[Federal Register Volume 67, Number 73 (Tuesday, April 16, 2002)]
[Proposed Rules]
[Pages 18560-18572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8795]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0 and 1

[CI Docket No. 02-32, CC Docket No. 94-93, CC Docket No. 00-175; FCC 
02-46]


Establishment of Rules Governing Procedures To Be Followed When 
Informal Complaints Are Filed by Consumers Against Entities Regulated 
by the Commission

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, the Commission seeks comment on whether to 
establish a consumer complaint mechanism to apply to all entities 
regulated by the Commission. The complaint mechanism will be patterned 
after our existing rules for informal complaints filed against common 
carriers pursuant to section 208 of the Act.

DATES: Comments are due May 16, 2002 and reply comments are due May 31, 
2002. Written comments by the public on the proposed information 
collections are due May 16, 2002. Written comments must be submitted by 
the Office of Management and Budget (OMB) on the proposed information 
collection on or before June 17, 2002.

ADDRESSES: Parties who choose to file comments by paper must file an 
original and four copies to the Commission's Acting Secretary, William 
F. Caton, Office of the Secretary, Federal Communications Commission, 
445 12th Street, SW., Room TW-A325, Washington, DC 20554. Comments may 
also be filed using the Commission's Electronic Filing System, which 
can be accessed via the Internet at www.fcc.gov/e-file/ecfs.html. In 
addition to filing comments with the Secretary, a copy of any comments 
on the information collections contained herein should be submitted to 
Judith Boley Herman, Federal Communications Commission, Room 1-C804, 
445 12th Street, SW., Washington, DC 20554, or via the Internet to 
[email protected], and to Jeanette Thornton, OMB Desk Officer, Room 
10236 NEOB, 725 17th Street, NW., Washington, DC 20503, or via the 
Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Lynn Remly or Margaret Egler (202-418-
1400), Consumer Information Bureau. For additional information 
concerning the information collection(s) contained in this document, 
contact Judith Boley Herman at 202-418-0214, or via the Internet at 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in CI Docket No. 02-32, CC Docket Nos. 
94-93 and 00-175, FCC 02-46, released February 28, 2002. The full text 
of this document is available on the Commission's Web site Electronic 
Comment Filing System and for public inspection during regular business 
hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., 
Washington, DC 20554.

Synopsis of Notice of Proposed Rulemaking

I. Introduction

    1. On February 14, 2002, the Commission released a Notice of 
Proposed Rule Making (NPRM) requesting comment on proposals to 
establish a unified, streamlined process for the intake and resolution 
of informal complaints filed by consumers in order to promote maximum 
compliance with the requirements of the Communications Act of 1934, as 
amended, (the Act) and our implementing rules and orders.
    2. We propose to establish a uniform, streamlined consumer 
complaint process that will be applicable to all services regulated by 
the Commission that are not currently covered by the common carrier 
informal complaint rules. We also propose changes to the common carrier 
informal complaint process, including specifying the type of 
documentation that should accompany informal complaints as well as 
prescribing a specific time frame within which a carrier must respond 
to such a complaint.

[[Page 18561]]

II. Overview

    3. In the NPRM, we seek comment on our proposal to create a 
consumer complaint process patterned after our Section 208 informal 
complaint rules and to extend this process to all entities regulated by 
the Commission. Currently, the informal complaint rules apply only to 
complaints against common carriers. We do not propose to limit or 
otherwise alter any remedies and procedural options in areas in which 
the Commission has already established specific informal complaint 
procedures. Those informal consumer complaints concerning issues for 
which there is no established resolution procedure and which are not 
subject to the jurisdiction of another governmental entity would be 
included under the informal consumer complaint rules proposed in this 
NPRM. Accordingly, we propose to provide that consumers generally 
should file informal complaints with the Consumer Information Bureau 
(CIB). While, as noted below, the Enforcement Bureau (EB) will not 
adjudicate informal consumer complaints, it will adjudicate formal 
consumer complaints and will have the authority to investigate, on its 
own motion, potential violations evidenced through the filing of 
informal complaints. If a given complaint is subject to an existing 
complaint procedure, CIB would facilitate the processing of such 
complaints by, for example, ensuring that the appropriate Bureau 
receives the complaint for resolution. If there is no established 
resolution procedure for the specific complaint, it would be processed 
under the procedure proposed in this notice. We invite comment on this 
proposal. The Commission has the authority to establish a uniform 
consumer complaint process applicable to all regulated entities. We 
tentatively conclude that it is in the public interest to provide 
consumers with an initial single point of contact to deal with their 
complaints concerning all of the entities regulated by the Commission, 
and not only common carriers.
    4. Under our proposed new approach, informal complaints would be 
processed by CIB, or another bureau where appropriate, through the non-
adjudicatory process set forth in our informal common carrier complaint 
rules. EB, or other bureaus in those instances where enforcement 
responsibility lies in such bureaus, would adjudicate ``formal'' 
consumer complaints and could, on its own motion, commence an 
investigation where informal consumer complaints suggest a pattern of 
violations of the Act or the Commission's rules by a particular 
licensee, or serious violations that justify enforcement action even in 
the absence of a pattern. We seek comment on this approach.
    5. Commenters are also requested to describe differences in the 
characteristics of the various communications-related services 
regulated by the Commission, and whether such differences warrant 
different informal complaint procedures administered by the Commission. 
For example, we recognize that, in the common carrier context, 
consumers and carriers often have a direct contractual relationship. No 
such relationship exists, for example, between broadcast licensees and 
consumers. Moreover, whereas consumers who file complaints against 
common carriers often seek monetary relief such as a refund or credit, 
consumers who file complaints against broadcast licensees typically 
have asked the Commission to exercise its discretion to take 
enforcement action such as a forfeiture or revocation of license. 
Nevertheless, even in these cases, voluntary action by the broadcaster, 
e.g., a public apology for its airing of objectionable material, might 
resolve the complaint. We seek comment on whether these differences 
warrant excluding certain classes of complaints from the uniform 
procedures proposed here.
    6. We also seek comment on the extent to which our streamlining 
proposals, if adopted, would impose an unnecessary burden on small 
regulated entities, as defined by the Regulatory Flexibility Act. For 
example, we ask whether the time to reply to complaints should be 
extended in the case of small entities, to avoid taxing their limited 
resources in time and money. Commenters are requested to make specific 
suggestions about how the proposals described in the paragraphs that 
follow might be adjusted in the case of small regulated entities.
    7. Where appropriate, we encourage consumers to express informally 
their concerns or grievances about regulated products and services 
directly to the product or service provider before filing a complaint 
with the Commission. We recognize, however, that this informal approach 
may be more appropriate in the sort of relationships described above, 
between a common carrier or a cable system operator and a consumer, 
rather than, for example, some complaints between a broadcast licensee 
and a consumer. We expect that many disputes will be satisfactorily 
resolved though such communications without the need to file 
complaints. We do not propose, however, that consumers be required to 
engage in such communications as a prerequisite to filing an informal 
or formal consumer complaint with the Commission. We believe that 
access to a consumer-friendly informal complaint process will ensure 
that consumers have an absolute right to have their grievances promptly 
addressed by the company involved with reasonable expectation that the 
regulated company will respond in the manner and within the time period 
prescribed by the Commission. We especially invite interested parties 
to comment on what if any measures are needed to ensure that consumers 
reasonably have the ability to contact companies directly with their 
grievances. We note, for example, that our Section 255 accessibility 
complaint rules require covered manufacturers and service providers to 
maintain a point of contact for receiving complaints and inquiries 
about their products and services from consumers and to file that point 
of contact information with the Commission. We seek comment on whether 
the Commission should have a similar requirement for other regulated 
entities, or whether there are other alternatives for assisting 
consumers who wish to contact a company directly with a complaint?
    8. Under our common carrier complaint rules, in accordance with 
Section 208 of the Act, informal complaints are filed directly with the 
Commission, which then serves on the carrier a ``Notice of Complaint'' 
that includes a copy of the complaint and instructions to respond to 
the complaint within a specified time. We propose to adopt a rule 
directing Commission staff to forward informal consumer complaints that 
raise issues within the Commission's jurisdiction and that meet the 
form and content requirements discussed below to the regulated entity 
or entities involved in the same manner as is done under our common 
carrier complaint rules, unless there is a more effective means to 
resolve the complaint. For example, in some cases informal consumer 
complaints may be resolved more quickly if the regulated entity that is 
the subject of the complaint is contacted by telephone or e-mail. 
Interested parties are invited to address the feasibility of this 
approach with respect to non-common carriers and whether different 
rules or procedures should apply.
    9. We propose to encourage informal consumer complaints to be 
transmitted to the Commission by any reasonable means, including 
transmission by letter, facsimile transmission, telephone (voice and 
TTY), Internet e-mail, and audio or video-cassette recording. Our 
objective is to make it easy for consumers to file

