[Federal Register Volume 63, Number 238 (Friday, December 11, 1998)]
[Proposed Rules]
[Pages 68418-68424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32910]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 65

[CC Docket No. 98-177; FCC 98-238]


1998 Biennial Regulatory Review--Petition for Section 11 Biennial 
Review.

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: On May 8, 1998, SBC Communications (``SBC'') filed a petition 
for rulemaking in which SBC presents a number of proposals designed to 
reduce or eliminate Commission regulations as part of the 1998 biennial 
review. The attached Notice of Proposed Rulemaking (``NPRM'') commences 
a biennial review proceeding to seek comment on SBC's proposals to 
reduce or eliminate regulations pertaining to incumbent local exchange 
carriers (``LECs''). Specifically, the NPRM seeks comments on SBC's 
proposals to revise the Commission's rate of return represcription 
rules, to eliminate the requirement to use the lead lag study 
methodology for calculating the cash working capital of large incumbent 
LECs, to detariff certain services subject to competition, to further 
streamline the cost allocation manual filing procedures, and to 
simplify the Commission's wireless radio rules. The NPRM declines to 
seek comment on the remaining SBC proposals because such proposals 
either involve rules promulgated as a result of the 1996 Act of the 
proposals or involve rules or

[[Page 68419]]

proposals that are already the subject of biennial review or other 
proceedings.

DATES: Submit comments on or before January 11, 1999.
    Submit reply comments on or before January 25, 1999.

ADDRESSES: Federal Communications Commission, 445-12th Street, NW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Anthony Dale, Common Carrier Bureau, 
Accounting Safeguards Division, (202) 418-2260, or via E-mail to 
``[email protected]''.

