A proposed rule detailing the revisions was published in the Federal Register on July 23, 2002, (67 FR 48050). A 90-day comment period was provided for interested persons to respond to the proposed rule. No comments were received and no changes have been made in the provisions of the final rule.

This rule was determined to be not significant for purposes of Executive Order 12866, and, therefore, has not been reviewed by the Office of Management and Budget (OMB).

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. This final rule would not preempt any state or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this rule.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), AMS has considered the economic impact of this action on small entities and has determined that its implementation will not have a significant economic impact on a substantial number of small entities.

The New York Cotton Future Market traders include the entire cotton industry: farmers, merchants, and textile mill owners. There are an estimated 3,000 traders. This final rule would affect all such traders. The majority of the traders are small businesses under the criteria established by the Small Business Administration. Amending the regulations to change the designated spot markets for determining tenderable differences will not significantly affect small businesses as defined under the RFA because:

(1) The information gathered will be more reflective of the cotton traded for cotton futures contracts and add more transparency to the market;

(2) The competitive position or market access of small entities in the cotton industry would not be affected;

(3) No new costs would be imposed on the affected industry.

In compliance with Office of Management and Budget (OMB) regulations (5 CFR part 1320) which implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ) the information collection requirements contained in the regulation to be amended have been previously approved by OMB and were assigned control number 0581-0029 under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ).

The Secretary of Agriculture is authorized under the U.S. Cotton Futures Act (7 U.S.C. 15b) to make such regulations as determined necessary to carry out the provisions of the Act. The Act provides for the designation of at least five bona fide spot markets from which spot cotton price information can be collected. Presently, there are seven such designated markets that qualify under the Cotton Futures Act requirements. The seven designated markets are as follows: Southeastern, North Delta, South Delta, East Texas and Oklahoma, West Texas, Desert Southwest and San Joaquin Valley. For the purposes of determining settlement of futures contracts five of the seven spot markets are used. They are Southeastern, North Delta, South Delta, East Texas and Oklahoma, and Desert Southwest. The Cotton Program of the Agricultural Marketing Service provides market information from these spot markets under the Cotton Statistics and Estimates Act (7 U.S.C. 473b) and the Agricultural Marketing Act of 1946 (7 U.S.C. 1622(g)).

The Commodity Futures Trading Commission, in an effort to better reflect market transparency, approved a request from the New York Board of Trade to change the spot markets used to calculate commercial differences in Cotton Futures Exchange deliveries. This final rule would change the designation of the spot markets which are used daily to calculate price differences for cotton futures contracts. The current designations were published in the Federal Register on August 4, 1988 (53 FR 29327). As previously stated, differences are quoted for those qualities of cotton which are tenderable on active futures contracts in five designated markets. These differences are averaged to obtain the differences quoted for futures settlement.

This final rule would provide that differences would continue to be quoted for those qualities of cotton which are tenderable on active futures contracts in all of the five markets currently designated for this purpose. However, the West Texas spot market would be added as a bone fide spot market for the settlement of futures contracts, and the North Delta and South Delta spot markets would be combined and averaged together when used for this purpose of calculating differences of tenderable qualities for the settlement of futures contracts. This final rule would change the calculation of differences of tenderable qualities for the settlement of futures contracts to be the average of the differences of (1) the Southeastern spot market; (2) the East Texas/Oklahoma spot market; (3) the West Texas spot market; (4) the Desert Southwest spot market; and (5) the combination and averaging of the North Delta and South Delta spot markets. The remaining designated spot markets would not change. These modifications are expected to more accurately reflect the trading value of tenderable cotton on futures contracts and add more transparency in the market.

The regulations in 9 CFR part 94 (referred to below as the regulations) govern the importation of certain animals and animal products into the United States in order to prevent the introduction of various animal diseases, including rinderpest and foot-and-mouth disease (FMD). These are dangerous and destructive communicable diseases of ruminants and swine. Section 94.1 of the regulations lists regions of the world that are considered free of rinderpest or free of both rinderpest and FMD. Rinderpest or FMD is considered to exist in all parts of the world not listed. Section 94.11 of the regulations lists regions of the world that the Animal and Plant Health Inspection Service (APHIS) has determined to be free of rinderpest and FMD, but from which importation of meat and animal products into the United States is restricted because of the regions' proximity to or trading relationships with rinderpest- or FMD-affected regions.

In an interim rule effective January 15, 2001, and published in the Federal Register on March 14, 2001 (66 FR 14825-14826, Docket No. 01-018-1), we amended the regulations by removing Great Britain (England, Scotland, Wales, and the Isle of Man) and Northern Ireland from the list of regions considered to be free of rinderpest and FMD. (The Federal Register published a correction (66 FR 18357) to the interim rule on April 6, 2001.) That interim rule was necessary because FMD had been confirmed in those regions. The effect of the interim rule was to prohibit or restrict the importation of any ruminant or swine and any fresh (chilled or frozen) meat and other products of ruminants or swine into the United States from Great Britain and Northern Ireland.

Although we removed Great Britain and Northern Ireland from the list of regions considered to be free of rinderpest and FMD, we recognized in the interim rule that the appropriate authorities had responded to the detection of FMD by imposing restrictions on the movement of ruminants, swine, and ruminant and swine products from FMD-affected areas; by conducting heightened surveillance activities; and by initiating measures to eradicate the disease. We stated that we intended to reassess the situation in those regions at a future date in the context of Office International des Epizooties (OIE) standards, and that as part of that reassessment process, we would consider all comments received regarding the interim rule.

Additionally, we stated in the interim rule that the future reassessments would enable us to determine whether it was necessary to continue to prohibit or restrict the importation of ruminants or swine and any fresh (chilled or frozen) meat and other products of ruminants or swine from Great Britain and Northern Ireland, or whether we could restore Great Britain and Northern Ireland to the list of regions in which FMD is not known to exist, or regionalize portions of Great Britain or Northern Ireland as FMD-free.

On January 9, 2002, we published a final rule in the Federal Register (67 FR 1072-1074, Docket No. 01-031-3) in which we restored Northern Ireland (as well as the Netherlands) to the list of regions considered to be free of rinderpest and FMD and to the list of regions subject to certain import restrictions on meat and animal products because of their proximity to or trading relationships with rinderpest- or FMD-affected regions. The action with respect to Northern Ireland and the Netherlands was based on the results of an evaluation of the FMD situation in those regions, which took into account, among other things, that each region met the standards of the OIE for being considered to be free of FMD.

On July 16, 2002, we published a notice in the Federal Register (67 FR 46628-46629, Docket No. 01-018-2) in which we advised the public of the availability of an evaluation that we had prepared concerning the FMD disease status of Great Britain. (We published a correction (67 FR 54164, Docket No. 01-018-3) to that notice on August 21, 2002.) The evaluation, entitled “APHIS Evaluation of FMD Status of Great Britain (England, Scotland, Wales, and the Isle of Man)” (May 2002), assessed the FMD status of Great Britain and the related disease risks associated with importing animals and animal products into the United States from Great Britain.

We solicited comments concerning the evaluation for 60 days ending September 16, 2002, and received 10 comments by that date. The comments were submitted by animal breeders and producers, an animal breeders' association, national beef and pork industry associations, and artificial insemination businesses. Seven of the 10 commenters supported restoring Great Britain to the list of FMD-free regions and relieving certain prohibitions and restrictions on the importation of animals and animal products into the United States from Great Britain. The other comments are discussed below.

One commenter expressed concern that the European Union (EU) is reportedly willing to accept the risk of an outbreak of FMD once every 10 years. The commenter asked what level of FMD risk is acceptable to the United Kingdom, and what actions the United Kingdom was taking to achieve that level of risk.

There is no research of which we are aware, and the commenter did not make reference to any specific report, that indicates that the EU or the United Kingdom is willing to accept the risk of an outbreak of FMD under any circumstances. Regardless of the level of risk that any individual country might be willing to accept, we prepare risk assessments based on our own standards. Our evaluation of Great Britain's eradication and control efforts, including site visits that are detailed in a document that is available to the public (see following section, “Status of Great Britain”), clearly shows that Great Britain has implemented effective measures to prevent further outbreaks of FMD.

Two commenters stated that, given the delay in diagnosis of FMD in Great Britain during the outbreak in 2001, education regarding the importance of early reporting of suspicious disease situations is advisable. The commenter inquired whether APHIS had any information about any such continuing educational efforts in Great Britain.

The United Kingdom's Department for Environment, Food, and Rural Affairs (DEFRA) maintains a Web site ( http://www.defra.gov.uk/footandmouth ) that offers information about, among other things, the disease and the 2001 outbreak, government restrictions and control measures, and precautions that farmers can take to avoid future outbreaks, including looking for early signs of disease. This information, made readily available to the public, through the internet and other media, demonstrates the commitment of the government of the United Kingdom to maintaining a high level of awareness and education regarding FMD.

One commenter wanted to know if we have received information about the compliance of former swill feeding operations with the swill feeding ban that was enacted by the United Kingdom in May 2001.

The ban on swill feeding is an important mitigating measure for the prevention of FMD, and DEFRA has initiated enforcement measures to ensure compliance with the ban. For 12 months following the implementation of the ban, local authorities, in cooperation with the Chief Veterinary Officer of DEFRA, visited all former swill feeders. The visits occurred at 2 weeks, 1 month, 2 months, 6 months, and 12 months. During those 12 months, many of the former swill feeders gave up pig production altogether. The swill feeding operations that remained were thoroughly inspected to ensure that they had changed their feeding regimes in compliance with the ban. Local authorities took feed samples at any swill feeding operation that they suspected was using meat or meat products in their feed. The necessary enforcement measures, up to and including prosecution, were taken in all cases of non-compliance with the ban. These non-compliant swill feeding operations continue to be inspected on a regular basis to ensure that compliance is upheld.

In addition to these inspection measures, the Chief Veterinary Officer of DEFRA has also instituted an awareness campaign aimed at former swill feeding operators as well as the public. Information about alternative methods of feeding, safe disposal of untreated swill, and various feed options has all been made available on DEFRA's Web site. Letters have been written to the local authorities emphasizing the importance of continued vigilance in their enforcement activities, and DEFRA's State Veterinary Service continues to work closely with the local authorities. Our risk assessment and site visits, in addition to the subsequent information we have received from DEFRA, indicate that these actions taken by DEFRA to ensure compliance with the swill feeding ban have been, and continue to be, an effective mitigation measure against the reintroduction of FMD.

Two commenters asked about the level of testing that had been done in deer and feral boars in areas of the country that had contained infected domestic animals.

The information available to us indicates that the wildlife populations were not tested extensively because FMD infections in wildlife were not believed to be a factor in the spread of FMD or to be a reservoir of infection. Detection and eradication efforts were focused on infected domestic animals. We believe that the risk of the spread of FMD from wildlife is minimal because the disease has been eradicated in the domestic livestock, and there has been no reintroduction of the disease from wildlife.

Two commenters noted that Canada will not allow the importation from the United Kingdom of some commodities that have been imported into the United Kingdom from certain trading partners in the EU known to be infected with FMD. These commenters asked whether APHIS has reviewed the risk to the United Kingdom, and then subsequently to the United States, of these types of importations. These commenters also inquired how the United Kingdom's import controls for commodities from FMD countries compare to the United States' import controls for commodities from FMD countries, and what level of protection is provided by the 100 percent documentation and identity checks conducted by the United Kingdom on the origin of meat imported from FMD countries.

The risk to the United Kingdom and subsequently to the United States of these types of importations is addressed in the current regulations that govern the importation of meat and other animal products. These regulations include special restrictions for those FMD-free regions that: (1) Supplement their national meat supply by the importation of fresh (chilled or frozen) meat of ruminants or swine from regions that are designated as having FMD; (2) share a common land border with regions that are designated as having FMD; or (3) import ruminants or swine from regions where FMD exists under conditions that are less restrictive than are acceptable for importation into the United States. These restrictions, found in § 94.11, will apply to Great Britain and offer additional protection against the possibility of the introduction of FMD into the United States.

One commenter noted the outbreaks of classical swine fever and FMD in the last 2 years in the United Kingdom and asked if APHIS' risk evaluation and assessment process addressed future risks to the United States based on this type of history.

Our risk evaluation and assessment process takes into account the quick and effective response of the government after the initial outbreaks of these diseases. The emergency response lessons that DEFRA learned have led to an increased level of sensitivity and an enhanced level of awareness of the potential for disease incursions. Although it is impossible to predict the potential for future risk with complete certainty, we believe that the continued surveillance and ongoing educational and control efforts of DEFRA, combined with the restrictions of § 94.11 discussed above, support our determination that there does not exist an undue risk of FMD being introduced into the United States through the importation of animals or animal products from Great Britain.

Two commenters requested that APHIS review other disease situations with regard to health risks to the U.S. livestock herd. One of the commenters specifically mentioned postweaning multi-systemic wasting syndrome (PMWS) and porcine dermatitis and nephropathy syndrome (PDNS), which the commenter said were increasing in prevalence and severity in Great Britain.

APHIS conducts ongoing review and analysis of diseases that could affect the U.S. livestock herd. With regard to PMWS and PDNS, both of these diseases already exist in the United States, and we have initiated an evaluation process to determine the extent of their spread and the health risks that they present both in the United Kingdom and in the United States.

Another commenter supported relieving restrictions on the importation from Great Britain of embryos and semen under certain conditions, but opposed relieving restrictions on the importation of other animal products from Great Britain because of FMD and because of the “unknown incubation period” of bovine spongiform encephalopathy (BSE).

Our evaluation of Great Britain's FMD control and eradication efforts since the initial outbreak of FMD indicates that they have been effective. The evaluation, which also took into account OIE's standards, found that there is no undue risk of the presence of FMD in Great Britain. Based on this evidence, we do not consider it necessary to prohibit the importation of animals and animal products from Great Britain due to FMD.

However, because the United Kingdom is listed in § 94.18(a)(1) as a region in which BSE is considered to exist, the importation of ruminants and fresh (chilled or frozen) meat, meat products, and edible products other than meat (excluding gelatin, milk, and milk products) from ruminants from the United Kingdom will continue to be prohibited. Status of Great Britain

In this final rule, we are restoring Great Britain to the list in § 94.1(a) of regions that are considered to be free of rinderpest and FMD. Our reasons follow.

When FMD occurs in an FMD-free country or zone where vaccination is not practiced before the outbreak, the OIE requires a waiting period of 3 months after the last case, when stamping-out and serological surveillance are applied, before that FMD-free country or zone can be reevaluated.

Great Britain did not vaccinate animals against FMD before the initial outbreak that was confirmed on February 20, 2001. Following the initial outbreak, Great Britain implemented a stamping-out policy, movement control measures, serological surveillance, import controls, a ban on swill feeding, and enhanced control of international waste to ultimately control and eradicate the disease.

The last case of FMD in Great Britain occurred on September 30, 2001. The animals were slaughtered immediately, and more than 3 months had elapsed by the time the evaluation was conducted. The OIE reinstated the FMD-free status of the United Kingdom on January 22, 2002. This reinstatement was a significant factor in our evaluation.

We have evaluated the FMD eradication efforts in Great Britain based on information provided to us by this region and by our own site visits. Our findings and site visit reports may be viewed on the Internet at http://www.aphis.usda.gov/vs/reg-request.html. You may also request paper copies of these documents by calling or writing the person listed under FOR FURTHER INFORMATION CONTACT. Please refer to Docket No. 01-018-4 when requesting copies. These documents are also available in our reading room. (The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call (202) 690-2817 before coming.)

We further believe that we have an obligation under our international trade agreements to restore a region previously recognized as FMD-free to our list of regions free of FMD as soon as practicable upon its meeting OIE standards for free status. The United States would expect the same policy to be applied in the event of an outbreak of disease, and subsequent eradication of that disease, in this country.

Based on our findings, and after reviewing comments submitted to us on the interim rule and on the evaluation, we are amending the regulations by restoring Great Britain to the list in § 94.1(a)(2) of regions that are declared free of both rinderpest and FMD. We are also restoring Great Britain to the list in § 94.11(a) of regions that are declared free of rinderpest and FMD but that are subject to special restrictions on the importation of their meat and other animal products into the United States. The regions listed in § 94.11(a) are subject to these special restrictions because they: (1) Supplement their national meat supply by importing fresh (chilled or frozen) meat of ruminants or swine from regions that are designated in § 94.1(a) as regions where rinderpest or FMD exists; (2) have a common land border with regions where rinderpest or FMD exists; or (3) import ruminants or swine from regions where rinderpest or FMD exists under conditions less restrictive than would be acceptable for importation into the United States.

This action relieves certain restrictions due to FMD on the importation into the United States of certain live animals and animal products from Great Britain. However, because Great Britain has certain trade practices regarding ruminants and swine that are less restrictive than are acceptable for importation into the United States, the importation of meat and other products from ruminants and swine into the United States from Great Britain continues to be subject to certain restrictions. Further, because the United Kingdom is listed in § 94.18(a)(1) as a region in which BSE is considered to exist, the importation of ruminants, fresh (chilled or frozen) meat, meat products, and certain other edible products of ruminants from the United Kingdom will continue to be prohibited.

In § 94.18, we refer to Northern Ireland and Great Britain (England, Scotland, Wales, and the Isle of Man) collectively as the United Kingdom. In this rule, we are amending §§ 94.1 and 94.11 to be consistent with § 94.18. Therefore, instead of adding Great Britain to the lists of regions in §§ 94.1 and 94.11, we are removing the references to Northern Ireland that are currently in both sections and adding the United Kingdom to those lists.

This is a substantive rule that relieves restrictions and, pursuant to the provisions of 5 U.S.C. 553, may be made effective less than 30 days after publication in the Federal Register . Immediate implementation of this rule is warranted to relieve certain restrictions on the importation of ruminants and swine and fresh (chilled or frozen) meat and other products of ruminants and swine into the United States from Great Britain that are no longer necessary. Therefore, the Administrator of the Animal and Plant Health Inspection Service has determined that this rule should be effective upon publication in the Federal Register .

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review process required by Executive Order 12866.

We are amending the regulations governing the importation of certain animals, meat, and other animal products by adding Great Britain to the list of regions considered to be free of rinderpest and FMD and to the list of regions that are subject to certain import restrictions on meat and animal products because of their proximity to or trading relationships with rinderpest-or FMD-affected regions. This final rule follows an interim rule that removed Great Britain and Northern Ireland from those lists due to detection of FMD in those regions. Based on the results of an evaluation of the current FMD situation in Great Britain, which took into account, among other things, that Great Britain met the standards of the OIE for being considered to be free of FMD, we have determined that Great Britain can be added to the list of regions considered free of FMD. This final rule relieves certain prohibitions and restrictions on the importation of ruminants and swine and fresh (chilled or frozen) meat and other products of ruminants and swine into the United States from Great Britain.

Great Britain has not historically been a major source of U.S. imports of the products affected by the FMD-related prohibitions and restrictions of the regulations, which include live ruminants, live swine, fresh (chilled or frozen) meat of ruminants and swine, processed ruminant and swine meat, some dairy products, animal feeds, and other ruminant and swine products such as semen, embryos, untanned hides and skins, unwashed wool, hair, bones, blood, and some other byproducts. Past imports of these products from Great Britain represent a small fraction of the total U.S. imports or total U.S. production of these products. Given the BSE-related prohibitions that will continue to apply to the importation of ruminants, fresh (chilled or frozen) meat, meat products, and certain other edible products of ruminants from the United Kingdom, as well as the restrictions on the importation of meat and other products from ruminants and swine from the United Kingdom that will apply under § 94.11, this final rule is not expected to alter these past trade patterns.

The majority of entities potentially affected by this final rule are considered small. For example, in 1997, approximately 97 percent (2,919 of 2,992) of meat and meat product wholesalers, 99 percent (1,490 of 1,503) of livestock wholesalers, 1 92 percent (79,155 of 86,022) of dairy farms, 99.3 percent (651,542 of 656,181) of cattle farms, 87 percent (40,185 of 46, 353) of hog and pig farms, 99.5 percent (29,790 of 29,938) of sheep and goat farms, 2 98 percent (1,272 of 1,297) of slaughtering establishments, and 95 percent (1,324 of 1,393) of meat processing establishments  3 would be considered small entities under the criteria set by the Small Business Administration. However, these entities should be little affected by this rulemaking because of the negligible effect on imports.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action would not have a significant economic impact on a substantial number of small entities.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

This final rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

Part 260 of the Board's regulations deals generally with administrative review of denials of claims or requests for waiver of recovery of overpayments under the Railroad Retirement Act (RRA). Part 320 deals with the same matters under the Railroad Unemployment Insurance Act (RUIA). The Board believes this regulation streamlines the process without diminishing the rights of claimants in the administrative review process. In addition, the Board believes that part 260 has been made more readable and thus more understandable to the public.

Specifically, the Board amends § 260.2 to clarify that the procedure applicable to the appeal of a decision denying the crediting of compensation also applies to the crediting of service months under the RRA. Sections 260.3(d) and 320.10(e) are amended to add as possible good cause for failure to file a timely reconsideration request or appeal within the agency that the claimant believed his or her representative had filed such a request or appeal. In order to protect an appellant where he or she may have a problem obtaining appeal forms, §§ 260.5(b), 260.9(b), 320.12, and 320.39 are amended to provide that the right to appeal is protected by the submission of a written request received within the appeal period stating an intent to appeal, if the claimant files the appeal form within the 30-day period following the date of the letter sending the form to the claimant.