[[Page 18562]]

complaints and for companies that are the subjects of complaints to 
move promptly to satisfy any meritorious complaints. Therefore, we 
propose that any consumer complaint filed with the Commission should 
include: (1) The name and address of the complainant; (2) the name and 
address of the company against whom the complaint is being made, and in 
the case of a broadcast station, the station call sign or network 
affiliation; (3) details about the product or service about which the 
complaint is being made; (4) a statement of facts supporting the 
complainant's allegation that the regulated company has acted or failed 
to act as required by the Act or the Commission's rules or orders; (5) 
if applicable, a copy of the complainant's bill or other correspondence 
from the regulated entity that gives rise to the dispute; and (6) the 
specific action by the regulated entity that is being sought by the 
complainant. We invite comment on this proposal. We also seek comment 
on whether the Commission should make it a priority to facilitate the 
filing of online complaints. What types of measures should the 
Commission take in this regard?
    10. Although these parameters will necessitate some diligence on 
the part of consumers in preparing and submitting complaints, we 
believe that any such burdens are far outweighed by the benefits of 
prompt and decisive action by the company involved or Commission staff. 
In order to ensure that all consumer complaints are addressed, 
Commission staff will be available to assist consumers in the filing of 
informal complaints. This may entail staff assisting the consumer in 
obtaining the necessary information. We seek comment on the burden 
imposed by this complaint process, specifically as to whether there are 
scenarios in which the proposed ``informal'' process would make it 
more, not less, difficult for consumers to obtain redress for their 
complaints? We seek comments and proposals as to how to make this 
process more consumer friendly, and to limit the burden placed on 
complaining consumers. The level and nature of the information required 
is likely to vary widely depending upon the specific allegations 
raised, and we believe that it is impractical to fashion a rule to 
anticipate these varying circumstances. We request comment on the kinds 
of information and documentation that should be required in informal 
consumer complaints and on what, if any, additional information should 
be included in informal consumer complaints against broadcast station 
licensees and other non-common carrier entities. We also request 
comment on whether we should make changes to our informal common 
carrier complaint rules with regard to the types of information and 
documentation that should be required pursuant to Sec. 1.716 of our 
rules.
    11. We envision an informal consumer complaint process that 
emphasizes informal, cooperative efforts between consumers and 
companies to resolve disputes without extensive involvement by 
Commission staff. We also wish to avoid imposing cumbersome filing and 
reporting requirements that might deprive consumers and companies of 
non-adversarial opportunities to resolve their disputes. Just as it is 
important for consumers to have a simple, easy-to-understand process 
for raising their concerns with the Commission, it is equally important 
that companies be able to respond quickly and effectively to those 
concerns. As with the common carrier complaint rules, a non-common 
carrier will be required to send a copy of its response to the 
complainant. It is not feasible to speculate about specific types of 
information that may be required by Commission staff in response to a 
complaint. Thus, we do not contemplate the imposition of any undue 
burdens on non-common carriers that have procedures in place for the 
quick and effective resolution of consumer complaints.
    12. We seek comment, however, on whether we should set a specific 
time frame within which a company must respond to notification of an 
informal consumer complaint. We anticipate that there would be a 
benefit to consumers in requiring carriers to respond within a 
predictable, uniform time frame, but we are concerned that setting such 
a time frame might do away with the flexibility necessary to respond to 
complaints of varying complexity. We ask commenters to comment on the 
appropriateness of a fixed 30-day, or other fixed number of days, 
response period for informal consumer complaints. We also ask 
commenters to comment on the appropriateness of a fixed 30-day, or 
other fixed number of days, response period for informal complaints 
filed against common carriers pursuant to Sec. 1.717 of our rules.
    13. We anticipate that many informal consumer complaints will be 
resolved by the informal process, as is the case under our current 
common carrier complaint rules. We also recognize that not all informal 
consumer complaints will be resolved by the company involved to the 
satisfaction of the consumer. Under our section 208 informal complaint 
rules for common carriers, Commission staff reviews the complaint and 
the carrier's response to determine what, if any, additional action is 
warranted. If the complainant is not satisfied by the carrier's 
response and the Commission's disposition, he or she may file a formal 
complaint with the Commission within six months of the carrier's 
response. If the complainant does not file a timely formal complaint, 
he or she is deemed to have abandoned the unsatisfied informal 
complaint. We propose a similar approach for informal consumer 
complaints involving non-common carriers. Specifically, under our 
proposal, Commission staff would review the informal complaint and 
company's response. If deemed necessary, staff would contact the 
complainant regarding the staff's review and the company's response. If 
the consumer is not satisfied with the company's response, staff will 
advise the consumer that it may file a formal complaint within six 
months of the company's response. Currently, the rules contain no 
procedures for filing a ``formal'' complaint in the non-common carrier 
context. We propose to establish a formal complaint process that is 
similar to that which applies to common carriers. Under this approach, 
consumers filing formal complaints against broadcast licensees or other 
non-common carriers would need to comply with pleading and filing 
requirements similar to those that apply to formal complaints filed 
against common carriers. Such complaints would be handled by EB or 
other relevant bureaus with jurisdiction over such matters. We seek 
comment on this approach. In particular, we seek comment on what, if 
any, additional or different pleading or filing requirements should 
apply to formal consumer complaints against the various types of non-
common carriers.
    14. As noted above, our experience has been that in many cases, 
consumers filing complaints against non-common carriers are, in fact, 
asking the Commission to investigate and take enforcement action. This 
is particularly true in the broadcast context, where the Act does not 
authorize the Commission to award damages to the complainant. We note, 
however, that the Commission has declined to assess forfeitures in 
formal complaint proceedings, but rather has initiated separate 
forfeiture proceedings where it believed that a common carrier's 
violation warranted assessment of a forfeiture. Such enforcement 
proceedings involve discretionary action by the Commission where the 
subject is a party, but not the complainant. We propose to follow this