SUPPLEMENTARY INFORMATION:
    Released: November 24, 1998
    1. In this NPRM we sought comments on several proposals submitted 
by SBC Communications, Inc. (SBC) in a recently filed Petition for 
Section 11 Biennial Review. Section 11 of the Communications Act of 
1934, as amended (the Act), instructs the Commission, in every even-
numbered year beginning in 1998, to ``review all regulations issued 
under this Act in effect at the time of the review that apply to the 
operations or activities of any provider of telecommunications 
service'' and to ``determine whether any such regulation is no longer 
necessary in the public interest as the result of meaningful economic 
competition between providers of such service.'' (See 47 U.S.C. 
161(a)). Section 11 further instructs the Commission to ``repeal or 
modify any regulation it determines to be no longer necessary in the 
public interest.'' (See 47 U.S.C. 161(b)). In addition, section 202(h) 
of the Telecommunications Act of 1996 (the 1996 Act) requires the 
Commission to review its broadcast ownership rules biennially as part 
of the review conducted pursuant to section 11. (See Telecommunications 
Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996)). Specifically, 
section 202(h) of the Act provides that the Commission ``shall review . 
. . all of its ownership rules biennially as part of its regulatory 
reform review under section 11 of the Communications Act of 1934 and 
shall determine whether any of such rules are necessary in the public 
interest as the result of competition. The Commission shall repeal or 
modify any regulation it determines to be no longer in the public 
interest.'' (See Section 202(h)) of the Telecommunications Act of 1996.
    2. On November 18, 1997, the Chairman announced that the Commission 
was commencing the 1998 biennial regulatory review of 
telecommunications regulations and broadcast ownership regulations, 
earlier than required. In addition, the announcement indicated that the 
scope of the first biennial regulatory review would be broader than 
statutorily required. Specifically, the announcement indicated that the 
first biennial review presented a key opportunity for serious ``top-to-
bottom'' examination of the Commission's rules and procedures to 
determine which of them need to be revised or eliminated. (See FCC News 
Release, ``1998 Biennial Review of FCC Regulations Begun Early'' (Nov. 
18, 1997)). Commission staff then undertook a broad review of 
Commission regulations. A two-fold approach was followed: (1) each of 
the operating Bureaus and the Office of Engineering and Technology 
(OET) conducted a review of rules under its jurisdiction; and (2) a 
team made up of representatives of the Office of Plans and Policy 
(OPP), the Chief Economist and his staff and the Competition Division 
of the Office of General Counsel (OGC) conducted a parallel review of 
Commission rules on a cross-cutting basis. In order to maximize the 
universe of rules that might be candidates for modification or 
elimination, the staff did not focus simply on the statutory standard 
of whether ``meaningful economic competition'' justified changes in the 
rules. Thus, for example, despite the lack of the development of such 
competition in the local exchange market, the staff nevertheless 
included rules relating to local exchange carriers as within the scope 
of the review.
    As part of this process, the staff sought and received substantial 
public input. Specifically, beginning on December 17, 1997 and 
continuing through January 30, 1998, each of the five operating 
bureaus, together with OGC, hosted a series of public forums to receive 
ideas from the public regarding Commission regulations that are 
potential candidates for repeal or modification during the first 
biennial regulatory review conducted pursuant to section 11 of the Act. 
In addition, staff from the Bureaus and OGC attended a series of five 
meetings held by practice groups of the Federal Communications Bar 
Association (FCBA), also to receive ideas about biennial review 
candidates. The staff also sought input from the Commissioners. 
Following this broad review of Commission regulations, on February 5, 
1998, the Commission staff released a list of 31 proceedings it 
proposed the Commission initiate as part of the 1998 biennial 
regulatory review. (See February 5 News Release)). The list of proposed 
rulemaking and notice of inquiry proceedings proposed examining a wide 
variety of subsets of Commission's rules. Nearly two-thirds of the 
proposed proceedings involved common carriers, and the proceedings 
covered hundreds of individual rules. The staff also noted that the 
Commission had many ongoing proceedings consistent with the 
deregulatory and streamlining goals of section 11.
    3. As the News Release specifically noted, the list of proposed 
biennial review proceedings was a working document that reflected the 
Commission staff's plans. The staff established an electronic mailbox 
<[email protected]> specifically for the purpose of soliciting ongoing 
deregulatory input from the public. In this regard, the process of 
determining which rules are likely candidates for modification or 
streamlining has been ongoing, and consequently the list of 31 
proceedings proposed by the Commission staff was neither exhaustive nor 
static. We disagree with SBC that this process, including the 
proceedings that we have initiated and will initiate, does not comply 
with the statutory requirements. It appears that SBC may be suggesting 
that the Commission should instead have initiated a single mega-
rulemaking proceeding to review every rule relating to common carriers 
(including wireline, wireless and international). We believe such a 
mega-proceeding is not required by statute, would be unworkable, and 
would result in less meaningful deregulation and streamlining than the 
approach the Commission is taking. The statute does not require a 
rulemaking determination by the Commission with respect to every rule 
that continues to serve the public interest and such an approach would 
inevitably fall under its own weight, thereby undermining the goal of 
section 11--to identify rules that no longer serve the public interest 
and modify or eliminate them.
    We ask for comment on the following SBC proposals:
    4. Rate-of-Return Prescription (47 CFR 65.101). SBC argues that 
section 65.101 et seq. of our regulations, which trigger an inquiry 
into whether a revised rate-of-return prescription is needed once 
certain financial triggers are met, are a ``vestige of rate of return 
regulation which is no longer needed under price cap regulation.'' We 
seek comment on SBC's statement and whether these rules continue to 
serve any purpose for carriers subject to price cap regulation.
    5. Cash Working Capital Studies (47 CFR 65.820(d)). SBC asserts 
that the lead-lag study method required for Class A carriers to 
calculate the working capital element of the interstate rate base is an 
overly burdensome endeavor for calculating what ``traditionally

[[Page 68420]]

