[Federal Register Volume 68, Number 49 (Thursday, March 13, 2003)]
[Proposed Rules]
[Pages 12020-12023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6092]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[CC Docket No. 96-45; FCC 03-13]


Federal-State Joint Board on Universal Service

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rule.

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SUMMARY: In this document, the Commission seeks comment on the 
Recommended Decision of the Federal-State Joint Board on Universal 
Service (Joint Board) regarding the definition of services supported by 
universal service. In its Recommended Decision, the Joint Board 
generally recommended that the Commission not modify the existing list 
of services supported by universal service. The Joint Board was unable 
to reach agreement, however, on whether equal access to interexchange 
service (equal access) satisfies the statutory criteria contained in 
the Communications Act of 1934, as amended, and should be added to the 
list of supported services. The Commission seeks comment regarding the 
Joint Board's recommendations and positions.

DATES: Comments are due on or before April 14, 2003. Reply comments are 
due on or before April 28, 2003.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Suite TW-A325, Marlene H. Dortch, Office of the Secretary, Washington, 
DC, 20554. See SUPPLEMENTARY INFORMATION for further filing 
instructions.

FOR FURTHER INFORMATION CONTACT: Katherine Tofigh, Attorney or Diane 
Law Hsu, Deputy Division Chief, Wireline Competition Bureau, 
Telecommunications Access Policy Division, (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking in CC Docket No. 96-45 released on February 25, 
2003. The full text of this document is available for public inspection 
during regular business hours in the FCC Reference Center, Room CY-
A257, 445 Twelfth Street, SW., Washington, DC 20554.

I. Notice of Proposed Rulemaking

    1. In this Notice of Proposed Rulemaking (NPRM), we seek comment on 
the Recommended Decision of the Federal-State Joint Board on Universal 
Service (Joint Board) regarding the definition of services supported by 
universal service. A copy of the Recommended Decision can be found at 
17 FCC Rcd 14095 (Wir. Com. Bur. rel. Jul. 10, 2002). In its 
Recommended Decision, the Joint Board generally recommended that the 
Commission not modify the existing list of services supported by 
universal service. The Joint Board was unable to reach agreement, 
however, on whether equal access to interexchange service (equal 
access) satisfies the statutory criteria contained in section 254(c) of 
the Communications Act of 1934, as amended (the Act), and should be 
added to the list of supported services. We seek comment regarding the 
Joint Board's recommendations and positions.

II. Procedural Issues

A. Ex Parte Presentations

    2. This is a permit but disclose rulemaking proceeding. Ex parte 
presentations are permitted, except during the Sunshine Agenda period, 
as long as they are disclosed as provided in the Commission's rules.

B. Initial Paperwork Reduction Act Analysis

    3. This NPRM may modify an information collection. As part of a 
continuing effort to reduce paperwork burdens, we invite the general 
public and the Office of Management and Budget (OMB) to take this 
opportunity to comment on the information collections contained in this 
NPRM, as required by the Paperwork Reduction Act of 1995, Public Law 
104-13. Public and agency comments are due at the same time as other 
comments on this NPRM; OMB comments are due May 12, 2003. Comments 
should address: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.

C. Initial Regulatory Flexibility Analysis

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

D. Need for and Objectives of the Proposed Rules

    5. Pursuant to section 254(c) of the Act, the Joint Board on 
Universal Service may periodically make recommendations to modify the 
list of supported services, in order to take account for advances in 
telecommunications and information technologies and services. On 
December 21, 2000, the Commission requested the Joint Board to review 
the definition of universal service and make recommendations regarding 
whether modifications to the definition are warranted. The Joint Board 
subsequently released a public notice seeking comment on the services, 
if any, that should be added to or removed from the list of core 
services. On July 10, 2002, the Joint Board released its 
recommendations regarding the list of services supported by universal 
service. The NPRM seeks comment on the Joint Board's recommendations.
1. Legal Basis
    6. The legal basis as proposed for this NPRM is contained in 
Sec. Sec.  4(i), 4(j), 201-205, 214, 254, and 403 of the Communications 
Act of 1934, as amended.
2. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules will Apply
    7. 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 modifications to the definition of universal 
services. To

