[Federal Register Volume 69, Number 60 (Monday, March 29, 2004)]
[Proposed Rules]
[Pages 16193-16202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6944]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[WC Docket No. 04-36; FCC 04-28]


Review of Regulatory Requirements for IP-Enabled Services

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document seeks comment on issues relating to services and 
applications utilizing Internet Protocol (IP), collectively referred to 
here as ``IP-enabled services.'' These services include, but are not 
limited to, voice over IP (VoIP) services, other communications 
capabilities utilizing the Internet Protocol, software-based 
applications that facilitate use of those services, and future services 
using IP expected to emerge in the market. As customers begin to 
substitute IP-enabled services for traditional communications, the 
Commission seeks comment as to the rate and extent of that 
substitution. Further, comments are requested on IP-enabled services 
presently available, expected future development of such services, how 
to distinguish among such services, and what regulatory requirements, 
if any, should apply to IP-enabled services.
    This NPRM seeks comment on ways in which the Commission might 
categorize IP-enabled services to ensure that any regulations applied 
are limited to those services and/or applications for which they are 
most appropriate. In particular, comments are requested on whether the 
services comprising each category constitute ``telecommunications 
services'' or ``information services'' under the definitions set forth 
in the Act. Noting the importance of these legal classifications, as 
well as the Commission's statutory forbearance authority and Title 1 
ancillary jurisdiction, this NPRM describes several central regulatory 
requirements and asks which, if any, should apply to each category of 
IP-enabled service. These regulatory requirements include, among 
others, those addressing disability accessibility, the 911 and E911 
systems, access charges, universal service, consumer protection, and 
traditional common carrier obligations.

DATES: Comments are due on or before May 28, 2004, and Reply Comments 
are due on or before June 28, 2004.

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

FOR FURTHER INFORMATION CONTACT: Russell Hanser, Senior Attorney, 
Competition Policy Division, Wireline Competition Bureau, at (202) 418-
0832, or at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in WC Docket No. 04-36, FCC 04-28, 
adopted February 12, 2004, and released March 10, 2004. The complete 
text of this NPRM is available for inspection and copying during normal 
business hours in 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 at [email protected]. It is also available on the 
Commission's Web site at http://www.fcc.gov.
    Comments may be filed using the Commission's Electronic Comment 
Filing System (ECFS) or by filing paper copies. All filings should 
refer to WC Docket No. 04-36. Comments filed through ECFS can be sent 
as an electronic file via the Internet at http://www.fcc.gov/e-file/ecfs.html. 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. 04-36. Parties may also submit 
an electronic comment by Internet e-mail. To get filing instructions 
for e-mail comments, commenters should send an e-mail to 
[email protected], and should include the following words in the 
regarding line of the message: ``get form.'' A sample form and directions will be sent in 
reply.
    Parties who choose to file by paper must file an original and four 
copies of each filing. Parties filing by paper must also send five (5) 
courtesy copies to the attention of Janice M. Myles, Wireline 
Competition Bureau, Competition Policy Division, 445 12th Street, SW., 
Suite 5-C327, Washington, DC 20554, or via e-mail [email protected]. 
Paper filings and courtesy copies must be delivered in the following 
manner. Filings can be sent by hand or messenger delivery, by 
commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although we continue to experience

[[Page 16194]]

delays in receiving U.S. Postal Service mail).
    The Commission's contractor, Natek, Inc., will receive hand-
delivered or messenger-delivered paper filings for the Commission's 
Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 
20002. The filing hours at this location are 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 or courtesy copies for the Commission's 
Secretary and Commission staff will be accepted. Commercial overnight 
mail (other than U.S. Postal Service Express Mail and Priority Mail) 
must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. 
U.S. Postal Service first-class mail, Express Mail, and Priority Mail 
should be addressed to 445 12th Street, SW., Washington, DC 20554. All 
filings must be addressed to the Commission's Secretary, Office of the 
Secretary, Federal Communications Commission.
    Each comment and reply comment must include a short and concise 
summary of the substantive arguments raised in the pleading. Comments 
and reply comments must also comply with section 1.48 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.