As proposed, section 260.5(l) provides that a hearing may be conducted by telephone conference at the discretion of the hearings officer. We have also amended section 320.25(d) to conform it to proposed section 260.5(l), which is being adopted without change.

A request for waiver of recovery of an overpayment must be filed within 60 days of the notice of overpayment. Sections 260.4(c) and 320.11(f) provide that the Board will still consider a request for waiver filed after the 60-day time period, but may proceed to collect the overpayment and that any amounts collected prior to the request for waiver will not be waived.

The regulation amends both parts 260 and 320 to delay recovery of an erroneous payment when a timely appeal is filed with the Bureau of Hearings and Appeals (new paragraphs 260.5(d) and 320.12(c)) and also when a timely appeal is filed with the three-member Board (new paragraphs 260.9(d) and 320.39(b)).

Sections 260.9(d) and (e) clarify that new evidence will ordinarily not be accepted on appeal to the three-member Board from a decision of a hearings officer, but that argument will be accepted. A new § 320.40(d) parallels § 260.9(e). Sections 260.10 and 320.49 provide that the date of postmark will be considered the date of filing a document with the Board. Finally, a number of nomenclature changes are made to reflect a recent reorganization.

Sections 260.10 and 320.49 are revised to state that as a general rule a document is filed on the day it is received by the Board but that the date of a postmark or other evidence of the date of mailing will be used to establish a filing date. The current § 320.49 contains a provision that allows the Board and a base-year employer to agree to transmit documents and notices by electronic mail. That sentence was inadvertently omitted from the proposed rule, and has been restored in the final rule as paragraph 320.49(c).

The Board published the proposed rule on March 29, 2002 (67 FR 15127), and invited comments by May 28, 2002. No comments were received. With the exceptions for §§ 320.25(d) and 320.49 noted above, the proposed rule has been redrafted as a final rule without change.

Pursuant to the Paperwork Reduction Act of 1995, the information collection associated with this rule, the Form HA-1, used to file appeals to the Bureau of Hearings and Appeals and to the three-member Board, has been approved by the Office of Management and Budget under control number 3220-0007. This collection has been cleared for use through August 31, 2004 by the Office of Management and Budget.

Prior to publication of this final rule, the Board submitted this rule to the Office of Management and Budget for review pursuant to Executive Order 12866. Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for rules that constitute significant regulatory action, including rules that have an economic effect of $100 million or more annually. This final rule is not a major rule in terms of the aggregate costs involved. Specifically, we have determined that this final rule is not a major rule with economically significant effects because it would not result in increases in total expenditures of $100 million or more per year.

The revisions made by this final rule are significant. Parts 260 and 320 explain the procedures for seeking review of and appealing a decision through several levels within the Railroad Retirement Board. The revisions should result in modest savings in administrative costs due to the streamlining of procedures. However, the revisions will benefit the agency's constituents as a result of the overall additional protections provided.

Both the Regulatory Flexibility Act and the Unfunded Mandates Act of 1995 define “agency” by referencing the definition of “agency” contained in 5 U.S.C. 551(1). Section 551(1)(E) excludes from the term “agency” an agency that is composed of representatives of the parties or of representatives of organizations of the parties to the disputes determined by them. The Railroad Retirement Board falls within this exclusion (45 U.S.C. 231f(a)) and is therefore exempt from the Regulatory Flexibility Act and the Unfunded Mandates Act.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct compliance costs on State and local governments, preempts State law, or otherwise has Federalism implications. We have reviewed this final rule under the threshold criteria of Executive Order 13132 and have determined that it would not have a substantial direct effect on the rights, roles, and responsibilities of States or local governments.

In accordance with the provisions of Executive Order 12866, this regulation has been reviewed by the Office of Management and Budget.

Section 343 of the Illegal Immigration Reform and Immigrant Responsibility Ac (IIRIRA), Pub. L. 104-208, 110 Stat. 3009, 636-37 (1996), created a new ground of inadmissibility and visa ineligibility now codified as section 212(a)(5)(C) of the Immigration and Nationality Act (INA), 8 U.S.C. 1182(a)(5)(C). It provides that, subject to section 212(r) of the INA, an alien who seeks to enter the United States for the purpose of performing labor as a health care worker, other than as a physician, is excludable (inadmissible) unless the alien presents to the consular officer a certificate from the CGFNS or a certificate from an equivalent independent credentialing organization approved by the Attorney General in consultation with the Secretary of Health and Human Services (HHS) verifying that:

(a) The alien's education, training, license, and experience meet all applicable statutory and regulatory requirements for admission to the United States under the classification specified in the application; are comparable with that required for an American health care worker of the same type; are authentic; and, in the case of a license, unencumbered; and

(b) The alien has the level of competence in oral and written English considered by the Secretary of HHS in consultation with the Secretary of Education, to be appropriate for the health care work of the kind in which the alien will be engaged; as shown by an appropriate score on one or more nationally recognized, commercially available, standardized assessments of the applicant's ability to speak and write; and

(c) If a majority of States licensing the profession in which the alien intends to work recognize a test predicting the success on the profession's licensing or certification examination, that the alien has passed such an examination.

INA section 212(r) mandates separate certification procedures for certain aliens seeking to enter the United States to perform nursing services. In general, such procedures apply to those aliens who already possess a valid State license and who received their nursing training in a country where the quality of education and the English proficiency of nursing graduates have been recognized by the CGFNS as meeting its standards.

The Department is adding a new section to its regulations at 22 CFR 40.53 that instructs a consular officer to obtain the appropriate statutorily required certification of competency from an alien seeking to enter the United States to perform services in certain health care occupations, prior to issuing an immigrant or a nonimmigrant visa to the alien.

The Department and INS have exercised their joint discretion under section 212(d)(3)(A) to waive the certification requirement for nonimmigrants due to a possible conflicting obligation of the United States under NAFTA. The Department will continue to use its discretion to temporarily waive this inadmissibility for nonimmigrant health care workers until concerned Executive branch agencies resolve the apparent conflict.

The Department's implementation of this regulation as an interim rule is based upon the “good cause” exceptions set forth at 5 U.S.C. 553(b)(3)(B) and 553(d)(3). The amendment to the regulation simply implements a legislative mandate without interpretation and codifies current practices. Therefore, the Department has determined that it is appropriate to publish this rule as an interim rule. Nevertheless, the Department will solicit comments from the public.

The Department of State, pursuant with the Regulatory Flexibility Act (5 U.S.C. 605(b), has assessed this regulation and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

Although this rule is being promulgated in conjunction with the Immigration and Naturalization Service, a domestic agency, the Department of State does not consider this rule to be a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review. The Department has reviewed the regulation to ensure its consistency with the regulatory philosophy and principles set forth in that Executive Order.

This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

This rule does not impose any new reporting or record-keeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. chapter 35.

Regulatory Findings

On May 28, 1997, the USIA (which has now been incorporated by the Department of States) published an amendment to their regulations regarding requests for waivers of the two-year home-country physical presence requirement by interested U.S. Government agencies on behalf of exchange visitors who are foreign medical graduates. The rule amended 514.44 of 22 CFR (now 41.63). Paragraph (c)(4)(iii), as amended, contained an error in the U.S. Code citation.

The regulation at 41.63(c)(4)(iii) contains a statement to be signed and dated by foreign medical graduate exchange visitors. The statement indicates that the medical graduate will incur penalties, as provided for under the provisions of “18 U.S.C. 1101,” for making false or misleading statements. The U.S.C. cite was incorrect, and should have been “18 U.S.C. 1001”. This rule amends the U.S.C. citation.

The registration of every immigrant alien in connection with the alien's visa application is required under Section 221(b) of the Immigration and Nationality Act (INA).Section 203(g) of the INA requires that the Secretary of State terminate an alien's registration if he or she fails to apply for an immigrant visa within one year following notification that a visa is available.

In order to make its procedures conform to changes in the Immigration Act of 1990 (Pub. L. 101-649), the Department published several amendments to its regulations on October 1, 1991.( See 56 FR 49678). The amendments revised, among other things, the regulation to allow a consular officer to begin termination of an alien's registration for an immigrant visa if the alien failed to apply within one year from the date of transmission of the consular officer's notification to the alien that a visa was available ( see 22 CFR 42.83). In making this revision, however, the Department did not also amend its corresponding definition of “registration.” Therefore, the Department is publishing this rule to correct this oversight. The Department has been applying this definition in its daily practice since 1991.

The Department's implementation of this regulation as a final rule is based upon the “good cause” exceptions found at 5 U.S.C. 553(b)(3)(B) and (d)(3). The amendments reflect a change in the Department's procedures rather than a change in policy.

The Department of State, in accordance with the Regulatory Flexibility Act(5 U.S.C.605(b)), has reviewed this regulation and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

The Department of State does not consider this rule to be a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review.Therefore, in accordance with the letter to the Department of State of February 4, 1994 from the Director of the Office of Management and Budget, it does not require review by the Office of Management and Budget.

This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement.

This rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

The Bureau amends its regulations on incoming publications (28 CFR part 540, subpart F). Regulations in 28 CFR 540.71 had allowed an inmate to receive paperback books and magazines from any source. A proposed rule was published in the Federal Register on January 18, 1994 (59 FR 2668). The proposed rule required that, in medium security, high security, and administrative institutions, only softcover publications from the publisher, book club, or book store would be permitted. Existing regulations already required this restriction on hardcover books and newspapers.

The proposed rule also provided for exceptions when a publication was no longer available from the publisher, book club, or bookstore. In such cases, the Unit Manager may require that the inmate provide written documentation that the publication is no longer available from these sources.

The proposed amendment was intended to simplify, and consequently strengthen, Bureau procedures designed to prevent the introduction of contraband into Bureau institutions. Bureau regulations on inmate legal activities (28 CFR part 543, subpart B) which restated in § 543.11(d) the policy on receipt of incoming publications were also proposed to be revised in a conforming amendment.

The public comment period on the Bureau's proposed rule closed on March 21, 1994. Comments were received from approximately 187 commenters (approximately 176 submitting a form letter response). A summary of the issues raised by these comments and agency response follow.

The form letter stated that the proposed regulation discriminated against all prisoners, indigent prisoners, religious organizations and groups, legal organizations and groups, news organizations and groups, small and independent businesses and employees, and free enterprise. The form letter also claimed that the proposed regulation cut prisoners off from their local, national, and international community contact and ties; impaired First Amendment rights to religious freedom; impaired a right to read, learn, and mentally, emotionally and spiritually grow and progress; and inflicted severe economic additional hardships on the families and friends of inmates, and on the general national and international communities. Finally, the form letter claimed the proposed regulations were in violation of the Constitution (in particular, the First Amendment), and were in violation of the Geneva Convention, international treaties and agreements, and the Universal Declaration of Human Rights. No specifics were provided regarding the latter alleged violations.

As an initial response, the Bureau notes that the rule applies to inmates in medium security, high security, and administrative facilities only. As of September, 2002, approximately 51% of federal inmates were housed in minimum and low security institutions, and would therefore be unaffected by this amendment. Based upon a general reevaluation of security needs at all facilities, the Bureau is considering extending the restriction to minimum and low security level institutions. That amendment will be addressed in a new proposed rule.

In any case, the revised regulations do not stop inmates from maintaining local, national, and international community contact and ties. Rather, the regulations address how the contact may be maintained through the media of softcover materials. Further specific response is provided below in conjunction with responses to other individual commenters (including those few form letters which contained additional comments).

Some commenters stated that this rule would discriminate against the indigent and create severe economic hardships, not only on indigent inmates, but also on their families, who would not be able to send material which the family had acquired initially for their own use.

The Bureau believes that this concern ignores other resources available to inmates and other avenues of recirculating softcover materials. For example, inmates retain access to a variety of reading materials in the institution's library. Inmates and their families can mitigate the presumed severe economic impact: Books sent to the inmate by family from a publisher, bookstore, or book club could be mailed by the inmate back to family or friends after the inmate has finished with the book. General limitations on inmate personal property preclude an inmate from amassing a large library of reading materials. Ordinarily the inmate would need to dispose of excess personal material such as books. Mailing the books back to family or friends accomplishes both purposes.

Even so, we believe that the Bureau's need to maintain a secure facility free from contraband outweighs any presumed economic hardship or inconvenience experienced by families or by inmates with relation to the minimal cost of mailing materials to family. The Bureau is mandated, in 18 U.S.C. 4042(a)(3), to provide for the protection and discipline of those in our custody. This statutory mandate compels us to limit the introduction of contraband, which may endanger the health, safety, and security of inmates and Bureau employees, despite minimal costs or inconveniences to the inmate, family or friends.

One commenter expressed concern that, because of specific assessments and/or fines, many inmates would not be able to afford magazine subscriptions or would have to make choices in the expenditure of their available funds.

If this is meant to imply that the inmate's only recourse is to solicit magazines from family and friends, the Bureau's response is that the revised regulations do not preclude family and friends from responding to such requests by initiating subscriptions under the inmate's name. With respect to the inmate's having to make choices on the expenditure of his or her funds, the Bureau notes that such decisions are not unique to inmates, but are an ordinary practice for all responsible persons.

With respect to the general comment that the proposed rule was unconstitutional (based on perceived violations of various amendments), the Bureau disagrees, noting that the revised regulations are a rational means of achieving a legitimate correctional management goal (namely, to preserve internal order and discipline and to maintain institutional security) and that the inmate has other means to obtain similar information.

More specifically, one commenter argued that the proposed rule violates the First Amendment rights of non-prisoners to mail what they choose. We believe that security considerations support the proposed restrictions on what inmates may receive in medium security, high security, and administrative facilities. As noted above, the Bureau believes that security needs at minimum and low security institutions may warrant similar restrictions, and that will be the subject of a separate proposed rulemaking.

The same commenter felt that the proposal is unconstitutionally over-inclusive. The restrictions that the proposed amendment creates, however, are not “unnecessarily broad.” The amendment does not totally ban incoming softcover materials; it merely restricts the sources that these materials may come from, in the same manner as is done for hardcover materials and newspapers.

With respect to commenters who suggested that the proposed rule impermissibly violated the First Amendment right to religious freedom or discriminated against religious organizations and groups, the Bureau disagrees. The rule is content neutral. Inmates are still entitled to the same publications as before the proposed rule; we only change the means of obtaining these publications.

One commenter suggested that the proposed rule violates the Constitution on equal protection grounds. The commenter felt the “the proposed rule is discriminatory by denying equal opportunity” to those low and minimum security inmates who are incarcerated in administrative facilities. The Bureau believes that the nature of administrative facilities requires procedural regulation based on the highest common denominator of inmates at the facility. The dedication of monetary and staff resources to allow for differentiation between security levels of inmates at any one administrative institution would be impracticable. Placement in an administrative facility is ordinarily a temporary assignment.

Other commenters further alleged that the rule is unconstitutional on the grounds of Fifth Amendment due process. However, the amendment poses neither a procedural nor a substantive due process violation. The rulemaking's comment period provided the public, including inmates, with an opportunity to voice their comments and concerns about the proposed rule. The inmate retains further due process protection through use of the administrative remedy program (28 CFR part 542).

Commenters argued that the proposed rule will deny them “the right to read, learn and mentally, spiritually, and emotionally grow and progress.” The Bureau disagrees. Inmates still retain the opportunity to obtain the material; the means of access have been limited for security reasons.

As stated above, the goal of the Bureau is to maintain security within the facilities free from contraband. Under the new rule, inmates are still permitted to read the same types of publications that they have been allowed to read before the proposed rule. Additionally, inmates can always “read, learn and mentally, spiritually and emotionally grow and progress” in the facility's library, which serves as an additional resource. Inmates are also provided with educational programs within the facility.

Several commenters questioned the Bureau's motives for issuing the amendment. In particular, a commenter suggested that the Bureau may be attempting to control “the free flow of ideas through prison walls.” Another commenter felt that “the rule is aimed more at controlling the political content of the information that inmates receive rather than controlling the introduction of contraband.” The Bureau emphasizes that this regulation operates in a content-neutral fashion and is not part of any attempt to control the content of the materials coming into Bureau correctional facilities.

A third commenter suggested that the rule is partly motivated by the book publishers “pushing for the sale of a new book rather than have a used one passed on to prisoners” from outside sources. The Bureau's action is based on security concerns and has not been spurred by the interests of book publishers.

Some commenters argued that the proposed rule was overly restrictive. One commenter claimed the motivation behind this rule was “a Bureau desire to re-allocated staff resources” without regard for the impact upon inmates and the general public. This commenter felt that the interest of the public in allowing inmates to receive softcover publications outweighed the interest of the Bureau to re-allocate staff resources.

The Bureau believes that the revised regulations properly balance security needs of the higher rated institutions and the inmate population, given the limitations of budgetary constraints. The current restrictions on sources for hardcover materials have functioned effectively to reduce the risk of contraband entering the institution. In contrast, the lack of restrictions on softcover materials has become problematic. for example, at one high security institution, over the course of a year approximately 25 softcover materials received at the institution contained contraband. In most instances, the contraband was drug-related.

It is important to note that the presence of even minute quantities of drug contraband pose serious problems to the security, discipline, and good order of a correctional institution. Through this rulemaking, extend to softcover materials procedures that have proven effective for hardcover materials.

As for the question of reallocating staff time, one anticipated benefit is a reduction in the amount of tome taken to process contraband which enters that institution by minimizing the likelihood that contraband will be mailed into the institution. Staff will continue to examine all mail (including softcover materials from a publisher, book store, or book club) for contraband.

Several commenters felt that the threat of contraband from soft cover materials should be addressed through use of “high tech security features” or revised mail room procedures. The Bureau believes reliance upon “high tech security features” is not practicable in this instance, given the limitations of budget and available technology.

Staff currently examine all mail both manually and with x-ray scanners. While these scanners are effective for identifying metallic contraband, they are not effective for paper contraband or for organic contraband such as drugs. The cost of devices designed to detect drugs ranges from $36,000 to over $100,000 per unit, depending upon the type of device selected. No one type of device is technically suitable for all of the various types of drug contraband. Consequently, an institution may need more than one of these devices. The Bureau currently operates 107 institutions; 54 of these institutions are medium security level or higher and consequently are covered under the revised regulations. The minimum cost to purchase just one of these devices for each of these 54 institutions ranges from 1.9 to 5.4 million dollars. Additional costs for supplies. The appreciable length of time needed to conduct tests with these devices is yet another consideration which leads the Bureau to determine that the proposed restriction of sources is the more reasonable solution for minimizing the possible introduction of contraband to the institution through softcover materials.

One commenter recommended the use of dogs for intercepting drugs. The Bureau notes that extensive use of dogs for this purpose entails costs of maintenance and handling, and even so may not provide adequate security against the wide range of possible contraband.

One commenter speculated that softcover material offered less opportunity than hardbound material for the transmission of contraband. In actuality, softcover material poses different opportunities for such transmission. The presence of numerous advertising or subscription inserts in a magazine complicates a search for certain types of contraband.

One commenter, apparently assuming that the problem cloud be addressed through efficiencies in operation, recommended processing softcover material on alternate days. The daily volume of mail is sufficiently high that efficiencies effected through the suggested change for processing mail would be negligible.

Commenters were also concerned that the new rule would leave institution mail staff with nothing to do. While the revised procedure should greatly reduce the likelihood that contraband will enter the institutions through such mail, staff must continue to monitor incoming publications. As one commenter noted, under the revised provision, Bureau staff would have to verify the legitimacy of the sender. The amount of time saved by the procedure can be devoted to these or other duties.

There are a variety of other concerns raised by commenters regarding perceived inconveniences of the rule. One commenter was concerned that reading materials in foreign languages will be difficult to obtain. Other commenters state that old manuscripts, books, and other publications cannot be readily obtained from publishers. One commenter worried that inmates whose friends and families live in small towns will be especially burdened, because many small towns do not have bookstores that offer a wide variety of reading materials.

While the bureau acknowledges that some inconveniences may result from this rule, book clubs do offer a wide variety of reading material, typically at a reduced cost, and are available to everyone regardless of location. Furthermore, reading material in foreign languages is available in most bookstores. The interests of the Bureau to maintain security and order outweigh the minor inconveniences that some inmates may experience.

Some commenters objected to the rule, stating that it would be too difficult to receive certain publications which they speculated would not be readily available from authorized sources. The Bureau notes that the rule contains an exception provision which allows the Unit Manager to authorize the receipt of publications from other sources if the publication is no longer available from the publisher, book club, or bookstore. One commenter argued that approved exceptions by the Unit Manager would be difficult to obtain. The Bureau expects that the use of the exception provision will be adequate for the purpose, and further adjustments to the exception provision can be made if the need becomes apparent.

One commenter argued that most softcover books, and magazines were purchased by family and friends at stores which do not provide mailing services. The Bureau believes this comment is highly speculative. Regardless, the Bureau contends that adequate choice exists for individuals purchasing softcover material (as is already the case for hardcover material).

Some commenters expressed concern that inmates would not be able to receive books from bookstores which ship by United Parcel Service (UPS) because prison addresses contain post office box numbers. These commenters stated that UPS does not deliver to post office box addresses. This has not proven to be a problem in the past with the delivery of hardcover materials from bookstores. Bureau facilities do receive deliveries from UPS and other package carriers.

