[Federal Register Volume 64, Number 136 (Friday, July 16, 1999)]
[Proposed Rules]
[Pages 38396-38405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18232]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 20

[WT Docket No. 97-207; FCC 99-137]


Calling Party Pays Service Offering in the Commercial Mobile 
Radio Services

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document seeks to remove regulatory obstacles to the 
offering to consumers of Calling Party Pays (CPP) services by 
Commercial Mobile Radio Services (CMRS) providers. CPP allows a CMRS 
provider to make available to its subscribers an offering whereby the 
party placing the call to a CMRS subscriber pays at least some of the 
charges associated with terminating the call, including most 
prominently charges for the CMRS airtime. The Commission is issuing 
this document to help facilitate the wider availability of CPP, and to 
consider possible actions this Commission could take to address several 
key issues associated with the offering of CPP service.

DATES: Comments are due on or before August 18, 1999, and reply 
comments are due on or before September 8, 1999.

ADDRESSES: Federal Communications Commission, Office of the Secretary, 
445 12th Street, S.W., Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Legal Information: David Siehl, 202-
418-1310; Economic Information: Joseph Levin, 202-418-1310; [TTY: 202-
418-7233].

SUPPLEMENTARY INFORMATION: The following synopsis concerns only the 
Notice of Proposed Rulemaking (NPRM) of the Commission's Declaratory 
Ruling and Notice of Proposed Rulemaking in WT Docket No. 97-207, FCC 
99-137, adopted June 10, 1999, and released July 7, 1999. The synopsis 
of the section of the document containing the Declaratory Ruling is 
being published separately in the Federal Register. The complete text 
of the entire released document is available for inspection and copying 
during normal business hours in the FCC Reference Information Center 
(Courtyard level), 445 12th Street, S.W., Washington, D.C. 20554, and 
also may be purchased from the Commission's copy contractor, 
International Transcription Services (ITS, Inc.), (202) 857-3800, 445 
12th Street, S.W., CY-B400, Washington, D.C. 20054.

Synopsis of Notice of Proposed Rulemaking

    1. The Commission is initiating this NPRM for two fundamental 
reasons. First, the availability of CPP as a service offering for 
wireless telephone subscribers has the potential to expand wireless 
market penetration and minutes of use and, in so doing, offers an 
opportunity to provide a near-term competitive alternative to incumbent 
local exchange carriers (ILECs) for residential customers. Second, the 
Commission believes that there may be obstacles to the widespread 
introduction of CPP, and that market forces alone may not eliminate 
these obstacles.
    2. The Commission finds that CPP could provide several important 
tangible benefits to telecommunications consumers in the United States. 
One major benefit envisioned is the possibility that CPP could 
ultimately lead to wireless services becoming a true competitive 
alternative to the local exchange services offered by ILECs, 
particularly for residential customers. Another potential benefit is 
that CPP could spur competition within the CMRS market by offering 
consumers a different and less expensive wireless service option.
    3. Many carrier commenters have argued that subcribership to 
wireless services would be expected to increase substantially because, 
in no longer paying for incoming calls, consumers would have a much 
more, valuable service, even at current prices. Independent market 
analysts have indicated that CPP would make prepaid wireless services, 
a critically important and growing segment of the CMRS market, more 
attractive to consumers by eliminating airtime charges for incoming 
calls. Because prepaid wireless telephone service is attracting many 
new wireless customers from socioeconomic groups that have not 
previously subscribed to wireless service, the broad availability of a 
prepaid option, in which the subscriber pays only to make calls, would 
reinforce the trend to much greater wireless penetration.
    4. Many industry analysts and commentators anticipate that CPP is 
the catalyst needed to create a significant increase in wireless usage 
by U.S. subscribers. First, CMRS subscribers who select CPP would be 
much more likely to leave their wireless phones in an activated mode in 
order to receive calls because they would not be responsible for paying 
the associated charges. Also, because CPP customers would be expected 
to be more willing to give out their wireless phone numbers if they did 
not have to pay for incoming calls, they would be much more likely to 
receive incoming calls. As a result, it is likely that more calling 
parties will place calls to wireless subscribers and take advantage of 
the opportunity to reach someone who is not tied to one location. The 
calling party will have an increased likelihood of being able to 
complete a call to a CPP subscriber, as compared to calling a wireless 
subscriber with called party pays service. Second, according to these 
analysts, to the extent that subscribers are comfortable with paying a 
set amount per month for wireless service, CPP will encourage them to 
increase the number of calls they make, up to the amount of their 
monthly CMRS budget, since they no longer will need to pay for, or 
budget for, incoming calls.
    5. The Commission would like to update its record on the experience 
with CPP and the impacts of it on the use of mobile services in other 
countries. The NPRM seeks comment on any recent international 
developments, and in addition, on domestic competitive trends that may 
be relevant to a CPP service offering in the U.S.
    6. In its Notice of Inquiry regarding CPP,\1\ the Commission asked 
about possible obstacles to greater availability of this service 
option. In summary, the responses indicate three areas that need to be 
addressed: (1) technical standards to control leakage; (2) calling 
party notification to protect consumers; and (3) arrangements for 
reasonably priced billing and collection services. The technical 
standards to collect and pass information needed to bill the calling 
party for calls to a wireless phone are being developed by an industry 
group, based on a working paper developed through Cellular 
Telecommunications Industry Association (CTIA) and released in January 
1998. There has been no indication in the comments that the Commission 
needs to intervene in this process.
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    \1\ Calling Party Pays Service Option in the Commercial Mobile 
Radio Services, WT Docket No. 97-207, Notice of Inquiry, 62 FR 58700 
(Oct. 30, 1997), 12 FCC Rcd 17693 (1997) (Notice of Inquiry).
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    7. The NPRM notes based on the record to this point, that it 
appears the lack of a nationwide notification has hindered successful 
CPP offerings in this country. The record strongly

