I. Background

Subpart A of Regulation J, Collection of Checks and Other Items by Federal Reserve Banks, governs the collection of checks and the handling of returned checks by the Reserve Banks. The purpose of the subpart is to provide rules for collecting and returning items and settling balances. Among other things, the subpart specifies the time and manner in which paying banks must settle for items presented to them by the Reserve Banks.

In accordance with Subpart A, the Reserve Banks have issued Operating Circular 3 (OC 3), Collection of Cash Items and Returned Checks, which provides specific terms and conditions under which the Reserve Banks will handle checks. 1 The Board's Regulation CC, Availability of Funds and Collection of Checks, and provisions of the Uniform Commercial Code (UCC), as adopted in a state, also govern the collection, presentment, and return of checks, to the extent those provisions are not inconsistent with Regulation J. 2

On December 10, 2013, the Board requested comment on proposed changes to the PSR policy. 3 The changes related to the Board's procedures for posting debit and credit entries to depository institutions' Federal Reserve accounts for automated clearinghouse (ACH) debit transactions and commercial check transactions. At the same time, the Board requested comment on proposed changes to Regulation J that would conform to the proposed changes to the PSR policy. 4

Currently, § 210.9(b)(2)(i) of Regulation J provides that the proceeds of a paying bank's settlement must be made available to its Administrative Reserve Bank by the latest of (1) the next clock hour that is at least one hour after the paying bank receives the check; (2) 9:30 a.m. eastern time; or (3) such later time as provided in the Reserve Banks' operating circulars. 5 Under this section, 9:30 a.m. is the earliest time a paying bank is required to settle for an item, and there has to be at least one hour between the time the item was presented to the paying bank and the time the paying bank settles for the item. The same rules apply to the settlement of returned items under § 210.12(i). 6

Section 12.2 of the Reserve Banks' Operating Circular 3 currently sets 11:00 a.m. as the earliest settlement time (later than 9:30 a.m. set forth in Regulation J). Under section 12.2, the proceeds of a paying bank's settlement must be available to its Administrative Reserve Bank by the later of 11:00 a.m. or the next clock hour that is at least one hour after the paying bank receives the item, but no later than 3:00 p.m. local time of the paying bank.

Consistent with the proposed PSR policy changes, the Board proposed that § 210.9(b)(2)(i) of Regulation J be revised to state that the paying bank shall settle for an item by the latest of (1) the next clock hour or clock half-hour that is at least one half-hour after the paying bank receives the item; (2) 8:30 a.m.; or (3) such later time as provided in the Reserve Banks' operating circulars. For example, if a Reserve Bank presents an item by 8:00 a.m., the paying bank would be required to settle for the item at 8:30 a.m., unless a later settlement time were provided for in the Reserve Banks' operating circulars. The Board proposed similar changes in §§ 210.9(b)(3)(i) and (b)(4)(i).

The Board also proposed to define “clock half-hour,” a new term in § 210.2(p)(2), to mean a time that is on the half-hour (for example, 1:30 or 2:30). Section 210.2(p), which the Board proposed to redesignate as § 210.2(p)(1), currently defines the term “clock hour” as a time that is on the hour (for example, 1:00 or 2:00).

The Board received six comments submitted by depository institution trade organizations on the proposed amendments to Regulation J. 7 The Board considered these comments in developing its final rule as discussed below.

The Board requested comment on whether one half-hour between receipt of items by a paying bank and the paying bank's settlement is sufficient for a paying bank to perform a limited verification of cash letters and determine whether to settle for or return the cash letter. The Board also requested comment on whether a shorter period between presentment and settlement would be appropriate (for example, fifteen minutes).

Two commenters, the American Bankers Association and the Independent Community Bankers of America, supported the Board's proposal to reduce the settlement window to one half-hour, agreeing that advances in check processing allow for a shorter period between check presentment and settlement. One commenter, the American Bankers Association, did not support shortening the period further to 15 minutes but did not provide a specific reason.

The Board believes that the almost all-electronic nature of check processing that currently exists makes one half-hour between presentment and settlement sufficient because of the reduced time required to verify cash letters in an electronic environment.

The Board also believes that sufficient tools are available to depository institutions to mitigate any adverse effect that movement to a one half-hour settlement window would have on an institution's Federal Reserve account balance. Past trends indicate that an institution should be able to predict within a reasonable margin of error the approximate dollar value of the checks it expects the Reserve Banks to present and should be able to hold balances sufficient to cover that amount. The Reserve Banks now pay interest on most institutions' Federal Reserve account balances, reducing institutions' opportunity cost (that is, loss of interest) associated with holding higher account balances overnight. 8 In addition, the PSR policy allows eligible institutions to collateralize their daylight overdrafts to avoid paying a fee. For each two-week reserve maintenance period, depository institutions also receive a $150 fee waiver, reducing the burden on institutions that might incur small amounts of uncollateralized daylight overdrafts. 9

For these reasons, the Board is adopting as proposed the amendments shortening the minimum time period between receipt of checks by a paying bank and the paying bank's settlement to one half-hour. The Board did not receive any comments on the proposal to define “clock half-hour” as a new term in § 210.2(p)(2) and is adopting the new term as proposed.

The Board requested comment on whether to permit the Reserve Banks to obtain settlement from a paying bank for a check by as early as 8:30 a.m. The Board also requested comment on the feasibility of settlement earlier than 8:30 a.m., given the current almost all-electronic check processing environment, and whether an earlier settlement time would even better align presentment to settlement. 10

Two commenters, the American Bankers Association and the Independent Community Bankers of America, supported the proposal to allow the Reserve Banks to obtain settlement from a paying bank for a check by as early as 8:30 a.m., noting that the rules that allow the Reserve Banks to pay interest on account balances held by institutions reduces the cost that institutions might incur to hold funds overnight to cover any checks presented early the next morning. One commenter, the American Bankers Association, did not support the proposal to move the settlement time earlier than 8:30 a.m. but did not provide a specific reason. Four commenters, the Credit Union National Association, the Georgia Credit Union League, the Missouri Credit Union Association, and the National Association of Federal Credit Unions, expressed concern that some smaller institutions might be negatively affected by the proposed change and might have to increase their Federal Reserve account balances to settle presented checks by holding higher balances overnight, arranging for additional funding before settlement time, or incurring daylight overdrafts.

The Board recognizes that some depository institutions will need to fund their accounts earlier in order to settle for checks by as early as 8:30 a.m. or incur daylight overdrafts. The Board believes, however, that sufficient tools are available to depository institutions to mitigate any adverse effect that a change to 8:30 a.m. may present. As discussed earlier, the Reserve Banks now pay interest on most institutions' Federal Reserve account balances, eligible institutions can collateralize their daylight overdrafts to avoid paying a fee, and depository institutions receive a $150 fee waiver for each two-week reserve maintenance period. The changes to the posting rules of the PSR policy and to Regulation J better align the policy and regulation with today's electronic check processing environment, in which over 90 percent of checks are available to be presented by 8:00 a.m. and prompt settlement is possible for the majority of the value of check activity. 11 Accordingly, the Board is adopting the amendments to Regulation J, § 210.9(b) as proposed. The Reserve Banks plan to amend OC 3 to conform to the changes in Regulation J.

The Board proposed that the changes to the PSR policy and these conforming changes to Regulation J would become effective six months after publication in the Federal Register . The Board requested comment on whether six months provided paying banks with sufficient time to make any necessary operational changes.

Five commenters, the American Bankers Association, the Credit Union National Association, the Georgia Credit Union League, the Independent Community Bankers of America, the Missouri Credit Union Association, believed that a six-month lead time would allow enough time to make any necessary operational changes. One commenter, the National Association of Federal Credit Unions, requested that the Board allow a one-year implementation period, stating that the proposed six-month implementation period would not allow institutions enough time to adjust their policies and procedures to reduce the chances of incurring daylight overdraft fees. The Board is adopting an effective date of July 23, 2015. All items scheduled to settle on this date and after will post according to the new posting rule procedures for these transactions, regardless of date of deposit.

The Board is also adopting a technical amendment to the definition of “Administrative Reserve Bank.”  12 Section 210.2(c) states that an “Administrative Reserve Bank” is the Reserve Bank in whose District the entity is located, as determined under the procedure described in § 204.3(b)(2) of the chapter (Regulation D). The Board has relocated § 204.3(b)(2) of Regulation D to § 204.3(g). 13 Accordingly, the Board is amending the definition of “Administrative Reserve Bank” in § 210.2(c) to cross-reference § 204.3(g) rather than § 204.3(b)(2).

The Board did not provide public notice or request comment regarding this technical amendment. Pursuant to section 553(b)(3)(B) of the Administrative Procedure Act, 14 the Board finds that public notice and comment is unnecessary because the technical amendment does not effect a substantive change; rather, the technical amendment conforms § 210.2(c) to reorganized Regulation D. For the same reasons, the Board finds that there is good cause for the technical amendment to be effective immediately, rather than thirty days after its publication date. 15

The Board conducts a competitive impact analysis when it considers a rule or policy change that may have a substantial effect on payment system participants. Specifically, the Board determines whether there would be a direct and material adverse effect on the ability of other service providers to compete with the Federal Reserve due to legal differences or due to the Federal Reserve's dominant market position deriving from such legal differences. 16 If such legal differences exist, the Board will assess whether the same objectives could be achieved by a modified proposal with lesser competitive impact or, if not, whether the benefits of the proposal outweigh the effect on competition.

The Board believes that the amendments to Regulation J do not have a direct and material adverse effect on the ability of other service providers to compete effectively with the Reserve Banks in providing similar services.

Under Regulation J, the Reserve Banks have the legal ability to obtain same-day settlement for checks they present before the paying bank's cut-off hour (typically 2:00 p.m. local time) through “auto-charge,” that is, a direct debit to the Federal Reserve account of the paying bank or its correspondent settlement agent. 17 Under amended Regulation J, the Reserve Banks could present a check at any time before the paying bank's cut-off hour and debit the account of the paying bank or its correspondent settlement agent on the next clock hour or half-hour that is at least one half-hour after presentment.

In contrast, the latest that a private-sector bank may present a paper check for same-day settlement is 8:00 a.m. local time. Section 229.36(f) of Regulation CC requires the paying bank to settle for the check by credit to a Reserve Bank account designated by the presenting bank by the close of Fedwire (currently 6:30 p.m.) or by another agreed-upon method and time. 18 Thus, the Reserve Banks may present checks later in the day for same-day settlement than private-sector banks. In addition, the Reserve Banks may obtain settlement earlier in the day than private-sector collecting banks and, in turn, may pass credits for deposited checks earlier in the day without incurring significant intraday float.

In March 1998, the Board requested comment on whether these legal differences between the rights of the Reserve Banks and private-sector presenting banks provided the Reserve Banks with a competitive advantage and whether the Board should take action to reduce the differences. 19 Commenters generally concluded that the costs of further changes outweighed any advantage of the Reserve Banks. In particular, commenters noted the efficiency of the Reserve Bank's auto-charge process for paying banks, and stated that moving the private-sector presentment deadline to later in the day or eliminating the direct debit of Federal Reserve accounts for check presentments would result in higher costs to paying banks and their business customers in terms of account management, settlement funds transfer fees, and shortened processing windows, and that those costs would outweigh the benefits gained by presenting banks. Based on an analysis of the comments, the Board took no further action.