One commenter assumed that books purchased from a used bookstore would not be acceptable. This, however, is not the case. A used bookstore could be the agent for mailing softcover material to an inmate.

Several commenters suggest that the proposed rule is inconsistent with the goals of rehabilitation. They feel that the rule impairs inmate education and self-improvement. The Bureau disagrees. While the rule places limitations, for reasons of security, on how certain material may be obtained, it is not intended to cut off total access to such material. Furthermore, the Bureau itself offers educational programs for inmates, including a mandatory literacy program with a GED standard and, in certain circumstances, post-secondary education programs.

The education department of the Bureau is responsive, to the extent that its budget allows, to inmate requests for library materials. The budget for an institution's education department covers education programming and library operations (including acquisitions). The statement by one commenter that institution libraries have no funds for acquisition of books is not generally true. This commenter stated that surplus books are donated by inmates to the institution's library and, based upon the assumption that fewer books would be sent into the institution, the amendment would result in fewer books being donated.

One commenter is concerned that the proposed rule change will adversely affect the inmate's ability to receive legal materials. The new rule will not significantly affect the inmate's ability to receive legal materials. Legal reference materials are available to inmates through the institution's law library. Purchasing legal reference materials from outside sources should not be problematic because they may be procured in the same manner as other softcover or hardcover publications.

The commenter expressed a concern that this rule would prevent his receiving softcover legal materials from his attorney. First, this rule does not govern correspondence and mail sent by attorneys to their clients. We have rules governing legal mail in 28 CFR 540.19. Secondly, this rule would only apply if an inmate receives softcover materials from the attorney. It would not prevent an inmate from receiving legal documents from his/her attorney of record or materials such as books from the institution's law library or directly from a publisher, book club or bookstore.

The proposed conforming amendment to the regulations on inmate legal activities (28 CFR 543.11) which restated the policy on receipt of incoming publications is not longer necessary because those provisions were replaced by a cross-reference in an amendment published on January 31, 1997 (62 FR 4890).

This regulation has been drafted and reviewed in accordance with Executive Order 12866, “Regulatory Planning and Review” section 1(b), Principles of Regulation. The Department of Justice has determined that this rule is a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review, and accordingly this rule has been reviewed by the Office of Management and Budget.

This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

The Director of the Bureau of Prisons, as required by the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and by approving it certifies that this regulation will not have a significant economic impact upon a substantial number of small entities for the following reasons: This rule pertains to the correctional management of offenders committed to the custody of the Attorney General or the Direct of the Bureau of Prisons, and its economic impact is limited to the Bureau's appropriated funds.

This rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by § 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

We try to write clearly. If you can suggest how to improve the clarity of these regulations, call or write Sarah Qureshi, Rules Unit, Office of General Counsel, Bureau of Prisons, 320 First St., NW., Washington, DC 20534; telephone (202) 307-2105.

In January, 2001 OSHA published revisions to its rule on recording and reporting occupational injuries and illnesses (66 FR 5916-6135) to take effect on January 1, 2002. A more complete discussion of the MSD definition issue is contained in the preamble to the January 19, 2001 rule. On July 3, 2001, OSHA proposed to delay the effective date until January 1, 2003, of 29 CFR 1904.12, recording criteria for cases involving work-related musculoskeletal disorders. OSHA explained that it was reconsidering the requirement in 29 CFR 1904.12 that employers check the MSD column on the OSHA Log for a case involving a “musculoskeletal disorder” as defined in that section. This action was taken in light of the Secretary of Labor's decision to develop a comprehensive plan to address ergonomic hazards, and to schedule a series of forums to consider key issues relating to the plan, including the approach to defining ergonomic injuries (66 FR 35113-35115).

After considering the views of interested parties, OSHA published a final rule on October 12, 2001 delaying the effective date of 29 CFR 1904.12 until January 1, 2003. OSHA also added a note to 29 CFR 1904.29(b)(7)(vi) explaining that the second sentence of that section, which provides that MSDs are not “privacy concern cases,” would not become effective until January 1, 2003.

OSHA concluded that delaying the effective date of the MSD definition in Section 1904.12 was appropriate because the Secretary was considering a related definitional question in the context of her comprehensive ergonomics plan. The Agency found that it would be premature to implement § 1904.12 before considering the views of business, labor and the public health community on the problem of ergonomic hazards. It also found that it would create confusion and uncertainty to require employers to implement the new definition of MSD contained in § 1904.12 while the Secretary was considering how to define an ergonomic injury under the comprehensive plan (66 FR 52031-52034).

On April 5, 2002, OSHA announced a comprehensive plan to address ergonomic injuries through a combination of industry-targeted guidelines, enforcement measures, workplace outreach, research, and dedicated efforts to protect Hispanic and other immigrant workers. In that announcement, OSHA found that no single definition of “ergonomic injury” was appropriate for all contexts, stating that, as OSHA develops guidance material for specific industries, the Agency may narrow the definition as appropriate to address the specific workplace hazards covered. (OSHA Press Release USDL 02-201 and associated Frequently Asked Questions).

On July 1, 2002, OSHA proposed to delay the effective date of Section 1904.12 for an additional year until January 1, 2004 to give the agency the time needed to resolve whether and how MSDs should be defined for recordkeeping purposes. This proposed delay had no effect on the employer's obligation to record all workplace injuries and illnesses that meet the criteria established in Sections 1904.4 through 1904.7, including those related to ergonomic stressors. The July 1, 2002 Federal Register document also requested public comment on various issues related to the MSD definition and column requirement. These issues included the following: “Is an MSD column needed on the OSHA 300 Log? Should the column be reinstated in § 1904.12 or should § 1904.12 be deleted? Would the statistics generated by an additional column be superior to the statistics now generated by the BLS?“ (67 FR 44127)

The period for submission of comments on the proposed rule closed on August 30, 2002. After considering the views of interested parties, OSHA has determined that the effective date of Sections 1904.12 and 1904.29(b)(7)(vi) should be delayed until January 1, 2004. This Federal Register document addresses only the delayed effective date of these provisions. OSHA is still considering the need for an MSD column and other substantive issues related to § 1904.12 on which comment has been requested. OSHA will announce its decision on these issues in a subsequent Federal Register document.

Many commenters supported the delay, citing reasons similar to those in the July 1, 2002 proposal, or urged OSHA to rescind Section 1904.12 altogether (Exs. 2-2, 2-3, 2-5, 2-6, 2-7, 2-8, 2-9, 2-12, 2-13, 2-14, 2-15,

2-16, 2-21, 2-23, 2-27, 2-28, 2-29, 2-30, 2-31, 2-32, 2-33, 2-35, 3-3, 3-4, 3-5, 3-12, 3-13, 3-14, 3-16, 3-17). In a representative comment, the American Dental Association stated that:

Commenters suggested that additional delay was appropriate to allow for consideration of relevant comment ( See, e.g., Exs. 2-2, 2-5, 3-14), to avoid confusion ( See, e.g. , Exs. 2-2, 2-3, 2-5, 2-16, 2-33), to avoid unnecessary training and computer programming costs ( See, e.g. , Exs. 2-7, 2-12, 2-21). Two commenters argued that delay was not harmful because there is no effect on the recording of MSD cases ( See, e.g. , Exs. 2-3, 2-30) and one stated that the delays would not affect safety because MSD cases would be recorded even when the MSD column was not checked ( See, e.g. , Ex. 3-13). Several commenters suggested that OSHA should delay the MSD definition for recordkeeping purposes until a common definition is adopted for ergonomic purposes ( See, e.g. , Exs. 2-13, 2-16, 2-30).

Other commenters recommended deletion of the § 1904.12 requirements, including the MSD column and the MSD definition ( See, e.g. , Exs. 2-2, 2-3, 2-5, 2-6, 2-7, 2-8, 2-9, 2-12, 2-13, 2-14, 2-16, 2-21, 2-23, 2-27, 2-28, 2-29, 2-30, 2-31, 2-32, 2-35, 3-5, 3-12, 3-13, 3-14, 3-16, 3-17), arguing that it is an unnecessary paperwork burden ( See, e.g. , Exs. 2-2, 2-5, 2-9, 2-12, 2-21, 2-23), that a column is not needed ( See, e.g. , Exs. 2-7, 2-9, 2-14, 2-21, 2-23, 2-27, 2-30, 3-5, 3-12, 3-16), that OSHA's comprehensive ergonomics plan found that no single definition is appropriate ( See, e.g. , Exs. 2-3, 2-12, 2-13, 2-16, 2-28, 2-29, 2-32, 2-35), that the § 1904.12 MSD definition was inappropriate ( See, e.g. , Exs. 2-3, 2-6, 2-7, 2-8, 2-9, 2-12, 2-13, 2-16, 2-23, 2-27, 2-28, 2-29, 2-30, 2-31, 2-32, 2-35, 3-3, 3-14, 3-16), and that controversy and lack of consensus in the scientific and medical communities on the MSD issue makes it premature for OSHA to include a regulatory definition ( See, e.g. , Exs. 2-8, 2-12, 2-13, 2-14, 2-31, 2-32, 2-35, 3-17).

Several commenters opposed a delay in implementing the recordkeeping rule's definition of MSD and the requirement to check the MSD column ( See, e.g. , Exs. 2-10, 2-11, 2-18, 2-19, 2-20, 2-22, 2-24, 2-25, 2-26, 2-34, 2-35, 2-36, 2-37, 2-39, 3-2, 3-7, 3-9, 3-15). The United Food & Commercial Workers International Union (UFCW) stated:

Commenters argued against further delay because delay will make it difficult to collect information on these disorders and make it difficult to take future action ( See, e.g. , Exs. 2-10, 2-22, 2-24, 2-35, 3-9), delay will make it more difficult to track MSD ( See, e.g. , Exs. 2-19, 2-20, 2-24, 2-35, 2-36, 2-39, 3-7, 3-9, 3-15), an MSD column can be used to identify injuries and develop prevention strategies ( See, e.g. , Exs. 2-10, 2-11, 2-18, 2-19, 2-20, 2-22, 2-24, 2-25, 2-34, 2-35, 2-36, 2-39, 3-9, 3-15), an MSD column is needed to develop more complete and consistent statistics by BLS ( See, e.g. , Exs. 2-11, 2-18, 2-20, 2-24, 2-25, 2-26, 2-35, 2-36, 3-7), an MSD column helps OSHA and NIOSH during workplace interventions ( See, e.g. , Exs. 2-20, 2-24, 2-25, 2-26), and lack of an MSD column may lead to under-recording of MSD injuries ( See, e.g. , Ex. 2-25).

Many commenters supported the broad definition of MSD in § 1904.12 to promote a complete capture of MSD cases regardless of risk factor, to produce more complete statistics on MSD, to protect workers from MSD injury by identifying ergonomic problems, and because it is difficult to ascertain one-time versus ongoing exposure ( See, e.g. , Exs. 2-4, 2-10, 2-11, 2-18, 2-20, 2-22, 2-24, 2-26, 2-34, 2-35, 2-36, 2-39, 3-6). Commenters also expressed their support of the MSD definition in the Section 1904.12 regulation, noting its similarity to definitions used in many other contexts, such as industrial hygiene practice, OSHA's guidelines for meatpacking plants, the National Academy of Sciences reports on ergonomics, NIOSH, employers with effective ergonomics programs, OSHA's settlement agreements, the former recordkeeping system, other government agencies, and other countries ( See, e.g. , Exs. 2-10, 2-11, 2-19, 2-20, 2-22, 2-24, 2-25, 2-26, 2-35, 2-36, 2-39, 3-9, 3-15). Several commenters observed that the definition is the same as the MSD definition used by the Bureau of Labor Statistics for the last three years ( See, e.g. , Exs. 2-10, 2-11, 2-19, 2-20, 2-22, 2-24, 2-35, 2-36, 2-39, 3-15).

The AFL-CIO (Ex. 2-24-1) supported these comments, and also argued that, without an MSD definition it would be difficult for DOL to take enforcement actions on ergonomics hazards under the general duty clause. The AFL-CIO also argued that the January 2001 revised OSHA recordkeeping rule included provisions that would assist employers, unions, workers and the government in identifying and addressing MSDs. The AFL-CIO recommended that the Department of Labor maintain the provisions of the 2001 recordkeeping rule and move immediately to implement the rule in its entirety.

OSHA does not believe that a MSD definition should be implemented now, for the same reasons outlined in the July 1, 2002 proposal to delay § 1904.12. While the Agency has not yet decided on the correct approach for dealing with the Part 1904 MSD definition, OSHA plans to publish a final rule in 2003 to resolve the MSD definition issue for the year 2004 and beyond.

OSHA does not agree that delayed implementation of Section 1904.12 will make it more difficult for employers, workers and OSHA to address workplace ergonomic hazards, or undermine OSHA's ability to enforce the general duty clause for ergonomic hazards. Employers are required to record all injuries and illnesses meeting the criteria established in Sections 1904.4 through 1904.7 of the recordkeeping rule regardless of whether a particular injury or illness meets the definition of MSD in Section 1904.12. Thus, the delay in implementing Section 1904.12 will not reduce the number of cases recorded or affect the narrative description of the injury or illness that must be provided for each case. Employers who use the Log and injury reports to discover ergonomic hazards will be able to continue to do so, relying on the description-of-injury information and other data to identify MSDs in their workplaces. Employees will continue to have access to the information provided in the Log and, under the new rule, to the information in the part of the Incident Report explaining how the incident occurred. Employers and employees will be able to categorize this injury and illness information in any manner they find useful.

The delay will not affect the quality or availability of useful statistical data on MSDs. At the facility level, employers, employees and government workers will continue to estimate MSD incidents by analyzing individual injury and illness entries, just as they have done in the past.

Finally, OSHA notes that the delay in the implementation of Section 1904.12 will have no effect on the Department's enforcement of the general duty clause. The definition of MSD in that section has never been in effect, and has not been a factor in enforcement of the clause. The sole effect of the delay is that employers need not use the definition to categorize cases on the OSHA Recordkeeping Log for calendar year 2003. This recordkeeping issue does not affect an employer's obligation under the general duty clause. The employer remains obligated to free its workplace from recognized hazards that are likely to cause serious physical harm.

OSHA is modifying the note following the introduction to Section 1904.12 to inform employers of the policy that will be in effect during 2003. The note also informs the employer that, instead of checking the column on the 300 Log for musculoskeletal disorders (since this column has been removed from the log), the employer is to check the column for “injury” or “all other illness,” depending on the circumstances of the case.

In a related matter, the privacy provisions of Part 1904 use the MSD definition from § 1904.12. Specifically, paragraph 1904.29(b)(7)(vi) of the rule states that employers must consider an illness case to be a privacy concern case, and withhold the employee's name from the forms, if the employee independently and voluntarily requests that his or her name not be entered on the Log. The second sentence of the paragraph states “[m]usculoskeletal disorders (MSDs) are not considered privacy concern cases.” Because the effective date of the § 1904.12 MSD definition is being delayed, OSHA will be unable to implement the § 1904.29(b)(7)(vi) requirement during 2003. Accordingly, OSHA is modifying the note to Section 1904.29(b)(7)(vi) stating that the second sentence takes effect on January 1, 2004.

In January, 2001 OSHA published revisions to its rule on recording and reporting occupational injuries and illnesses (66 FR 5916-6135) to take effect on January 1, 2002, including provisions for recording occupational hearing loss when an employee experienced a standard threshold shift (STS). An STS is defined in OSHA's § 1910.95 noise standard as a change in hearing threshold, relative to the baseline audiogram for that employee, of an average of 10 decibels (dB) or more at 2000, 3000, and 4000 hertz (Hz) in one or both ears. On July 3, 2001, OSHA proposed to delay the effective date of 29 CFR 1904.10 Recording criteria for cases involving occupational hearing loss until January 1, 2003. OSHA explained that it was reconsidering the requirement in 29 CFR § 1904.10 due to ongoing concerns about the level of hearing loss that should be considered a significant health condition, asked for comment on whether or not to delay the provisions while reconsidering the issue, and asked the public to submit substantive comments on the hearing loss recording issue (66 FR 35113-35115).

After considering the views of interested parties, OSHA published a final rule on October 12, 2001 delaying the effective date of 29 CFR 1904.10 until January 1, 2003, and setting forth interim hearing loss recording criteria for 2002 (66 FR 52031-52034). The Agency then issued a final rule on July 1, 2002 establishing new recording criteria for occupational hearing loss that captured STS cases when the employee's overall hearing level exceeded 25 dB from audiometric zero. (67 FR 44037-44048). In a separate proposed rule published that same date, OSHA proposed to delay the requirement to check a hearing loss column on the OSHA 300 Log, and asked for substantive comment on the utility of the column, the usefulness of the data that would be produced, and any costs or burdens associated with implementing a hearing loss column (67 FR 44124-44127).

The period for submission of comments on the proposed rule closed on August 30, 2002. After considering the views of interested parties, OSHA has determined that the effective date of Section 1904.10(b)(7) should be delayed until January 1, 2004. OSHA will implement the provisions at that time, and does not see any need for further delay on the hearing loss column issue.

A number of commenters either supported OSHA's proposed one-year delay of § 1904.10(b)(7), or recommended deleting the requirement to identify hearing loss cases in a separate column of the OSHA 300 Log ( See, e.g. , Exs. 2-3, 2-6, 2-7, 2-14, 2-28, 2-29, 2-30, 2-33, 2-35, 3-1, 3-3, 3-4, 3-5, 3-12, 3-13, 3-14, 3-17). Commenters argued that delay will reduce the cost and burden associated with revising and reissuing the form ( See, e.g. , Exs. 2-3, 2-7, 2-28, 2-29, 3-13), will provide time to update and distribute the forms ( See, e.g. , Exs. 2-28, 2-29, 3-13), will allow employers enough time to update computer software used to comply with Part 1904 ( See, e.g. , Exs. 2-28, 2-29), provide time for employee training ( See, e.g. , Ex. 3-13), minimize confusion due to the inflated number of hearing loss cases recorded in the first year ( See, e.g. , Exs. 2-28, 2-29), and allow OSHA to work with BLS to work out an alternative methods for collecting statistics ( See, e.g. , Ex. 2-35).

Commenters also supported a delay until the MSD column issue is resolved ( See, e.g. , Exs. 2-3, 2-26, 3-13) so the forms would only be revised once. For example, NIOSH stated that it “[r]ecognizes that multiple year revisions in the OSHA 300 form may cause confusion among employers and can jeopardize the accuracy of survey data based on a sample of 300 Logs. Therefore, NIOSH believes that OSHA should make every effort to consolidate any revisions to the OSHA 300 Log decides to make at one point in time” (Ex. 2-26).

A number of commenters recommended OSHA delete the hearing loss column altogether ( See, e.g. , Exs. 2-6, 2-7, 2-14, 2-30, 2-35, 3-3, 3-5, 3-12, 3-14, 3-17). Commenters objected to the column with statements that a separate column for hearing loss is not needed ( See, e.g. , Exs. 2-6, 2-7, 2-14, 2-30, 2-35, 3-5), because it is unclear how the column would be used to improve the effectiveness of an employer's hearing conservation program, given the follow-up actions required by 1910.95 ( See, e.g. , Exs. 2-7, 2-35), because the data will not shed light on causes or provide value in determining prevention strategies ( See, e.g. , Ex. 2-30), because work relatedness determinations are subject to error and a column is subject to more error than a survey that accounts for non-occupational hearing loss ( See, e.g. , Ex. 2-35), because statistics can be generated from the descriptions on the 300 Log ( See, e.g. , Ex. 2-6), and that it would be better to conduct a BLS survey with real life examples, questions and practical definitions with input from industry, medical professions, and statisticians ( See, e.g. , Ex. 3-14). The National Grain and Feed Association argued that the column would have no protective value, stating that:

Other commenters opposed further delay of the hearing loss column and urged OSHA to implement the § 1904.10(b)(7) requirements in 2003 ( See, e.g. , Exs. 2-4, 2-10, 2-11, 2-17, 2-18, 2-19, 2-22, 2-24, 2-25, 2-26, 2-34, 2-36, 2-37, 2-39, 3-9, 3-15). These commenters argued that a hearing loss column is needed to provide a basis for prevention efforts ( See, e.g. , Exs. 2-11, 2-17, 2-19, 2-20, 2-24, 2-36, 2-37, 3-7, 3-15), that there is little or no burden to adding a hearing loss column ( See, e.g. , Exs. 2-4, 2-11, 2-24, 2-34, 2-37, 2-39), and that waiting for resolution of the MSD column issue is unnecessary and inappropriate and causes unnecessary delay with collection and analysis of the data, ( See, e.g. , Exs. 2-4, 2-24, 2-34). The International Chemical Workers Union Council stated that delay will condemn more workers and even supervisors to unnecessary hearing loss, and that a column would provide information to employees because “There are no requirements for employers to post or even develop a summary of hearing loss by workplace, department, or job type. As such, the only way that workers and their representatives can learn what areas of the plant and how many workers are experiencing significant hearing loss is by these being posted on the 300 Log, by word of mouth, or by convincing the employer to develop a summary of hearing loss on a yearly basis” (Ex. 2-34).

