Ombudsman or representatives of the Office must rely on the ability of the individual to communicate consent (whether verbally or written including through the use of assistive technology).

In addition, the Ombudsman and representatives of the Office will want to be assured that the resident (or legal representative, where applicable) appears to understand to what he or she is consenting. Therefore, throughout the regulations, the term “communication of informed consent” is used to describe the interaction between residents (or their legal representative, where applicable) and Ombudsmen and representatives of the Office.

The Ombudsman and representatives of the Office have a duty to “provide services to protect the health, safety, welfare, and rights of residents.” Section 712(a)(5)(B)(i); see also 712(a)(3)(B) of the Act. This may be impossible for the Ombudsman or representatives of the Office to accomplish where the resident is unable to provide informed consent and where there is no legal representative to provide informed consent on behalf of the resident. Therefore, AoA proposes, at section 1327.17(b)(2)(B), that the Ombudsman or representative of the Office shall determine whether the complaint was resolved “in a manner that is in the resident's best interest” in circumstances where the resident is unable to provide informed consent and where there is no legal representative to provide informed consent on behalf of the resident.

The “resident's best interest” standard is proposed only in the circumstance where the resident is unable to provide informed consent and where there is no legal representative to provide informed consent on behalf of the resident. In all other circumstances, the current NORS instruction applies, which defines “resolved complaint” as “The complaint/problem was addressed to the satisfaction of the resident or complainant.” 7 AoA seeks comment on this provision, noting that this proposed standard differs from the current NORS instruction in specified circumstances.

As stated above regarding proposed section 1327.15(b)(2)(c), the proposed regulations provide that the State procedures for disclosure under Section 712(d) of the Act must provide that the Ombudsman and representatives of the Office shall not be required to report abuse, neglect or exploitation, despite State laws to the contrary, where such report would constitute disclosure prohibited by the Act. Through proposed section 13271.17(b)(3), AoA seeks to clarify the disclosure requirements of the Act with respect to abuse reporting and provide limited circumstances in which disclosure is permitted, i.e. where an individual may be at risk and unable to indicate his or her wishes related to disclosure.

Where an Ombudsman or representative of the Office is processing a complaint on behalf of a resident, but the resident is unable to communicate informed consent and has an authorized representative, the proposed regulations clarify that the Ombudsman or representative of the Office has the authority to rely on the guidance of a guardian or other legal representative. However, the provision qualifies this reliance “so long as the Ombudsman or representative of the Office has no reasonable cause to believe that the representative of the resident is not acting in the best interests of the resident.” The purpose of this limitation is to conform to the principle stated in Section 712(b)(1)(B)(ii) of the Act:

“The State shall ensure that representatives of the Office shall have . . . access to the records access to the records as is necessary to investigate a complaint if—

(I) a legal guardian of the resident refuses to give the permission;

(II) a representative of the Office has reasonable cause to believe that the guardian is not acting in the best interests of the resident; and

(III) the representative obtains the approval of the Ombudsman. . . .”

Section 712 of the Act at various places uses the terms “guardian” (e.g., 712(a)(3)(A)(ii)) and “legal representative” (e.g., 712(b)(1)(B)(i)(I), 712(d)(2)(B)(i)). AoA proposes to use the term “guardian or other legal representative” throughout the proposed regulations to clarify that the Ombudsman and representatives of the Office may rely, where appropriate, on the communications of a resident's guardian or other legally authorized representative (such as a health care proxy or financial power of attorney authorized by the resident). In many cases, a resident may have previously authorized someone to make decisions on his or her behalf and, therefore, may not need a court-appointed guardian even if he or she meets the standard of incapacity for appointment of a guardian. Therefore, AoA proposes the provision regarding communication of informed consent by the representative of the resident at section 1327.17(b)(5).

In fiscal year 2011, 9% of the 204,044 complaints investigated, resolved and closed by Ombudsman programs were complaints of abuse, gross neglect or exploitation (represented by A, P-117, and P-121 codes in the National Ombudsman Reporting System (NORS)). NORS Instructions provide guidance and definitions to Ombudsman programs regarding the reporting of complaints related to abuse, gross neglect and exploitation.

Under Sections 712(a)(3)(B) and 712(a)(5)(B)(i) of the Act, the Ombudsman and representatives of the Office have a duty to “provide services to assist the residents in protecting the health, safety, welfare, and rights of the residents.” Where a resident is able to consent related to disclosure of his or her identity, the provisions of Section 712(d) of the Act require the Ombudsman and the representatives of the Office to prohibit disclosure absent consent.

The Act requires the Office to “provide service to protect the health, safety, welfare, and rights of the residents.” Section 712(a)(5)(B)(i) of the Act. However, this requirement is particularly challenging to meet in situations where a resident is allegedly a victim of abuse, gross neglect or exploitation, and is unable to communicate informed consent to disclose his or her identity.

Therefore, AoA proposes that the State-developed procedures for disclosure by the Ombudsman and representatives of the Office may provide authority to disclose the identity of the resident to appropriate authorities when the Ombudsman or representative of the Office is processing a complaint related to the resident when the disclosure would be in the best interest of the resident and meets at least one of the following criteria:

(1) The resident is unable to communicate informed consent to the Ombudsman or representative of the Office, has no guardian or other legal representative, and the Ombudsman or representative of the Office has reason to suspect that the resident is a victim of abuse, gross neglect, or exploitation (as stated in proposed section 1327.17(b)(6))

(2) The resident is unable to communicate informed consent to the Ombudsman or representative of the Office, and the resident has a guardian or other legal representative who the Ombudsman or representative of the Office has reasonable cause to believe is a perpetrator of abuse, gross neglect, or exploitation of the resident (as stated in proposed section 1327.17(b)(7)). AoA proposes this provision as it is consistent with the statutory provision requiring that States provide the Office with access to the records of a resident where the representative of the Office has reasonable cause to believe a guardian is not acting in the best interest of the resident. Section 712(b)(1)(B)(ii) of the Act.

The proposed rule states that the disclosure procedures may permit the Ombudsman or representative of the Office to “refer the matter and disclose the identity of the resident” based on the determination of the best interest of the resident by the Ombudsman or representative of the Office in proposed sections 1327.17(b)(6)-(7). This proposal authorizes, but does not require, procedures related to disclosure to provide this authority in order to be consistent with Section 712(d)(2)(A) of the Act which provides for disclosure “only at the discretion of the Ombudsman.”

However, AoA proposes that the State-developed procedures for disclosure by the Ombudsman and representatives of the Office must require disclosure of the identity of the resident to appropriate authorities when the Ombudsman or representative of the Office is processing a complaint related to the resident in the narrow circumstance when: (1) The Ombudsman or representative of the Office personally witnesses suspected abuse, gross neglect or exploitation of a resident (as stated in proposed section 1327.17(b)(8)) and (2) the representative has reasonable cause to believe that the disclosure would be in the best interest of the resident, and (3) the representative obtains the approval of the Ombudsman.

A representative of the Office who personally witnesses suspected abuse would be required to obtain approval of the Ombudsman before disclosing the identity of the resident to appropriate authorities. This is analogous to the approval required by the Act for representatives seeking access to records to investigate a complaint related to a legal guardian for whom the representative of the Office has reasonable cause to believe is not acting the best interests of the resident. Section 712(b)(1)(B)(ii) of the Act. In this situation of personally witnessing an incident, the Ombudsman or the representative of the Office may be the only person other than the victim with information on the incident.

This is in contrast to the more common occurrence where complaints of suspected abuse, gross neglect or exploitation are brought to the attention of the Ombudsman program from another person with information regarding the incident. Where another person is bringing the information to the attention of the Office, such complainant or reporter is presumably able (and may be mandated under State law) to report to appropriate authorities for an official investigation of the allegations. As background, in fiscal year 2011, Ombudsman program cases (in all complaint categories, not only abuse-related complaints) were generated by the following types of complainants: Residents (38%), relatives or friends of residents (19%), facility staff (17%), Ombudsman program staff and volunteers (13%), and others (12%).8

Where the Ombudsman or representative of the Office personally witnesses the incident, and the resident is unable to communicate informed consent, the Ombudsman or representative of the Office may open a complaint with himself or herself as the complainant and work to resolve the issue but may incorrectly conclude that they are prohibited by the Act from disclosing the identity of the resident. AoA believes that the absence of disclosure of the resident's identity in this situation could create a barrier to facility management which may need information to protect the resident and/or to appropriate investigatory agencies which may need information in order to fulfill their protective, regulatory and/or law enforcement duties related to the alleged victim.

Therefore, AoA proposes, at section 1327.17(b)(8) that disclosure of the identity of a resident should be required in the situation where an Ombudsman or representative of the Office personally witnesses the incident, so long as (1) the resident at issue does not request the Ombudsman or representative to not make a report of the suspected activity witnessed by the Ombudsman or representative, (2) the representative has reasonable cause to believe that the disclosure would be in the best interest of the resident, and (3) the representative obtains the approval of the Ombudsman.

The Act requires the State agency to require the Office to coordinate with protection and advocacy systems, legal assistance, and State and local law enforcement agencies and courts of competent jurisdiction. Section 712(h)(6)-(8) of the Act; see also Section 721(d) of the Act, and section “G. Functions and Responsibilities of the State Long-Term Care Ombudsman” regarding “Ombudsman Responsibility with respect to Coordination of Ombudsman Activities with Other Elder Rights, Disability Rights, and Elder Justice Entities,” above.

AoA proposes section 1327.17(c) in order to consolidate the list of the relevant entities covered by the Act into a comprehensive list and to clearly set forth its expectation that all levels of the Office should promote collaborative efforts and diminish duplicative efforts in the development and carrying out of elder rights and elder justice programs. See Section 201(e)(2)(A)(ix) of the Act. This provision addresses the duty to coordinate activities by representatives of the Office, including those representatives in a local Ombudsman entity, at the local level, in contrast to proposed rule section 1327.13(l), above, which relates specifically to the responsibility of the State Ombudsman to coordinate with relevant entities at the State level.

The Act requires the Ombudsman to perform functions that may be considered “lobbying” under some state laws, including recommending changes in laws pursuant to Section 712(a)(3)(G)(ii) and providing information to legislators regarding recommendations related to the problems and concerns of residents of long-term care facilities pursuant to Section 712(h)(3) of the Act.

As federal grantees, States are required to make certain certifications regarding lobbying under the 45 CFR Part 93. AoA proposes section 1327.17(d) in order to clarify that the functions and duties required of the Office by the Act do not constitute a violation of this part (see 45 CFR § 93.100).

The Act specifically requires the Assistant Secretary to issue regulations related to conflicts of interest at Section 713 of the Act. Freedom from conflicts of interest is critically important to the successful operation of Ombudsman programs. Ombudsman programs are effective only when they can provide credible representation of the interests of residents without conflicts of interest.

In its evaluation of Long-Term Care Ombudsman programs, the Institute of Medicine dedicated a chapter to issues related to conflicts of interest, explaining:

Organizational conflicts may arise from the organizational location of the Office and/or local Ombudsman entities, in which the work of the Ombudsman is unable to focus primarily on the interests of long-term care residents due to competing functions or priorities. For example, the Office might be located within an agency that makes determinations regarding resident eligibility for benefits or services. A resident who requests the Ombudsman to resolve a complaint related to the eligibility determination, and discovers that the Ombudsman is housed within the same entity, may not trust the Ombudsman to perform credible complaint resolution work on his or her behalf.

Similarly, the Office might be located within an agency that is the official finder of fact regarding abuse allegations (such as adult protective services or the state licensing agency). If an Ombudsman identifies a pattern of inadequate abuse investigation taken by the agency, the agency may have a conflicting interest in protecting its reputation, which may cause it to interfere with the Ombudsman's duty to address the issue systemically (for example, by making recommendations to policymakers outside of the agency).

In some states, individual representatives of the Office have been assigned conflicting roles by a local Ombudsman entity with multiple service responsibilities. For example, the representative may have employment assignments both in the Ombudsman Program and protective services so may be called upon to provide protective services for a resident. But the actions taken to protect the resident and actions to advocate for what the resident desires may conflict with one another. As another example, a representative may be assigned conflicting duties of case management for long-term supports and services for a resident. If the resident wishes to file a complaint related to the service plan developed by the case manager, he or she would be in the position of requesting advocacy assistance of the very individual who made the case management decisions which the resident.

The IOM recommended, among other things, the following:

While AoA has provided States with technical assistance and education on questions related to conflicts of interest, a recent compliance review and recurring questions raised by States and Ombudsman programs suggest that clear regulations would assist in the effective and efficient determination of compliance with the conflict of interest principles in Section 712 of the Act.

The proposed regulations require a State agency to examine whether it has conflicts related to either the organizational placement of the Ombudsman program or the individuals selected to serve as Ombudsmen and representatives of the Office. If an organizational or individual conflict exists, the State agency must identify the conflict. See Section 712(f)(4) of the Act.

AoA proposes the following process to assist States in complying with the Act. Ombudsmen annually report on program activities, characteristics, and funding; complaint resolution; and recommendations for long-term care systems change through NORS.11 The proposed regulations would utilize the current reporting process to provide States and Ombudsmen with a mechanism for submitting evidence of compliance with the Act's requirements related to conflicts. It is AoA's intent to include in future NORS Instructions a description of how to appropriately report the identification of any conflicts related to the implementation of the Ombudsman program and describe steps the State has taken to remove or remedy the conflict.

For example, a State agency which houses both adult protective services and the Office of the State Long-Term Care Ombudsman should identify such conflict in NORS and indicate its plans to remove or remedy the conflict so that it does not interfere with the duties of the Office as set forth below.

Section 712(f)(4) of the Act requires that State agencies “establish, and specify in writing, mechanisms to identify . . . conflicts of interest.” The proposed regulations provide a comprehensive, though not exhaustive, list of potential conflicts to assist States in this identification process. The list consists of conflicts identified in Section 712 of the Act, as well as others specified in the IOM report.

The proposed regulations require a State agency to remove or remedy all identified organizational and individual conflicts. AoA realizes that many State agencies provide multiple programs and services, including adult protective services, guardianship services, licensing and regulation, and home and community-based services in board and care and assisted living settings. Some of these responsibilities create organizational conflicts with the functions and duties of Ombudsman programs. As the IOM reported:

AoA proposes use of NORS reporting for States to describe the steps taken to remove or remedy conflicts of interest. For example, a State agency which houses both adult protective services and the Office of the State Long-Term Care Ombudsman might submit assurances that staff are not assigned conflicting responsibilities and submit policies and procedures demonstrating the distinct public roles and public information related to the respective programs; separate, secure, and confidential data collection systems; separate and confidential record-keeping; and clear referral processes between the programs.

AoA realizes that some States will face challenges in removing or remedying some organizational conflicts of interest. We welcome comments on the anticipated impact of this proposed regulation. In addition, AoA realizes that some of the provisions related to employment of the Ombudsman or representatives of the Office at proposed section 1327.19(d)(5) (i.e., one-year waiting period after serving in a licensing or long-term care provider responsibility) serve as a proxy for avoiding conflicts of interest but do not guarantee the outcome of an Ombudsman or representatives of the Office free of potential conflicts. AoA welcomes suggestions on alternative approaches that promote the conflict-free integrity of the Ombudsman and representatives of the Office, but do not arbitrarily disqualify excellent candidates for the position.

AoA plans to engage with States in the provision of technical assistance, training and resources to assist them in crafting effective solutions to remedy conflicts that may impact the ability of the Ombudsman program to fulfill its duties to residents under the Act. AoA also recognizes that many States have already taken significant steps to avoid, identify and remedy conflicts. For example, in terms of organization, some have moved the Office into a distinctly identifiable and more independent office within the organizational structure of the State agency on aging. Some have moved it into another State agency. Others have moved the Office out of State government entirely. Some States have established laws, regulations, or policies that have clearly delineated an independent identity for the Office, providing the Ombudsman with the ability to represent resident interests to policymakers, the public, and others without interference. Others have implemented clear policies and procedures, within the designation process, for identifying and remedying conflicts of interest for current and potential representatives of the Office.

AoA proposes that this rule become effective one year after the publication of the final rule. This will provide States time to review their relevant laws, regulations, policies, standards, State plan on aging, and practices and to take any steps that might be necessary in order to achieve compliance with the rule.

AoA has proposed regulations on operational issues for which it believes regulatory action is critical to assure successful Ombudsman program operation. AoA acknowledges that guidance in other areas related to Ombudsman program operation may also be beneficial to States but that the statute is sufficiently specific and/or sub-regulatory guidance, training, technical assistance or other types of assistance to the States may be sufficient to meet the need. One such area for which additional guidance may be necessary is the provision of legal counsel to the Ombudsman program.

The Act provides:

LEGAL COUNSEL.—The State agency shall ensure that—

(1)(A) adequate legal counsel is available, and is able, without conflict of interest, to—

(i) provide advice and consultation needed to protect the health, safety, welfare, and rights of residents; and

(ii) assist the Ombudsman and representatives of the Office in the performance of the official duties of the Ombudsman and representatives; and

(B) legal representation is provided to any representative of the Office against whom suit or other legal action is brought or threatened to be brought in connection with the performance of the official duties of the Ombudsman or such a representative; and

(2) the Office pursues administrative, legal, and other appropriate remedies on behalf of residents.

AoA believes that the statute is adequately specific to determine State compliance with regard to adequate legal counsel. In the past, AoA has determined that it has adequate authority under the statute, without a regulation in place, to cite a State agency deficiency in compliance with this provision. AoA Region IV Ombudsman Assessment Report, June 13, 1994. AoA acknowledges that guidance could be helpful in defining competencies of legal counsel that may contribute to its adequacy and the application of the conflict of interest provisions in the proposed regulations to the legal counsel requirement. AoA believes this guidance could be provided to States without the need for regulation. However, AoA welcomes comments on the question of whether regulations are needed by States in order to more fully implement the Act's requirements related to the provision of legal counsel to the Ombudsman program.

Executive Orders 13563 and 12866 direct agencies to assess all 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 proposed rule has been designated a “substantive, non-significant regulatory action” and not economically significant, under Section 3(f) of Executive Order 12866. The proposed rule has been reviewed by the Office of Management and Budget.

Under the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) (5 U.S.C. §§ 601 et seq.), agencies must consider the impact of regulations on small entities and analyze regulatory options that would minimize a rule's impacts on these entities. Alternatively, the agency head may certify that the proposed rule will not have a significant economic impact on a substantial number of small entities. AoA does not anticipate that this NPRM will have a significant economic impact on a substantial number of small businesses and other small entities.

Under the Paperwork Reduction Act, before an agency submits a proposed collection of information to the Office of Management and Budget (OMB) for approval, it must publish a document in the Federal Register providing notice of the proposed collection of information and a 60-day comment period, and must otherwise consult with members of the public and affected agencies concerning the proposed collection. In accordance with Section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. §§ 3501 et seq.), AoA has determined there are limited new information collection requirements in the proposed rule.

Currently, States are required to annually report on program activities, characteristics, and funding; complaint resolution; and recommendations for long-term care systems change of the Office of the State Long-Term Care Ombudsman through the National Ombudsman Reporting System (NORS).13 The proposed regulations would add one additional question to NORS: the identification of organizational conflicts of interest and a description of steps taken by the State to remove or remedy any identified conflict(s). Prior to the effective date of a final rule, AoA intends to request an amendment to current NORS instructions and to alter existing reporting software to capture data consistent with this requirement.

AoA estimates that the proposed changes would expand the reporting requirement from 8569 hours to 8621 hours.

Title: State Annual Long-Term Care Ombudsman Report.

OMB Control Number: 0985-0005.

Type of Request: Modification of Information Collection Request.

Respondents: 50 States, the District of Columbia and Puerto Rico.

Frequency: Annually

Estimated Annual Burden on Respondents: 52 hours (52 respondents × 1 hour per year).

We invite comments on: (1) The necessity and utility of the information collection, (2) the accuracy of the estimate of the burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) ways to minimize the burden of collection without reducing the quality of the collected information.