Currently, institutions may determine, as part of the agreement between a presenting bank and a paying bank, the time at which settlement for electronic checks is required to be funded. A presenting bank and a paying bank could agree, for example, to a minimum time between presentment and settlement. For presenting banks and paying banks that opt to use a check clearinghouse rather than directly exchange checks, private-sector clearinghouses have the option to use the Reserve Banks' National Settlement Service (NSS) to effect settlement of checks or may settle by directing their members to initiate funds transfers over the Reserve Banks' Fedwire Funds Service. 20 Beginning in January 2015, the NSS file submission window will be 7:30 a.m. to 5:30 p.m. Fedwire Funds operating hours begin at 9:00 p.m. the previous calendar day and end at 6:30 p.m.

Under the final amendments to Regulation J and the recently adopted changes to the PSR policy posting rules, the bulk of the Reserve Banks' postings of credits to senders and debits to paying banks for commercial check transactions will shift to earlier in the day. The value of checks a bank sends to the Reserve Banks could be higher or lower than the value it receives from the Reserve Banks. As a result, the earlier posting of commercial check transactions may be viewed as more or less attractive, depending on whether the value of an institution's check credits is higher or lower than the value of its check debits. Further, private-sector institutions can achieve improvements in earlier settlement similar to those provided by the rule and the PSR policy changes through private agreements among participants, as well as the use of NSS.

More recently, the Board requested comment on the continued utility of the Regulation CC same-day settlement rule for paper checks and whether the rule should be applied to electronic check presentments by private-sector banks. The Board also noted that if, in the future, it proposes to eliminate the same-day settlement rule, it could also propose to retain the proscription against paying banks' assessment of presentment fees in order to maintain the current balance of bargaining power, as well as reduce the competitive disparities in presentment abilities between the Reserve Banks and private-sector banks. 21 The Board is in the process of analyzing these comments and will discuss these issues, as appropriate, at a later date in the context of the final amendments to Regulation CC. In the meantime, the Board does not believe that the changes to Regulation J reducing the minimum time between presentment and settlement to 30 from 60 minutes, and moving the earliest settlement time to 8:30 a.m. from 9:30 a.m., changes the Reserve Banks' competitive position versus private-sector presenting banks in a material way.

The Board has reviewed the final regulation in accordance with section 3(a) of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ). The rule would apply to all depository institutions that receive presentment or return of checks from the Reserve Banks. Based on current information, the Board believes that the final rule would not have a significant economic impact on a substantial number of small entities (5 U.S.C. 605(b)). Nonetheless, a Final Regulatory Flexibility Analysis has been prepared in accordance with 5 U.S.C. 604, after consideration of comments received during the public comment period.

These final amendments to Regulation J are necessary to conform the required settlement times for checks presented by the Reserve Banks to the method for posting debits and credits to institutions' Federal Reserve accounts to measure daylight overdrafts under recent revisions to the PSR policy. The Board believes that the Regulation J revisions and the PSR policy posting rules better align the settlement for checks with actual deposit and presentment times, reflecting the industry's almost complete shift from paper to electronic check processing.

The Board requested information and comment on any costs that would arise from the application of the proposed rule. Four institutions expressed concern that some smaller institutions might be negatively affected by the proposed change and might have to increase their Federal Reserve account balances to settle presented checks by holding higher balances overnight, arranging for additional funding before settlement time, or incurring daylight overdrafts. As discussed earlier, the Board believes that sufficient tools are available to depository institutions to mitigate any adverse effect. For example, the Reserve Banks now pay interest on most institutions' Federal Reserve account balances, eligible institutions can collateralize their daylight overdrafts to avoid paying a fee, and depository institutions receive a $150 fee waiver for each two-week reserve maintenance period. 22 As further discussed earlier, under the PSR policy posting rules, the bulk of the Reserve Banks' postings of debits to paying institutions for commercial check transactions will shift to earlier in the day, allowing the Reserve Banks to provide credits to depositing institutions earlier, thus mitigating adverse effects on depository institutions.

The final rule affects all institutions that receive checks or returned checks handled by the Reserve Banks. The Board believes that virtually all depository institutions receive checks or returned checks handled by the Reserve Banks on at least an occasional basis. Pursuant to regulations issued by the Small Business Administration (SBA) (13 CFR 121.201), a “small banking organization” includes a depository institution with $550 million or less in total assets. Based on data reported as of June 30, 2014, the Board believes that there are approximately 11,750 small depository institutions.

The final rule would permit the Reserve Banks to require a paying bank to settle for an item by as early as 8:30 a.m., instead of 9:30 a.m., and as soon as one half-hour, instead of one hour, after it receives the item from the Reserve Banks. Paying banks may choose to fund their accounts to accommodate the earlier settlement time by holding sufficient balances overnight or arranging for funding before the settlement time. Otherwise, paying banks would incur daylight overdrafts in their Federal Reserve account. The rule contains no other reporting, recordkeeping, or compliance requirements.

As noted earlier, four commenters, the Credit Union National Association, the Georgia Credit Union League, the Missouri Credit Union Association, and the National Association of Federal Credit Unions, suggested that some smaller institutions might be negatively affected by the proposed change and might have to increase their Federal Reserve account balances to settle presented checks by holding higher balances overnight or arranging for additional funding before settlement time. Otherwise, paying banks would incur daylight overdrafts. As discussed earlier, the Board believes that sufficient tools are available to depository institutions to mitigate any adverse effect on an institution's Federal Reserve account balance (including interest on Federal Reserve account balances, collateralization of daylight overdrafts to avoid paying a fee, and a $150 fee waiver for each two-week reserve maintenance period). As further discussed earlier, under the PSR policy posting rules, the bulk of the Reserve Banks' postings of debits to paying institutions for commercial check transactions will shift to earlier in the day, allowing the Reserve Banks to provide credits to depositing institutions earlier, thus mitigating adverse effects on depository institutions.

Alternatively, the Board could have adopted a rule that permits the Reserve Banks to require a paying bank to settle for an item at a time earlier than 8:30 a.m. or leave the earliest possible settlement time at 9:30 a.m. The Board believes the proposed time of 8:30 a.m. better achieves the Board's goal of aligning presentment to settlement, and better aligns with today's electronic check processing environment, than the existing 9:30 a.m. settlement time under Regulation J. In addition, the Board believe that the proposed settlement time of 8:30 a.m. will impose minimal costs on paying banks. The Board sought comment on (1) whether permitting the Reserve Banks to obtain settlement from a paying bank for a check by as early as 8:30 a.m. was appropriate and (2) the feasibility of settlement prior to 8:30 a.m. and whether an earlier posting time would even better align presentment to settlement. (See discussion earlier in section II.B.)

In addition, in lieu of proposing to permit the Reserve Banks to require a paying bank to settle as soon as one half-hour after it receives the item from the Reserve Banks, the Board could have proposed a shorter or longer period. The Board believes the final time period of one half-hour promotes the Board's objective of minimizing the window between presentment and settlement to reflect technological and operational developments while continuing to provide paying banks with sufficient time to perform a limited verification of cash letters. The Board requested comment on whether one half-hour between presentment and settlement is appropriate or if a shorter window would be sufficient. (See discussion earlier in section II.A.)

In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3506; 5 CFR part 1320, appendix A.1), the Board reviewed the final rule under the authority delegated to the Board by the Office of Management and Budget (OMB). No collections of information pursuant to the PRA are contained in the final rule.

For the reasons set forth in the preamble, the Board amends Regulation J, 12 CFR part 210, as follows:

I. Background

On December 10, 2013, the Board requested comment on several changes to part II of the PSR policy intended to enhance the efficiency of the payment system. 1 Technology and processing improvements have enabled payment systems and depository institutions to achieve significant efficiencies since the Board first established the procedures, referred to as posting rules, to measure depository institutions' intraday Federal Reserve account balances. The proposed changes to these posting rules are intended to align them with current operations and processing times and to strategically position the rules for future advancements in the speed of clearing and settlement.

The Board proposed moving the posting times for commercial and government ACH debit transactions processed overnight to 8:30 a.m. from 11:00 a.m. eastern time (ET) to coincide with the posting time for ACH credit transactions processed overnight. 2 Under the proposal, other types of ACH transactions, including same-day ACH and certain ACH return items, would not be affected and would continue to post at 5:00 p.m.

The Board outlined four potential benefits to shifting earlier the posting for ACH debit transactions. First, posting ACH debit transactions according to the proposed posting rules would simplify account management by allowing institutions to fund the net of all ACH activity at a single posting time, rather than funding debit and credit transactions separately. Second, the change would increase liquidity early in the day both for institutions that originate ACH debit transactions over the FedACH network and for those institutions that originate ACH debit transactions over the Electronic Payments Network (EPN), the other ACH operator, but have transactions delivered to receiving institutions over the FedACH network (interoperator transactions). 3 Third, moving the posting time for ACH debit transactions to 8:30 a.m. would align the Reserve Banks' FedACH settlement times with those of EPN. The Board believes that this change would remove any potential competitive disparities between the two ACH operators and their participants arising from the different settlement times for ACH debit transactions. Fourth, the earlier posting of ACH debit transactions would increase the efficiency of the ACH network by aligning better the settlement of ACH debit transactions with their processing. Additionally, posting ACH debit transfers at 8:30 a.m. would better conform to the Board's principles for measuring daylight overdrafts, specifically the principle that encourages posting times to be as close as possible to the delivery of payments to the receiving institution. 4

FHFA is responsible for ensuring that the regulated entities operate in a safe and sound manner, including the maintenance of adequate capital and internal controls, that their operations and activities foster liquid, efficient, competitive, and resilient national housing finance markets, and that they carry out their public policy missions through authorized activities. See 12 U.S.C. 4513. These Orders are being issued under 12 U.S.C. 4514(a), which authorizes the Director of FHFA to require by Order that the regulated entities submit regular or special reports to FHFA and establishes remedies and procedures for failing to make reports required by Order. The Orders are accompanied by Summary Instructions and Guidance to which is appended reporting templates and scenarios for stress testing.

For the convenience of the affected parties, the text of the Orders, without the accompanying Summary Instructions and Guidance and appendices, follows below in its entirety. You may access these Orders with all of the accompanying material from FHFA's Web site at: http://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Issues-Scenarios-and-Guidance-to-FannieMae,-Freddie-Mac-and-the-Federal-Home-Loan-Banks-Regarding-Annual-Dodd-Frank-St.aspx. The Orders and Summary Instructions and Guidance will be available for public inspection and copying at the Federal Housing Finance Agency, Eighth Floor, 400 Seventh St. SW., Washington, DC 20024. To make an appointment, call (202) 649-3804.