[[Page 38397]]

supports the conclusion that some effective form of calling party 
notification is critically important to avoid consumer confusion with 
CMRS provider introduction of CPP offerings. Further, the comments 
almost unanimously indicate that without a uniform notification system, 
conflicting state notifications would increase consumer confusion about 
calls to CPP subscribers if CPP were to be implemented more widely. 
Another consequence of conflicting notifications would be increased 
costs to wireless carriers in their efforts to provide notifications to 
calling parties in different jurisdictions. The Commission believes 
that it is essential to develop a uniform notification system, in 
cooperation with the states, and seeks comment on what elements that 
notification system should contain.
    8. A threshold issue concerning notification is whether there 
should be a uniform nationwide standard that specifies the manner in 
which a CMRS carrier must indicate to a caller that the caller will be 
billed for his or her call to the CMRS phone or pager. A second issue 
is how to develop and implement such a notification standard, 
particularly how we may incorporate the knowledge and concerns of the 
states with regard to consumer notification and protection.
    9. The Commission agrees with the commenters that a uniform 
nationwide notification system is necessary to facilitate the 
implementation of CPP. The NPRM finds that such a notification would 
significantly alleviate confusion on the part of calling parties by 
providing them the capability to make an informed decision on whether 
to proceed with completing the call. In addition, as several commenters 
submit, a uniform nationwide standard for notification announcement 
would likely minimize the cost to wireless carriers of providing a 
notification, especially where they service multi-state areas. The NPRM 
seeks comment on what additional consumer protection measures states 
could take that would be consistent with a uniform notification 
announcement and within the scope of their authority to protect 
consumers.
    10. The NPRM concludes that the Commission has jurisdiction to 
implement a uniform nationwide notification under sections 201(b) and 
section 332(c)(3)(A) of the Act.\2\ In addition, the Commission 
recognizes the traditional role of the states in the areas of consumer 
notification and protection. Indeed section 332(c)(3)(A) provides that 
States may regulate ``other terms and conditions'' of any CMRS 
service.\3\
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    \2\ 47 U.S.C. 201(b), 332(c)(3)(A).
    \3\ See 47 U.S.C. 332(c)(3)(A); see also House Report at 261 
(explaining that other ``terms and conditions'' of CMRS include such 
matters as customer billing information and practices, billing 
disputes and ``other consumer protection matters.'').
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    11. The Communications Act establishes as a primary mission of the 
Commission regulation of interstate and foreign communication so as to 
make available to all the people of the United States a rapid, 
efficient Nation-wide, and world-wide wire and radio communications 
service.\4\ The NPRM also notes that section 201(b) declares unlawful 
any unjust and unreasonable practices, which clearly governs CMRS calls 
that originate and terminate in different states.\5\ Based on its 
determination in the Declaratory Ruling that CPP is a form of CMRS, the 
Commission believes that it may have authority under section 332 of the 
Act to establish uniform rules in furtherance of our statutory mandate 
to ``establish a federal regulatory framework to govern the offering of 
all [CMRS].'' \6\ In the alternative, the NPRM seeks comment on other 
jurisdictional grounds for establishing a nationwide system for CPP 
notification, and on the extent to which the Commission should prohibit 
inconsistent or conflicting state notification regulations.\7\
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    \4\ 47 U.S.C. 151.
    \5\ 47 U.S.C. 201(b).
    \6\ H.R. Conf. Rep. No. 103-213 at 490 (1993). See CTIA Comments 
to NOI at 20, n. 42 (referring to this report in arguing for a 
nationwide notification, and also, referring to the Senate version, 
Sec. 402(13)).
    \7\ For example, CITA contends that ``the Commission retains 
jurisdiction to ensure that inconsistent State regulation does not 
thwart uniformity of nationwide CPP notification mechanisms.'' See 
CTIA Comments at NOI at 17-18 n.37 (citing Louisiana Public Service 
Commission v. FCC, 476 U.S. 355 (1986)).
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    12. The Commission further recognizes, however, as the record 
reflects, that the states have a legitimate interest, pursuant to the 
``other terms and conditions'' exception provided by section 
332(c)(3)(A),\8\ to regulate matters concerning aspects of consumer 
protection involved, e.g., in customer billing practices.\9\
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    \8\ See 47 U.S.C. 332(C)(3)(A).
    \9\ See House Report at 261.
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    13. The Commission believes that a process should be initiated that 
considers the role and interest of the states in consumer protection. 
The NPRM invites comment on how the Commission might tailor a 
nationwide notification system that would provide the states a way, 
consistent with statutory authority, to protect intrastate interests in 
a manner that would not conflict with the nationwide benefits of a 
uniform notification system for CPP. The NPRM directs the Wireless 
Telecommunication Bureau to work actively with the states, through the 
National Association of Regulatory Utility Commissioners (NARUC), as 
well as with interested wireless industry and consumer representatives, 
to seek to develop a consensus implementation of our calling party 
notification proposal.
    14. The Commission seeks to ensure calling party notification that 
protects all consumers, including those with disabilities, that 
reflects the knowledge and experience of the states, and that can be 
implemented on a cost-effective basis.
    15. The NPRM proposes that the calling party notification for CPP 
should consist of a verbal message provided by the CMRS provider to the 
calling party. Because CPP will represent a significant change to 
consumers calling a wireless telephone or pager, the Commission 
believes that initially it is important that notification include the 
following elements:
    (1) Notice that the calling party is making a call to a wireless 
phone subscriber that has chosen the CPP option, and that the calling 
party therefore will be responsible for payment of airtime charges.
    (2) Identification of the CMRS provider.
    (3) The per minute rate, or other rates, that the caller will be 
charged by the CMRS provider.
    (4) An opportunity to terminate the call prior to incurring any 
charges.
    16. Although the Commission acknowledges that specific rate 
information may be superfluous in certain situations, the Commission 
tentatively concludes that rate information would be considered 
relevant by a substantial majority of calling parties. The rate 
information would have to include all of the additional charges billed 
by the CMRS provider to the calling party for the call. For example the 
Commission understands that CPP offerings envisioned by CMRS providers 
would include per minute charges for terminating airtime. It is 
possible that a CMRS providers may also include other charges now paid 
by the CMRS subscriber receiving the call, for instance, for roaming or 
for long-distance service. If so, the notification must include all of 
the per minute and other charges to be billed to the calling party. The 
NPRM seeks comment on this element in a proposed notification system.
    17. The Commission seeks comment on the desirability of moving to a 
simpler, more streamlined notification