makes up far less than 1% of the total rate base.'' As detailed in 
Exhibit A of the SBC Petition, SBC recommends that carriers be given 
the option of including a cash working capital allowance in the rate 
base or else foregoing recovery. SBC further proposes that to the 
extent carriers elect an allowance for cash working capital, carriers 
should be allowed to freeze the amount of cash working capital or else 
choose from three methods of calculating the cash working capital 
allowance: the lead-lag study method currently required by Commission 
regulations; the balance sheet method; or the 45-day formula method 
detailed in Exhibit A to the SBC petition. We seek comment on SBC 
proposals to reduce the burdens currently imposed on Class A carriers 
by the lead-lag studies.
    6. Detariffing of Services Subject to Competition. SBC states that 
certain local exchange carrier (LEC) services are competitive and that 
the Commission should detariff these services. Specifically, SBC 
indicates its belief that special access services, direct trunked 
transport, operator services, directory assistance and interexchange 
services are competitive and should be detariffed for all carriers. We 
seek comment on SBC's conclusions about competition for these services 
and whether detariffing would be appropriate as an exercise of our 
section 10 forbearance authority. (See 47 U.S.C. 160). Commenters 
supporting detariffing should indicate whether they favor permissive 
detariffing or complete detariffing.
    7. Part 64 Cost Allocation Manual (CAM) Simplification. SBC asserts 
that the Part 64 CAM requirements are too complex. SBC further argues 
that price cap regulation adequately guards against ratepayer 
subsidization of nonregulated activities, which the CAM requirements 
originally were designed to protect against. Exhibit D to the SBC 
Petition contains detailed suggestions for how many of the current CAM 
requirements could be simplified. We seek comment on these 
recommendations to simplify the CAM process in a manner consistent with 
its underlying purposes of discouraging, and facilitating detection of, 
improper cost allocations and cross-subsidization. (See Accounting 
Safeguards Under the Telecommunications Act of 1996, Report and Order, 
12 FCC Rcd 2993, paras. 13, 24, 50 (1996) (Accounting Safeguards 
Order), recon. pending.
    8. We note that some of SBC's CAM simplification proposals are 
already the subject of pending biennial review proceedings or other 
Commission proceedings. In the Accounting Reductions NPRM, we proposed 
streamlining certain CAM filing and CAM audit requirements, 
particularly with respect to mid-size incumbent local exchange 
carriers. In the Accounting Reductions NPRM, we proposed to establish 
less burdensome CAM procedures for the mid-sized incumbent LECs and to 
reduce the frequency with which independent audits of the cost 
allocations based upon CAMs are required. In addition, we note that the 
Accounting Safeguards Division of the Common Carrier Bureau recently 
streamlined certain CAM filing procedures with respect to an incumbent 
local exchange carrier's affiliate transactions. Finally, we note that 
SBC's proposal regarding cost allocation procedures for incidental 
interLATA services is an issue raised by SBC in its Petition for 
Reconsideration of the Accounting Safeguards Order. Because we plan to 
address the resolution of these proposals in existing proceedings, 
commenters should avoid submitting redundant comments in this docket.
    9. Affiliate Transaction Rules. SBC suggests that, like the Part 64 
CAM process, the Commission should be able to simplify its affiliate 
transactions rules. We note that the two issues raised by SBC are 
issues raised by either SBC or other parties in Petitions for 
Reconsideration of the Accounting Safeguards Order. Without seeking 
comment on the two issues raised by SBC, we seek general comments on 
other ways the affiliate transactions rules might be simplified in a 
manner consistent with the underlying purposes of discouraging, and 
facilitating detection of, improper cost allocations and cross-
subsidization.
    10. Wireless Radio Rules. SBC states that process and procedure 
rules for wireless radio services are located in various rule parts. It 
suggests that ``[t]o ensure consistent application and understanding of 
the rules related to the provision of wireless services, the rules must 
be streamlined and/or eliminated as appropriate to remove 
duplication.'' The Commission has already initiated a proceeding to 
substantially streamline and consolidate these regulations to 
facilitate conversion to the universal licensing system. The goals of 
that proceeding are ``to establish a simplified set of rules that (1) 
minimizes filing requirements as much as possible; (2) eliminates 
redundant, inconsistent, or unnecessary submission requirements; and 
(3) assures ongoing collection of reliable licensing and ownership 
data.'' We believe that the universal licensing system proceeding 
addresses many of the issues that SBC raises in its petition. We also 
note that the Commission has recently requested comments on whether 
there are any regulations of wireless telecommunications carriers from 
which we should forbear under section 10 of the 1996 Act. Because we 
want to ensure that we receive as full a record as possible, and as 
many suggestions as possible, we therefore seek comment on SBC's 
general proposals that may go beyond the proposed changes set out in 
these proceedings, including specific suggestions for rule changes.
    11. Many additional SBC proposals mirror the staff's list of 
proposed biennial review proceedings. The Commission has already 
initiated proceedings on these matters, or will do so in the near 
future. Accordingly, we do not seek comment on those matters here. The 
proposals contained in the SBC Petition that track the staff's 
proposals have been incorporated by reference into each of the recently 
released notices. Other biennial review proposals advocated by SBC 
involve regulations only recently adopted as part of the Commission's 
implementation of the Telecommunications Act of 1996. With 
implementation just recently underway, and in some instances appellate 
review still pending, we believe it premature to modify or eliminate 
these rules as part of the 1998 biennial review. Yet another subset of 
biennial review proposals included in the SBC Petition involves issues 
that are already the subject of ongoing proceedings, either before the 
Commission or the courts. We think it more appropriate to handle these 
proposals in the context of such existing proceedings. These various 
proposals may be further considered at an appropriate time in the 
future. Finally, we do not request comment on SBC's suggestion that we 
reduce our enforcement efforts with respect to those rules that do 
remain on the books and on its request that we use the biennial review 
to increase regulation of others. We believe neither of these proposals 
is consistent with the thrust of section 11. Specifically, we do not 
believe it is appropriate that section 11 be used as a shield for 
carriers to avoid the consequences of violations of the Communications 
Act or Commission rules, or as a sword to impose new regulatory burdens 
on others.
    12. By this NPRM, we solicit comment on those proposals submitted 
by SBC so identified above. Commenters should frame their discussion 
and analysis in a manner consistent with the analytical framework set 
forth by Congress in section 11 of the Act. In addition to our more 
specific requests for comment above, we invite