The text of the Orders is as follows:

Whereas, section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) requires certain financial companies with total consolidated assets of more than $10 billion, and which are regulated by a primary Federal financial regulatory agency, to conduct annual stress tests to determine whether the companies have the capital necessary to absorb losses as a result of adverse economic conditions;

Whereas, FHFA's rule implementing section 165(i)(2) of the Dodd-Frank Act is codified as 12 CFR part 1238 and requires that “[e]ach regulated entity must file a report in the manner and form established by FHFA.” 12 CFR 1238.5(b);

Whereas, the Director of FHFA considers it appropriate to Order each regulated entity to report to FHFA results of stress testing under 12 CFR part 1238 using scenarios supplied by FHFA;

Whereas, FHFA issued to each regulated entity the required scenarios and reporting templates on November 14, 2014, fifteen calendar days following the Federal Reserve Board's release of global shock scenario elements for use in its Dodd-Frank stress testing exercises; and

Whereas, section 1314 of the Safety and Soundness Act, 12 U.S.C. 4514(a) authorizes the Director of FHFA to require regulated entities, by general or specific order, to submit such reports on their management, activities, and operations as the Director considers appropriate.

Now therefore, it is hereby Ordered as follows:

Each regulated entity shall conduct annual stress testing and report to FHFA and to the Board of Governors of the Federal Reserve System the results of such stress testing as required by 12 CFR part 1238, in the form and with the content described therein and in the Summary Instructions and Guidance accompanying this Order, using the scenarios and assumptions issued on November 14, 2014, and provided in Appendices 4 through 11 to the Summary Instructions and Guidance that accompanies this Order.

It is so ordered, this 1st day of December 2014.

This Order is effective immediately.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus Model A318, A319, A320, and A321 series airplanes. The NPRM published in the Federal Register on April 10, 2014 (79 FR 19846).

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2013-0261, dated October 28, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A318, A319, A320, and A321 series airplanes. The MCAI states:

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (79 FR 19846, April 10, 2014) and the FAA's response to each comment.

Airlines for America, Inc. (A4A), on behalf of several affected member airlines, requested that we revise paragraphs (h), (i), and (l)(2) of the NPRM (79 FR 19846, April 10, 2014) to remove the requirement to include the AD reference in repair approvals. The commenters have made this request because this proposed requirement is overly broad and would add significant cost and complexity to their operations. The commenters were concerned that this proposed requirement would set a precedent for how repairs are approved, and could negatively affect all U.S. operators of foreign-manufactured airplanes.

We concur with the commenters' request to remove from this AD the requirement that repair approvals specifically refer to this AD.

Since late 2006, we have included a standard paragraph titled “Airworthy Product” in all MCAI ADs in which the FAA develops an AD based on a foreign authority's AD. The MCAI or referenced service information in an FAA AD often directs the owner/operator to contact the manufacturer for corrective actions, such as a repair. Briefly, the Airworthy Product paragraph allowed owners/operators to use corrective actions provided by the manufacturer if those actions were FAA-approved. In addition, the paragraph stated that any actions approved by the State of Design Authority (or its delegated agent) are considered to be FAA-approved.

In the NPRM (79 FR 19846, April 10, 2014), we proposed to prevent the use of repairs that were not specifically developed to correct the unsafe condition, by requiring that the repair approval provided by the State of Design Authority or its delegated agent specifically refer to this FAA AD. This change was intended to clarify the method of compliance and to provide operators with better visibility of repairs that are specifically developed and approved to correct the unsafe condition. In addition, we proposed to change the phrase “its delegated agent” to include “the Design Approval Holder (DAH) with a State of Design Authority's design organization approval (DOA)” to refer to a DAH authorized to approve required repairs for the proposed AD.

Comments were provided to the NPRM (79 FR 19846, April 10, 2014) about these proposed changes. One commenter, UPS, stated the following: “The proposed wording, being specific to repairs, eliminates the interpretation that Airbus messages are acceptable for approving minor deviations (corrective actions) needed during accomplishment of an AD mandated Airbus service bulletin.”

This comment has made the FAA aware that some operators have misunderstood or misinterpreted the Airworthy Product paragraph to allow the owner/operator to use messages provided by the manufacturer as approval of deviations during the accomplishment of an AD-mandated action. The Airworthy Product paragraph does not approve messages or other information provided by the manufacturer for deviations to the requirements of the AD-mandated actions. The Airworthy Product paragraph only addresses the requirement to contact the manufacturer for corrective actions for the identified unsafe condition and does not cover deviations from other AD requirements. However, deviations to AD-required actions are addressed in 14 CFR 39.17, and anyone may request the approval for an alternative method of compliance to the AD-required actions using the procedures found in 14 CFR 39.19.

To address this misunderstanding and misinterpretation of the Airworthy Product paragraph, we have changed that paragraph and retitled it “Contacting the Manufacturer.” This paragraph now clarifies that for any requirement in this AD to obtain corrective actions from a manufacturer, the actions must be accomplished using a method approved by the FAA, EASA, or Airbus's EASA DOA.

The Contacting the Manufacturer paragraph also clarifies that, if approved by the DOA, the approval must include the DOA-authorized signature. The DOA signature indicates that the data and information contained in the document are EASA-approved, which is also FAA-approved. Messages and other information provided by the manufacturer that do not contain the DOA-authorized signature approval are not EASA-approved, unless EASA directly approves the manufacturer's message or other information.

This clarification does not remove flexibility afforded previously by the Airworthy Product paragraph. Consistent with long-standing FAA policy, such flexibility was never intended for required actions. This is also consistent with the recommendation of the AD Implementation Aviation Rulemaking Committee to increase flexibility in complying with ADs by identifying those actions in manufacturers' service instructions that are “Required for Compliance” with ADs. We continue to work with manufacturers to implement this recommendation. But once we determine that an action is required, any deviation from the requirement must be approved as an alternative method of compliance.

Other commenters pointed out that in many cases the foreign manufacturer's service bulletin and the foreign authority's MCAI may have been issued some time before the FAA AD. Therefore, the DOA may have provided U.S. operators with an approved repair, developed with full awareness of the unsafe condition, before the FAA AD is issued. Under these circumstances, to comply with the FAA AD, the operator would be required to go back to the manufacturer's DOA and obtain a new approval document, adding time and expense to the compliance process with no safety benefit.

Based on these comments, we removed the requirement from this AD that the DAH-provided repair specifically refer to this AD. Before adopting such a requirement in the future, the FAA will coordinate with affected DAHs and verify they are prepared to implement means to ensure that their repair approvals consider the unsafe condition addressed in an AD. Any such requirements will be adopted through the normal AD rulemaking process, including notice-and-comment procedures, when appropriate.

We have also decided not to include a generic reference to either the “delegated agent” or the “DAH with State of Design Authority design organization approval,” but instead we will provide the specific delegation approval granted by the State of Design Authority for the DAH.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 19846, April 10, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 19846, April 10, 2014).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We estimate that this AD affects 851 airplanes of U.S. registry.

We also estimate that it would take about 178 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work hour. Required parts would cost about $31,334 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $39,540,864, or $46,464 per product.

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

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

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

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2014-0193; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section.

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2000-12-12, Amendment 39-11790 (65 FR 39072, June 23, 2000). AD 2000-12-12 applied to certain Airbus Model A300, A300-600, and A310 series airplanes. The NPRM published in the Federal Register on December 30, 2013 (78 FR 79333).

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2013-0016, dated September 17, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A300, A300-600, and A310 series airplanes. The MCAI states:

The unsafe condition is fatigue cracking, which could result in reduced structural integrity of the lower spar of the nacelle pylon. Related investigative actions include additional eddy current and liquid penetrant inspections for cracking. Corrective actions include repairing cracking. For certain cracking lengths, repairs are described as reinforcing the lower spar with a doubler. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2013-1066-0002 .

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (78 FR 79333, December 30, 2013) and the FAA's response to each comment.

United Parcel Service (UPS) requested that we revise the NPRM (78 FR 79333, December 30, 2013) to remove the requirement to include the AD reference in repair approvals. UPS noted its concerns that the proposal would require development of a unique Airbus process for U.S. operators; that it could have significant financial and administrative impacts to existing customer support agreements and different AD records requirements within an operator's fleet; that it will increase requests for approval of alternative methods of compliance (AMOC) and result in delayed return to service; and that it creates a new requirement that did not exist when the superseded AD was written.

We concur with the commenter's request to remove from this AD the requirement that repair approvals must specifically refer to this AD.

Since late 2006, we have included a standard paragraph titled “Airworthy Product” in all MCAI ADs in which the FAA develops an AD based on a foreign authority's AD. The MCAI or referenced service information in an FAA AD often directs the owner/operator to contact the manufacturer for corrective actions, such as a repair. Briefly, the Airworthy Product paragraph allowed owners/operators to use corrective actions provided by the manufacturer if those actions were FAA-approved. In addition, the paragraph stated that any actions approved by the State of Design Authority (or its delegated agent) are considered to be FAA-approved.

In the NPRM (78 FR 79333, December 30, 2013), we proposed to prevent the use of repairs that were not specifically developed to correct the unsafe condition, by requiring that the repair approval provided by the State of Design Authority or its delegated agent specifically refer to this FAA AD. This change was intended to clarify the method of compliance and to provide operators with better visibility of repairs that are specifically developed and approved to correct the unsafe condition. In addition, we proposed to change the phrase “its delegated agent” to include a design approval holder (DAH) with State of Design Authority design organization approval (DOA), as applicable, to refer to a DAH authorized to approve required repairs for the proposed AD.

UPS specifically stated the following in its comments to the NPRM (78 FR 79333, December 30, 2013): “The proposed wording, being specific to repairs, eliminates the interpretation that Airbus messages are acceptable for approving minor deviations (corrective actions) needed during accomplishment of an AD mandated Airbus service bulletin.”

This comment has made the FAA aware that some operators have misunderstood or misinterpreted the Airworthy Product paragraph to allow the owner/operator to use messages provided by the manufacturer as approval of deviations during the accomplishment of an AD-mandated action. The Airworthy Product paragraph does not approve messages or other information provided by the manufacturer for deviations to the requirements of the AD-mandated actions. The Airworthy Product paragraph only addresses the requirement to contact the manufacturer for corrective actions for the identified unsafe condition and does not cover deviations from other AD requirements. However, deviations to AD-required actions are addressed in 14 CFR 39.17, and anyone may request the approval for an alternative method of compliance to the AD-required actions using the procedures found in 14 CFR 39.19.

To address this misunderstanding and misinterpretation of the Airworthy Product paragraph, we have changed that paragraph and retitled it “Contacting the Manufacturer.” This paragraph now clarifies that for any requirement in this AD to obtain corrective actions from a manufacturer, the actions must be accomplished using a method approved by the FAA, EASA, or Airbus's EASA DOA.

The Contacting the Manufacturer paragraph also clarifies that, if approved by the DOA, the approval must include the DOA-authorized signature. The DOA signature indicates that the data and information contained in the document are EASA-approved, which is also FAA-approved. Messages and other information provided by the manufacturer that do not contain the DOA-authorized signature approval are not EASA-approved, unless EASA directly approves the manufacturer's message or other information.

This clarification does not remove flexibility afforded previously by the Airworthy Product paragraph. Consistent with long-standing FAA policy, such flexibility was never intended for required actions. This is also consistent with the recommendation of the Airworthiness Directive Implementation Aviation Rulemaking Committee to increase flexibility in complying with ADs by identifying those actions in manufacturers' service instructions that are “Required for Compliance” with ADs. We continue to work with manufacturers to implement this recommendation. But once we determine that an action is required, any deviation from the requirement must be approved as an alternative method of compliance.

Commenters to an NPRM having Directorate Identifier 2012-NM-101-AD (78 FR 78285, December 26, 2013) pointed out that in many cases the foreign manufacturer's service bulletin and the foreign authority's MCAI may have been issued some time before the FAA AD. Therefore, the DOA may have provided U.S. operators with an approved repair, developed with full awareness of the unsafe condition, before the FAA AD is issued. Under these circumstances, to comply with the FAA AD, the operator would be required to go back to the manufacturer's DOA and obtain a new approval document, adding time and expense to the compliance process with no safety benefit.

Based on these comments, we removed from this AD the requirement that the DAH-provided repair specifically refer to this AD. Before adopting such a requirement, the FAA will coordinate with affected DAHs and verify they are prepared to implement means to ensure that their repair approvals consider the unsafe condition addressed in the AD. Any such requirements will be adopted through the normal AD rulemaking process, including notice-and-comment procedures, when appropriate.

We also have decided to revise the language in paragraphs (g)(3), (g)(4), (h)(3), (h)(4), (i)(3), and (i)(4) of this AD to retain references to repair approvals done by the DGAC (or its delegated agent) from AD 2000-12-12, Amendment 39-11790 (65 FR 39072, June 23, 2000), as well as including references to EASA and the specific delegation approval granted by EASA for the DAH. Further, we revised paragraphs (n)(2) and (n)(3) of this AD to remove references to the “delegated agent” and the “DAH with State of Design Authority design organization approval” and instead provided the specific delegation approval granted by the State of Design Authority for the DAH.

We reviewed the relevant data, including the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (78 FR 79333, December 30, 2013) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (78 FR 79333, December 30, 2013).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We estimate that this AD affects 91 airplanes of U.S. registry.

The actions required by AD 2000-12-12, Amendment 39-11790 (65 FR 39072, June 23, 2000), and retained in this AD take about 4 work-hours per product, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the actions required by AD 2000-12-12 is $340 per product.

We also estimate that it would take about 12 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $92,820, or $1,020 per product.

In addition, we estimate that any necessary follow-on actions would take about 60 work-hours and require parts costing $1,680, for a cost of $6,780 per product. We have no way of determining the number of aircraft that might need these actions.

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

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

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2013-1066; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section.

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

On February 25, 2013, at 78 FR 12648, the Federal Register published our notice of proposed rulemaking (NPRM), which proposed to amend 14 CFR part 39 to supersede AD 2011-12-10, Amendment 39-16717 (76 FR 35330, June 17, 2011), corrected March 5, 2012 (77 FR 12991), that applied to Robinson Model R22, R22 Alpha, R22 Beta, and R22 Mariner helicopters with blade, part number (P/N) A016-4; and Model R44 and R44 II helicopters with blade, P/N C016-2 or C-016-5, installed. AD 2011-12-10 required a pilot check of the blade skin-to-spar joint area for any bare metal before the first flight of each day. AD 2011-12-10 also required repetitively inspecting each blade for corrosion, separation, a gap, or a dent, refinishing any bare metal before further flight, and replacing any damaged blade with an airworthy blade. AD 2011-12-10 was prompted by a fatal accident due to blade delamination.

At the time we issued AD 2011-12-10, Robinson had developed replacement blades on the R22 and R44 model helicopters. AD 2011-12-10 was issued as a Final rule; request for comment; however, the amount of time permitted to replace the blades required allowing the public an opportunity to comment. Thus, the NPRM proposed to retain the pilot check, recurring inspection, and blade refinishing requirements of AD 2011-12-10. An owner/operator (pilot) may perform the visual check required by paragraph (f)(1) of this AD and must enter compliance with that paragraph into the helicopter maintenance records in accordance with 14 CFR 43.9(a)(1) through (4) and 91.417(a)(2)(v). A pilot may perform this check because it involves only looking at a visible area of the blades and can be performed equally well by a pilot or a mechanic. This check is an exception to our standard maintenance regulations. The NPRM also proposed to add a part-numbered blade to its applicability for R22 model helicopters. Lastly, the NPRM proposed to require, within five years of the effective date, replacing both main rotor blades with the new part-numbered aluminum blades, which would constitute terminating action of the recurring inspection requirements. These actions are intended to detect and prevent debonding of the blade skin, which could result in blade failure and subsequent loss of control of the helicopter.

After our NPRM (78 FR 12648, February 25, 2013) was published, we received comments from 15 commenters and have given due consideration to each one. We have identified five unique issues and addressed those issues as follows.

Ten operators requested that we withdraw the NPRM and allow continued repetitive inspections of the blades for all affected models, as there is insufficient data justifying the termination of the requirement for repetitive inspections and for replacing the main rotor blades with new blades that do not require the AD inspection. One commenter noted that there have been no blade failures since the procedures of AD 2011-12-10 have been implemented, and therefore the NPRM increases the financial burden to an operator without increasing safety. Another commenter requested that more data be obtained regarding the effect of the operating environment and the inspection accordingly modified. Two commenters stated that a salt air environment caused the debonding due to corrosion. Some commenters state that inspections and routine maintenance, if done correctly, will ensure continued operational safety.

We do not agree. Blade debonding continues to occur in service. The cause of the debonding was determined to be erosion on unpainted blade tip bond lines which allows the bond to weaken and the skin to pull up. The erosion is mechanical and occurs in any environment regardless of salt or moisture in the air. This unsafe condition is sufficient to mandate inspections due to the catastrophic consequences if the blade becomes delaminated. However, airworthiness cannot be assured long-term by reliance on continued repetitive inspections. Although there have been no fatalities since we issued AD 2011-12-10, Robinson continues to report instances of blade delamination found during maintenance checks. Because blades continue to have debond issues, and as using a safety-by-inspection approach for a critical component has been shown to have an inherent amount of risk, it is in the interest of safety to reduce the retirement of the blades from 12 years from the blade manufacturing date to an earlier date.

Five operators requested that we remove the requirement for replacing the blades for the R44 Astro models, because these models are not equipped with hydraulic assisted controls and the new blades cannot be installed on these models unless the helicopter is converted to hydraulic assisted controls, a costly conversion which is not necessary for safe flight. These commenters further stated that the conversion is not only an additional expense but also can only be performed at the Robinson factory. One commenter believed the new blades are compatible with the non-hydraulic airframe and requested we require that Robinson test the new blades on the non-hydraulic R44 Astro airframe, so that the new blades can be installed on the R44 Astro without also having to convert the helicopter. The commenters also stated that Robinson then reserves the right to upgrade any component on the helicopter to their latest revision even though there is no AD or SB stating the Robinson required change, and this Robinson requirement results in additional cost increase. One commenter requested that we justify this requirement for the R44 Astro helicopters by identifying the number of reports of blade delamination on R44 Astros and explain the safety improvement resulting from converting a helicopter to hydraulic assisted controls. Finally, the commenters also stated that requiring replacement of the blades (and thus, conversion) for R44 Astro helicopters significantly reduces the resale value of these helicopters.

We do not agree. The R44 Astro is subject to the same unsafe condition as the other R22 and R44 helicopter models. The purpose of this AD is not to require converting a helicopter to hydraulic assisted controls; the purpose is to correct this unsafe condition on the blades. Robinson's decision whether to test the new blades with the non-hydraulic R44 Astro helicopter is a business decision, and the FAA does not have the authority to mandate a different decision. Similarly, Robinson's decision to discontinue blades designed for the non-hydraulic equipped helicopters is a business decision that the FAA does not have the authority to change. Because the blades for the non-hydraulic equipped R44 Astro helicopters are calendar life limited to 12 years and will no longer be produced, and as the manufacturer has not pursued FAA approval for installation of the new blades on the non-hydraulic R44 Astro, the owners of the Astro helicopter will need to install hydraulic assisted flight controls after 12 years regardless of the AD requirements. The FAA acknowledges that the expense and downtime to accomplish the blade replacement is greater for the R44 helicopters that are not equipped with hydraulic assisted controls. However, this greater cost due to an absence of hydraulic controls, while unfortunate, does not change the blade safety issue or the need to require replacement of the blades prior to their retirement life.

Four operators stated that the FAA has not considered the cost of this AD on operators and requested that Robinson be responsible for the cost of the new blades. One commenter also requested that Robinson be responsible for the cost of converting the R44 Astro to hydraulic assisted flight controls, as this will be required for that model when the new blades are installed.

We do not agree. While we acknowledge that the costs associated with the actions of this AD are not minimal, we have determined that these costs are reasonable given the unsafe condition. As far as request for Robinson to bear these costs, the FAA does not have the authority to require a manufacturer to bear the cost of a repair.

One commenter requested that we require blade replacement at the 2,200 hour overhaul or 12 years instead of the 5-year compliance time. The commenter stated that as Robinson started the production of new blades about 3 years ago, the 5-year replacement period would require some owners to replace the blades long before reaching the 12-year inspection, and this financial cost was not taken into account with the proposed rule.

We do not agree. We determined a replacement period of five years from the date of the AD by using a quantitative and qualitative risk assessment methodology. The risk of blade skin debonding results in a loss of control of the helicopter and is beyond acceptable risk guidelines when allowing the blades to continue in service indefinitely. Although the risk assessment indicates that immediate action is required to correct the unsafe condition, this risk is partially mitigated by the improved inspection techniques, making it acceptable to allow a five year period of time for blades to be replaced. The added cost to retire the blades has been anticipated in the financial burden justification of this AD. The FAA acknowledges that in some situations the cost to the operator may be in excess of the cost of the replacement blades, but we have determined that the costs associated with the actions of this AD are reasonable given the safety issue.

Lastly, one commenter did not make a request but stated that bare metal can be seen on areas of the helicopter and that the helicopter manufacturer provides poor corrosion protection on the helicopter. The commenter explained that metal-to-metal contact causes the corrosion that occurs on the blades.

We disagree. Metal-to-metal contact may be a mechanism that is causing the corrosion in the rotor blade tip cap to skin interface, but it has not been shown to be a mechanism for skin debonding in the area of the blade that has been found in the fleet. Skin debonding is the unsafe condition the actions in this AD are correcting.

We have reviewed the relevant information, considered the comments received, and determined that an unsafe condition exists and is likely to exist or develop on other products of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed, except we are allowing compliance with the revised service information as an optional action. We have also made clarifications in the economic analysis to reflect the correct cost of required parts and labor for R-44 helicopters without hydraulically boosted flight controls installed. The total estimated cost for these model helicopters has not changed. These changes are consistent with the intent of the proposals in the NPRM (78 FR 12648, February 25, 2013) and will not increase the economic burden on any operator nor increase the scope of the AD.

We have reviewed the following Robinson service information:

• Letter titled “Additional Information Regarding Main Rotor Blade Skin Debonding,” dated May 25, 2007, discussing blade skin debonding;

• Rotorcraft Flight Manual (RFM) changes to the Normal Procedures Section 4 and Systems Description Section 7, revised April 20, 2007, for each applicable model helicopter containing a “caution” about skin-to-spar bond line erosion;

• One Service Letter with two different Nos.: R22 SL-56B and R44 SL-32B, both revised April 30, 2010, specifying proper inspection and protection (refinishing) of bonded areas; and

• Service Bulletins SB-103 for the Model R22 and SB-72 for the Model R44, both dated April 30, 2010, and SB-103A and SB-72A, both dated July 19, 2012, specifying proper inspection and protection (refinishing) of bonded areas for certain affected blades.

• R44 Service Letter SL-37, dated June 18, 2010, specifying the required modifications for a carbureted R-44 to install P/N C016-7 blades.

We estimate that this AD affects 1,290 Model R22 helicopters and 1,353 Model R44 helicopters, for a total of 2,643 helicopters of U.S. Registry. At an average labor rate of $85 per hour, we estimate that operators will incur the following costs in order to comply with this AD:

• Time to perform the before flight check each day is negligible.

• Inspecting both blades will require about three work hours, for a total cost per helicopter of $255 and a total cost to the U.S. operator fleet of $673,965.

• Replacing both blades on a Model R22 helicopter will require about 20 work hours, and required parts will cost $29,808, for a total cost per helicopter of $31,508 and a total cost to the U.S. R22 operator fleet of $40,645,320 over a 5-year period.

• Replacing both blades on a Model R44 helicopter with hydraulically boosted flight controls installed (approximately 1,053 helicopters) will require about 20 work hours, and required parts will cost $43,783, for a total cost per helicopter of $45,483 and a total cost to the U.S. R44 operator fleet of $47,893,599 over a 5-year period.

• Replacing both blades on a Model R44 helicopter without hydraulically boosted flight controls installed (approximately 300 helicopters) will require modifying the aircraft with hydraulic flight controls, and adding the P/N C016-7 blades and the required airframe provisions at a cost of 100 work-hours for a total labor cost of $8,500. Parts will cost $103,747 for a total cost per helicopters of $112,247, and a cost to U.S. operators of $33,674,100 over 5 years.

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

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

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

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

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

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

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

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

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

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

On September 26, 2014, the FAA published in the Federal Register a final rule (79 FR 57758) that amended, removed, and established multiple ATS routes in the north central and northeast United States to reflect and accommodate route changes being made in Canadian airspace as part of Canada's WTM airspace redesign project, and corrected a notice of proposed rulemaking (NPRM) publishing error. The rule also made a number of changes or corrections deemed necessary following the NPRM public comment period.

The FAA now has identified in the rule that the following 13 fixes in several route descriptions were established in the FAA and Canadian aeronautical databases as WPs: DUTSH, OH; RICCS, WV; WAYLA, NY; PUPPY, NY; ARKKK, NY; FABEN, NY; STOMP, NY; POSTS, MI; JOSSY, NY; KRAZZ, NY; AGNOB, Canada; LORKA, Canada; and ADVIK, Canada.

Additionally, the final route segment providing cross border connectivity between the U.S. and Canada for the RNAV route Q-822 description was changed within Canadian airspace by NAV CANADA due to route realignment requirements. Also in RNAV route Q-822, the TANGU, Canada, WP was changed to the SINVI, Canada, WP located in a new geographic latitude/longitude position.

This rule makes the corrections to be in concert with FAA and Canadian aeronautical databases.

The FAA is amending Title 14, Code of Federal Regulations (14 CFR) part 71 by modifying RNAV routes Q-29, Q-69, Q-82, Q-84, Q-103, Q-140, Q-812, Q-818, Q-822, Q-907, Q-935, and Q-937. The RNAV route modifications correct fix characterizations to match FAA and Canadian aeronautical database information and support Canadian airspace redesign changes for routes into and out of the Winsor, Toronto, and Montreal areas within Canada to ensure safe and efficient across border connectivity.

The RNAV route modifications accomplished by this action are outlined below.

High altitude United States RNAV routes (Q-routes) are published in paragraph 2006 and high altitude Canadian RNAV routes (Q-routes) are published in paragraph 2007 of FAA Order 7400.9Y dated August 6, 2014, and effective September 15, 2014, which is incorporated by reference in 14 CFR 71.1. The high altitude United States and Canadian RNAV routes (Q-routes) listed in this rule will be subsequently published in the Order.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies the route structure as necessary to preserve the safe and efficient flow of air traffic within the National Airspace System. In addition, as this rule is correcting errors in certain Q routes and updating RNAV route Q-822 to accommodate changes by Canada that affect these routes, I find that notice and public procedure under 5 U.S.C. 553(b) are impractical, unnecessary and not in the public interest.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures,” paragraph 311a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

On November 10, 2014, a Notice of Temporary Deviation entitled, “Drawbridge Operation Regulation; Gulf Intracoastal Waterway, Belle Chasse, LA” was published in the Federal Register . 79 FR 66621.

That temporary deviation allowed for the Louisiana State Route 23 (LA 23) vertical lift span bridge, also known as the Judge Perez Bridge, across the Gulf Intracoastal Waterway (Algiers Alternate Route), mile 3.8, at Belle Chasse, Plaquemines Parish, Louisiana, to remain closed to navigation for an additional one hour in the evenings from 5:30 p.m. to 6:30 p.m. from December 26, 2014, through February 20, 2015.

Subsequent to publication, the Sheriff of Plaquemines Parish requested by letter dated November 18, 2014, that the additional one hour deviation commence immediately because of major safety concerns with regard to parish residents and the ability of emergency vehicles to transit the area. The Sheriff of Plaquemines Parish indicated that the area has experienced increased traffic during a construction pre-shut down phase at the Phillips 66 plant.

The deviation requested allows the bridge to remain closed to navigation for an additional one hour in the evening, Monday through Friday, effecting a total deviation period from Friday, November 24, 2014, through Friday, February 20, 2015. Coordination with local Coast Guard and waterway users was conducted, and immediate commencement of the deviation will not have a significant impact on mariners.

Presently, in accordance with 33 CFR 117.451(b), the draw shall open on signal; except that, from 6 a.m. to 8:30 a.m. and from 3:30 p.m. to 5:30 p.m. Monday through Friday, except Federal holidays, the draw need not open for the passage of vessels.

This temporary deviation allows the vertical lift bridge to remain closed to navigation for one additional hour in the afternoon. This additional hour extends the afternoon curfew hours to 6:30 p.m. Monday through Friday beginning November 24, 2014 through December 25, 2014. In case of an emergency, the bridge will be able to open for the passage of vessels.

The State Route 23 vertical lift span drawbridge across the Gulf Intracoastal Waterway (Algiers Alternate Route), mile 3.8, at Belle Chasse, Louisiana has a vertical clearance of 40 feet above mean high water in the closed-to-navigation position and 100 feet above mean high water in the open-to-navigation position. Navigation on the waterway consists primarily of tugs with tows, commercial fishing vessels, and occasional recreational craft. Mariners may use the Gulf Intracoastal Waterway (Harvey Canal) to avoid unnecessary delays. The Coast Guard has coordinated this closure with the Gulf Intracoastal Canal Association (GICA). The GICA representative indicated that the vessel operators will be able to schedule transits through the bridge to avoid delays and significant impacts on operations. Due to prior experience, as well as coordination with waterway users, it has been determined that this closure will not have a significant effect on these vessels.

In accordance with 33 CFR 117.35, the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation.

This deviation from the operating regulations is authorized under 33 CFR 117.35.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl .

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2014-0668 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before February 3, 2015. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2014-0668, by one of the following methods.

• Federal eRulemaking Portal: http://www.regulations.gov . Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html .

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets .

In the Federal Register of October 15, 2014 (79 FR 61844) (FRL-9917-24), EPA issued a document pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the receipt of a pesticide petition (PP IN-10755) filed by the firm Lewis & Harrison, 122 C Street NW., Suite 505, Washington, DC 20001, on behalf of International Specialty Products. The petition requested that 40 CFR 180.960 be amended by establishing an exemption from the requirement of a tolerance for residues of 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt (CAS Reg. No. 1471342-08-1). That document included a summary of the petition prepared by the petitioner and solicited comments on the petitioner's request. A comment was received on the notice of filing. EPA's response to the comment is discussed in Unit VIII.B.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and use in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing an exemption from the requirement of a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . .” and specifies factors EPA is to consider in establishing an exemption.

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be shown that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

Consistent with FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. In the case of certain chemical substances that are defined as polymers, the Agency has established a set of criteria to identify categories of polymers expected to present minimal or no risk. The definition of a polymer is given in 40 CFR 723.250(b) and the exclusion criteria for identifying these low-risk polymers are described in 40 CFR 723.250(d). 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt conforms to the definition of a polymer given in 40 CFR 723.250(b) and meets the following criteria that are used to identify low-risk polymers.

1. The polymer is not a cationic polymer nor is it reasonably anticipated to become a cationic polymer in a natural aquatic environment.

2. The polymer does contain as an integral part of its composition the atomic elements carbon, hydrogen, and oxygen.

3. The polymer does not contain as an integral part of its composition, except as impurities, any element other than those listed in 40 CFR 723.250(d)(2)(ii).

4. The polymer is neither designed nor can it be reasonably anticipated to substantially degrade, decompose, or depolymerize.

5. The polymer is manufactured or imported from monomers and/or reactants that are already included on the TSCA Chemical Substance Inventory or manufactured under an applicable TSCA section 5 exemption.

6. The polymer is not a water absorbing polymer with a number average molecular weight (MW) greater than or equal to 10,000 daltons.

7. The polymer does not contain certain perfluoroalkyl moieties consisting of a CF3- or longer chain length as specified in 40 CFR 723.250(d)(6) and less than 5% oligomeric material below MW 1,000.

Thus, 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt meets the criteria for a polymer to be considered low risk under 40 CFR 723.250. Based on its conformance to the criteria in this unit, no mammalian toxicity is anticipated from dietary, inhalation, or dermal exposure to 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt.

For the purposes of assessing potential exposure under this exemption, EPA considered that 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt could be present in all raw and processed agricultural commodities and drinking water, and that non-occupational non-dietary exposure was possible. The number average MW of 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt is 18,200 daltons. Generally, a polymer of this size would be poorly absorbed through the intact gastrointestinal tract or through intact human skin. Since 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt conform to the criteria that identify a low-risk polymer, there are no concerns for risks associated with any potential exposure scenarios that are reasonably foreseeable. The Agency has determined that a tolerance is not necessary to protect the public health.

Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt to share a common mechanism of toxicity with any other substances, and 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative .

Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base unless EPA concludes that a different margin of safety will be safe for infants and children. Due to the expected low toxicity of 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt, EPA has not used a safety factor analysis to assess the risk. For the same reasons the additional tenfold safety factor is unnecessary.

Based on the conformance to the criteria used to identify a low-risk polymer, EPA concludes that there is a reasonable certainty of no harm to the U.S. population, including infants and children, from aggregate exposure to residues of 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt.

An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.

One comment was received for a notice of filing from a private citizen who opposed any pesticide product that leaves a residue above 0.00. The Agency understands the commenter's concerns and recognizes that some individuals believe that no residue of pesticides should be allowed. However, under the existing legal framework provided by FFDCA section 408, EPA is authorized to establish pesticide tolerances or exemptions where persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by the statute.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established a MRL for 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt.

Accordingly, EPA finds that exempting residues of 2,5-Furandione, polymer with methoxyethene, butyl ethyl ester, sodium salt from the requirement of a tolerance will be safe.

This final rule establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these rules from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this final rule has been exempted from review under Executive Order 12866, this final rule is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA) (15 U.S.C. 272 note).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian Tribes, or otherwise have any unique impacts on local governments. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1501 et seq. ).

Although this action does not require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994), EPA seeks to achieve environmental justice, the fair treatment and meaningful involvement of any group, including minority and/or low-income populations, in the development, implementation, and enforcement of environmental laws, regulations, and policies. As such, to the extent that information is publicly available or was submitted in comments to EPA, the Agency considered whether groups or segments of the population, as a result of their location, cultural practices, or other factors, may have atypical or disproportionately high and adverse human health impacts or environmental effects from exposure to the pesticide discussed in this document, compared to the general population.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

This is a synopsis of the Federal Communications Commission's Report and Order (“ R&O ”), WT Docket No. 12-40, RM No. 11510, FCC 14-181, adopted November 7, 2014 and released November 10, 2014. The full text of the R&O, including all Appendices, is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW., Room CY-A157, Washington, DC 20554, or by downloading the text from the Commission's Web site at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db1110/FCC-14-181A1.pdf. The complete text also may be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc. Portals II, 445 12th Street SW., Suite CY-B402, Washington, DC 20554. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to FCC504@fcc.gov or calling the Consumer and Government Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

1. Under the current site-based licensing rules, a Cellular applicant requests authorization to construct at a specific transmitter location (or multiple locations) in Unserved Area and may construct only authorized transmitters. Cellular Unserved Area applications specify the area to be licensed as CGSA and, because they are classified as “major” applications no matter how small the expansion area, they are subject to a 30-day public comment period during which petitions to deny and competing applications may be filed. In the event that mutually exclusive applications are accepted for a particular Unserved Area, they are resolved through competitive bidding in closed auctions. Unserved Area licenses granted are subject to a one-year construction deadline for the authorized site; failure to build out results in automatic termination of the authorization for that site, and the Unserved Area again is subject to re-licensing.

2. In a Notice of Proposed Rulemaking released on February 15, 2012 (“ 2012 NPRM ”), the Commission proposed to transition the Cellular Service to geographic-based licensing by issuing geographic-area overlay licenses through competitive bidding in two stages. The Commission also proposed new and revised rules. The Commission sought comment on all aspects of its proposals as well as on other ideas, proposals, and comments discussed in the 2012 NPRM, and also invited the submission of alternative ideas. In response to the 2012 NPRM, interested parties submitted comments, reply comments, and ex parte letters. The specific reforms adopted by the Commission in the R&O are described below.

3. While the traditional geographic licensing model, such as the model for the Broadband Personal Communications Service (“PCS”) and other commercial wireless services, entails awarding licenses (via competitive bidding if mutually exclusive applications are accepted) for areas whose boundaries are co-terminus with well-known political boundaries or other market areas established by the Commission, such as Metropolitan Statistical Areas, the Commission concludes that geographic areas should be defined for the Cellular Service at this time by CGSA boundaries. This is consistent with the Commission's goals and recognizes the history and current status of the Cellular Service.

4. As explained in more detail in the 2012 NPRM, the Commission digitized all CGSAs using the most recent maps on file for licensed CGSAs, creating map files in geographic information system (“GIS”) format. Since then, the staff has regularly updated the files, and in October 2013, made them publicly available online. They draw directly from official Universal Licensing System (“ULS”) station records for the Cellular Service, using the most recent CGSA maps of record, including those accompanying Cellular applications submitted pursuant to Commission rules. The staff uses them to determine the official boundary of an authorized CGSA (and a proposed CGSA when reviewing a Cellular Service application). They will continue to be updated regularly, and licensees as well as new-system applicants should consult them to verify CGSA boundaries.

5. Based on the record in this proceeding, the Commission finds that its proposed 40 dBµV/m field strength limit is appropriate for the Cellular Service and, accordingly, the Commission adopts a new rule establishing this limit. The Commission also finds it appropriate, consistent with other geographic-based wireless services, to permit neighboring co-channel Cellular licensees to negotiate different field strength limits—higher or lower than 40 dBµV/m. The Commission emphasizes that Cellular licensees must comply at all times with the applicable radiated power limits as well as applicable provisions of international agreements and treaties. However, given that the Commission is preserving the ability to expand service coverage into any Unserved Area nationwide, both through CGSA expansions and SAB extensions (as discussed further below), the Commission finds it appropriate to depart from the 2012 NPRM proposal to subject all Cellular licensees to a 40 dBµV/m (or negotiated) signal field strength limit at their respective license boundaries. Under the approach the Commission has adopted in the R&O, a Cellular licensee's CGSA will not always be adjacent to a neighboring co-channel licensee's CGSA; it may in some cases be bordered by Unserved Area. Therefore, increased flexibility for Cellular licensees is warranted when applying the field strength limit rule.

6. Accordingly, the Commission adopts a rule that will apply at every point along the neighboring co-channel licensee's CGSA boundary. The following two examples illustrate this new rule: (1) If a licensee's CGSA borders Unserved Area (whether currently or through a service coverage expansion in compliance with the new rules), that licensee can exceed the 40 dBµV/m limit at its own CGSA boundary, so long as it complies with that limit (or a negotiated limit) at every point along the neighboring co-channel licensee's CGSA boundary; (2) if two co-channel licensees' CGSAs are adjacent, both licensees will be subject to the field strength limit rule at every point along their shared CGSA boundary to protect one another. The Commission concludes that this more flexible approach serves the public interest.

7. The Commission declines at this time to provide a methodology regarding how the field strength should be determined. Cellular licensees are best positioned to choose a methodology that takes into account factors unique to their systems and the area involved, including, for example, technologies, traffic loading, topography, and location of major roads. The Commission recognizes that the existing regime in the Gulf of Mexico (“Gulf”) Cellular market was carefully crafted following lengthy Commission and judicial proceedings. Accordingly, as set forth in the new field strength limit rule (47 CFR 22.983) and the revised version of 47 CFR 22.912 that the Commission also adopts in this R&O (discussed further below), the Commission finds that it serves the public interest to continue to maintain the status quo Gulf regime in most respects and not apply the new field strength limit rule. Specifically, the Commission will continue to require service area extension agreements and associated filings with the Commission as follows: land-based carriers adjoining the Gulf will be required to negotiate any desired SAB extensions into the Gulf of Mexico Exclusive Zone and submit minor modification applications to the Commission, certifying that such consent has been obtained; and licensees in the Gulf of Mexico Exclusive Zone will likewise be required to negotiate any desired SAB extensions into the licensed area of neighboring land-based carriers and submit minor modification applications to the Commission, certifying that such consent has been obtained. The Commission clarifies that all land-based carriers will, however, be subject to the new field strength limit rule to protect the licensed CGSA boundaries of all neighboring co-channel land-based licensees.

8. No commenters objected to the proposal to retain the requirements for mandatory coordination currently set forth in 47 CFR 22.907, and the Commission finds that it serves the public interest to adopt that proposal. As the Commission emphasizes, Cellular licensees will be permitted to expand their CGSAs and extend their SABs (in compliance with the new rules adopted in the R&O ), which are calculated based on contours. The formulas in 47 CFR 22.911 provide a proven method for the requisite calculation of such contours and the service area within them, and the Commission finds that they do not warrant change at this time. The Commission does, however, revise 47 CFR 22.911 to delete provisions rendered obsolete by its decision to adopt a field strength limit rule and the related decision to eliminate certain requirements governing SAB extensions into another licensee's CGSA, discussed below, in connection with transitioning the Cellular Service to a geographic-based model. These revisions to 47 CFR 22.911 do not affect the formulas for calculating CGSAs and SABs.

9. Background. Under the current Cellular site-based licensing regime, a licensee seeking to extend service coverage on a secondary basis into the licensed area of a neighboring co-channel licensee is required to negotiate an SAB extension agreement and is then required to file a minor modification application for the extension and certify that the neighboring licensee's consent has been obtained. In response to the 2012 NPRM, some commenters cautioned that previously negotiated SAB extension agreements should not be disrupted by the Commission.

10. Consistent with the approach taken in other commercial wireless services and the Commission's goals in this proceeding, the Commission revises 47 CFR 22.912 to reflect that the Commission will no longer require applications for SAB extensions into neighboring CGSAs, and it adopts a conforming change to 47 CFR 22.911(d). The Commission clarifies that, so long as a licensee either meets the 40 dBµV/m field strength limit or negotiates a different limit (higher or lower) with the neighboring co-channel licensee, resulting SAB extensions into a neighboring licensee's CGSA will be permitted without a minor modification application or a certification that consents have been obtained. The exception is with respect to the Gulf, as discussed above. The Commission emphasizes that it does not seek to disrupt previously negotiated SAB extension agreements between Cellular licensees, nor does it seek to prohibit new ones. The Commission fully expects that parties will continue to comply with the terms of their existing SAB extension agreements or negotiate new terms if they deem warranted.

11. Under the existing site-based licensing regime, Cellular licensees are required to file minor modification applications notifying the Commission of the addition or modification of transmitter sites that form the CGSA boundary—so-called border sites. While system changes to purely internal (non-border) sites generally do not require a Commission filing, changes to border sites require the notifications (but not prior approval) even when the resulting new or modified SAB remains entirely within the CGSA boundary.

12. The Commission finds that it serves the public interest to no longer require that Cellular licensees notify the Commission of changes to cell sites, or the addition of new cell sites, where the SAB remains confined within the existing CGSA boundary. This approach is consistent with the Commission's goals of reducing licensee administrative burdens, enhancing flexibility to adapt quickly to technological and market place changes, and increasing harmonization of the Cellular Service rules with those of other geographically licensed services.

13. Section 22.165(e). The introductory clause of 47 CFR 22.165 limits the scope of the entire rule to transmitters that may be added without prior Commission approval, and subsection 22.165(e) governs Cellular licensees solely in that context; it does not address whether adding a Cellular transmitter triggers the requirement to file a notification with the Commission. Consistent with the licensing approach the Commission adopts in this R&O, the Commission also adopts a simplified 47 CFR 22.165(e) that eliminates references to the legacy Cellular licensing model ( e.g., the five-year construction period of an initial primary license) and clarifies when a Cellular transmitter may be added without prior Commission approval.

14. There is currently no required minimum for expansion of an existing system's CGSA into Unserved Area, and any expansion no matter how small requires a major modification application seeking prior Commission approval. All CGSA-expansion applications are placed on public notice for 30 days. This reform proceeding has evaluated whether there is a continued need for modification applications and subsequent buildout notifications for very small system changes. Also, a high number of amendments are subsequently filed, either to cure applicant errors or change the coverage or certain technical parameters initially proposed. The result is a process that consumes significant licensee and FCC resources. Commission data indicate that, by limiting CGSA-expansion major modification applications to those that propose expansion of 50 contiguous square miles or more, together with adopting a streamlined procedure for service coverage expansions of less than 50 contiguous square miles, the volume of major modification applications and associated amendments for CGSA expansions will be dramatically reduced. Likewise, the volume of build-out notification filings would also be significantly reduced.

15. The Commission is persuaded, as noted above, to continue to permit CGSA expansions in all CMA Blocks at this time. The Commission also agrees with the commenters that it serves the public interest to establish by rule a minimum requirement of 50 contiguous square miles (as determined pursuant to the applicable formula in 47 CFR 22.911) for all CGSA expansions ( i.e., to expand service coverage on a primary, protected basis). The Commission concludes that this approach balances the concerns of large and smaller carriers alike, particularly because the Commission will not only continue to permit secondary operation to serve smaller parcels (less than 50 contiguous square miles), but will enhance flexibility by eliminating previously required Commission filings for such parcels, as discussed in detail in the next section of this R&O. The Commission incorporates this minimum requirement for CGSA expansions into the revised version of 47 CFR 22.949 that the Commission adopts in this R&O and, consistent with the Commission's regulatory reform agenda to streamline rules where possible, the Commission consolidates the existing new-system coverage requirements currently set forth in 47 CFR 22.951 into 47 CFR 22.949. The Commission declines at this time to adopt a commenter's proposal to establish a two-year build-out requirement solely for licensees in Alaska; it finds that the one-year build-out requirement applicable to all Cellular licensees has generally worked well and does warrant change at this time.

16. The Commission anticipates that licensees will not make unnecessary filings under the new rules it adopts in this R&O. The Commission clarifies that, to the extent that applications are filed claiming Unserved Area as CGSA without meeting the new minimum square mileage requirement, Commission staff will not process them; rather, they will return or dismiss such filings unless first withdrawn by the applicant.

17. Since 2004, the Commission has permitted Cellular licensees to extend their SABs into adjacent Unserved Area and provide service on a secondary basis without first filing a major modification application seeking prior Commission approval, so long as the extension is less than 50 square miles. In such instances, the licensee has been required to file only a notification upon commencing service on a secondary ( i.e., an unlicensed, unprotected) basis. A licensee seeking to claim the area as part of its CGSA ( i.e., for primary, protected service) is required to submit a major modification application subject to a 30-day public comment period, no matter how small the area. The 2004 relaxation of the prior approval requirement in such circumstances was designed to provide licensees with additional flexibility to respond to operational demands immediately in a manner that remained consistent with site-based licensing rules.

18. As explained in the preceding section, to balance the concerns of smaller, more rural carriers and large carriers alike, the Commission adopts revised Cellular rules based on a geographic licensing model while also preserving certain elements of the existing site-based model, including the continued ability to expand CGSAs into Unserved Area so long as the proposed expansion area is at least 50 contiguous square miles. A high volume of applications under current Cellular rules are to make improvements in response to technological changes, demographic changes, and consumer demand that change the CGSA boundary by an extremely small amount. The Commission finds that it serves the public interest to permit continued access to these small parcels of Unserved Area, but the Commission recognizes that filings associated with minor system changes that expand service into these small parcels often constitute hindrances to system improvements.

19. The Commission declines to adopt commenters' unsupported proposals to permit Cellular incumbents simply to absorb small parcels of Unserved Area into their existing CGSAs, even when bordered on all sides by only one incumbent. The Commission finds these proposals to be inconsistent with Commission precedent. Consistent, however, with the approach the Commission adopts in this R&O to increase flexibility to make changes to an existing system without Commission filings, the Commission finds it serves the public interest to permit incumbents to extend their SABs (as calculated under 47 CFR 22.911) into adjacent Unserved Area parcels that are less than 50 contiguous square miles and provide service coverage on a secondary basis indefinitely and without any filings with the Commission. The Commission clarifies that this is applicable whether the SAB extension is the result of an added transmitter, modification of a cell site, or both. A licensee extending its SAB into an Unserved Area parcel of less than 50 contiguous square miles must: (1) Pursuant to 47 CFR 22.983 that the Commission adopts in this R&O, comply with the 40 dBµV/m field strength limit at the boundary of the neighboring co-channel licensee's CGSA or negotiate a different field strength limit; (2) accept interference from other Cellular systems; and (3) avoid causing harmful interference to any neighboring co-channel licensee's CGSA. To the extent that more than one incumbent borders and wishes to serve the same Unserved Area parcel less than 50 contiguous square miles, such incumbents will be required to provide service in that parcel on a shared secondary (unprotected) basis only. The Commission finds that these revisions serve the public interest and further the Commission's goals in this proceeding.

20. In the 2012 NPRM, the Commission noted that, pursuant to delegated authority and rules adopted in the ULS proceeding to eliminate paper filings, the Bureau had announced optional electronic filing of CGSA map files in lieu of the large-scale (1:500,000 scale) paper CGSA maps required to be submitted with certain Cellular applications. The Commission also reaffirmed the Bureau's delegated authority to determine and announce the effective date of mandatory electronic filing of such maps, with instructions for the public regarding access to such submissions. The Bureau continued its voluntary policy to allow all Cellular licensees, including the smaller carriers, time to explore and choose appropriate software for their electronic map filings. The 2012 NPRM anticipated mandatory electronic filing and sought comment on proposed rules incorporating this requirement.

21. Nearly all large-scale CGSA maps are now submitted by applicants electronically in ULS. The Commission finds that, in conjunction with the numerous other changes adopted in the R&O to modernize the Cellular rules, it is appropriate to adopt final rules that require mandatory electronic filing of map files (rather than the large-scale paper CGSA maps) in GIS format with any Cellular applications that require maps. The Commission will continue to accept and preserve large-scale paper maps filed prior to the effective date of the electronic filing requirement that the Commission adopts in this R&O. Thereafter, the Commission will not accept paper maps with Cellular applications unless it finds that a large-scale paper map is necessary to review and act on a particular application and requests such a submission. Applications that do not comply with the new requirement will either be returned to the applicant or dismissed.

22. In an effort to streamline and modernize the Cellular Service-specific rules in Subpart H as well as certain Part 1 and other Part 22 rules applicable to Cellular licensing, the Commission proposed in the 2012 NPRM numerous rule deletions and changes to current requirements. The Commission specifically indicated that, in the future, certain information and exhibits currently required pursuant to 47 CFR 22.929 and 22.953(a) would not be routinely required by the Commission's engineering staff in their review of Cellular new-system and modification applications, and therefore proposed streamlining the information requirements in those rules.

23. Based on the record and consistent with the Commission's regulatory reform agenda, the Commission finds that it serves the public interest to adopt revised provisions to minimize the content requirements for Cellular applications. Specifically, the Commission adopts the proposal to delete 47 CFR 22.929 and consolidate application requirements into a single revised and streamlined rule, 47 CFR 22.953, such that applicants for new systems or system modifications will no longer be required routinely to submit the following information in their exhibits: Height of the center of radiation of the antenna above average terrain; antenna gain in the maximum lobe; antenna model; antenna manufacturer name; antenna type; antenna height to tip above ground level; maximum effective radiated power; beam-width of the maximum lobe of the antenna; polar plot of the horizontal gain pattern of the antenna; electrical field polarization of the wave emitted by the antenna when installed as proposed; channel plan; service proposal; Cellular design; blocking level; start-up expenses; and interconnection.

24. In light of technological advances and maturity of the Cellular Service, the Commission finds that the information and technical exhibits identified above are either no longer routinely necessary for Commission staff in reviewing Cellular applications or can be accessed elsewhere. By eliminating all 16 of these requirements for routine review, the Commission is alleviating to a significant degree the resources that licensees will need to expend on Cellular applications. The Commission concludes that such streamlining and modernization of the current rules serves the public interest.

25. Block A of the Chambers, Texas CMA (CMA672-A) (“Chambers”) is the only CMA in the country for which a Cellular initial primary license has never been issued, and AT&T Mobility of Galveston LLC (“AT&T Galveston”) holds an interim operating authorization—not a permanent license—and provides Cellular service to nearly all of the area under Call Sign KNKP971. The Commission proposed that the entire CMA672-A be licensed on a geographic area basis by auction, with specified build-out benchmarks.

26. In light of the Commission's decision in this R&O to adopt a geographic-based licensing model for the Cellular Service, the Commission finds it appropriate to adopt the Commission's proposal regarding the Chambers license, with a few clarifications. The current rules provide for the acceptance of mutually exclusive applications for the initial license for Chambers, which would be resolved by competitive bidding pursuant to section 309(j) of the Communications Act of 1934, as amended. Accordingly, the Wireless Telecommunications Bureau (“Bureau”) will accept applications for a CMA-based initial primary license for Chambers, consistent with initial licensing of other CMA Blocks that have been subject to competitive bidding where mutually exclusive applications have been accepted. The Commission finds that it serves the public interest to adopt the proposed geographic coverage build-out requirements, rather than subjecting the new Chambers licensee to the legacy five-year and Unserved Area licensing build-out/application processes. The Chambers licensee will therefore be required to provide signal coverage and offer service over at least 35% of the geographic area of CMA672-A within four years of initial license grant, and to at least 70% of that same area by the end of the license term, as set forth in new 47 CFR 22.960 that the Commission adopts in this R&O. As proposed, for purposes of this geographic benchmark, the licensee is to count total land, and failure to meet these coverage benchmarks will result in automatic termination of the license and its return to the Commission for re-licensing by auction. Any licensee that so fails to meet these benchmarks will not be eligible to regain the Chambers license. The Commission emphasizes that the holder of the interim operating authorization (currently AT&T Galveston) does not have primary authority to operate and would not be afforded incumbent status entitled to protection from the Chambers licensee.

27. The performance obligations for the Chambers license are consistent with those for geographic area licenses in certain other services similarly issued through competitive bidding. Accordingly, consistent with its regulatory reform agenda and as proposed, the Commission finds that it serves the public interest to eliminate—or, where appropriate, update—the numerous existing provisions pertaining to or referencing the legacy build-out periods for the Cellular Service throughout Parts 1 and 22 of the Commission's rules. The Commission discusses these specific rule changes further below.

28. Moreover, the Commission concludes that it is appropriate to deem the boundary of CMA672-A as the CGSA boundary of the Chambers licensee. Neighboring co-channel licensees will not be permitted to claim as CGSA any area within CMA672-A, even if not built out by the Chambers licensee by the end of the initial license term. The Chambers licensee will be permitted to claim, as a CGSA expansion, Unserved Area in a neighboring CMA, provided that it has first met all of its build-out requirements in CMA672-A by the end of the initial license term. Any such CGSA expansion area will not, however, remain part of the Chambers license in the event the Chambers license is automatically terminated by Commission rule or revoked for any reason, in which case the area within CMA672-A will revert to the Commission for re-licensing by auction, while the CGSA expansion area will revert to the Commission for re-licensing pursuant to the Unserved Area licensing rules.

29. With respect to licensee protection requirements, pursuant to the field strength limit rule the Commission adopts in this R&O, the Commission clarifies that the Chambers licensee will have the flexibility to construct anywhere within CMA672-A subject to Cellular Service technical requirements, but must comply with the 40 dBµV/m field strength limit at the CGSA boundaries of neighboring co-channel licensees, unless a different limit is negotiated. Further, consistent with the new Cellular field strength limit rule and with protection requirements in other geographic-based wireless services, a neighboring co-channel Cellular licensee must comply with the 40 dBµV/m field strength limit at the Chambers licensed area boundary ( i.e., the boundary of CMA672-A), regardless of whether the Chambers licensee is yet operating near the border of CMA672-A, or else negotiate a different limit.

30. The Commission concludes that this approach provides the most efficient and effective means to foster the provision of additional advanced wireless service by a primary licensee to this Texas market and serves the public interest. In the event that mutually exclusive applications are accepted for this license, the Commission concludes that new 47 CFR 22.961, which the Commission adopts in this R&O consistent with the Commission's proposal in the 2012 NPRM, shall govern. The Commission directs the Bureau to proceed, within a reasonable time following the effective date of the final rules the Commission adopts in this R&O, to release the appropriate public notice(s) to implement its decision regarding the Chambers license.

31. The Commission emphasizes that, with this R&O, the Commission is not eliminating the existing prohibition on CGSA overlaps. Accordingly, whenever CGSA-expansion or new-system CGSA applications are mutually exclusive with other pending proposed operations, they will continue to be set for resolution by competitive bidding in a closed auction unless the competing applicants are able to resolve the mutual exclusivity beforehand (for example, through settlement) in accordance with the Commission's rules. Consistent with the Commission's proposals in the 2012 NPRM, the Commission adopts new 47 CFR 22.961 not only to govern the Chambers license, but also mutually exclusive Cellular Unserved Area applications, and the Commission consolidates into 47 CFR 22.961 certain other rules to eliminate redundancy and obsolescence in provisions addressing mutually exclusive Cellular Service applications.

32. In this section, the Commission explains various other changes to its rules in Part 22, Subpart H, and provisions found elsewhere in Part 22 as well as in Part 1. The Commission urges all parties to review and become familiar with all final rules the Commission adopts in the R&O in this proceeding, including the new and revised terms and definitions, all as set forth in Appendix A of this R&O and which will take effect as specified in the pertinent Ordering Clauses.

33. As stated above in the context of its decision concerning the Chambers license, obsolete and outdated terms are pervasive in the current rules applicable to the Cellular Service. Consistent with the Commission's proposal in the 2012 NPRM, a number of revised rules are being adopted in this R&O solely to bring the rules up to date by eliminating legacy terminology and cross-references, and by replacing outdated terms. In addition, the Commission adopts revisions here to conform certain rules in Parts 1 and 22 to the other rule changes the Commission adopts, as described above in this R&O.

34. Specifically, the Commission is deleting rules and adopting revised rules as follows: 47 CFR 1.929(b) (revised); 47 CFR 22.99 (deleting defined terms “Build-out transmitters,” “Five-year build-out period,” and “Partitioned Cellular market,” revising slightly the definitions for “Cellular Geographic Service Area,” “Extension,” and “Unserved Area,” and adding and defining the term “Cellular Market Area”); 47 CFR 22.131 (revising paragraphs (c)(3)(iii) and (d)(2)(iv)); 47 CFR 22.143 (revising paragraph (a)); 47 CFR 22.909 (revised); 47 CFR 22.911 (deleting paragraph (c) and revising paragraph (e)); 47 CFR 22.912 (revised); 47 CFR 22.946 (revised); 47 CFR 22.947 (deleted); 47 CFR 22.948 (revised); and 47 CFR 22.949 (revised). The Commission also proposed to delete 47 CFR 1.919(c) governing the reporting of Cellular cross-ownership interests, which is obsolete because the reporting requirement has sunset. Accordingly, the Commission deletes 47 CFR 1.919(c) as proposed. The Commission finds that adopting these rule changes serves the public interest and advances the Commission's regulatory reform agenda.

35. The Commission noted in the 2012 NPRM that, with sunset of the requirement to provide analog Cellular service, all of 47 CFR 22.901(b) had been rendered moot. Stating its belief that all Cellular licensees have had ample time to make their choice and file either the one-time AMPS sunset certification or the appropriate revised CGSA showing, the Commission proposed to terminate its collection of such certifications and to delete 47 CFR 22.901(b). Based on the record, the Commission finds that it serves the public interest to adopt revised 47 CFR 22.901, deleting paragraph (b) of the rule as proposed. As of the effective date of revised 47 CFR 22.901 that the Commission adopts in this R&O, the Commission will cease collecting AMPS sunset certifications from Cellular licensees.

36. The Commission proposed in the 2012 NPRM to correct a clerical error in the distance computation formula in 47 CFR 1.958(d)—an error that was introduced in the process of moving the provision containing the formula from Part 22 (then 47 CFR 22.157) to Subpart F of Part 1 of its rules. The error in this distance computation formula was inadvertent, and correction is obviously warranted. Accordingly, the Commission adopts the corrected rule as proposed.

37. The Commission invited comment in the 2012 NPRM on whether the revised Cellular Service-specific rules should be incorporated into Part 27. The Commission further suggested that, if the revised Cellular Service rules were to be moved into Part 27, then the rules for the Part 24 PCS, should also be moved into Part 27, and sought comment on optimal timing and whether a separate rulemaking should be launched to address any such relocations. The Commission concludes that relocating the Part 22, Subpart H Cellular Service rules is not appropriate. Moreover, the Commission also concludes that it is not appropriate to further consider relocation of the Part 24 PCS rules in this proceeding.

38. The Commission proposed in the 2012 NPRM generally to exempt the Gulf from the licensing revisions being considered, except that it proposed to subject Gulf licensees to the same field strength limit as all other Cellular licensees and also to certain rule changes designed to update and streamline the Cellular licensing regime. The Commission has already described, earlier in this R&O, its decision regarding field strength limit and the related issue of contractually negotiated SAB extensions with respect to the Gulf. The Commission concludes that, to the extent Gulf licensees are subject to Unserved Area licensing procedures under the current rules, consistent with the proposal in the 2012 NPRM, it serves the public interest that Gulf licensees not be exempt from the revised rules and procedures that the Commission adopts in this R&O to modernize and streamline the Cellular Unserved Area licensing model. This does not disrupt the Gulf regime.

39. To permit the orderly and effective resolution of the changes and issues raised in the 2012 NPRM, and consistent with numerous prior proceedings, the Commission adopted a companion Order imposing a freeze on the acceptance of certain Cellular applications and imposing other interim procedures. The freeze and related interim procedures were very limited so as to permit continued expansion of service to consumers by incumbents but nonetheless help the Commission identify Unserved Area in substantially licensed CMA Blocks for purposes of conducting the proposed overlay auction. Although the Commission is not concluding this proceeding with this R&O, the Commission finds that it no longer serves the goals of this proceeding or the public interest to continue the freeze or the interim procedures. Accordingly, the freeze and the interim procedures that were imposed will no longer be in force as of the date specified in the pertinent Ordering Clause.

40. Three of the rule amendments adopted by this R&O —47 CFR 22.165(e), 22.948, and 22.953—contain modified information collection requirements subject to the Paperwork Reduction Act of 1995 (“PRA”), Public Law 104-13. Those rule amendments will be submitted to the Office of Management and Budget (“OMB”) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the modified information collection requirements. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Commission has assessed the effects on small business concerns of the rule changes it is adopting by this R&O and finds that businesses with fewer than 25 people will benefit from the elimination of certain filing requirements as well as from the streamlining and updating of various requirements applicable to all Cellular licensees.

41. The Commission will send a copy of this R&O to Congress and the Government Accountability Office pursuant to the Congressional Review Act.

42. The Regulatory Flexibility Act of 1980 (“RFA”) requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, the Commission has prepared a Final Regulatory Flexibility Analysis (“FRFA”), set forth in Appendix C of the R&O, concerning the possible impact of the rule changes contained in the R&O.

43. Permit-But-Disclose. The Commission will continue to treat this proceeding as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making 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 rule 1.1206(b). In proceedings governed by rule 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 Commission's Electronic Comment Filing System (“ECFS”) available for that proceeding, and must be filed in their native format ( e.g., .doc, .xml, .ppt, searchable .pdf).

44. 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).

45. Accordingly, it is ordered, pursuant to Sections 1, 2, 4(i), 4(j), 7, 301, 302, 303, 307, 308, 309, and 332 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 157, 301, 302, 303, 307, 308, 309, and 332, that this report and order in WT Docket No. 12-40 is adopted.

46. It is further ordered that Parts 1 and 22 of the Commission's rules, 47 CFR parts 1 and 22, are amended, as specified in Appendix A, effective 30 days after publication in the Federal Register except as otherwise provided herein. It is the Commission's intention in adopting these rule changes that if any provision of the rules, or the application thereof to any person or circumstance, is held to be unlawful, the remaining portions of the rules not deemed unlawful, and the application of such rules to other persons or circumstances, shall remain in effect to the fullest extent permitted by law.

47. It is further ordered that the amendments adopted in the report and order, and specified in Appendix A, to Sections 22.165(e), 22.948, and 22.953 of the Commission's rules, 47 CFR 22.165(e), 22.948, and 22.953, which contain modified information collection requirements that require approval by the Office of Management and Budget under the Paperwork Reduction Act, will become effective after the Commission publishes a notice in the Federal Register announcing such approval and the relevant effective date.

48. It is futher ordered that, effective 30 days after publication in the Federal Register of a summary of this report and order, the freeze and interim procedures that were imposed as of the adoption date of the 2012 Notice of Proposed Rulemaking and Order in this WT Docket No. 12-40 will no longer be in effect.

49. It is further ordered that, pursuant to Section 801(a)(1)(A) of the Congressional Review Act, 5 U.S.C. 801(a)(1)(A), the Commission shall send a copy of this report and order to Congress and to the Government Accountability Office.

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

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 1 and 22 as follows:

This is a synopsis of the Commission's Report and Order, MB Docket No. 14-46, adopted September 15, 2014, and released September 16, 2014. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street SW., Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractors, Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160 or via email www.BCPIWEB.com. This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. The Commission will send a copy of the Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows: