[Federal Register Volume 68, Number 137 (Thursday, July 17, 2003)]
[Proposed Rules]
[Pages 42333-42337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18056]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 03-109; FCC 03-120]


Lifeline and Link-Up Programs

AGENCY: Federal Communications Commission.

ACTION: 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 modifications to the Lifeline and Link-
Up programs. The Commission seeks comment regarding the Joint Board's 
recommendations.

DATES: Comments are due on or before August 18, 2003. Reply comments 
are due on or before September 2 , 2003.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554. See SUPPLEMENTARY INFORMATION for filing 
instructions.

FOR FURTHER INFORMATION CONTACT: Shannon Lipp, Attorney, 
Telecommunications Access Policy, Wireline Competition Bureau, (202) 
418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking in WC Docket No. 03-109, FCC 03-120, released on 
June 9, 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 12th Street, SW., Washington, DC 20554.

I. Introduction

    1. In this Notice of Proposed Rulemaking (NPRM), the Commission 
seeks comment on the Recommended Decision of the Federal-State Joint 
Board on Universal Service (Joint Board) regarding modifications to the 
Lifeline and Link-Up programs. In its Recommended Decision, the Joint 
Board recommended that the Commission expand the default federal 
eligibility criteria to include an income-based criterion and 
additional means-tested programs. In addition, the Joint Board 
recommended that the Commission require states, under certain 
circumstances, to adopt verification procedures. Finally, to more 
effectively target low-income consumers, the Joint Board recommended 
that the Commission provide outreach guidelines for the Lifeline/Link-
Up program.
    2. The Commission notes that the Joint Board recommended that the 
Commission specifically seek comment on several issues. In particular, 
the Joint Board recommended that the Commission seek more information 
about the reasons for differences in low-income penetration rates over 
time and among states. The Joint Board recommended that the Commission 
adopt a voluntary information collection from the states regarding 
their Lifeline/Link-Up programs, and seek comment on the survey's 
format and questions. The Joint Board also recommended that the 
Commission seek comment on whether it would be possible to modify the 
Link-Up program to directly address barriers posed by outstanding 
unpaid balances for local and long distance services. In addition, the 
Joint Board recommended that the Commission obtain more information 
about how an appeals process for the termination of Lifeline benefits 
could work and whether 60 days was an appropriate time period for a 
consumer to appeal. Finally, the Joint Board recommended that the 
Commission seek comment on whether states could adopt verification of 
continued Lifeline eligibility procedures within one year. The 
Commission encourages commenters to address these issues in their 
comments.
    3. In addition, the Commission seeks comment on several minor 
changes to clarify and streamline our rules. Section 52.33(a)(1)(i)(C) 
of the Commission's rules states that ``Lifeline Assistance Program 
customers shall not receive the monthly number-portability charge.'' 
However, this rule is not referenced in Sec.  54.401 of the 
Commission's rules where Lifeline is defined. The Commission proposes 
to add paragraph (e) to Sec.  54.401 to clarify that Lifeline customers 
are exempt from the monthly number-portability charge, cross-
referencing Sec.  52.33(a)(1)(i)(C). Additionally, in the First Report 
and Order, 62 FR 32862, June 17, 1997, the Commission adopted the Joint 
Board's recommendation to prohibit service deposit requirements for 
customers who accept toll limitation. Currently, Sec.  54.401(c) states 
that, ``[e]ligible telecommunications carriers may not collect a 
service deposit in order to initiate Lifeline service, if the 
qualifying low-income consumer voluntarily elects toll blocking from 
the carrier, where available. If toll blocking is unavailable, the 
carrier may charge a service deposit.'' The Commission proposes to 
amend this section by replacing ``toll blocking'' with ``toll 
limitation'' to make this rule consistent with the First Report and 
Order. Finally, subpart G of part 36 of our rules, Lifeline Connection 
Assistance Expense Allocation, states that ``[t]his subpart shall be 
effective through December 31, 1997. On January 1, 1998, Lifeline 
Connection Assistance shall be provided in accordance with part 54, 
subpart E of this chapter.'' Because Sec.  Sec.  36.701 through 36.741 
contained in this subpart are no longer effective, the Commission 
proposes to remove this subpart from our rules.

II. Procedural Issues

A. Ex Parte Presentations

    4. This is a permit but disclose rulemaking proceeding. Ex parte 
presentations are permitted, except during the Sunshine Agenda period, 
as

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long as they are disclosed as provided in the Commission's rules.