[[Page 68421]]

commenters to submit information on the costs and benefits of the rules 
at issue in this proceeding and of our proposed modifications. We also 
ask commenters to provide data and evidence to support their positions 
so as to facilitate objective analysis of the issues raised.
    13. This matter shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's revised ex parte rules, 
which became effective June 2, 1997. See Amendment of 47 CFR 1.1200 et 
seq. Concerning Ex Parte Presentations in Commission Proceedings, GC 
Docket No. 95-21, Report and Order, 12 FCC Rcd 7348, 7356-57, para. 27 
(citing 47 CFR 1.1204(b)(1)). Persons making oral ex parte 
presentations are reminded that memoranda summarizing the presentations 
must contain summaries of the substance of the presentations and not 
merely a listing of the subjects discussed. More than a one or two 
sentence description of the views and arguments presented is generally 
required. See 47 CFR 1.1206(b)(2), as revised. Other rules pertaining 
to oral and written presentations are set forth in Section 1.1206(b) as 
well.
    14. This Notice of Proposed Rulemaking contains either a proposed 
or modified information collection. As part of its continuing effort to 
reduce paperwork burdens, we invite the general public and the Office 
of Management and Budget (OMB) to take this opportunity to comment on 
the information collections contained in this NPRM, as required by the 
Paperwork Reduction Act of 1995, Pub. L. No. 114-13. Public and agency 
comments are due at the same times as other comments on this NPRM; OMB 
comments are due 60 days from the date of publication of this NPRM in 
the Federal Register. Comments should address: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    15. The Regulatory Flexibility Act (RFA) requires that an initial 
regulatory flexibility analysis be prepared for notice-and-comment 
rulemaking proceedings, unless the agency certifies that ``the rule 
will not, if promulgated, have a significant economic impact on a 
substantial number of small entities.'' The RFA defines the term 
``small entity'' as having the same meaning as ``small business 
concern'' under the Small Business Act (SBA), which defines ``small 
business concern'' as ``one which is independently owned and operated 
and which is not dominant in its field of operation.'' Section 121.201 
of the SBA regulations defines small telecommunications entities in SIC 
Code 4813 (Telephone Communications, Except Radiotelephone) as any 
entity with fewer than 1,500 employees at the holding company level. 
Some entities employing fewer than 1,500 employees at the holding 
company level may be affected by SBC's proposals. We, however, do not 
consider such entities to be ``small entities'' under the RFA because 
they are either affiliates of large corporations or dominant in their 
field of operations. Therefore, we do not believe that the proposed 
rules will affect a substantial number of small entities that are 
incumbent local exchange carriers.
    16. The rule changes proposed in the NPRM, if adopted, will affect 
all small businesses filing new wireless license applications or 
modifying or renewing an existing wireless license. To assist the 
Commission in analyzing the total number of affected small entities, 
commenters are requested to provide estimates of the number of small 
entities who will be affected by the rules proposed in this NPRM. The 
Commission estimates the following number of small entities that 
provide wireless telecommunications service may be affected by the 
proposed rule changes.