[[Page 18563]]

approach in the non-common carrier context as well. We believe this 
approach takes into account that the complaint process and the 
forfeiture process are two distinct processes, each subject to 
different types of judicial scrutiny. In addition, the Enforcement 
Bureau may initiate investigations, on its own motion, and take or 
recommend enforcement actions where, for example, informal consumer 
complaints received show a possible pattern of rule violations by a 
particular non-common carrier or an egregious individual violation 
against a consumer.
    15. We also seek comment on whether to handle informal consumer 
complaints concerning interference to home electronic equipment using 
this proposed process. We propose not to forward informal consumer 
complaints involving such interference to the companies because our 
experience has shown that interference to home electronic equipment can 
occur from either a legal or illegal operation, and the mere fact that 
a consumer may be experiencing interference, in and of itself, is not 
sufficient to allege a violation of our rules. Where, however, a 
consumer does provide sufficient information that the interference is 
the result of a violation, Commission staff will process the complaint 
under the informal complaint process. As in other areas, if a 
complainant is not satisfied, it may file a formal complaint with EB. 
And, of course, EB would initiate independent enforcement action where 
appropriate. We seek comment on these proposals.
    16. We invite comment on whether we should establish any time limit 
for the filing of an informal complaint under the proposed rules. We 
note that section 415(b) of the Act limits the filing of certain claims 
against common carriers for money damages to ``within two years from 
the time the cause of action accrues, and not after * * *'' We 
recognize that the affected entities need to be protected from being 
exposed indefinitely to stale complaints. On the other hand, we 
recognize that consumers should have maximum flexibility in electing to 
pursue informal complaints, especially in the case of repeated 
infractions on the part of an entity. We seek comment on this issue, on 
the relationship of section 415 to our informal complaint authority 
under the proposed rules, and on the need for regulatory parity in this 
respect as among the various entities regulated by the Commission.
    17. We also seek comment on how the Commission can best address the 
issues raised above to better serve consumers. We ask the parties to 
comment on how the Commission can better coordinate its complaint 
process with the processes used by state and local governments. What 
efforts can be made to share information gained by this coordination? 
What other procedural assistance should the Commission offer to 
consumers, as well as state and local governments?
    18. We also seek comment on a specific proposal contained in the 
Amendment of Subpart E of Chapter 1 of the Commission's Rules Governing 
Procedures to be Followed When Informal Complaints Are Filed Against 
Common Carriers, CC Docket No. 94-92, Notice of Proposed Rulemaking (59 
FR 51538, October 12, 1994) relating to a complainant's right to file a 
formal section 208 complaint based on an unsatisfied informal section 
208 complaint. Section 1.718 of the common carrier complaint rules 
provides that a complainant that is not satisfied with a carrier's 
resolution of an informal section 208 complaint must file a formal 
complaint within six months of the carrier's report in order to 
continue prosecution of the complaint and to continue to use the filing 
date of the informal complaint for statute of limitation purposes. The 
filing of an informal complaint is in no way a prerequisite to filing a 
formal complaint. In addition, the institution of the proposed informal 
complaint process does not supplant the formal complaint process. 
Previously, the Commission proposed to revise Secs. 1.718 to provide 
that in all cases involving an unsatisfied informal section 208 
complaint, the period of time allowed for filing a formal complaint 
that will relate back to the filing date of the informal complaint is 
sixty days after the staff has informed the parties in writing of its 
disposition of the informal complaint. Interested parties are asked to 
comment on whether the proposed rule would pose any hardship or 
disadvantage for either complainants or defendant carriers.
    19. We propose to amend the pertinent provisions in the current 
rules that designate informal complaints as records that are routinely 
available for public inspection. Because informal complaint records 
include personal information relating to consumers such as their names, 
addresses, and phone numbers, we propose to no longer make them 
routinely available for public inspection. Such personal information is 
subject to protection from disclosure under the Privacy Act and is not 
generally available to the public. To comply with the requirements of 
the Privacy Act, informal complaint records that are subject to 
disclosure pursuant to requests for information under the Freedom of 
Information Act, and other requests for such information will be 
sanitized to remove all personal, identifying information relating to 
the complainants prior to the records being disclosed. Such personal 
information is not generally available to the public. We anticipate 
that the implementation of this proposal will be in the interests of 
the consumers and in keeping with the letter and intent of the Privacy 
Act. Moreover, we must ensure that our rules facilitate the submission 
of relevant information by consumers and defendant companies without 
fear of dissemination of information that is confidential or 
proprietary. We encourage interested parties to address whether our 
existing rules governing the disclosure of confidential or proprietary 
materials are adequate to protect the interests of consumers and 
regulated companies or whether additional or different safeguards are 
needed. If a formal complaint process is established for non-common 
carrier complaints as discussed in paragraph above, however, or if EB 
or another relevant bureau independently begins an investigation or 
enforcement proceeding, the informal complaints triggering the formal 
complaint or investigation would be made routinely available to the 
public unless confidential treatment was specifically requested at the 
time of filing. The Commission's Privacy Act System of Records lists 
such disclosure. Conceivably, however, consumers who file underlying 
informal complaints that are the subject of the investigation or 
enforcement proceeding may request confidentiality. Personal 
information on such consumers will be subject to protection under the 
Privacy Act and will not be disclosed.
    20. We propose that informal complaints filed pursuant to these new 
rules shall be deemed ``exempt'' proceedings, as is the case with 
informal complaints filed pursuant to our common carrier complaint 
rules under section 208 of the Act. This exempt designation will allow 
the Commission and its staff to meet or otherwise communicate with 
either the complaining consumer or the regulated entity, as well as 
with third parties, on an ex parte basis to discuss matters pertaining 
to the complaint and related compliance issues. This exempt 
classification has proven to be highly beneficial to consumers, 
regulated common carriers and the Commission in terms of facilitating 
the identification and exchange of information and ideas needed to 
resolve section 208 informal complaints and related compliance issues. 
We seek comment on whether

[[Page 18564]]

this is the appropriate classification of informal complaints, and on 
the potential effect of this classification on complainants and 
defendant companies. On the other hand, if a formal complaint process 
is established as discussed above, then these complaint proceedings 
will be treated as restricted for the purposes of the ex parte rules.
Paperwork Reduction Act
    This NPRM contains a proposed information collection. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and the Office of Management and 
Budget (OMB) to comment on the information collection(s) contained in 
this NPRM, as required by the Paperwork Reduction Act of 1995, Public 
Law 104-13. Public and agency comments are due at the same time as 
other comments on this NPRM; OMB notification of action is due June 17, 
2002. Comments should address: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions 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.
    OMB Control Number: None.
    Title: In the Matter of Establishing Rules Governing Procedures To 
Be Followed When Informal Complaints Are Filed by Consumers Against 
Entities Regulated by the Commission.
    Form No.: N/A.
    Type of Review: New collection.
    Respondents: Business or other for-profit; not-for-profit 
institutions; and/or state, local or tribal governments.
    Number of Respondents: 200,000.
    Estimated Time Per Response: 0.5 hours.
    Frequency of Response: On occasion.
    Total Annual Burden: 100,000 hours.
    Total Annual Costs: $1,000,000.
    Needs and Uses: The Commission will use the information to resolve 
consumer complaints and identify trends in the violation of Commission 
rules.

III. Procedural Matters

A. Ex Parte Presentations

    21.This is a non-restricted notice and comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided that they are disclosed as provided in 
Commission rules. See generally 47 CFR 1.1202, 1.1203, and 1.1206 (a).