B. Initial Paperwork Reduction Act Analysis

    5. 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 Notice; OMB comments are due August 18, 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

    6. 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 below in section I.D. 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.
1. Need for and Objectives of the Proposed Rules
    7. On December 21, 2000, the Commission requested the Joint Board 
to review the Lifeline/Link-Up program for all low-income consumers. 
The Joint Board subsequently released a public notice seeking comment 
on the Lifeline/Link-Up program. On April 2, 2003, the Joint Board 
released its recommendations regarding modifications to the Lifeline/
Link-Up program. This NPRM seeks comment on the Joint Board's 
recommendations.
    8. Since its inception, the Lifeline/Link-Up program has provided 
support for telephone service to millions of low-income consumers. 
Despite this success, the Commission believes that the program can be 
further improved. For example, expanding the current federal default 
eligibility criteria to add an income-based criterion of 135% of the 
Federal Poverty Guidelines (FPG) and additional means-tested programs 
would allow the Lifeline/Link-Up program to adapt to the changes 
resulting from ``The Personal Responsibility and Work Opportunity 
Reconciliation Act'' (PROWRA) and would otherwise address issues 
associated with receiving public assistance. Permitting eligibility 
based solely on income responds to concerns that PROWRA has caused 
decreased enrollment in welfare assistance programs. Participants in 
means-tested programs must meet income-based eligibility criteria that 
vary by program. Requiring participation in such programs or utilizing 
income-based criteria ensures that only low-income consumers are 
eligible for Lifeline/Link-Up support.
    9. Adding certification for income-based eligibility and 
verification requirements for program and income-based eligibility 
would ensure that only eligible low-income individuals receive 
benefits, thereby preventing fraud and abuse. Adopting outreach 
guidelines would facilitate the marketing of the Lifeline/Link-Up 
program to eligible individuals and increase telephone subscribership 
among low-income households. Finally, issuing a survey form would 
enable the Commission to gather data and information from states 
regarding the administration of Lifeline/Link-Up programs. The 
Commission believes that these proposed modifications to the Lifeline/
Link-Up program may increase Lifeline/Link-Up subscription rates and 
make phone service affordable to more low-income individuals and 
families.
2. Legal Basis
    10. The legal basis as proposed for this NPRM is contained in 
sections 4(i), 4(j), 201-205, 214, 254, and 403 of the Communications 
Act of 1934, as amended, 47 U.S.C. 4(i), 4(j), 201-205, 214, 254, 403.
3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    11. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A ``small business concern'' is one which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the Small Business 
Administration (SBA).
    12. The Commission's decision to adopt certification and 
verification requirements, and its use of a voluntary survey, would 
apply to service providers that provide services to qualifying low-
income consumers who receive Lifeline/Link-Up support. According to the 
Universal Service Administrative Company's (USAC) 2002 Annual Report, 
only local exchange carriers, cellular/personal communications services 
(PCS) providers, and competitive access providers would be subject to 
these requirements. Because many of these service providers could 
include small entities, the Commission expects that the proposal in 
this proceeding could have a significant economic impact on local 
exchange carriers, small incumbent local exchange carriers, cellular/
PCS providers, and competitive access providers that are small 
entities.
    13. Small Incumbent Local Exchange Carriers. The Commission has 
included small incumbent local exchange carriers in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is on 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent local exchange carriers are not dominant in their field of 
operation because any such dominance is not ``national'' in scope. The 
Commission has therefore included small incumbent local exchange 
carriers in this RFA analysis, although we emphasize that this RFA 
action has no effect on Commission analyses and determinations in 
other, non-RFA contexts.
    14. Local Exchange Carriers, Small Incumbent Local Exchange 
Carriers, Competitive Access Providers. Neither the Commission nor the 
SBA has developed a size standard specifically for small providers of 
local exchange services. The closest applicable size standard under the 
SBA rules is for wired telecommunications carriers. This