Commenters also cited statistical reasons for a hearing loss column, stating that a column will improve the BLS data as current BLS data on hearing loss is limited and includes only cases resulting in days away from work ( See, e.g. , Exs. 2-10, 2-11, 2-17, 2-18, 2-19, 2-20, 2-24, 2-26, 2-34, 2-36, 2-37, 2-39), that there are no other credible sources of national statistics on hearing loss ( See, e.g. , Ex. 2-20), that no alternative data collection methods are as effective ( See, e.g. , Ex. 2-10), and that there is no other cost effective method for collecting occupational hearing loss statistics ( See, e.g. , Exs. 2-24, 2-26). The Coalition to Protect Workers' Hearing (Ex. 2-4), which includes the American Academy of Audiology, the American Association of Occupational Health Nurses, the American Industrial Hygiene Association, the American Speech-Language-Hearing Association, the Council for Accreditation in Occupational Hearing Conservation, the Institute of Noise Control Engineering, The National Hearing Conservation Association, and Self Help for Hard of Hearing People, Inc., argued that:

OSHA has decided to retain the hearing loss column. Doing so will improve the Nation's statistical information on occupational hearing loss, facilitate analysis of hearing loss data at individual workplaces, and improve the Agency's ability to assess this common occupational disorder. One of the major functions of the Part 1904 regulation is to produce national statistics for occupational injury and illness (29 U.S.C. 657.(c)(1)). The data will clearly improve the Nation's statistics on occupational hearing loss. The current data published by the Bureau of Labor Statistics for injuries and illnesses occurring in year 2000 reveal that the category entitled “Disorders of the ear, mastoid process, hearing” provided estimates of 316 cases, and the subcategory of “deafness, hearing loss” provided estimates of 146 cases ( http://www.bls.gov/iif/oshwc/osh/case/ostb1047.txt .

Because the BLS statistics on case characteristics only reflect injuries and illnesses that result in days away from work, and workers commonly suffer hearing loss and never require a day away from work, the BLS estimates represent only a minor fraction of the total hearing loss experienced by U.S. workers and do not reflect the incidence of occupational hearing loss. A discussion of the BLS data systems and how they function may be found at http://www.bls.gov/bls/safety.htm . By providing a separate 300 Log column for this disorder, the data for hearing loss will be summarized by the employer at the end of the year, and will be captured by the BLS when sampled employers submit their summary injury and illness information. Thus, national statistics will be available, for the first time, that include cases that result in days away from work and those that do not. Since OSHA recently published new criteria for recording occupational hearing loss that will result in consistent data capture of significant hearing loss cases (67 FR 44037-44048), the column can be used by BLS to generate useful, consistent, and accurate statistics for the Nation.

The resulting statistics will be of value to several groups. The data will have value on their own as a public information resource that can be accessed by students, hearing loss professionals, researchers, and others. The data can be used by policy makers to prioritize hearing loss prevention efforts and measure the performance of those efforts, whether they are enforcement, guidance, outreach or consultation. OSHA believes that the greatest value of the data will be realized by employers and employees at individual workplaces. These individuals have always had the ability to determine the incidence of hearing loss cases in their workplace via analysis of the individual case descriptions on the OSHA 300 Logs; the hearing loss column will only make this task easier. The greater value of the column lies in the new ability to benchmark the hearing loss statistics of an individual workplace to the hearing loss statistics for industry as a whole, or to hearing loss statistics for a comparable industry classification. This will allow employers and employees to compare their hearing loss prevention performance to the performance of their peers and know whether or not their efforts are succeeding. This is a function that is not required under the § 1910.95 noise standard, and is a useful purpose of the Part 1904 records.

OSHA disagrees with the arguments against a hearing loss column. In response to the criticism that the data will not shed light on causes or provide value in determining preventive strategies ( See, e.g. , Ex. 2-30), a mere entry on the Log does not, by itself, show an employer or employee how to prevent hearing loss. That is the function of further analysis of the hearing loss cases, the workplace, and the employer's hearing conservation program. In this matter, hearing loss is no different than any other type of injury or illness. The Log provides descriptive data about occupational injuries and illnesses and some of the circumstances surrounding them. It does not replace the need for causal analysis of occupational injuries and illnesses. One commenter also raised the error rate for determining the work relatedness of hearing loss cases (Ex. 2-35). OSHA notes that the data only reflect work-related hearing loss cases. Part 1904 requires the employer to consider the case to be work-related only when exposure at work either causes or contributes to a hearing loss, or significantly aggravates a pre-existing hearing loss (§ 1904.5). Section 1904.10(b)(6) allows the employer to consider the case non work-related if a physician or other licensed health care professional determines the hearing loss is not work related.

Finally, the column is not burdensome. Although the rule does not require employers to use computer software to track injuries and illnesses, many employers do so voluntarily, and these employers will have some minimal initial costs to revise their software. Employers will also experience a small training cost to familiarize the employees who maintain the records with the new column. However, once these tasks are completed, it is no more burdensome to check a hearing loss column than one of the other columns on the form.

OSHA has decided to delay the § 1904.10(b)(7) requirements until January 1, 2004. While the Agency has now received comment on the hearing loss column and has collected adequate information to evaluate the issue, there is not enough time to implement the requirement for use in 2003. As the American Petroleum Institute remarked, the one year delay would “[p]rovide adequate time for OSHA to update and distribute the form 300 and 300S; provide adequate time for employers to update their recordkeeping software and retrain those responsible for recordkeeping; provide OSHA with valuable input from stakeholders; minimize confusion, including the inflated number of hearing loss cases that would be expected during the first (changeover) year of the new criteria for hearing loss; and make more efficient use of resources” (Ex. 2-29).

OSHA agrees with the API. In order to implement the hearing loss column in 2003, the Agency would need to redesign the forms, print them in sufficient quantity, and distribute them for employers use. The states with OSHA Approved State Plans would need to modify their regulations and any state-specific forms they use to obtain equivalent data. Employers would need to implement the new forms, change any software they might be using to keep their records, and make any other changes they deem necessary. While none of these tasks are particularly difficult or burdensome, there is clearly insufficient time available to accomplish these tasks before January 1 of 2003. Waiting until January 2004 will provide all affected parties with more than adequate time to implement the new forms in a methodical, planned fashion.

OSHA would like to clarify three matters in relation to recording occupational hearing loss in conjunction with the Section 1904.10 final rule issued July 1, 2002. First, the preamble to the final rule stated that employers in the shipbuilding industries are not covered by OSHA's noise standard § 1910.95 and are therefore not required to perform audiometric tests. (67 FR 44038, 44040). This statement was an error. OSHA Directive STD 0.2 Identification of General Industry Safety and Health Standards (29 CFR 1910) Applicable to Shipyard Work specifically states that employers in the shipbuilding industry that are covered by the 29 CFR part 1915 Standards are required to comply with a number of 29 CFR Part 1910 standards, including the § 1910.95 requirements for occupational noise.

The second issue involves the computation of a Standard Threshold Shift (STS), which is one part of the two-part recording criteria recently published (67 FR 44037-44048). (The case must also reflect a 25 dB hearing level compared to audiometric zero.) The STS computation is to be made in accordance with the Occupational Noise Exposure Standard 1910.95. As OSHA stated in the preamble to the July 1, 2002 rulemaking, the Section 1904.10 regulation “[u]ses existing measurements employers are already using to comply with the OSHA noise standard, resulting in less paperwork burden for employers covered by both rules” (67 FR 44040). Under 1910.95, the employee's current audiogram is compared to the employee's baseline audiogram, which may be the original audiogram taken when the employee was first placed in a hearing conservation program, or the revised baseline audiogram allowed by the Occupational Noise Exposure standard. Paragraph 1910.95(g)(9) of the noise rule states:

(9) Revised baseline. An annual audiogram may be substituted for the baseline audiogram when, in the judgment of the audiologist, otolaryngologist, or physician who is evaluating the audiogram:

(i) The standard threshold shift revealed by the audiogram is persistent, or

(ii) The hearing threshold shown in the annual audiogram indicates significant improvement over the baseline audiogram.

OSHA's former recording criteria required the employer to track separate baselines for recording and hearing conservation purposes. However, the new Part 1904 hearing loss recording system relies on the existing 1910.95 calculations, and separate baselines will no longer be required. In short, under the new Part 1904, a recordable hearing loss case occurs when an employee experiences an STS (as defined in 29 CFR 1910.95), the STS is work-related, and the employee's aggregate hearing loss exceeds 25dB from audio metric zero.

Third, OSHA has noted concern among employers because the application of the new two-part test in the new § 1904.10 recording criteria will result in an increase in recorded hearing loss cases. As noted in the July 1, 2002 rulemaking, the new criteria will capture more hearing loss cases. Employers will experience an increase in recorded hearing loss cases in 2003 and future years. Caution must be used when comparing the 2003 and future data to prior years, when the 25 dB criteria for recordkeeping was used. OSHA recognizes this increase, and will take the changes in the recordkeeping rule into account when evaluating an employer's injury and illness experience.

The Administrative Procedure Act generally requires a thirty-day period between the publication date and the effective date of a final substantive rule. 5 U.S.C. 553(d) provides, in relevant part, as follows:

The required publication or service of a substantive rule shall be made not less than thirty days before its effective date, except—

(1) a substantive rule which grants or recognizes an exemption or relieves a restriction; [or]

* * *

(3) as otherwise provided by the agency for good cause found and published with the rule.

There will not be thirty days between the publication of this final rule and its effective date of January 1, 2003. However, the exemptions from the thirty-day requirement recognized in 5 U.S.C. 553(d)(1) and (3) apply here. First, this final rule grants an exemption by delaying certain regulatory requirements that would otherwise take effect for the year 2003. The requirements to check the MSD column and the hearing loss column are effective on January 1, 2003 as a matter of law unless this rule takes effect before that date. Therefore, the rule grants an exemption to a legal requirement, and is excepted from the thirty-day effective date requirement.

Moreover, OSHA also finds that there is good cause to make the rule effective on January 1, 2003, even if that date is less than thirty days from publication. The effective date for the requirements to check the MSD and hearing loss columns was delayed during 2002 while OSHA considered comment on issues related to these requirements. This rule merely continues the status quo during 2003; it does not require any change in recordkeeping procedures.

If this rule cannot be made effective until thirty days from publication, employers will be required to comply with the new MSD and hearing loss column requirements for a brief time during 2003, only to revert back to the existing requirements. This would impose burdensome requirements on employers to quickly train their employees and modify their recordkeeping software in time to accommodate the new requirements on January 1. These extraordinary efforts would be wasted since the columns would be in effect for only a short time, and would produce no worthwhile data. Moreover, there would be a substantial degree of confusion about compliance responsibilities since the current recordkeeping forms do not contain the columns or the MSD definition, and OSHA could not produce and distribute new forms in time. For these reasons, OSHA believes that this final rule must take effect on January 1, 2003.

The final rule will continue OSHA's current policies regarding the recording of hearing loss and musculoskeletal tissue disorders during 2003 and will not impose any new paperwork requirements during that year. The addition of a new hearing loss column in 2004 will result in minor paperwork burdens associated with the addition of a new column, involving training of recordkeeping staff, obtaining new forms, and conversion of non-mandatory computer programs. The forms will be made available free of charge in 2003, before they are required for use in 2004. These burdens are already taken into account in the paperwork estimates for this rule.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601), the Assistant Secretary certifies that the final rule will not have a significant economic impact on a substantial number of small entities. The rule does not add any new requirements, merely delaying the effective date of two sections of the rule, and allowing a previously delayed section to go into effect in 2004.

The 26 States and territories with their own OSHA-approved occupational safety and health plans must adopt a comparable regulation within six months of the publication date of this final regulation. These states and territories are: Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Virgin Islands, Washington, and Wyoming. Connecticut, New Jersey, and New York have OSHA approved State Plans that apply to state and local government employees only.

Due to the short amount of time remaining in 2002, some of the states may not complete their rulemaking actions by January 1, 2003. However, the states will complete rulemaking to delay the effective dates of their equivalent regulations shortly thereafter. In the meantime, employers in these states will use the same forms used in federal jurisdiction states (which as noted above do not currently contain the columns or MSD definition) to ensure the uniformity of national data per Section 1904.37.

This document has been deemed significant under Executive Order 12866 and has been reviewed by OMB.

This document was prepared under the direction of John Henshaw, Assistant Secretary for Occupational Safety and Health. It is issued under Section 8 of the Occupational Safety and Health Act (29 U.S.C. 657) and 5 U.S.C. 553.

Section 118 of the Copyright Act, 17 U.S.C., creates a compulsory license for the use of certain copyrighted works in connection with noncommercial broadcasting. Terms and rates for this compulsory license applicable to parties who are not subject to privately negotiated licenses are published in 37 CFR part 253 and are subject to adjustment at five-year intervals. This is a window year for such an adjustment.

After extended negotiations initiated by the Library of Congress, the parties in this docket submitted proposals for adjustment of the rates and terms contained in part 253. Section 251.63(b) of the Copyright Arbitration Royalty Panel (”CARP”) rules, 37 CFR, provides that terms and rates for a statutory license may be adopted by the Librarian of Congress in lieu of a CARP proceeding if all parties reach a settlement, and the Librarian publishes the negotiated terms and rates in the Federal Register for notice and comment. If no one objects to the proposed rates and terms and submits a Notice of Intent to Participate in a CARP proceeding, then the Librarian may adopt the negotiated rates and terms as final.

On October 30, 2002, the Library published a Notice of Proposed Rulemaking (“NPRM”) setting forth the rates and terms negotiated by the parties in this proceeding for the period 2003-2007. 67 FR 66090 (October 30, 2002). The NPRM specified that objecting parties must submit their objections and Notices of Intent to Participate by December 2, 2002. No filings were received. Consequently, pursuant to 37 CFR 252.63(b), the Librarian moves to final rules.

The final section 118 royalty terms and rates are effective on January 1, 2003. January 1, 2003, is less than 30 days from publication of the notice of the final rule. Section 553 of the Administrative Procedure Act, 5 U.S.C., provides that final rules shall not be effective less than 30 days from their publication unless, inter alia, the agency finds good cause, a description of which must be published with the rule. 5 U.S.C. 553(d)(3). Good cause exists in this case.

The final rules are the product of negotiations between representatives of copyright owners and copyright users. All owners and users affected by these rates have already had the opportunity to participate in the process, and any additional interested parties were afforded further opportunity to participate when the Copyright Office published them as proposed rules in the Federal Register . 67 FR 66090 (October 30, 2002). The copyright owners and users who negotiated the final rules have the expectation that they will become effective on January 1, 2003. Even those parties affected by the rules who did not participate in their negotiation are aware that 2002 is a window year for new rates and terms for the 2003-2007 period, beginning on January 1, 2003. See 67 FR at 66092.

The negotiations that produced these final rules took a considerable amount of time to orchestrate and did not result in final agreements until late this year. In addition, some of the rates are dependent upon changes in the Consumer Price Index, information which was not known until the end of November. This resulted in a delay in publishing the final rules until now. Because of these circumstances, and because no parties affected by these rules are prejudiced, good cause exists that they become effective less than 30 days from date of publication of this Notice.

Adopted: November 21, 2002; Released December 4, 2002.

1. By this order we deny the petition for reconsideration of Bennet & Bennet, PLLC, on behalf of its LMDS clients, filed August 10, 2001. 1 Bennet seeks reconsideration of Assessment of Regulatory Fees for Fiscal Year 2001 , 16 FCC Rcd 13525 (2001), 66 FR 36177, July 11, 2001, (2001 Fee Order), to the extent that order reaffirmed the classification of the LMDS within the category of MDS services for purposes of assessing regulatory fees for FY 2001. As a result of this determination, LMDS facilities are subject to an annual fee of $450 per call sign. Bennet asserts that LMDS should be classified as a microwave service, which would subject it to a $5 annual fee payable for an entire ten year license term at the time of renewal (total payment $50). Bennet also argues that the FY 2001 MDS fee is excessive.

2. In the 2001 Fee Order, the Commission rejected the arguments of Winstar Communications, Inc. that LMDS should be reclassified as a microwave service. Fee Order, 16 FCC Rcd 13532 paragraph 22. Winstar justified its proposal by arguing that there had been increased administrative activity associated with part 21 MDS this year, whereas there had been little activity associated with LMDS. It also noted generally that it could think of no similarity between LMDS and MDS and no reason why LMDS should be treated differently than other part 101 fixed Microwave services. Sprint opposed the proposal, noting that the LMDS administrative burden had been higher in the year 2000 and had been supported by fee contributions by MDS users. Further, Sprint argued that there were many similarities between the services, including that they both provided the same high speed voice and data services, although LMDS focused on large business users and MMDS focused on residential consumers. The Commission held that although LMDS and microwave services may utilize the same equipment, LMDS is operationally similar to MDS. The Commission concluded that this functional classification had proven adequate for more than 2 years and there was no reason to change it. Additionally, the Commission rejected the arguments of Worldcom, Inc. that the increase in the MDS fee from $275 in FY 2000 to $450 was excessive. Fee Order, 16 FCC Rcd at 13531-32 paragraphs 18-20. The Commission found that the $450 figure reflected the best accounting methods and the most accurate data available.

3. Bennet, who did not file comments earlier in this proceeding, now seeks reconsideration of the Commission's decision to continue to include LMDS in the MDS category for assessing regulatory fees. Bennet contends that LMDS should be included in the microwave category for purposes of assessing fees. In support of its contention, Bennet posits that significant differences exist between the LMDS and MDS services. According to Bennet, these differences include: That MDS uses site based licenses and individually licensed station hub sites, while LMDS uses geographically based licenses and generally does not use individually licensed hubs; that MDS is primarily a one-way video service, while LMDS is primarily a two-way service; and that LMDS and MDS use different equipment and network configurations and have different propagation characteristics, with LMDS and microwave services having more propagation limitations. It further states that the services serve different markets. In this regard, it notes that LMDS and other part 101 microwave services compete against each other in the same target markets and that the Commission's regulatory fee scheme unjustifiably places LMDS at a competitive disadvantage because the other part 101 services pay only a nominal regulatory fee. It also notes that licensing and rulemaking actions for MDS require more administrative resources than the resources required for LMDS. As to the size of the MDS fee, Bennet maintains that the increase from $275 to $450 is burdensome and not supported by any corresponding increase in regulatory costs.

4. Sprint responds that MDS and LMDS are operationally, competitively, and legally similar, both providing high speed wireless voice and data services, but noting that MDS serves primarily residential users and LMDS primarily serves large business users. Sprint contends that differences in the cost of licensing LMDS and MDS are irrelevant since the cost of licensing is not included in calculating annual fees. Fee Order, 16 FCC Rcd at 13595. In Sprint's view, reclassifying LMDS would unfairly increase the fees for other MDS operators.

5. Based on our review of the record in this proceeding, we find that Bennet's petition fails to provide sufficient grounds for us to depart summarily from the Commission's previous analysis regarding this matter. The Commission's decision to subject LMDS and MDS to identical regulatory fees stemmed largely from the fact that LMDS was operationally similar to MDS and MMDS. 2 In this regard, we note, for example, that we have previously noted that LMDS is competitive with MMDS. 3 Moreover, as the Commission has permitted licensees increasing flexibility in the use of their spectrum, the pattern has been for distinctions between LMDS and MMDS to erode. 4 While Bennet attempts to illustrate that LMDS more closely parallels certain microwave services, it does not dispute the similarities which we have previously noted between LMDS and MMDS. We also concur with Sprint's argument that licensing costs, which are covered by application fees assessed under section 8 of the Act, 47 U.S.C. 158, are not recovered through section 9 regulatory fees of the Act, 47 U.S.C. 159, and, therefore, have no bearing on our decision. We note, moreover, that, pending changes to the statutory schedule of fees in section 8, LMDS services have not been assessed any section 8 application fees. Consequently, we continue to believe, based on the record before us, that LMDS should be included in the MDS category for regulatory fees for FY 2001. As to the increase in the MDS fee, we believe that we have thoroughly explained this matter in the 2001 Fee Order. No further discussion of this point is warranted. Moreover, the public interest would not be served by disrupting the current fee process, which has been completed by numerous entities, pending resolution of this matter, particularly given that many of Bennet's arguments were raised for the first time on reconsideration.

6. While an insufficient record exists to lead us to modify our decision with respect to LMDS services in FY 2001, we plan to develop a more complete record on these issues in the next regulatory fee proceeding. In addition, in light of continuing technological convergence, innovation, and evolving service offerings in the marketplace, we will provide parties in an upcoming wireless bureau proceeding the opportunity to address our existing fixed wireless regulatory fee assessments and their application to similarly situated service providers. The development of a comprehensive record on these issues will enable us to review our existing classifications for certain services and identify the need, if any, for modifications in the regulatory fee amounts assessed for particular service categories.

7. Accordingly, it is ordered, that the petition for reconsideration of Bennet & Bennet, PLLC on behalf of its LMDS clients, filed August 10, 2001, is denied.

The final regulations that are the subject of these corrections revised the technical and operational requirements for the EAS. The revisions were intended to enhance the capabilities and performance of the EAS during state and local emergencies, thereby promoting public safety.

As published, the final regulations inadvertently omitted the existing State and Territory FIPS number codes used in transmitting EAS messages.