In addition, States are already required by Section 712 of the Act to develop policies and procedures for the operation of the Long-Term Care Ombudsman Program. The proposed regulations are intended to clarify this existing requirement without creating any additional burden on States.

Executive Order 13132 prohibits an agency from publishing any rule that has federalism implications if the rule either, imposes substantial direct compliance costs on State and local governments and is not required by statute, or the rule preempts State law, unless the agency meets the consultation and funding requirements of Section 6 of the Executive Order. This rule does not have federalism impact as defined in the Executive Order.

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that a covered agency prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a covered agency must prepare a budgetary impact statement, Section 205 further requires that it select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with the statutory requirements. In addition, Section 203 requires a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule. We have determined that this rule will not result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of more than $100 million in any one year. Accordingly, we have not prepared a budgetary impact statement, specifically addressed the regulatory alternatives considered, or prepared a plan for informing and advising any significantly or uniquely impacted small governments.

Section 654 of the Treasury and General Government Appropriations Act of 1999 requires Federal agencies to determine whether a proposed policy or regulation may affect family well-being. If the agency's determination is affirmative, then the agency must prepare an impact assessment addressing seven criteria specified in the law. This regulation protects the confidentiality of information contained in the records of State child support enforcement agencies. These regulations will not have an adverse impact on family well-being as defined in the legislation.

Pursuant to Executive Order 13563 of January 18, 2011, and Executive Order 12866 of September 30, 1993, Executive Departments and Agencies are directed to use plain language in all proposed and final rules. AoA believes it has used plain language in drafting of the proposed rule and would welcome any comment from the public in this regard.

For the reasons stated in the preamble, the Administration on Aging, Administration for Community Living, U.S. Department of Health and Human Services, proposes to amend 45 CFR Part 1321 and add Part 1327 as follows:

This is a synopsis of the Commission's Notice of Proposed Rulemaking (NPRM), FCC 13-58, adopted on April 29, 2013, and released on May 1, 2013, in GN Docket No. 13-111; RM-11430; ET Docket No. 08-73; WT Docket No. 10-4; PRM09WT; PRM11WT; and FCC 13-58. The full text of the NPRM and copies of any subsequently filed documents in this matter may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 20554. Customers may contact the Commission's duplication contractor at its Web site, www.bcpiweb.com, or by calling (202) 488-5300. Document can also be downloaded in Word or Portable Document Format (PDF) at http://www.fcc.gov/guides/cramming-unauthorized-misleading-or-deceptive-charges-placed-your-telephone-bill.

Pursuant to 47 CFR 1.1200 through 1.1216, this matter shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must: (1) List all persons attending or otherwise participating in the meeting at which the ex parte presentation was made; and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with section 1.1206(b) of the Commission's rules. In proceedings governed by section 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

People with Disabilities: To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

The NPRM seeks comment on potential new information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

1. In the NPRM, the Commission proposes measures to facilitate the development of multiple technological solutions to combat the use of contraband wireless devices in correctional facilities nationwide. Prisoners' use of contraband wireless devices to engage in criminal activity is a serious threat to the safety of prison employees, other prisoners, and the general public. The Commission proposes a series of modifications to its rules to facilitate spectrum lease agreements between wireless providers and providers or operators of managed access systems used to combat contraband wireless devices. The NPRM also seeks comment on the Commission's proposal to require wireless providers to terminate service, if technically feasible, to a contraband wireless device if an authorized correctional facility official notifies the wireless provider of the presence of the contraband wireless device within the correctional facility. While the Commission is limiting its proposals to managed access and detection solutions, the Commission nevertheless invites comment on other technological approaches for addressing the problem of contraband wireless device use in correctional facilities. For each proposal, the Commission requests specific comment regarding costs and benefits.

2. Managed access systems are micro-cellular, private networks that analyze transmissions to and from wireless devices to determine whether the device is authorized or unauthorized for purposes of accessing public carrier networks. Authorized devices are allowed to communicate normally with the commercial wireless network, while transmissions to or from unauthorized devices are terminated. To date, wireless providers and managed access providers have used spectrum lease agreements to negotiate the transfer of rights for such systems and have sought approval or provided notification of such agreements under the Commission's spectrum leasing rules. Additionally, the managed access lessee typically seeks to modify its regulatory status from commercial mobile radio service (CMRS) to private mobile radio service (PMRS), which requires additional filings and results in processing delays. The Commission proposes rule and procedural changes to facilitate a streamlined application process for spectrum leases entered into exclusively to combat the use of unauthorized wireless devices in correctional facilities.

3. The Commission proposes to modify its rules and procedures to make qualifying leases for managed access systems in correctional facilities subject to immediate processing and approval. The Commission proposes to immediately process long-term de facto lease applications and spectrum manager notifications for managed access systems, even in cases where grant of multiple lease applications would result in the lessee holding geographically overlapping spectrum rights or where the license involves spectrum subject to designated entity unjust enrichment provisions or entrepreneur transfer restrictions. Pursuant to this proposal, grant or acceptance of qualifying managed access leases would be indicated the following business day on the Commission's Universal Licensing System. The accepted lease would then be effective upon the date set forth by the licensee and lessee in the lease application or notification. The Commission seeks comment on the rule changes necessary to implement this proposal.

4. Specifically, the Commission seeks comment on its proposal to require applications or notifications for managed access leases to meet the completeness standards set forth in its existing spectrum leasing rules. Licensees and lessees would continue to file Form 608, and would be required to complete all relevant fields and certifications on the form. If an application or notification is sufficiently complete but the responses or certifications raise questions regarding the lessee's eligibility or qualification to hold spectrum, the Commission proposes that the application or notification will not be eligible for immediate approval or processing consistent with the Commission's current processes. The Commission proposes to modify Form 608 to allow managed access providers and CMRS licensees to identify that a proposed lease is a managed access lease exclusively for a system in a correctional facility, and to require managed access providers to attach a written certification explaining the nature of the managed access system, including the location of the correctional facility, the provider's relationship to the facility, and the exact proposed coordinates of the leased spectrum boundaries. Regarding enforcement mechanisms, the Commission seeks comment on its proposal to continue to apply existing spectrum leasing rules to managed access leases, and whether these protections are sufficient to ensure rule compliance in the context of Commission authorization of managed access systems deployed to combat contraband phone use, and whether any additional conditions or alternative mechanisms are required to further the public interest. The Commission also seeks comment on whether managed access operators should be encouraged or required to provide notification to households and businesses in the vicinity of the correctional facility in which a managed access system is installed and how such a process would be implemented.

5. The Commission proposes to amend section 20.9 of its rules to establish that managed access services in correctional facilities provided on spectrum leased from CMRS providers will be presumptively treated as PMRS. The Commission proposes to require the lessee to certify on the application or notification that the leased spectrum will be used solely for the operation of a managed access system at a correctional facility. However, a managed access lessee would retain the option of applying for CMRS status by including an exhibit to Form 608 demonstrating that the service meets the CMRS definition or is the functional equivalent of CMRS. The Commission seeks comment on this proposal, and also whether it should apply the Commission's 911 and enhanced 911 (E911) rules to managed access services that provide access to 911 and E911.

6. The Commission seeks comment on its proposal to exercise forbearance in order to immediately process de facto leases for managed access systems in correctional facilities that do not raise concerns with use and eligibility restrictions, that do not require a waiver or declaratory ruling with respect to a Commission rule, but that do involve leases of spectrum in the same geographic area or involve designated entity unjust enrichment provisions and transfer restrictions. Specifically, the Commission proposes to forbear from the applicable prior public notice requirements and individualized review requirements of sections 308, 309, and 310(d) of the Communications Act (“the Act”). The Commission also seeks comment on a proposal to streamline the process for a managed access provider to obtain special temporary authority to operate a managed access system in a correctional facility prior to obtaining a more permanent authorization.

7. The Commission also seeks comment generally on proposals submitted by Global Tel*Link Corp. (filed July 20, 2011), the Mississippi Department of Corrections (filed Aug. 21, 2009), and Tecore Networks (comments filed in GN Docket No. 12-52 on Apr. 30, 2012) and the extent to which they may be incorporated into the NPRM's lease processing and approval proposals.

8. In addition to the Commission's proposals regarding streamlining the lease application process for managed access systems, the Commission seeks comment on proposals to facilitate the deployment of detection systems. Detection systems generally identify the location of a contraband wireless device through triangulation, and then correctional facility employees search for and physically confiscate the identified contraband device to terminate operations. Detection system operators do not require a FCC license or authorization. The Commission seeks comment on a proposal submitted by CellAntenna (filed Sept. 2, 2011) that consists of a three step plan: first, the correctional facility identifies unauthorized wireless devices within the facility; second, the warden transmits the identifying information of the contraband device to the appropriate CMRS provider via email or fax; and third, the CMRS provider sends a message to the unauthorized device notifying the user that the device is unauthorized and suspends service to the device.

9. Consistent with CellAntenna's proposal, the Commission proposes to require CMRS licensees to terminate service to contraband devices within correctional facilities pursuant to a qualifying request from an authorized party. The Commission seeks comment on the specific information that the correctional facility must transmit to the provider to effectuate termination, timing for carrier termination, methods of authenticating a termination request, and other issues. The Commission also seeks specific comment on the cost burdens that a carrier would face in establishing the reporting mechanisms, technical upgrades, if any, operational enhancements, and personnel training necessary to handle requests for termination. In addition, to the extent that carriers incur such costs to support requests for termination, the Commission seeks comment on mechanisms by which carriers could recoup the initial and ongoing expense of complying with a requirement to terminate service to contraband devices.

10. With regard to identifying contraband devices, according to CellAntenna, when a variety of unique identifying information about the device is transmitted to the device's CMRS provider, the CMRS provider can identify the device in its systems and terminate service to the device. The Commission seeks comment on CellAntenna's technical analysis and on any safeguards that may be necessary to protect against the unlikely event that an authorized device outside of the correctional facility is detected.

11. Additionally, the Commission seeks comment on whether contraband wireless devices identified by CellAntenna's technology and other technologies, including managed access systems, have the requisite characteristics, including accuracy, to identify contraband wireless devices for purposes of service termination while avoiding incorrect identification of legitimate devices. Should the Commission establish minimum performance standards for detection systems or encourage voluntary commitments? How would the Commission verify that an entity meets such a standard? Alternatively, to the extent that detection equipment requires FCC certification, the Commission could impose technical accuracy standards through the equipment certification process. The Commission seeks comment on these alternatives, and on their costs and benefits.

12. The Commission seeks comment on a number of issues surrounding the process of requesting termination of service to contraband devices. Specifically, would correctional facilities have greater operational flexibility if an authorized agent were able to make the formal termination request? What criteria should be used to determine the authorized correctional facility personnel? Would such criteria be an adequate safeguard against the transmission of inaccurate information to a carrier? Do different carriers and different wireless technologies require different information to identify and terminate service to a device? Do the requirements differ for resellers or small wireless providers relative to large wireless providers? Are all types of detection equipment and systems capable of capturing the identical suite of information? The Commission seeks comment on any electronic or other means in addition to email and fax that would be an acceptable way for a correctional facility to transmit a termination request.

13. With regard to the process of terminating service to contraband devices, the Commission seeks comment on a variety of issues. Should the Commission establish set intervals or times at which a correctional facility or detection provider can transmit batch termination requests to a carrier? Is it relevant if both the carrier and correctional facility have automated systems for requesting termination and terminating service to contraband wireless devices? Are there specific issues to consider with respect to processing termination requests by small or rural CMRS providers? What role could the database being developed by the wireless industry to identify and terminate service to stolen smartphones play in this process? Could participating wireless providers reduce implementation costs by relying on existing technologies and processes? The Commission seeks comment on ways that a correctional facility with a detection system will be able to identify the appropriate individual or group within a carrier to transmit termination requests. Alternatively, is there a common interface that could be used to automate the transmission and processing of the termination request? The Commission also seeks comment on the best means for a carrier to acknowledge receipt of a termination request. Could confirmation that termination occurred within any set timeframe be sufficient?

14. The Commission seeks comment on the processes and costs for a carrier to terminate service to unauthorized devices, and the costs for a carrier, correctional facility, or third party detection provider to implement procedures and technologies to ensure that disruption of service to legitimate wireless users is minimized or prevented. If the Commission requires the carrier to send a message as CellAntenna proposes, would it be necessary or feasible to provide a vehicle through which the user of the alleged contraband device could demonstrate that the pending termination is in error? Are there other intermediary steps a carrier could take to attempt to confirm that service is being terminated to a contraband device and not a legal device? Are there any costs associated with sending such notification and, if so, who should bear them? CellAntenna proposes to require the carrier to suspend service to the device within one hour after receipt of notification. The Commission seeks comment on whether this interval is appropriate. Would some carriers, for example small or rural providers, require additional time relative to larger carriers? Does the time period affect the cost of compliance with these proposals?

15. The Commission seeks comment on its belief that is has authority pursuant to section 303 of the Act to require CMRS providers to terminate service to contraband wireless devices. The Commission also seeks comment on the possible effectiveness of voluntary carrier participation in an industry wide effort to terminate service to contraband wireless devices.

16. The Commission seeks comment on the extent to which providers or operators of managed access or detection systems comply with section 705 of the Act if they divulge or publish the existence of a communication for the purpose of operating the system, and whether such providers or operators are entitled to receive communications under section 705 of the Act. The Commission also seeks comment on whether any of the proposals regarding detection and managed access systems would implicate the pen registers and trap and trace devices chapter of Title 18 of the U.S.C. and, to the extent that a proposal would implicate that chapter, could the consent exception nevertheless permit operation of a device?

17. Although the Commission does not propose any measures beyond those designed to facilitate the use and improve the efficacy of managed access and detection systems for addressing the problem of contraband wireless devices in correctional facilities, the Commission invites comment on other technological solutions, whether discussed in previously filed documents summarized in the NPRM, or set out in comments filed in response to the NPRM.

18. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in the NPRM. Written public comments are requested on the IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines indicated in the DATES section of this document. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

19. The rules proposed in the NPRM are necessary to improve the viability of different technologies used to combat contraband wireless devices in correctional facilities. Prisoners can use contraband wireless devices to engage in criminal activity such as arranging the delivery of contraband drugs or other goods, transmitting information on prison staff to or from non-inmates, and harassing witnesses or other individuals. These activities threaten the safety of prison employees, other prisoners, and the general public.

20. The proposed rules seek to improve the viability of technologies that detect wireless devices in correctional facilities and that can block transmissions to or from unauthorized wireless devices in correctional facilities. First, the Commission proposes to streamline the process for approving or accepting spectrum lease applications or notifications for spectrum leases entered into for managed access systems used in correctional facilities under its leasing procedures in part 1 of its rules. Second, the Commission proposes to require CMRS providers to terminate service to contraband wireless devices in correctional facilities that have been identified by a detection system. While not proposing any rule or process changes with respect to other possible wireless device interdiction technologies, the Commission seeks comment on other possible solutions.

21. The legal basis for any action that may be taken pursuant to the NPRM is contained in sections 2, 4(i), 4(j), 301, 302, 303, 307, 308, 309, 310, and 332 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 301, 302a, 303, 307, 308, 309, 310, and 332.

22. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that will 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. Under the Small Business Act, a “small business concern” is one that: 1) is independently owned and operated; 2) is not dominant in its field of operation; and 3) meets any additional criteria established by the SBA.

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

24. 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, 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.

25. 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 NPRM.

26. 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 NPRM.

27. 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 NPRM.

28. 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 NPRM.

29. 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 the Commission's 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. The Commission does 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, the Commission estimates 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.

30. 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, the Commission estimates that the majority of wireless firms can be considered small.

31. 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.

32. 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.

33. 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.

34. 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.

35. In addition, there are numerous incumbent site-by-site SMR licensees and licensees with extended implementation authorizations in the 800 and 900 MHz bands. The Commission does 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 1500 or fewer employees. The Commission assumes, 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.

36. 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.

37. In 2007, the Commission reexamined its rules governing the 700 MHz band in the 700 MHz Second Report and Order, at 72 FR 48814, Aug. 24, 2007. 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.

38. 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).

39. 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.

40. 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, the Commission estimates that the majority of Satellite Telecommunications firms are small entities that might be affected by rules adopted pursuant to the NPRM.

41. 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, the Commission estimates that the majority of Other Telecommunications firms are small entities that might be affected by the NPRM.

42. Other Communications Equipment Manufacturing. The Census Bureau defines this category to include: “establishments primarily engaged in manufacturing communications equipment (except telephone apparatus, and radio and television broadcast, and wireless communications equipment).” In this category, the SBA deems a business manufacturing other communications equipment to be small if it has 750 or fewer employees. For this category of manufacturers, Census data for 2007 show that there were 452 establishments that operated that year. Of the 452 establishments, 4 had 500 or greater employees. Accordingly, the Commission estimates that a substantial majority of the manufacturers of equipment used to provide interoperable and other video-conferencing services are small.

43. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing which is: all such firms having 750 or fewer employees. According to Census Bureau data for 2007, there were a total of 939 establishments in this category that operated for part or all of the entire year. Of this total, 17 had 1,000 or more employees and 27 had 500 or more employees. Thus, under this size standard, the majority of firms can be considered small.

44. Engineering Services. The Census Bureau defines this category to include: “establishments primarily engaged in applying physical laws and principles of engineering in the design, development, and utilization of machines, materials, instruments, structures, process, and systems.” The SBA deems engineering services firms to be small if they have $4.5 million or less in annual receipts, except military and aerospace equipment and military weapons engineering establishments are deemed small if they have $27 million or less an annual receipts. According to Census Bureau data for 2007, there were 58,391 establishments in this category that operated the full year. Of the 58,391 establishments, 5,943 had $5 million or greater in receipts and 2,892 had $10 million or more in annual receipts. Accordingly, the Commission estimates that a majority of engineering service firms are small.

45. Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System Instrument Manufacturing. The Census Bureau defines this category to include “establishments primarily engaged in manufacturing direction, navigation, guidance, aeronautical, and nautical systems and instruments.” The SBA deems Search, Detection, Navigation, Guidance, Aeronautical, and Nautical and Instrument Manufacturing firms to be small if they have 750 or fewer employees. According to Census Bureau data for 2007, there were 647 establishments in operation in that year. Of the 647 establishments, 36 had 1,000 or more employees, and 50 had 500 or more employees. Accordingly, the Commission estimates that a majority of firms in this category are small.

46. Security Guards and Patrol Services. The Census Bureau defines this category to include “establishments primarily engaged in providing guard and patrol services.” The SBA deems security guards and patrol services firms to be small if they have $18.5 million or less in annual receipts. According to Census Bureau data for 2007, there were 9,198 establishments in operation the full year. Of the 9,198 establishments, 355 had greater than $10 million in annual receipts. Accordingly, the Commission estimates that a majority of firms in this category are small.

47. All Other Support Services. The Census Bureau defines this category to include “establishments primarily engaged in providing day-to-day business and other organizations support services.” The SBA deems all other support services firms to be small if they have $7 million or less in annual receipts. According to Census Bureau data for 2007, there were 14,539 establishments in operation the full year. Of the 14,539 establishments, 273 had $10 million or more in annual receipts, and 639 had $5 million or greater in annual receipts. Accordingly, the Commission estimates that a majority of firms in this category are small.

48. In the NPRM, the Commission seeks comment regarding rule changes to improve the viability of technologies used to combat contraband wireless devices in correctional facilities. The rules are prospective in that they only apply if an entity avails itself of managed access or detection technologies. There are two classes of small entities that may be impacted; providers of wireless services, and providers or operators of managed access or detection systems used in correctional facilities.

49. The proposed rules streamline the process for leasing spectrum to be used in a managed access system in correctional facilities, and require CMRS providers to terminate service to identified contraband wireless devices. With respect to rule changes to streamline the spectrum leasing process for managed access systems, the proposed rules do not directly impose any new recordkeeping requirements. To the extent that filing a form seeking approval or providing notification of a lease entered into for a managed access system is a reporting requirement, the proposed rules streamline reporting requirements.