[[Page 38398]]

system that would not include rate information, after consumers have 
become accustomed to CPP and are aware of the additional charges 
involved. The NPRM in addition seeks comment on whether our proposed 
method of notification, as well as the simpler version described above, 
will be accessible to people with disabilities. The NPRM also requests 
proposed solutions to any problems that are identified.
    18. The NPRM also seeks comment on other options for ensuring that 
calling parties have adequate notification. There are a number of 
notification options being used in states, such as Arizona, where CPP 
is now being offered. Some carriers rely on 1+ dialing as the means to 
indicate to the caller that a toll is involved. Other options include 
the use of dedicated NXX \10\ codes for CPP subscribers and the use of 
special numbers with a 500 Service Area Code (SAC) to identify the 
number as a CPP call. The Commission seeks comment on what additional 
notification measures states might be able to adopt that would not 
conflict with uniform nationwide notification.
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    \10\ NXX is the three-digit number identifying the central 
office. See 47 CFR 52.7(c).
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    19. The Commission recognizes that businesses need to restrict the 
ability of telephone users to make various types of billable calls from 
certain lines (e.g., toll restricted lines on private branch exchanges 
(PBXs)). The NPRM asks for comment on the number of companies and other 
organizations that use PBXs or Centrex and could be adversely affected 
by the broader implementation of CPP, as well as projections of the 
magnitude of potential losses they might incur because of the inability 
to identify calls beings placed from their systems to CPP subscribers.
    20. The NPRM also seeks comment on the ways businesses and other 
organizations can meet the need for restricted access, particularly if 
the telecommunications industry moves to more widespread number 
portability. In light of the number portability, number pooling, and 
other signaling system based solutions, the NPRM seeks comments on the 
viability of signaling solutions, perhaps combined with line class 
codes.\11\ Commenters should address the viability of proposed 
solutions and whether the solutions can be implemented with current 
network capabilities. The NPRM seeks comment on whether establishing 
service codes would sufficiently address these issues. The Commission 
also seeks comment on the impact on business users, who use restricted 
access, if dedicated service codes were not established.
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    \11\ A line class code is a code used at the PBX or Centrex 
switch to restrict a specific number within the PBX or Centrex 
system from making a particular type of call.
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    21. The NPRM seeks comment on the desirability of establishing a 
dedicated service code or codes to assign to CPP subscribers so that 
callers may more readily identify a CPP call. The NPRM also seeks 
comment on whether it is necessary or desirable to treat the 
notification for paging the same as mobile telephony. In particular, 
the use of a distinct code would appear to be unworkable in the context 
of the Source One approach to CPP. Therefore, the NPRM solicits 
comments that address the best ways of balancing the need for a uniform 
CPP notification approach using special numbering codes, with the need 
to work within the special operating constraints of paging carriers. 
Although such specially assigned telephone numbers could be used as the 
sole means of notifying consumers that they are calling a CPP number, 
the Commission tentatively concludes that if special numbers are to be 
established, they should serve to supplement the above notification 
system, not replace it. Comment is sought on this tentative conclusion. 
Finally, the NPRM seeks comment on the effect of calling party 
notification through assignment of numbering codes on number exhaust 
and number portability, and on possible means to mitigate any 
significant negative effects.
    22. The NPRM finds that the Commission has jurisdiction to 
establish calling party notification through dedicated numbering codes 
pursuant to section 251(e)(1), which confers exclusive jurisdiction on 
the Commission over the North American Numbering Plan as it pertains to 
the United States, along with the power to delegate to the states 
certain portions of this jurisdiction.\12\ The Notice of Inquiry record 
indicates that the Commission could rely on this provision if it were 
to implement a CPP notification scheme based on ``1+dialing'' or use of 
specialized area codes. The NPRM tentatively concludes that section 251 
of the Act does provide a jurisdictional basis to implement such a 
method and seeks comment on this tentative conclusion.
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    \12\ Section 251(e)(1) states that ``[t]he Commission shall have 
exclusive jurisdiction over those portions of the North American 
Numbering Plan that pertains to the United States. * * *'' 47 U.S.C. 
251(e)(1).
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    23. The Commission notes that in a 1997 decision regarding ``casual 
calling'' it suggested that carriers have reasonable options other than 
tariffs to establish contractual relationships with casual callers that 
would legally obligate such callers to pay for their services, and that 
providing the caller the rates, terms, and conditions prior to the 
completion of a call would establish an enforceable contract between 
the caller and the carrier.\13\ The Commission believes that these same 
principles should apply in the context of CPP.
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    \13\ See Policy and Rules Concerning the Interstate, 
Interexchange Marketplace, CC Docket No. 96-61, Order on 
Reconsideration, 62 FR 59583 (Nov. 4, 1997), 12 FCC Rcd 15014, 
15026-27 n. 74 (para. 18) (1997).
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    24. The NPRM seeks comment on whether the proposed notification 
method ought to be sufficient to establish an ``implied in fact'' 
contractual arrangement between the CMRS provider and the calling 
party, and, if not, what else may be necessary.
    25. Furthermore, the NPRM urges commenters to discuss whether 
market conditions exist or are likely to develop in the United States 
that would exert competitive pressure on CPP rates to be charged a 
calling party by a CMRS carrier. Under this approach, the Commission 
would defer regulatory intervention until there is clear evidence that 
Commission action is necessary to resolve rate issues. In addition, the 
NPRM seeks comment on any other approaches that would help safeguard 
consumers who wish to place calls to CPP subscribers. In this regard, 
the NPRM notes that the Commission's Rules require that the rates 
charged for calls placed through TRS be no greater than the rates 
charged for a functionally equivalent call that does not use TRS 
facilities.\14\ The requests comment on whether methods are needed to 
ensure that the CPP rates charged for voice and TTY calls placed 
through TRS centers do not exceed those that do not use such 
facilities.
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    \14\ Section 64.604(c)(3) of the Commission's Rules, 47 CFR 
64.604(c)(3).
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Relationship Between LEC Billing and Collection Services and CPP 
Offerings

    26. The record contains a variety of views on the need for the 
Commission to mandate LEC billing and collection. On the other hand, 
some LECs and wireless carriers submit that there is no evidence yet of 
a strong market demand for CPP, and that the Commission should let the 
market operate. In considering the regulatory treatment of billing and 
collection services, the Commission observes that it has generally 
declined to regulate the provision of billing and collection services 
unless regulation is needed to protect competition. In 1983, shortly 
after the Modified Final Judgment, the Commission regulated billing and

[[Page 38399]]

collection services by establishing a separate access charge for 
billing and collection provided to IXCs and requiring exchange carriers 
that provided billing and collection services to one IXC to provide 
such services to all IXCs. In 1986, however, the Commission de-tariffed 
billing and collection services provided by LECs and found regulation 
of such services to be unnecessary. In 1992, the Commission clarified 
that billing and collection service was a communications service within 
the meaning of section 3(a) of the Act,\15\ but that it was not subject 
to regulation under Title II because it was not a ``common carrier'' 
service (although it could be regulated under the Commission's 
ancillary jurisdiction under Title I of the Act). In 1993, the 
Commission refused to require IXCs to provide billing and collection 
services to providers of 900 services.
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    \15\ 47 U.S.C. 3(a) (current version at 47 U.S.C. 3(51) (1996)).
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    27. In some instances where the provision of billing and collection 
services has not been required, there have been nondiscrimination 
requirements. For instance, in the 1996 Telecommunications Act, 
Congress added section 272 \16\ requiring Bell Operating Companies 
(BOCs) who wished to provide certain types of services to provide them 
through separate affiliates. Section 272(c)(1) of the Act provides that 
BOCs may not discriminate between such affiliates and ``any other 
entity in the provision or procurement of goods, services, facilities, 
and information, or in the establishment of standards. * * *'' \17\ In 
implementing that section, we held that to the extent a BOC provides 
billing and collection services to an affiliate, such services were 
subject to the non-discrimination requirements of section 
272(c)(1).\18\ The Commission's Rules also defined the term ``entity'' 
as including ``telecommunications carriers, ISPs, and manufacturers.'' 
\19\
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    \16\ 47 U.S.C. 272(a).
    \17\ 47 U.S.C. 272(c)(1).
    \18\ Implementation of Non-Accounting Safeguards of Sections 271 
and 272 of the Communications Act of 1934, as amended, CC Docket No. 
96-149, First Report and Order and Further Notice of Proposed 
Rulemaking, 62 FR 2991 (Jan. 21, 1997), 11 FCC Rcd 21905, 22007-
22008 (paras. 216-219) (1996).
    \19\ Id.
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    28. At this point, the record is not sufficient to decide, as a 
policy matter, whether the Commission should require CPP-related LEC 
billing and collection. The NPRM seeks comment on whether such billing 
and collection is needed for the regional or nationwide offering of 
CPP, and, if so, whether that need reflects market failure or some 
anti-competitive conduct. In addition, the NPRM asks whether the 
offering of CPP would be cost-prohibitive in the absence of incumbent 
LEC billing and collection services. The Commission also seeks specific 
comment on the availability of alternatives, such as third party 
billing through credit card companies or clearinghouses. The NPRM notes 
that with technological developments, CMRS carriers interested in 
providing a CPP service option may want to develop their own 
capabilities to rate and record billing information, with LECs making 
use of that information if the LECs were to bill LEC customers 
directly. The NPRM seeks comment on these developments and their impact 
on implementing CPP, particularly in regard to LEC billing and 
collection, third party billing, and CMRS carrier billing.
    29. The NPRM seeks comment on whether the Commission should mandate 
that LECs provide to CMRS providers billing information sufficient for 
the CMRS provider or third parties to bill calling parties for CPP-
related calls or that LECs provide any CPP-related billing and 
collection on a nondiscriminatory basis.
    30. The NPRM seeks comment on whether calls placed through 
Telecommunications Relay Service (TRS) facilities, including those from 
pay telephones, or calls between two text telephone (TTY) users, 
implicate any additional billing and collection issues that may need to 
be addressed in this proceeding. Commenters are requested to be as 
specific as possible about the nature of the TRS and/or TTY related 
problems in billing and collection and should propose solutions. The 
NPRM also solicits comment on any other problems or issues that may 
affect consumers, including those with disabilities, if CPP were to be 
implemented on a broader scale by wireless carriers in the United 
States.

Potential Jurisdictional Bases for Commission Action

    31. Assuming that the Commission concludes in this proceeding as a 
policy matter that requires the provision of LEC billing and collection 
for CPP in the U.S., the NPRM seeks comment concerning our statutory 
authority to promulgate such a requirement. Specifically, the NPRM 
seeks comment on several potential sources of jurisdiction raised by 
the commenters in response to the Notice of Inquiry.
    32. The NPRM seeks comment on whether the statutory objectives of 
the Act support the assertion of ancillary jurisdiction here, and on 
AirTouch's contentions that the exercise of jurisdiction over LEC 
billing and collection in the CPP context is distinguishable from other 
instances where the Commission has declined to exercise ancillary 
jurisdiction over LEC billing and collection.\20\ Finally, the NPRM 
seeks comment on whether other provisions of the Act, such as section 
332,\21\ provide an independent jurisdictional basis for a federal 
requirement regarding CPP-related billing and collection.
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    \20\ 47 U.S.C. 4(i).
    \21\ 47 U.S.C. 332.
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    33. The NPRM also seeks comment on whether we have jurisdiction 
under any of the theories described above over the provision of billing 
information by LECs to support CPP-related billing and collection by 
others. Some commenters argue that in the case of ILECs, we have 
authority to require the provision of billing information under section 
251(c)(3) of the Act, which requires that ILECs provide 
nondiscriminatory access to ``network elements'' on an unbundled 
basis.\22\ These commenters argue that billing and collection 
information constitutes a unbundled network element (UNE) that is 
subject to this statutory requirement. The NPRM seeks comment on this 
view, particularly in light of the fact that the definition of 
``network element'' in section 3(29) of the Act includes ``information 
sufficient for billing and collection.'' \23\ The Commission seeks 
comment on whether such information would need to be unbundled under 
the statutory ``necessary'' and ``impair'' standard. The Commission 
plans to apply the criteria developed on remand from the Supreme 
Court's decision in Iowa Utilities Board.\24\
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    \22\ 47 U.S.C. 251(c)(3).
    \23\ 47 U.S.C. 153(29).
    \24\ AT&T Corp. v. Iowa Utils. Bd., 119 S. Ct. 721 (1999).
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    34. Assuming that a LEC is providing CPP-related billing and 
collection services or information, the NPRM also seeks comment on 
whether we have jurisdiction to require that LEC to provide such 
services or information on a reasonable, non-discriminatory basis. 
Assuming that the Commission is to determine that CPP-related billing 
information qualifies as a UNE subject to section 251(c)(3), the Act 
requires that incumbent LECs provide nondiscriminatory access to UNEs 
``on rates, terms, and conditions that are just, reasonable, and 
nondiscriminatory.''\25\ In view of this requirement, the NPRM seeks 
comment on whether, if an ILEC

[[Page 38400]]

elects to provide billing and collection for CPP for any CMRS carrier, 
the ILEC must offer the same services on a reasonable, non-
discriminatory basis to all CMRS carriers who request such services. 
Further, the NPRM invites comment on whether the Commission has 
authority, based on ancillary jurisdiction or any other statutory 
provisions, to impose similar non-discrimination requirements with 
respect to CPP-related billing information on incumbent LECs and on 
non-incumbent LECs, i.e., competitive LECs and LECs serving rural 
areas, who are not subject to section 251(c)(3).
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    \25\ 47 U.S.C. 251(c)(3).
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    35. The NPRM seeks comment on jurisdictional issues relating to 
state regulation of LEC CPP-related billing and collection. Under 
section 332 of the Act, states are preempted from regulating entry by 
CMRS providers. Similarly, section 253(a) prohibits any state or local 
statute or regulation that constitutes a barrier to entry to any 
telecommunications service provider, although section 253(b) preserves 
intact state regulatory authority to ``safeguard the rights of 
consumers.'' \26\ Some commenters contend that if a state were to 
prohibit LECs from providing billing and collection services in support 
of CPP, this would effectively preclude CMRS carriers from providing 
CPP within the state, and would therefore constitute de facto entry 
regulation subject to preemption under section 332 or a barrier to 
entry under section 253. The NPRM seeks comment on this view. In 
addition, some commenters point out that the California PUC has 
recently denied a petition by AirTouch to compel Pacific Bell to 
provide billing and collection for a CPP trial based on Pacific Bell's 
tariff for billing and collection of wireless services. The denial was 
based on language in a California PUC decision that prohibits a LEC 
from billing its wireline customers at wireless rates for calls placed 
to wireless phones. The NPRM seeks comment on whether this decision 
raises jurisdictional issues that the Commission should address.
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    \26\ 47 U.S.C. 253(a)-(b).
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CPP, Interconnection, and Reciprocal Compensation

    36. The Notice of Inquiry also sought comment regarding whether the 
implementation of reciprocal compensation for LEC-CMRS interconnection 
requirements provides a sufficient market incentive for CMRS carriers 
not to charge their subscribers for incoming calls. The Notice of 
Inquiry noted that CPP and reciprocal compensation may address a 
similar issue regarding the means by which a CMRS provider recoups the 
cost of completing a call that does not originate on the CMRS network. 
The Commission asked for comment regarding whether reciprocal 
compensation would eliminate or reduce the need for CPP.
    37. The Commission agrees with parties who contend that, under 
existing interconnection agreement, compensation for transport and 
termination generally does not cover the costs of terminating airtime. 
As a result, the Commission does not believe that the availability of 
reciprocal compensation renders moot any issues regarding CPP.
    38. Some parties contend that, although CPP can be distinguished 
from and is not the same thing as reciprocal compensation, CPP-like 
service can be offered by expanding existing interconnection 
agreements. Sprint Spectrum indicates that implementation of CPP 
through interconnection agreements is done in Europe and elsewhere. 
Under these agreements, the caller is billed by the LEC based on 
published LEC rates for fixed-to-mobile calls. The LEC is solely 
entitled to the caller's account and has sole responsibility for bad 
debt. The LEC pays the wireless carrier an interconnection charge to 
terminate traffic on the wireless network. The interconnection charges 
are determined either by regulators or negotiated bilaterally by the 
carriers involved. Under the European model, the wireless carrier for 
the called party imposes a wireless termination access charge on the 
LEC, or the wireless carrier originating the call. The LEC or the 
wireless carrier serving the originating caller may, in turn, bill its 
customer, the calling party, to recoup the charge (if it so chose). 
Such implementation of a CPP service would amount to ``asymmetrical 
compensation,'' such that the symmetrical rates between wireline and 
wireless carriers for transport and termination under a reciprocal 
compensation arrangement would not be operative. With the asymmetrical, 
or non-symmetrical, compensation approach, CMRS carriers would not need 
to recover their costs with a distinct ``airtime'' charge for use of 
the CMRS carriers' network if all of the costs related to completing a 
call to a wireless phone are included in the ``asymmetrical'' rate.
    39. Thus, the NPRM invites parties generally to comment on these 
and any other issues relating to the possible provision of CPP-like 
service by CMRS carriers wanting to use an interconnection approach. 
The Commission also seeks comment on the impact of such an approach on 
LECs, including competitive LECs (CLECs), and upon CMRS (such as 
paging) providers.

Administrative Matters

    In addition to filing comments with the Secretary, a copy of any 
comments on the information collections contained in the Notice of 
Proposed Rulemaking (NPRM) should be submitted to David Siehl, Policy 
Division, Wireless Telecommunications Bureau, 445 12th Street, S.W., 
Washington, D.C. 20554. Comments may also be filed using the 
Commission's Electronic Comment Filing System (ECFS). Comments filed 
through the ECFS can be sent as an electronic file via the Internet to 
<http://www.fcc.gov/e-file/ecfs.html>. Generally, only one copy of an 
electronic submission must be filed. In completing the transmittal 
screen, commenters should include their full name, Postal Service 
mailing address, and a reference to WT Docket No. 97-207. Parties may 
also submit an electronic comment by Internet E-Mail. To obtain filing 
instructions for E-Mail comments, commenters should send an e-mail to 
[email protected], and should include the following words in the body of the 
message, ``get from .''
    All relevant and timely comments will be considered by the 
Commission before final action is taken in this proceeding. To file 
formally in this proceeding, participants must file an original and 
five copies of all comments, reply comments, and supporting comments. 
If participants want each Commissioner to receive a personal copy of 
their comments, an original and nine copies must be filed. Comments and 
reply comments will be available for public inspection during regular 
business hours in the Commission's Reference Center and through ITS, 
Inc., the Commission's duplicating contractor.
    For purposes of this proceeding, the Commission waives those 
provisions of the rules that require formal comments to be filed on 
paper, and encourages parties to file comments electronically. 
Electronically filed comments that conform to the guidelines specified 
in this summary will be considered part of the record in this 
proceeding and accorded the same treatment as comments filed on paper 
pursuant to Commission rules. To file electronic comments in this 
proceeding, parties may use the electronic filing interface available 
on the Commission's World Wide Web site at: <http://
dettifoss.fcc.gov:8080/cgi-bin/ws.exe/

[[Page 38401]]

beta/ecfs/upload.hts>. Further information on the process of submitting 
comments electronically is available at that location and at: <http://
www.fcc.gov/e-file/>.
    For purposes of this permit-but-disclose notice and comment 
rulemaking proceeding, members of the public are advised that ex parte 
presentations are permitted, except during the ``Sunshine Agenda'' 
period, provided they are disclosed under the Commission's rules.

Ordering Clauses

    Accordingly, it is ordered That the actions reflected in the Notice 
of Proposed Rulemaking of this Declaratory Ruling and Notice of 
Proposed Rulemaking are taken pursuant to sections 1, 4(i), 7, 201, 
202, 303(r), and 332 of Communications Act of 1934, as amended, 47 
U.S.C. 151, 154(i), 157, 201, 202, 303(r), 332.
    It is further ordered That notice is hereby given of the proposed 
regulatory changes described in the Notice of Proposed Rulemaking, and 
that comment is sought on these proposals.
    It is further ordered That the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of this 
Notice, including the Initial Regulatory Flexibility Analysis, to the 
Chief Counsel for Advocacy of the Small Business Administration in 
accordance with section 603(a) of the Regulatory Flexibility Act of 
1980, Public Law 96-354, 94 Stat. 1164, 5 U.S.C. 601-612 (1980).

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act (RFA),\27\ the 
Commission has prepared this present Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on small 
entities by the policies and rules proposed in this Notice of Proposed 
Rulemaking (NPRM). Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the NPRM provided in paragraph 77 of 
the full text of the NPRM. The Commission will send a copy of the NPRM, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration.\28\ In addition, the NPRM and IRFA (or 
summaries thereof) will be published in the Federal Register.\29\
---------------------------------------------------------------------------

    \27\ See 5 U.S.C. 603.
    \28\ See 5 U.S.C. 603(a).
    \29\ See id.
---------------------------------------------------------------------------

A. Need for, and Objectives of, the Proposed Rules

    In this NPRM, the Commission proposes solutions to obstacles that 
may be impeding the ability of carriers interested in offering Calling 
Party Pays (CPP) from doing so. CPP holds the potential for making 
mobile wireless services more attractive to large numbers of customers 
who do not subscribe today, and for spurring the acceptance and 
development of services offered by mobile wireless telecommunications 
providers as competitive alternatives to the services of local exchange 
carriers (LECs). There is significant evidence that CPP would help 
encourage Commercial Mobile Radio Service (CMRS) subscribers to leave 
their handsets on and available to receive incoming calls because they 
would not be incurring as high a cost for receiving calls on a usage-
sensitive basis. This increases the use of mobile wireless services, 
and provides certain benefits to both calling parties, who otherwise 
would not be able to complete calls to CMRS subscribers who keep their 
phones off, and CMRS subscribers, who would no longer have an economic 
incentive to avoid or minimize the acceptance of calls. These benefits 
may be especially significant for price-conscious customers who find 
that the flat-rate plans that come with large numbers of minutes 
included are too expensive. CPP would also be beneficial to those 
consumers concerned with the ability to control their monthly 
telecommunications expenses. Thus, CPP holds the potential for making 
mobile wireless services more effectively available to large numbers of 
customers who do not subscribe today or who strictly limit their usage, 
and to spur further competition by offering a different service option 
that may be particularly attractive to low-income, and low-volume and 
mid-volume consumers.
    Because the Commission finds that there is some uncertainty about 
the regulatory status of CPP, the Commission issued a Declaratory 
Ruling clarifying that service offered with a CPP option, as defined in 
paragraph 2 of the full text of the NPRM, still qualifies as CMRS 
service. The NPRM considers important calling party notification 
issues. The Commission there considers a uniform notification standard 
to protect calling parties by providing them with sufficient 
information to make an informed decision before completing a CPP call 
to a wireless subscriber and incurring charges. The Commission also 
asks how it may work cooperatively with the states to develop such a 
notification system. The Commission also seeks comment on possible 
additional measures. Second, the Commission discusses and seeks comment 
on whether the proposed notification is sufficient to create an 
``implied-in-fact'' contract between the caller and the CMRS carrier. 
Third, the Commission discusses whether there is any need for 
Commission action to protect callers from unreasonably high charges for 
CPP calls. Fourth, the Commission discusses how CMRS providers may bill 
and collect from the calling party for calls to CPP subscribers, 
including LEC billing and collection. The Commission also seeks comment 
at various points on issues relating to the accessibility of CPP 
offerings to people with disabilities, including Telecommunications 
Relay Service (TRS) and text telephone (TTY) users.

B. Legal Basis for Proposed Rules

    The proposed action is authorized under sections 1, 4(i), 7, 201, 
202, 303(r), and 332 of Communications Act of 1934, 47 U.S.C. 151, 
154(i), 157, 201, 202, 303(r), 332.

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

    The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted.\30\ 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.\31\ 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).\32\ A small organization is 
generally ``any not-for-profit enterprise which is independently owned 
and operated and is not dominant in its field.'' \33\ Nationwide, as of 
1992, there were approximately 275,801 small organizations.\34\ ``Small 
governmental jurisdiction'' generally means ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a

[[Page 38402]]

population of less than 50,000.'' \35\ As of 1992, there were 
approximately 85,006 such jurisdictions in the United States.\36\ 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 (96 percent) are small entities. Below, the 
Commission further describes and estimates the number of small entity 
licensees and regulatees that may be affected by the rules, herein 
adopted.
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    \30\ 5 U.S.C. 603(b)(3).
    \31\ 5 U.S.C. 601(3).
    \32\ Small Business Act, 15 U.S.C. 632 (1996).
    \33\ 5 U.S.C. 601(4).
    \34\47 U.S.C. 33.
    \35\ 5 U.S.C. 601(5).
    \36\ Commission regulation, as adopted pursuant to the CMRS 
Second Report and Order, Implementation of Sections 3(n) and 332 of 
the Communications Act, Regulatory Treatment of Mobile Services, GN 
Docket 93-252, Second Report and Order, 9 FCC Rcd 1411, 1425, 1427-
28 (paras. 39 through 43) (1994) (CMRS Second Report and Order), 
recon. pending (adopting section 20.3), further delineates the 
statutory definition. Section 20.3(a)(1) adds to the phrase, 
``provided for profit,'' the following language: ``i.e., with the 
intent of receiving compensation or monetary gain.'' 47 CFR 
20.3(A)(1).
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Common Carrier Services and Related Entities

    The most reliable source of information regarding the total numbers 
of certain common carrier and related providers nationwide, as well as 
the number of commercial wireless entities, appears to be data the 
Commission publishes in its Trends in Telephone Service report. 
According to data in the most recent report, there are 3,528 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.
    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.\37\ Below, the Commission discusses the total 
estimated number of telephone companies falling within the two 
categories and the number of small businesses in each, and then 
attempts to refine further those estimates to correspond with the 
categories of telephone companies that are commonly used under its 
rules.
---------------------------------------------------------------------------

    \37\ 13 CFR 121.201.
---------------------------------------------------------------------------

    Although some affected incumbent local exchange carriers (ILECs) 
may have 1,500 or fewer employees, the Commission does 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, the Commission 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.'' \38\
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    \38\ 13 CFR 121.201, SIC code 4813.
---------------------------------------------------------------------------

Total Number of Telephone Companies Affected

    The U.S. Bureau of the Census (``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, covered specialized mobile radio 
providers, and resellers. It seems certain that some of these 3,497 
telephone service firms may not qualify as small entities or small 
ILECs because they are not ``independently owned and operated.'' \39\ 
For example, a reseller that is affiliated with an interexchange 
carrier having more than 1,500 employees would not meet the definition 
of a small business. It is reasonable to conclude that fewer than 3,497 
telephone service firms are small entity telephone service firms or 
small ILECs that may be affected by the proposed rules.
---------------------------------------------------------------------------

    \39\ See generally, 15 U.S.C. 632(a)(1).
---------------------------------------------------------------------------

Wireline Carriers and Service Providers

    The SBA has developed a definition of small entities for telephone 
communications companies except 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 the SBA's definition, a small business telephone company 
other than a radiotelephone company is one employing no more than 1,500 
persons.\40\ 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. The Commission does not 
have data specifying the number of these carriers that are not 
independently owned and operated, and thus is 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 
the SBA's definition. Consequently, the Commission estimates that fewer 
than 2,295 small telephone communications companies other than 
radiotelephone companies are small entities or small ILECs that may be 
affected by the proposed rules.
---------------------------------------------------------------------------

    \40\ 13 CFR 121.201, SIC code 4813.
---------------------------------------------------------------------------

Local Exchange Carriers

    Neither the Commission nor the SBA has developed a definition for 
small providers of local exchange services. 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, 1,410 
carriers reported that they were engaged in the provision of local 
exchange services. The Commission does 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 is 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, the 
Commission estimates that fewer than 1,410 providers of local exchange 
service are small entities or small ILECs that may be affected by the 
proposed rules.

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.\41\ According to the most recent Trends in Telephone Service 
data, 509 carriers reported that they were engaged in the provision of 
pay telephone services. The Commission does not have data

[[Page 38403]]

specifying the number of these carriers that are not independently 
owned and operated or have more than 1,500 employees, and thus is 
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, the Commission estimates that 
there are fewer than 509 small entity pay telephone operators that may 
be affected by the proposed rules.
---------------------------------------------------------------------------

    \41\ 13 CFR 121.201, SIC code 4813.
---------------------------------------------------------------------------

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.\42\ According 
to the most recent Trends in Telephone Service data, 358 reported that 
they were engaged in the resale of telephone service. The Commission 
does 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 is 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, the Commission estimates that there 
are fewer than 358 small entity resellers that may be affected by the 
proposed rules.
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    \42\ Id.
---------------------------------------------------------------------------

International Services

    The Commission has not developed a definition of small entities 
applicable to licensees in the international services. Therefore, the 
applicable definition of small entity is generally the definition under 
the SBA rules applicable to Communications Services, Not Elsewhere 
Classified (NEC). This definition provides that a small entity is 
expressed as one with $11.0 million or less in annual receipts.\43\ 
According to the Census Bureau, there were a total of 848 
communications services providers, NEC, in operation in 1992, and a 
total of 775 had annual receipts of less than $9.999 million. The 
Census report does not provide more precise data.
---------------------------------------------------------------------------

    \43\ 13 CFR 120.121, SIC code 4899.
---------------------------------------------------------------------------

Wireless and Commercial Mobile Services

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.\44\ According to the Bureau of the Census, only twelve 
radiotelephone firms from 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, 
the Commission notes that there are 1,758 cellular licenses; however, a 
cellular licensee may own several licenses. In addition, according to 
the most recent Trends in Telephone Service data, 732 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. The Commission does 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 is 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, the Commission estimates that there are fewer 
than 732 small cellular service carriers that may be affected by the 
proposed rules.
---------------------------------------------------------------------------

    \44\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

220 MHz Radio Service-Phase I Licensees

    The 220 MHz service has both Phase I and Phase II licenses. Phase I 
licensing was conducted by lotteries in 1992 and 1993. There are 
approximately 1,515 such non-nationwide licensees and four nationwide 
licensees currently authorized to operate in the 220 MHz band. The 
Commission has not developed a definition of small entities 
specifically applicable to such incumbent 220 MHZ Phase I licensees. To 
estimate the number of such licensees that are small businesses, the 
Commission applies the definition under the SBA rules applicable to 
Radiotelephone Communications companies. This definition provides that 
a small entity is a radiotelephone company employing no more than 1,500 
persons. According to the Bureau of the Census, only 12 radiotelephone 
firms out of a total of 1,178 such firms which operated during 1992 had 
1,000 or more employees. Therefore, if this general ratio continues in 
1999 in the context of Phase I 220 MHz licensees, the Commission 
estimates that nearly all such licensees are small businesses under the 
SBA's definition.

220 MHz Radio Service-Phase II Licensees

    The Phase II 220 MHz service is a new service, and is subject to 
spectrum auctions. In the 220 MHz Third Report and Order, the 
Commission adopted criteria for defining small businesses and very 
small businesses for purposes of determining their eligibility for 
special provisions such as bidding credits and installment payments. 
The Commission has defined a small business as an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $15 million for the preceding three years. 
Additionally, a very small business is defined as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $3 million for the preceding 
three years. The SBA has approved these definitions. An auction of 
Phase II licenses commenced on September 15, 1998, and closed on 
October 22, 1998. Nine hundred and eight (908) licenses were auctioned 
in 3 different-sized geographic areas: three nationwide licenses, 30 
Regional Economic Area Group Licenses, and 875 Economic Area (EA) 
Licenses. Of the 908 licenses auctioned, 693 were sold. Companies 
claiming small business status won: one of the Nationwide licenses, 67% 
of the Regional licenses, and 54% of the EA licenses. As of January 22, 
1999, the Commission announced that it was prepared to grant 654 of the 
Phase II licenses won at auction. A re-auction of the remaining, unsold 
licenses is likely to take place during calendar year 1999.

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, the 
Commission will utilize the SBA's definition applicable to 
radiotelephone companies, i.e., an entity employing no more than 1,500

[[Page 38404]]

persons. At present, there are approximately 24,000 Private Paging 
licenses and 74,000 Common Carrier Paging licenses. According to the 
most recent Trends in Telephone Service data, 137 carriers reported 
that they were engaged in the provision of either paging or ``other 
mobile'' services, which are placed together in the data. The 
Commission does 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 is 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, the 
Commission estimates that there are fewer than 137 small paging 
carriers that may be affected by the proposed rules, if adopted. The 
Commission estimates that the majority of private and common carrier 
paging providers would qualify as small entities under the SBA 
definition.

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,\45\ and the most 
recent Telecommunications Industry Revenue data shows that 23 carriers 
reported that they were engaged in the provision of SMR dispatching and 
``other mobile'' services. Consequently, the Commission estimates that 
there are fewer than 23 small mobile service carriers that may be 
affected by the proposed rules.
---------------------------------------------------------------------------

    \45\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

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. Based on this information, the 
Commission concludes 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.

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 by auction. Such auctions have not yet been scheduled, however. 
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.

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).\46\ The Commission will use the SBA's definition 
applicable to radiotelephone companies, i.e., an entity employing no 
more than 1,500 persons.\47\ 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's 
definition.
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    \46\ BETRS is defined in sections 22.757 and 22.759 of the 
Commission's Rules, 47 CFR 22.757 and 22.759.
    \47\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

Air-Ground Radiotelephone Service

    The Commission has not adopted a definition of small entity 
specific to the Air-Ground Radiotelephone Service.\48\ Accordingly, the 
Commission will use the SBA's definition applicable to radiotelephone 
companies, i.e., an entity employing no more than 1,500 persons.\49\ 
There are approximately 100 licensees in the Air-Ground Radiotelephone 
Service, and the Commission estimates that almost all of them qualify 
as small under the SBA definition.
---------------------------------------------------------------------------

    \48\ The service is defined in section 22.99 of the Commission's 
Rules, 47 CFR 22.99.
    \49\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

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.\50\ 
In the context of 900 MHz SMR, this regulation defining ``small 
entity'' has been approved by the SBA; approval concerning 800 MHz SMR 
is being sought. The proposed rules in the NPRM apply to SMR providers 
in the 800 MHz and 900 MHz bands that either hold geographic area 
licenses or have obtained extended implementation authorizations. 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.
---------------------------------------------------------------------------

    \50\ 47 CFR 90.814(b)(1).
---------------------------------------------------------------------------

    For geographic area licenses in the 900 MHz SMR band, there are 60 
who qualified as small entities. For the 800 MHz SMR's, 38 are small or 
very small entities.

Offshore Radiotelephone Service

    This service operates on several UHF TV broadcast channels that are 
not used for TV broadcasting in the coastal area of the states 
bordering the Gulf of Mexico.\51\ At present, there are approximately 
55 licensees in this service. We are unable at this time to

[[Page 38405]]

estimate the number of licensees that would qualify as small under the 
SBA's definition for radiotelephone communications.
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    \51\ This service is governed by subpart I of part 22 of the 
Commission's Rules. See 47 CFR 22.1001-22.1037.
---------------------------------------------------------------------------

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    CMRS carriers interested in offering their subscribers CPP would be 
required to provide a notification to those placing calls to the CPP 
subscriber that include the following elements: (1) Notice that the 
calling party is making a call to a wireless phone subscriber that has 
chosen the CPP option, and that the calling party therefore will be 
responsible for payment of airtime charges; (2) Identification of the 
CMRS provider; (3) The per minute rate, or other rates, that the caller 
will be charged by the CMRS provider; and (4) An opportunity to 
terminate the call prior to incurring any charges. In addition, LECs 
may be required to provide billing name and address information to CMRS 
carriers for parties who call CPP subscribers. Comments are also 
requested on the possible need for billing and collection services to 
be provided for CPP by LECs. The Commission requests comment on how 
these requirements can be modified to reduce the burden on small 
entities and still meet the objectives of the proceeding.

E. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    The Commission has minimized burdens to the maximum extent 
possible. CPP is an optional CMRS offering that carriers may provide to 
their wireless subscribers, at the sole discretion of the carrier. As 
to the provision of caller billing name and address information, or 
billing and collection services, it is anticipated that any such 
services would be provided to CMRS carriers at negotiated rates that 
would enable LECs to recover all associated costs. The Commission seeks 
comment on significant alternatives that commenters believe should be 
adopted.

F. Federal Rules that May Duplicate, Overlap, or Conflict With the 
Proposed Rules: None

List of Subjects in 47 CFR Part 20

    Communications common carrier; Communications radio.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 99-18232 Filed 7-15-99; 8:45 am]
BILLING CODE 6712-01-P