[[Page 12021]]

estimate the number of small entities that could be affected by these 
proposed modifications to the Commission's rules, we first consider the 
statutory definition of ``small entity'' under the RFA. The RFA defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small business 
concern'' under the Small Business Act. A small business concern is one 
that: (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).
    8. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on Commission analyses and determinations 
in other, non-RFA contexts.
    9. The most reliable source of information regarding the total 
numbers of common carrier and related providers nationwide, including 
the numbers of commercial wireless entities, appears to be data the 
Commission publishes annually in its Trends in Telephone Service 
report. These carriers include, inter alia, incumbent local exchange 
carriers, competitive local exchange carriers, competitive access 
providers, interexchange carriers, other wireline carriers and service 
providers (including shared-tenant service providers and private 
carriers), operator service providers, pay telephone operators, 
providers of telephone toll service, wireless carriers and services 
providers, and resellers.
    10. Total Number of Telephone Companies Affected. The United States 
Bureau of the Census (the ``Census Bureau'') reports that, at the end 
of 1997, there were 6,239 firms engaged in providing telephone 
services, as defined therein. This number contains a variety of 
different categories of carriers, including local exchange carriers, 
interexchange carriers, competitive access providers, cellular 
carriers, mobile service carriers, operator service providers, pay 
telephone operators, PCS providers, covered SMR providers, and 
resellers. It seems certain that some of those 6,239 telephone service 
firms may not qualify as small entities because they are not 
``independently owned and operated.'' For example, a PCS provider that 
is affiliated with an interexchange carrier having more than 1,500 
employees would not meet the definition of a small business. It is 
reasonable to conclude, therefore, that 6,239 or fewer telephone 
service firms are small entity telephone service firms that may be 
affected by the decisions proposed in this NPRM.
    11. Local Exchange Carriers and Competitive Access Providers. 
Neither the Commission nor the SBA has developed a definition for small 
providers of local exchange services. The closest applicable definition 
under the SBA rules is for wired telecommunications carriers. This 
provides that a wired telecommunications carrier is a small entity if 
it employs no more than 1,500 employees. According to the most recent 
Commission data there are 1,619 local services providers with 1,500 or 
fewer employees. Because it seems certain that some of these carriers 
are not independently owned and operated, we are unable at this time to 
estimate with greater precision the number of these carriers that would 
qualify as small business concerns under SBA's definition. Of the 1,619 
local service providers, 1,024 are incumbent local exchange carriers, 
411 are Competitive Access Providers (CAPs) and Competitive Local 
Exchange Carriers (CLECs), 131 are resellers and 53 are other local 
exchange carriers. Consequently, we estimate that fewer than 1,619 
providers of local exchange service are small entities or small 
incumbent local exchange carriers that may be affected.
    12. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under the SBA rules is for wired telecommunications 
carriers. This provides that a wired telecommunications carrier is a 
small entity if it employs no more than 1,500 employees. According to 
the most recent Commission data regarding the number of these carriers 
nationwide of which we are aware appears, there are 181 IXCs with 1,500 
or fewer employees. Because it seems certain that some of these 
carriers are not independently owned and operated, we are unable at 
this time to estimate with greater precision the number of these 
carriers that would qualify as small business concerns under SBA's 
definition. Consequently, we estimate that there are fewer than 181 
small entity IXCs that may be affected by the proposals in the NPRM.
    13. Operator Service Providers, Prepaid Calling Card Providers, 
Satellite Service Carriers, Toll Resellers, Other Toll Carriers, and 
Payphone Providers. Neither the Commission nor SBA has developed a 
definition particular to operator service providers (OSPs), prepaid 
calling card providers, satellite service carriers, toll resellers, 
other toll carriers, or payphone providers. The closest applicable 
definition for these carrier-types under SBA rules is for telephone 
communications companies other than radiotelephone (wireless) 
companies. The most reliable source of information regarding the number 
of these carriers nationwide of which we are aware appears to be the 
data that we collect annually on the Form 499-A. According to our most 
recent data, there are 20 OSPs, 31 prepaid calling card providers, 25 
satellite service carriers, 538 toll resellers, 37 other toll carriers, 
and 933 payphone providers that have 1,500 of fewer employees. Although 
it seems certain that some of these carriers are not independently 
owned and operated, we are unable at this time to estimate with greater 
precision the number of these carriers that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are fewer than 20 OSPs, 31 prepaid calling card providers, 
25 satellite service carriers, 538 toll resellers, 37 other toll 
carriers, and 933 payphone providers may be affected by the decisions 
and rules adopted in this NPRM.
    14. Cellular and Wireless Telephony. Neither the Commission nor the 
SBA has developed a definition of small entities specifically for 
wireless telephony. The closest definition is the SBA definition for 
cellular and other wireless telecommunications. Under this definition, 
a cellular licensee is a small entity if it employs no more than 1,500 
employees. According to the most recent Commission data, 858 providers 
classified themselves as providers of wireless telephony, including 
cellular telecommunications, Personal Communications Service, and 
Specialized Mobile Radio (SMR) Telephony Carriers. 291 providers report 
having 1,500 or fewer employees. We do not have data specifying the 
number of these carriers that are not independently owned and operated, 
and thus are unable at this time to estimate with greater precision the 
number of cellular service carriers that would qualify as small 
business concerns

[[Page 12022]]

under the SBA's definition. Consequently, we estimate that there are 
fewer than 291 wireless telephony carriers that may be affected.
    15. Other Wireless Services. Neither the Commission nor the SBA has 
developed a definition of small entities specifically applicable to 
wireless services other than wireless telephony. The closest applicable 
definition under the SBA rules is again that of cellular and other 
wireless telecommunications, under which a service provider is a small 
entity if it employs no more than 1,500 employees. According to the 
most recent Commission data, 884 providers with 1,500 of fewer 
employees classified themselves as paging services, SMR dispatch, 
wireless data carriers, or other mobile service providers. We do not 
have data specifying the number of these carriers that are not 
independently owned and operated, and thus are unable at this time to 
estimate with greater precision the number of wireless service 
providers that would qualify as small business concerns under the SBA's 
definition. Consequently, we estimate that there are fewer than 884 
wireless service providers that may be affected.
3. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    16. Should the Commission decide to revise the definition of 
universal service, the associated rule changes could modify the 
reporting and recordkeeping requirements of some telecommunications 
service providers regulated under the Communications Act.
    17. Section 254(e) states that only eligible telecommunications 
carriers (ETCs) designated pursuant to section 214(e) shall be eligible 
to receive Federal universal service support. In order to be designated 
an ETC, a carrier must throughout its service area ``offer the services 
that are supported by Federal universal service support mechanisms 
under section 254(c).'' Carriers generally apply to their state 
commission for designation as carriers eligible to receive universal 
service support, but seek designation from the Commission if they are 
not subject to the jurisdiction of the state commission. If the 
definition of supported services is modified, service provides may be 
required to verify to either the state or Commission that any services 
added to the definition of universal service are offered throughout 
their service areas and that they advertise the availability of such 
services. Entities, especially small businesses, are encouraged to 
quantify the cost of compliance for reporting possible additions to the 
list of supported services.
    18. In addition, ETCs may only use support ``for the provision, 
maintenance, and upgrading of facilities and services'' for supported 
services. Pursuant to this rule, state regulatory commissions provide 
the Commission with annual certifications indicating that ETCs in their 
states receiving federal universal service support will use the support 
only for its intended purposes. Carriers not subject to the 
jurisdiction of the state must submit a sworn affidavit to the 
Commission stating that they will use the support only for its intended 
purposes. Entities, especially small businesses, are encouraged to 
quantify the cost of compliance for certifying possible additions to 
the list of supported services.
4. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    19. 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.
    20. As discussed previously, this NPRM seeks comment on the Joint 
Board's recommendations regarding the definition of universal service. 
The Joint Board determined that the current list of core services 
continue to satisfy the criteria outlined in section 254(c) and 
recommended that the Commission retain the existing services. For most 
of the additional services under consideration, the Joint Board 
recommended that the Commission not expand the existing definition of 
services that are supported by federal universal service. The Joint 
Board, however, was unable to reach agreement on whether equal access 
satisfies the statutory criteria contained in section 254(c) of the 
Act.
    21. Should the definition of universal service be modified, we seek 
comment on how to reduce the administrative burden and cost of 
compliance for small telecommunications service providers with respect 
to each of the proposals. We particularly seek comment from carriers 
that are ``small business concerns'' under the Small Business Act.
5. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rules
    22. None.