This is a consolidated summary of the Federal Communications Commission's Report and Order ( R&O ), FCC 02-229, adopted August 8, 2002, and released September 24, 2002, and Second Report and Order ( 2nd R&O ), FCC 02-247, adopted September 10, 2002, and released September 24, 2002. The full text of the R&O and 2nd R&O is available for public inspection during regular business hours at the FCC Reference Information Center, 445 12th St., SW., Room CY-A257, Washington, DC 20554. The complete text may be purchased from the Commission's duplicating contractor: Qualex International, 445 12th Street, SW, Room CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail at qualexint@aol.com.

1. In June 2001, the Commission issued a Notice of Proposed Rulemaking seeking to identify and address outdated rule sections of part 22. See Year 2000 Biennial Regulatory Review—Amendment of part 22 of the Commission's Rules to Modify or Eliminate Outdated Rules Affecting the Cellular Radiotelephone Service and other Commercial Mobile Radio Services, Notice of Proposed Rulemaking , 66 FR 31589 (June 12, 2001) ( NPRM ). As the Commission observed in the NPRM , technological advances have allowed cellular carriers to increase the capacity of their systems, and to provide advanced services to their customers in the form of enhanced service quality and advanced calling features. Moreover, the mobile telephony industry has become much more competitive with the entry of CMRS providers using technologies other than analog cellular into the market. Many of the Commission's cellular rules, however, do not reflect these developments, and continue to be more applicable to the earlier forms of cellular than the more advanced digital services available today. Accordingly, the Commission concluded in the NPRM that it is appropriate to re-examine its original cellular rules to determine whether certain rules should be eliminated or modified.

2. In 1996, Congress anticipated that the development of competition would lead market forces to reduce the need for regulation and amended the Communications Act of 1934 to permit and encourage competition in various communications markets. See Telecommunications Act of 1996, Pub. Law No. 104-104, 110 Stat. 56 (1996) (“1996 Act”), introductory statement (the 1996 Act was intended “[t]o promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.”); Joint Managers' Statement, S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 113 (1996) at 1 (stating that the 1996 Act would establish a “pro-competitive, deregulatory national policy framework”). Section 11 of the 1996 Act requires the Commission to review biennially all of its regulations “that apply to the operations or activities of any provider of telecommunications service” and to “determine whether any such regulation is no longer necessary in the public interest as a result of meaningful economic competition between providers of such service.” See 47 U.S.C. 161. In the past, the Commission has looked to the plain meaning of the text for guidance in exercising its obligation pursuant to section 11. See In the Matter of 2000 Biennial Regulatory Review Spectrum Aggregation Limits for Commercial Mobile Radio Services, WT Docket No. 01-14, Report and Order, 67 FR 1626 (Jan. 14, 2002). The Commission has stated that “the language places an obligation on the Commission to ‘determine’ if the regulation in question ‘is no longer necessary in the public interest as the result of meaningful economic competition.’ ” Id . at 1617. Further, section 11 explicitly provides that “the Commission shall repeal or modify” any regulation that it determines is no longer necessary in the public interest as a result of meaningful economic competition. 47 U.S.C. 161(b). The Commission notes that section 11 places the burden on the Commission to make the requisite determinations; no particular burden is placed on the opponents or proponents of a given rule. The Commission has previously interpreted the language of section 11 as directing it to examine why a rule originally was “necessary” and whether it continues to be necessary. The Commission has found that in making the determination whether a rule remains “necessary” in the public interest once meaningful economic competition exists, the Commission must consider whether the concerns that led to the rule or the rule's original purposes may be achieved without the rule or with a modified rule. Id . at 1628.

3. In establishing the Cellular Radiotelephone Service in the early 1980s, the Commission found that a single technology—analog—should be mandated to accomplish two goals: (1) To enable subscribers of one cellular system to be able to use their existing terminal equipment ( i.e. , mobile handset) in a cellular market in a different part of the country (roaming); and (2) to facilitate competition by eliminating the need for cellular consumers to acquire different handset equipment in order to switch between the two competing carriers within the consumers' home market (thus ensuring reasonable consumer costs.). To facilitate these goals, all carriers were required to provide service exclusively in accordance with the then-existing compatibility standard for analog systems, known as Advanced Mobile Phone Service (AMPS). The detailed technical standards for AMPS were set out in the Office of Engineering and Technology Bulletin No. 53 (OET 53) in April 1981. The OET 53 specifications established technical operational parameters and descriptions of call processing algorithms and protocols to be used by analog cellular systems. Pursuant to § 22.901, a carrier must provide service to any subscriber within the carrier's CGSA, including both the carrier's subscribers and roaming customers that are using technically compatible equipment. 47 CFR 22.901. Section 22.901(d) specifically requires that carriers make mobile services available to subscribers whose mobile equipment conforms to the AMPS compatibility standard. 47 CFR 22.901(d). The Commission's cellular rules, in effect, continue to obligate carriers to provide analog service consistent with the standard identified two decades ago in OET 53.

4. After reviewing the record, the Commission concludes that in light of the present competitive state of mobile telephony, the nationwide coverage achieved by cellular carriers, and the clear market demand for nationwide, ubiquitous coverage by carriers, the analog requirement has substantially achieved its purpose of ensuring that the public has access to low-cost, compatible equipment and to nationwide roaming. Not only does the Commission determine that the rule is no longer necessary to achieve its purposes, it concludes that it imposes costs and impedes spectral efficiency. The development of the mobile telephony industry further leads the Commission to find that these objectives can largely be accomplished by market forces without the need for regulation. The Commission therefore concludes that the analog requirement should be removed. However, eliminating the rule immediately without a reasonable transition period would be extremely disruptive to certain consumers, particularly those with hearing disabilities as well as emergency-only consumers, who currently continue to rely on the availability of analog service and lack digital alternatives. Accordingly, the Commission modifies its rules requiring application of the analog compatibility standard to include a sunset period of five years, during which time the Commission anticipates that problems regarding access will likely be resolved. In order to enable the Commission to monitor the adequacy of access to mobile telephony by those currently reliant on analog service, certain CMRS carriers will be required to file reports prior to the sunset, describing the extent to which hearing aid-compatible digital devices are available to and usable by consumers with hearing disabilities, and the progress made in informing their customers of the impact of the 5-year sunset date on 911-only phones and analog-only phones, as well as the availability of digital replacements for donated analog phones.

5. The Commission finds that it is not necessary to retain the analog requirement in order to ensure competition. Indeed, the Commission concludes that continuing to require carriers to operate consistent with the AMPS standard may hinder competition by causing spectral inefficiencies and increased costs to those carriers who would prefer to concentrate on digital technology. Additionally, the robust mobile telephony market leads the Commission to conclude that the analog requirement is no longer necessary to ensure reasonable costs, as well as the continued availability of roaming to the vast majority of consumers. Removal of the requirement is consistent with its desire to move toward a less regulatory approach, as well as a congressional directive to treat similarly-situated CMRS in a like manner.

6. The analog requirement is no longer needed to foster competition . The Commission sought to ensure that there was competition, albeit limited, within any given market by compelling carriers to operate consistent with AMPS specifications as well as requiring that carriers serve all consumers using AMPS-compatible handsets. The mobile telephony industry, however, has changed immensely in the two decades since the establishment of the cellular service. The market for mobile telephony service now includes the Personal Communications Services (PCS) and the Specialized Mobile Radio (SMR) service in addition to cellular. The Commission noted in its Seventh CMRS Competition Report that 268 million people, or 94 percent of the total U.S. population, currently reside in areas in which three or more different operators (cellular, broadband PCS, and/or digital SMR providers) offer mobile telephony service in the counties in which they live. Over 229 million people, or 80 percent of the U.S. population, live in counties with five or more mobile telephony operators offering service, while 151 million people, or 53 percent of the population live in counties with at least six different mobile telephony operators.

7. Rather than encouraging competition, the Commission concludes that, in many instances, the analog requirement harms competition by imposing unnecessary operating costs and impeding the spectral efficiency of the two cellular providers in the market. First, the analog requirement places a financial burden on cellular licensees who would prefer to use their spectrum and other resources on digital technology rather than setting aside a portion to support their analog facilities. Cellular licensees that deploy digital technologies must also maintain a minimum scale analog network. These cellular licensees incur operation and maintenance costs for two mobile telephony networks in order to comply with Commission rules. Also, by maintaining two networks, operation and maintenance costs associated with the digital network may be higher because the carrier is not able to optimize the system as efficiently as it would if there was only one network. Second, the Commission also agrees with commenters who argue that imposition of the analog requirement impedes spectral efficiency. Digital technologies are more efficient than analog, use less bandwidth, and give consumers access to advanced services not feasible with analog. The analog requirement prevents cellular licensees from choosing to efficiently utilize their spectrum by installing an all-digital network and potentially providing additional advanced services. Further, the analog requirement may result in certain carriers being capacity constrained in certain geographic markets depending on the amount of spectrum dedicated to AMPS, usage by AMPS customers, type of digital technology, and how intensively their digital customers utilize their services. Thus, to the extent that a cellular carrier incurs costs to operate an analog network that it would not maintain but for the analog requirement, the Commission concludes that the rule imposes unnecessary financial burdens and hinders spectral efficiency. These factors in turn impede the ability of the cellular carrier to compete vis-à-vis other mobile telephony providers who are not subject to the requirement.

8. Access to reasonably priced equipment is not dependent on the continued imposition of the analog requirement . It is no longer the case that the analog requirement is needed to ensure reasonably priced equipment, and, as a result, increased competition. Because early cellular mobile equipment was expensive, the Commission concluded that it was cost-prohibitive for consumers to switch providers in the event the two carriers in the market utilized different technical standards. The Commission found that consumers would be discouraged from switching cellular providers if they had to purchase additional equipment in order to be served by the second carrier. The Commission found that mandating a specific technology would enable consumers to choose between carriers without regard to cost of equipment, thereby encouraging competition between the carriers. Today, however, mobile handsets are much less expensive. The declining cost of such equipment as well as the frequent carrier subsidy of the cost of the telephones have diminished the handset disincentives for consumers switching between providers (whether cellular or other CMRS). Consumers are now able to easily choose from a panoply of carriers and technologies.

9. Roaming is not dependent on the analog requirement . The Commission continues to consider the existence of a nationwide, compatible service to be a major goal for the cellular service. However, given the current competitive state of mobile telephony, the Commission concludes that consumers will continue to have the ability to roam outside of their home markets even in the absence of the analog requirement. In the years since the cellular service was established, many CMRS providers using digital technology, particularly broadband PCS and SMR services, have developed and established a strong market presence. When the rules for market-based PCS and SMR services were established, the Commission declined to impose technological compatibility rules, and allowed carriers the flexibility to implement air interface technologies of their own choosing. In the absence of a Commission-mandated standard for PCS and SMR, carriers have nonetheless established systems providing seamless nationwide service in response to customer demand. Service providers have been successful in establishing nationwide systems, even though they employ different air interface technologies, by acquiring licenses in as many markets as possible, establishing roaming agreements with other carriers who have implemented the same digital technology, and providing multimode handsets that allow customers to roam using analog cellular service where interoperable digital service is not available.

10. The Commission does not find persuasive arguments that elimination of the analog requirement will force small and regional carriers to convert to digital earlier than they would otherwise in order to ensure seamless service to their customers and other consumers, or that such a transition will be cost-prohibitive for such service providers or their customers. The choice to switch from analog to digital technology, as well as the rate at which the transition occurs, are business decisions made by the individual carrier. Indeed, the Commission concludes that market forces are already at work with respect to small and regional carriers. After reviewing current and future market trends in mobile telephony, the Commission finds that many small and regional carriers are or will be shifting their systems towards digital technology. The Commission expects that construction by PCS licensees in rural areas will continue to increase, thereby providing digital services to customers in rural areas. With the introduction of digital services by PCS providers, cellular licensees are likely to find it competitively necessary to install or expand their digital network, regardless of whether or not the analog requirement is retained. Moreover, the Commission expects that the increasing presence of multimode handsets will minimize the necessity for small and regional carriers to completely switch to a digital system. Accordingly, the Commission concludes that roaming and interoperability concerns held by small and regional carriers are not a sufficient basis to require the continued application of the analog requirement.

11. The Commission notes that the five-year sunset period it is establishing for other reasons should mitigate the concerns of small or regional carriers, such as the disruptions to operations that an immediate elimination of the analog requirement might cause. For example, a transition period permits carriers to evaluate their current and future technology choices as well as those of their current roaming partners. Carriers will have the opportunity to negotiate new contracts where needed to ensure the availability of roaming services to their customers. Also, the elimination of the cellular analog requirement will increase the demand for the development and commercial implementation of multimode/multiband handsets, a process that is already occurring. By the end of the transition period, these handsets should be widely available and customers may choose to migrate to these new handsets depending on their roaming needs. Further, the transition period provides additional time for PCS licensees in both Rural Service Areas (RSAs) and Metropolitan Statistical Areas (MSAs) to further build out their licensed service areas in order to enhance opportunities for roaming for all consumers.

12. The possible impact on telematics providers does not justify retention of the analog requirement. Telematics providers argue that the elimination of the rule will significantly impair their ability to provide service because these systems require analog technology due to its ubiquitous coverage, and that there is currently no other widely-deployed technology available to adequately support telematics services. While digital service providers are continuing to expand their service area footprint, commenters argue that there are still large gaps in coverage, and note that the various digital standards are not interoperable. Commenters argue that digital systems cannot yet transmit both voice and data on the same call, a feature that commenters argue is important for telematics providers. Commenters assert that the interoperability problem is particularly difficult for telematics devices because manufacturers must choose a technology that is embedded in a vehicle that will have a useful life of ten or more years. Telematics providers contend that, unlike the typical cellular subscriber who can readily switch to digital handsets if necessary, the development cycle (the length of time necessary to design, test, and install equipment in vehicles) and hardware basis of telematics-equipped vehicles prevents users of such services from quickly and easily migrating to a new technology. Commenters argue that, in evaluating this issue, the Commission should take into account the useful life of the vehicle, the vehicle development cycle, as well as investments made by owners of vehicles with embedded telematics systems.

13. The Commission concludes that arguments advanced by telematics providers do not constitute sufficient basis to warrant the indefinite imposition of an outdated technical standard. Each of the factors identified by telematics providers— e.g. development cycles of vehicles, choice of hardware and technology platforms—are considerations within the control of the individual provider or the original equipment manufacturer with whom it partners. However, as in the case of regional carriers, the Commission finds that the sunset period it is establishing for other reasons should also mitigate any significant impacts that might affect telematics providers. During the transition period, the Commission anticipates that telematics providers will be able to partner with cellular, PCS, and SMR carriers in order to secure service on the carriers' digital networks. Based on the record, the Commission concludes that within the next five years, the telematics industry will make great strides towards developing multimode devices that will provide interoperability and facilitate roaming on digital networks. Moreover, the majority of commenters concede that a reasonable transition period would ease any concerns regarding the elimination of the analog requirement.

14. Modification of the rule is supported by section 332 of the Communications Act. Another factor supporting the modification of the analog requirement to include a five-year sunset is section 332 of the Act, which directs the Commission to regulate CMRS providers to technical and operational rules comparable to those that apply to providers of substantially similar common carrier services. Section 332 requires that differences between rules governing competing services should be conformed if the Commission determines that the differences distort competition by placing unequal regulatory burdens on different types of CMRS providers. Over the years, the Commission has shifted towards taking a less regulatory approach in setting out technical standards for the various wireless services. Yet in the case of cellular, while the Commission has afforded carriers the flexibility to deploy new technologies and to offer digital services similar to that offered by PCS providers, cellular carriers must nonetheless continue to provide analog service. The analog standard forces cellular carriers to incur costs and burdens not assumed by other CMRS licensees despite the similarity of services provided by cellular carriers as compared with other providers.

15. A primary reason for the growth of mobile telephony is the safety and security functions of wireless telephones. Indeed, some consumers acquire wireless telephones that can only make 911 calls. These 911-only consumers can be categorized as: (1) “Unsubscribed” consumers of recycled phones that were previously, but are no longer, service-initialized by a wireless carrier, and have been reissued under some type of donor program, such as phones donated to victims of domestic violence, and (2) subscribers of newly manufactured 911-only phones that can only make 911 calls but are incapable of receiving any incoming calls. Consumers of the latter are often elderly persons who cannot afford basic wireless service or do not want typical wireless service, but desire immediate access to emergency services. The Commission concludes that a transition period is warranted in order to mitigate possible negative effects to emergency-only consumers that might otherwise occur with an immediate elimination of the analog requirement. Also, in some geographic areas in which digital coverage is currently insufficient, a transition period will allow carriers time to enhance coverage. The transition period will allow for the continued expansion of digital networks and further conversion of analog networks to digital, thereby providing for a more extensive network of digital technologies. During the transition period, service providers can conduct customer outreach in order to educate consumers that analog services may be discontinued on a certain date, thereby providing emergency-only consumers with time to migrate from analog to digital handsets.

16. Although there is currently a sizable number of unsubscribed analog and 911-only consumers, it can be assumed that the total number of such users will decline in the future, as digital networks expand and carriers migrate current analog customers to digital services. The Commission expects that unsubscribed consumers will have access to digital equipment as digital handsets are being donated as well as analog handsets. It is reasonable to assume that the number of digital handsets will increase over time because the number of digital subscribers is approximately three times that of analog subscribers, and a consumer uses a handset on average for 1.5 to 2.5 years before acquiring a new one. Because handsets are recycled every 18 to 30 months, the Commission concludes that a transition period should ensure that recipients of donated mobile telephones have access to digital equipment.

17. The Commission has for some time been cognizant of the concerns held by persons with hearing disabilities regarding their ability to access wireless technologies and services. Although most consumers have a variety of mobile technologies and services available to them, persons with hearing disabilities desiring to use wireless devices must currently rely on analog service or the small number of digital phones that are currently compatible with hearing aids—a compatibility that is limited to certain types of hearing aids. Unlike analog handsets, digital technologies have been shown to cause interference to hearing aids and cochlear implants. For the most part, analog wireless equipment does not pose interference problems for hearing aid wearers because they transmit signals at a steady rate; no extraneous audible noise is produced because these signals are not demodulated by the handset and in turn amplified by the hearing aid. Unlike analog equipment, however, digital wireless telephones do not transmit electromagnetic energy at a steady rate, and the fluctuations can cause disruptive interference to hearing aids or cochlear implants. Currently, nearly all digital equipment can cause some interference to many types of hearing aids and cochlear implants.

18. The Commission's review of the record leads it to conclude that immediately removing the requirement that cellular carriers operate consistent with the analog compatibility standard would indeed be detrimental to persons with hearing disabilities. Because persons with hearing disabilities must continue to rely on analog technology for access to wireless service at this time, the Commission finds that the record supports implementing a transition period during which time it anticipates that digital solutions to the hearing aid-compatibility problem will be developed and made widely available. In order to ensure that analog service remains available to persons with hearing disabilities while industry seeks to develop accessible digital technologies, the Commission provides for a five-year transition period before the elimination of the analog requirement. The Commission concludes that a five-year period provides a reasonable time frame for the development of solutions to hearing aid-compatibility issues. The progress made in developing digital TTY solutions leads it to determine that the industry will also likely be able to develop digital solutions for telephones within a five-year period. Moreover, mandating a shorter timeframe may result in persons with hearing disabilities gaining access to digital handsets more quickly than if the Commission sets out a longer period. Because the Commission is reserving the right to extend the sunset period in the event that solutions to hearing aid-compatibility problems are unsatisfactory, the industry has an incentive to develop digital solutions to the access problem.

19. The Commission notes that it is establishing a transition period to safeguard the ability of persons with hearing disabilities to access mobile telephony services even though carriers are otherwise obligated to ensure that telecommunications service is accessible to persons with disabilities. Section 255 of the Communications Act requires that “[a] provider of telecommunications service shall ensure that the service is accessible to and usable by individuals with disabilities, if readily achievable.” See 47 U.S.C. 255(c). In the NPRM , the Commission observed that if the analog requirement was eliminated, section 255 would still require that carriers to make digital services compatible with hearing aid devices. Although a few commenters argue that mobile telephony providers and manufacturers can circumvent the provisions of section 255, the Commission concludes that section 255 requires providers to ensure that their services remain accessible to persons with hearing disabilities. However, the independent requirements of section 255 notwithstanding, the Commission finds that it is appropriate to also establish a five-year transition period in order to address the particular current problem of hearing aid-compatibility with digital handsets, and ensure access to mobile telephony service for persons with hearing disabilities.

20. Reporting requirement. In order to monitor the progress made by the wireless and hearing aid industries in developing solutions, and to ensure that wireless services are continuing to be made available to persons with hearing disabilities as well as 911-only consumers, the Commission will require that, no later than the third and fourth anniversary of the effective date of this order, certain CMRS licensees and other entities file reports with the Commission. The reports will be required from all cellular licensees providing nationwide coverage. In addition, the reports must inform the Commission whether each carrier intends to discontinue analog service, identify the markets in which it plans to discontinue analog service, and for how long it plans to continue analog service and in which markets. If a carrier intends to discontinue analog service, the carrier must certify and provide information in its report that there are hearing aid-compatible digital devices available to persons with hearing disabilities at the time of filing, or, if no such equipment is available at the time of filing, describe the extent to which, by the end of the fifth year, digital equipment will be available to persons with hearing disabilities in market(s) where the carrier intends to discontinue analog service. Carriers may also be required to show in their reports that they are in compliance with the provisions of section 255 of the Act, as well as with any other obligations required of them by the Commission. Such carriers, in their reports, may also be required to describe their plan for informing its subscribers, the public and other interested parties regarding plans to discontinue analog service. Finally, other interested parties will be able to file reports or comments as appropriate, and the Commission encourages joint efforts. Such Reports will be made publicly available to all interested parties who may file supplemental information as appropriate to ensure that the Commission has a full record. The information contained in the reports will be used to determine whether or not the Commission will initiate a proceeding to extend the sunset date or take appropriate enforcement action under section 255.