B. Initial Regulatory Flexibility Act Analysis

    22. As required by the Regulatory Flexibility Act, the Commission 
has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the 
possible significant economic impact on a substantial number of small 
entities of the proposals addressed in this Notice. Written public 
comments are requested on the IRFA. These comments must be filed in 
accordance with the same filing deadlines for comments on the NPRM, and 
they should have a separate and distinct heading designating them as 
responses to the IRFA. The Commission's Consumer Information Bureau, 
Reference Information Center, will send a copy of this NPRM, including 
the IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration, in accordance with the Regulatory Flexibility Act.
1. Need for and Objectives of the Proposed Rules
    23. Since the passing of the Telecommunications Act of 1996, the 
convergence of competition and technology has resulted in more 
opportunities for consumers, but also more areas of confusion and 
concern. We initiate this proceeding to seek comment on proposals to 
establish a unified, streamlined process for the intake and resolution 
of complaints filed by consumers. We expect such a process to promote 
maximum compliance with both the requirements of the Communications Act 
of 1934, as amended (the Act), and the Commission's implementing rules 
and orders.
    24. The Commission has previously emphasized that our consumer 
complaint mechanisms are a principal vehicle for achieving compliance 
and promoting competition. We are concerned, however, that our existing 
complaint measures require consumers to navigate an array of rule 
provisions and disparate procedures in order to file complaints. 
Because the Commission relies on the informal complaint process to 
protect consumers, including small businesses, the process must expand 
in order to be accessible and efficient. We propose to establish an 
informal consumer complaint mechanism that emphasizes ease of filing by 
consumers and voluntary cooperative efforts by consumers and affected 
companies to resolve their differences. Our intention is to create a 
process that is both simple and effective.
2. Legal Basis
    25. The Commission has authority to process informal complaints 
filed against common carriers pursuant to section 208 of the Act and 
Secs. 1.716 through 1.718 of the Commission's rules. Further, the 
Commission has the authority to extend the informal complaint process 
to other entities regulated by the Commission under sections 1, 2, and 
4(i) and (j) of the Act.
3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    26. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A ``small business concern'' is one which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the Small Business 
Administration (SBA).
    27. A small organization is generally ``any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.'' Nationwide, as of 1992, there were 
approximately 275,801 small organizations. ``Small governmental 
jurisdiction'' generally means ``governments of cities, counties, 
towns, townships, villages, school districts, or special districts, 
with a population of less than 50,000.'' As of 1992, there were 
approximately 85,006 governmental entities in the United States. This 
number includes 38,978 counties, cities, and towns; of these, 37,566, 
or 96%, 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%) are small entities. Below, we further 
describe and estimate the number of small entity licensees and 
regulatees that may be affected by these proposed rules.
    28. Cable Services or Systems. The SBA has developed a definition 
of small entities for cable and other pay television services, which 
includes all such companies generating $11 million

[[Page 18565]]

or less in revenue annually. This definition includes cable systems 
operators, closed circuit television services, direct broadcast 
satellite services, multipoint distribution systems, satellite master 
antenna systems and subscription television services. According to the 
Census Bureau data from 1992, there were 1,788 total cable and other 
pay television services and 1,423 had less than $11 million in revenue.
    29. The Commission has developed its own definition of a small 
cable system operator for purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide. Based on our most recent information, 
we estimate that there were 1,439 cable operators that qualified as 
small cable system operators at the end of 1995. Since then, some of 
those companies may have grown to serve over 400,000 subscribers, and 
others may have been involved in transactions that caused them to be 
combined with other cable operators. Consequently, we estimate that 
there are fewer than 1,439 small entity cable system operators.
    30. The Act also contains a definition of a small cable system 
operator, which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 67,700,000 
subscribers in the United States. Therefore, we estimate that an 
operator serving fewer than 677,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we estimate that the number of 
cable operators serving 677,000 subscribers or less totals 1,450. We do 
not request nor collect information on whether cable system operators 
are affiliated with entities whose gross annual revenues exceed 
$250,000,000, and therefore are unable at this time to estimate more 
accurately the number of cable system operators that would qualify as 
small cable operators under the definition in the Communications Act.
    31. Other Pay Services. Other pay television services are also 
classified under the North American Industry Classification System 
(NAICS) codes 51321 and 51322, which includes cable systems operators, 
closed circuit television services, direct broadcast satellite services 
(DBS), multipoint distribution systems (MDS), satellite master antenna 
systems (SMATV), and subscription television services.
    32. Common Carrier Services and Related Entities. The most reliable 
source of information regarding the total numbers of certain common 
carrier and related providers nationwide appears to be data the 
Commission publishes annually in its Carrier Locator report, derived 
from filings made in connection with the Telecommunications Relay 
Service (TRS). According to data in the most recent report, there are 
4,822 interstate service providers. These providers 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 service, 
providers of telephone exchange service, and resellers.
    33. We have included small incumbent local exchange carriers (LECs) 
in this present RFA analysis. As noted above, a ``small business'' 
under the RFA is one that, inter alia, meets the pertinent small 
business size standard (e.g., a telephone communications business 
having 1,500 or fewer employees), and ``is not dominant in its field of 
operation.'' The SBA's Office of Advocacy contends that, for RFA 
purposes, small incumbent LECs are not dominant in their field of 
operation because any such dominance is not ``national'' in scope. We 
have therefore included small incumbent LECs in this RFA analysis, 
although we emphasize that this RFA action has no effect on Commission 
analyses and determinations in other, non-RFA contexts.
    34. Total Number of Telephone Companies Affected. The Census Bureau 
reports that, at the end of 1992, there were 3,497 firms engaged in 
providing telephone services, as defined therein, for at least one 
year. This number contains a variety of different categories of 
carriers, including local exchange carriers, interexchange carriers, 
competitive access providers, operator service providers, pay telephone 
operators, and resellers. It seems certain that some of these 3,497 
telephone service firms may not qualify as small entities or small 
incumbent LECs because they are not ``independently owned and 
operated.'' It seems reasonable to conclude that fewer than 3,497 
telephone service firms are small entity telephone service firms or 
small incumbent LECs that may be affected by these proposed rules.
    35. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
other than radiotelephone (wireless) companies. The Census Bureau 
reports that there were 2,321 such telephone companies in operation for 
at least one year at the end of 1992. According to the SBA's 
definition, a small business telephone company other than a 
radiotelephone (wireless) company is one employing no more than 1,500 
persons. All but 26 of the 2,321 non-radiotelephone (wireless) 
companies listed by the Census Bureau were reported to have fewer than 
1,000 employees. Even if all 26 of the remaining companies had more 
than 1,500 employees, there would still be 2,295 non-radiotelephone 
(wireless) companies that might qualify as small entities or small 
incumbent LECs. Although it seems certain that some of these carriers 
are not independently owned and operated, we are unable at this time to 
estimate with greater precision the number of wireline carriers and 
service providers that would qualify as small business concerns under 
SBA's definition. Therefore, we estimate that fewer than 2,295 small 
telephone communications companies other than radiotelephone (wireless) 
companies are small entities or small incumbent LECs that may be 
affected by these proposed rules.
    36. Local Exchange Carriers, Competitive Access Providers, 
Interexchange Carriers, Operator Service Providers, Payphone Providers, 
and Resellers. Neither the Commission nor the SBA has developed a 
definition for small LECs, competitive access providers (CAPS), 
interexchange carriers (IXCs), operator service providers (OSPs), 
payphone providers, or resellers. The closest applicable definition for 
these carrier-types under SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies. The most 
reliable source of information that we know regarding the number of 
these carriers nationwide appears to be the data that we collect 
annually in connection with the TRS. According to our most recent data, 
there are 1,395 LECs, 349 CAPs, 204 IXCs, 21 OSPs, 758 payphone 
providers, and 541 resellers. Although it seems certain that some of 
these carriers are not independently owned and operated, or have more 
than 1,500 employees, we are unable at this time to estimate with 
greater precision the number of these carriers that would qualify as 
small business concerns under the SBA's definition. Therefore, we 
estimate that there are fewer than 1,395 small entity LECs or small 
incumbent LECs, 349 CAPs, 204 IXCs,

[[Page 18566]]