E. Comment Filing Procedures

    23. We invite comment on the issues and questions set forth in the 
Notice of Proposed Rulemaking and Initial Regulatory Flexibility 
Analysis contained herein. Pursuant to applicable procedures set forth 
in Sec. Sec.  1.415 and 1.419 of the Commission's rules, interested 
parties may file comments on or before April 14, 2003; and reply 
comments on or before April 28, 2003. All filings should refer to CC 
Docket No. 96-45. Comments may be filed using the Commission's 
Electronic Comment Filing System (ECFS) or by filing paper copies.
    24. Comments filed through ECFS can be sent as an electronic file 
via the Internet to <http://www.fcc.gov/e-file/ecfs.html. 
Generally, only one copy of an electronic submission must be filed. In 
completing the transmittal screen, commenters should include their full 
name, Postal Service mailing address, and the applicable docket number, 
which in this instance is CC Docket No. 96-45. Parties may also submit 
an electronic comment by Internet e-mail. To receive filing 
instructions for e-mail comments, commenters should send an e-mail to 
[email protected], and should include the following words in the body of the 
message: get form . A sample form and 
directions will be sent in reply.
    25. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appears in the caption of this proceeding, commenters must 
submit two additional copies for each additional docket or rulemaking 
number. Parties who choose to file by paper are hereby notified that 
effective December 18, 2001, the Commission's contractor, Vistronix, 
Inc., will receive hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary at a new location in downtown 
Washington, DC. The address is 236 Massachusetts Avenue, NE., Suite 
110, Washington, DC 20002. The filing hours at this location will be 8 
a.m. to 7 p.m. All hand deliveries must be held together with rubber 
bands or fasteners. Any envelopes must be disposed of before entering 
the building. This facility is the only location where hand-delivered 
or messenger-delivered paper filings for

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the Commission's Secretary will be accepted. Accordingly, the 
Commission will no longer accept these filings at 9300 East Hampton 
Drive, Capitol Heights, MD 20743. Other messenger-delivered documents, 
including documents sent by overnight mail (other than United States 
Postal Service (USPS) Express Mail and Priority Mail), must be 
addressed to 9300 East Hampton Drive, Capitol Heights, MD 20743. This 
location will be open 8 a.m. to 5:30 p.m. The USPS first-class mail, 
Express Mail, and Priority Mail should continue to be addressed to the 
Commission's headquarters at 445 12th Street, SW., Washington, DC 
20554. The USPS mail addressed to the Commission's headquarters 
actually goes to our Capitol Heights facility for screening prior to 
delivery at the Commission.