21. Further, the Hearing Aid Compatibility Act of 1988 (HAC Act) requires almost all new telephones to “provide internal means for effective use with hearing aids that are designed to be compatible with telephones which meet established technical standards for hearing aid compatibility,” but provides an exemption for certain categories of phones including those used with CMRS and the private mobile radio services (or PMRS). 47 U.S.C. 610(b)(1); see 47 CFR 68.4(a). In November 2001, the Commission initiated a proceeding to examine whether this exemption continues to remain necessary, or whether the statutory criteria for revocation or limitation of the exemption have been satisfied. See In the Matter of Section 68.4(a) of the Commission's Rules Governing Hearing Aid-Compatible Telephones, WT Docket No. 01-309, Notice of Proposed Rulemaking , 16 FCC Rcd 20558 (2001) ( HAC Proceeding ). The action taken here does not preclude the Commission from independently requiring carriers to comply with HAC requirements, even during the 5-year transition period, in the event that the Commission determines in the HAC Proceeding that the statutory criteria for revocation or limitation of the exemption have been satisfied. Finally, the Wireless Telecommunications Bureau, in conjunction with the Consumer & Governmental Affairs Bureau, will work closely with the Food and Drug Administration and the Commission's Office of Engineering and Technology in the development of standards for hearing aid design that alleviate interference.

22. In the NPRM , the Commission proposed to remove § 22.919 of its rules, which sets forth electronic serial number (ESN) design requirements for manufacturers of cellular telephones. The purpose of this rule was to address the problem of cellular “cloning” fraud that was prevalent in the mid-1990s. Over the years, however, other measures have developed to combat cloning fraud. For example, Congress enacted the Wireless Telephone Protection Act of 1998 to address fraudulent and unauthorized use of wireless telecommunications services. Further, the cellular industry has developed a more secure access protocol, known as authentication. Other anti-fraud countermeasures developed by the industry include “radio frequency fingerprinting,” which identifies a mobile handset by its unique radio transmission characteristics, as well as “call profiling,” which enables carriers to monitor for unusual, sudden changes in calling patterns.

23. After reviewing the original purpose of the rule, the anti-fraud techniques that have been developed since the adoption of the rule, as well as the comments in this proceeding, the Commission concludes that the ESN rule is no longer necessary in the public interest and adopts its proposal to eliminate § 22.919. The concerns that led to the adoption of this rule have been addressed and no longer require retention of this rule. The Commission finds that it is unnecessary to continue to mandate detailed hardware design requirements given the success the wireless industry has had in developing other more effective anti-fraud measures.

24. Section 22.905 identifies the part of the electromagnetic spectrum that is allocated to the Cellular Radiotelephone Service and divides it into two blocks, labeled A and B. See 47 CFR 22.905. It also sets forth a channelization plan that sub-divides each block into 416 paired 30 kHz channels and designates 21 of these paired channels as control channels. Alternative technologies, including the principal digital technologies many cellular licensees have overlaid on top of their analog networks, are exempt from this channelization plan rule. The Commission proposed in the NPRM to remove the channelization plan for compatible AMPS cellular systems from § 22.905 of its rules, and to rephrase the remainder of that section such that it specifies only the portions of the electromagnetic spectrum allocated to the Cellular Radiotelephone Service and which frequency ranges make up the two initial blocks. The Commission reasoned that the analog technology to which the channelization plan is applicable is well-established nationwide, and thus removing the plan would not pose any risk of decreased cellular technical compatibility.

25. Given the number of standard analog base stations and handsets in use today and the efficiencies to be gained by implementing alternative digital (not analog) technologies, it appears highly unlikely that any carrier would have the incentive to deploy an alternative analog technology during the five-year sunset adopted in this proceeding. Further, carriers will continue to be bound by existing roaming agreements for at least some portion of the sunset, again making it highly unlikely that there would be any incentive to deploy an alternative analog technology. The Commission notes that the AMPS channelization plan is the current industry standard for AMPS and will presumably continue to provide guidance to licensees through the sunset of the analog requirement.

26. In the NPRM, the Commission sought comment on its proposal to modify § 22.915 of its rules, which sets out a number of technical specifications for, inter alia, the performance of audio filter and deviation limiter circuitry in analog cellular telephones, and adjustment of the modulation levels in analog cellular telephones. Consistent with its less regulatory approach with PCS and other CMRS, as well as its proposal to eliminate the analog requirement, the Commission proposed to eliminate the provision set out in § 22.915 requiring cellular systems to have the capability to provide service using the modulation types specified in OET 53 (analog compatibility standard). The Commission also proposed to remove all rules governing audio filter and deviation limiter performance, modulation levels, and in-band radio frequency emission limits.

27. The Commission also proposed changes to § 22.917 of its rules, which prescribes emission masks limiting both in-band and out-of-band radio frequency emissions. As with the proposal to remove the channelization requirements, the Commission proposed changes to the introductory paragraph of § 22.917, which requires that analog modulated emissions be transmitted only on the communication channels. Further, the Commission sought comment regarding how it should define the out-of-band emission limit in order to provide an adequate measure of interference protection to other licensees and service, while also allowing licensees the flexibility to establish a different limit where appropriate. Specifically, the Commission asked whether licensees should be permitted to operate transmitters on frequencies closer to the edge of their authorized spectrum than full compliance with § 22.917 would normally allow, as long as all potentially affected parties ( i.e. adjacent licensees) agree to such a provision. The Commission also noted that its Wireless Communications Service (WCS) rules provide this flexibility, and it indicated that cellular and broadband PCS licensees would also benefit from such flexibility. Accordingly, the Commission sought to conform the language and provisions of the out-of-band emission limit rules specific to the cellular service and broadband PCS with those applicable to WCS.

28. As the Commission is moving toward a less regulatory approach with respect to its service rules and is permitting carriers to deploy technologies that best fit the needs of the market, the Commission adopts its proposal with certain modifcations. Further, the Commission concludes that, because it seeks to ensure regulatory conformity wherever practical, its rules regarding out-of-band emissions limits for the various services should be similar.

29. However, certain commenters to the proceeding point out that implementation of the measurement resolution bandwidth specified in the proposed rule would have the effect of imposing a stricter out-of-band emission limit than that which currently applies. Specifically, the commenters object to the proposed rule's specification that compliance with the out-of-band emissions limit should be measured by using instrumentation employing a resolution bandwidth of 1 MHz or more from the center of the band. In proposing the rule change, the Commission sought only to harmonize certain procedures in the WCS, PCS and cellular services, and did not intend to make the out-of-band emission limits more restrictive. Accordingly, the Commission modifies the proposed rule by substituting in language that is more consistent with recently adopted International Telecommunications Union (ITU) standards for emissions. See ITU-R SM.329.

30. Section 22.367(a)(4) of the Commission's rules provides that electromagnetic waves radiated by base, mobile, and auxiliary test transmitters in the Cellular Radiotelephone Service must be vertically polarized. 47 CFR 22.367(a)(4). This rule was originally adopted in order to promote technical compatibility for cellular systems, as well as to reduce the likelihood of interference from cellular transmitters to broadcast television (TV) reception on the upper UHF TV channels. See In the Matter of Revision of part 22 of the Commission's Rules Governing the Public Mobile Services, CC Docket No. 92-115, Report and Order, 9 FCC Rcd 6513 (1994). The Commission tentatively concluded in the NPRM to relax § 22.367 of its rules to provide that cellular stations no longer be limited as to the polarization of the transmitted waves. The Commission specifically sought comment on what interference or adverse effects might be caused to mobile, fixed, and broadcast services operating in the cellular service spectrum or adjacent spectrum.

31. The original purposes of the rule no longer warrant this requirement on cellular carriers. The Commission is persuaded that relaxation of this requirement will have little effect on interoperability or UHF television channels. Even if a base station's transmissions are vertically polarized, many hand-held mobile units may not benefit from vertical polarization because they are either held in a manner such that their antenna is not vertical, or because the transmission's polarization will be shifted due to reflections from man-made structures. Accordingly, a vertically polarized transmission generally will provide little interoperability benefit to users of hand-held mobile phones. Furthermore, cellular base stations transmit on frequencies above 869 MHz (a minimum separation of 63 MHz from the closest UHF television frequency), thereby reducing the likelihood of interference with upper-band UHF television channels.

32. The Commission is not persuaded by arguments that the vertical polarization requirement should not be removed because it could result in reduced RF coverage for its end users, and impair telematics' ability to provide geographic location information for emergency services. The Commission notes that such concerns are limited to rural areas, where cellular carriers are unlikely to use other than vertical polarization because they have little incentive to do so. In addition, it is anticipated that cellular carriers will make the appropriate technical adjustments to account for varying polarization of transmit and receive antennas, and thereby obtain equivalent analog cellular performance at the boundaries of a rural cell site when using alternative technologies. The Commission notes that cellular carriers already have the flexibility to reduce coverage or turn off their systems for short or long periods without seeking prior approval of the Commission or notifying customers of their intended action. Further, telematics carriers may negotiate with cellular carriers and may enter into voluntary contractual relationships to accommodate specific coverage needs. Finally, the Commission believes that the industry and not regulation should dictate technical specifications wherever possible. Given these reasons, the Commission is not persuaded that it is necessary to retain this rule simply to ensure coverage for telematics subscribers attempting calls on the fringe of rural cell sites.

33. Section 22.941 of the Commission's rules sets forth the procedure by which the Commission assigns system identification numbers (SIDs) to systems in the Cellular Radiotelephone Service. SIDs are used by cellular systems to identify the home system of a cellular telephone and by cellular telephones to determine their roaming status. 47 CFR 22.941. In the NPRM, the Commission proposed to no longer consider SIDs as a term of the cellular license and to remove the requirement in § 22.941 of its rules that cellular licensees notify the Commission of the use of additional SIDs. The Commission proposed to retain portions of that rule that provide that a cellular system may transmit another system's SID only if that system consents to such use.

34. The Commission concludes that it is not necessary in the public interest to retain the current cellular SID rules as set out in § 22.941 of its rules as there is no public policy rationale that SIDs must be a term of cellular authorizations. There are no SID rules for PCS, SMR, or other CMRS, and this administrative function is carried out successfully within those radio services by the private sector without Commission involvement. Further, the Commission removes the SID rule in its entirety, including the “consent for use” portion of the rule ( i.e. allowing the usage of another system's SID only pursuant to consent). The Commission finds no reason to retain a portion of the rule or intervene when the private sector has shown, as in the case of PCS, for example, that it is capable of coordinating these types of administrative functions on its own. For the reasons stated above, the Commission is eliminating the SID rule in favor of administration of this function by the private sector. In eliminating this rule, the Commission must take certain steps to provide a smooth transition of the SID administration function to the private sector. These steps include identifying a party or parties to administer the function, transitioning the Commission's SID database to the party(s), and publicizing the change to the cellular industry. Therefore, the Commission authorizes and directs the Wireless Telecommunications Bureau to take all necessary steps to privatize this function.

35. Section 22.911(a) of the Commission's rules sets forth a standardized method for determining the CGSA of a cellular system. A system's CGSA is defined as the geographic area served by the system, within which that system is entitled to protection and adverse effects are recognized for the purpose of determining whether a petitioner has standing. See 47 CFR 22.99. Cellular licensees must provide the Commission with certain technical parameters describing each cell site that makes up the external boundary of its system. These technical parameters (latitude, longitude, height above average terrain, and power), or in some cases, an alternative study, are used to determine the service area boundary (SAB) for each cell site. In this vein, the geographic area within the aggregated SAB contours of a system (excluding areas outside the market boundary) is its CGSA. The method for determining the CGSA uses a general mathematical formula to calculate distances from the cell site along the cardinal radials to the SAB of each cell in the system. See 47 CFR 22.911, 22.912.

36. Section 22.911(b) provides, however, that any cellular licensee may apply for a modification of its licensed CGSA if it believes that the standard method produces a CGSA that is substantially different from the actual coverage of its system. In adopting this alternative approach for calculating the CGSA, the Commission stated that alternative showings would only be accepted where the change to the CGSA is substantial and justified by unique or unusual circumstances, or where the SAB formula is clearly inapplicable. When preparing to file an application requesting such a modification, the licensee must employ alternative methods (actual measurements, more accurate prediction models or a combination of the two) to determine the location of the median 32 dBuV/m field strength contour and the distances along cardinal radials to that contour. In describing how these distances to the median 32 dBuV/m contours must be used to determine the CGSA, paragraphs (b)(1) and (b)(3) of § 22.911 use the term SAB in several places. In the Commission's experience, this occasionally leads licensees to believe that they may employ the alternative methods to determine an SAB, as opposed to the CGSA, and then to use that “alternate” SAB in connection with various other rules such as the SAB extension rule or the traffic capture protection rule. In the NPRM, the Commission sought to clarify that the SAB of a cell derived using the standard method and the 32 dBuV/m contour that is used when preparing an alternative CGSA determination are different and not interchangeable. Accordingly, the Commission proposed to reword paragraphs (b)(1) and (b)(3) of § 22.911 to replace the word “SAB” with “32 dBuV/m contour.”

37. The Commission adopts the rule clarification as proposed. In setting out the standard method, the Commission sought to establish a method that would simplify and remove a measure of uncertainty from the process of calculating and plotting CGSAs. The Commission sought to prevent disagreements between parties and the Commission regarding the accuracy of methods used by parties to predict or measure actual coverage for a particular location or terrain. Although there may be certain situations in which it may not represent actual coverage as closely as other methods, the standard formula provides a simple and consistent method by which to calculate cellular system coverage. The Commission's decision to clarify § 22.911(a) is consistent with its original intent in limiting the scope of alternate CGSA showings, i.e. , to expedite Commission processing of applications, thereby avoiding delays in the provision of cellular service to the public. The Commission does not foreclose, however, the ability of carriers in adjacent markets to agree to the use of an alternative propagation method, or to enter into contract agreements, pursuant to § 22.912, to allow SAB extensions calculated using the standard method into the other carrier's CGSA. The Commission believes that a process that affords carriers flexibility and permits parties to enter into contractual agreements will expedite service to subscribers, in comparison to a more protracted process whereby parties must present and argue the merits of conflicting engineering studies before the Commission.

38. Section 22.946, which sets out construction requirements relating to the deployment of new cellular systems, was previously amended in the Commission's Universal Licensing System proceeding. See In the Matter of Biennial Regulatory Review—Amendment of parts 1, 13, 22, 24, 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules to Facilitate the Development and Use of the Universal Licensing System, WT Docket No. 98-20, Report and Order, 63 FR 6894 (Dec. 14, 1998) ( ULS Report and Order ). In implementing the ULS Report and Order, however, a table entitled “H-1—Commencement of Service,” was inadvertently deleted from § 22.946. Because certain information in the table was out-dated, the Commission proposed to correct § 22.946 by re-inserting the table, and to reflect updated information. The Commission also proposed to delete the final phrase of § 22.946(b), which prohibits cellular system licensees from “intentionally serv[ing] only roamer stations.”

39. As consumers now have numerous mobile telephony offerings from which to choose, the concern regarding lack of competition no longer exists. Accordingly, the Commission will remove the provision that prohibits service only to roamer stations. Further, after the Commission adopted the NPRM, it issued a Report and Order in WT Docket No. 97-112 regarding cellular service in the Gulf of Mexico. See In the Matter of Cellular Service and Other Commercial Mobile Radio Services in the Gulf of Mexico, WT Docket No. 97-112, Amendment of part 22 of the Commission's Rules to Provide for Filing and Processing of Applications for Unserved Areas in the Cellular Service and to Modify Other Cellular Rules, CC Docket No. 90-6, Report and Order, 67 FR 9596 (March 4, 2002). In that proceeding, the Commission amended § 22.946 to reflect construction requirements for licensees in the Gulf of Mexico. Because it was necessary to amend § 22.946 to add the Gulf of Mexico construction requirements, the Commission decided to re-insert the inadvertently omitted Table H-1 at that time. The Commission notes that § 22.946 was amended to re-insert Table H-1 after the comment period in this proceeding had run, and that no one filed comments opposing that correction to this rule section.

40. Section 22.323 of the Commission's rules authorizes carriers to provide other communications services incidental to the primary public mobile service, provided certain conditions are met. In general, § 22.323 requires carriers providing incidental services to protect mobile subscribers by ensuring that: (1) The costs and charges of subscribers not wishing to use incidental services are not increased as a result of the carrier's provision of incidental services to other subscribers; (2) the quality and availability of primary public mobile service does not materially deteriorate; and (3) provision of such incidental services is not inconsistent with the Communications Act of 1934 or the Commission's rules and policies. 47 CFR 22.323. In the NPRM, the Commission proposed to eliminate these conditions, and sought comment on whether it should also remove the remaining provision ( i.e. , the statement that incidental services are permitted) as it applies to some or all part 22 services.

41. In a related matter, the NPRM also sought comment on FreePage Corporation's (FreePage) request that § 22.323 be amended to include the “Limited Program Distribution Service” (LPDS) service proposed by FreePage as an “incidental service.” In February 2000, the Wireless Telecommunications Bureau sought comment on a petition for rulemaking filed by FreePage requesting that the Commission amend § 22.323 to permit paging licensees to use their assigned channels to transmit audio programming of interest to a narrow or specialized audience. Possible services cited by FreePage included, without limitation, children's programming, foreign language programming, and reading services for persons who have sight disabilities.

42. In the NPRM, the Commission invited comments on whether spectrum assigned to CMRS licensees could be used for the LPDS service proposed by FreePage. In particular, the Commission sought comments addressing whether the service proposed by FreePage is in fact a broadcast service, and, therefore, whether it would need to change existing spectrum allocation and service rules to permit LPDS service in spectrum assigned to CMRS licensees. More generally, the Commission also requested comments on what effects, if any, the implementation of FreePage's LPDS proposal would have on other authorized service offerings or services proposed in pending Commission rulemaking proceedings. Finally, the Commission solicited comments from members of the disability community regarding how they might benefit from a revision of the Commission's rules that would permit use of the spectrum for programming to narrow or specialized audiences.

43. The Commission agrees with commenters that the imposing of conditions on the provision of incidental services by part 22 licensees is no longer necessary. Section 22.323(a) imposes the condition that the costs and charges to subscribers not wishing to receive incidental services may not be increased as a result of the provision of incidental services to other subscribers. Because of the competitive wireless environment, however, CMRS licensees are not subject to federal rate regulation and are not permitted to file tariffs with the Commission. Under these circumstances, the Commission concludes that this rate restriction is unnecessary, as any dissatisfied subscriber will have the option of switching to a competing carrier. The Commission further concludes that there is no reason to retain the remainder of the rule in the absence of those conditions. The Commission recognizes that some commenters advocated that it retain this portion of the rule on the grounds that having an express provision for incidental services codified in the rules is helpful in demonstrating to state commissions that certain services must be treated as CMRS exempt from state and local regulation of rates and entry.

44. With respect to FreePage's request to include a provision in § 22.323 that LPDS is an incidental service within the meaning of the rule, the Commission denies the request but grants alternative relief as follows. First, the Commission finds that it is unnecessary to determine whether FreePage's LPDS service constitutes an incidental service because FreePage may provide any form of fixed or mobile service under a part 22 authorization, provided only that its service does not constitute broadcasting. Second, to the extent FreePage's intended service offering constitutes broadcast service, the Commission finds that it is in the public interest to provide FreePage with the flexibility to provide its LPDS service pursuant to the terms of a developmental authorization. The Commission therefore directs Commission staff to waive the allocation if necessary in order to process the developmental license. Accordingly, FreePage may file an application for developmental authority with the Commission, which will be processed by the Wireless Telecommunications Bureau pursuant to the regulations set forth in § 22.401 of the Commission's rules. The Commission believes that a developmental license will afford FreePage the opportunity to assess consumer demand for its LPDS service offering.

45. In the NPRM, the Commission noted that §§ 22.937, 22.943, and 22.945 were originally adopted to prevent speculation and trafficking in cellular licenses that were awarded by random selection. Because the Commission is now required to resolve mutually exclusive applications for initial cellular licenses through competitive bidding, it proposed to eliminate or substantially modify rule §§ 22.937, 22.943, and 22.945 as they are now unnecessary and no longer serve the public interest.