50. Under current rules, the licensee and lessee of spectrum must file Form 608 seeking approval or providing notification of a lease. Due to existing leasing rules intended to protect competition, any lease notification or application for a managed access system filed after the first will likely result in a protracted application or notification review, because subsequent applications or notifications will be for spectrum covering identical geographic areas that could be used to provide an interconnected mobile service.

51. The Commission's proposed rule changes streamline the application review process by allowing entities to certify that the application or notification is for a managed access system in a state or local correctional facility. The proposed rules will require entities to attach a new certification explaining the nature of the managed access system, including the location of the correctional facility, the lessee's relationship to the correctional facility, and the exact coordinates of the leased spectrum boundaries. While this may qualify as a reporting requirement, absent the rule lessees would still be required to identify the specific coordinates of the leased spectrum area in an attachment to Form 608. Therefore, to the extent this qualifies as a reporting requirement, the impact is neutral, if not positive.

52. The proposed rules will streamline the filing requirements for managed access providers that seek to modify the lease to indicate that the service offering is a PMRS. Under current processes, the lessee is presumed to be offering the same services as the licensee, and in managed access leases, the lessor likely provides a CMRS. Therefore, to modify the service offering to PMRS, the lessee must first file a lease application, and once the lease application is approved, it has to file to modify the lease to establish that the service is PMRS. Under the proposal in the NPRM, managed access leases would presumptively be PMRS, thereby eliminating the need to file a modification.

53. The NPRM also seeks comment on whether to require the managed access provider to provide notice to the households or businesses surrounding a correctional facility prior to activating the system. If the Commission adopts this requirement, it would be a new obligation that would consume some level of resources to identify the relevant households or businesses, generate a notice letter, mail the letter, and provide staff for any possible responses to the letter.

54. The proposed rules governing detection systems may impose new recordkeeping requirements and will impose new compliance requirements for CMRS providers and operators of detection systems. The proposed rules will require CMRS providers to terminate service to identified contraband wireless devices in correctional facilities. To the extent that any correctional facility installs and operates a system that can identify the relevant information necessary to terminate service to an identified contraband wireless device—therefore triggering CMRS providers' obligations—CMRS providers would have to implement some type of internal process to terminate service to the contraband devices. This will likely require the allocation of resources to create the system, including some level of additional staffing necessary to meet the obligations under this requirement.

55. Additionally, the Commission seeks comment on the process for transmitting termination requests, including how the information that must be included in a termination request. It is possible that an outgrowth of the questions asked and responses received could result in specific requirements for the form in which the request is transmitted, including the type of information that is required. This may also require some level of recordkeeping to ensure that service to contraband devices, and not to legitimate devices, is terminated. To the extent the rules do impose these requirements, they will be necessary to ensure that legitimate wireless users are not impacted by operation of the system, which should be the minimum performance objective for any detection system. Therefore, while a specific form in which the termination request must be transmitted may impose some compliance or recordkeeping obligations, they are a necessary predicate for the operation of a detection system.

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

57. The proposed rules govern systems and technologies that are not widely deployed in the marketplace. To date, only two managed access system that have received Commission authorization or approval are operational. Similarly, while there are detection systems in active use in correctional facilities, there are no current rules that require CMRS providers to terminate service to contraband devices identified by detection systems.

58. The Commission seeks comment on the impact of some of its proposals, specifically with respect to the proposal to require CMRS providers to terminate service to identified contraband wireless devices, on small businesses. Commenters are asked whether small entities face any special or unique issues with respect to terminating service to devices, and whether they would require additional time to take such action.

59. Historically, the Commission's license applications are not modified for small entities, and the Commission does not propose to do so in the NPRM for the proposed modification of Form 608 for managed access leases. Sections 308, 309, and 310(d) of the Act require the Commission to determine whether licensing transactions are in the public interest. This analysis requires the same type of information regardless of the size of the entity.

60. The NPRM, while it discusses at length the general design of managed access and detection systems, does not directly require or propose to require any specific design standard. However, the NPRM does ask whether a specific performance standard may be necessary to ensure the accuracy of detection systems. The NPRM asks whether the standard should differ between rural and urban areas, or between large and small detection system providers or operators.

61. The NPRM does not propose any exemption for small entities. The Commission finds an overriding public interest in preventing the illicit use of contraband wireless devices by prisoners to perpetuate criminal enterprises, and a strong public interest obligation for the transfer of spectrum rights. Managed access providers must meet the necessary filing requirements for the Commission to meet its obligations under the Act. Further, to the extent that a small entity could be exempt from the proposed service termination requirement, it would reduce the overall effectiveness of a detection system. If inmates discover that a wireless provider whose service area includes the correctional facility does not terminate service to found devices within the facility, inmates will accordingly use only that service.

62. The NPRM seeks comment on the application and relevance of section 705 of the Act and Title 18 of the U.S. Code.

63. Pursuant to the authority contained in sections 1, 2, 4(i), 4(j), 301, 302, 303, 307, 308, 309, 310, and 332 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 301, 302a, 303, 307, 308, 309, 310, and 332, the NPRM IS ADOPTED.

64. Pursuant to the authority contained in sections 1, 2, 4(i), 4(j), 301, and 303 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 301, 303, and sections 1.2 and 1.407 of the Commission's rules, 47 CFR 1.2, 1.407, the petitions listed in the caption of the NPRM are granted to the extent indicated herein, and otherwise denied.

65. The Commission's Consumer & Governmental Affairs Bureau, Reference Information Center, shall send a copy of the NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR parts 1 and 20 as follows:

This is a summary of the Commission's Notice of Proposed Rulemaking, FCC 13-77, adopted on May 30, 2013 and released on May 30, 2013. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW., CY-A257, Washington, DC 20554. This document will also be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) The complete text may be purchased from the Commission's copy contractor, 445 12th Street SW., Room CY-B402, Washington, DC 20554. To request these documents in accessible formats (computer diskettes, large print, audio recording, and Braille), send an email to fcc504@fcc.gov or call the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

1. With this Notice of Proposed Rulemaking (“NPRM”), we begin our implementation of sections 204 and 205 of the Twenty-First Century Communications and Video Accessibility Act (“CVAA”). These sections generally require that user interfaces on digital apparatus and navigation devices used to view video programming be accessible to and usable by individuals who are blind or visually impaired. Both of these sections also require that these devices provide a mechanism that is “reasonably comparable to a button, key, or icon designated for activating” certain accessibility features. As set forth below, we seek comment on whether to interpret section 205 of the CVAA to apply to navigation devices supplied by multichannel video programming distributors (“MVPDs”) and section 204 of the CVAA to apply to all other “digital apparatus designed to receive or play back video programming transmitted in digital format simultaneously with sound.” Alternatively, we seek comment on whether to interpret section 205 to apply to navigation devices, as that term is defined in § 76.1200 of the Commission's rules, and section 204 to apply to all other digital apparatus. Consistent with our statutory mandate, we tentatively conclude that the requirement for the appropriate functions of the digital apparatus or navigation device to be accessible covers all “user functions” of such apparatus and devices, and that such functions do not include the debugging and diagnostic functions. In addition, in accordance with the statute, we do not propose to specify the technical standards for making those user functions accessible. Consistent with the report of the Video Programming Accessibility Advisory Committee (“VPAAC”) that examined this topic, we propose to require that the 11 essential functions of an apparatus identified by the VPAAC are representative, but not an exhaustive list, of the user functions that must be made accessible to and usable by individuals who are blind or visually impaired. We also seek comment on whether the most effective way to implement the requirement that certain accessibility features be activated through a mechanism reasonably comparable to a button, key, or icon is to require those features to be activated (and deactivated) in a single step. We tentatively conclude that we should handle alternate means of compliance and enforcement matters in the same way that we implemented those matters in other CVAA contexts. We propose deadlines consistent with those that the VPAAC proposed. Finally, in addition to our implementation of the CVAA, we take this opportunity to modernize our apparatus rules by proposing to eliminate the outdated requirement that manufacturers label analog television sets based on whether they include a closed-caption decoder and rename part 79 of our rules.

2. Background. Section 204 of the CVAA, entitled “User Interfaces on Digital Apparatus,” directs the Commission to require “if achievable (as defined in section 716) that digital apparatus designed to receive or play back video programming transmitted in digital format simultaneously with sound” be built in a way that makes them “accessible to and useable by individuals who are blind or visually impaired.” Section 204 also directs the Commission to require those apparatus to “buil[d] in access to those closed captioning and video description features through a mechanism that is reasonably comparable to a button, key, or icon designated for activating the closed captioning or accessibility features.” Section 204 also states that “in applying this subsection the term `apparatus' does not include a navigation device, as such term is defined in § 76.1200 of the Commission's rules.”

3. Section 205 of the CVAA, entitled “Access to Video Programming Guides and Menus Provided on Navigation Devices,” imposes requirements relating to navigation devices. It directs the Commission to require, “if achievable (as defined in section 716), that the on-screen text menus and guides provided by navigation devices (as such term is defined in § 76.1200 of title 47, Code of Federal Regulations) for the display or selection of multichannel video programming are audibly accessible in real-time upon request by individuals who are blind or visually impaired.” Section 205 also directs the Commission to require, “for navigation devices with built-in closed captioning capability, that access to that capability through a mechanism is reasonably comparable to a button, key, or icon designated for activating the closed captioning, or accessibility features.”

4. On April 9, 2012, the Video Programming Accessibility Advisory Committee (“VPAAC”) released the VPAAC Second Report: User Interfaces as directed by section 201(e)(2) of the CVAA. In it, VPAAC Working Group 4, which was the working group assigned to recommend ways to implement sections 204 and 205 of the CVAA, defined the functional requirements needed to carry out those sections. Among other things, the VPAAC Second Report: User Interfaces lists 11 criteria that it deems essential to make digital apparatus and navigation devices accessible. Working Group 4 stated that it sought to develop the criteria without hindering innovation or product differentiation, and that “the consumer marketplace [will] identify the optimal technologies and implementations.” The VPAAC Second Report: User Interfaces offers some examples of how to achieve the criteria, but stated that the examples “are only meant to clarify the intent of the associated functional requirement.” The VPAAC Second Report: User Interfaces also lists “open issues” about which Working Group 4 could not develop consensus; significantly, the members could not achieve consensus on a recommendation for the method of turning closed captioning on and off. On April 24, 2012, the Commission released a Public Notice seeking comment on the VPAAC Second Report: User Interfaces.

5. Discussion. We organize our discussion of sections 204 and 205 of the CVAA into the following sections: (A) Scope of Sections 204 and 205; (B) Functions That Must Be Made Accessible; (C) Activating Accessibility Features; (D) Making Navigation Devices Available “Upon Request”; (E) Alternate Means of Compliance; (F) Enforcement; (G) Exemption for Small Cable Operators; and (H) Timing. In addition, we tentatively conclude that we should eliminate outdated closed captioning labeling rules that apply to analog television receivers and rename part 79 of our rules.

6. Scope of Sections 204 and 205. As stated above, sections 204 and 205 of the CVAA require that accessible user interfaces be included in two categories of equipment: “digital apparatus” and “navigation devices.” Specifically, section 204 applies to “digital apparatus designed to receive or play back video programming transmitted in digital format simultaneously with sound, including apparatus designed to receive or display video programming transmitted in digital format using Internet protocol.” Section 204 states that the “term `apparatus' does not include a navigation device” as that term is defined in § 76.1200 of the Commission's rules. Instead, accessibility requirements for “navigation devices” are governed by the provisions of section 205. Section 76.1200(c) defines “navigation devices” as devices such as converter boxes, interactive communications equipment, and other equipment used by consumers to access multichannel video programming and other services offered over multichannel video programming systems. Congress' intended meaning of the terms “digital apparatus” and “navigation devices,” as used in the context of sections 204 and 205, however, is not entirely clear. We discuss below the appropriate scope of sections 204 and 205 and the interrelationship between these sections. Our goal is to interpret these sections in a manner that best effectuates Congressional intent.

7. Categories of Devices Covered Under Sections 204 and 205. We seek comment on whether we should interpret section 205 of the CVAA to apply only to navigation devices that are supplied to subscribers by their MVPDs and section 204 of the CVAA to apply more broadly, covering all other digital apparatus that receive or play back video programming. Under this interpretation, equipment provided to MVPD subscribers by MVPDs would be covered under section 205, while all other digital apparatus, including equipment purchased at retail by a consumer to access video programming, would be covered under section 204. We seek comment on this interpretation.

8. We note that the statutory language of section 205 could be read to apply to navigation devices provided by MVPDs. Significantly, section 205 contains numerous provisions that appear to presume a preexisting relationship between the individual requesting or using the device, menu and/or guide and the entity providing it. For example, section 205(b)(3) states that an “entity shall only be responsible for compliance with the requirements [of section 205(a)] with respect to navigation devices that it provides to a requesting blind or visually impaired individual.” Likewise, sections 205(b)(4) and (b)(5) discuss the obligations of “the entity providing the navigation device.” We believe that section 205's references to an “entity” “providing” the device, menu or guide in these provisions could reasonably be interpreted to mean an MVPD, because in contrast to a consumer electronics retailer that offers consumers devices for purchase, an MVPD provides devices (typically for lease) to its customers upon request. Accordingly, we believe that the Commission could reasonably conclude that MVPDs are the entities “responsible for compliance” with section 205, and the equipment, menus and guides these entities provide to their subscribers are what Congress intended to cover under section 205.

9. In addition, section 205(b)(4)(B) states that the entity providing the navigation device to the requesting blind or visually impaired individual “shall provide any such software, peripheral device, equipment, service, or solution at no additional charge and within a reasonable time to such individual.” This language also appears to be directed at MVPDs because the obligations identified in this provision—responding to a “requesting individual” “within a reasonable time” and providing a device “at no additional charge”—presupposes an existing relationship between the provider and the consumer. A consumer enters a retail store or visits a retailer's Web site and expects to be able to purchase the products offered immediately, and does not expect to get them for free. In contrast, when an MVPD subscriber contacts the MVPD to request an accessible device, the MVPD must either ship the device or schedule an appointment to install it in the subscriber's home. Either of these actions would take some amount of time, and Congress could reasonably be understood to have sought, through this provision, to ensure that MVPDs would fulfill these requests promptly and without greater expense to the consumer than if the MVPD were providing inaccessible equipment to the consumer.

10. Moreover, section 205(b)(6), which sets out phase-in periods for compliance with these rules, states that the Commission must provide “affected entities” with at least 3 years “to begin placing in service devices that comply with” accessibility requirements related to on-screen text menus and guides. The phrase “placing in service” makes sense with respect to devices offered by MVPDs to their subscribers; it does not appear to have any applicability to devices sold at retail.

11. Interpreting section 205 to apply only to MVPD-supplied navigation devices, menus and guides appears further supported by section 205(b)(2), which allows the Commission to “provide an exemption from the regulations [implementing section 205(a)] for cable systems serving 20,000 or fewer subscribers.” Inclusion of this specific exemption for cable operators seems to suggest that the “affected entities” referred to in section 205 are MVPDs. That is, if this section did not otherwise apply to MVPDs, there would be no need for Congress to exempt cable operators from our regulations.

12. As demonstrated, the statutory language of section 205 could reasonably be understood that Congress's aim in this section was to apply a specialized set of regulations to navigation devices, menus and guides provided by MVPDs to their subscribers. We seek comment on the above interpretations of the cited provisions.

13. We ask that commenters address potential drawbacks associated with this interpretation. For example, given that no language in section 205 explicitly limits the provision's scope to navigation devices supplied by MVPDs, is it permissible for us to interpret the statue in this manner? If we do so, how do we give meaning to terms of the statute that refer more broadly to “navigation devices (as such term is defined in § 76.1200 of title 47, Code of Federal Regulations) for the display or selection of multichannel video programming”? Similarly, if we interpret section 205 to only cover navigation devices supplied by MVPDs, how do we explain the provisions that apply certain requirements set forth in the statute to manufacturers of hardware and software?

14. Moving to section 204, this provision could be reasonably read to be directed towards equipment manufacturers. For example, section 204(a) amends section 303 of the Communications Act by adding language requiring that “Digital apparatus . . . be designed, developed, and fabricated” to be accessible, all terms that would apply to manufacturers. In addition, section 204 indicates an intent by Congress to cover a broad array of devices: “Digital apparatus designed to receive or play back video programming transmitted in digital format simultaneously with sound, including apparatus designed to receive or display video programming transmitted in digital format using Internet protocol.” In the IP Closed Captioning Order, the Commission interpreted virtually identical statutory language contained in section 203 of the CVAA (codified in 47 U.S.C. 303(u)(1)), to cover a wide array of physical devices such as set-top boxes, PCs, smartphones and tablets, as well as integrated software. As noted below, we believe the Commission could reasonably conclude that Congress intended the same broad meaning to apply in the context of section 204, and we seek comment on that interpretation.

15. The intended scope of sections 204 is muddied, however, by a reference in that section to the term “navigation devices” as that term is defined by § 76.1200 of the Commission's rules. Specifically, section 204 states that the “digital apparatus” covered under that section “does not include a navigation device, as such term is defined in § 76.1200 of the Commission's rules.” In contrast, section 205's requirements expressly apply to “on-screen text menus and guides provided by navigation devices (as such term is defined in § 76.1200 of title 47, Code of Federal Regulations).” Section 76.1200(c) defines “navigation devices” as devices such as converter boxes, interactive communications equipment, and other equipment used by consumers to access multichannel video programming and other services offered over multichannel video programming systems. The Commission has interpreted this term to encompass a broad array of “equipment used to access multichannel video programming or services.” For example, televisions, personal computers, cable modems, and VCRs all fall under the Commission's navigation devices definition.

16. Given the broad scope of the term, however, interpreting the “navigation devices” exception in section 204 literally could largely nullify section 204. Specifically, nearly all section 204 digital apparatus “designed to receive or play back video programming transmitted in digital format” would also be classified as navigation devices under § 76.1200(c) because they can be used “to access multichannel video programming and other services offered over multichannel video programming systems.” If we were to interpret the section 204 exemption to exempt all “navigation devices” and not just those provided by MVPDs, it is possible that the only devices that would be covered by section 204 would be removable media players, such as DVD and Blu-ray players. This is because any device that has a tuner, an audiovisual input, or IP connectivity could be considered a navigation device. We seek comment on whether any other digital apparatus would be covered by section 204 if we literally applied the navigation devices exception contained in that section to all navigation devices.

17. We believe that references in sections 204 and 205 to “navigation devices” can be reasonably interpreted as language designed to prevent overlap in coverage between sections 204 and 205; that is, a device can be a section 204 device or a section 205 device, but not both. We request comment on whether we should interpret section 205 to cover navigation devices provided by MVPDs and section 204 to exclude such devices, but otherwise to broadly cover all “apparatus designed to receive or play back video programming transmitted in digital format simultaneously with sound” as that term is broadly described in section 204(a)(1). We believe that this interpretation is a reasonable one under the tenet of statutory construction that requires statutory language be read in the context of the larger statutory scheme. As the DC Circuit has observed, “[c]ontext serves an especially important role in textual analysis of a statute when Congress has not expressed itself as unequivocally as might be wished. Where, as here, we are charged with understanding the relationship between two different provisions within the same statute, we must analyze the language of each to make sense of the whole.” We could conclude that Congress intended to carve out of section 204 a subset of devices—MVPD-provided navigation devices covered by section 205—from the section 204 provision that applies generally to all digital apparatus that receives or plays back video. Moreover, interpreting the section 204 exception for navigation devices broadly would appear to render virtually meaningless section 204's statement that digital apparatus include “apparatus designed to receive or display video programming transmitted in digital format using Internet protocol.” This is because we believe that nearly any device that can display video programming using Internet protocol could use the Internet protocol to access MVPD programming or other services, thereby making that device a navigation device under the broad reading of that term. We seek comment on this interpretation.