Synopsis of the Notice of Proposed Rulemaking

    1. Background. IP is a protocol used to transmit data in a 
packetized format. Widespread common usage of IP-based applications has 
facilitated the proliferation of a great variety of services, including 
the world wide web, e-mail, file transfer, instant messaging, and 
virtual private networks, each of which can integrate audio, video and 
data functionality to provide capabilities beyond those traditionally 
available via the public circuit-switched network. Moreover, IP-enabled 
services provide consumers with opportunities for customization beyond 
those offered by circuit-switched voice services, including virtual 
telephone numbers, unified messaging, and call management. Finally, 
these services generally may transit wireline, wireless, cable, or 
other broadband facilities, promoting inter-platform competition.
    2. Several carriers transport voice calls over their backbone IP 
networks, and recently consumers--in both the residential and 
enterprise markets--have more widely begun to substitute IP-enabled 
services and applications for traditional circuit-switched network 
voice calls. Cable providers and traditional wireline carriers have 
deployed or announced plans to deploy IP-enabled voice services to 
consumers. Consumers have also begun to use peer-to-peer IP-enabled 
voice applications to facilitate direct communication over their 
existing broadband facilities.
    3. The prospect that IP-enabled services might come to be used as 
substitutes for the public circuit-switched network requires that the 
Commission examine the extent, if any, to which regulations currently 
applied to circuit-switched telephony should also be applied to any 
class of IP-enabled service. However, the Commission's examination must 
also recognize that these IP-enabled services differ in critical ways 
from traditional telephony, and that these differences may have 
important consequences for the Commission's decisions.
    4. Categorizing IP Enabled Services. The Commission seeks comment 
on how, if at all, it should distinguish among IP-enabled services, and 
requests comment on several potential grounds for categorization, 
including (among others) the degree to which a service is functionally 
equivalent to traditional telephony; the degree to which a service is 
viewed as a substitute for traditional telephony; and whether a service 
interconnects with the PSTN and/or uses traditional telephone numbers. 
The Commission also asks commenters to propose any appropriate ground 
for categorization not specified in the NPRM.
    5. Jurisdictional Considerations. The NPRM seeks comment on the 
jurisdictional nature of IP-enabled services. The Commission recently 
concluded that Pulver.com's Free World Dialup (FWD) service is an 
unregulated information service subject to Federal jurisdiction, and 
that it would in any event be inappropriate to apply the Commission's 
traditional end-to-end jurisdictional analysis to FWD. The Commission 
seeks comment on whether these conclusions also apply to other classes 
of IP-enabled services. Additionally, comment is sought on other 
grounds for Federal jurisdiction over IP-enabled services. Finally, the 
NPRM seeks comment on whether there is any ground for asserting 
exclusive Federal jurisdiction over all or some IP-enabled services, 
including but not limited to the Supremacy Clause or Commerce Clause of 
the U.S. Constitution, section 253 of the Communications Act, or 
section 332 of the Communications Act.
    6. Appropriate Legal and Regulatory Framework. The NPRM seeks 
comment on which IP-enabled services (if any) should be classified as 
telecommunications services, which (if any) should be classified as 
information services, and the effect, if any, of recent judicial 
decisions on the Commission's discretion to make such classifications. 
Comments are also requested regarding how the Commission should achieve 
important Federal policy goals, including whether it should use its 
ancillary jurisdiction for those IP-enabled services classified as 
information services or its forbearance authority for those services 
classified as telecommunications services. The Commission encourages 
specific, pragmatic proposals that will account for the technical, 
economic and other features that differentiate IP-enabled services from 
other services. Finally, the Commission seeks comment on the relevance 
of certain existing rules in the context of IP-enabled services and on 
what constraints there may be on the Commission's authority to revisit 
its existing interpretation of the statutory terms ``telecommunications 
service'' and ``information service.''
    7. Specific Regulatory Requirements: 911/E911. The Commission seeks 
comment on the current capabilities of VoIP services to deliver 
traditional callback and location information. Additionally, comments 
are requested on means by which IP-enabled services can be used to 
improve current 911 and E911 services. Finally, the Commission seeks 
comment on whether any existing IP-enabled services satisfy the 
criteria established by the Commission to determine whether a service 
should be subject to some form of 911/E911 regulation and whether those 
criteria form the appropriate bases for determining whether IP-enabled 
services should be subject to those requirements.
    8. Specific Regulatory Requirements: Disability Access. The NPRM 
invites comment regarding how the Act's requirements concerning the 
accessibility of communications equipment and services to the disabled 
should be applied in the context of IP-enabled services. Commenters are 
invited to refresh the record compiled in the context of a previous 
Notice of Inquiry concerning the applicability of section 255 to IP 
telephony. Finally, the NPRM seeks comment regarding how migration to 
IP-enabled services will affect the Commission's statutory

[[Page 16195]]

obligation to ensure that interstate and intrastate telecommunications 
relay services are available to hearing-impaired and speech-impaired 
individuals.
    9. Specific Regulatory Requirements: Carrier Compensation. Comments 
are invited on the extent to which access charges should apply to VoIP 
or other IP-enabled services.
    10. Specific Regulatory Requirements: Universal Service. The NPRM 
seeks comment on how the regulatory classification of IP-enabled 
services, including VoIP, would affect the Commission's ability to fund 
universal service. Several related issues have been raised previously 
in other Commission proceedings, and parties are encouraged to 
incorporate into this docket any relevant prior filings. In this 
proceeding, commenters are invited to address obligations and 
entitlements of both facilities-based and non-facilities-based 
providers of IP-enabled services.
    11. Specific Regulatory Requirements: Title III. To the extent that 
providers of IP-enabled services use wireless technology to deliver 
such services, they may fall within the ambit of Title III of the Act, 
which provides the structure for the Commission's regulation of 
spectrum-based services, including broadcasting and all other services 
that use radio waves. Section 332 of the Act provides a specific 
framework for Commercial Mobile Radio Service (CMRS) providers. Given 
the Commission's previous history of forbearance from application of 
economic regulation to CMRS providers, the NPRM seeks comment on the 
impact of Section 332 on IP-enabled services offered by CMRS providers, 
and what other effect Title III may have on the provision or regulation 
of IP-enabled services provided in whole or in part over a wireless 
platform. In addition, comments are requested as to whether the 
Commission should distinguish among wireless providers of IP-enabled 
services based on the nature of their spectrum use (e.g. fixed mobile, 
licensed/unlicensed).
    12. Specific Regulatory Requirements: Title VI. Often, IP-enabled 
services are provided over cable facilities. The Commission seeks 
comment on what impact, if any, the provision of broadband over cable 
plant should have on its treatment of IP-enabled services, as well as 
any effect that Title VI of the Act might have on any potential 
regulation of cable-based IP-enabled services. If the Commission 
classifies IP-enabled services as telecommunications services, should 
it forbear from applying certain Title II provisions to cable providers 
offering IP-enabled services, and what would be the basis for such 
forbearance? The NPRM also asks whether any class of IP-enabled service 
should be construed to be a ``cable service'' under the Act.
    13. Specific Regulatory Requirements: Other Requirements. The 
Commission also seeks comment on a number of other provisions in the 
Act, including consumer protection requirements and economic 
regulations set forth in Title II of the Act and in previous Commission 
orders.
    14. Other Considerations. The NPRM invites comment on the 
implications of decisions in this docket for rural carriers, which 
generally face high operating expenses and equipment costs and rely on 
intrastate access charges for revenues. Comments are also requested on 
potential implications for international issues including settlement 
rates, the ability of consumers to use their IP CPE overseas to send 
and receive calls, and foreign policy or trade concerns. Additionally, 
comments are invited regarding the effect of IP-enabled services on 
numbering resources. The NPRM also requests comment regarding other 
policy objectives, including the interest in maintaining an open 
network architecture. Finally, the NPRM seeks comment regarding the 
availability of enforcement mechanisms to address disputes between IP-
enabled service providers and their customers and between or among two 
or more providers.

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended 
(RFA), the Commission has prepared the present Initial Regulatory 
Flexibility Analysis (IRFA) of the possible significant economic impact 
on small entities that might result from this NPRM. See 5 U.S.C. 603, 
as amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA), Public Law 104-121, 110 Stat. 857 (1996). 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 above. The Commission will send a copy of the 
NPRM, including this IRFA, to the Chief Counsel for Advocacy of the 
Small Business Administration. See 5 U.S.C. 603(a).

1. Need for, and Objectives of, the Proposed Rules

    This NPRM examines issues relating to services and applications 
making use of Internet Protocol (IP), including but not limited to 
voice over IP (VoIP) services (collectively, ``IP-enabled services''). 
IP-enabled ``services'' could include the digital communications 
capabilities of increasingly higher speeds, which use a number of 
transmission network technologies, and which generally have in common 
the use of the Internet Protocol. Some of these may be highly managed 
to support specific communications functions. IP-enabled 
``applications'' could include capabilities based in higher-level 
software that can be invoked by the customer or on the customer's 
behalf to provide functions that make use of communications services. 
The NPRM states that the Commission must examine what its role should 
be in this new environment of increased consumer choice and power, and 
asks whether it can best meet its role of safeguarding the public 
interest by continuing its established policy of minimal regulation of 
the Internet and the services provided over it.
    To assist the Commission in its analysis of how properly to treat 
IP-enabled services, the NPRM seeks comment on ways in which the 
Commission might distinguish among such services, and on what 
regulatory treatment, if any, would be appropriate for different 
classes of service. The NPRM then requests comment on whether the 
services comprising each category constitute ``telecommunications 
services'' or ``information services'' under the definitions set forth 
in the Act. Finally, recognizing the central importance of these legal 
classifications but also highlighting the Commission's statutory 
forbearance authority and Title I ancillary jurisdiction, the NPRM 
describes a number of central regulatory requirements (including, for 
example, those relating to access charges, universal service, the 911 
and E911 systems, and disability accessibility), and asks which, if 
any, should apply to each category of IP-enabled services.

2. Legal Basis

    The legal basis for any action that may be taken pursuant to this 
NPRM is contained in sections 1, 4(i), and 4(j) of the Communications 
Act of 1934, as amended, 47 U.S.C. 151, 154(i) and 154(j), and sections 
1.1, 1.48, 1.411, 1.412, 1.415, 1.419, and 1.1200-1.1216, of the 
Commission's rules, 47 CFR 1.1, 1.48, 1.411, 1.412, 1.415, 1.419, and 
1.1200-1.1216.

[[Page 16196]]

3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules May Apply

    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. 5 U.S.C. 603(b)(3), 604(a)(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.'' 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. 
This present NPRM might, in theory, reach a variety of industries; out 
of an abundance of caution, we have attempted to cast a wide net in 
describing categories of potentially affected small entities. We would 
appreciate any comment on the extent to which the various entities 
might be affected by our action.
    Small Businesses. Nationwide, there are a total of approximately 
22.4 million small businesses, according to SBA data.
    Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.
    Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined as ``governments of cities, towns, townships, 
villages, school districts, or special districts, with a population of 
less than fifty thousand.'' As of 1997, there were approximately 87,453 
governmental jurisdictions in the United States. This number includes 
39,044 county governments, municipalities, and townships, of which 
37,546 (approximately 96.2%) have populations of fewer than 50,000, and 
of which 1,498 have populations of 50,000 or more. Thus, we estimate 
the number of small governmental jurisdictions overall to be 84,098 or 
fewer.
a. Telecommunications Service Entities
    (i) Wireline Carriers and Service Providers. 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. We have nevertheless 
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.
    Incumbent Local Exchange Carriers (LECs). Neither the Commission 
nor the SBA has developed a small business size standard specifically 
for incumbent local exchange services. The appropriate size standard 
under SBA rules is for the category Wired Telecommunications Carriers. 
Under the SBA's Wired Telecommunications Carriers standard for small 
businesses (1,500 or fewer employees), 1,032 incumbent LECs would be 
deemed small.
    Competitive Local Exchange Carriers (CLECs), Competitive Access 
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other 
Local Service Providers.'' Neither the Commission nor the SBA has 
developed a small business size standard specifically for these service 
providers. Under the SBA's Wired Telecommunications Carriers standard 
for small businesses (1,500 or fewer employees), 458 CLECs or CAPs 
would be deemed small businesses. In addition, 16 carriers have 
reported that they are ``Shared-Tenant Service Providers,'' and all 16 
are estimated to have 1,500 or fewer employees.
    Local Resellers. Under the SBA's Wired Telecommunications Carriers 
standard for small businesses (1,500 or fewer employees), an estimated 
127 local resellers would be deemed small businesses.
    Toll Resellers. Under the SBA's Wired Telecommunications Carriers 
standard for small businesses (1,500 or fewer employees), an estimated 
590 toll resellers would be deemed small businesses.
    Payphone Service Providers (PSPs). Under the SBA's Wired 
Telecommunications Carriers standard for small businesses (1,500 or 
fewer employees), an estimated 757 PSPs would be deemed to be small 
businesses.
    Interexchange Carriers (IXCs). Under the SBA's Wired 
Telecommunications Carriers standard for small businesses (1,500 or 
fewer employees), an estimated 223 interexchange carriers would be 
deemed to be small businesses.
    Operator Service Providers (OSPs). Under the SBA's Wired 
Telecommunications Carriers standard for small businesses (1,500 or 
fewer employees), an estimated 22 OSP would be deemed small businesses.
    Prepaid Calling Card Providers. Under the SBA's Wired 
Telecommunications Carriers standard for small businesses (1,500 or 
fewer employees), an estimated 36 prepaid calling card providers would 
be deemed small businesses.
    800 and 800-Like Service Subscribers. Under the SBA's Wired 
Telecommunications Carriers standard for small businesses (1,500 or 
fewer employees), we estimate that there are 7,692,955 or fewer small 
entity 800 subscribers; 7,706,393 or fewer small entity 888 
subscribers; and 1,946,538 or fewer small entity 877 subscribers.
    (ii) International Service Providers. The appropriate size 
standards under SBA rules are for the two broad categories of Satellite 
Telecommunications and Other Telecommunications. Under both categories, 
such a business is small if it has $12.5 million or less in average 
annual receipts. For the first category of Satellite 
Telecommunications, Census Bureau data for 1997 show that there were a 
total of 324 firms that operated for the entire year. Census data for 
1997 shows that 273 Satellite Telecommunications firms had annual 
receipts of under $10 million. The second category--Other 
Telecommunications--includes ``establishments primarily engaged in * * 
* providing satellite terminal stations and associated facilities 
operationally connected with one or more terrestrial communications 
systems and capable of transmitting telecommunications to or receiving 
telecommunications from satellite systems.'' According to Census Bureau 
data for 1997, 424 firms had annual receipts of $5 million to 
$9,999,999.
    (iii) Wireless Telecommunications Service Providers. Wireless 
Service Providers. The SBA has developed a small business size standard 
for wireless firms within the two broad economic census categories of 
``Paging'' and ``Cellular and Other Wireless Telecommunications.'' 
Under both SBA categories, a wireless business is small if it has 1,500 
or fewer employees. Census Bureau data for 1997 show that 1,303 paging 
firms had employment of 999 or fewer employees, and an additional 17 
paging firms had employment of 1,000 employees or more. For the census 
category Cellular and Other Wireless Telecommunications, Census Bureau 
data for 1997 show that 965 firms had employment of 999 or fewer 
employees, and an additional 12 firms had employment of 1,000 employees 
or more.
    Cellular Licensees. According to the most recent Commission data, 
719 carriers reported that they were engaged in the provision of 
cellular service, Personal Communications Service (PCS), or Specialized 
Mobile Radio

[[Page 16197]]

(SMR) Telephony services, which are placed together in the data. Under 
the SBA standard that businesses with 1500 or fewer employees are 
deemed small, we have estimated that 294 of these are small, under the 
SBA's small business size standard.
    Common Carrier Paging. For the census category of Paging, Census 
Bureau data for 1997 show that 1,303 firms had employment of 999 or 
fewer employees, and an additional 17 firms had employment of 1,000 
employees or more. Under the SBA's small business size standard, we 
estimate that the majority of these businesses are small.
    Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission established small business size standards for the 
wireless communications services (WCS) auction. A ``small business'' is 
an entity with average gross revenues of $40 million for each of the 
three preceding years, and a ``very small business'' is an entity with 
average gross revenues of $15 million for each of the three preceding 
years. The SBA has approved these small business size standards. The 
Commission auctioned geographic area licenses in the WCS service. In 
the auction, there were seven winning bidders that qualified as ``very 
small business'' entities, and one that qualified as a ``small 
business'' entity.
    Wireless Telephony. Wireless telephony includes cellular, personal 
communications services (PCS), and specialized mobile radio (SMR) 
telephony carriers. Under the SBA's small business size standard, we 
estimate that 294 wireless telephony carriers are small.
    Broadband Personal Communications Service. The broadband Personal 
Communications Service (PCS) spectrum is divided into six frequency 
blocks 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 $40 million or less in 
the three previous calendar years. For Block F, an additional 
classification for ``very small business'' was added and is defined as 
an entity that, together with its affiliates, has average gross 
revenues of not more than $15 million for the preceding three calendar 
years.'' These standards defining ``small entity'' 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 
percent 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. On January 26, 2001, the 
Commission completed the auction of 422 C and F Broadband PCS licenses 
in Auction No. 35, and 29 successful bidders qualified as ``small'' or 
``very small'' businesses.
    Narrowband Personal Communications Services. For purposes of two 
past auctions of narrowband personal communications services (PCS) 
licenses, ``small businesses'' were defined as entities with average 
gross revenues for the prior three calendar years of $40 million or 
less. Through these auctions, the Commission has awarded a total of 41 
licenses, out of which 11 were obtained by small businesses. To ensure 
meaningful participation of small business entities in future auctions, 
the Commission has adopted a two-tiered small business size standard in 
the Narrowband PCS Second Report and Order. A ``small business'' is an 
entity that, together with affiliates and controlling interests, has 
average gross revenues for the three preceding years of not more than 
$40 million. A ``very small business'' is an entity that, together with 
affiliates and controlling interests, has average gross revenues for 
the three preceding years of not more than $15 million. The SBA has 
approved these small business size standards.
    220 MHz Radio Service--Phase I Licensees. According to the Census 
Bureau data for 1997, only 12 wireless firms out of a total of 1,238 
such firms that operated for the entire year, had 1,000 or more 
employees. Consequently, under the SBA's small business standard, we 
estimate that a very small minority of such firms are small.
    220 MHz Radio Service--Phase II Licensees. Phase II 220 MHz service 
is a new service, and is subject to spectrum auctions. For purposes of 
the auctions, we adopted a small business size standard for ``small'' 
and ``very small'' businesses for purposes of determining their 
eligibility for special provisions such as bidding credits and 
installment payments. This small business size standard indicates that 
a ``small business'' is an entity that, together with its affiliates 
and controlling principals, has average gross revenues not exceeding 
$15 million for the preceding three years. A ``very small business'' is 
an entity that, together with its affiliates and controlling 
principals, has average gross revenues that do not exceed $3 million 
for the preceding three years. The SBA has approved these small 
business size standards. After two auctions of these Phase II licenses, 
fourteen winning companies that claimed small business status won 158 
licenses.
    800 MHz and 900 MHz Specialized Mobile Radio Licenses. The 
Commission awards ``small entity'' and ``very small entity'' bidding 
credits in auctions for Specialized Mobile Radio (SMR) geographic area 
licenses in the 800 MHz and 900 MHz bands to firms that had revenues of 
no more than $15 million in each of the three previous calendar years, 
or that had revenues of no more than $3 million in each of the previous 
calendar years, respectively. The Commission has held auctions for 
geographic area licenses in the 800 MHz and 900 MHz SMR bands. There 
were 60 winning bidders that qualified as small or very small entities 
in the 900 MHz SMR auctions. Of the 1,020 licenses won in the 900 MHz 
auction, bidders qualifying as small or very small entities won 263 
licenses. In the 800 MHz auction, 38 of the 524 licenses won were won 
by small and very small entities. Consequently, the Commission 
estimates that there are 301 or fewer small entity SMR licensees in the 
800 MHz and 900 MHz bands.
    700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order, we 
adopted a small business size standard for ``small businesses'' and 
``very small businesses'' for purposes of determining their eligibility 
for special provisions such as bidding credits and installment 
payments. A ``small business'' as an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $15 million for the preceding three years. Additionally, a 
``very small business'' is an entity that, together with its affiliates 
and controlling principals, has average gross revenues that are not 
more than $3 million for the preceding three years. An auction of 52 
Major Economic Area (MEA) licenses commenced on September 6, 2000, and 
closed on September 21, 2000. Five of the winning bidders were small 
businesses that won a total of 26 licenses. A second auction of 700 MHz 
Guard Band licenses commenced on February 13, 2001 and closed on 
February 21, 2001. One winning bidder was a small business and won a 
total of two licenses.
    Rural Radiotelephone Service. Under the SBA's small business 
standard, the Commission estimates that there are 1,000 or fewer small 
entity licensees in the Rural Radiotelephone Service.

[[Page 16198]]

    Air-Ground Radiotelephone Service. There are approximately 100 
licensees in the Air-Ground Radiotelephone Service, and under the SBA's 
small business standard, we estimate that almost all of them qualify as 
small.
    Aviation and Marine Radio Services. Small businesses in the 
aviation and marine radio services use a very high frequency (VHF) 
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator 
transmitter. Under the SBA's small business standard, we estimate that 
there are up to approximately 712,000 licensees that are held by small 
businesses or individuals. In addition, between December 3, 1998 and 
December 14, 1998, the Commission held an auction of 42 VHF Public 
Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 
161.775-162.0125 MHz (coast transmit) bands. For purposes of the 
auction, the Commission defined a ``small'' business as an entity that, 
together with controlling interests and affiliates, has average gross 
revenues for the preceding three years not to exceed $15 million 
dollars. In addition, a ``very small'' business is one that, together 
with controlling interests and affiliates, has average gross revenues 
for the preceding three years not to exceed $3 million dollars. There 
are approximately 10,672 licensees in the Marine Coast Service, and the 
Commission estimates that almost all of them qualify as ``small'' 
businesses under the above special small business size standards.
    Fixed Microwave Services. Fixed microwave services include common 
carrier, private operational-fixed, and broadcast auxiliary radio 
services. At present, there are approximately 22,015 common carrier 
fixed licensees and 61,670 private operational-fixed licensees and 
broadcast auxiliary radio licensees in the microwave services. The 
Commission does not have data specifying the number of these licensees 
that have more than 1,500 employees, and thus is unable at this time to 
estimate with greater precision the number of fixed microwave service 
licensees that would qualify as small business concerns under the SBA's 
small business size standard.
    Offshore Radiotelephone Service. This service operates on several 
UHF television broadcast channels that are not used for television 
broadcasting in the coastal areas of states bordering the Gulf of 
Mexico. There are presently approximately 55 licensees in this service. 
We are unable to estimate at this time the number of licensees that 
would qualify as small under the SBA's small business size standard.
    39 GHz Service. The Commission created a special small business 
size standard for 39 GHz licenses--an entity that has average gross 
revenues of $40 million or less in the three previous calendar years. 
An additional size standard for ``very small business'' is: an entity 
that, together with affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. The SBA has 
approved these small business size standards. The auction of the 2,173 
39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The 
18 bidders who claimed small business status won 849 licenses.
    Multipoint Distribution Service, Multichannel Multipoint 
Distribution Service, and ITFS. Multichannel Multipoint Distribution 
Service (MMDS) systems, often referred to as ``wireless cable,'' 
transmit video programming to subscribers using the microwave 
frequencies of the Multipoint Distribution Service (MDS) and 
Instructional Television Fixed Service (ITFS). In connection with the 
1996 MDS auction, the Commission established a small business size 
standard as an entity that had annual average gross revenues of less 
than $40 million in the previous three calendar years. The MDS auctions 
resulted in 67 successful bidders obtaining licensing opportunities for 
493 Basic Trading Areas (BTAs). Of the 67 auction winners, 61 met the 
definition of a small business. MDS also includes licensees of stations 
authorized prior to the auction. In addition, the SBA has developed a 
small business size standard for Cable and Other Program Distribution, 
which includes all such companies generating $12.5 million or less in 
annual receipts. According to Census Bureau data for 1997, there were a 
total of 1,311 firms in this category that had operated for the entire 
year. Of this total, 1,180 firms had annual receipts of under $10 
million and an additional 52 firms had receipts of $10 million or more 
but less than $25 million. This SBA small business size standard also 
appears applicable to ITFS. There are presently 2,032 ITFS licensees. 
All but 100 of these licenses are held by educational institutions. 
Educational institutions are included in this analysis as small 
entities. Thus, we tentatively conclude that at least 1,932 licensees 
are small businesses.
    Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (LMDS) is a fixed broadband point-to-multipoint 
microwave service that provides for two-way video telecommunications. 
The auction of the 1,030 Local Multipoint Distribution Service (LMDS) 
licenses began on February 18, 1998 and closed on March 25, 1998. The 
Commission established a small business size standard for LMDS licenses 
as an entity that has average gross revenues of less than $40 million 
in the three previous calendar years. An additional small business size 
standard for ``very small business'' was added as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. The SBA has 
approved these small business size standards in the context of LMDS 
auctions. There were 93 winning bidders that qualified as small 
entities in the LMDS auctions. A total of 93 small and very small 
business bidders won approximately 277 A Block licenses and 387 B Block 
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; 
there were 40 winning bidders. Based on this information, we conclude 
that the number of small LMDS licenses consists of the 93 winning 
bidders in the first auction and the 40 winning bidders in the re-
auction, for a total of 133 small entity LMDS providers.
    218-219 MHz Service. The first auction of 218-219 MHz spectrum 
resulted in 170 entities winning licenses for 594 Metropolitan 
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by 
entities qualifying as a small business. For that auction, the small 
business size standard was an entity that, together with its 
affiliates, has no more than a $6 million net worth and, after federal 
income taxes (excluding any carry over losses), has no more than $2 
million in annual profits each year for the previous two years.
    24 GHz--Incumbent Licensees. According to Census Bureau data for 
1997, there were 977 licensees that operated for the entire year. Of 
this total, 965 firms employed 999 or fewer employees, and an 
additional 12 firms employed 1,000 employees or more. Thus, under the 
SBA's standard for small businesses, the great majority of firms can be 
considered small.
    24 GHz--Future Licensees. With respect to new applicants in the 24 
GHz band, the small business size standard for ``small business'' is an 
entity that, together with controlling interests and affiliates, has 
average annual gross revenues for the three preceding years not in 
excess of $15 million. ``Very small business'' in the 24 GHz band is an 
entity that, together with controlling interests and affiliates, has 
average gross revenues not exceeding $3 million for the preceding three 
years. The SBA has approved these small business size

[[Page 16199]]

standards. These size standards will apply to any future auctions, if 
held.
b. Cable and OVS Operators
    Cable and Other Program Distribution. This category includes cable 
systems operators, closed circuit television services, direct broadcast 
satellite services, multipoint distribution systems, satellite master 
antenna systems, and subscription television services. The SBA has 
developed small business size standard for this census category, which 
includes all such companies generating $12.5 million or less in revenue 
annually. According to Census Bureau data for 1997, there were a total 
of 1,311 firms in this category that had operated for the entire year. 
Of this total, 1,180 firms had annual receipts of under $10 million and 
an additional 52 firms had receipts of $10 million or more but less 
than $25 million.
    Cable System Operators (Rate Regulation Standard). Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide. The most recent estimates indicate that 
there were 1,439 cable operators who qualified as small cable system 
operators at the end of 1995.
    Cable System Operators (Telecom Act Standard). The Communications 
Act of 1934, as amended, also contains a size standard for small cable 
system operators, which is ``a cable operator that, directly or through 
an affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission neither requests nor collects 
information on whether cable system operators are affiliated with 
entities whose gross annual revenues exceed $250 million, and therefore 
is unable, at this time, to estimate more accurately the number of 
cable system operators that would qualify as small cable operators 
under the size standard contained in the Communications Act of 1934.
    Open Video Services. Open Video Service (OVS) systems provide 
subscription services. The SBA has created a small business size 
standard for Cable and Other Program Distribution. This standard 
provides that a small entity is one with $12.5 million or less in 
annual receipts. The Commission estimates that up to 24 OVS operators 
might qualify as small businesses that may be affected by the rules and 
policies adopted herein.
c. Internet Service Providers
    Internet Service Providers. The SBA has developed a small business 
size standard for Internet Service Providers (ISPs). ISPs ``provide 
clients access to the Internet and generally provide related services 
such as web hosting, web page designing, and hardware or software 
consulting related to Internet connectivity.'' Under the SBA size 
standard, such a business is small if it has average annual receipts of 
$21 million or less. According to Census Bureau data for 1997, there 
were 2,751 firms in this category that operated for the entire year. Of 
these, 2,659 firms had annual receipts of under $10 million, and an 
additional 67 firms had receipts of between $10 million and $24, 
999,999. Consequently, we estimate that the majority of these firms are 
small entities that may be affected by our action.
d. Other Internet-Related Entities
    Web Search Portals. We note that, in this NPRM, we have described 
activities such as email, online gaming, web browsing, video 
conferencing, instant messaging, and other, similar IP-enabled 
services. The Commission has not adopted a size standard for entities 
that create or provide these types of services or applications. 
However, the census bureau has identified firms that ``operate web 
sites that use a search engine to generate and maintain extensive 
databases of Internet addresses and content in an easily searchable 
format. Web search portals often provide additional Internet services, 
such as e-mail, connections to other web sites, auctions, news, and 
other limited content, and serve as a home base for Internet users.'' 
The SBA has developed a small business size standard for this category; 
that size standard is $6 million or less in average annual receipts. 
According to Census Bureau data for 1997, there were 195 firms in this 
category that operated for the entire year. Of these, 172 had annual 
receipts of under $5 million, and an additional nine firms had receipts 
of between $5 million and $9,999,999. Consequently, we estimate that 
the majority of these firms are small entities that may be affected by 
our action.
    Data Processing, Hosting, and Related Services. Entities in this 
category ``primarily * * * provid[e] infrastructure for hosting or data 
processing services.'' The SBA has developed a small business size 
standard for this category; that size standard is $21 million or less 
in average annual receipts. According to Census Bureau data for 1997, 
there were 3,700 firms in this category that operated for the entire 
year. Of these, 3,477 had annual receipts of under $10 million, and an 
additional 108 firms had receipts of between $10 million and 
$24,999,999. Consequently, we estimate that the majority of these firms 
are small entities that may be affected by our action.
    All Other Information Services. ``This industry comprises 
establishments primarily engaged in providing other information 
services (except new syndicates and libraries and archives).'' We note 
that, in this NPRM, we have described activities such as e-mail, online 
gaming, web browsing, video conferencing, instant messaging, and other, 
similar IP-enabled services. The SBA has developed a small business 
size standard for this category; that size standard is $6 million or 
less in average annual receipts. According to Census Bureau data for 
1997, there were 195 firms in this category that operated for the 
entire year. Of these, 172 had annual receipts of under $5 million, and 
an additional nine firms had receipts of between $5 million and 
$9,999,999. Consequently, we estimate that the majority of these firms 
are small entities that may be affected by our action.
    Internet Publishing and Broadcasting. ``This industry comprises 
establishments engaged in publishing and/or broadcasting content on the 
Internet exclusively. These establishments do not provide traditional 
(non-Internet) versions of the content that they publish or 
broadcast.'' The SBA has developed a small business size standard for 
this new (2002) census category; that size standard is 500 or fewer 
employees. To assess the prevalence of small entities in this category, 
we will use 1997 Census Bureau data for a relevant, now-superseded 
census category, ``All Other Information Services.'' The SBA small 
business size standard for that prior category was $6 million or less 
in average annual receipts. According to Census Bureau data for 1997, 
there were 195 firms in the prior category that operated for the entire 
year. Of these, 172 had annual receipts of under $5 million, and an 
additional nine firms had receipts of between $5 million and 
$9,999,999. Consequently, we estimate that the majority of these firms 
are small entities that may be affected by our action.
    Software Publishers. These companies may design, develop or publish 
software and may provide other support services to software purchasers, 
such as providing documentation or assisting in installation. The 
companies may also design software to meet the needs of

[[Page 16200]]

specific users. The SBA has developed a small business size standard of 
$21 million or less in average annual receipts for all of the following 
pertinent categories: Software Publishers, Custom Computer Programming 
Services, and Other Computer Related Services. For Software Publishers, 
Census Bureau data for 1997 indicate that there were 8,188 firms in the 
category that operated for the entire year. Of these, 7,633 had annual 
receipts under $10 million, and an additional 289 firms had receipts of 
between $10 million and $24,999,999. For providers of Custom Computer 
Programming Services, the Census Bureau data indicate that there were 
19,334 firms that operated for the entire year. Of these, 18,786 had 
annual receipts of under $10 million, and an additional 352 firms had 
receipts of between $10 million and $24,999,999. For providers of Other 
Computer Related Services, the Census Bureau data indicate that there 
were 5,524 firms that operated for the entire year. Of these, 5,484 had 
annual receipts of under $10 million, and an additional 28 firms had 
receipts of between $10 million and $24,999,999.
    Equipment Manufacturers. In this NPRM, we invite comment on whether 
the disability access provisions of sections 255 and 252(a)(2) of the 
Act, as well as the Commission's Rules implementing these statutes in 
the Disability Access Order, apply in the context of VoIP and other IP-
enabled services. Section V.B.1 notes that sections 255 and 252(a)(2) 
and the Commission's implementing rules apply to manufacturers of 
equipment that the Act and the rules deem covered by the provisions. 
The Commission currently does not collect data regarding how many, or 
which, companies manufacture such equipment. Thus, out of an abundance 
of caution, we have perhaps been over-inclusive in creating the 
following list of possibly covered entities. Again, commenters are 
invited to comment on these categories and on the possible number of 
small entities within these categories.
    Wireless Communications Equipment Manufacturers. The SBA has 
established a small business size standard for Radio and Television 
Broadcasting and Wireless Communications Equipment Manufacturing. 
Examples of products in this category include ``transmitting and 
receiving antennas, cable television equipment, GPS equipment, pagers, 
cellular phones, mobile communications equipment, and radio and 
television studio and broadcasting equipment'' and may include other 
devices that transmit and receive IP-enabled services, such as personal 
digital assistants (PDAs). Under the SBA size standard, firms are 
considered small if they have 750 or fewer employees. According to 
Census Bureau data for 1997, there were 1,215 establishments in this 
category that operated for the entire year. Of those, there were 1,150 
that employed fewer than 500 employees, and an additional 37 that 
employed 500 to 999 employees. The percentage of wireless equipment 
manufacturers in this category was approximately 61.35%, so we estimate 
that the number of wireless equipment manufacturers with employment of 
under 500 was actually closer to 706, with an additional 23 
establishments having employment of between 500 and 999. Consequently, 
we estimate that the majority of these firms are small entities that 
may be affected by our action.
    Telephone Apparatus Manufacturing. This category ``comprises 
establishments primarily engaged in manufacturing wire telephone and 
data communications equipment.'' Examples of pertinent products are 
``central office switching equipment, cordless telephones (except 
cellular), PBX equipment, telephones, telephone answering machines, and 
data communications equipment, such as bridges, routers, and 
gateways.'' The SBA has developed a small business size standard for 
this category of manufacturing; that size standard is 1,000 or fewer 
employees. According to Census Bureau data for 1997, there were 598 
establishments in this category that operated for the entire year. Of 
these, 574 had employment of under 1,000, and an additional 17 
establishments had employment of 1,000 to 2,499. Consequently, we 
estimate that the majority of these firms are small entities that may 
be affected by our action.
    Electronic Computer Manufacturing. This category ``comprises 
establishments primarily engaged in manufacturing and/or assembling 
electronic computers, such as mainframes, personal computers, 
workstations, laptops, and computer servers.'' The SBA has developed a 
small business size standard for this category of manufacturing; that 
size standard is 1,000 or fewer employees. According to Census Bureau 
data for 1997, there were 563 establishments in this category that 
operated for the entire year. Of these, 544 had employment of under 
1,000, and an additional 11 establishments had employment of 1,000 to 
2,499. Consequently, we estimate that the majority of these 
establishments are small entities that may be affected by our action.
    Computer Terminal Manufacturing. ``Computer terminals are input/
output devices that connect with a central computer for processing.'' 
The SBA has developed a small business size standard for this category 
of manufacturing; that size standard is 1,000 or fewer employees. 
According to Census Bureau data for 1997, there were 142 establishments 
in this category that operated for the entire year, and all of the 
establishments had employment of under 1,000. Consequently, we estimate 
that the majority or all of these establishments are small entities 
that may be affected by our action.
    Other Computer Peripheral Equipment Manufacturing. Examples of 
peripheral equipment in this category include keyboards, mouse devices, 
monitors, and scanners. The SBA has developed a small business size 
standard for this category of manufacturing; that size standard is 
1,000 or fewer employees. According to Census Bureau data for 1997, 
there were 1,061 establishments in this category that operated for the 
entire year. Of these, 1,046 had employment of under 1,000, and an 
additional six establishments had employment of 1,000 to 2,499. 
Consequently, we estimate that the majority of these establishments are 
small entities that may be affected by our action.
    Fiber Optic Cable Manufacturing. These establishments manufacture 
``insulated fiber-optic cable from purchased fiber-optic strand.'' The 
SBA has developed a small business size standard for this category of 
manufacturing; that size standard is 1,000 or fewer employees. 
According to Census Bureau data for 1997, there were 38 establishments 
in this category that operated for the entire year. Of these, 37 had 
employment of under 1,000, and one establishment had employment of 
1,000 to 2,499. Consequently, we estimate that the majority of these 
establishments are small entities that may be affected by our action.
    Other Communication and Energy Wire Manufacturing. These 
establishments manufacture ``insulated wire and cable of nonferrous 
metals from purchased wire.'' The SBA has developed a small business 
size standard for this category of manufacturing; that size standard is 
1,000 or fewer employees. According to Census Bureau data for 1997, 
there were 275 establishments in this category that operated for the 
entire year. Of these, 271 had employment of under 1,000, and four 
establishments had employment of 1,000 to 2,499. Consequently, we 
estimate that the majority or all of these establishments are small 
entities that may be affected by our action.

[[Page 16201]]

    Audio and Video Equipment Manufacturing. These establishments 
manufacture ``electronic audio and video equipment for home 
entertainment, motor vehicle, public address and musical instrument 
amplifications.'' The SBA has developed a small business size standard 
for this category of manufacturing; that size standard is 750 or fewer 
employees. According to Census Bureau data for 1997, there were 554 
establishments in this category that operated for the entire year. Of 
these, 542 had employment of under 500, and nine establishments had 
employment of 500 to 999. Consequently, we estimate that the majority 
of these establishments are small entities that may be affected by our 
action.
    Electron Tube Manufacturing. These establishments are ``primarily 
engaged in manufacturing electron tubes and parts (except glass 
blanks).'' The SBA has developed a small business size standard for 
this category of manufacturing; that size standard is 750 or fewer 
employees. According to Census Bureau data for 1997, there were 158 
establishments in this category that operated for the entire year. Of 
these, 148 had employment of under 500, and three establishments had 
employment of 500 to 999. Consequently, we estimate that the majority 
of these establishments are small entities that may be affected by our 
action.
    Bare Printed Circuit Board Manufacturing. These establishments are 
``primarily engaged in manufacturing bare (i.e., rigid or flexible) 
printed circuit boards without mounted electronic components.'' The SBA 
has developed a small business size standard for this category of 
manufacturing; that size standard is 500 or fewer employees. According 
to Census Bureau data for 1997, there were 1,389 establishments in this 
category that operated for the entire year. Of these, 1,369 had 
employment of under 500, and 16 establishments had employment of 500 to 
999. Consequently, we estimate that the majority of these 
establishments are small entities that may be affected by our action.
    Semiconductor and Related Device Manufacturing. These 
establishments manufacture ``computer storage devices that allow the 
storage and retrieval of data from a phase change, magnetic, optical, 
or magnetic/optical media.'' The SBA has developed a small business 
size standard for this category of manufacturing; that size standard is 
500 or fewer employees. According to Census Bureau data for 1997, there 
were 1,082 establishments in this category that operated for the entire 
year. Of these, 987 had employment of under 500, and 52 establishments 
had employment of 500 to 999.
    Electronic Capacitor Manufacturing. These establishments 
manufacture ``electronic fixed and variable capacitors and 
condensers.'' The SBA has developed a small business size standard for 
this category of manufacturing; that size standard is 500 or fewer 
employees. According to Census Bureau data for 1997, there were 128 
establishments in this category that operated for the entire year. Of 
these, 121 had employment of under 500, and four establishments had 
employment of 500 to 999.
    Electronic Resistor Manufacturing. These establishments manufacture 
``electronic resistors, such as fixed and variable resistors, resistor 
networks, thermistors, and varistors.'' The SBA has developed a small 
business size standard for this category of manufacturing; that size 
standard is 500 or fewer employees. According to Census Bureau data for 
1997, there were 118 establishments in this category that operated for 
the entire year. Of these, 113 had employment of under 500, and 5 
establishments had employment of 500 to 999.
    Electronic Coil, Transformer, and Other Inductor Manufacturing. 
These establishments manufacture ``electronic inductors, such as coils 
and transformers.'' The SBA has developed a small business size 
standard for this category of manufacturing; that size standard is 500 
or fewer employees. According to Census Bureau data for 1997, there 
were 448 establishments in this category that operated for the entire 
year. Of these, 446 had employment of under 500, and two establishments 
had employment of 500 to 999.
    Electronic Connector Manufacturing. These establishments 
manufacture ``electronic connectors, such as coaxial, cylindrical, rack 
and panel, pin and sleeve, printed circuit and fiber optic.'' The SBA 
has developed a small business size standard for this category of 
manufacturing; that size standard is 500 or fewer employees. According 
to Census Bureau data for 1997, there were 347 establishments in this 
category that operated for the entire year. Of these, 332 had 
employment of under 500, and 12 establishments had employment of 500 to 
999.
    Printed Circuit Assembly (Electronic Assembly) Manufacturing. These 
are establishments ``primarily engaged in loading components onto 
printed circuit boards or who manufacture and ship loaded printed 
circuit boards.'' The SBA has developed a small business size standard 
for this category of manufacturing; that size standard is 500 or fewer 
employees. According to Census Bureau data for 1997, there were 714 
establishments in this category that operated for the entire year. Of 
these, 673 had employment of under 500, and 24 establishments had 
employment of 500 to 999.
    Other Electronic Component Manufacturing. These are establishments 
``primarily engaged in loading components onto printed circuit boards 
or who manufacture and ship loaded printed circuit boards.'' The SBA 
has developed a small business size standard for this category of 
manufacturing; that size standard is 500 or fewer employees. According 
to Census Bureau data for 1997, there were 1,835 establishments in this 
category that operated for the entire year. Of these, 1,814 had 
employment of under 500, and 18 establishments had employment of 500 to 
999.
    Computer Storage Device Manufacturing. These establishments 
manufacture ``computer storage devices that allow the storage and 
retrieval of data from a phase change, magnetic, optical, or magnetic/
optical media.'' The SBA has developed a small business size standard 
for this category of manufacturing; that size standard is 1,000 or 
fewer employees. According to Census Bureau data for 1997, there were 
209 establishments in this category that operated for the entire year. 
Of these, 197 had employment of under 500, and eight establishments had 
employment of 500 to 999.
4. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements
    None at this time.
5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    The RFA requires an agency to describe any significant alternatives 
that it has considered in reaching its proposed approach, which may 
include (among others) the following four alternatives: (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. 5 U.S.C. 603(c).
    The NPRM expressly states that the Commission may ultimately need 
to

[[Page 16202]]

differentiate among various IP-enabled services, and that regulation 
may be deemed inappropriate with regard to most, if not all, IP-enabled 
services, applications or providers. It thus seeks comment on the 
appropriate grounds on which to differentiate among providers of IP-
enabled services. The NPRM further seeks comment on the appropriate 
legal classification for each category of IP-enabled services, and on 
which regulatory requirements, if any, should be applied to services 
falling into each category. The NPRM makes no conclusions regarding 
which regulations, if any, would apply to any entity, including small 
entities. We seek comment here on the effect various proposals will 
have on small entities, and on the effect alternative rules would have 
on those entities.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    None.
    15. Pursuant to the authority contained in sections 1, 4(i), and 
4(j) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 154(j), this Notice of Proposed Rulemaking is adopted.
    16. That the Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this Notice of 
Proposed Rulemaking, including the IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration, in accordance with the 
Regulatory Flexibility Act.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 04-6944 Filed 3-26-04; 8:45 am]
BILLING CODE 6712-01-P