46. In adopting § 22.937, the Commission stated that it was requiring applicants to show financial qualification because of the large capital investment required to finance the complex and sophisticated technology associated with cellular operations. The Commission noted that cellular service was viewed as a relatively high-cost business venture because the service was still at an early stage of development. The Commission concludes that § 22.937 is no longer necessary as a general matter because the cellular radiotelephone service has matured and there are two authorized cellular carriers in all MSAs and virtually all RSAs. The Commission's cellular rules have been amended to permit interested parties to file applications for any areas not serviced by cellular carriers after the expiration of the applicable build-out period, and such applications are now subject to competitive bidding. Although it proposed to retain § 22.937 in the context of comparative renewal proceedings, the Commission finds that the rule is not necessary. The Commission has the authority to seek financial qualification information in a comparative renewal proceeding if it so chooses. The Commission therefore eliminates § 22.937 in its entirety.

47. The Commission similarly concludes that § 22.943 should be removed as unnecessary. The Commission's anti-trafficking rules were developed to deter speculation on cellular licenses. In setting out the anti-trafficking rules, the Commission sought to balance the public interest in liberal transferability of licenses with a means to deter insincere applicants from speculating on unbuilt facilities. Accordingly, the Commission proposed to eliminate § 22.943 to the extent that it prohibits trafficking in cellular licenses and precludes unserved area licensees from assigning or transferring an authorization until they have provided service to subscribers for at least one year. The Commission noted that the cellular service-specific anti-trafficking rule set out in § 22.943 may be unnecessary and duplicative as there are similar provisions in part 1 of its rules that are applicable to all wireless services.

48. While § 22.943 was useful in deterring speculation during the time period in which it used lotteries to select licensees, the Commission now uses competitive bidding to resolve mutual exclusivity. Mutually exclusive applications for licenses in other CMRS are also required to be resolved through the use of competitive bidding. Yet in those cases, the Commission does not impose service-specific anti-trafficking rules, or mandate specific holding periods prior to assignment or transfer of licenses acquired through competitive bidding. Accordingly, the Commission eliminates the portions of § 22.943 that prohibit trafficking in cellular licenses, and that require carriers who acquired unserved area licenses to provide service to subscribers for at least one year before such licenses may be assigned or transferred. The Commission further finds that the cellular service-specific anti-trafficking rule set out in § 22.943 is unnecessary, given the presence of the anti-trafficking provisions of § 1.948(i), which is applicable to all services. See 47 CFR 1.948(i).

49. The Commission's conclusion to remove service-specific anti-trafficking provisions of § 22.943 extends to § 22.943(c), which states that it will not accept applications for consent to assign or transfer a cellular authorization acquired by a current licensee for the first time as a result of a comparative renewal proceeding until the system has provided service to subscribers for at least three years. See 47 CFR 22.943(c). The Commission noted in the NPRM that it would leave intact portions of § 22.937 relating cellular renewal proceedings, but requested comment on whether to retain § 22.943(c). Although § 22.943(c) also relates to cellular renewals, it is nonetheless an anti-trafficking provision and should be removed as duplicative of rule § 1.948(i).

50. Similarly, because § 22.945 was adopted for the sole purpose of preventing lottery system abuses, the Commission's obligation to resolve mutual exclusivity through competitive bidding also makes this rule unnecessary. An applicant filing more than one application for a specific unserved area under the current rules would have no advantage over other applicants seeking authorization to serve the same geographic area.

51. In the NPRM, the Commission not only sought comment on its specific proposals, but also invited comment on whether it should modify any additional provisions of its part 22 rules as a result of competitive or technological developments.

52. Section 22.941 sets forth the “unserved area” licensing process for the cellular service. Certain carriers recommend that the Commission replace the unserved area licensing process. 47 CFR 22.941. In general, the commenters point out that the current site-by-site approach requires pre-approval each time a licensee wishes to expand its system. Proposals by two of the commenters favor a one-time process that licenses the remaining unserved areas, so that pre-approval of future expansions is no longer necessary. One recommendation proposes that the Commission abandon the per-application approach of the unserved area rules and instead: (1) Automatically incorporate areas of 50 square miles or less into the CGSAs of the first-authorized incumbent adjoining the unserved area; and (2) open a filing window for all unserved areas exceeding 50 square miles, resulting in either the incorporation of the unserved area into the incumbent carrier's CGSA, or an auction among mutually exclusive applicants. Another proposal recommends eliminating filings for unserved areas of less than 50 square miles that are completely surrounded by an incumbent's CGSA ( i.e. , the incumbent is the only one eligible under the rules to file an application), while another recommends that incumbents should be able to cover unserved areas of less than 50 square miles on a secondary basis without having to obtain prior Commission approval.

53. The Commission declines to adopt such changes. Suggestions made by commenters constitute a fundamental change to its cellular service licensing model, and, as such, are beyond the scope of this proceeding. The Commission also notes that under its current process, the Commission receives approximately 40 unserved area applications each month, disposing of each usually within 45-60 days. Given that so few unserved area applications are filed with the Commission today and are processed quickly, it questions whether the burdens on all licensees of a major overhaul at this point warrants any corresponding benefits. In considering the wisdom of making significant changes within the cellular unserved licensing context, the Commission would need to identify an alternative approach that is administratively efficient, less complicated than the current approach, represents an improvement over the status quo in terms of speed of licensing and convenience for licensees, and continues to provide small as well as large carriers with reasonable opportunities to serve currently unserved areas. Given that the current system results in little administrative delay, the Commission does not find that commenters have done so. Moreover, commenters have failed to adequately address construction, interference protection, and market structure issues that would need to be addressed under a new processing regime. The Commission believes that a more complete record must be developed before any Commission action is warranted.

54. One commenter seeks to remove the requirement that licensees notify the Commission of each CGSA expansion for markets within the initial five-year construction period. Currently, § 22.165(e) requires licensees to notify the Commission within 15 days of expanding their CGSAs, even during the initial five-year construction period. Cellular licensees are free to construct facilities anywhere within their markets without the possibility of competing applications during the initial construction period. The proposal would have the Commission require the licensee to file a system information update at the end of the five-year period, i.e. , identify the areas that are served and unserved in preparation for the unserved area Phase I process.

55. The Commission agrees that generally it and other licensees have no interest in knowing the precise location of an initial licensee's CGSA until the end of the initial five-year period. At that point, the CGSA must be a matter of record available to potential Phase I unserved area applicants as well as the Commission's staff in order to process the unserved area applications. Presently, there are only eleven cellular markets that are still within the initial five-year construction period. In addition, the Commission will soon issue initial licenses in three of the remaining RSAs. Even though very few licensees will be in a position to take advantage of this change, the Commission will revise the rule substantially as requested. Therefore, the Commission will revise § 22.165(e) to require licensees in their initial five-year build-out period to notify the Commission of cell sites making up their CGSAs once yearly on the anniversary of license grant, rather than requiring licensees to file notifications within 15 days of initiating service at each site. The Commission concludes that revising this requirement to provide for an annual reporting obligation will minimize unnecessary regulatory burdens for initial cellular licensees while providing a reasonably up-to-date source of data for other cellular licensees and Commission staff.

56. Section 22.912 of the Commission's rules provides that any SAB extensions into an adjacent carrier's CGSA requires the consent of the adjacent carrier. One commeter requested the Commission to clarify that, in the case where an adjacent carrier has already consented to analog SAB extensions into its CGSA, a separate agreement is not required in order to extend the SAB of a digital signal into the CGSA so long as it does not exceed boundary established by the initial analog agreement. The Commission clarifies that its rules do not limit the scope of private, contractual agreements between cellular licensees in this case. To the extent that a carrier enters into an agreement that provides for extensions of both analog and digital signals into an adjacent carrier's CGSA, the Commission's rules do not require separate notification to the Commission of such extensions; a single notification of the scope of that extension will be adequate notice.

57. The actions taken in this Report and Order have been analyzed with respect to the Paperwork Reduction Act of 1995, Public Law No. 104-13, and found to impose no new or modified recordkeeping requirements or burdens on the public.

58. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the NPRM . The Commission sought written public comment on the proposals in the NPRM , including comment on the IRFA. The comments received are discussed below. The Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

59. In the Telecommunications Act of 1996, Congress added sections 11 and 202(h) to the Communications Act of 1934, as amended, requiring the Commission to (1) review biennially its regulations that pertain to the operations or activities of telecommunications service providers, and (2) determine whether those regulations are no longer necessary in the public interest as a result of meaningful economic competition. 47 U.S.C. 11(b). Following such review, the Commission is required to modify or repeal any such regulations that are no longer in the public interest. Accordingly, as part of the Commission's year 2000 Biennial Review of regulations, the Report and Order amends part 22 of the Commission's rules by modifying or eliminating various rules that have become outdated due to technological change, increased competition in the Commercial Mobile Radio Services (CMRS) market, or supervening rules.

60. In particular, the Report and Order removes the cellular analog requirement after a five-year transition period and requires reports by certain CMRS licensees and other entities showing the level of access to mobile telephony had by persons with hearing disabilities or those using emergency-only phones. The Report and Order also removes the manufacturing requirements governing Electronic Serial Numbers (ESNs) in cellular telephones, as well as modifying several other technical rules. In the same vein, the Commission found some of the cellular anti-trafficking rules to be outdated because they were adopted during a period when the Commission resolved mutually exclusive applications for initial cellular services through lottery, rather than the current system of resolving such mutually exclusive applications through competitive bidding. The Commission also reevaluated certain other part 22 rules that apply both to cellular and to other CMRS, specifically § 22.323, which imposes conditions on the provision of “incidental” services by Public Mobile Services providers.

61. Although the Commission received numerous comments in response to the NPRM , it received no comments in response to the IRFA. However, as described below, the Commission nonetheless considered potential significant economic impacts of the rules on small entities.

62. Analog Compatibility Requirement. Although the comments suggest that elimination of the analog requirement would not affect the majority of wireless consumers that are already using digital service, some commenters contend that there are particular classes of consumers and service providers that would be harmed by elimination of the rule. These commenters focus particularly on the possibility that, if the rule were eliminated, cellular carriers in major markets would be likely to drop analog service in those markets to provide more capacity for their digital systems. Commenters argue that, at the very least, the requirement should be eliminated only after a transition period. The unavailability of analog service in these markets, commenters contend, would have an adverse impact on the following groups:

63. Small and regional carriers. Small and regional carriers argue that, if the analog requirement is eliminated, they will be forced to transition from solely analog services to digital in order to ensure that their customers will have service outside of their home market, as well as to continue to provide roaming service to customers of the large nationwide carriers. They argue that eliminating the analog requirement will force them to bear the financial burden of immediately converting to digital, regardless of consumer demand within their particular markets. Further, these commenters assert that a decision to adopt any particular digital technology will be dictated by a small/regional carrier's larger roaming partner. Moreover, commenters argue that, in certain areas, a small or regional licensee may be positioned between major markets whose licensees have chosen incompatible digital technologies, forcing it to choose between roaming partners and multiple digital standards in the absence of analog technology. These commenters argue that, in the absence of interoperable digital technology, the analog requirement should not be eliminated.

64. Analog-only consumers. It is estimated that there are approximately 26 million analog-only subscribers. These include consumers who use analog-only handsets because their carriers do not provide digital service (mainly rural cellular carriers) as well as subscribers who have purchased 911-only mobile phones. Remaining analog-only users are non-subscribers, such as certain elderly or victims of domestic violence, who have received recycled analog equipment for use for emergency purposes. Presently, a customer using analog-only equipment can roam on other cellular networks in the event the consumer is outside of his/her home market. Commenters argue that these cellular customers would lose the ability to roam with their current analog-only handset if the analog standard is eliminated and both carriers within a given area shut down their analog networks.

65. Telematics. Telematics services providers have, for the most part, relied on analog technology to ensure interoperable communications nationwide. Telematics advocates assert that analog service is vital, due to the ambulant nationwide nature of telematics technology. It is argued that digital systems cannot yet transmit both voice and data on the same call, a feature that commenters argue is important for telematics providers. These commenters assert that the interoperability problem is particularly difficult for telematics devices because manufacturers must choose a technology that is embedded in a vehicle that will have a useful life of ten or more years. Moreover, these providers assert that, unlike the typical cellular subscriber who can readily switch to digital handsets if necessary, the development cycle (the length of time necessary to design equipment, test, and install in compatible vehicles) and hardware basis of telematics-equipped vehicles prevents users of such services from quickly and easily migrating to a new technology. These providers argue that telematics devices are imbedded into vehicles in such a way as to make it cost prohibitive to retrofit legacy vehicles with analog-based equipment. Given the development cycles and life spans of such vehicles (often longer than ten years), commenters argue that the immediate elimination of the analog rule would be a setback for telematics providers and their customers. Instead, certain telematics providers argue that if the analog requirement must be eliminated, the industry must be given a reasonable transition period, and suggest that such a transition period would be ten years.

66. Persons with hearing disabilities. Persons with hearing disabilities desiring to use wireless devices must currently rely on analog service or the small number of digital phones that are currently compatible with only certain hearing aids. Unlike analog handsets, digital technologies have been shown to cause interference to hearing aids and cochlear implants. Accessibility advocates and those with hearing disabilities note that market forces ( e.g. need for spectrum efficiency, enhanced services such as wireless data) make a shift to digital technology inevitable. These commenters argue that at this point, however, due to the lack of hearing aid-compatible digital equipment, persons with hearing disabilities must rely on analog equipment to access mobile telephony, thereby settling for inferior sound quality, fewer service options, and higher prices. Commenters argue that, because persons with hearing disabilities account for only a small percentage of mobile telephony users, there are not sufficient economic incentives for carriers to expend resources to ensure that these individuals have access to wireless service. Accessibility advocacy groups maintain that the analog requirement should not be eliminated (if at all) until new digital services are accessible and readily available to persons with hearing disabilities.

67. Electronic Serial Number. Numerous commenters support the proposal to remove § 22.919. Commenters agree that the industry is capable of developing anti-fraud measures on its own and that the rule prevents carriers from deploying advanced technologies such as smart cards. One commenter, however, supports elimination of the detailed design requirements in the rule, but would keep the requirement that cellular telephones have a unique ESN. Further, two other commenters argue that removing the ESN rule would be disruptive to other aspects of cellular service. Alternatively, another commenter supports the Commission's proposal, but does so because it believes that it should be legal to clone cellular telephones (in particular, as a small business activity) for customers who are already legitimate cellular subscribers, as opposed to those who are not subscribers.

68. Channelization Requirements. A majority of the commenters addressing this issue support the Commission's proposal. One commenter, however, opposes the elimination of the channelization plan rule prior to the elimination of the analog service requirement, stating that some cellular carriers might start providing analog service using a different and incompatible analog channel plan, which would leave some subscribers without roamer service. Another commenter also opposes removal of the channelization plan because it believes that the rule provides a legal basis for “frequency protection” from adjacent systems using digital technologies.

69. Modulation Requirements and In-band Emissions Limitations. The Commission received a number of comments supporting various aspects of its proposal to a number of technical specifications for, inter alia, the performance of audio filter and deviation limiter circuitry in analog cellular telephones, and adjustment of the modulation levels in analog cellular telephones. One commenter states that § 22.915 should be eliminated because the rule's requirements are specific to the AMPS analog compatibility standard, and, as such, are contrary to the goal of allowing carriers to implement the technologies of their choice, and stifles the development of technologically advanced systems. Certain commenters, however, object to the specific language the Commission proposed for the out-of-band emission limit measurement rule in § 22.917. These parties point out that implementation of the measurement resolution bandwidth specified in the proposed rule would have the effect of imposing a stricter out-of-band emission limit than that which currently applies. A few commenters submitted alternative language which more accurately reflect the Commission's intended goal of harmonizing certain procedures in the wireless communications services (WCS), personal communications services (PCS) and cellular services.

70. Wave Polarization Requirement. A majority of the commenters addressing this issue generally support relaxation of the rule requiring electromagnetic waves radiated by transmitters to be vertically polarized because of the technical flexibility it will provide cellular carriers. One commenter notes that flexibility in polarization is beneficial in order to reduce multipath fading and to improve signal quality, while another points out that eliminating the vertical polarization requirement will permit carriers to reduce the antenna space needed on towers, thereby benefiting carriers as well as the public by fostering more aesthetically pleasing antenna sites, reducing the number of antennas required at a particular site (thereby reducing the need for local zoning clearance in many cases), permitting collocation of multiple carriers' facilities on the same tower, and reducing site deployment costs.

71. One commenter, however, objects to relaxing the rule on the basis that non-vertical antenna polarization could result in reduced RF coverage for its end users and impair telematics' ability to provide geographic location information for emergency services. Specifically, the commenter notes that it utilizes analog cellular technology to provide location-based telematics service offerings, such as automatic crash notification, through systems embedded in vehicles of certain automobile manufacturers. Likewise, another commenter objects to relaxing the requirement because of the “isolation” it provides to cellular systems from co-channel and adjacent-channel transmitters.

72. Assignment of System Identification Numbers. Commenters generally support the proposal to eliminate the procedures and rules set forth in § 22.941 by which the Commission administers cellular system identification numbers (SIDs). The commenters agree that there is no regulatory purpose in retaining SIDs as a term of cellular licenses. As commenters point out, there are no SID rules for PCS, SMR, or other CMRS, and this administrative function is carried out successfully within those radio services by the private sector without Commission involvement.

73. Determination of Cellular Geographic Service Area. Several cellular carriers oppose the Commission's intent to clarify the language in § 22.911(b) regarding the term “SAB” (service area boundary) in situations in which a carrier employs alternative methods to calculate the CGSA of its system. One commenter advocates that the Commission in fact allow alternative propagation methods to be used for evaluating signal extensions into adjacent systems, in lieu of the formula in § 22.911(a), and another commenter argues that when a carrier has determined its CGSA by use of an alternative method, it is “illogical and inconsistent” to require that cell SABs be used for all other purposes.

74. Incidental Services Rule. Commenters generally agree that the Commission should modify § 22.323 of its rules that permits carriers to provide other communications services incidental to the primary public mobile service. Commenters, on the other hand, believe that the provision in § 22.323 that states that incidental services are permitted should be retained. Several of the carriers addressing this issue point out that an express provision for incidental services is helpful in demonstrating to state commissions that certain services must be treated as CMRS exempt from state and local regulation of rates and entry.

75. 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. 5 U.S.C. 603(b)(3). The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 5 U.S.C. 601(6). In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. 5 U.S.C. 601(3). 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). 15 U.S.C. 632.

76. This Report and Order results in rule changes that could affect small businesses that currently are or may become Cellular Radiotelephone Service providers that are regulated under subpart H of part 22 of the Commission's rules. In addition, changes to § 22.323 of the Commission's rules could affect service providers that are regulated under any provisions of part 22 of the Commission's rules. These include, in addition to Cellular Radiotelephone Service providers, providers of Paging and Radiotelephone (Common Carrier Paging), Air-Ground Radiotelephone, Offshore Radiotelephone, and Rural Radiotelephone services. In addition, pursuant to § 90.493(b) of the Commission's rules, paging licensees on exclusive channels in the 929-930 MHz bands are subject to the licensing, construction, and operation rules set forth in part 22. See 47 CFR 90.493(b). As this rulemaking proceeding may apply to multiple services, the Commission analyzes the number of small entities affected on a service-by-service basis. In addition to service providers, some of the proposed rule changes may also affect manufacturers of cellular telecommunications equipment. The Commission will include a separate discussion regarding the number of small cellular equipment manufacturing entities that are potentially affected by the proposed rule changes.

77. Cellular Radiotelephone Service. The SBA has developed a small business size standard for small businesses in the category “Cellular and Other Wireless Telecommunications.” 13 CFR 121.201, North American Industry Classification System (NAICS) code 513322. Under that SBA category, a business is small if it has 1,500 or fewer employees. According to the Bureau of the Census, only twelve firms from a total of 1,238 cellular and other wireless telecommunications firms operating during 1997 had 1,000 or more employees. Therefore, even if all twelve of these firms were cellular telephone companies, nearly all cellular carriers were small businesses under the SBA's definition. In addition, the Commision notes that there are 1,807 cellular licenses; however, a cellular licensee may own several licenses. According to the most recent Trends in Telephone Service data, 806 carriers reported that they were engaged in the provision of either cellular service, PCS, or SMR telephony services, which are placed together in that data. See Trends in Telephone Service, Industry Analysis Division, Common Carrier Bureau, Table 5.3—Number of Telecommunications Service Providers that are Small Businesses (August 2001). The Commission has estimated that 323 of these are small under the SBA small business size standard. Accordingly, based on this data, the Commission estimates that not more than 323 cellular service providers will be affected by these revised rules.

78. Paging. The Commission has adopted, and the SBA has approved, a two-tier definition of small businesses in the context of auctioning licenses in the paging services. Under this definition, a small business is defined as either (1) an entity that, together with its affiliates and controlling principals, has average gross revenues for the three preceding years of not more than $3 million, or (2) an entity that, together with affiliates and controlling principals, has average gross revenues for the three preceding calendar years of not more than $15 million. See Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Third Report, FCC 98-91(rel. June 11, 1998). The Commission has estimated that as of January 1998, there were more than 600 paging companies in the United States. In the August 2001 Trends in Telephone Service data, 427 carriers reported that they were engaged in the provision of paging and messaging service; 407 of these firms identified themselves as having 1,500 or fewer employees. The Commission does not have data specifying the number of these carriers that are not independently owned and operated or meet the small business thresholds set forth above, or the number of these carriers that are regulated under part 22 of the Commission's rules, and thus is unable at this time to estimate with precision the number of affected paging carriers that would qualify as small business concerns under its definition. However, the Commission estimates that the majority of existing paging providers qualify as small entities under its definition. Consequently, the Commission estimates that there are up to approximately 600 currently licensed small paging carriers that may be affected by the rule changes set out in the Report and Order. Further in December 2001, 182 bidders placed high bids for 5,323 geographic area paging licenses in Auction No. 40. Applications remain pending as of the release of this Report and Order. Thus, in addition to existing licensees, the rule changes adopted in the Report and Order could affect paging licenses won in Auction No. 40.

79. Air-Ground Radiotelephone Service. The Commission has not adopted a definition of small business specific to the Air-Ground radiotelephone service. Accordingly, the Commission uses the SBA definition applicable to radiotelephone companies, i.e. , an entity employing no more than 1,500 persons. There are approximately 24 licensees in the Air-Ground radiotelephone service, and the Commission estimates that almost all of them qualify as small entities under the SBA definition.

80. Offshore Radiotelephone Service. This service operates on several ultra high frequency (UHF) TV broadcast channels that are not used for TV broadcasting in the coastal area of the states bordering the Gulf of Mexico. At present, there are less than ten licensees in this service. The Commission has not adopted a definition of small business specific to the Offshore Radiotelephone Service. Accordingly, the Commission uses the SBA definition applicable to radiotelephone companies, i.e. , an entity employing no more than 1,500 persons. The Commission assumes that all licensees in this service are small entities, as that term is defined by the SBA.

81. Rural Radiotelephone Service. The Commission has not adopted a definition of small entity specific to the Rural Radiotelephone Service. A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio Systems (BETRS). The Commission therefore uses the SBA definition applicable to radiotelephone companies; i.e. , an entity employing no more than 1,500 persons. There are approximately 100 licensees in the Rural Radiotelephone Service, and the Commission estimates that almost all of them qualify as small entities under the SBA definition.

82. Cellular Equipment Manufacturers. Some of the actions adopted in the Report and Order will also affect manufacturers of cellular equipment. The Commission does not know how many cellular equipment manufacturers are in the current market. The 1997 Economic Census provides that there were 1,089 communications-related equipment manufacturing companies as of 1997. This category includes not only cellular equipment manufacturers, but television and AM/FM radio manufacturers as well. Under SBA regulations, a “radio and television broadcasting and wireless communications equipment manufacturing” company, which includes not only U.S. cellular equipment manufacturers but also firms that manufacture radio and television broadcasting and other communications equipment as well as electronic components, must have a total of 750 or fewer employees in order to qualify as a small business concern. 13 CFR 121.201, NAICS code 334220. Although the exact number is unknown, the number of cellular equipment manufacturers is considerably lower than 1,089. U.S. Census Bureau, 1997 Economic Census, Manufacturing Subject Series, at Table 3—Detailed Statistics by Industry: 1997, NAICS code 334220 (October 2000).

83. Broadband Personal Communications Service. The broadband PCS spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission has created a small business size standard 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 small business size standard for “very small business” was added and is defined as an entity that, together with their affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. These small business size standards, in the context of broadband PCS auctions, have been approved by the SBA. No small businesses within the SBA-approved small business size standards 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 reauctioned 347 C, D, E, and F Block licenses; there were 48 small business winning bidders. Based on this information, the Commission concludes that the number of small broadband PCS licensees will include the 90 winning C Block bidders and the 93 qualifying bidders in the D, E, and F blocks plus the 48 winning bidders in the re-auction, for a total of 231 small entity PCS providers as defined by the SBA small business standards 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.

84. The Commission will require that, (1) three years from the effective date of this order and (2) four years from the effective date of this order, certain CMRS licensees and other entities file reports with the Commission. In the reports, the carrier must either certify that, within their own markets, there are, at the time of filing, hearing aid-compatible digital devices available to and usable by persons with hearing disabilities for use with that carrier's digital network, or, if no such equipment is available at the time of filing, describe the extent to which, by the end of the fifth year, digital equipment will be available to and usable by persons with hearing disabilities, and describe how the public is being informed of their availability. If upon review of the filings, the Commission determines that significant problems remain regarding access to mobile telephony by persons with hearing disabilities, the Commission may find that the analog requirement will be removed only for technologies where hearing aid-compatibility solutions are available, or that the sunset period will be extended for all carriers. Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered.

85. The RFA requires an agency to describe any significant 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. See 5 U.S.C. 603.

86. Because several commenters argued that certain entities, such as persons with hearing disabilities and small and regional carriers, may be harmed by the immediate removal of the analog requirement, the Commission instituted a five-year transition period to ease the transition to digital technology. By establishing this five-year transition period, the Commission takes account of the potentially smaller resources available to small entities.

87. The Report and Order concluded that several of the Commission's technical and anti-trafficking cellular rules are outdated. Therefore, modifying or eliminating these rules should decrease the costs associated with regulatory compliance for cellular service providers, provide additional flexibility in manufacturing cellular equipment, and also enhance the market demand for some products. Also, amending the incidental services rules will allow licensees in the part 22 services greater flexibility in the types of services they offer. The Commission notes that the intent underlying its actions is to lessen the levels of regulation, consistent with its mandate for undertaking biennial reviews. The Commission has therefore described, supra, actions intended to lessen the regulatory burden on carriers and equipment manufacturers, including small entities.

88. Report to Congress: The Commission will send a copy of the Report and Order, including the associated FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of the Report and Order , including the associated FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the Report and Order and associated FRFA (or summaries thereof) will also be published in the Federal Register . See 5 U.S.C. 604(b).

89. Pursuant to the authority of sections 4(i), 7, 303(c), 303(f), 303(g), 303(r), and 332 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(c), 303(f), 303(g), 303(r), and 332, the rule changes specified below are adopted.

90. The rule changes set forth below will become effective February 18, 2003.

91. Certain commercial mobile radio service carriers and other entities must submit reports regarding access to mobile telephony services by emergency-only consumers and persons with hearing disabilities at one and two years prior to the sunset of the rules requiring cellular carriers to provide analog service compatible with Advanced Mobile Phone Service (AMPS) specifications.

92. The Wireless Telecommunications Bureau is authorized to carry out such actions necessary to transfer the administration of cellular system identification numbers as identified herein.

93. In the NPRM, the Commission proposed to modify various general cellular service requirements set out in § 22.901 of the Commission's rules. First, the Commission proposed deleting current § 22.901(d), which addresses alternative cellular technologies. Because the rule is drafted as though the principal cellular technology is analog technology, the Commission therefore proposed deleting current § 22.901(d) and adding the following language to the introductory paragraph of the rule: “In providing cellular services, each cellular system may incorporate any technology that meets all applicable technical requirements in this part.”

94. The Commission also proposed deleting certain §§ 22.901(a) and 22.901(b) of its rules. Section 22.901(a) requires that cellular licensees provide subscribers with information regarding the service area of the cellular provider. The Commission sought comment on whether there is any material difference between the service-area-related information provided by cellular providers in comparison with other providers of CMRS services. The NPRM also requested comment on whether, in light of the current level of competition in the provision of CMRS services, such a requirement is still necessary to ensure that consumers have access to service-area-related information. Section 22.901(b) requires the cellular licensee to notify the Commission in the event that a subscriber's request for service is denied due to lack of cellular system capacity. See 47 CFR 22.901(b). The Commission proposed removing this requirement, noting that the rule does not provide any mechanism for ameliorating any instance of a lack of system capacity. The Commission also explained that, given the current level of competition, consumers who are denied service by a particular provider due to lack of capacity will be very likely to have other service options.

95. Further, the Commission proposed deleting the first sentence of the introductory paragraph, which provides that “Cellular system licensees must provide cellular mobile radiotelephone service upon request to all cellular subscribers in good standing . . . .” 47 CFR 22.901. The Commission also proposed removing the specific reference in the introductory paragraph that provides that a cellular system may terminate service when a subscriber “operates a cellular telephone in an airborne aircraft.”

96. First, the Commission concludes that the competitive state of the mobile telephony market renders unnecessary both § 22.901(d) to the extent it characterizes certain technologies as “primary” or “alternative” as well as the first sentence in the introductory paragraph of § 22.901 to the extent it requires licensees to “provide cellular mobile radiotelephone service upon request to all cellular subscribers in good standing.” The Commission deletes the existing text of § 22.201(d) (which implies that analog is the principal technology in use). The Commission adds a technologically-neutral statement to § 22.901: “In providing cellular services, each cellular system may incorporate any technology that meets all applicable technical requirements of this part.” Further, the Commission finds that the statement in the introductory paragraph about provision of service to “cellular subscribers in good standing” is unnecessary because, even in the absence of this rule, cellular service providers, like all common carriers, are required to comply with sections 201 and 202 of Title II of the Act. Those sections require cellular carriers to provide service upon reasonable request, to have charges, practices, classifications, and regulations that are just and reasonable, and to avoid unjust or unreasonable discrimination in their charges, practices, classifications, regulations, facilities, or services. Further, the Commission notes that there are no other comparable rule requirements placed on other CMRS licensees.

97. Second, the Commission finds that it is no longer necessary to require cellular carriers to provide subscribers with information regarding the service area of the provider and therefore delete § 22.901(a). While the Commission agrees that consumers should have access to information about carriers' service areas prior to purchasing wireless services, as well as while using the services, it finds that cellular carriers, as well as PCS and digital SMR carriers are already making this information available at retail outlets, as well as via the internet. The Commission notes that PCS and digital SMR providers are doing so without any comparable regulatory requirement, presumably because consumers demand this information. Notably, the Commission believes the rule is no longer necessary because, even in the absence of the rule, cellular carriers will continue to make this information available while marketing their services in today's competitive marketplace.

98. Third, the Commission finds that the current level of competition renders unnecessary the provision in § 22.901(b) that carriers must notify the Commission in the event that a subscriber's request for service is denied due to lack of capacity. As a threshold matter, the Commission is unaware of any cellular licensee having filed such a notification with the Commission. The Commission notes that carriers must provide sufficient capacity for analog service in instances where it is required. In fact, revised § 22.901(b)(2) states in part that “[c]ellular licensees must allot sufficient system resources such that the quality of AMPS provided, in terms of geographic coverage and traffic capacity, is fully adequate to satisfy the concurrent need for AMPS availability.” The Commission believes that this rule provision, combined with the choices of wireless services available to consumers today, will ensure that consumers of analog services will continue to receive adequate service even in the absence of the notification requirement.

99. Finally, the Commission concludes that it is unnecessary to retain the provision in the introductory paragraph to § 22.901 stating that a carrier may terminate service to a customer who operates a cellular telephone while on board an airborne aircraft. The Commission finds that there is no basis to retain this provision because its rules already explicitly prohibit operation of cellular telephones on board airborne aircraft, and a cellular licensee would be within its obligations under sections 201 and 202 of the Act in terminating the service of customers who violate the Commission's rules. Further, such a rule could be misinterpreted to limit a cellular or other CMRS licensee's ability to terminate service to customers in the case of other types of rule violations. Therefore, the Commission finds that an express condition regarding airborne operation is unnecessary and potentially confusing to licensees.

100. The actions taken in the Second Report and Order have been analyzed with respect to the Paperwork Reduction Act of 1995, Public Law No. 104-13, and found to impose no new or modified recordkeeping requirements or burdens on the public.

101. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the NPRM . The Commission sought written public comment on the proposals in the NPRM, including comment on the IRFA. The comments received are discussed below. The Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

102. As part of the Commission's year 2000 Biennial Review of regulations, the Second Report and Order amends part 22 of the Commission's rules by modifying or eliminating various rules that have become outdated due to technological change, increased competition in the Commercial Mobile Radio Services (CMRS) market, or supervening rules.

103. A number of commenters argue that certain portions of § 22.901 should be removed as outdated, duplicative, and unnecessary. Other commenters, however, argued that the Commission should retain the requirement in § 22.901(a) requiring cellular licensees to provide service area a information to potential customers. They argue that consumers require access to this information in order to make sound choices when purchasing wireless services. Likewise, other commenters urge the Commission to retain the requirement in § 22.901(b) requiring cellular licensees to notify the Commission in the event a consumer's request for service is denied due to lack of capacity. They argue that eliminating the rule may lead to cellular carriers not providing sufficient capacity for analog services going forward.

104. Cellular Radiotelephone Service. The SBA has developed a small business size standard for small businesses in the category “Cellular and Other Wireless Telecommunications.” 13 CFR 121.201, North American Industry Classification System (NAICS) code 513322. Under that SBA category, a business is small if it has 1,500 or fewer employees. According to the Bureau of the Census, only twelve firms from a total of 1,238 cellular and other wireless telecommunications firms operating during 1997 had 1,000 or more employees. Therefore, even if all twelve of these firms were cellular telephone companies, nearly all cellular carriers were small businesses under the SBA's definition. In addition, the Commision notes that there are 1,807 cellular licenses; however, a cellular licensee may own several licenses. According to the most recent Trends in Telephone Service data, 806 carriers reported that they were engaged in the provision of either cellular service, PCS, or SMR telephony services, which are placed together in that data. See Trends in Telephone Service , Industry Analysis Division, Common Carrier Bureau, Table 5.3—Number of Telecommunications Service Providers that are Small Businesses (August 2001). The Commission has estimated that 323 of these are small under the SBA small business size standard. Accordingly, based on this data, the Commission estimates that not more than 323 cellular service providers will be affected by these revised rules.

105. None.

106. The Second Report and Order concluded that certain provisions of § 22.901 are unnecessary in light of meaningful economic competition or technological advances. Therefore, modifying or eliminating these provisions should decrease the costs associated with regulatory compliance for cellular service providers, provide additional flexibility in manufacturing cellular equipment, and also enhance the market demand for some products.

107. None.

108. Report to Congress: The Commission will send a copy of the Second Report and Order, including the associated FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of the Second Report and Order, including the associated FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the Second Report and Order and FRFA (or summaries thereof) will also be published in the Federal Register . See 5 U.S.C. 604(b).

(a) Out of band emissions. The power of any emission outside of the authorized operating frequency ranges must be attenuated below the transmitting power (P) by a factor of at least 43 + 10 log(P) dB.

(b) Measurement procedure. Compliance with these rules is based on the use of measurement instrumentation employing a resolution bandwidth of 100 kHz or greater. In the 1 MHz bands immediately outside and adjacent to the frequency block a resolution bandwidth of at least one percent of the emission bandwidth of the fundamental emission of the transmitter may be employed. A narrower resolution bandwidth is permitted in all cases to improve measurement accuracy provided the measured power is integrated over the full required measurement bandwidth ( i.e. 100 kHz or 1 percent of emission bandwidth, as specified). The emission bandwidth is defined as the width of the signal between two points, one below the carrier center frequency and one above the carrier center frequency, outside of which all emissions are attenuated at least 26 dB below the transmitter power.

(c) Alternative out of band emission limit. Licensees in this service may establish an alternative out of band emission limit to be used at specified band edge(s) in specified geographical areas, in lieu of that set forth in this section, pursuant to a private contractual arrangement of all affected licensees and applicants. In this event, each party to such contract shall maintain a copy of the contract in their station files and disclose it to prospective assignees or transferees and, upon request, to the FCC.

(d) Interference caused by out of band emissions. If any emission from a transmitter operating in this service results in interference to users of another radio service, the FCC may require a greater attenuation of that emission than specified in this section.

The National Highway Traffic Safety Administration has adopted a regulation that provided a centralized location for documents incorporated by reference into various Federal motor vehicle safety standards. This regulation is located at 49 CFR 571.5, Matter incorporated by reference. Over the past several years, NHTSA has included its incorporations by reference in the safety standards as they are adopted or amended. Accordingly, the addresses contained in 49 CFR 571.5 have, in many instances, become outdated. Additionally, one of the documents incorporated by reference, Data from the National Health Survey, Public Health Publication No. 1000, series 11, no. 8, has been updated, and the information contained in that publication is now available from the Center for Disease Control, rather than the Department of Health, Education, and Welfare.

The fishery for reef fish is managed under the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (Reef Fish FMP) that was prepared by the Gulf of Mexico Fishery Management Council (Council). The fisheries for coastal migratory pelagic resources are managed under the Fishery Management Plan for the Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic (Coastal Migratory Pelagics FMP) that was prepared jointly by the Council and the South Atlantic Fishery Management Council. These FMPs were approved by NMFS and implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

The Council, in cooperation with the Gulf charter vessel/headboat industry, developed Amendment 14 to the Fishery Management Plan for the Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic (Amendment 14) and Amendment 20 to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (Amendment 20) to address issues of increased fishing mortality and fishing effort in the for-hire (charter vessel/headboat) sector of the recreational fishery in the Gulf of Mexico. NMFS approved Amendments 14 and 20 and promulgated the charter vessel/headboat moratorium regulations 67 FR 43558, June 28, 2002) to implement the amendments.

However, after a recent review of the administrative record, NMFS and the Council have determined that the amendments contained an error relating to the eligibility criteria and, therefore, did not correctly reflect the action taken by the Council. Thus, the regulations implementing the amendments also contained this error, and not all persons entitled to receive charter vessel/headboat permits under the moratorium approved by the Council would be able to receive permits under the erroneous amendments and regulations. The regulations that implemented the moratorium require all charter operators in the Gulf of Mexico EEZ to have a valid “moratorium permit,” as opposed to the prior open access charter permit, beginning December 26, 2002.

This emergency rule will minimize any potential adverse effects resulting from the error in the amendments and implementing regulations until the issue can be resolved through the normal rulemaking process. This rule defers the date that the “moratorium permit” is required until June 16, 2003. This rule also automatically extends the expiration date of valid or renewable “open access” permits for these fisheries through June 16, 2003, i.e., no additional renewal application is required during this period. This emergency rule also extends the deadlines for issuance of “moratorium permits” and for resolution of appeals, consistent with the extension of the date the “moratorium permit” is required. However, those applicants who qualified under the existing regulations will be issued “moratorium permits” as soon as possible. NMFS intends to initiate the normal rulemaking process to correct the eligibility criterion error as soon as possible.

For the reasons stated above, this emergency rule meets NMFS policy guidelines for the use of emergency rules (62 FR 44421, August 21, 1997), because the emergency situation results from recently discovered circumstances; presents a serious management problem in the fishery; and the emergency rule realizes immediate benefits that outweigh the value of prior notice, opportunity for public comment, and deliberative consideration expected under the normal rulemaking process.

NMFS prepared an economic evaluation of the regulatory impacts associated with this emergency rule, which is summarized as follows.

The major effect of the emergency rule is the avoidance of severe economic loss that would occur through the disruption of the business operation of 935 for-hire vessel businesses. Under the current final rule implementing a for-hire permit moratorium, 2,037 vessels would qualify for the limited access permit and be allowed continued operation in the Gulf of Mexico for-hire fishery. An additional 935 vessels would be disqualified for the permit and, therefore, excluded from the fishery due to the errors in the amendments and the implementing final rule. These vessels represent 30 percent of the Council-intended valid participants in the fishery (3,071 vessels). Average receipts per for-hire vessel in the Gulf of Mexico are estimated at $64,000-$80,000 per year. Assuming a new amendment required less than 180 days for implementation, the emergency rule would eliminate the potential loss of $30-$37 million in receipts from these vessels. Additionally, approximately 112,000 for-hire angler trips would be allowed to be taken, supporting $37.5 million in angler expenditures. Due to the avoidance of business cessation and subsequent loss of all associated receipts, the emergency rule is determined to have a significant positive economic impact on a substantial number of small business entities.

The Assistant Administrator for Fisheries, NOAA (AA), has determined that this emergency rule is necessary to minimize significant adverse social and economic impacts, ( i.e., unintended exclusion of participation in these fisheries), that would otherwise occur as a result of an error in Amendments 14 and 20 and their implementing regulations. The AA has also determined that this rule is consistent with the Magnuson-Stevens Act and other applicable laws.

The emergency rule is determined to be not significant under Executive Order 12866. Copies of the economic evaluation are available ( see ADDRESSES ).

Because there is no requirement to provide for prior notice and opportunity for public comment on this rule the analytical requirements of the Regulatory Flexibility Act do not apply.

This emergency rule would defer permit-related deadlines established in the final rule implementing the charter vessel/headboat permit moratorium in the Gulf of Mexico (67 FR 43558, June 28, 2002) until an inconsistency in that rule's permit eligibility criteria can be resolved through normal rulemaking procedures, i.e. , proposed rule, public comment, and final rule. Specifically, the deadlines for issuance of a moratorium permit, for the requirement to have a moratorium permit aboard a vessel, and for the Regional Administrator's (RA) decision regarding appeals are deferred pending subsequent rulemaking to resolve the eligibility criterion. This action will allow those applicants who would have otherwise been denied initial access to the fishery to continue participating in the fishery. Currently, the open access permits are set to expire on December 26, 2002. For these reasons, the AA finds good cause to waive the requirement to provide prior notice and the opportunity for public comment, pursuant to authority set forth at U.S.C. 553(b)(B), as such procedures would be impracticable. This emergency rule relieves restrictions by deferring deadlines for obtaining required permits and by extending the effectiveness of certain existing permits to allow continued participation in these fisheries. Because this is a substantive rule that relieves a restriction, the 30-day delayed effectiveness provision of the Administrative Procedures Act does not apply.