------------------------------------------------------------------------
 If you are sending this type of document    It should be addressed for
    or using this delivery method. . .            delivery to. . .
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Hand-delivered or messenger-delivered       236 Massachusetts Avenue,
 paper filings for the Commission's          NE., Suite 110, Washington,
 Secretary.                                  DC 20002 (8 a.m. to 7
                                             p.m.).
-------------------------------------------
Other messenger-delivered documents,        9300 East Hampton Drive,
 including documents sent by overnight       Capitol Heights, MD 20743
 mail (other than United States Postal       (8 a.m. to 5:30 p.m.).
 Service Express Mail and Priority Mail).
-------------------------------------------
United States Postal Service first-class    445 12th Street, SW.,
 mail, Express Mail, and Priority Mail.      Washington, DC 20554
------------------------------------------------------------------------

    All filings must be sent to the Commission's Secretary: Marlene H. 
Dortch, Office of the Secretary, Federal Communications Commission, 445 
12th Street, SW., Suite TW-A325, Washington, DC 20554.
    26. Parties who choose to file by paper should also submit their 
comments on diskette to Sheryl Todd, Telecommunications Access Policy 
Division, Wireline Competition Bureau, Federal Communications 
Commission, 445 12th Street, SW., Room 5-B540, Washington, DC 20554. 
Such a submission should be on a 3.5 inch diskette formatted in an IBM 
compatible format using Microsoft Word or compatible software. The 
diskette should be accompanied by a cover letter and should be 
submitted in ``read only'' mode. The diskette should be clearly labeled 
with the commenter's name, proceeding (including the docket number, in 
this case, CC Docket No. 96-45), type of pleading (comment or reply 
comment), date of submission, and the name of the electronic file on 
the diskette. The label should also include the following phrase ``Disk 
Copy--Not an Original.'' Each diskette should contain only one party's 
pleading, preferably in a single electronic file. In addition, 
commenters must send diskette copies to the Commission's copy 
contractor, Qualex International, Portals II, 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554.
    27. Regardless of whether parties choose to file electronically or 
by paper, parties should also file one copy of any documents filed in 
this docket with the Commission's copy contractor, Qualex 
International, Inc., Portals II, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554. Comments and reply comments will be available for 
public inspection during regular business hours in the FCC Reference 
Center, Room CY-A257, 445 12th Street, SW., Washington, DC 20554. In 
addition, the full text of this document is available for public 
inspection and copying during regular business hours at the FCC 
Reference Information Center, Portals II, 445 12th Street, SW., Room 
CY-A257, Washington, DC, 20554. This document may also be purchased 
from the Commission's duplicating contractor, Qualex International, 
Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, 
telephone (202) 863-2893, facsimile (202) 863-2898, or via e-mail 
[email protected].
    28. Comments and reply comments must include a short and concise 
summary of the substantive arguments raised in the pleading. Comments 
and reply comments must also comply with Sec.  1.49 and all other 
applicable sections of the Commission's rules. We direct all interested 
parties to include the name of the filing party and the date of the 
filing on each page of their comments and reply comments. All parties 
are encouraged to utilize a table of contents, regardless of the length 
of their submission. We also strongly encourage parties to track the 
organization set forth in the NPRM in order to facilitate our internal 
review process.

F. Further Information

    29. Alternative formats (computer diskette, large print, audio 
recording, and Braille) are available to persons with disabilities by 
contacting Brian Millin at (202) 418-7426 voice, (202) 418-7365 TTY, or 
[email protected]. This NPRM can also be downloaded in Microsoft Word and 
ASCII formats at http://www.fcc.gov/ccb/universal_service/highcost.

III. Ordering Clauses

    30. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 4(i), 4(j), 201-205, 214, 254, and 403 of the 
Communications Act of 1934, as amended, this Notice of Proposed 
Rulemaking is adopted.
    31. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice of Proposed Rulemaking, including the Initial 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

List of Subjects in 47 CFR Part 54

    Reporting and recordkeeping requirements, Telecommunications, 
Telephone.

Federal Communications Commission.

Marlene H. Dortch,
Secretary.
[FR Doc. 03-6092 Filed 3-12-03; 8:45 am]
BILLING CODE 6712-01-P