18. We also find it notable that the National Cable & Telecommunications Association (“NCTA”), which is comprised of cable operators, presumes that section 205 applies to its members. NCTA notes that “Congress granted cable operators `maximum flexibility' to determine the manner of compliance” with the obligations of section 205, and NCTA makes no suggestion that this section applies to any other entities beyond MVPDs. In recognizing that section 205 applies to its members, NCTA acknowledges that cable operators must provide accessible equipment for “blind or visually impaired customers who request such a feature or function” and that “cable operators must provide it free of charge.”

19. The legislative history on this provision is scant, and offers no additional insight into Congress's intent as to the scope of sections 204 and 205. Neither does the VPAAC Second Report: User Interfaces provide us any guidance on how best to interpret the scope of sections 204 and 205. We note, however, that the VPAAC Second Report: User Interfaces refers to devices covered by section 205 as “set-top boxes,” suggesting that, at a minimum, they presumed Congress did not intend section 205 to cover the broad universe of devices covered by § 76.1200 of our rules. We seek comment on our analysis. Could section 205 alternatively be interpreted more broadly to apply not just to MVPD-provided equipment but also to retail set-top boxes such as TiVos? If we were to interpret section 205 to apply also to those retail set-top boxes, how would we apply to that equipment the many provisions in section 205, analyzed above, that presume the complying entity is an MVPD?

20. Section 205 also includes a provision stating that, with respect to navigation device features and functions delivered in software, the requirements of section 205 “shall apply to the manufacturer of such software,” and with respect to navigation device features and functions delivered in hardware, the requirements of section 205 “shall apply to the manufacturer of such hardware.” We seek comment on why Congress might have included this provision, how this provision should be interpreted, and the applicability of section 205 to hardware and software manufacturers of navigation device features and functions. Does the inclusion of this provision indicate that Congress intended that manufacturers of hardware and software supplied to MVPDs for subscriber use share responsibility with MVPDs for compliance under section 205? If such manufacturers do share liability with MVPDs, would such liability be joint and several? Should the provision be read only as Congress' recognition that the manufacturer of the hardware and/or developer of the software for MVPD-supplied equipment are often different parties?

21. Alternatively, we seek comment on whether we should interpret the term “navigation device” for purposes of sections 204 and 205 literally. Under a literal interpretation, the term would encompass the full array of equipment used to access multichannel video programming or services as defined under the Commission's rules regardless of whether such equipment is provided by an MVPD. Under this interpretation, we would give literal effect to the language of the provision contained in section 204 stating that “the term `apparatus' does not include a navigation device, as such term is defined in § 76.1200 of the Commission's rules” as well as the language of the provision in section 205 defining navigation devices by reference to § 76.1200 of the Commission's rules. We note that nowhere in the statute does it say that the navigation device carve-out contained in section 204 or the term “navigation devices” in section 205 applies only to navigation devices supplied by MVPDs. Given the potentially conflicting interpretations of sections 204 and 205 that we have discussed herein, do these statutory provisions have a “plain” meaning as the courts have used that term?

22. If we adopted this interpretation, would section 204 apply only to small subset of devices-specifically, removable media players, such as DVD and Blu-ray players? Under this alternative interpretation, would all other devices used to view video programming be covered under section 205? Would a literal reading of the navigation devices exemption in section 204 render meaningless other provisions of that section? For example, would literally interpreting the section 204 exception for navigation devices render meaningless section 204's statement that digital apparatus include “apparatus designed to receive or display video programming transmitted in digital format using Internet protocol” because every device with Internet connectivity is a navigation device under Commission precedent? In the alternative, should we interpret the conjunction “and” in § 76.1200(c) to require that “navigation devices” be used by consumers to access both multichannel video programming and other services offered over multichannel video programming systems? See 47 CFR 76.1200(c) (defining navigation devices to mean devices used by consumers to access multichannel video programming and other services offered over multichannel video programming systems). Under that interpretation, would a cable modem or a device that streams Internet video, but cannot be used to access multichannel video programming, be a “navigation device”? How would we reconcile this interpretation with Commission precedent?

23. In addition, we seek comment on what functions, if any, would need to be made accessible under section 205 if section 205 applies to navigation devices purchased at retail. For example, do smartphones, personal computers, and similar equipment that would be covered under this section under a broad reading of navigation devices provide on-screen text menus and guides for the display of multichannel video programming? If not, would such devices escape the accessibility requirements of sections 204 and 205 altogether? We seek comment on this alternative interpretation of the statute. We also seek comment on whether the text of the CVAA would permit the Commission to amend its definition of “navigation devices” so that, for this specific purpose, the definition would cover only MVPD-supplied navigation devices? In addition, we invite commenters to suggest any other interpretation of the statute which would effectuate Congressional intent and be consistent with the language contained in sections 204 and 205 of the CVAA.

24. Coverage of MVPD-Provided Applications and Other Software. We also seek comment on whether the requirements of section 205 apply to applications and other software developed by MVPDs to enable their subscribers to access their services on third-party devices such as tablets, laptops, smartphones, or computers. For example, at least one MVPD currently permits subscribers to access its entire package of video programming via an application that subscribers can download to personal computers, tablets, smartphones, and similar devices. In this example, would the MVPD's application qualify as a navigation device subject to the requirements of section 205? If not, would it qualify as a digital apparatus under section 204? Should the applicability of section 205 (or 204) to an MVPD application be impacted by that application's ability to fully replicate a subscriber's MVPD service versus providing only a subset of programming offerings? We recognize that some MVPDs currently enable subscribers to access video programming both inside and outside the home (e.g., TV Everywhere offerings). Should it matter to our analysis whether the MVPD application can be used outside the home? Does it matter whether the video programming is being delivered over the MVPD's IP network or through a different Internet Service Provider? If we interpret the term “navigation devices” to include retail devices in addition to MVPD-provided navigation devices, how would we determine which party is responsible when a consumer uses an MVPD-provided application on a device purchased at retail? What responsibility do manufacturers of digital apparatus and navigation devices covered by sections 204 and 205 have to make such MVPD services accessible?

25. Definition of Digital Apparatus Under Section 204. Regarding section 204, we tentatively conclude that the term “digital apparatus” as used in that section should be defined similarly to how the Commission defined the term “apparatus” when implementing the closed captioning apparatus requirements of section 203, but excluding the navigation devices that are subject to section 205. The descriptive language used in sections 203 and 204 is largely parallel. In the IP Closed Captioning Order, the Commission concluded that the scope of apparatus covered by section 203 should be defined to include “the physical device and the video players that manufacturers install into the devices they manufacture (whether in the form of hardware, software, or a combination of both) before sale, as well as any video players that manufacturers direct consumers to install.” The Commission explained further that “apparatus” includes video players that manufacturers embed in their devices (“integrated video players”), video players designed by third parties but installed by manufacturers in their devices before sale, and video players that manufacturers require consumers to add to the device after sale in order to enable the device to play video.

26. We seek comment on our tentative conclusion to interpret “digital apparatus” similarly for purposes of section 204. Does the terminology or purpose of sections 203 and 204 differ in any material respects for the purpose of determining to what extent we should interpret the term “digital apparatus” to apply to hardware and associated software, as described above? Should the fact that section 204 uses the term “digital” to modify apparatus (a modifier not present in section 203) have any significance for our analysis? How, as a practical matter, does this modifier affect the scope of apparatus subject to section 204? For example, are there any devices currently being manufactured or marketed that are subject to section 203 but should not be subject to section 204 because such devices do not receive or display video programming transmitted in a “digital format”?

27. The VPAAC points out that, in contrast to the “[s]et-top boxes” covered by section 205, digital apparatus subject to section 204 “may have no native capability to decode and display [audiovisual] content, but with a suitable downloaded application, such capability may be enabled.” If a digital apparatus requires a downloaded application to enable the decoding and display of audiovisual content how should that impact our analysis of whether the device is covered by section 204?

28. We tentatively conclude that the inclusion of the phrase “including apparatus designed to receive or display video programming transmitted in digital format using Internet protocol” is merely meant to clarify that this provision should not be limited to more traditional video-programming apparatus without IP functionality such as non-IP enabled televisions, and that the fact that this language appears in section 204 but not section 203 should not result in a different interpretation of the scope of section 204. We seek comment on this tentative conclusion.

29. We also tentatively conclude that we should interpret the term “designed to” as used in section 204 the same way that the Commission interpreted it in the IP Closed Captioning Order. There, the Commission rejected the argument that we should evaluate whether a device is covered by focusing on the original design or intent of the manufacturer of the apparatus. The Commission concluded instead that “to determine whether a device is designed to receive or play back video programming, and therefore covered by the statute, we should look to the device's functionality, i.e. whether it is capable of receiving or playing back video programming.” The Commission stated that this bright-line standard, based on the device's capability, will provide more certainty for manufacturers. It also stated that, “to the extent a device is built with a video player, it would be reasonable to conclude that viewing video programming is one of the intended uses of the device,” and that “[f]rom a consumer perspective, it would also be reasonable to expect that a device with a video player would be capable of displaying captions.” We seek comment on our proposal. In addition, although section 204 does not contain the limitation in section 203 to apparatus “manufactured in the United States or imported for use in the United States,” we propose applying that same limitation for purposes of our regulations. We seek comment on this proposal as well.

30. Functions That Must Be Made Accessible: Functions Required by Section 204. Section 204 directs the Commission to require that digital apparatus “be designed, developed, and fabricated so that control of appropriate built-in apparatus functions” is “accessible to and usable by individuals who are blind or visually impaired,” and “that if on-screen text menus or other visual indicators built into the digital apparatus are used to access the [appropriate built-in apparatus functions], such functions shall be accompanied by audio output . . . so that such menus or indicators are accessible to and usable by individuals who are blind or visually impaired in real-time.” We tentatively conclude that the “appropriate” functions that must be made accessible under section 204 include all user functions of the device, but that such user functions do not include the debugging/diagnostic functions. We exclude the debugging/diagnostic functions as it is our understanding those functions are typically accessed by technicians and repair specialists and are not intended for consumer use. We seek comment on whether our understanding is correct or whether debugging/diagnostic functions should also be made accessible.

31. As to which functions constitute the user functions of the apparatus other than debugging/diagnostic functions, we look to the VPAAC Second Report: User Interfaces. This report identified 11 “essential functions,” which VPAAC Working Group 4 defined as “the set of appropriate built-in apparatus functions” referred to in section 204. The 11 essential functions identified in the VPAAC Second Report: User Interfaces are: (1) Power on/off; (2) volume adjust and mute; (3) channel and program selection; (4) channel and program information; (5) configuration—setup; (6) configuration—closed captioning control; (7) configuration—closed captioning options; (8) configuration—video description control; (9) display configuration info; (10) playback functions; and (11) input selection. Most of these are fairly self-evident, and the VPAAC Second Report: User Interfaces provides additional information to describe them. The VPAAC explains that each of these functions requires “user input” and “user feedback.” User input refers to how the user would activate the function (for example, the power button for a device). User feedback refers to how the user can surmise that the device or apparatus recognized and carried out the command. The VPAAC Second Report: User Interfaces recommends that user input be readily identifiable, and that user feedback be readily accessible. We seek comment on the list and the VPAAC's explanations of these functions. We specifically seek comment on the meaning of the ninth essential function, “display configuration info.” How does this essential function differ from “Configuration—setup”? We also invite commenters to define these terms more specifically if they believe that the VPAAC Second Report: User Interfaces's descriptions do not provide adequate guidance to manufacturers.

32. We tentatively conclude that the VPAAC Second Report: User Interfaces's 11 essential functions are representative, but not an exhaustive list, of the categories of user functions of an apparatus, and therefore are examples of “appropriate built-in apparatus functions” as that term is used in section 204 of the CVAA. We do not believe that Congress intended to limit the accessibility of digital apparatus and navigation devices to the “essential” features and functions, or to some but not to all features and functions that are typically accessed by and readily made available for consumers to use. In other words, we believe that the term “appropriate” can be interpreted to distinguish between the diagnostic, debugging, “service mode” functions and the user functions that consumers can access and use. We seek comment on our tentative conclusion. At the same time, we seek comment on whether there are any other functions that are not included in the 11 essential functions listed in the VPAAC Second Report: User Interfaces, such as V-Chip and other parental controls, that may provide additional guidance to manufacturers. If any commenter believes that any of the 11 essential functions do not represent appropriate functions that must be accessible, that commenter should identify and provide specific examples of those inappropriate functions. Is there a mechanism that we can establish in this proceeding to ensure that as new digital apparatus functions become available to consumers, they are also made accessible? Should we assume that any newly developed non-debugging/diagnostic functions are “appropriate” under the statute and should be made accessible unless a manufacturer receives a finding from the Commission to the contrary, or should we allow manufacturers to argue in defense to a complaint that a function was not made accessible because it was not an “appropriate function” under the statute?

33. Section 204 applies to apparatus “designed to receive or play back video programming transmitted in digital format simultaneously with sound, including apparatus designed to receive or display video programming transmitted in digital format using Internet protocol.” We seek comment on the extent to which apparatus manufacturers will need channel and program information (or other information necessary to select programming) from third-party video programming distributors (“VPDs”) to meet section 204's requirement that “on-screen text menus or other visual indicators built in to the digital apparatus” be “accompanied by audio that is either integrated or peripheral to the apparatus.” That is, if the apparatus is built to display visual information provided by a third party, does the apparatus need to make that information accessible? For example, if an Internet-connected TV includes a Netflix application, should we require that application to be accessible? Should we require that third-party applications that a consumer might download and install be accessible? Who is responsible for that accessibility? In implementing other sections of the CVAA, the Commission applied its rules to integrated software and to third-party applications that the manufacturer requires to be downloaded, but not other third-party applications that a customer downloads and installs. We tentatively conclude that we should take the same approach here, and we seek comment on that tentative conclusion. If commenters disagree, they should explain how the manufacturer can obtain the necessary information, such as guide data, from the VPD to make such information accessible to a user who is blind or visually impaired and whether the Commission has the authority to require a VPD to make this information accessible or pass through the necessary information to an apparatus. With respect to apparatus that are not provided by the MVPD but access MVPD services, does 47 U.S.C. 303(bb)(3) or any other provision of the Communications Act provide the Commission with the authority to require channel and program information to be made available to apparatus? As we discuss above in section III.A.2, we seek comment on whether MVPDs are responsible for the applications that they develop; what responsibilities does an MVPD have to make channel and program information available to a third-party application (for example, on a retail CableCARD device)?

34. In addition to the requirements related to accessibility of “on-screen text menus or other visual indicators,” section 204 also directs us to adopt regulations requiring that digital apparatus “be designed, developed, and fabricated so that control of appropriate built-in apparatus functions are accessible” to people who are blind or visually impaired. Of the 11 functions identified in the VPAAC Second Report: User Interfaces, only “power on/off” seems to be accessed other than through on-screen guides and menus, and we believe that other buttons on an apparatus that are not on-screen text menus or other visual indicators must also be made accessible. We seek comment on any other meaning of this phrase; that is, what functions of digital apparatus do people access in a manner other than through on-screen guides and menus? Does the inclusion of this provision in section 204, but not in section 205, suggest that digital apparatus are subject to additional requirements not applicable to navigation devices?

35. Functions Required by Section 205. Section 205 of the CVAA directs the Commission to require that “on-screen text menus and guides provided by navigation devices . . . for the display or selection of multichannel video programming are audibly accessible in real-time upon request.” We seek comment on whether, as a legal or policy matter, there should be any substantive differences between the specific functions of apparatus that are required to be made accessible under section 204 as opposed to the specific functions of navigation devices that are required to be accessible under section 205. We tentatively conclude that all of the user functions that are offered via on-screen text menus and guides should be accessible for navigation devices. Although we recognize that sections 204 and 205 use slightly different language (section 205's accessibility requirement applies to on-screen text menus and guides only), we believe that all of a navigation device's user functions are activated via text menus and guides for the display or selection of multichannel video programming. We seek comment on our tentative conclusion.

36. We tentatively conclude that the VPAAC Second Report: User Interfaces's 11 essential functions are representative, but not an exhaustive list, of the categories of functions that a navigation device must make accessible. The VPAAC Second Report: User Interfaces stated that the “essential functions,” are “applicable to devices covered under CVAA section 204 and CVAA section 205.” We seek comment on whether requiring navigation devices to make the 11 essential functions identified by the VPAAC accessible would achieve section 205's requirement that “on-screen text menus and guides provided by navigation devices . . . for the display or selection of multichannel video programming are audibly accessible in real-time upon request.” We seek comment on whether there are any other on-screen text menus or guides provided for the display or selection of programming that are not included in the 11 listed in the VPAAC Second Report: User Interfaces, such as V-Chip and other parental controls, that may provide additional guidance to covered entities. As we asked in the section 204 discussion above, if any commenter believes that any of the 11 essential functions do not represent on-screen text menus or guides that must be accessible, that commenter should identify and provide specific examples of those inappropriate functions. Is there a mechanism that we can establish in the proceeding to ensure that as new methods used to display or select multichannel video programming become available, they are also made accessible? Should we assume that any newly developed “on-screen text menus and guides provided by navigation devices” are covered under the statute and should be made accessible unless the Commission finds to the contrary, or should we allow covered entities to argue in defense to a complaint that a menu or guide was not made accessible because it was not “for the display or selection of multichannel video programming” under the statute? Does section 205 provide us authority to require that MVPDs provide programming description information in programming guides for local programs and channels for the purpose of promoting accessibility?

37. User Input and Feedback. The VPAAC Second Report: User Interfaces suggests that user input and feedback should be both visual and non-visual for all essential functions. We agree that this is a vital aspect of making essential functions accessible to individuals who are blind or visually impaired, and note that a device can accept input and provide non-visual feedback audibly or through touch. Sections 204 and 205 require, respectively, that “on-screen text menus” (and guides, in the case of section 205) be “accompanied by audio output” and “audibly accessible in real-time.” We tentatively conclude that those feedback requirements are self-implementing. With respect to other functions of an apparatus, we seek comment on whether we should apply the guidance contained in § 6.3(a) of our rules (which implements sections 255 and 716 of the CVAA), to explain that “accessible” means: (a) Input, control, and mechanical functions shall be locatable, identifiable, and operable in accordance with each of the following, assessed independently: Operable without vision. Provide at least one mode that does not require user vision, operable with low vision and limited or no hearing. Provide at least one mode that permits operation by users with visual acuity between 20/70 and 20/200, without relying on audio output, and operable with little or no color perception. Provide at least one mode that does not require user color perception; and (b) all information necessary to operate and use the product, including but not limited to, text, static or dynamic images, icons, labels, sounds, or incidental operating cues, comply with each of the following, assessed independently: Availability of visual information. Provide visual information through at least one mode in auditory form, and availability of visual information for low vision users. Provide visual information through at least one mode to users with visual acuity between 20/70 and 20/200 without relying on audio.

Do we need to specify how a device accepts input or provides feedback to individuals who are blind or visually impaired with respect to the other functions of an apparatus, or will applying this guidance make the device accessible? We seek comment on whether the functions other than “on-screen text menus” can be made accessible in any way; that is, if the functions of the remote are made accessible in some way, does the remote itself need to be accessible? We also seek comment on any other user input and feedback suggestions.

38. Technical Standards. The CVAA states that the “Commission may not specify the technical standards, protocols, procedures, and other technical requirements for meeting” the requirement to make appropriate digital apparatus functions accessible to individuals who are blind or visually impaired. Given this limitation on our authority, we seek comment on how the Commission can ensure that the rules it adopts in this proceeding are properly implemented. We seek comment on specific metrics that the Commission can use to evaluate accessibility and compliance with our implementation of sections 204 and 205 of the CVAA. Are there performance objectives or functional criteria that covered entities can look to voluntarily as an aid in meeting these obligations? We also seek comment on any other steps the Commission can take to promote accessibility in light of the statutory limitations.

39. Achievability. Both sections 204 and 205 of the CVAA state that we should make our rules regarding the accessibility of user interfaces, guides, and menus effective only “if achievable (as defined in section 716).” According to section 716(g) of the Communications Act, “achievable” means:

(1) The nature and cost of the steps needed to meet the requirements of this section with respect to the specific equipment or service in question.

(2) The technical and economic impact on the operation of the manufacturer or provider and on the operation of the specific equipment or service in question, including on the development and deployment of new communications technologies.

(3) The type of operations of the manufacturer or provider.

(4) The extent to which the service provider or manufacturer in question offers accessible services or equipment containing varying degrees of functionality and features, and offered at differing price points.

40. Separate Equipment or Software. We seek comment on the directive in section 205 that our regulations “shall permit but not require the entity providing the navigation device to the requesting blind or visually impaired individual to comply with [the on-screen text menu and guide accessibility requirements] through that entity's use of software, a peripheral device, specialized consumer premises equipment, a network-based service or other solution, and shall provide the maximum flexibility to select the manner of compliance.” Section 205 provides further that “the entity providing the navigation device to the requesting blind or visually impaired individual shall provide any such software, peripheral device, equipment, service, or solution at no additional charge and within a reasonable time to such individual and shall ensure that such software, device, equipment, service, or solution provides the access required by such regulations.” We tentatively conclude that this solution must achieve the same functions as a built-in accessibility solution and must be provided by the entity providing the navigation device, rather than requiring the customer to seek out such a solution from a third party. We seek comment on these tentative conclusions. We also seek comment on how to define what is “a reasonable time” to give a requesting subscriber accessible equipment. We tentatively conclude that the other requirements in this provision are self-implementing, and we seek comment on our tentative conclusion.

41. Activating Accessibility Features (Comparable to a Button, Key, or Icon). In this section, we seek comment on the mechanism that the Commission must establish for consumers to activate the accessibility features of an apparatus or navigation device.

42. Activating Closed Captioning and Video Description Features: Closed Captioning. Sections 204 and 205 both direct the Commission to require certain apparatus and navigation devices with built-in closed captioning capability to provide access to closed captioning features “through a mechanism that is reasonably comparable to a button, key, or icon designated for activating the closed captioning or accessibility features.” Working Group 4 did not reach consensus on what the phrase “reasonably comparable to a button, key, or icon” means, but it provided the different language proposed by “consumer representatives” and “proposed by NCTA (and endorsed by CEA and its member companies).” Consumer representatives proposed that the VPAAC Second Report: User Interfaces recommend a closed captioning button when a dedicated physical button was used to control volume and/or channel selection, while NCTA, with CEA, proposed requiring only a mechanism “reasonably comparable to physical buttons” in those situations.

43. We seek comment on whether the most effective way to implement the requirement in sections 204 and 205 that closed captioning be activated through a mechanism reasonably comparable to a button, key, or icon would be to require the closed captioning feature to be activated in a single step. That is, users would be able to activate closed captioning features on an MVPD-provided navigation device or other digital apparatus immediately in a single step just as a button, key, or icon can be pressed or clicked in a single step. We believe that this single-step proposal is consistent with section 204 and 205's language describing “a mechanism that is reasonably comparable to a button, key, or icon,” and consistent with Congress's intent “to ensure ready access to these features by persons with disabilities.” In addition, a single-step requirement is future-proofed in that it does not require that any particular technology be used to enable accessibility, providing entities subject to section 204 and 205 the flexibility to continue to develop innovative compliance solutions. We seek comment on this concept, and on what constitutes a single step. Alternatively, is the best solution to require that “[w]hen dedicated physical buttons are used to control volume and/or channel selection, the controls for access to closed captions (or video description) must also be dedicated physical buttons, comparable in location to those provided for control of volume or channel selection,” as mentioned in the VPAAC Second Report: User Interfaces? For example, if volume on a particular device is controlled through the use of a dedicated button, should we require that closed captioning on that device be activated through the use of a dedicated button as well because it is a comparable function? What if the device does not have volume control through the use of a dedicated button or has no volume control at all? How would the proposal by consumer representatives mentioned in the VPAAC Second Report: User Interfaces operate in this context? Should the Commission impose different activation mechanisms on different types of apparatus? Should the Commission require that the closed captioning feature also be deactivated in a single step?

44. We ask commenters to set forth the costs and benefits of our proposal as well as the costs and benefits of any other proposals. Commenters should describe with specificity how their proposals would be considered “reasonably comparable to a button, key or icon.” Further, we seek comment on whether we should require covered entities to seek a Commission finding that a mechanism other than button, key, or icon is reasonably comparable to those mechanisms before building it into an apparatus or navigation device, or could they make that showing as a defense to a complaint? How should our regulations apply with respect to programmable universal remotes that can be programmed with different features?

45. Video Description. Section 204 explicitly requires certain apparatus to provide access to closed captioning and video description features through a mechanism reasonably comparable to a button, key or icon. Section 205 includes a similar requirement for a mechanism reasonably comparable to a button, key, or icon, but explicitly references only closed captioning capability; video description is not mentioned. Section 205 does state, however, that the mechanism “should be reasonably comparable to a button, key, or icon designated for activating the closed captioning, or accessibility features.” Despite the fact that section 205 does not use the term “video description” is it reasonable for us to interpret “accessibility features” in section 205 to encompass video description? For example, does the phrase “accessibility features” in section 205 reference capabilities that the mechanism required by section 205 must be able to access? Or is the term merely descriptive of the mechanism to which the mandated mechanism must be reasonably comparable? Video description is an essential accessibility feature. Therefore, would it be incongruous to require other digital apparatus to offer an activation mechanism for video description, but not navigation devices? We note in this regard that our video description rules currently apply to broadcasters and MVPDs. Thus, if accessibility requirements did not extend to video description in navigation devices then the requirements will not apply to devices used to access a large portion of video described programming. Given this, may we interpret the term “accessibility features” as used in section 205(b)(5) to include, at a minimum, video description? How, if at all, is such an interpretation impacted by the heading in section 205 that is titled “User Controls for Closed Captioning”?

46. We also seek comment on whether sections 204 and 205 require single-step activation of video description as we propose to require for closed captioning. We seek comment on whether a solution may be different for closed captioning and video description. We believe that the single-step approach is particularly appropriate for video description, given that following screen prompts (even on a device compliant with the accessibility rules we propose in this NPRM) can be challenging for individuals who are blind or visually impaired. We seek comment on whether sections 204 and 205 require single-step activation of video description. We also seek comment on whether the fact that video description is not specifically mentioned in section 205 means that there should be a different activation mechanism for video description for navigation devices.

47. Activating Other Accessibility Features. We seek comment on the phrase “accessibility features.” Are there additional “accessibility features” besides closed captioning and video description that sections 204 and 205 require be activated via a mechanism similar to a button, key, or icon? Or is the term merely descriptive of the mechanism to which the mandated mechanism must be reasonably comparable and does not outline the capabilities that the mandated mechanism must itself access? To the extent that Congress contemplated additional “accessibility features,” did it intend to include access to secondary audio programming for accessible emergency information as well as video description? In addition, should “accessibility features” include the activation of the audible output of on-screen text menus or guides required by sections 204 and 205? If so, should we adopt the same single-step mechanism requirement to make these features accessible, or would it be permissible under the statute to use different methods depending on the feature involved?

48. We also seek comment on whether the term “accessibility features” in sections 204 and 205 includes accessibility settings (such as font, color, and size of captions or, in the case of audible output of on-screen text menus or guides, settings such as volume, speed, and verbosity) as these settings enable consumers to make practical use of the closed captioning and audible output. We seek comment on how these settings must be made available. The NAD criticizes devices that require “the user [to] navigate a maze of many choices before reaching the closed captioning settings.” Would a requirement that accessibility settings be in the first level of a menu of a digital apparatus or navigation device address this concern? By “first level of a menu,” we mean that “accessibility features,” such as closed captions, video description and emergency information made available on the secondary audio stream, and audible output of on-screen text menus or guides, would be one of the choices on an initial menu screen; consumers would not need to navigate through a sub-menu to gain access to the menu of accessibility features and settings. Would that concept still achieve accessibility for video description given that screen prompts (even on a device compliant with the visual impairment accessibility rules we propose in this NPRM) can be challenging for individuals who are blind or visually impaired? We invite any other proposals that would make access to accessibility features easier for consumers and ask commenters to set forth the costs and benefits of any such proposals. We also seek comment on any other issues related to the activation of accessibility features, including how any adopted regulations should apply with respect to programmable universal remotes.

49. Maximum Flexibility. Section 205 also states that the Commission's rules should permit the entity providing the navigation device “maximum flexibility in the selection of means for compliance” with the mechanism for making accessibility features accessible. In its comments, NCTA asserts that “the plain language [of the CVAA] shows that Congress did not require cable operators and other MVPDs to include closed captioning buttons on their remote controls.” It is unclear from NCTA's comments, however, how it proposes that MVPDs comply with the requirement that accessibility features be made accessible. Although we recognize that Congress intended to afford covered entities “maximum flexibility” in complying with our rules, we do not interpret this term to mean that covered entities have unlimited discretion in determining how to fulfill the purposes of the statute. To interpret their “flexibility” in such a manner could potentially undermine the very intent of section 205, which is to ensure that navigation devices are accessible to individuals with disabilities. In any event, we seek comment on whether our single-step activation proposal with regard to closed captioning and video description provides the flexibility contemplated by the statute. What other mechanism is reasonably comparable to a button, key, or icon that would satisfy this requirement where a navigation device is provided with a remote control? We seek comment on how the Commission can interpret “maximum flexibility” with regard to activation mechanisms and yet still effectuate the goals of the statute.

50. Making Accessible Devices Available “Upon Request”. Section 205 directs us to require that guides and menus be made accessible “upon request,” and states that, “[a]n entity shall only be responsible for compliance with the requirements added by this section with respect to navigation devices that it provides to a requesting blind or visually impaired individual.” We interpret this section to require covered entities to provide accessible navigation devices to requesting subscribers “within a reasonable time.” We also interpret section 205's “upon request” language to apply to on-screen text menu and guide accessibility. Does this language also apply to the requirement that closed captioning and other accessibility features be activated via a mechanism that is reasonably comparable to a button, key, or icon?

51. We note that section 205(b)(3) states that an “entity shall only be responsible for compliance with the requirements added by this section with respect to the navigation devices that it provides to a requesting blind or visually impaired individual.” We seek comment on how this provision should be read in conjunction with the requirement in section 303(bb)(2) that pertains to accessing closed captioning capabilities. Does section 205(b)(3) of the CVAA apply to section 303(bb)(2) of the Communications Act? A literal interpretation of section 205(b)(3) would require that compliant closed captioning mechanisms need only be made available to requesting individuals who are blind or visually impaired. However, we note that this interpretation would lead to anomalous results as it is individuals who are deaf or hard of hearing who typically use closed captioning rather than individuals who are blind or visually impaired. Moreover, both section 205(a), creating the requirement for on-screen text menus and guides for the display or selection of multichannel video programming to be audibly accessible, as well as section 205(b)(4)(B), describing the provision of software and other solutions for making navigation devices accessible, only make reference to people who are blind and visually impaired with respect to requests that will be made under this section. Does the fact that these two sections focus on making navigation devices accessible to people with vision disabilities and do not reference people who are deaf and hard of hearing provide permissible justification for not making requests a pre-requisite to providing “a mechanism [that is] reasonably comparable to a button, key, or icon designated for activating the closed captioning, or accessibility features” required under section 303(bb)(2) of the Communications Act? In other words, was it Congress's intent for responsible entities to include the closed captioning mechanism on all applicable devices?

52. Alternatively, does the word “responsibility” in section 205(b)(3) of the CVAA mean liability for money damages? Under that reading, could the Commission order a covered entity to comply with section 205(b)(3) but only impose a forfeiture if a blind or visually impaired individual has requested access to the closed-captioning capability? Or is section 205(b)(3) of the CVAA designed to shield an entity from liability for equipment they did not distribute (e.g., if a consumer purchases a navigation device at retail, the consumer's MVPD is not responsible for the accessibility of that device)?

53. We also seek comment on whether a “request” could take any form (e.g., a phone call, an email, or a request made in-person). How can we ensure that MVPDs have a sufficient supply of accessible equipment in inventory to meet anticipated demand for accessible devices? We also seek comment on whether we should require MVPDs to notify their subscribers in braille or other accessible format that accessible devices are available upon request, and if so, how MVPDs should notify their subscribers (e.g., bill inserts). In addition to, or instead of, requiring MVPDs to notify subscribers, what other procedures could we adopt to ensure that individuals who are blind or visually impaired know that they can request an accessible navigation device? We further seek comment on whether section 205 requires MVPDs to provide accessible versions of all the classes of navigation devices they make available to subscribers, so that subscribers seeking accessibility features can choose among various price points and features. How would this provision apply to retail navigation devices if we conclude that retail navigation devices fall under the scope of section 205? Finally, to the extent that section 205 applies more broadly to other entities besides MVPDs, we seek comment on how these requirements should be implemented.

54. Alternate Means of Compliance. Section 204 of the CVAA states that an entity may meet the requirements of section 204(a) “through alternate means than those prescribed by” the regulations that we adopt. In implementing a similar provision in section 203 of the CVAA, the Commission has allowed parties either to (i) request a Commission determination that the proposed alternate means satisfies the statutory requirements through a request pursuant to § 1.41 of our rules; or (ii) claim in defense to a complaint or enforcement action that the Commission should determine that the party's actions were permissible alternate means of compliance. We tentatively conclude to adopt this approach in the instant proceeding. In addition, as the Commission has done in other contexts, rather than specify what may constitute a permissible “alternate means,” we tentatively conclude that we will address any specific requests from manufacturers when they are presented to us.

55. Enforcement. We tentatively conclude that we should adopt the same complaint filing procedures that the Commission adopted in the IP-closed captioning context. Those procedures (i) require complainants to file within 60 days after experiencing a problem; (ii) allow complainants to file their complaints either with the Commission or with the entity responsible for the problem; (iii) provide the entity 30 days to respond to the complaint; (iv) do not specify a time frame within which the Commission must act on complaints; (v) follow the Commission's flexible, case-by-case forfeiture approach governed by § 1.80(b)(6) of our rules; (vi) specify the information that the complaints must include as set forth below; and (vii) require covered entities to make contact information available to end users for the receipt and handling of written complaints. Such complaints should include: (a) The complainant's name, postal address, and other contact information, such as telephone number or email address; (b) the name and contact information, such as postal address, of the apparatus or navigation device manufacturer or provider; (c) information sufficient to identify the software or device used; (d) the date or dates on which the complainant purchased, acquired, or used, or tried to purchase, acquire, or use the apparatus or navigation device; (e) a statement of facts sufficient to show that the manufacturer or provider has violated or is violating the Commission's rules; (f) the specific relief or satisfaction sought by the complainant; (g) the complainant's preferred format or method of response to the complaint; and (h) if a section 205 complaint, the date that the complainant made an accessibility request and the person or entity to whom that request was directed. We also propose that a complaint alleging a violation of the apparatus or navigation device rules that we adopt in this proceeding may be transmitted to the Consumer and Governmental Affairs Bureau by any reasonable means, such as the Commission's online informal complaint filing system, letter in writing or Braille, facsimile transmission, telephone (voice/TRS/TTY), email, or some other method that would best accommodate the complainant's disability. Because our rules are intended to make apparatus and guides accessible to individuals who are blind or visually impaired, we propose that if a complainant calls the Commission for assistance in preparing a complaint, Commission staff will document the complaint in writing for the consumer and such communication will be deemed to be a written complaint. We also propose that the Commission will forward such complaints, as appropriate, to the named manufacturer or provider for its response, as well as to any other entity that Commission staff determines may be involved, and that the Commission be permitted to request additional information from any relevant parties when, in the estimation of Commission staff, such information is needed to investigate the complaint or adjudicate potential violations of Commission rules. Finally, we seek comment on whether any revisions to FCC Form 2000C, the disability access complaint form are necessary, and if so, what revisions are needed?

56. Exemption for Small Cable Operators. Section 205 states that the Commission “may provide an exemption from the regulations for cable systems serving 20,000 or fewer subscribers.” We note that the use of “may” suggests that adoption of such an exemption is discretionary. Should the Commission adopt such an exemption? What would be the costs and benefits of permitting this exemption? Commenters should address the factors the Commission should consider in determining whether this exemption is appropriate. To the extent we do adopt such an exemption, what alternatives would subscribers with disabilities have in the areas that are served by MVPDs that are subject to the exemption? Instead of exempting such small cable systems completely, would it be appropriate to provide them more time with which to comply with the regulations? How should we interpret this provision if we require entities besides MVPDs to comply with the requirements of section 205?

57. Timing. Section 205 of the CVAA provides that with respect to the navigation device rules we adopt that require a mechanism comparable to a button, key, or icon, “[t]he Commission shall provide affected entities with not less than 2 years after the adoption of such regulations to begin placing in service devices that comply with the requirements.” The CVAA also provides that with respect to the navigation device accessibility rules that we adopt, we shall provide affected entities with “not less than 3 years after the adoption of such regulations to begin placing in service devices that comply with the requirements.” The VPAAC recommends that we adopt these minimum phase-in periods, but that they run from the date of publication of the regulations in the Federal Register, rather than from the date of adoption. We tentatively conclude that we should adopt the VPAAC's recommendation because the recommendation was developed via consensus with support from the industry that should have an understanding of how long the development process for these devices will take. If commenters advocate a longer phase-in period, they should provide a detailed justification for why more time is necessary.

58. Section 204 does not provide a phased-in requirement with respect to digital apparatus, other than that a “digital apparatus designed and manufactured to receive or play back the Advanced Television System Committee's Mobile DTV Standards A/153 shall not be required to meet the requirements of the regulations” adopted under section 204 until at least two years after the date the final rules are published in the Federal Register. The VPAAC Second Report: User Interfaces suggests that the Commission make its rules regarding digital apparatus effective two years after publication of final rules in the Federal Register, consistent with the time frame given for compliance with both the ACS and IP closed captioning rules adopted pursuant to the CVAA. We tentatively conclude that we should adopt this recommendation because the recommendation was developed via consensus with support from the industry that should have an understanding of how long the development process for these devices will take. Commenters advocating longer phase-in periods for the various components of the section 204 rules or for any class of apparatus should provide a detailed justification for why more time is necessary.

59. Elimination of Analog Closed Captioning Labeling Requirement and Renaming Part 79. Finally, although this is not mandated by the CVAA, we take the opportunity to seek comment on a proposal to update our closed captioning apparatus rules. We tentatively conclude that we should remove the requirement that manufacturers label analog television receivers based on whether they contain an analog closed captioning decoder, as well as the requirement that manufacturers include information in the television's user manual if the receiver implements only a subset of the analog closed captioning functionality. We find that this rule is no longer necessary. Our regulations required that by March 1, 2007, all televisions contain a digital television receiver and, by extension, a digital closed captioning decoder. Thus, all television receivers being sold today are required to implement the features of digital closed captioning, which are more extensive than the features required for analog closed captioning. We believe that there are no televisions being manufactured in or imported into the United States today that implement only a subset of the analog closed captioning functionality. Therefore, we do not see the need to require the labeling of television receivers that include analog tuners, nor do we see the need to maintain the requirement that user manuals indicate if a device does not support all of the aspects of the analog closed captioning standard. We seek comment on this analysis and on our proposal to eliminate the analog labeling requirement.

60. Second, we propose to rename part 79 of the Commission's rules to better organize our rules. With the proposed addition of the user interface rules outlined above, part 79 has expanded in scope beyond closed captioning and video description of broadcast and MVPD programming to more broadly encompass the accessibility of video programming, of which closed captioning and video description are a part. Therefore, we propose to rename part 79 to the more general, “Accessibility of Video Programming.” Additionally, we believe that dividing part 79 into two subparts-one that includes rules that apply to video programming owners, providers, and distributors, and one that includes rules that apply to apparatus-will help readers browse our rules. Therefore, we propose to establish a subpart A, entitled “Video Programming Owners, Distributors, and Providers,” to contain those rules regarding the provision of various services, and a subpart B, “Apparatus,” to contain those rules pertaining to devices and other equipment used to receive, play back, or record video programming. We seek comment on these proposed changes.

61. Procedural Matters. The proceeding this Notice initiates shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with § 1.1206(b). In proceedings governed by § 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

62. Initial Regulatory Flexibility Analysis. The Regulatory Flexibility Act of 1980, as amended (“RFA”), requires that a regulatory flexibility analysis be prepared for notice and comment rule making proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

63. With respect to this Notice, an Initial Regulatory Flexibility Analysis (“IRFA”) is below. Written public comments are requested in the IFRA, and must be filed in accordance with the same filing deadlines as comments on the Notice, with a distinct heading designating them as responses to the IRFA. The Commission will send a copy of this Notice, including the IRFA, in a report to Congress pursuant to the Congressional Review Act. In addition, a copy of this Notice and the IRFA will be sent to the Chief Counsel for Advocacy of the SBA, and will be published in the Federal Register.

64. Paperwork Reduction Act Analysis. This document contains proposed new and modified information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

65. Comment Filing Procedures. Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998). Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/. Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission. All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building. Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington, DC 20554. People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

66. Additional Information: For additional information on this proceeding, please contact Brendan Murray of the Media Bureau, Policy Division, Brendan.Murray@fcc.gov, (202) 418-1573, or Adam Copeland of the Media Bureau, Policy Division, Adam.Copeland@fcc.gov, (202) 418-1037.

67. Ordering Clause. Accordingly, IT IS ORDERED that, pursuant to the authority contained in sections 1, 4(i), 4(j), 303(r), 303(aa), and 303(bb) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 303(r), 303(aa), and 303(bb), and sections 204 and 205 of the Twenty-First Century Communications and Video Accessibility Act, Pub. L. 111-260, sections 204 and 205, this Notice of Proposed Rulemaking IS ADOPTED.

68. As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”), the Commission has prepared this present Initial Regulatory Flexibility Analysis (“IRFA”) concerning the possible significant economic impact on small entities by the policies and rules proposed in the Notice of Proposed Rulemaking (“NPRM”). Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments provided on the first page of the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (“SBA”). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register.

69. Need for, and Objectives of, the Proposed Rule Changes. The Federal Communications Commission (“Commission”) seeks comment in this NPRM on how to implement sections 204 and 205 of the Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”). These sections generally require the Commission to adopt rules to require digital apparatus and navigation device user interfaces used to view video programming be accessible to and usable by individuals who are blind or visually impaired. Specifically, section 204 directs the Commission to require that “appropriate built-in apparatus functions” be made accessible to blind people. Section 205 directs the Commission to require that “on-screen text menus and guides provided by navigation devices” be made accessible. The Commission seeks comment on the types of devices covered by sections 204 and 205. Both of these sections also require that these devices provide a mechanism that is “reasonably comparable to a button, key, or icon designated for activating” closed captioning, video description, and accessibility features. The NPRM tentatively concludes that: (1) The requirement for the appropriate functions of the digital apparatus or navigation device to be accessible covers all “user functions” of such apparatus and devices, and that such functions do not include the debugging and diagnostic functions; (2) The Commission should not specify the technical standards for making those user functions accessible, consistent with the statute; (3) The Commission should handle alternate means of compliance and enforcement matters in the same way that the Commission implemented those matters in other CVAA contexts; and (4) The deadlines for compliance with these rules should be consistent with those proposed by a working group that focused on this topic. The Commission also seeks comment the most effective way to implement the requirement that closed captioning, video description, and accessibility features be activated through a mechanism reasonably comparable to a button, key, or icon is to require those features to be activated (and deactivated) in a single step; on how to interpret section 205's direction that accessible navigation devices shall be provided “upon request;” on how to handle complaints and enforce the rules adopted pursuant to sections 204 and 205 of the CVAA; and on whether to adopt an exemption from regulations adopted under section 205 with respect to cable systems that serve 20,000 or fewer subscribers. Finally, in addition to the implementation of the CVAA, the NPRM proposes to modernize the Commission's apparatus rules by eliminating the outdated requirement that manufacturers label analog television sets based on whether they include a closed-caption decoder and rename part 79 of the Commission's rules. The Commission seeks comment on all of these tentative conclusions and issues.

70. Our goal in this proceeding is to enable disabled people to use their digital video devices more easily. The proposed revisions to our rules will help fulfill the purpose of the CVAA to “update the communications laws to help ensure that individuals with disabilities are able to fully utilize communications services and equipment and better access video programming.”

71. Legal Basis. The proposed action is authorized pursuant to the Twenty-First Century Communications and Video Accessibility Act of 2010, Pub. L. 111-260, 124 Stat. 2751, and the authority found in sections 4(i), 4(j), 303(u) and (z), 330(b), and 713(g), of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 303(u) and (z), 330(b), and 613(g).

72. 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. Below, we provide a description of such small entities, as well as an estimate of the number of such small entities, where feasible.

73. Cable Television Distribution Services. Since 2007, these services have been defined within the broad economic census category of “Wired Telecommunications Carriers,” which 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. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus, under this category and the associated small business size standard, the majority of such firms can be considered small.

74. Cable Companies and Systems. The Commission has also developed its own small business size standards, for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers, nationwide. 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 6,635 systems nationwide, 5,802 systems have under 10,000 subscribers, and an additional 302 systems have 10,000-19,999 subscribers. Thus, under this second size standard, most cable systems are small.

75. Cable System Operators. The Communications Act of 1934, as amended, also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” The Commission has determined that 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 all but nine cable operators nationwide are small under this subscriber 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.

76. Television Broadcasting. This Economic Census category “comprises establishments primarily engaged in broadcasting images together with sound. These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public.” The SBA has created the following small business size standard for Television Broadcasting firms: those having $14 million or less in annual receipts. The Commission has estimated the number of licensed commercial television stations to be 1,387. In addition, according to Commission staff review of the BIA Advisory Services, LLC's Media Access Pro Television Database on March 28, 2012, about 950 of an estimated 1,300 commercial television stations (or approximately 73 percent) had revenues of $14 million or less. We therefore estimate that the majority of commercial television broadcasters are small entities.

77. We note, however, that in assessing whether a business concern qualifies as small under the above definition, business (control) affiliations must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimate of small businesses to which rules may apply does not exclude any television station from the definition of a small business on this basis and is therefore possibly over-inclusive to that extent.

78. In addition, the Commission has estimated the number of licensed noncommercial educational (NCE) television stations to be 396. These stations are non-profit, and therefore considered to be small entities.

79. Direct Broadcast Satellite (“DBS”) Service. DBS service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic “dish” antenna at the subscriber's location. DBS, by exception, is now included in the SBA's broad economic census category, “Wired Telecommunications Carriers,” which was developed for small wireline firms. Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus, under this category and the associated small business size standard, the majority of such firms can be considered small. Currently, only two entities provide DBS service, which requires a great investment of capital for operation: DIRECTV and EchoStar Communications Corporation (“EchoStar”) (marketed as the DISH Network). Each currently offers subscription services. DIRECTV and EchoStar each report annual revenues that are in excess of the threshold for a small business. Because DBS service requires significant capital, we believe it is unlikely that a small entity as defined by the SBA would have the financial wherewithal to become a DBS service provider.

80. Satellite Telecommunications Providers. Two economic census categories address the satellite industry. The first category has a small business size standard of $15 million or less in average annual receipts, under SBA rules. The second has a size standard of $25 million or less in annual receipts.

81. The category of “Satellite Telecommunications” “comprises establishments primarily engaged in providing 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.” Census Bureau data for 2007 show that 607 Satellite Telecommunications establishments operated for that entire year. Of this total, 533 establishments had annual receipts of under $10 million or less, and 74 establishments had receipts of $10 million or more. Consequently, the Commission estimates that the majority of Satellite Telecommunications firms are small entities that might be affected by our action.

82. The second category, i.e., “All Other Telecommunications,” comprises “establishments 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 data for 2007 shows that there were a total of 2,639 establishments that operated for the entire year. Of those 2,639 establishments, 2,333 operated with annual receipts of less than $10 million and 306 with annual receipts of $10 million or more. Consequently, the Commission estimates that a majority of All Other Telecommunications establishments are small entities that might be affected by our action.

83. Satellite Master Antenna Television (SMATV) Systems, also known as Private Cable Operators (PCOs). SMATV systems or PCOs are video distribution facilities that use closed transmission paths without using any public right-of-way. They acquire video programming and distribute it via terrestrial wiring in urban and suburban multiple dwelling units such as apartments and condominiums, and commercial multiple tenant units such as hotels and office buildings. SMATV systems or PCOs are now included in the SBA's broad economic census category, “Wired Telecommunications Carriers,” which was developed for small wireline firms. Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus, under this category and the associated small business size standard, the majority of such firms can be considered small.

84. Home Satellite Dish (“HSD”) Service. HSD or the large dish segment of the satellite industry is the original satellite-to-home service offered to consumers, and involves the home reception of signals transmitted by satellites operating generally in the C-band frequency. Unlike DBS, which uses small dishes, HSD antennas are between four and eight feet in diameter and can receive a wide range of unscrambled (free) programming and scrambled programming purchased from program packagers that are licensed to facilitate subscribers' receipt of video programming. Because HSD provides subscription services, HSD falls within the SBA-recognized definition of “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. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus, under this category and the associated small business size standard, the majority of such firms can be considered small.

85. 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. In 2009, the Commission conducted Auction 86, the sale of 78 licenses in the BRS areas. The Commission offered three levels of bidding credits: (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) received 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) received 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) received a 35 percent discount on its winning bid. Auction 86 concluded in 2009 with the sale of 61 licenses. Of the ten winning bidders, two bidders that claimed small business status won four licenses; one bidder that claimed very small business status won three licenses; and two bidders that claimed entrepreneur status won six licenses.

86. In addition, the SBA's placement of Cable Television Distribution Services in the category of Wired Telecommunications Carriers is applicable to cable-based Educational Broadcasting Services. Since 2007, “Wired Telecommunications Carriers” have been 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.” Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services; wired (cable) audio and video programming distribution; and wired broadband Internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry. For these services, the Commission uses the SBA small business size standard for Wired Telecommunications Carriers, which is 1,500 or fewer employees. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus, under this category and the associated small business size standard, the majority of such firms can be considered small. In addition to Census data, the Commission's internal records indicate that as of September 2012, there are 2,241 active EBS licenses. The Commission estimates that of these 2,241 licenses, the majority are held by non-profit educational institutions and school districts, which are by statute defined as small businesses.

87. Fixed Microwave Services. Microwave services include common carrier, private-operational fixed, and broadcast auxiliary radio services. They also include the Local Multipoint Distribution Service (LMDS), the Digital Electronic Message Service (DEMS), and the 24 GHz Service, where licensees can choose between common carrier and non-common carrier status. At present, there are approximately 31,428 common carrier fixed licensees and 79,732 private operational-fixed licensees and broadcast auxiliary radio licensees in the microwave services. There are approximately 120 LMDS licensees, three DEMS licensees, and three 24 GHz licensees. The Commission has not yet defined a small business with respect to microwave services. For purposes of the IRFA, we will use the SBA's definition applicable to Wireless Telecommunications Carriers (except satellite)—i.e., an entity with no more than 1,500 persons. 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 the category of “Wireless Telecommunications Carriers (except Satellite),” Census data for 2007 show that there were 11,163 firms that operated for the entire year. Of this total, 10,791 firms had employment of 999 or fewer employees and 372 had employment of 1,000 employees or more. Thus, under this category and the associated small business size standard, the majority of firms can be considered small. We note that the number of firms does not necessarily track the number of licensees. We estimate that virtually all of the Fixed Microwave licensees (excluding broadcast auxiliary licensees) would qualify as small entities under the SBA definition.

88. Open Video Systems. 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. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus, under this category and the associated small business size standard, the majority of such firms can be considered small. 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, at least some of the OVS operators may qualify as small entities.

89. Cable and Other Subscription Programming. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers.” The SBA has developed a small business size standard for this category, which is: all such firms having $15 million dollars or less in annual revenues. To gauge small business prevalence in the Cable and Other Subscription Programming industries, the Commission relies on data currently available from the U.S. Census for the year 2007. Census Bureau data for 2007 show that there were 659 establishments in this category that operated for the entire year. Of that number, 462 operated with annual revenues of $9,999,999 million dollars or less. 197 operated with annual revenues of 10 million or more. Thus, under this category and associated small business size standard, the majority of firms can be considered small.

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

91. Incumbent Local Exchange Carriers (“LECs”). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The appropriate size standard under SBA rules is for the category “Wired Telecommunications Carriers.” Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus, under this category and the associated small business size standard, the majority of such firms can be considered small.

92. Competitive Local Exchange Carriers, Competitive Access Providers (CAPs), “Shared-Tenant Service Providers,” and “Other Local Service Providers.” Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category “Wired Telecommunications Carriers.” Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 shows that there were 31,996 establishments that operated that year. Of those 31,996, 1,818 operated with more than 100 employees, and 30,178 operated with fewer than 100 employees. Thus, under this category and the associated small business size standard, the majority of such firms can be considered small. 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.

93. Motion Picture and Video Production. The Census Bureau defines this category as follows: This industry comprises establishments primarily engaged in producing, or producing and distributing motion pictures, videos, television programs, or television commercials. We note that firms in this category may be engaged in various industries, including cable programming. Specific figures are not available regarding how many of these firms produce and/or distribute programming for cable television. The SBA has developed a small business size standard for this category, which is: all such firms having $29.5 million dollars or less in annual revenues. To gauge small business prevalence in the Motion Picture and Video Production industries, the Commission relies on data currently available from the U.S. Census for the year 2007. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 9,095 firms in this category that operated for the entire year. Of these, 8,995 had annual receipts of $24,999,999 or less, and 100 had annual receipts ranging from not less than $25,000,000 to $100,000,000 or more. Thus, under this category and associated small business size standard, the majority of firms can be considered small.

94. Motion Picture and Video Distribution. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in acquiring distribution rights and distributing film and video productions to motion picture theaters, television networks and stations, and exhibitors.” We note that firms in this category may be engaged in various industries, including cable programming. Specific figures are not available regarding how many of these firms produce and/or distribute programming for cable television. The SBA has developed a small business size standard for this category, which is: all such firms having $29.5 million dollars or less in annual revenues. To gauge small business prevalence in the Motion Picture and Video Distribution industries, the Commission relies on data currently available from the U.S. Census for the year 2007. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 450 firms in this category that operated for the entire year. Of these, 434 had annual receipts of $24,999,999 or less, and 16 had annual receipts ranging from not less than $25,000,000 to $100,000,000 or more. Thus, under this category and associated small business size standard, the majority of firms can be considered small.

95. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, which is: all such firms having 750 or fewer employees. According to Census Bureau data for 2007, there were 919 establishments that operated for part or all of the entire year. Of those 919 establishments, 771 operated with 99 or fewer employees, and 148 operated with 100 or more employees. Thus, under that size standard, the majority of establishments can be considered small.

96. Audio and Video Equipment Manufacturing. The SBA has classified the manufacturing of audio and video equipment under in NAICS Codes classification scheme as an industry in which a manufacturer is small if it has less than 750 employees. Data contained in the 2007 Economic Census indicate that 491 establishments in this category operated for part or all of the entire year. Of those 491 establishments, 456 operated with 99 or fewer employees, and 35 operated with 100 or more employees. Thus, under the applicable size standard, a majority of manufacturers of audio and video equipment may be considered small.

97. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements. One proposed rule change discussed in the NPRM would affect reporting, recordkeeping, or other compliance requirements. This proposed rule change would eliminate the outdated requirement that manufacturers of analog television sets label devices with a notice about closed captioning features.

98. Steps Taken to Minimize Significant 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 proposed approach, which may include the following four alternatives (among others): (1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

99. We emphasize at the outset that, although alternatives to minimize economic impact on small businesses (such as the possible exemption from section 205 regulations for cable systems that serve 20,000 or fewer subscribers) have been and are being considered as part of this proceeding, our proposals are governed by the congressional mandate contained in sections 204 and 205 of the CVAA. The NPRM seeks comment on whether any alternatives to the proposed rules exist, and gives small entities wide latitude in the specific steps it will use to meet the rules-in other words, the proposed rules are entirely performance, rather than design, focused. Individual entities, including smaller entities, may benefit from this provision because our proposed rules will do not specify how any entity must achieve accessibility, but rather encourage all entities (include small entities) to be creative and develop cost-effective methods to achieve accessibility.

100. Overall, in proposing rules governing accessible digital apparatus and navigation devices, we believe that we have appropriately considered both the interests of individuals who are blind, visually impaired, deaf, or hard of hearing and the interests of the entities who will be subject to the rules, including those that are smaller entities. Our proposed rules are consistent with Congress' goal of “updat[ing] the communications laws to help ensure that individuals with disabilities are able to fully utilize communications services and equipment and better access video programming.” In seeking to achieve that Congressional goal, our proposed rules will not require small businesses to conform to any standard, and allow them to use any less expensive “alternative means of compliance” for cost savings. Moreover, elimination of the labeling requirement is another step that the Commission proposes to reduce costs for small businesses.

101. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rule. None.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 79 as follows:

A map showing the boundaries of the area of application of the Convention (Convention Area), which comprises the majority of the WCPO, can be found on the WCPFC Web site at: www.wcpfc.int/doc/convention-area-map. The Convention focuses on the conservation and management of highly migratory species (HMS) and the management of fisheries for HMS. The objective of the Convention is to ensure, through effective management, the long-term conservation and sustainable use of HMS in the WCPO. To accomplish this objective, the Convention establishes the Commission for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (WCPFC). The WCPFC includes Members, Cooperating Non-members, and Participating Territories (collectively, CCMs). The United States is a Member. American Samoa, Guam, and the CNMI are Participating Territories.

As a Contracting Party to the Convention and a Member of the WCPFC, the United States is obligated to implement the decisions of the WCPFC. The WCPFC Implementation Act (16 U.S.C. 6901 et seq.), authorizes the Secretary of Commerce, in consultation with the Secretary of State and the Secretary of the Department in which the United States Coast Guard is operating (currently the Department of Homeland Security), to promulgate such regulations as may be necessary to carry out the obligations of the United States under the Convention, including the decisions of the WCPFC. The WCPFC Implementation Act further provides that the Secretary of Commerce shall ensure consistency, to the extent practicable, of fishery management programs administered under the WCPFC Implementation Act and the Magnuson-Stevens Fishery Conservation and Management Act (MSA; 16 U.S.C. 1801 et seq.), as well as other specific laws (see 16 U.S.C. 6905(b)). The Secretary of Commerce has delegated the authority to promulgate regulations to NMFS.

At its Ninth Regular Session, in Manila, Philippines, in December 2012, the WCPFC adopted “Conservation and Management Measure for Bigeye, Yellowfin and Skipjack Tuna in the Western and Central Pacific Ocean” (CMM 2012-01). The CMM's stated general objective is to ensure that the stocks of bigeye tuna, yellowfin tuna (Thunnus albacares), and skipjack tuna (Katsuwonus pelamis) in the WCPO are, at a minimum, maintained at levels capable of producing their maximum sustainable yield as qualified by relevant environmental and economic factors. The CMM includes specific objectives for each of the three stocks: For each, the fishing mortality rate is to be reduced to or maintained at levels no greater than the fishing mortality rate associated with maximum sustainable yield. The requirements of the CMM, identified as “interim” measures, are for calendar year 2013. The CMM also calls for the WCPFC to establish, at its regular annual session in December 2013, a multi-year management program for 2014-2017 for the three stocks. Given the stock status of bigeye tuna in the WCPO and the general positions of CCMs regarding their longline fisheries, it is highly likely that the multi-year management program will result in a CMM with the same catch limits for longline fisheries as those included in CMM 2012-01. NMFS proposes to implement the longline provisions of CMM 2012-01 for 2014 as well as 2013, and to implement changes as necessary following the regular session of the WCPFC in December 2013. In this manner, NMFS will avoid any gaps in regulatory oversight of the fisheries that otherwise might result. Implementing this proposed rule for 2013 and 2014 also would serve to provide advance notice to the public that the catch limit would continue, pending implementation of any new measure adopted by the WCPFC, allowing fishers to adjust their fishing practices accordingly. Once the WCPFC adopts a new CMM, NMFS will take the steps necessary to implement that CMM.