21 OSPs, 758 payphone providers, and 541 resellers that may be affected 
by these proposed rules.
    37. Small Incumbent Local Exchange Carriers. We have included small 
incumbent local exchange carriers in this present RFA analysis. As 
noted above, a ``small business'' under the RFA is one that, inter 
alia, meets the pertinent small business size standard (e.g., a 
telephone communications business having 1,500 or fewer employees), and 
``is not dominant in its field of operation.'' The SBA's Office of 
Advocacy contends that, for RFA purposes, small incumbent local 
exchange carriers are not dominant in their field of operations because 
any such dominance is not ``national'' in scope.
    38. 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 one with $11.0 million or 
less in annual receipts. 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 $10.0 
million. The Census report does not provide more precise data.
    39. International Broadcast Stations. Commission records show that 
there are 17 international high frequency broadcast station 
authorizations. We do not request nor do we collect annual revenue 
information, and are unable to estimate the number of international 
high frequency broadcast stations that would constitute a small 
business under the SBA definition.
    40. International Public Fixed Radio (Public and Control Stations). 
There is one licensee in this service subject to the payment of 
regulatory fees to the Commission, and the licensee does not constitute 
a small business under the SBA definition.
    41. Fixed Satellite Transmit/Receive Earth Stations. There are 
approximately 2,784 earth station authorizations, a portion of which 
are Fixed Satellite Transmit/Receive Earth Stations. We do not request 
nor do we collect annual revenue information, and are unable to 
estimate the number of the fixed satellite transmit/receive earth 
stations that would constitute a small business under the SBA 
definition.
    42. Fixed Satellite Small Transmit/Receive Earth Stations. There 
are approximately 2,784 earth station authorizations, a portion of 
which are Fixed Satellite Small Transmit/Receive Earth Stations. We do 
not request nor do we collect annual revenue information, and are 
unable to estimate the number of fixed satellite small transmit/receive 
earth stations that would constitute a small business under the SBA 
definition.
    43. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems. 
These stations operate on a primary basis, and frequency coordination 
with terrestrial microwave systems is not required. Thus, a single 
``blanket'' application may be filed for a specified number of small 
antennas and one or more hub stations. There are 492 current VSAT 
System authorizations. We do not request nor do we collect annual 
revenue information, and are unable to estimate the number of VSAT 
systems that would constitute a small business under the SBA 
definition.
    44. Mobile Satellite Earth Stations. There are 15 licensees. We do 
not request nor do we collect annual revenue information, and are 
unable to estimate the number of mobile satellite earth stations that 
would constitute a small business under the SBA definition.
    45. Radio Determination Satellite Earth Stations. There are four 
licensees. We do not request nor do we collect annual revenue 
information, and are unable to estimate the number of radio 
determination satellite earth stations that would constitute a small 
business under the SBA definition.
    46. Space Stations (Geostationary). There are presently 66 
Geostationary Space Station authorizations. We do not request nor do we 
collect annual revenue information, and are unable to estimate the 
number of geostationary space stations that would constitute a small 
business under the SBA definition.
    47. Space Stations (Non-Geostationary). There are presently six 
Non-Geostationary Space Station authorizations, of which only three 
systems are operational. We do not request nor do we collect annual 
revenue information, and are unable to estimate the number of non-
geostationary space stations that would constitute a small business 
under the SBA definition.
    48. Direct Broadcast Satellites. Because DBS provides subscription 
services, DBS falls within the SBA-recognized definition of ``Cable and 
Other Pay Television Services.'' This definition provides that a small 
entity is one with $11.0 million or less in annual receipts. Currently, 
there are nine DBS authorizations, though there are only two DBS 
companies in operation at this time. We do not request nor do we 
collect annual revenue information for DBS services, and are unable to 
determine the number of DBS operators that would constitute a small 
business under the SBA definition.
    49. Commercial Radio and Television Services. The proposed rules 
and policies will apply to television broadcasting licensees and radio 
broadcasting licensees. The SBA defines a television broadcasting 
station that has $10.5 million or less in annual receipts as a small 
business. Television broadcasting stations consist of establishments 
primarily engaged in broadcasting visual programs by television to the 
public, except cable and other pay television services. Included in 
this industry are commercial, religious, educational, and other 
television stations. Also included are establishments primarily engaged 
in television broadcasting and which produce taped television program 
materials. Separate establishments primarily engaged in producing taped 
television program materials are classified under another NAICS number. 
There were 1,509 television stations operating in the nation in 1992. 
That number has remained fairly constant as indicated by the 
approximately 1,663 operating television broadcasting stations in the 
nation as of September 30, 2000. For 1992, the number of television 
stations that produced less than $10.0 million in revenue was 1,155 
establishments.
    50. Additionally, the SBA defines a radio broadcasting station that 
has $5 million or less in annual receipts as a small business. A radio 
broadcasting station is an establishment primarily engaged in 
broadcasting aural programs by radio to the public. Included in this 
industry are commercial, religious, educational, and other radio 
stations. Radio broadcasting stations, which primarily are engaged in 
radio broadcasting and which produce radio program materials, are 
similarly included. However, radio stations that are separate 
establishments and are primarily engaged in producing radio program 
material are classified under another NAICS number. The 1992 Census 
indicates that 96 percent (5,861 of 6,127) of radio station 
establishments produced less than $5 million in revenue in 1992. 
Official Commission records indicate that a= total of 11,334 individual 
radio stations were operating in 1992. As of September 30, 2000, 
Commission records indicate that a total of 12,717 radio stations were 
operating, of which 8,032 were FM stations. The proposed rules may 
affect an estimated

[[Page 18567]]

total of 1,663 television stations, approximately 1,281 of which are 
considered small businesses. The proposed rules will also affect an 
estimated total of 12,717 radio stations, approximately 12,209 of which 
are small businesses. These estimates may overstate the number of small 
entities because the revenue figures on which they are based do not 
include or aggregate revenues from non-television or non-radio 
affiliated companies. There are also 2,366 low power television 
stations (LPTV). Given the nature of this service, we will presume that 
all LPTV licensees qualify as small entities under the SBA definition.
    51. Auxiliary, Special Broadcast and Other Program Distribution 
Services. This service involves a variety of transmitters, generally 
used to relay broadcast programming to the public (through translator 
and booster stations) or within the program distribution chain (from a 
remote news gathering unit back to the station). The Commission has not 
developed a definition of small entities applicable to broadcast 
auxiliary licensees. The applicable definitions of small entities are 
those, noted previously, under the SBA rules applicable to radio 
broadcasting stations and television broadcasting stations.
    52. The Commission estimates that there are approximately 2,700 
translators and boosters. The Commission does not collect financial 
information on any broadcast facility, and the Department of Commerce 
does not collect financial information on these auxiliary broadcast 
facilities. We believe that most, if not all, of these auxiliary 
facilities could be classified as small businesses by themselves. We 
also recognize that most commercial translators and boosters are owned 
by a parent station which, in some cases, would be covered by the 
revenue definition of small business entity discussed above. These 
stations would likely have annual revenues that exceed the SBA maximum 
to be designated as a small business (either $5 million for a radio 
station or $10.5 million for a TV station). Furthermore, they do not 
meet the Small Business Act's definition of a ``small business 
concern'' because they are not independently owned and operated.
    53. Multipoint Distribution Service (MDS). This service involves a 
variety of transmitters, which are used to relay programming to the 
home or office. In connection with the 1996 MDS auction, the Commission 
defined small businesses as entities that had annual average gross 
revenues for the three preceding years not in excess of $40 million. 
The SBA has approved this definition of a small entity in the context 
of MDS auctions. These stations were licensed prior to implementation 
of Section 309(j) of the Communications Act of 1934, as amended. 
Licenses for new MDS facilities are now awarded to auction winners in 
Basic Trading Areas (BTAs) and BTA-like areas. The MDS auctions 
resulted in 67 successful bidders obtaining licensing opportunities for 
493 BTAs. Of the 67 auction winners, 61 met the definition of a small 
business. There are approximately 2,000 MDS/MMDS/LMDS stations 
currently licensed. We conclude that there are 1,595 MDS/MMDS/LMDS 
providers that are small businesses as deemed by the SBA and the 
Commission's auction rules.
    54. Cellular Licensees. Neither the Commission nor the SBA has 
developed a definition of small entities specific 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 
(wireless) company employing no more than 1,500 persons. According to 
the Census Bureau, only twelve radiotelephone (wireless) firms from a 
total of 1,178 such firms that operated during 1992 had 1,000 or more 
employees. Even if all twelve of these firms were cellular telephone 
companies, nearly all cellular carriers were small businesses under the 
SBA's definition. In addition, we note that there are 1,758 cellular 
licenses; however, a cellular licensee may own several licenses. 
According to the most recent Telecommunications Reporting Worksheets 
data, 806 wireless telephony providers reported that they were engaged 
in the provision of either cellular service, Personal Communications 
Service (PCS) services, and specialized mobile radio telephony 
carriers, which are placed together in the data. We do not have data 
specifying the number of these carriers that are not independently 
owned and operated or have more than 1,500 employees, and are unable at 
this time to estimate with greater precision the number of cellular 
service carriers that would qualify as small business concerns under 
the SBA's definition. We estimate that there are fewer than 806 small 
wireless service providers that may be affected by these proposed 
rules.
    55. 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, we apply the definition under the SBA rules 
applicable to Radiotelephone (Wireless) Communications companies. This 
definition provides that a small entity is a radiotelephone (wireless) 
company employing no more than 1,500 persons. According to the Census 
Bureau, only 12 radiotelephone (wireless) firms out of a total of 1,178 
such firms that operated during 1992 had 1,000 or more employees. If 
this general ratio continues in 2001 in the context of Phase I 220 MHz 
licensees, we estimate that nearly all such licensees are small 
businesses under the SBA's definition.
    56. 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, we adopted criteria for defining small 
and very small businesses for purposes of determining their eligibility 
for special provisions such as bidding credits and installment 
payments. We have 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. A 
very small business is defined as an entity that, together with its 
affiliates and controlling principals, has average gross revenues that 
do not exceed $3 million for the preceding three years. The SBA has 
approved these definitions. Auctions of Phase II licenses commenced on 
September 15, 1998, and closed on October 22, 1998. In the first 
auction, 908 licenses were auctioned in three different-sized 
geographic areas: three nationwide licenses, 30 Regional Economic Area 
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 
licenses auctioned, 693 were sold. Thirty-nine small businesses won 
licenses in the first 220 MHz auction. The second auction included 225 
licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies 
claiming small business status won 158 licenses.
    57. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, 
we 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. We have 
defined a small business as an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $15

[[Page 18568]]

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. An auction of 52 Major 
Economic Area (MEA) licenses commenced on September 6, 2000, and closed 
on September 21, 2000. Of the 104 licenses auctioned, 96 licenses were 
sold to 9 bidders. Five of these bidders were small businesses that won 
a total of 26 licenses. A second auction of 700 MHz Guard Band licenses 
commenced on February 13, 2001 and closed on February 21, 2001. All 
eight of the licenses auctioned were sold to three bidders. One of 
these bidders was a small business that won a total of two licenses.
    58. Private and Common Carrier Paging. In the Paging Third Report 
and Order, we 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. We 
have 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 Metropolitan Economic Area 
licenses commenced on February 24, 2000, and closed on March 2, 2000. 
Of the 985 licenses auctioned, 440 were sold. Fifty-seven (57) 
companies claiming small business status won. At present, there are 
approximately 24,000 Private-Paging site-specific licenses and 74,000 
Common Carrier Paging licenses. According to Telecommunications 
Industry Revenue data, 172 carriers reported that they were engaged in 
the provision of either paging or ``other mobile'' services, which are 
placed together in the data. We do not have data specifying the number 
of these carriers that are not independently owned and operated or have 
more than 1,500 employees, and therefore are unable at this time to 
estimate with greater precision the number of paging carriers that 
would qualify as small business concerns under the SBA's definition. 
Consequently, we estimate that there are fewer than 172 small paging 
carriers that may be affected by these proposed rules. We estimate that 
the majority of private and common carrier paging providers would 
qualify as small entities under the SBA definition.
    59. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequencies 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 its affiliates, has average gross revenues of not more than $15 
million for the preceding three calendar years. The SBA has approved 
these regulations defining ``small entity'' in the context of broadband 
PCS auctions. 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. On March 23, 1999, the 
Commission re-auctioned 347 C, D, E, and F Block licenses; there were 
48 small business winning bidders. An additional classification for 
``very small business'' was added for C Block and is defined as ``an 
entity that together with its affiliates and persons or entities that 
hold interest in such entity and their affiliates, has average annual 
gross revenues that are not more than forty million dollars for the 
preceding three years.'' The SBA approved this definition.'' Based on 
this information, we conclude that the number of small broadband PCS 
licensees will include the 90 winning C Block bidders and the 93 
qualifying bidders in the D, E, and F blocks, plus the 48 winning 
bidders in the re-auction, for a total of 231 small entity PCS 
providers as defined by the SBA and the Commission's auction rules. On 
January 26, 2001, the Commission completed the auction of 422 C and F 
Broadband PCS licenses in Auction No. 35. Of the 35 winning bidders in 
this auction, 29 qualified as small or very small businesses.
    60. Narrowband PCS. To date, two auctions of narrowband PCS 
licenses have been conducted. Through these auctions, the Commission 
has awarded a total of 41 licenses, out of which 11 were obtained by 
small businesses. For purposes of the two auctions that have already 
been held, small businesses were defined as entities with average gross 
revenues for the prior three calendar years of $40 million or less. To 
ensure meaningful participation of small business entities in the 
auctions, the Commission adopted a two-tiered definition of small 
businesses in the Narrowband PCS Second Report and Order. A small 
business is an entity that, together with affiliates and controlling 
interests, has average gross revenues for the three preceding years of 
not more than $40 million. A very small business is an entity that, 
together with affiliates and controlling interests, has average gross 
revenues for the three preceding years of not more than $15 million. 
The SBA has approved these definitions. In the future, the Commission 
will auction 459 licenses to serve Metropolitan Trading Areas (MTAs) 
and 408 response channel licenses. There is also one megahertz of 
narrowband PCS spectrum that has been held in reserve and that the 
Commission has not yet decided to release for licensing. The Commission 
cannot predict accurately the number of licenses that will be awarded 
to small entities in future auctions. However, four of the 16 winning 
bidders in the two previous narrowband PCS auctions were small 
businesses, as that term was defined under the Commission's Rules. The 
Commission assumes, for purposes of this IRFA, that a large portion of 
the remaining narrowband PCS licenses will be awarded to small 
entities. The Commission also assumes that at least some small 
businesses will acquire narrowband PCS licenses by means of the 
Commission's partitioning and disaggregation rules.
    61. 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). We will use the 
SBA's definition applicable to radiotelephone (wireless) companies, 
i.e., an entity employing no more than 1,500 persons. There are 
approximately 1,000 licensees in the Rural Radiotelephone Service, and 
we estimate that almost all of them qualify as small entities under the 
SBA's definition.
    62. Air-Ground Radiotelephone Service. The Commission has not 
adopted a definition of small entity specific to the Air-Ground 
Radiotelephone Service. We will use the SBA's definition applicable to 
radiotelephone (wireless) companies, i.e., an entity employing no more 
than 1,500 persons. There are approximately 100 licensees in the Air-
Ground Radiotelephone Service, and we estimate that almost all of them 
qualify as small under the SBA definition.

[[Page 18569]]

    63. Specialized Mobile Radio (SMR). Pursuant to 47 CFR 
90.814(b)(1), the Commission has defined ``small business'' for 
purposes of auctioning 900 MHz SMR licenses, 800 MHz SMR licenses for 
the upper 200 channels, and 800 MHz SMR licenses for the lower 230 
channels on the 800 MHz band, as a firm that has had average annual 
gross revenues of $15 million or less in the three preceding calendar 
years. The SBA has approved this small business size standard for the 
800 MHz and 900 MHz auctions. Sixty winning bidders for geographic area 
licenses in the 900 MHz SMR band qualified as small business under the 
$15 million size standard. The auction of the 525 800 MHz SMR 
geographic area licenses for the upper 200 channels began on October 
28, 1997, and was completed on December 8, 1997. Ten winning bidders 
for geographic area licenses for the upper 200 channels in the 800 MHz 
SMR band qualified as small businesses under the $15 million size 
standard. An auction of 800 MHz SMR geographic area licenses for the 
General Category channels began on August 16, 2000 and was completed on 
September 1, 2000. Of the 1,050 licenses offered in that auction, 1,030 
licenses were sold. Eleven winning bidders for licenses for the General 
Category channels in the 800 MHz SMR band qualified as small business 
under the $15 million size standard. In an auction completed on 
December 5, 2000, a total of 2,800 Economic Area licenses in the lower 
80 channels of the 800 MHz SMR service were sold. Of the 22 winning 
bidders, 19 claimed small business status. Thus, 40 winning bidders for 
geographic licenses in the 800 MHz SMR band qualified as small 
businesses. In addition, there are numerous incumbent site-by-site SMR 
licenses on the 800 and 900 MHz band.
    64. These proposed rules apply to SMR providers in the 800 MHz and 
900 MHz bands that either hold geographic area licenses or have 
obtained extended implementation authorizations. We do not know how 
many firms provide 800 MHz or 900 MHz geographic area SMR service 
pursuant to extended implementation authorizations, nor how many of 
these providers have annual revenues of no more than $15 million. One 
firm has over $15 million in revenues. We assume, 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.
    65. Private Land Mobile Radio (PLMR). PLMR systems serve an 
essential role in a range of industrial, business, land transportation, 
and public safety activities. Companies of all sizes operating in all 
U.S. business categories use these radios. The Commission has not 
developed a definition of small entity specifically applicable to PLMR 
licensees due to the vast array of PLMR users. 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.
    66. The Commission is unable at this time to estimate the number of 
small businesses that could be impacted by the proposed 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. Because any entity 
engaged in a commercial activity is eligible to hold a PLMR license, 
the proposed rules in this context could potentially impact every small 
business in the United States.
    67. Amateur Radio Service. We estimate that 8,000 applicants will 
apply for vanity call signs in FY 2001. These licensees are presumed to 
be individuals, and therefore not small entities.
    68. Aviation and Marine Radio Service. Small businesses 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. The applicable definition of small entity is the definition 
under the SBA rules for radiotelephone (wireless) communications.
    69. Most applicants for 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. For purposes of this 
IRFA, we estimate that there may be at least 712,000 potential 
licensees that are individuals or are small entities, as the SBA 
defines that term.
    70. Fixed Microwave Services. Microwave services include common 
carrier, private-operational fixed, and broadcast auxiliary radio 
services. At present, there are approximately 22,015 common carrier 
fixed licensees and 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, we will use the SBA's 
definition applicable to radiotelephone (wireless) companies--i.e., an 
entity with no more than 1,500 persons. We estimate that all of the 
Fixed Microwave licensees (excluding broadcast auxiliary licensees) 
would qualify as small entities under the SBA definition for 
radiotelephone (wireless) companies.
    71. Public Safety Radio Services. Public Safety radio services 
include police, fire, local government, 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. As indicated earlier, all governmental entities with 
populations of less than 50,000 fall within the definition of a small 
entity.
    72. 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. The 
services include the citizen's band (CB) radio service, general mobile 
radio service (GMRS), radio control radio service, and family radio 
service (FRS). Since the CB, GMRS, and FRS licensees are individuals, 
no small business definition applies for these services. We are unable 
at this time to estimate the number of other licensees that would 
qualify as small under the SBA's definition.
    73. Offshore Radiotelephone Service. This service operates on 
several UHF TV broadcast channels that are not used for TV broadcasting 
in the coastal areas of states bordering the Gulf of Mexico. There are 
presently approximately 55 licensees in this service. We are unable to 
estimate at this time the number of licensees that would qualify as 
small under the SBA's definition for radiotelephone (wireless) 
communications.
    74. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these definitions. The Commission auctioned geographic area licenses in 
the WCS service. In the auction, there were seven

[[Page 18570]]

winning bidders that qualified as very small business entities, and one 
that qualified as a small business entity. We conclude that the number 
of geographic area WCS licensees affected includes these eight 
entities.
    75. 39 GHz Service. The Commission defined ``small entity'' for 39 
GHz licenses as an entity that has average gross revenues of less than 
$40 million in the three previous calendar years. 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. The SBA has approved these regulations defining ``small entity'' 
in the context of 39 GHz auctions. The auction of the 2,173 39 GHz 
licenses began on April 12, 2000 and closed on May 8, 2000. The 18 
bidders who claimed small business status won 849 licenses.
    76. Local Multipoint Distribution Service. The auction of the 1,030 
Local Multipoint Distribution Service (LMDS) licenses began on February 
18, 1998 and closed on March 25, 1998. The Commission defined ``small 
entity'' for LMDS licenses as an entity that has average gross revenues 
of less than $40 million in the three previous calendar years. An 
additional classification for ``very small business'' was added and is 
defined as an entity that, together with its affiliates, has average 
gross revenues of not more than $15 million for the preceding three 
calendar years. The SBA has approved these regulations defining ``small 
entity'' in the context of LMDS auctions. There were 93 winning bidders 
that qualified as small entities in the LMDS auctions. A total of 93 
small and very small business bidders won approximately 277 A Block 
licenses and 387 B Block licenses. On March 27, 1999, the Commission 
re-auctioned 161 licenses; there were 40 small entity winning bidders. 
Based on this information, we conclude that the number of small LMDS 
licenses will include the 93 winning bidders in the first auction and 
the 40 winning bidders in the re-auction, for a total of 133 small 
entity LMDS providers as defined by the SBA and the Commission's 
auction rules.
    77. 218-219 MHz Service. The first auction of 218-219 MHz spectrum 
resulted in 170 entities winning licenses for 595 Metropolitan 
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by 
entities qualifying as a small business. For that auction, we defined a 
small business as an entity that, together with its affiliates, has no 
more than a $6 million net worth and, after federal income taxes 
(excluding any carry over losses), has no more than $2 million in 
annual profits each year for the previous two years. In the 218-219 MHz 
Report and Order and Memorandum Opinion and Order, we defined a small 
business as an entity that, together with its affiliates and persons or 
entities that hold interests in such an entity and their affiliates, 
has average annual gross revenues not to exceed $15 million for the 
preceding three years. A very small business is defined as an entity 
that, together with its affiliates and persons or entities that hold 
interests in such an entity and its affiliates, has average annual 
gross revenues not to exceed $3 million for the preceding three years. 
We cannot estimate, however, the number of licenses that will be won by 
entities qualifying as small or very small businesses under our rules 
in future auctions of 218-219 MHz spectrum. Given the success of small 
businesses in the previous auction, and the above discussion regarding 
the prevalence of small businesses in the subscription television 
services and message communications industries, we assume for purposes 
of this IRFA that in future auctions, all of the licenses may be 
awarded to small businesses, which would be affected by these proposed 
rules.
4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    78. With certain exceptions, the Commission's informal complaint 
process will apply to all Commission licensees and regulatees. The 
compliance requirements imposed by the proposed rules on these entities 
are three-fold. First, entities against which a complaint is made must 
acknowledge receipt of the complaint. Second, these entities are 
expected to resolve the consumer complaints if possible; and third, the 
entity must advise the Commission that resolution of such complaint has 
either been attempted and has been unsuccessful or has been achieved. 
Entities will be required to respond within a prescribed time frame. 
All steps of the informal complaint process are completed by non-
professional staff. Therefore, we expect that the cost for addressing 
consumer complaints per complaint will be no greater for small entities 
than it will be for large ones. Failure to resolve an informal 
complaint may lead to the filing of a formal complaint by the consumer 
and possible enforcement measures exercised by the Commission.
5. Steps Taken to Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    79. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): (1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.
    80. As described in the NPRM, we are attempting to streamline our 
complaint procedures to make the same requirements applicable to all 
licensees and regulatees. One of the alternatives we are considering is 
in keeping with alternative (1) above and is the establishment of a 
different time for responses to complaints involving small businesses. 
As set forth above, we are seeking comments on this alternative, 
including the issue of whether a different standard should be applied 
to different industries. Our expectation is that the establishment of 
an informal complaint process will reduce costs overall for small 
entities, by minimizing the need for extensive legal or accounting 
services that might be necessary in a formal complaint process.
    81. In addition, this item contemplates that small entities may 
choose to avail themselves of the informal complaint process when in 
problematic situations. We are considering an alternative for small 
businesses that would allow such businesses, using the informal 
complaint process, additional time to file formal complaints if 
necessary. We emphasize that this informal complaint process is 
entirely voluntary and imposes no mandatory burden on small entities 
that use this process. We seek additional comment on this alternative 
in the NPRM.
    82. Furthermore, we seek comment on other alternatives or 
suggestions that might simplify our informal complaint procedures or 
otherwise benefit small entities, while remaining consistent with our 
purposes in this proceeding.

[[Page 18571]]

6. Federal Rules That May Duplicate, Overlap, or Conflict with the 
Proposed Rules.
    83. None.

A. Comment Due Dates and Filing Procedures

    84. Pursuant to Secs. 1.415 and 1.419 of the Commission's rules, 
interested parties may file comments on or before May 16, 2002, and 
reply comments on or before May 31, 2002. Comments may be filed using 
the Commission's Electronic Comment Filing System (ECFS) or by filing 
paper copies.
    85. 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. If 
multiple docket or rulemaking numbers appear in the caption of this 
proceeding, however, commenters must transmit one electronic copy of 
the comments to each docket or rulemaking number referenced in the 
caption. In completing the transmittal screen, commenters should 
include their full name, Postal Service mailing address, and the 
applicable docket or rulemaking number. Parties may also submit an 
electronic comment by Internet e-mail. To get 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 
form your e-mail address.'' A sample form and directions will be sent 
in reply.
    86. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appear in the caption of this proceeding, commenters must submit 
two additional copies for each additional docket or rulemaking number. 
All filings must be sent to the Commission's Acting Secretary, William 
F. Caton, Office of the Secretary, Federal Communications Commission, 
445 Twelfth Street, SW., TW-A325, Washington, DC 20554.
    87. Parties who choose to file by paper should also submit their 
comments on diskette. These diskettes should be submitted to: Renee 
Owusu, Consumer Information Bureau, 445 12th Street, SW., Washington, 
DC 20554. Such a submission should be on a 3.5 inch diskette formatted 
in an IBM compatible format using Word 97 or compatible software. The 
diskette should be accompanied by a cover letter and should be 
submitted in ``read only'' mode. The diskette should be clearly labeled 
with the commenter's name, proceeding (including the docket number in 
this case CI Docket No. 02-32), type of pleading (comment or reply 
comment), date of submission, and the name of the electronic file on 
the diskette. The label should also include the following phrase ``Disk 
Copy--Not an Original.'' Each diskette should contain only one party's 
pleadings, preferably in a single electronic file. In addition, 
commenters must send diskette copies to the Commission's copy 
contractor, Qualex International, Portals II, 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554.
    88. Alternative formats (computer diskette, large print, audio 
cassette, and Braille) are available to persons with disabilities by 
contacting Brian Millin of the Consumer Information Bureau at (202) 
418-7426, TTY (202) 418-7365, or at [email protected]. The NPRM and the 
proposed rules can also be downloaded from http://www.fcc.gov.
    89. Written comments by the public on the proposed information 
collections are due May 16, 2002. Written comments must be submitted by 
the Office of Management and Budget (OMB) on the proposed information 
collections on or before June 17, 2002. In addition to filing comments 
with the Secretary, a copy of any comments on the information 
collection(s) contained herein should be submitted to Judy Boley 
Herman, Federal Communications Commission, Room 1-C804, 445 12th 
Street, SW., Washington, DC 20554, or via the Internet to 
[email protected] and to Jeanette Thornton, OMB Desk Officer, Room 10236 
NEOB, 725 17th Street, NW., Washington, DC 20503 or via the Internet to 
[email protected].
IV. Ordering Clauses
    90. Pursuant to the authority contained in sections 1, 2, 4(i), 
4(j), 208, 303(r), and 403 of the Communications Act of 1934, as 
amended, the Notice of Proposed Rulemaking is adopted.
    91. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Notice of Proposed 
Rulemaking, including the Initial Regulatory Flexibility Certification, 
to the Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 1

    Commission practice and procedure.

    Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR parts 0 and 1 as 
follows:

PART 0--COMMISSION ORGANIZATION

    1. The authority citation for part 0 continues to read as follows:

    Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.
    2. Section 0.453 is amended by revising paragraph (a)(2)(ii)(F) to 
read as follows:


Sec. 0.453  Public reference rooms.

* * * * *
    (a) * * *
    (2) * * *
    (ii) * * *
    (F) All formal complaints against common carriers filed under 
Secs. 1.711 through 1.735 of this chapter, all documents filed in 
connection therewith and all communications related thereto.
* * * * *
    3. Section 0.457 is amended by adding paragraph (f)(4) to read as 
follows:


Sec. 0.457  Records not routinely available for public inspection.

* * * * *
    (f) * * *
    (4) Informal complaints filed under Secs. 1.711 through 1.735 of 
this chapter, all documents filed in connection therewith, and all 
communications related thereto.
* * * * *

PART 1--PRACTICE AND PROCEDURE

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

    Authority: 47 U.S.C. 151, 154(I), 154(j), 155, 225, 303(r), 309 
and 325(e).

    5. Add Sec. 1.715 to subpart E following the undesignated center 
heading entitled ``Informal Complaints'' to read as follows:


Sec. 1.715  Purpose and scope.

    (a) The purpose of these rules is to establish a unified, 
streamlined process for the intake and resolution of complaints filed 
by consumers in order to promote maximum compliance with the 
requirements of the Communications Act of 1934, as amended, and our 
implementing rules and orders.
    (b) These rules shall apply to all consumer complaints filed 
against any entities regulated by the Commission, except common 
carriers. Complaints against common carriers should be filed pursuant 
to Secs. 1.716 through 1.718. The requirements contained in this 
subpart are not intended to preempt the adoption or enforcement of 
other rules

[[Page 18572]]

established by the Commission, or any other governmental entity, as 
remedies in specific areas.
    (c) A consumer complaint may be transmitted to the Commission by 
any reasonable means, including letter, facsimile transmission, 
telephone (voice and TTY), Internet e-mail, and audio or video cassette 
recording. The complaint should contain:
    (1) The name and address of the complainant;
    (2) The name and address of the company against which the complaint 
is being made;
    (3) Details about the product or service about which the complaint 
is being made;
    (4) A statement of facts supporting the complainant's allegation 
that the defendant company has acted or failed to act as required by 
the Act or the Commission's rules or orders;
    (5) If the complainant is disputing a rate or charge assessed by 
the defendant company, a copy of the complainant's bill setting forth 
the rate or charge in dispute; and
    (6) The specific relief or satisfaction being sought by the 
complainant.
    (d) The Commission will forward consumer complaints to the 
appropriate regulated entity for investigation. The regulated entity 
will, within 30 days, advise the Commission in writing, with a copy to 
the complainant, of its satisfaction of the complaint or of its refusal 
or inability to do so. Where there are clear indications from the 
entity's report or from other communications with the parties that the 
complaint has been satisfied, the Commission may, in its discretion, 
consider a complaint proceeding to be closed, without response to the 
complainant. In all other cases, the Commission will contact the 
complainant regarding its review and disposition of the matters raised.

[FR Doc. 02-8795 Filed 4-15-02; 8:45 am]
BILLING CODE 6712-01-P