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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, the Commission is unable at 
this time to estimate with greater precision the number of these 
carriers that would qualify as small business concerns under SBA's size 
standard. 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, the Commission 
estimate that no more than 1,619 providers of local exchange service 
are small entities may be affected.
    15. Cellular and Other Wireless Telecommunications. The SBA has 
developed a small business size standard for Cellular and Other 
Wireless Telecommunications, which consists of all such firms having 
1,500 or fewer employees. According to data for 1997, a total of 977 
such firms operated for the entire year. Of those, 965 firms employed 
999 or fewer persons for the year, and 12 firms employed 1,000 or more. 
Therefore, nearly all such firms were small businesses. In addition, 
the Commission notes that there are 1,807 cellular licenses; however, a 
cellular licensee may own several licenses. According to Commission 
data, 858 carriers reported that they were engaged in the provision of 
cellular service, Personal Communications Service (PCS), or Specialized 
Mobile Radio telephony service, which are placed together in the data. 
We have estimated that 291 of these are small under the SBA small 
business size standard.
    16. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequencies designated A through F, 
and the Commission has held auctions for each block. The Commission 
defined ``small entity'' for Blocks C and F as an entity that has 
average gross revenues of less than $40 million in the three previous 
calendar years. For Block F, an additional classification for ``very 
small business'' was added and is defined as an entity that, together 
with their affiliates, has average gross revenues of not more than $15 
million for the preceding three calendar years. These regulations 
defining ``small entity'' in the context of broadband PCS auctions have 
been approved by the SBA. No small businesses within the SBA-approved 
definition bid successfully for licenses in Blocks A and B. There were 
90 winning bidders that qualified as small entities in the Block C 
auctions. A total of 93 small and very small business bidders won 
approximately 40% of the 1,479 licenses for Blocks D, E, and F. On 
March 23, 1999, the Commission re-auctioned 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 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.
4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    17. Currently, carriers that receive Lifeline/Link-Up support are 
required to submit FCC Form 497 on a quarterly basis for each month. 
Regardless of any rule changes, carriers will continue to be required 
to submit this form to USAC. Should the Commission decide to adopt the 
Joint Board's recommendation to require states to implement and 
carriers to perform certification and verification procedures, the 
associated rule changes could require carriers to retain additional 
records to document compliance with performing certification and 
verification of a consumer's eligibility. Without more certainty about 
which options the Commission will or will not adopt as rules, we cannot 
accurately estimate the cost of compliance by small carriers, including 
whether FCC Form 497 will require carriers to provide more information 
in response to new rule changes. In this NPRM, the Commission therefore 
seeks comment on the types of burdens carriers will face in retaining 
records documenting certification and verification compliance, and in 
submitting reports to USAC. The Commission also seeks comment on 
whether the costs of such recordkeeping and reporting are outweighed by 
the potential benefits of the possible reforms. Entities, especially 
small businesses, are encouraged to quantify, if possible, the costs 
and benefits of the reporting and recordkeeping requirement proposals, 
if possible.
5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    18. 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.
    19. The NPRM seeks comment on how to reduce the administrative 
burden and cost of compliance for small telecommunications service 
providers. The Commission has accepted the statutory requirement that 
an alternative be considered when necessary to protect the interests of 
small entities. We particularly seek comment from contributors that are 
``small business concerns'' under the Small Business Act on the 
following proposals contained in the Recommended Decision.
    20. The Commission seeks comment, for example, on the Joint Board's 
recommendation that the Commission require carriers to notify consumers 
of their impending termination of Lifeline benefits when the carrier 
initiates termination of a consumer's Lifeline benefits. The consumer 
could have up to 60 days to appeal to their carrier before Lifeline 
support is discontinued. The Commission seeks further comment on how 
such an appeals process would work, balancing the needs of Lifeline 
recipients with the administrative burden that an appeals process may 
impose on carriers. Without such an appeals process, consumers may have 
difficulty maintaining telephone service if the consumer's financial 
situation temporarily fluctuates. Telephone service is necessary for 
finding and keeping a job, thus assisting the consumer in his/her climb 
out of poverty into the working world.
    21. To reduce the administrative burden on states to adopt 
certification and verification procedures, the Joint Board compiled an 
appendix of state certification and verification procedures to provide 
guidance to other states seeking to adapt those procedures to their 
state Lifeline/Link-Up programs. Although these requirements may impose 
an additional burden on carriers required to perform the certification 
and

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verification, the Joint Board believes that these requirements prevent 
fraud and abuse, maintain the integrity of the Lifeline universal 
service support mechanism, and are necessary to help control costs.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    22. None.

D. Comment Filing Procedures

    23. The Commission invites 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 sections 1.415 and 1.419 of the Commission's 
rules, interested parties may file comments on or before August 18, 
2003. Reply comments are due on or before September 2, 2003. All 
filings should refer to WC Docket No. 03-109. 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 WC Docket No. 03-109. 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 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 or     It should be addressed
         using this delivery method--              for delivery to--
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Hand-delivered or messenger-delivered paper    236 Massachusetts Avenue,
 filings for the Commission's Secretary.        NE., Suite 110,
                                                Washington, DC 20002 (8
                                                a.m. to 7 p.m.)
Other messenger-delivered documents,           9300 East Hampton Drive,
 including documents sent by overnight mail     Capitol Heights, MD
 (other than United States Postal Service       20743 (8 a.m. to 5:30
 Express Mail and Priority Mail).               p.m.)
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, WC Docket No. 03-109), 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 section 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

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order to facilitate our internal review process.

E. Further Information

    29. To request materials in accessible formats for people with 
disabilities (braille, large print, electronic files, audio format), 
send an e-mail to [email protected] or call the Consumer & Governmental 
Affairs Bureau at 202-418-0531 (voice), 202-418-7365 (tty).
    30. For further information, contact Shannon Lipp at (202) 418-7400 
or Diane Law Hsu at (202) 418-7400 in the Telecommunications Access 
Policy Division, Wireline Competition Bureau.

III. Ordering Clauses

    31. 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.
    32. 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. 03-18056 Filed 7-16-03; 8:45 am]
BILLING CODE 6712-01-P