CMM 2012-01 is the successor to CMM 2011-01, adopted in March 2012 (most provisions of which were applicable in 2012), and to CMM 2008-01, adopted in December 2008 (most provisions of which were applicable in 2009-2011). These and other CMMs adopted by the WCPFC are available at www.wcpfc.int/conservation-and-management-measures.

Among other provisions, CMM 2012-01 requires that CCMs limit catches of bigeye tuna by their longline vessels to specified levels in 2013. The catch limit for the United States longline fisheries is 3,763 mt. This is the same as the catch limit for the United States established in CMMs 2008-01 and 2011-01 that NMFS implemented for 2009-2012 (final rule published 74 FR 63999 (2009 rule) and interim final rule published 77 FR 51709 (2012 rule)). As in the 2009 rule and the 2012 rule, this proposed rule would establish a limit on retained catches (as a proxy for catches) of bigeye tuna. Under CMM 2012-01 and its Attachment F, the longline fisheries of American Samoa, Guam, and the CNMI are not subject to longline bigeye tuna catch limits.

This proposed rule would implement the longline bigeye tuna catch limit of CMM 2012-01 for the United States. The proposed limit and associated restrictions would apply to U.S. longline fisheries in the WCPO other than those of American Samoa, Guam, and the CNMI.

For the purpose of this proposed rule, the longline fisheries of the three U.S. Participating Territories would be distinguished from the other longline fisheries of the United States (all of which are U.S.-flagged vessels) based on a combination of three factors: (1) Where the bigeye tuna are landed; (2) the types of Federal longline fishing permits registered to the fishing vessel; and (3) whether the fishing vessel is included in an arrangement under authorization of Section 113(a) of Public Law 112-55, 125 Stat. 552 et seq., the Consolidated and Further Continuing Appropriations Act, 2012 (continued by Pub. L. 113-6, 125 Stat. 603, section 110, the Department of Commerce Appropriations Act, 2013). Hereafter, this law is referred to as the “Section 113 authorization”; the original law, enacted for 2011 and 2012, is referred to as “prior Section 113(a)”; and, arrangements authorized under either of these laws are referred to as “Section 113(a) arrangements.”

The Section 113 authorization remains in effect until the earlier of December 31, 2013, or such time as the Western Pacific Fishery Management Council (WPFMC) recommends, and the Secretary approves, an amendment to the Fishery Ecosystem Plan for the Pacific Pelagic Fisheries of the Western Pacific Region (Pelagics FEP) that would authorize U.S. Participating Territories to use, assign, allocate, and manage catch limits of highly migratory fish stocks, or fishing effort limits, established by the WCPFC, and the amendment is implemented via regulations. The WPFMC at its 154th meeting took final action to amend the Pelagics FEP accordingly; however, the amendment has not yet been approved or implemented by NMFS. It is possible the amendment will apply in 2013 or 2014, in which case the provisions of this proposed rule that take into consideration the Section 113 authorization would cease to apply, as the amendment would effectively replace it. The Section 113 authorization may also cease to apply on its own in 2014, if the effective date is not further extended beyond December 31, 2013; therefore, the provisions of this proposed rule that take into consideration the Section 113 authorization would similarly cease to apply. Thus, this proposed rule provides notice to the public that the provisions in the rule for Section 113(a) arrangements may be applicable in 2014, if the Section 113 authorization is further continued, but the regulatory text would only implement the provisions for Section 113(a) arrangements for 2013. NMFS would take appropriate action to amend the regulatory text if Section 113(a) arrangements are applicable in 2014.

With respect to the first factor, bigeye tuna landed by U.S. vessels in any of the three U.S. Participating Territories, with certain provisos, would be attributed to the longline fishery of that Participating Territory. The provisos are that: (1) The bigeye tuna must not be captured in the portion of the U.S. exclusive economic zone (EEZ) surrounding the Hawaiian Archipelago; and (2) the bigeye tuna must be landed by a U.S. fishing vessel operated in compliance with one of the permits required under the regulations implementing the Pelagics FEP developed by the WPFMC or the Fishery Management Plan for U.S. West Coast Fisheries for Highly Migratory Species (West Coast HMS FMP) developed by the Pacific Fishery Management Council (i.e., a permit issued under 50 CFR 665.801 or 660.707).

With respect to the second factor, bigeye tuna that are caught by a fishing vessel registered for use under a valid American Samoa Longline Limited Access Permit would, subject to the provisos mentioned above, be attributed to the longline fishery of American Samoa, regardless of where that catch is landed. This distinction is made because American Samoa Longline Limited Access Permits are issued only to people that have demonstrated participation in the American Samoa pelagic fisheries, such that the catch may properly be attributed to that territory. The 2009 rule and the 2012 rule included these two above factors as well as the related provisos.

The 2012 rule also included a third factor for the attribution of catch to the U.S. Participating Territories, to take into consideration the provisions of prior Section 113(a). This proposed rule takes into consideration these same provisions, which are included in the Section 113 authorization. These provisions authorize the U.S. Participating Territories of the WCPFC to use, assign, allocate, and manage catch limits or fishing effort limits agreed to by the WCPFC through arrangements with U.S. vessels with permits issued under the Pelagics FEP. They also further direct the Secretary of Commerce, for the purposes of annual reporting to the WCPFC, to attribute catches made by vessels operating under Section 113(a) arrangements to the U.S. Participating Territories. The provisions also establish specific eligibility criteria for these arrangements. The 2012 rule established additional requirements and conditions for catches to be attributed to the U.S. Participating Territories. This proposed rule includes these same eligibility criteria, requirements, and conditions, which are described in more detail below.

The longline fisheries of the United States and its territories operating in the WCPO are managed as discrete fisheries, with separate compilations of catch and effort statistics and separate management measures for each fishery. In order to allow for the orderly administration of these fisheries and a consistent manner of attributing catches to the fisheries of the U.S. Participating Territories under eligible Section 113(a) arrangements, NMFS would wait to attribute catches under eligible Section 113(a) arrangements until the date the catch limit would be reached can be forecasted with a fairly high degree of probability. Thereafter, NMFS would attribute catches to the fisheries of the U.S. Participating Territories under eligible Section 113(a) arrangements starting seven days before the date the U.S. catch limit is forecasted to be reached. This procedure would allow NMFS to properly administer and enforce the specific management requirements for each fishery throughout the year, consistent with the approved Pelagics FEP.

As in 2012, NMFS would prepare forecasts during 2013 and 2014 of the date that the bigeye tuna catch limit would be reached and periodically make these forecasts available to the public, such as by posting on a Web site. All the forecasts prepared up until the time that catch attribution to the U.S. Participating Territories under Section 113(a) arrangements actually begins would assume that there would be no such catch attribution to the U.S. Participating Territories. Those forecasts would be subject to change as new information becomes available. Because of these potential changes, it is necessary to identify a particular forecast for the purpose of determining when catch attribution to the U.S. Participating Territories under eligible Section 113(a) arrangements would begin. For this purpose, NMFS would use the first forecast that indicates the catch limit would be reached within 28 days of the date of preparation of that forecast. The projected catch limit date in this forecast would be called, for the purpose of this proposed rule, the pre-Section 113(a) attribution forecast date. As soon as NMFS determines the pre-Section 113(a) attribution forecast date, NMFS would evaluate all Section 113(a) arrangements that it has received to date, based on the eligibility criteria specified below, and calculate a new forecast date for the catch limit, this time not counting as part of the tally any U.S. catches to be attributed to the U.S. Participating Territories under eligible Section 113(a) arrangements. In order to allow NMFS a reasonable amount of time to complete this process, NMFS would begin attributing catches to the U.S. Participating Territories under eligible Section 113(a) arrangements seven days before the pre-Section 113(a) attribution forecast date and the new forecast date for the catch limit would be calculated based on this attribution start date. At that time, NMFS would also make publicly available a new forecast date on a Web site—the post-Section 113(a) attribution forecast date—and would update that forecast date as appropriate throughout 2013 and 2014 (if Section 113(a) arrangements are applicable in 2014).

There would be no official due date for the receipt by NMFS of potentially eligible Section 113(a) arrangements. However, NMFS would need 14 days to process arrangements that it receives, so for an arrangement received after the date that NMFS determines the pre-Section 113(a) attribution forecast date, attribution to the appropriate U.S. Participating Territory would start 14 days after NMFS has received the arrangement or seven days before the pre-Section 113(a) attribution forecast date, whichever date is later.

NMFS considered starting catch attribution to the U.S. Participating Territories under eligible Section 113(a) arrangements only after the 3,763 mt catch limit is reached, in order to be consistent with past administration of the longline fisheries in the WCPO. However, given the time needed to process Section 113(a) arrangements and the time needed to put into effect the prohibitions once the 3,763 mt catch limit is reached, waiting until the catch limit is reached to begin attribution under arrangements with the U.S. Participating Territories would likely cause public confusion and result in unnecessary costs in the fishery if there is an eligible Section 113(a) arrangement. For example, should attribution begin only after the catch limit is reached and the prohibitions go into effect, a vessel owner providing NMFS with a copy of an eligible arrangement a few days before the catch limit is reached would be subject to the prohibitions for a number of days while the arrangement is reviewed, even though the prohibitions would be later found not to apply to the vessel. Beginning attribution to the U.S. Participating Territories a short period before the pre-Section 113(a) attribution forecast date would help minimize confusion and costs associated with such a situation. It would also have the advantage of avoiding, in certain circumstances, the administrative and other costs associated with putting the prohibitions into effect.

The proposed rule would also include certain requirements that must be met in order for NMFS to attribute bigeye tuna caught by a particular vessel included in a Section 113(a) arrangement to the longline fishery of a U.S. Participating Territory. First, with the exception of existing arrangements received by NMFS prior to the effective date of the proposed rule, NMFS would need to receive from the vessel owner or designated representative a copy of the arrangement at least 14 days prior to the date the bigeye tuna were caught. In addition, the arrangement would need to satisfy specific criteria, discussed in detail in the section below.

Any bigeye tuna attributed to the longline fisheries of American Samoa, Guam, or the CNMI as specified in the proposed rule would not be counted against the U.S. limit. All other bigeye tuna captured by longline gear in the Convention Area by U.S. longline vessels and retained would be counted against the U.S. limit of 3,763 mt.

Under the proposed rule, an arrangement would not be eligible for the attribution of bigeye tuna to the U.S. Participating Territories under the terms of the Section 113 authorization, unless each of the following five criteria were met: (1) The arrangement would need to include vessels registered for use with valid permits issued under the Pelagics FEP; (2) the arrangement could not impose requirements regarding where the vessels fish or land their catch; (3) the arrangement would need to be signed by all the owners of the vessels included in the arrangement, or by their designated representative(s); (4) the arrangement would need to be signed by an authorized official of the U.S. Participating Territory(ies) or his or her designated representative(s); and (5) the arrangement would need to be funded by deposits to the Western Pacific Sustainable Fisheries Fund in support of fisheries development projects identified in a territory's Marine Conservation Plan adopted pursuant to section 204 of the MSA. If NMFS determined that an arrangement did not meet the criteria for eligibility, NMFS would notify the parties to the arrangement or their designated representative(s) of its determination within 14 days of receiving a copy of the arrangement.

Under the proposed rule, should NMFS determine that the limit is expected to be reached before the end of 2013 or 2014, NMFS would publish a notice in the Federal Register to announce specific fishing restrictions that would be effective from the date the limit is expected to be reached until the end of the 2013 or 2014 calendar year. NMFS would publish the notice of the restrictions at least seven calendar days before the effective date to provide vessel operators with advance notice. Periodic forecasts of the date the limit is expected to be reached would be made available to the public, such as by posting on a Web site, to help vessel operators plan for the possibility of the limit being reached.

(1) Retain on board, transship, or land bigeye tuna: Starting on the effective date of the restrictions and extending through December 31 of that calendar year, it would be prohibited to use a U.S. fishing vessel to retain on board, transship, or land bigeye tuna captured in the Convention Area by longline gear, except as follows:

First, any bigeye tuna already on board a fishing vessel upon the effective date of the restrictions could be retained on board, transshipped, and/or landed, provided that they were landed within 14 days after the restrictions become effective. A vessel that had declared to NMFS pursuant to 50 CFR 665.803(a) that the current trip type is shallow-setting would not be subject to this 14-day landing restriction, so these vessels would be able to land fish more than 14 days after the restrictions become effective.

Second, bigeye tuna captured by longline gear could be retained on board, transshipped, and/or landed if they were caught by a fishing vessel registered for use under a valid American Samoa Longline Limited Access Permit, or if they were landed in American Samoa, Guam, or the CNMI, with the following provisos: The bigeye tuna must not have been caught in the portion of the U.S. EEZ surrounding the Hawaiian Archipelago and must have been landed by a U.S. fishing vessel operated in compliance with a valid permit issued under 50 CFR 660.707 or 665.801.

Third, bigeye tuna captured by longline gear could be retained on board, transshipped, and/or landed if they were caught by a vessel that is included in an eligible Section 113(a) arrangement, as specified above, and the bigeye tuna were subject to attribution to the longline fishery of American Samoa, Guam, or the CNMI in accordance with the terms of the arrangement, and to the extent consistent with the requirements and procedures set forth in the proposed rule, with the following proviso: NMFS would need to have received from the vessel owner or designated representative a copy of the arrangement at least 14 days prior to the activity (i.e., the retention on board, transshipment, or landing). The advance notification provision would not apply to existing arrangements received by NMFS prior to the effective date of the proposed rule.

(2) Transshipment of bigeye tuna to certain vessels: Starting on the effective date of the restrictions and extending through December 31 of that calendar year, it would be prohibited to transship bigeye tuna caught in the Convention Area by longline gear to any vessel other than a U.S. fishing vessel operated in compliance with a valid permit issued under 50 CFR 660.707 or 665.801.

(3) Fishing inside and outside the Convention Area: To help ensure compliance with the restrictions related to bigeye tuna caught by longline gear in the Convention Area, the proposed rule would establish two additional, related prohibitions that would be in effect starting on the effective date of the restrictions and extending through December 31 of that calendar year. First, it would be prohibited to fish with longline gear both inside and outside the Convention Area during the same fishing trip, with the exception of a fishing trip that is in progress at the time the announced restrictions go into effect. In that exceptional case, the vessel would still be required to land any bigeye tuna taken in the Convention Area within 14 days of the effective date of the restrictions, as described above. Second, if a vessel is used to fish using longline gear outside the Convention Area and enters the Convention Area at any time during the same fishing trip, the longline gear on the fishing vessel would be required to be stowed in a manner so as not to be readily available for fishing while the vessel is in the Convention Area. These two prohibitions would not apply to the following vessels: (1) Vessels on declared shallow-setting trips pursuant to 50 CFR 665.803(a); and (2) vessels operating for the purposes of this rule as part of the longline fisheries of American Samoa, Guam, or the CNMI (including vessels registered for use under valid American Samoa Longline Limited Access Permits and vessels landing their bigeye tuna catch in one of the three U.S. Participating Territories, so long as these vessels conduct fishing activities in accordance with the provisos described above; and vessels included in an eligible Section 113(a) arrangement, as specified above, provided that their catches of bigeye tuna are subject to attribution to the longline fishery of American Samoa, Guam, or the CNMI at the time of the activity).

The Administrator, Pacific Islands Region, NMFS, has determined that this proposed rule is consistent with the WCPFC Implementation Act and other applicable laws, subject to further consideration after public comment.

For implementation of the 2009 rule, NMFS prepared an Environmental Assessment (EA) and a Supplemental EA (hereafter, 2009 EA and 2009 SEA, respectively). For implementation of the 2012 rule, NMFS prepared a Supplemental EA (hereafter, 2012 EA). NMFS has prepared a Supplemental Information Report (SIR) to examine whether additional NEPA analysis is needed to assess the impacts of the proposed rule on the human environment. The SIR includes the following sections: (1) The criteria for supplementing NEPA analysis; (2) summary of existing NEPA documents; (3) evaluation of the proposed action; (4) evaluation of new information available since preparation of the existing NEPA analysis; (5) analysis of the need for additional NEPA analysis; and (6) conclusions. In the SIR, NMFS concludes that no supplemental NEPA analysis is required to implement by regulation the 3,763 mt bigeye tuna catch limit for U.S. longline fisheries for 2013 and 2014 for the following reasons: (1) The proposed action is substantially the same as the 2009 rule and the 2012 rule; (2) the potential impacts from the proposed action on the human environment were addressed in the 2009 EA, 2009 SEA, and 2012 SEA; (3) the resources potentially affected by the proposed action were adequately described and evaluated in the 2009 EA, 2009 SEA, and 2012 SEA; and (4) there is no new significant information or circumstances affecting the action area that were not taken into consideration in the 2009 EA, 2009 SEA, and 2012 SEA.

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

An initial regulatory flexibility analysis (IRFA) was prepared, as required by section 603 of the Regulatory Flexibility Act. The IRFA describes the economic impact this proposed rule would have on affected small entities, if adopted. A description of the action, why it is being considered, and the legal basis for this action are contained in the SUMMARY section of the preamble and in other sections of this SUPPLEMENTARY INFORMATION section of the preamble. The analysis follows:

The proposed rule would apply to owners and operators of U.S. vessels fishing with longline gear in the Convention Area, except those that are part of the longline fisheries of American Samoa, Guam, and the CNMI. The total number of affected entities is approximated by the number of Hawaii Longline Limited Access Permits (issued under 50 CFR 665.13) that are assigned to vessels (permitted vessels). Under the limited access program, no more than 164 permits may be issued. During 2006-2012 the number of permitted vessels ranged from 130 to 145 (these figures and some other estimates in the remainder of this IRFA differ slightly from previously published estimates because of subsequent updates to the data and/or methods that were used for the estimates). The current number of permitted vessels (as of May 2013) is 129. Traditionally, most of the Hawaii fleet's fishing effort has been in the Convention Area, with the remainder of the effort to the east of the Convention Area, as described below. Owners and operators of U.S. longline vessels based on the U.S. west coast also could be affected by this proposed rule. However, based on the complete lack of fishing by that fleet in the Convention Area since 2005, it is expected that very few, if any, U.S. west coast vessels would be affected.

Most of the Hawaii longline fleet targets bigeye tuna using deep sets, and during certain parts of the year, portions of the fleet target swordfish using shallow sets. In the years 2005 through 2012, the estimated numbers of Hawaii longline vessels that actually fished ranged from 124 to 129. Of the vessels that fished, the number of vessels that engaged in deep-setting in the years 2005 through 2012 ranged from 122 to 129, and the number of vessels that engaged in shallow-setting ranged from 18 to 35. The number of vessels that engaged in both deep-setting and shallow-setting ranged from 17 to 35. The number of vessels that engaged exclusively in shallow-setting ranged from zero to two. As an indication of the size of businesses in the fishery, average annual ex-vessel revenue for the fleet during 2005-2010 was about $71 million (in 2012 dollars). Virtually all of those revenues are believed to come from shallow-set and deep-set longlining. Based on an average of 127 active vessels during that period, the mean annual per-vessel revenue was about $0.6 million (in 2012 dollars). NMFS has determined that most or all vessels in the affected fisheries are likely to be small entities based on the average annual per-vessel revenue and the Small Business Administration's definition of a small fish harvester (i.e., gross annual receipts of less than $4.0 million).

