[Federal Register Volume 63, Number 64 (Friday, April 3, 1998)]
[Rules and Regulations]
[Pages 16440-16445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8754]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[CC Docket No. 95-155; FCC 98-48]


Toll Free Service Access Codes

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: On March 30, 1998, the Commission released a Fourth Report and 
Order and Memorandum Opinion and Order in CC Docket No. 95-155 adopting 
an assignment method for toll free vanity numbers. The Fourth Report 
and Order is intended to ensure the efficient, orderly, and fair 
allocation of toll free numbers.

EFFECTIVE DATE: April 3, 1998.

FOR FURTHER INFORMATION CONTACT: Robin Smolen, Network Services 
Division, Common Carrier Bureau, (202) 418-2320.

SUPPLEMENTARY INFORMATION: This summarizes the Commission's Fourth 
Report and Order in CC Docket No. 95-155, In the Matter of Toll Free 
Service Access Codes, FCC 98-48, adopted March 27, 1998, and released 
March 30, 1998. The file is available for inspection and copying during 
the weekday hours of 9 a.m. to 4:30 p.m. in the Commission's Reference 
Center, room 239, 1919 M St., N.W., Washington D.C., or copies may be 
purchased from the Commission's duplicating contractor, ITS, Inc. 1231 
20th St., N.W., Washington, D.C. 20036, phone (202) 857-3800.

Analysis of Proceeding

    1. In the Fourth Report and Order in CC Docket No. 95-155, the 
Commission resolves how vanity numbers should be assigned. The 
Commission delegated authority to the Common Carrier Bureau to resolve 
those issues necessary for the assignment of the 888 set-aside vanity 
numbers and implementation of 877, including conservation plans, if 
needed, on any or all toll free codes in use to prevent exhaust of toll 
free numbers before deployment of the next toll free code. The 
Commission concludes that vanity numbers in the 877 toll free code, and 
toll free codes beyond 877, shall be released and made available on a 
first-come, first-served basis as each toll free code is deployed. The 
Commission further concludes that a right of first refusal shall be 
offered to current 800 subscribers holding 800 vanity numbers that 
correspond to the 888 vanity numbers that were initially set aside. If 
the 800 subscriber refrains from exercising its option to reserve the 
corresponding 888 vanity number, that number shall be released and made 
available on a first-come, first-served basis. The 888 set-aside 
numbers are to be made available for assignment 90 days after the 877 
code is deployed.
    2. With respect to this Fourth Report and Order, a Final Regulatory 
Flexibility Analysis is contained in the Attachment.
    3. It is ordered, pursuant to sections 1, 4(i), 201-205, 18, and 
251 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 201-205, 218, and 251, that the Fourth Report and Order in CC 
Docket 95-155 is hereby adopted.
    4. It is further ordered, pursuant to section 5(c)(1) of the 
Communications Act, as amended, 47 U.S.C. 155(c)(1), and Sec. 0.201(d) 
of the Commission's rules, 47 CFR 0.201(d), that authority is delegated 
to the Chief, Common Carrier Bureau to resolve those issues necessary 
for the assignment of the 888 set-aside vanity numbers and 
implementation of 877, including conservation plans, if needed on any 
or all toll free codes in use to prevent exhaust of toll free numbers 
before deployment of the next toll free code.
    5. It is further ordered that all policies, rules, and requirements 
of this document are effective April 3, 1998.

List of Subjects

47 CFR Part 52

    Local exchange carrier, Numbering, Telecommunications.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    Part 52 of Title 47 of the Code of Federal Regulations is amended 
as follows:

PART 52--NUMBERING

    1. The authority citation for part 52 continues to read as follows:

    Authority: Sections 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 
U.S.C. 151, 152, 154, 155 unless otherwise noted. Interpret or apply 
secs. 3, 4, 201-05, 207-09, 218, 225-7, 251-2, 271 and 332, 48 Stat. 
1070, as amended, 1077; 47 U.S.C. 153, 154, 201-05, 207-09, 218, 
225-7, 271 and 332 unless otherwise noted.


[[Page 16441]]


    2. Add Sec. 52.111 to subpart D to read as follows:


Sec. 52.111  Toll Free Number Assignment.

    Toll free numbers shall be made available on a first-come, first-
served basis unless otherwise directed by the Commission.

    Note: This attachment will not appear in the Code of Federal 
Regulations.

Attachment--Final Regulatory Flexibility Analysis

    1. As required by the Regulatory Flexibility Act (``RFA''), an 
Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated in 
the Toll Free Service Access Codes, Notice of Proposed Rulemaking 
(``Notice''). The Commission sought written public comment on the 
proposals in the Notice, including comments on the IRFA. This present 
Final Regulatory Flexibility Analysis (``FRFA'') in this Fourth Report 
and Order (``Order'') conforms to the RFA.
    2. To the extent that any statement contained in this FRFA is 
perceived as creating ambiguity with respect to our statements made in 
preceding sections of this Fourth Report and Order, the statements set 
forth in those preceding sections shall be controlling.

Need for, and Objectives of, the Order

    3. The Commission, pursuant Sections 1, 4(i), 201-205, 218, and 251 
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 
201-205, 218, and 251, adopts this Fourth Report and Order to ensure 
the efficient, fair, and orderly allocation of toll free numbers.

Summary of Significant Issues Raised by the Public Comments in Response 
to the IRFA

    4. In the Notice, the Commission included an IRFA of the possible 
impact on small entities of the proposals suggested in the Notice. The 
Commission noted that the proposals set forth in the Notice may have a 
significant economic impact on a substantial number of small entities, 
because toll free numbers are essential to many businesses both in 
terms of marketing and advertising products. Further, the Commission 
noted that toll free numbers may also have an intrinsic value to many 
businesses. The Commission sought written public comments on the IRFA. 
Although no comments were submitted in direct response to the IRFA, the 
Commission has addressed the issues raised in the general comments that 
pertain to small entities, and has considered the possible economic 
impact on small entities.

Description and Estimate of the Number of Small Entities to Which the 
Rules Will Apply

    5. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (``SBA''). A small organization is generally ``any not-
for-profit enterprise which is independently owned and operated and is 
not dominant in its field.'' Nationwide, as of 1992, there were 
approximately 275,801 small organizations. Small governmental 
jurisdiction generally means ``governments of cities, counties, towns, 
townships, villages, school districts, or special districts, with a 
population of less than 50,000.'' As of 1992, there were approximately 
85,006 such jurisdictions in the United States. This number includes 
38,978 counties, cities, and towns; of these, 37,566, or 96 percent, 
have populations of fewer than 50,000. The Census Bureau estimates that 
this ratio is approximately accurate for all governmental entities. 
Thus, of the 85,006 governmental entities, we estimate that 81,600 (91 
percent) are small entities. Below, we further describe and estimate 
the number of small entity licensees and regulates that may be affected 
by the proposed rules, if adopted.
    6. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide, as 
well as the numbers of commercial wireless entities, appears to be data 
the Commission publishes annually in its Telecommunications Industry 
Revenue report, regarding the Telecommunications Relay Service 
(``TRS''). According to data in the most recent report, there are 3,459 
interstate carriers. These carriers include, inter alia, local exchange 
carriers, wireline carriers and service providers, interexchange 
carriers, competitive access providers, operator service providers, pay 
telephone operators, providers of telephone toll service, providers of 
telephone exchange service, and resellers.
    7. The SBA has defined establishments engaged in providing 
``Radiotelephone Communications'' and ``Telephone Communications, 
Except Radiotelephone'' to be small businesses when they have no more 
than 1,500 employees. Below, we discuss the total estimated number of 
telephone companies falling within the two categories and the number of 
small businesses in each, and we then attempt to refine further those 
estimates to correspond with the categories of telephone companies that 
are commonly used under our rules.
    8. Although some affected incumbent local exchange carriers 
(``ILECs'') may have 1,500 or fewer employees, we do not believe that 
such entities should be considered small entities within the meaning of 
the RFA because they are either dominant in their field of operations 
or are not independently owned and operated, and therefore by 
definition not ``small entities'' or ``small business concerns'' under 
the RFA. Accordingly, our use of the terms ``small entities'' and 
``small businesses'' does not encompass small ILECs. Out of an 
abundance of caution, however, for regulatory flexibility analysis 
purposes, we will separately consider small ILECs within this analysis 
and use the term ``small ILECs'' to refer to any ILECs that arguably 
might be defined by the SBA as ``small business concerns.''
1. Responsible Organizations
    9. This Order applies to all Responsible Organizations 
(''RespOrgs''), which may be small business entities. Any entity that 
meets certain eligibility criteria may serve as a RespOrg. Neither the 
Commission nor the SBA has developed a definition of small entities 
that would apply specifically to RespOrgs. The most reliable source of 
information regarding the number of RespOrgs appears to be data 
collected by Database Service Management, Inc. (``DSMI''), the 
organization that administers the toll free allotment database. 
According to a May 8, 1996, report obtained from DSMI, 168 companies 
reported that they were RespOrgs. Although it seems certain that some 
of these RespOrgs are not independently owned and operated, or have 
more than 1,500 employees, we are unable at this time to estimate with 
greater precision the number of RespOrgs that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are fewer than 168 small entity RespOrgs that may be 
affected by

[[Page 16442]]

the decisions adopted in this Fourth Report and Order.
2. Toll Free Subscribers
    10. This Order also applies to all toll free subscribers, which 
also may be small business entities. ``As noted and discussed supra, 
the RFA generally defines the term ``small entity'' as having the same 
meaning as the terms ``small business,'' ``small organization,'' and 
``small governmental jurisdiction.'' We note here that toll free 
subscribers may include entities from all three of these categories of 
small entities.'' Neither the Commission nor the SBA has developed a 
definition of small entities specifically applicable to toll free 
subscribers. The most reliable source of information regarding the 
number of 800 subscribers of which we are aware appears to be the data 
we collect on the 800 numbers in use. According to our most recent 
data, at the end of 1995, the number of 800 numbers in use was 
6,987,063. Similarly, the most reliable source of information regarding 
the number of 888 subscribers appears to be the data we collect on the 
888 numbers in use. According to our most recent data, as of March 23, 
1998, a total of 6,115,550 888 numbers were in use. Although it seems 
certain that some of these subscribers either are not independently 
owned and operated businesses, or do not have more than 1,500 
employees, we are unable at this time to estimate with greater 
precision the number of toll free subscribers that would qualify as 
small business concerns under SBA's definition. Consequently, we 
estimate that there are fewer than 6,987,063 small entity 800 
subscribers and fewer than 6,115,550 888 subscribers that may be 
affected by the decisions adopted in this Fourth Report and Order.
3. Telephone and Wireless Entities
    11. Total Number of Telephone Companies Affected. The provisions 
adopted herein may have a significant effect on a substantial number of 
the small telephone companies identified by SBA. The United States 
Bureau of the Census (``the Census Bureau'') reports that, at the end 
of 1992, there were 3,497 firms engaged in providing telephone 
services, as defined therein, for at least one year. This number 
contains a variety of different categories of carriers, including local 
exchange carriers, interexchange carriers, competitive access 
providers, cellular carriers, mobile service carriers, operator service 
providers, pay telephone operators, PCS providers, covered SMR 
providers, and resellers. It seems certain that some of those 3,497 
telephone service firms may not qualify as small entities or small 
ILECs because they are not ``independently owned and operated.'' For 
example, a PCS provider that is affiliated with an interexchange 
carrier having more than 1,500 employees would not meet the definition 
of a small business. It seems reasonable to conclude, therefore, that 
fewer than 3,497 telephone service firms are small entity telephone 
service firms or small ILECs that may be affected by the decisions 
adopted in this Fourth Report and Order.
    12. Wireline Carriers and Service Providers. SBA has developed a 
definition of small entities for telephone communications companies 
other than radiotelephone (wireless) companies. The Census Bureau 
reports that, there were 2,321 such telephone companies in operation 
for at least one year at the end of 1992. According to SBA's 
definition, a small business telephone company other than a 
radiotelephone company is one employing no more than 1,500 persons. All 
but 26 of the 2,321 non-radiotelephone companies listed by the Census 
Bureau were reported to have fewer than 1,000 employees. Thus, even if 
all 26 of those companies had more than 1,500 employees, there would 
still be 2,295 non-radiotelephone companies that might qualify as small 
entities or small ILECs. Although it seems certain that some of these 
carriers are not independently owned and operated, we are unable at 
this time to estimate with greater precision the number of wireline 
carriers and service providers that would qualify as small business 
concerns under SBA's definition. Consequently, we estimate that there 
are fewer than 2,295 small entity telephone communications companies 
other than radiotelephone companies that may be affected by the 
decisions adopted in this Fourth Report and Order.
    13. Local Exchange Carriers. Neither the Commission nor the SBA has 
developed a definition for small providers of local exchange services 
(``LECs''). The closest applicable definition under the SBA rules is 
for telephone communications companies other than radiotelephone 
(wireless) companies. According to the most recent Telecommunications 
Industry Revenue data, 1,371 carriers reported that they were engaged 
in the provision of local exchange services. We do not have data 
specifying the number of these carriers that are either dominant in 
their field of operations, are not independently owned and operated, or 
have more than 1,500 employees, and thus are unable at this time to 
estimate with greater precision the number of LECs that would qualify 
as small business concerns under the SBA's definition. Consequently, we 
estimate that fewer than 1,371 providers of local exchange service are 
small entities or small ILECs that may be affected by the proposed 
rules, if adopted.
    14. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (``IXCs''). The closest applicable 
definition under the SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies. According to 
the most recent Telecommunications Industry Revenue data, 143 carriers 
reported that they were engaged in the provision of interexchange 
services. We do not have data specifying the number of these carriers 
that are not independently owned and operated or have more than 1,500 
employees, and thus are unable at this time to estimate with greater 
precision the number of IXCs that would qualify as small business 
concerns under the SBA's definition. Consequently, we estimate that 
there are fewer than 143 small entity IXCs that may be affected by the 
proposed rules, if adopted.
    15. Competitive Access Providers. Neither the Commission nor the 
SBA has developed a definition of small entities specifically 
applicable to competitive access services providers (``CAPs''). The 
closest applicable definition under the SBA rules is for telephone 
communications companies other than except radiotelephone (wireless) 
companies. According to the most recent Telecommunications Industry 
Revenue data, 109 carriers reported that they were engaged in the 
provision of competitive access services. We do not have data 
specifying the number of these carriers that are not independently 
owned and operated, or have more than 1,500 employees, and thus are 
unable at this time to estimate with greater precision the number of 
CAPs that would qualify as small business concerns under the SBA's 
definition. Consequently, we estimate that there are fewer than 109 
small entity CAPs that may be affected by the proposed rules, if 
adopted..
    16. Operator Service Providers. Neither the Commission nor the SBA 
has developed a definition of small entities specifically applicable to 
providers of operator services. The closest applicable definition under 
the SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies. According to the most recent

[[Page 16443]]

Telecommunications Industry Revenue data, 27 carriers reported that 
they were engaged in the provision of operator services. We do not have 
data specifying the number of these carriers that are not independently 
owned and operated or have more than 1,500 employees, and thus are 
unable at this time to estimate with greater precision the number of 
operator service providers that would qualify as small business 
concerns under the SBA's definition. Consequently, we estimate that 
there are fewer than 27 small entity operator service providers that 
may be affected by the proposed rules, if adopted.
    17. Pay Telephone Operators. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to pay 
telephone operators. The closest applicable definition under SBA rules 
is for telephone communications companies other than radiotelephone 
(wireless) companies. According to the most recent Telecommunications 
Industry Revenue data, 441 carriers reported that they were engaged in 
the provision of pay telephone services. We do not have data specifying 
the number of these carriers that are not independently owned and 
operated or have more than 1,500 employees, and thus are unable at this 
time to estimate with greater precision the number of pay telephone 
operators that would qualify as small business concerns under the SBA's 
definition. Consequently, we estimate that there are fewer than 441 
small entity pay telephone operators that may be affected by the 
proposed rules, if adopted.
    18. Resellers (including debit card providers). Neither the
    Commission nor the SBA has developed a definition of small entities 
specifically applicable to resellers. The closest applicable SBA 
definition for a reseller is a telephone communications company other 
than radiotelephone (wireless) companies. According to the most recent 
Telecommunications Industry Revenue data, 339 reported that they were 
engaged in the resale of telephone service. We do not have data 
specifying the number of these carriers that are not independently 
owned and operated or have more than 1,500 employees, and thus are 
unable at this time to estimate with greater precision the number of 
resellers that would qualify as small business concerns under the SBA's 
definition. Consequently, we estimate that there are fewer than 339 
small entity resellers that may be affected by the proposed rules, if 
adopted.
    19. Wireless (Radiotelephone) Carriers. SBA has developed a 
definition of small entities for radiotelephone (wireless) companies. 
The Census Bureau reports that there were 1,176 such companies in 
operation for at least one year at the end of 1992. According to SBA's 
definition, a small business radiotelephone company is one employing 
fewer than 1,500 persons. The Census Bureau also reported that 1,164 of 
those radiotelephone companies had no more than 1,000 employees. Thus, 
even if all of the remaining 12 companies had more than 1,500 
employees, there would still be 1,164 radiotelephone companies that 
might qualify as small entities if they are independently owned or 
operated. Although it seems certain that some of these carriers are not 
independently owned and operated, we are unable at this time to 
estimate with greater precision the number of radiotelephone carriers 
and service providers that would qualify as small business concerns 
under SBA's definition. Consequently, we estimate that there are fewer 
than 1,164 small entity radiotelephone companies that may be affected 
by the decisions adopted in this Fourth Report and Order.
    20. Cellular Licensees. Neither the Commission nor the SBA has 
developed a definition of small entities applicable to cellular 
licensees. Therefore, the applicable definition of small entity is the 
definition under the SBA rules applicable to radiotelephone (wireless) 
companies. This provides that a small entity is a radiotelephone 
company employing no more than 1,500 persons. According to the Bureau 
of the Census, only twelve radiotelephone firms out of a total of 1,178 
such firms which operated during 1992 had 1,000 or more employees. 
Therefore, even if all twelve of these firms were cellular telephone 
companies, nearly all cellular carriers were small businesses under the 
SBA's definition. In addition, we note that there are 1,758 cellular 
licenses; however, a cellular licensee may own several licenses. In 
addition, according to the most recent Telecommunications Industry 
Revenue data, 804 carriers reported that they were engaged in the 
provision of either cellular service or Personal Communications Service 
(``PCS'') services, which are placed together in the data. We do not 
have data specifying the number of these carriers that are not 
independently owned and operated or have more than 1,500 employees, and 
thus are unable at this time to estimate with greater precision the 
number of cellular service carriers that would qualify as small 
business concerns under the SBA's definition. Consequently, we estimate 
that there are fewer than 804 small cellular service carriers that may 
be affected by the proposed rules, if adopted.
    21. Private and Common Carrier Paging. The Commission has proposed 
a two-tier definition of small businesses in the context of auctioning 
licenses in the Common Carrier Paging and exclusive Private Carrier 
Paging services. Under the proposal, a small business will be defined 
as either (1) an entity that, together with its affiliates and 
controlling principals, has average gross revenues for the three 
preceding years of not more than $3 million, or (2) an entity that, 
together with affiliates and controlling principals, has average gross 
revenues for the three preceding calendar years of not more than $15 
million. Because the SBA has not yet approved this definition for 
paging services, we will utilize the SBA's definition applicable to 
radiotelephone companies, i.e., an entity employing no more than 1,500 
persons. At present, there are approximately 24,000 Private Paging 
licenses and 74,000 Common Carrier Paging licenses. According to the 
most recent Telecommunications Industry Revenue data, 172 carriers 
reported that they were engaged in the provision of either paging or 
``other mobile'' services, which are placed together in the data. We do 
not have data specifying the number of these carriers that are not 
independently owned and operated or have more than 1,500 employees, and 
thus are unable at this time to estimate with greater precision the 
number of paging carriers that would qualify as small business concerns 
under the SBA's definition. Consequently, we estimate that there are 
fewer than 172 small paging carriers that may be affected by the 
proposed rules, if adopted. We estimate that the majority of private 
and common carrier paging providers would qualify as small entities 
under the SBA definition.
    22. Mobile Service Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
mobile service carriers, such as paging companies. As noted above in 
the section concerning paging service carriers, the closest applicable 
definition under the SBA rules is that for radiotelephone (wireless) 
companies, and the most recent Telecommunications Industry Revenue data 
shows that 172 carriers reported that they were engaged in the 
provision of either paging or ``other mobile'' services. Consequently, 
we estimate that there are fewer than 172 small mobile service carriers 
that may be affected by the proposed rules, if adopted.

[[Page 16444]]

    23. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequency blocks designated A through 
F, and the Commission has held auctions for each block. The Commission 
defined ``small entity'' for Blocks C and F as an entity that has 
average gross revenues of less than $40 million in the three previous 
calendar years. For Block F, an additional classification for ``very 
small business'' was added and is defined as an entity that, together 
with their affiliates, has average gross revenues of not more than $15 
million for the preceding three calendar years. These regulations 
defining ``small entity'' in the context of broadband PCS auctions have 
been approved by the SBA. No small businesses within the SBA-approved 
definition bid successfully for licenses in Blocks A and B. There were 
90 winning bidders that qualified as small entities in the Block C 
auctions. A total of 93 small and very small business bidders won 
approximately 40% of the 1,479 licenses for Blocks D, E, and F. 
However, licenses for blocks C through F have not been awarded fully, 
therefore there are few, if any, small businesses currently providing 
PCS services. Based on this information, we conclude that the number of 
small broadband PCS licensees will include the 90 winning C Block 
bidders and the 93 qualifying bidders in the D, E, and F blocks, for a 
total of 183 small entity PCS providers as defined by the SBA and the 
Commission's auction rules.
    24. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission 
has defined ``small entity'' in auctions for geographic area 800 MHz 
and 900 MHz SMR licenses as a firm that had average annual gross 
revenues of less than $15 million in the three previous calendar years. 
This definition of a ``small entity'' in the context of 800 MHz and 900 
MHz SMR has been approved by the SBA. The decisions adopted in this 
Fourth Report and Order may apply to SMR providers in the 800 MHz and 
900 MHz bands that either hold geographic area licenses or have 
obtained extended implementation authorizations. We do not know how 
many firms provide 800 MHz or 900 MHz geographic area SMR service 
pursuant to extended implementation authorizations, nor how many of 
these providers have annual revenues no more than $15 million. We 
assume, for purposes of this FRFA, that all of the extended 
implementation authorizations may be held by small entities, which may 
be affected by the decisions adopted in this Fourth Report and Order.
    25. The Commission recently held auctions for geographic area 
licenses in the 900 MHz SMR band. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. Based on this 
information, we conclude that the number of geographic area SMR 
licensees affected by the decisions adopted in this Fourth Report and 
Order includes these 60 small entities. In the recently concluded 800 
MHz SMR auction there were 524 licenses awarded to winning bidders, of 
which 38 were won by small or very small entities. We assume that all 
38 may be affected by the decisions adopted in this Fourth Report and 
Order.
4. Cable System Operators (SIC 4841)
    26. SBA has developed a definition of small entities for cable and 
other pay television services, which includes all such companies 
generating less than $11 million in revenue annually. This definition 
includes cable systems operators, closed circuit television services, 
direct broadcast satellite services, multipoint distribution systems, 
satellite master antenna systems and subscription television services. 
According to the Census Bureau data from 1992, there were 1,788 total 
cable and other pay television services and 1,423 had less than $11 
million in revenue.
    27. The Commission has developed its own definition of a small 
cable system operator for the purposes of rate regulation. Under the 
Commission's rules, a ``small cable company,'' is one serving fewer 
than 400,000 subscribers nationwide. Based on our most recent 
information, we estimate that there were 1,439 cable operators that 
qualified as small cable system operators at the end of 1995. Since 
then, some of those companies may have grown to serve over 400,000 
subscribers, and others may have been involved in transactions that 
caused them to be combined with other cable operators. Consequently, we 
estimate that there are fewer than 1,439 small entity cable system 
operators that may be affected by the decisions adopted in this Fourth 
Report and Order.
    28. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than one percent of 
all subscribers in the United States and is not affiliated with any 
entity or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 66,000,000 
subscribers in the United States. Therefore, we found that an operator 
serving fewer than 660,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that the number of cable 
operators serving 660,000 subscribers or less totals 1,450. We do not 
request nor do we collect information concerning whether cable system 
operators are affiliated with entities whose gross annual revenues 
exceed $250,000,000, and thus are unable at this time to estimate with 
greater precision the number of cable system operators that would 
qualify as small cable operators under the definition in the 
Communications Act.

Description of Projected Reporting, Recordkeeping and Other Compliance 
Requirements

    29. In this Fourth Report and Order, we adopt a requirement that 
DSMI release vanity numbers in the 877 toll free code and in toll free 
codes beyond 877 at the same time as each code is deployed, to be made 
available on a first-come, first-served basis. In addition, we adopt a 
requirement that RespOrgs assign the 888 vanity numbers that were 
initially set aside, to their 800 customers holding the corresponding 
800 vanity number, provided these 800 subscribers exercise an option to 
reserve the 888 set-aside number. Finally, we adopt a requirement that 
DSMI release the 888 set-aside vanity numbers, to be made available on 
a first-come, first-served basis if the 800 subscriber chooses to 
refrain from exercising its option to reserve the number. We conclude 
that these requirements are consistent with our obligation under 
section 251(e) of the Act to ensure that numbers are made available on 
an equitable basis. We believe that these requirements will not unduly 
burden DSMI because the act of releasing numbers is part of DSMI's 
responsibility as administrator of the toll free database and will not 
require any additional recordkeeping. Furthermore, these requirements 
will reduce DSMI's burden by no longer requiring DSMI to ensure that 
these numbers remain unavailable. We also believe that these 
requirements will not unduly burden RespOrgs, including small business 
entities, because the act of assigning numbers to subscribers and 
releasing numbers to the spare pool is part of RespOrgs' 
responsibilities as managers of toll free subscribers' database 
records. We further believe that these requirements will not unduly 
burden subscribers, including small business entities, because the 
subscribers may

[[Page 16445]]

decline to exercise the option. If however, the subscriber chooses to 
exercise the option, the necessary steps involved in reserving these 
numbers do not exceed the necessary steps involved in reserving any 
other toll free numbers. We anticipate that no new skills are necessary 
to comply with this requirement, and that no additional staff or other 
resources should be necessary to comply with this requirement. 
Furthermore, we adopt no new reporting or recordkeeping requirements 
for toll free subscribers, including small business entities.

Significant Alternatives and Steps Taken by Agency To Minimize 
Significant Economic Impact on a Substantial Number of Small Entities 
Consistent With Stated Objectives

    30. As stated, we conclude that releasing vanity numbers in the 877 
code and codes beyond 877 as each code is deployed to be made available 
on a first-come, first-served basis, is consistent with our obligation 
under section 251(e) of the Act to ensure that numbers are made 
available on an equitable basis. This conclusion is in the public 
interest, and will not have an adverse impact on toll free subscribers, 
including small business entities, because it will open the toll free 
market to all toll free subscribers on an equal basis. Small toll free 
subscribers will be affected in the same manner as non-small business 
entities. We also conclude that allowing current 800 subscribers a 
right of first refusal to the corresponding 888 vanity numbers 
initially set aside is consistent with our obligation under Section 
251(e) of the Act to ensure that numbers are made available on an 
equitable basis. This conclusion is also in the public interest, and 
will not have an adverse impact on toll free subscribers, including 
small business entities, because all toll free subscribers, including 
small business entities, with an 800 number corresponding to an 888 
set-aside number will have a right of first refusal.
    31. We considered providing a right of first refusal to subscribers 
that expressed interest in replicating their toll free numbers beyond 
the 888 toll free code. We declined to accept various proposals 
associated with a right of first refusal for future codes. We concluded 
that such a requirement would have conflicted with our goal to allocate 
toll free numbers efficiently, fairly, and on an orderly basis. We 
found that a right of first refusal for future codes would have been 
discriminatory against new subscribers because it would have precluded 
them from obtaining certain desirable numbers. If incumbent subscribers 
were allowed to exercise a right of first refusal in future codes, they 
would have a decided advantage over entities by precluding them from 
obtaining these numbers to represent their businesses. The entities 
that would be placed at a disadvantage by such an approach would 
probably have included small business entities. New business entities 
are often small, and the new entities would have been the entities 
precluded from obtaining those desirable vanity numbers. By allowing a 
right of first refusal for the 888 set-aside only, new subscribers, 
including small business entities, will have the opportunity to reserve 
desirable numbers in 877 and codes beyond 877.
    32. We also considered providing a right of first refusal with a 
fee. We declined to accept various proposals associated with a fee-
based right of first refusal. We concluded that such a requirement 
would not solve the problems associated with discriminatory access to 
toll free numbers. In addition, such a requirement could place an undue 
financial burden on small business entities that may not have the 
financial resources to comply with such a fee requirement.
    33. We also considered imposing a Standard Industrial 
Classification (``SIC'') code requirement. Under this option, an 
incumbent toll free subscriber with commercial concerns related to 
assignment of the corresponding vanity number in a subsequent toll free 
code would have reported its code to its toll free service provider or 
RespOrg, that in turn would have reported the code to DSMI. DSMI would 
have incorporated this SIC code into the subscriber's record and 
queried the database when applicants requested a corresponding number 
in another code to determine if their SIC code is the same as the 
current holder of the corresponding number in the previous toll free 
code. If the two parties shared the same SIC code and were, therefore, 
considered competitors, the applicant for the new number would have 
been prohibited from obtaining that number. We concluded that this 
option is inconsistent with our goal to allocate toll free numbers on 
an efficient, fair, and orderly basis. We determined that such a 
requirement would be administratively burdensome, difficult to apply 
because of a rapidly changing market, and subject to manipulation. 
Moreover, as with a right of first refusal, this option would have 
provided incumbent subscribers with a decided advantage over entities 
in the same line of business by precluding them from obtaining certain 
desirable numbers. The entities that would have been placed at a 
disadvantage by such an approach would have probably included small 
business entities. New business entities are often small, and the new 
entities would have been the entities precluded form obtaining those 
888 numbers.
    34. The Office of Advocacy, U.S. Small Business Administration 
(''SBA''), filed a Written Ex Parte Presentation on March 17, 1998 
requesting a delay in the opening of the 877 toll free code until the 
Commission has resolved the issue of vanity-number treatment and has 
analyzed alternatives that can ease the burden on small entities.
    This Fourth Report and Order addresses the issue of vanity-number 
assignment and in doing so considers the effects on small businesses. 
Furthermore, delaying 877 deployment would have adverse consequences on 
new RespOrgs planning their businesses around the April 5, 1998 date. 
New business entities are often small, and these entities would have 
been placed at a disadvantage by delaying 877 deployment.

Report to Congress

    35. The Commission will send a copy of the Toll Free Service Access 
Codes, Fourth Report and Order, including this Final Regulatory 
Flexibility Analysis, in a report to be sent to Congress pursuant to 
the Small Business Regulatory Enforcement Fairness Act of 1996, see 5 
U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of 
the Toll Free Service Access Codes, Fourth Report and Order, including 
FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the Toll Free Service Access Codes, Fourth 
Report and Order and FRFA (or summaries thereof) will also be published 
in the Federal Register. See 5 U.S.C. 604(b).

[FR Doc. 98-8754 Filed 4-2-98; 8:45 am]
BILLING CODE 6712-01-P