(a) Cellular Radiotelephone Service

    The Commission has not 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 companies. This definition provides that a small entity 
is a radiotelephone company employing no more than 1,500 persons. The 
size data provided by the SBA does not enable us to make a meaningful 
estimate of the number of cellular providers which are small entities 
because it combines all radiotelephone companies with 1000 or more 
employees. The 1992 Census of Transportation, Communications, and 
Utilities, conducted by the Bureau of the Census, is the most recent 
information available. This document shows that 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. The 
Commission assumes, for purposes this IRFA, that all of the current 
cellular licensees are small entities, as that term is defined by the 
SBA. In addition, the Commission notes that there are 1,758 cellular 
licenses; however, a cellular licensee may own several licenses. The 
most reliable source of information regarding the number of cellular 
service providers nationwide appears to be data the Commission 
publishes annually in its Telecommunications Industry Revenue report, 
regarding the Telecommunications Relay Service (TRS). The report places 
cellular licensees and Personal Communications Service (PCS) licensees 
in one group. According to the data released in November, 1997, there 
are 804 companies reporting that they engage in cellular or PCS 
service. It seems certain that some of these carriers are not 
independently owned and operated, or have more than 1,500 employees; 
however, the Commission is unable at this time to estimate with greater 
precision the number of cellular service carriers qualifying as small 
business concerns under the SBA's definition. For purposes of this 
IRFA, the Commission estimates that there are fewer than 804 small 
cellular service carriers.

(b) Broadband and Narrowband PCS

    Broadband PCS. The broadband PCS spectrum is divided into six 
frequency blocks designated A through F. The Commission has defined 
``small entity'' in the auctions for Blocks C and F as a firm that had 
average gross revenues of less than $40 million in the three previous 
calendar years. (See 47 CFR 24.720(b)(1)). This definition of ``small 
entity'' in the context of broadband PCS auctions has been approved by 
the SBA. The Commission has auctioned broadband PCS licenses in blocks 
A through F. Of the qualified bidders in the C and F block auctions, 
all were entrepreneurs. Entrepreneurs was defined for these auctions as 
entities, together with affiliates, having gross revenues of less than 
$125 million and total assets of less than $500 million at the time the 
FCC Form 175 application was filed. Ninety bidders, including C block 
reauction winners, won 493 C block licenses and 88 bidders won 491 F 
block licenses. For purposes of this IRFA, the Commission assumes that 
all of the 90 C block broadband PCS licensees and 88 F block broadband 
PCS

[[Page 68422]]

licensees, a total of 178 licensees, are small entities.
    Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS. The Commission does not have 
sufficient information to determine whether any of these licensees are 
small businesses within the SBA-approved definition for radiotelephone 
companies. At present, there have been no auctions held for the major 
trading area (MTA) and basic trading area (BTA) narrowband PCS 
licenses. The Commission anticipates a total of 561 MTA licenses and 
2,958 BTA licenses will be awarded in the auctions. Given that nearly 
all radiotelephone companies have no more than 1,500 employees, and 
that no reliable estimate of the number of prospective MTA and BTA 
narrowband licensees can be made, the Commission assumes, for purposes 
of this IRFA, that all of the licenses will be awarded to small 
entities, as that term is defined by the SBA.

(c) 220 MHz Radio Services

    Since the Commission has not yet defined a small business with 
respect to 220 MHz radio services, it will utilize the SBA definition 
applicable to radiotelephone companies, i.e., an entity employing no 
more than 1,500 persons. With respect to the 220 MHz services, the 
Commission has proposed a two-tiered definition of small business for 
purposes of auctions: (1) for Economic Area (EA) licensees, a firm with 
average annual gross revenues of not more than $6 million for the 
preceding three years; and (2) for regional and nationwide licensees, a 
firm with average annual gross revenues of not more than $15 million 
for the preceding three years. Given that nearly all radiotelephone 
companies employ no more than 1,500 employees, for purposes of this 
IRFA the Commission will consider the approximately 3,800 incumbent 
licensees as small businesses under the SBA definition.

(d) Paging

    The Commission has proposed a two-tier definition of small 
businesses in the context of auctioning geographic area paging 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. Since 
the SBA has not yet approved this definition for paging services, the 
Commission will utilize the SBA 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 Telecommunications 
Industry Revenue data, there were 172 ``paging and other mobile'' 
carriers reporting that they engage in these services. Consequently, 
the Commission estimates that there are fewer than 172 small paging 
carriers. The Commission estimates that the majority of private and 
common carrier paging providers would qualify as small entities under 
the SBA definition.

(e) Air-Ground Radiotelephone Service

    The Commission has not adopted a definition of small business 
specific to the Air-Ground radiotelephone service. Accordingly, the 
Commission will use the SBA definition applicable to radiotelephone 
companies, i.e., an entity employing no more than 1,500 persons. There 
are approximately 100 licensees in the Air-Ground radiotelephone 
service, and the Commission estimates that almost all of them qualify 
as small entities under the SBA definition.

(f) Specialized Mobile Radio (SMR)

    The Commission awards bidding credits in auctions for geographic 
area 800 MHz and 900 MHz SMR licenses to firms that had revenues of no 
more than $15 million in each of the three previous calendar years. 
This regulation defining ``small entity'' in the context of 900 MHz SMR 
has been approved by the SBA. The Commission does 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 of no more than $15 million. One firm 
has over $15 million in revenues. The Commission assumes for purposes 
of this IRFA that all of the remaining existing extended implementation 
authorizations are held by small entities, as that term is defined by 
the SBA. The Commission has held auctions for geographic area licenses 
in the 900 MHz SMR band, and recently completed an auction for 
geographic area 800 MHz SMR licenses. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. In the recently 
concluded 800 MHz SMR auction there were 524 licenses won by winning 
bidders, of which 38 licenses were won by small or very small entities.

(g) Private Land Mobile Radio Services (PLMR)

    PLMR systems serve an essential role in a range of industrial, 
business, land transportation, and public safety activities. The 
Commission has not developed a definition of small entities 
specifically applicable to PLMR licensees due to the vast array of PLMR 
users. 23. For the purpose of determining whether a licensee is a small 
business as defined by the SBA, each licensee would need to be 
evaluated within its own business area. The Commission is unable at 
this time to estimate the number of small businesses which could be 
impacted by the rules. The Commission's 1994 Annual Report on PLMRs 
indicates that at the end of fiscal year 1994 there were 1,087,267 
licensees operating 12,481,989 transmitters in the PLMR bands below 512 
MHz. Any entity engaged in a commercial activity is eligible to hold a 
PLMR license, therefore these proposed rules could potentially impact 
every small business in the United States.

(h) Aviation and Marine Radio Service

    Small entities in the aviation and marine radio services use a 
marine very high frequency (VHF) radio, any type of emergency position 
indicating radio beacon (EPIRB) and/or radar, a VHF aircraft radio, 
and/or any type of emergency locator transmitter (ELT). The Commission 
has not developed a definition of small entities specifically 
applicable to these small businesses. Therefore, the applicable 
definition of small entity is the definition under the SBA rules. Most 
applicants for individual recreational licenses are individuals. 
Approximately 581,000 ship station licensees and 131,000 aircraft 
station licensees operate domestically and are not subject to the radio 
carriage requirements of any statute or treaty. Therefore, for purposes 
of the evaluations and conclusions in this IRFA, the Commission 
estimates that there may be at least 712,000 potential licensees which 
are individuals or are small entities, as that term is defined by the 
SBA.

(i) Offshore Radiotelephone Service

    This service operates on several ultra high frequency (UHF) TV 
broadcast channels that are not used for TV broadcasting in the coastal 
area of the states bordering the Gulf of Mexico.
     At present, there are approximately 55 licensees in this service. 
The

[[Page 68423]]

Commission is unable at this time to estimate the number of licensees 
that would qualify as small entities under the SBA definition for 
radiotelephone communications. The Commission assumes, for purposes of 
this IRFA, that all of the 55 licensees are small entities, as that 
term is defined by the SBA.

(j) General Wireless Communication Service

    This service was created by the Commission on July 31, 1995 by 
transferring 25 MHz of spectrum in the 4660-4685 MHz band from the 
federal government to private sector use. The Commission has scheduled 
the GWCS auction for May 27, 1998. The Commission is unable at this 
time to estimate the number of licensees that would qualify as small 
entities under the SBA definition for radiotelephone communications.

(k) Fixed Microwave Services

    Microwave services includes common carrier fixed, private 
operational fixed, and broadcast auxiliary radio services. At present, 
there are 22,015 common carrier fixed licensees and approximately 
61,670 private operational fixed licensees and broadcast auxiliary 
radio licensees in the microwave services. The Commission has not yet 
defined a small business with respect to microwave services. For 
purposes of this IRFA, the Commission will utilize the SBA definition 
applicable to radiotelephone companies, i.e., an entity with less than 
1,500 persons. The Commission estimates that for purposes of this IRFA 
all of the Fixed Microwave licensees (excluding broadcast auxiliary 
radio licensees) would qualify as small entities under the SBA 
definition for radiotelephone communications.

(l) Commercial Radio Operators (restricted and commercial)

    There are several types of commercial radio operator licenses. 
Individual licensees are tested by Commercial Operator License 
Examination managers (COLEMs). COLEMs file the applications on behalf 
of the licensee. The Commission has not developed a definition for a 
small business or small organization that is applicable for COLEMs. The 
RFA defines the term ``small organization'' as meaning ``any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field * * *'' (See 5 U.S.C. 601(4)). The Commission's 
rules do not specify the nature of the entity that may act as a COLEM. 
However, all of the COLEM organizations would appear to meet the RFA 
definition for small organizations.

(m) Amateur Radio Services

    Amateur Radio service licensees are coordinated by Volunteer 
Examiner Coordinators (VECs). The Commission has not developed a 
definition for a small business or small organization that is 
applicable for VECs. The RFA defines the term ``small organization'' as 
meaning ``any not-for-profit enterprise which is independently owned 
and operated and is not dominant in its field * * *'' (See 5 U.S.C. 
601(4)). The Commission's rules do not specify the nature of the entity 
that may act as a VEC. All of the sixteen VEC organizations would 
appear to meet the RFA definition for small organizations.

(n) Personal Radio Services

    Personal radio services provide short-range, low power radio for 
personal communications, radio signaling, and business communications 
not provided for in other services. These services include citizen band 
(CB) radio service, general mobile radio service (GMRS), radio control 
radio service, and family radio service (FRS). Inasmuch as the CB, 
GMRS, and FRS licensees are individuals, no small business definition 
applies for these services. The Commission is unable at this time to 
estimate the number of licensees that would qualify as small entities 
under the SBA definition.

(o) Public Safety Radio Services and Governmental Entities

    Public Safety radio services include police, fire, local 
governments, forestry conservation, highway maintenance, and emergency 
medical services. There are a total of approximately 127,540 licensees 
within these services. Governmental entities as well as private 
businesses comprise the licensees for these services. All governmental 
entities with populations of less than 50,000 fall within the 
definition of a small business. (See 5 U.S.C. 601(5)). There are 
approximately 37,566 governmental entities with populations of less 
than 50,000. The RFA also includes small governmental entities as a 
part of the regulatory flexibility analysis. The definition of a small 
governmental entity is one with a population of less than 50,000. There 
are 85,006 governmental entities in the nation. This number includes 
such entities as states, counties, cities, utility districts, and 
school districts. There are no figures available on what portion of 
this number has populations of fewer than 50,000; however, this number 
includes 38,978 counties, cities, and towns and of those, 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, the 
Commission estimates that 96 percent or 81,600 are small entities that 
may be affected by our rules.

(p) Rural Radiotelephone Service

    The Commission has not adopted a definition of small entity 
specific to the Rural Radiotelephone Service. A significant subset of 
the Rural Radiotelephone Service is the Basic Exchange Telephone Radio 
Systems (BETRS). The Commission will use the SBA definition applicable 
to radiotelephone companies; i.e., an entity employing no more than 
1,500 persons. There are approximately 1,000 licensees in the Rural 
Radiotelephone Service, and the Commission estimates that almost all of 
them qualify as small entities under the SBA definition.

(q) Marine Coast Service

    The Commission has not adopted a definition of small business 
specific to the Marine Coast Service. The Commission will use the SBA 
definition applicable to radiotelephone companies; i.e, an entity 
employing no more than 1,500 persons. There are approximately 10,500 
licensees in the Marine Coast Service, and the Commission estimates 
that almost all of them qualify as small under the SBA definition.

(r) Wireless Communications Services (WCS)

    WCS is a wireless service, which can be used for fixed, mobile, 
radiolocation, and digital audio broadcasting satellite uses. The 
Commission defined ``small business'' for the WCS auction as an entity 
with average gross revenues of $40 million for each of the three 
preceding years. The Commission auctioned geographic area licenses in 
the WCS service. There were seven winning bidders who qualified as very 
small business entities and one small business entity in the WCS 
auction. Based on this information, the Commission concludes that the 
number of geographic area WCS licensees affected include these eight 
entities. In addition to the above estimates, new applicants in the 
wireless radio services will be affected by these rules, if adopted. To 
assist the Commission in analyzing the total number of affected small 
entities, commenters are requested to provide information regarding how 
many small business entities will be affected by the proposed rules. 
Comments relating to the number

[[Page 68424]]

of small business entities affected are due by the deadlines contained 
in the NPRM.
    17. In this NPRM, we seek comment on proposals to revise the 
Commission's rate-of-return prescription regulations, the methodologies 
used for calculating cash working capital, the detariffing of certain 
telecommunications services, streamlining cost allocation manual filing 
procedures, and consolidating the Commission's wireless radio rules. 
These proposals are specifically designed to streamline regulations 
that apply to incumbent local exchange carriers (LECs), including the 
Bell operating companies (BOCs) and GTE, and to wireless 
telecommunications providers. We therefore expect that the potential 
impact of the proposals, if adopted, is beneficial and does not amount 
to a possible significant economic impact on affected entities. If 
commenters believe that the proposals discussed in the Notice require 
additional RFA analysis, they should include a discussion of these 
issues in their comments.
    18. We therefore certify, pursuant to section 605(b) of the RFA, 
that the rules proposed in this NPRM will not have a significant 
economic impact on a substantial number of small entities. The 
Commission will publish this certification in the Federal Register and 
will provide a copy of the certification to the Chief Counsel for 
Advocacy of the SBA. The Commission will also include this 
certification in the report to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act. (See 5 U.S.C. 801(a)(1)(A)).
    19. Pursuant to applicable procedures set forth in section 1.415 
and 1.419 of the Commission's Rules, 47 C.F.R. 1.415, 1.419, interested 
parties may file comments on or before January 11, 1999 and reply 
comments on or before January 25, 1999. To file formally in this 
proceeding, you must file an original and four copies of all comments, 
reply comments, and supporting comments. If you want each Commissioner 
to receive a personal copy of your comments, you must file an original 
and nine copies. Comments and reply comments should be sent to Office 
of the Secretary, Federal Communications Commission, 1919 M Street, 
N.W., Room 222, Washington, D.C. 20554, with a copy to Anthony Dale, 
Legal Branch, Accounting Safeguards Division, FCC, Suite 201, Room 
200D, 2000 L Street, N.W., Washington, D.C. 20554. Parties should also 
file one copy of any documents filed in this docket with the 
Commission's copy contractor, International Transcription Services, 
Inc., 1231 20th Street, N.W., Washington, D.C. 20036. Comments and 
reply comments will be available for public inspection during regular 
business hours in the FCC Reference Center 1919 M Street, N.W., Room 
239, Washington, D.C. 20554.
    20. Written comments by the public on the proposed and/or modified 
information collections are due January 11, 1999 and reply comments on 
or before January 25, 1999. Written comments must be submitted by the 
Office of Management and Budget (OMB) on the proposed and/or modified 
information collections on or before 60 days after date of publication 
in the Federal Register. In addition to filing comments with the 
Secretary, a copy of any comments on the information collections 
contained herein should be submitted to Judy Boley, Federal 
Communications Commission, Room 234, 1919 M Street, N.W., Washington, 
DC 20554, or via the Internet to [email protected] and to Timothy Fain, 
OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W., Washington, DC 
20503 or via the Internet to [email protected].
    21. Parties are also asked to submit comments and reply comments on 
diskette. Such diskette submission would be in addition to and not a 
substitute for the formal filing requirements addressed above. Parties 
submitting diskettes should submit them to Anthony Dale, Legal Branch, 
Accounting Safeguards Division, FCC, Suite 201, Room 200D, 2000 L 
Street, N.W., Washington, D.C. 20554. Such a submission should be on a 
3.5 inch diskette formatted in an IBM compatible form using MS Dos 5.0 
and WordPerfect 5.1 software. The diskette should be submitted in 
``read only'' mode. The diskette should be clearly labeled with the 
party's name, proceeding, type of pleading (comment or reply comments) 
and date of submission. The diskette should be accompanied by a cover 
letter.
    22. Parties also may file comments electronically via the Internet 
at: <http://www.fcc.gov/e-file/ecfs.html>. See Electronic Filing of 
Documents in Rulemaking Proceedings, GC Docket No. 97-113, Report and 
Order, FCC 98-56 (rel. April 6, 1998). Only one copy of an electronic 
submission must be submitted. In completing the transmittal screen, 
commenters should include their full name, Postal Service mailing 
address, and the lead docket number for this proceeding, which is CC 
Docket No. 98-177. Parties may also file informal comments or an exact 
copy of your formal comments electronically via the Internet at www.fcc.gov/e-file/> or via e-mail at <[email protected]>. Only one 
copy of electronically-filed comments must be submitted. You must put 
the docket number of this proceeding in the subject line if you are 
using e-mail (CC Docket No. 98-177), or in the body of the text if by 
Internet. Parties must note whether an electronic submission is an 
exact copy of formal comments on the subject line. Parties also must 
include their full name and Postal Service mailing address in their 
submission.

List of subjects in 47 CFR Part 65

    Administrative practice and procedure, Communications common 
carriers, Reporting and recordkeeping requirements, Telephone.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-32910 Filed 12-10-98; 8:45 am]
BILLING CODE 6712-01-P