The proposed rule would not establish any new reporting or recordkeeping requirements. The new compliance requirement would be for affected vessel owners and operators to cease retaining, landing, and transshipping bigeye tuna caught with longline gear in the Convention Area if and when the catch limit is reached in 2013 or 2014, for the remainder of the calendar year, with the exceptions and provisos described in other sections of this SUPPLEMENTARY INFORMATION section of the preamble. (Although the restrictions that would come into effect in the event the catch limit is reached would not prohibit longline fishing, per se, they are sometimes referred to in this analysis as constituting a “fishery closure.”) Fulfillment of this requirement is not expected to require any professional skills that the vessel owners and operators do not already possess. The costs of complying with this requirement are described below to the extent possible.

Complying with the proposed rule could cause foregone fishing opportunities and result in associated economic losses in the event that the bigeye tuna catch limit is reached in 2013 or 2014 and the restrictions on retaining, landing, and transshipping bigeye tuna are imposed for portions of either or both of those years. These costs cannot be projected with any quantitative certainty. For the purpose of projecting baseline conditions under no action, this analysis relies primarily on fishery performance from 2005 through 2008. The years prior to 2005 are excluded because the regulatory environment underwent major changes (the swordfish-directed shallow-set longline fishery was closed in 2001 and reopened in 2004 with limits on fishing effort and turtle interactions). The years 2009-2012 are excluded because bigeye tuna catch limits similar to the limits proposed here were in place. The proposed limit, by prescription, is 10 percent less than catches in 2004 (here and in the remainder of this IRFA, “catches” means fish that are caught and retained on board). The proposed annual limit of 3,763 mt is less than the amount caught in any of the years 2005-2008, and it is 20 percent less than the annual average amount caught in that period. Thus, if catches in 2013 and 2014 are similar to those in 2005-2008, there would be a fairly high likelihood of the proposed limit being reached in both years.

If the bigeye tuna limit is reached before the end of 2013 or 2014 and the Convention Area bigeye fishery is consequently closed for the remainder of the calendar year, it can be expected that affected vessels would shift to the next most profitable fishing opportunity (which might be not fishing at all). Revenues from that “next best” alternative activity reflect the opportunity costs associated with longline fishing for bigeye tuna in the Convention Area. The economic cost of the proposed rule would not be the nominal direct losses in revenues that would result from not being able to fish for bigeye tuna in the Convention Area, but rather the difference in benefits derived from that activity and those derived from the next best activity. The economic cost of the proposed rule on affected entities is examined here by first estimating the direct losses in revenues that would result from not being able to fish for bigeye tuna in the Convention Area as a result of the catch limit being reached. Those losses represent the upper bound of the economic cost of the proposed rule on affected entities. Potential next-best alternative activities that affected entities could undertake are then identified in order to provide a (mostly qualitative) description of the degree to which actual costs would be lower than that upper bound.

Upper bounds on potential economic costs can be estimated by examining the projected value of longline landings from the Convention Area that would not be made as a result of reaching the limit. For this purpose, it is assumed that, absent this proposed rule, fishing patterns in 2013 and 2014 would be about the same as those in 2005-2008. In the IRFA for the 2009 rule, two no-action scenarios were considered—one in which future catches would be equal to the average during 2005-2008, and a second in which the increasing trend in the fleet's catches in 2005-2008 would continue in future years. The second scenario is not considered in this analysis because if catches in 2011—a year in which a bigeye tuna catch limit was in place but was not reached—are considered, there was no clear upward trend (in 2009 and 2010, the limit was reached and the restrictions went into effect). Based on the numbers of fish caught from vessel logbook data, and average fish weights derived from landings data, the average annual fleet catch of bigeye tuna in 2005-2008 was 4,718 mt. Thus, if catches in 2013 and 2014 would be 4,718 mt per year without a limit in place, imposition of a catch limit of 3,763 mt would be expected to result in 20 percent less bigeye tuna being caught in 2013-2014 than under no action. In the deep-set fishery, catches of marketable species other than bigeye tuna would likely be affected in a similar way (if vessels do not shift to alternative activities). Assuming for the moment that ex-vessel prices would not be affected by a fishery closure, under the proposed rule, revenues in 2013 and 2014 to entities that participate exclusively in the deep-set fishery would be approximately 20 percent less than under no action. If average annual ex-vessel revenues during 2005-2008 (about $0.6 million per active vessel, in 2012 dollars) are a good indicator of future revenues under no action, per-vessel annual revenues under the proposed rule would be as much as $0.1 million less, on average, than under no action.

In the shallow-set fishery, affected entities would bear limited cost in the event of the limit being reached (but most affected entities also participate in the deep-set fishery and might bear costs in that fishery, as described below). The cost would be approximately equal to the revenues lost from not being able to retain or land bigeye tuna captured while shallow-setting in the Convention Area, or the cost of shifting to shallow-setting in the eastern Pacific Ocean (EPO), which is to the east of 150 degrees W. longitude, whichever is less. In the fourth calendar quarters of 2005-2008, almost all shallow-setting effort took place in the EPO, and 97 percent of bigeye tuna catches were made there, so the cost of a bigeye tuna fishery closure would appear to be very limited. During 2005-2008, the shallow-set fishery caught an average of 54 mt of bigeye tuna per year from the Convention Area. If the proposed bigeye tuna catch limit is reached even as early as July 31 in 2013 or 2014, the Convention Area shallow-set fishery would have caught at that point, based on 2005-2008 data, on average, 99 percent of its average annual bigeye tuna catches. Thus, imposition of the landings restriction at that point in 2013 or 2014 would result in the loss of revenues from approximately 0.5 mt (1 percent of 54 mt) of bigeye tuna, which, based on recent ex-vessel prices, would be worth no more than $5,000. Thus, expecting about 27 vessels to engage in the shallow-set fishery (the annual average in 2005-2012), the average of those potentially lost annual revenues would be no more than $200 per vessel.

The remainder of this analysis focuses on the potential costs of compliance in the deep-set fishery. Again, the estimates of potentially lost revenues given above are for the purpose of estimating upper bounds on potential economic losses on affected entities and do not account for revenues from alternative activities, some of which are discussed further below.

It should be noted that impacts on affected entities' profits would be less than impacts on revenues, because costs would be lower if a vessel ceases fishing after the catch limit is reached. Variable costs can be expected to be affected roughly in proportion to revenues, as both would stop accruing once a vessel stops fishing. But affected entities' costs also include fixed costs, which are borne regardless of whether a vessel is used to fish—e.g., if it is tied up at the dock during a fishery closure. Thus, profits would likely be adversely impacted proportionately more than revenues.

As stated previously, actual compliance costs for a given entity might be less than the upper bounds described above because ceasing fishing would not necessarily be the most profitable opportunity in the event of the catch limit being reached. Two alternative opportunities that are expected to be attractive to affected entities include: (1) Deep-set longline fishing for bigeye tuna in the Convention Area in a manner such that the vessel is considered part of the longline fishery of American Samoa, Guam, or the CNMI; and (2) deep-set longline fishing for bigeye tuna and other species in the EPO. These two opportunities are discussed in detail below. Three additional opportunities, which were examined in economic analyses prepared for the 2009 rule are: (3) Shallow-set longline fishing for swordfish (for deep-setting vessels that would not otherwise do so), (4) deep-set longline fishing in the Convention Area for species other than bigeye tuna, and (5) working in cooperation with vessels operating as part of the longline fisheries of the Participating Territories—specifically, receiving transshipments at sea from them and delivering the fish to the Hawaii market. Vessel repair and maintenance is another possibility. A study by NMFS of the effects of the WCPO bigeye tuna longline fishery closure in 2010 (Richmond, L., D. Kotowicz, J. Hospital and S. Allen, 2012, Adaptations in a Fishing Community: Monitoring Socioeconomic Impacts of Hawai`i's 2010 Bigeye Tuna Closure, PIFSC Internal Report IR-12-019, Honolulu, United States Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service, Pacific Islands Fisheries Science Center) did not identify any alternative activities that vessels engaged in during the closure other than deep-setting for bigeye tuna in the EPO, vessel maintenance and repairs, and granting lengthy vacations to employees. Thus, alternative opportunities (3), (4) and (5) are probably relatively unattractive relative to the first two, and they are not discussed here in any further detail.

Before examining in detail the two potential alternative opportunities that would appear to be the most attractive to affected entities, it is important to note that under the proposed rule, once the limit is reached and the WCPO bigeye tuna fishery is closed, it would be prohibited to fish with longline gear both inside and outside the Convention Area during the same trip (with the exception of a fishing trip that is in progress when the limit is reached and the restrictions go into effect). For example, after the restrictions go into effect, during a given fishing trip, a vessel could be used for longline fishing for bigeye tuna in the EPO or for longline fishing for species other than bigeye tuna in the Convention Area, but not both. This reduced operational flexibility would bring costs, since it would constrain the potential profits from alternative opportunities collectively. Those costs cannot be quantified.

With respect to alternative opportunity (1), deep-setting for bigeye tuna in a manner such that the vessel is considered part of the longline fishery of one of the three U.S. Participating Territories, there would be three such ways to do so: (a) landing the bigeye tuna in one of the three Participating Territories; (b) having an American Samoa Longline Limited Access Permit; or (c) entering into an arrangement with one or more of the three Participating Territories under the Section 113 authorization, such that the vessel is considered part of the Participating Territory's longline fishery. In the first two circumstances, the vessel would be considered part of the longline fishery of the Participating Territory only if the bigeye tuna were not caught in the portion of the U.S. EEZ around the Hawaiian Islands and they are landed by a U.S. vessel operated in compliance with a permit issued under the Pelagics FEP or the West Coast HMS FMP.

With respect to alternative opportunity (1)(a), landing the bigeye tuna in one of the Participating Territories, there are three potentially important constraints. First, whether the fish are landed by the vessel that caught the fish or by a vessel to which the fish were transshipped, the costs of a vessel transiting from the traditional fishing grounds in the vicinity of the Hawaiian Archipelago to one of the Participating Territories would be substantial. Second, none of these three locales has large local consumer markets to absorb substantial additional landings of fresh sashimi-grade bigeye tuna. Third, transporting the bigeye tuna from these locales to larger markets, such as in Hawaii, the U.S. west coast, or Japan, would bring substantial additional costs and risks. These cost constraints suggest that this opportunity has limited potential to mitigate the economic impacts of the proposed rule on affected small entities.

Opportunity (1)(b), having an American Samoa Longline Limited Access Permit, would be available only to the subset of the Hawaii longline fleet that has both Hawaii and American Samoa longline permits (“dual permit vessels”). Vessels that do not currently have both permits could obtain them if they meet the eligibility requirements and pay the required costs. For example, the number of dual permit vessels increased from 12 in 2009, when the first WCPO bigeye tuna catch limit was established, to 20 in 2011, where it remained in 2012. The previously cited NMFS study of the 2010 fishery closure (Richmond et al. 2012) found that bigeye tuna landings of dual permit vessels increased substantially after the start of the closure on November 22, 2010, indicating that this was an attractive opportunity for dual permit vessels, and suggesting that those entities might have benefitted from the catch limit and the closure.

Opportunity (1)(c), entering into a Section 113(a) arrangement with a U.S. Participating Territory, would be available to all affected entities in 2013; it is not known whether it would be available in 2014. This is the same opportunity that was available in 2011 and 2012 when prior Section 113(a) was in effect. In those two years, the vessels of the members of the Hawaii Longline Association (HLA) were included in a Section 113(a) arrangement with American Samoa, and as a result, the catch limit was not reached in either year, and no longline vessels were subject to the restrictions that would have gone into effect had the limit been reached. This option would likely not come without cost—at least one of the three Participating Territories would have to agree to the arrangement. As an indication of the possible cost, the terms of the arrangement between American Samoa and the members of the HLA that applied in 2011 and 2012 included payments totaling $250,000 from the HLA to the Western Pacific Sustainable Fisheries Fund, equal to $2,000 per vessel in the arrangement (it is not known how the total cost was allocated among the members of the HLA, so it is possible that the owners of particular vessels paid substantially more than or less than $2,000).

With respect to alternative opportunity (2), deep-set fishing for bigeye tuna in the EPO, this would be an option for affected entities only if it is allowed under regulations implementing the decisions of the Inter-American Tropical Tuna Commission (IATTC). Currently there is a bigeye tuna catch limit of 500 mt for 2013 that applies to U.S. longline vessels greater than 24 meters (m) in length. It is presently not known whether the limit will be reached in 2013. Annual longline bigeye tuna catch limits have been in place for the EPO in most years since 2004, but since 2009, when the limit was 500 mt and applicable only to vessels longer than 24 m in length, the limits have not been reached. The IATTC is scheduled to consider needed management measures for 2014 and beyond for the tropical tuna stocks at its annual meeting in June 2013, but it is not known whether it will maintain or modify its current bigeye tuna longline catch limit provisions, which are in effect through 2013.

Historical fishing patterns can provide an indication of the likelihood of affected entities making use of the opportunity of deep-setting in the EPO in the event of a closure in the WCPO. The proportion of the U.S. fishery's annual bigeye tuna catches that were captured in the EPO from 2005 through 2008 ranged from 2 percent to 22 percent, and averaged 11 percent. In 2005-2007, that proportion, which ranged from 2 percent to 11 percent, may have been constrained by the bigeye tuna catch limits established by NMFS to implement the decisions of the IATTC.

Prior to 2009, most of the U.S. annual bigeye tuna catch by longline vessels in the EPO typically was made in the second and third quarters of the year: in 2005-2008 the percentages caught in the first, second, third, and fourth quarters were 14, 33, 50, and 3 percent, respectively. These two historical patterns—that relatively little of the bigeye tuna catch in the longline fishery was typically taken in the EPO (11 percent in 2005-2008, on average) and that most EPO bigeye tuna catches were made in the second and third quarters, with relatively few catches in the fourth quarter, when the proposed catch limit would most likely be reached, suggest that there could be substantial costs for at least some affected entities to shift to deep-set fishing in the EPO in the event of a closure in the WCPO. On the other hand, fishing patterns in 2009-2012, when annual bigeye tuna catch limits were in effect in the WCPO, suggest that a substantial shift in deep-set fishing effort to the EPO could occur. In 2009, 2010, 2011, and 2012, the proportions of the fishery's annual bigeye tuna catches that were captured in the EPO were about 16, 27, 22, and 19 percent, respectively. And during that three-year period, on average, the proportions caught in the first, second, third, and fourth quarters were 7, 14, 41, and 37 percent, respectively. Thus, a substantial amount of fishing occurred in the EPO in the fourth quarters of 2009-2012, when WCPO catch limits were in place (the limits were reached in 2009 and 2010). However, the NMFS study of the 2010 closure (Richmond et al. 2012) found that some businesses—particularly those with smaller vessels—were less inclined than others to fish in the EPO during the closure because of the relatively long distances that would need to be travelled in the relatively rough winter ocean conditions. The study identified a number of factors that likely made fishing in the EPO less lucrative than fishing in the WCPO during that part of the year, including fuel costs and the need to limit trip length in order to maintain fish quality and because of limited fuel storage capacity.

In addition to affecting the volume of landings of bigeye tuna and other species, the proposed catch limit could affect fish prices, particularly during a fishery closure. Both increases and decreases appear possible. After the limit is reached and landings from the WCPO are prohibited, ex-vessel prices of bigeye tuna (e.g., that are caught in the EPO or by vessels in the longline fisheries of the three U.S. Participating Territories), as well as of other species landed by the fleet, could increase as a result of the constricted supply. This would mitigate economic losses for vessels that are able to continue fishing and landing bigeye tuna during the closure. For example, the NMFS study of the 2010 closure (Richmond et al. 2012) found that ex-vessel prices during the closure in December were 50 percent greater than the average during the previous five Decembers (it is emphasized that because it was an observational study, neither this nor other observations of what occurred during the closure can be affirmatively linked as effects of the fishery closure). Conversely, a WCPO bigeye tuna fishery closure could cause a decrease in ex-vessel prices of bigeye tuna and other products landed by affected entities if the interruption in the local supply prompts the Hawaii market to shift to alternative (e.g., imported) sources of bigeye tuna. Such a shift could be temporary—that is, limited to 2013 and/or 2014, or it could lead to a more permanent change in the market (e.g., as a result of wholesale and retail buyers wanting to mitigate the uncertainty in the continuity of supply from the Hawaii longline fisheries). In the latter case, if locally caught bigeye tuna fetches lower prices because of stiffer competition with imported bigeye tuna, then ex-vessel prices of local product could be depressed indefinitely. The NMFS study of the 2010 closure (Richmond et al. 2012) found that a common concern in the Hawaii fishing community prior to the closure in November 2010 was retailers having to rely more heavily on imported tuna, causing imports to gain a greater market share in local markets. The study found this not to have been borne out, at least not in 2010, when the evidence gathered in the study suggested that few buyers adapted to the closure by increasing their reliance on imports, and no reports or indications were found of a dramatic increase in the use of imported bigeye tuna during the closure. The study concluded, however, that the 2010 closure caused buyers to give increased consideration to imports as part of their business model, and it was predicted that tuna imports could increase during any future closure. To the extent that ex-vessel prices would be reduced by this action, revenues earned by affected entities would be affected accordingly, and these impacts could occur both before and after the limit is reached, and as described above, possibly after 2014.

The potential economic effects identified above would vary among individual business entities, but it is not possible to predict the range of variation. Furthermore, the impacts on a particular entity would depend both on that entity's response to the proposed rule and to the behavior of other vessels in the fleet, both before and after the catch limit is reached. For example, the greater the number of vessels that take advantage—before the limit is reached—of opportunity (1), fishing as part of one of the Participating Territory's fisheries, the lower the likelihood that the limit would be reached. The fleet's behavior in 2011 and 2012 is illustrative. In both those years, most vessels in the Hawaii fleet were included in a Section 113(a) arrangement with American Samoa, and as a consequence, the catch limit was not reached in either year. Thus, none of the vessels in the fleet, including those not included in the Section 113(a) arrangement, were prohibited from fishing for bigeye tuna in the Convention Area at any time during those two years. The fleet's experience in 2010 (before opportunities under prior Section 113(a) were available) provides another example of how economic impacts could be distributed among different entities. In 2010 the limit was reached and the WCPO bigeye tuna fishery was closed on November 22. As described above, dual permit vessels were able to continue fishing (outside the U.S. EEZ around the Hawaiian Archipelago) and benefit from the relatively high ex-vessel prices that bigeye tuna fetched during the closure.

In summary, NMFS has estimated upper bounds on the potential economic impacts of the proposed rule on affected entities, but the actual impacts to most entities are likely to be substantially less than those upper bounds, and for some entities the impacts could be neutral or positive.

As indicated above, most or all affected entities are believed to be small entities, in which case small entities would not be disproportionately affected relative to large entities. However, as described above, there could be disproportionate impacts according to vessel size. The 500 mt EPO bigeye catch limit for 2013 applies only to vessels greater than 24 m in length, so in the event that the WCPO bigeye tuna fishery is closed and the 500 mt limit is reached in the EPO, only vessels 24 m or less in length would be able to take advantage of the alternative opportunity of deep-setting for bigeye tuna in the EPO. On the other hand, smaller vessels can be expected to find it more difficult, risky, and/or costly to fish in the EPO during the relatively rough winter months than larger vessels. If there are any large entities among the affected entities, and if the vessels of the large entities are larger than those of small entities, then it is possible that small entities could be disproportionately affected relative to large entities. All the affected entities are longline fishing businesses, so there would be no disproportionate economic impacts based on fishing gear. No disproportionate economic impacts based on home port would be expected.

NMFS has not identified any Federal rules that duplicate, overlap or conflict with the proposed rule.

NMFS has not identified any significant alternatives to the proposed rule, other than the no-action alternative. Taking no action could result in lesser adverse economic impacts than the proposed action for many affected entities (but as described above, for some affected entities, the proposed rule could be more economically beneficial than no-action), but NMFS has determined that the no-action alternative would fail to accomplish the objectives of the WCPFC Implementation Act, including satisfying the international obligations of the United States as a Contracting Party to the Convention.

For the reasons set out in the preamble, 50 CFR part 300 is proposed to be amended as follows: