[Federal Register Volume 64, Number 144 (Wednesday, July 28, 1999)]
[Rules and Regulations]
[Pages 40774-40776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19065]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 3

[IB Docket No. 98-96, FCC 99-150]


Biennial Review

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document further streamlines the authorization and 
regulation of privately owned accounting authorities that settle 
accounts for maritime mobile, maritime satellite, aircraft and hand-
held terminal radio services. The Commission concluded that there is no 
need for the Commission to act as an accounts clearinghouse for 
maritime and satellite communications and that the private authorities 
that the Commission has certified, acting under regulations prescribed 
by the Commission and under its oversight, can successfully settle all 
accounts for U.S. users of these radio services. The Commission also 
concluded that Commission withdrawal as an accounting authority will 
promote competition among private authorities. The Commission initiated 
this proceeding pursuant to the Telecommunications Act of 1996, which 
directs the Commission to undertake a review every even-numbered year 
of all regulations that apply to providers of telecommunications 
services to determine whether any such regulation is no longer 
necessary.

DATES: Effective August 27, 1999.

FOR FURTHER INFORMATION CONTACT: John Copes, Attorney-Advisor, 
Multilateral and Development Branch, Telecommunications Division, 
International Bureau, (202) 418-1478.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's R&O, 
FCC 99-150, adopted on June 21, 1999, and released on July 13, 1999. 
The full text of this R&O is available for inspection and copying 
during normal business hours in the Federal Communications Commission, 
Reference Information Center (Room CY-A257), 445 12th St., SW, 
Washington, DC 20554 The complete text of the R&O may also be purchased 
from the Commission's copy contractor, International Transcription 
Service, Inc., 1231 20th St., NW, Washington, DC 20036, (202) 857-3800.

Summary of R&O

    1. In July 1998, the Commission adopted a Notice of Proposed 
Rulemaking (63 FR 39800, July 24, 1998) (NPRM) to streamline further 
the regulations and authorization of privately owned accounting 
authorities that settle accounts in the maritime mobile and maritime 
mobile-satellite radio services. Maritime mobile satellites are also 
used to provide satellite-based aviation services and services to hand-
held radio terminals. In that connection the Commission proposed to 
withdraw from performing the functions of an accounting authority and, 
instead, to rely solely upon the private accounting authorities to 
settle accounts for U.S. users of maritime and satellite 
communications. The Commission also proposed to amend its rules to make 
explicit the fact that certified accounting authorities are required, 
in settling accounts, to deal with the public on a reasonable and 
nondiscriminatory basis. The Commission also inquired into whether it 
should designate a new entity to perform the function of ``accounting 
authority of last resort'' the Commission has traditionally performed 
whereby it settles accounts for all users who have not designated an 
accounting authority at the time they made the radio communication.
    2. On June 21, 1999, the Commission adopted a Report and Order and 
Further Notice of Proposed Rulemaking (FCC 99-150) to make final the 
proposals in its July 1999 NPRM and to institute a transition period 
leading to the handing over of its functions to private accounting 
authorities. A proposed rule relating to this proceeding is published 
elsewhere in this issue of the Federal Register. In the R&O portion of 
the document, the Commission affirmed its proposal to withdraw from 
performing the functions of an accounting authority and to rely solely 
upon the private accounting authorities to provide account-settlement 
services for maritime and satellite communications. The Commission made 
clear that it will continue to operate as administrator of all U.S.-
certified accounting authorities and the basic rules and procedures for 
certifying accounting authorities and will continue to oversee the 
operation of all certified accounting authorities.
    3. The Commission has also made final its proposal to amend section 
3.10(e) of its rules (47 CFR 3.10(e)) to make clear that private 
accounting authorities are required to serve the public on a reasonable 
and

[[Page 40775]]

nondiscriminatory basis in their performance of their accounts-
settlement services. The rules had already required private accounting 
authorities to deal with their customers in a reasonable manner. The 
Commission concluded, however, that it would be desirable upon its 
withdrawal as an accounting authority to make explicit the fact that 
such reasonable treatment requires accounting authorities to offer 
their services to the public upon a reasonable request therefore, 
without undue discrimination against any customer or class of customer, 
and to charge reasonable and nondiscriminatory fees for service.
    4. The Commission, however, concluded that, notwithstanding the 
general requirement for nondiscriminatory treatment, it should continue 
to exempt one ``grandfathered'' entity from the requirement to serve 
all comers. Prior to 1996, when the Commission adopted formal rules 
governing the certification and authorization of private accounting 
authorities, the Commission had certified a variety of such entities on 
an interim basis. Under those interim certification procedures, the 
Commission had allowed one entity to become an accounting authority to 
provide account-settlements services solely for its own ships. At the 
time the Commission adopted formal certification rules that imposed 
upon private authorities the requirement to treat all users in a 
reasonable manner (section 3.10(e)), the Commission decided to exempt 
that entity from the obligation of section 3.10(e) to allow it to 
continue to provide services only for its own ships. The Commission 
noted that the grandfathered entity had become an accounting authority 
solely to serve its own ships and had stated that it has no interest in 
providing account-settlement services as a business. The Commission 
concluded that, because it had become an accounting authority before 
there was a requirement to serve all users, it would be a hardship to 
require the entity to change its operation under the 1996 rules. 
Because it believes that the amendment of Section 3.10(e) does not 
substantively alter the obligations contained in the prior wording of 
Section 3.10(e), the Commission had proposed to continue the exemption 
under the amended rule section.

Regulatory Flexibility Act

    5. As required by the Regulatory Flexibility Act, 5 U.S.C. 603, we 
prepared an Initial Regulatory Flexibility Analysis (IRA) of the 
possible impact on small entities of the proposals contained in the 
July 1999 NPRM in this proceeding. We received no comments on the IRFA. 
After reviewing comments on the proposals in the NPRM, we have prepared 
a Final Regulatory Flexibility Analysis (FRFA) on the rules adopted by 
the R&O. The FRFA is contained in Attachment B.
    6. Accordingly, it is ordered, pursuant to Sections 4(i), 4(j), 11, 
201-205 and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 154(j), 161, 201-205 and 303(r), that this R&O is hereby 
adopted.
    7. It is further ordered that section 3.10(e) is amended to read as 
shown in Attachment A.
    8. It is further ordered that the Office of Public Affairs, 
Reference Operations Division, shall send a Copy of this R&O, including 
the regulatory flexibility certification, to the Chief Counsel for 
Advocacy of the Small Business Administration.

Final Regulatory Flexibility Analysis

    9. As required by the RFA, 5 U.S.C, 603, the Commission included an 
Initial Regulatory Flexibility Analysis (IRFA) in the NPRM in this 
proceeding. The Commission sought written public comment on the 
proposals in the NPRM, including comment on the IRFA. This FRFA 
conforms to the RFA.

A. Need for, and Objectives of, the Rule Adopted Here

    10. This R&O adopts an amendment to Section 3.10 of the 
Commission's Rules and Regulations to clarify that the section 
obligates private accounting authorities certified by the Federal 
Communications Commission to deal with the public on a non-
discriminatory basis. We do not believe that this amendment changes the 
substance of the rule that the Commission adopted in 1996, which 
implicitly required such non-discriminatory treatment, but believe that 
it is desirable to make private accounting authorities' obligations as 
clear as possible.
    11. The R&O also adopts the proposal in the NPRM to continue the 
exemption for one entity that had previously been certified as a 
private accounting authority on an interim basis that allows it to 
provide account-settlement services only for its own vessels. This 
entity had obtained interim certification before the Commission imposed 
an obligation for private accounting authorities to provide service to 
all customers requesting it, and the Commission believes that it would 
work an undue hardship to require it to change the scope of its 
operations. We believe that the public has adequate opportunity to 
obtain service from other private accounting authorities the Commission 
has certified and that there is no reason at this time to require this 
entity to serve all comers.
    12. Finally, this R&O adopts the proposal in the NPRM that the 
Commission will cease to act as an accounting authority, leaving the 
settlement of maritime and satellite accounts to the private accounting 
authorities the Commission has certified. We believe that withdrawal of 
the Commission as an accounting authority will strengthen the system of 
private accounting authorities the Commission has created over the 
years and allow such private authorities to become more competitive. We 
do not see a need for a governmental body to perform account-settlement 
functions, because these functions have been performed without 
difficulty by a variety of private authorities, operating under FCC 
rules for many years. The Commission has concluded that there is no 
reason for the FCC to continue to settle the accounts for other U.S. 
government agencies. We find that the agencies have not argued that 
they have any special needs with respect to the settlement of their 
radio accounts that cannot be met by private accounting authorities. 
The Commission did, however, note that the agencies have relied upon 
the Commission to settle their accounts and conclude that the immediate 
withdrawal of the Commission as an accounting authority could cause 
some temporary disruption or curtailment of service to government 
users. The Commission, therefore, concluded to delay its departure and 
to institute a transition period. The Commission believes that such 
transition period will give that agencies time to make all 
preparations, including any budgetary adjustments, for shift to a 
private accounting authority. The nature of the transition period will 
be addressed by the FNPRM.

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

    13. There were no comments submitted in response to the IRFA. 
Because the proposed amendment of Section 3.10 made no substantive 
change to the current obligation of private accounting authorities, the 
adoption of the proposed amendment will have no significant impact upon 
any small business entities. Similarly, the proposal to continue to 
exempt one entity from the obligation to provide service to all users 
on a non-discriminatory basis does not make a change from the present 
situation, adoption of the proposal will not have

[[Page 40776]]

a significant impact upon a small business. The entity that was 
exempted is not itself a small business. Because there are many other 
private accounting authorities who are obligated to serve users on a 
non-discriminatory basis, allowing the one entity to provide services 
only to its own vessels will not adversely affect any small businesses 
that are customers of private accounting authorities. Finally, the 
decision for the FCC to withdraw as an accounting authority should not 
have any significant impact upon small business entities. Even without 
the FCC to settle accounts for users, there will be a sizeable number 
of private accounting authorities to take over FCC functions.

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

    14. 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.
    15. 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. The rules proposed in 
this Notice of Proposed Rulemaking, however, apply only to entities 
providing account-settlement services for maritime mobile and maritime 
mobile-satellite radio services. As noted, there are currently only 17 
such entities. Small businesses may be able to become accounting 
clearinghouses, as the establishment of such a function does not appear 
to involve high implementation costs.

D. Description of Projected Recordkeeping and Other Compliance 
Requirements

    16. The rule amendment adopted in this R&O merely clarifies an 
existing requirement imposed on accounting authorities. It, therefore, 
does not alter the reporting, recordkeeping or other compliance 
requirements of certified accounting authorities in the maritime 
mobile, maritime mobile-satellite, aeronautical and other satellite-
based radio services. The decision to continue the exemption of one 
currently certified accounting authority from the requirement to serve 
the public on a non-discriminatory basis affects only that entity. 
Further, because it continues the current exemption, it will not alter 
that entity's recordkeeping or compliance activities. The decision of 
the Commission to withdraw as an accounting authority will affect both 
those now certified as accounting authorities and those who may apply 
for certification in the future. The withdrawal of the Commission will 
result in the transfer of the accounts that the Commission now settles 
to the private accounting authorities. This should give each such 
accounting authority the opportunity to compete for increased business. 
The withdrawal of the Commission , however, should not increase the 
recordkeeping and compliance efforts of private accounting authorities.

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

    17. Because the rule amendment adopted in this R&O did not alter 
the obligations of any present or future certified private accounting 
authority, there was no need to take any steps to minimize the impact 
of the rule. Similarly, the decision of the Commission to continue the 
exemption for one entity from the obligation to serve the public on a 
non-discriminatory basis did not change that entity's current 
obligations, there was no need to take steps to minimize the impact of 
the exemption on small entities. The decision of the Commission to 
withdraw as an accounting authority will increase the potential 
business of currently certified accounting authorities. It also may 
make additional entities decide that they would like to seek 
certification as a private accounting authority. Commission withdrawal 
as an accounting authority will require those who currently rely upon 
the FCC to settle their maritime and satellite radio accounts will be 
required to select new accounting authority from among certified 
accounting authorities. It is conceivable that selection of such an 
accounting authority may be more difficult for some small entities than 
others. Because the Commission has delayed the effectiveness of its 
withdrawal as an accounting authority until the completion of a 
transition plan, small entities will not have to choose a new authority 
immediately. Small entities will be able to bring any special needs to 
the attention of the Commission during the preparation of the 
transition plan that will be undertaken pursuant to the FNPRM.

Report to Congress

    18. The Commission will send a copy of this R&O, including this 
FRFA, in a report to be sent to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A). 
In addition, the Commission will send a copy of the R&O, including this 
FRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the R&O and FRFA (or summaries thereof) will 
be Published in the Federal Register. See 5 U.S.C. 604(b).

List of Subjects in 47 CFR Part 3

    Accounting.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.

Rule Changes

    Part 3 of the Commission's Rules and Regulations Title 47 of the 
Code of Federal Regulations is amended as follows:

PART 3--AUTHORIZATION AND ADMINISTRATION OF ACCOUNTING AUTHORITIES 
IN MARITIME AND MARITIME MOBILE-SATELLITE RADIO SERVICES

    1. The authority citation for Part 3 continues to read as follows:

    Authority: 47 U.S.C. 154(i), 154(j) and 303(r).

    2. Section 3.10 is amended by revising the first sentence of 
paragraph (e) to read as follows:


Sec. 3.10  Basic requirements.

* * * * *
    (e) Applicants must offer their services to any member of the 
public making a reasonable request therefor, without undue 
discrimination against any customer or class of customer, and fees 
charged for providing such services shall be reasonable and non-
discriminatory. * * *
* * * * *
[FR Doc. 99-19065 Filed 7-27-99; 8:45 am]
BILLING CODE 6712-01-P