[Federal Register Volume 73, Number 35 (Thursday, February 21, 2008)]
[Rules and Regulations]
[Pages 9463-9481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-3130]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[WC Docket No. 04-36, CC Docket Nos. 95-116, 99-200; FCC 07-188]


IP-Enabled Services, Telephone Number Portability, Numbering 
Resource Optimization

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission adopted rules extending local number 
portability obligations and numbering administration support 
obligations to interconnected VoIP services and responded to the 
District of Columbia Circuit Court of Appeals stay of the Commission's 
Intermodal Number Portability Order.

DATES: Effective March 24, 2008.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Melissa Kirkel, Wireline Competition 
Bureau, (202) 418-1580.

SUPPLEMENTARY INFORMATION: In this Order, the Commission undertakes 
several steps to help ensure that consumers and competition benefit 
from local number portability (LNP) as intended by the Communications 
Act of 1934, as amended (the Act) and Commission precedent. First, the 
Commission extends LNP obligations and numbering administration support 
obligations to encompass interconnected VoIP services. Second, the 
Commission issues a Final Regulatory Flexibility Analysis (FRFA) in 
response to the D.C. Circuit's stay of the Commission's Intermodal 
Number Portability Order. The Commission finds that wireline carriers 
qualifying as small entities under the Regulatory Flexibility Act (RFA) 
should be required to port to wireless carriers where the requesting 
wireless carrier's ``coverage area'' overlaps the geographic location 
in which the customer's wireline number is provisioned, provided that 
the porting-in carrier maintains the number's original rate center 
designation following the port.
    The Commission will send a copy of this Report and Order and Order 
on Remand in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).

[[Page 9464]]

Final Paperwork Reduction Act of 1995 Analysis

    This document does not contain new or modified information 
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, therefore, it does not contain any new 
or modified ``information collection burden for small business concerns 
with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4).

Synopsis of Report and Order

    1. On March 10, 2004, the Commission initiated a proceeding to 
examine issues relating to Internet Protocol (IP)-enabled services--
services and applications making use of IP, including, but not limited 
to, VoIP services. In the IP-Enabled Services Notice (69 FR 16193, Mar. 
29, 2004), the Commission sought comment on, among other things, 
whether to extend the obligation to provide LNP to any class of IP-
enabled service provider. The Commission also sought comment on whether 
the Commission should take any action to facilitate the growth of IP-
enabled services, while at the same time maximizing the use and life of 
the North American Numbering Plan (NANP) numbering resources.
    2. The Commission finds that the customers of interconnected VoIP 
services should receive the benefits of LNP. Such action is 
fundamentally important for the protection of consumers and is 
consistent with the authority granted to the Commission under section 
251(e) and sections 1 and 2 of the Act. Moreover, as described below, 
by requiring interconnected VoIP providers and their numbering partners 
to ensure that users of interconnected VoIP services have the ability 
to port their telephone numbers when changing service providers to or 
from an interconnected VoIP provider, the Commission benefits not only 
customers but the interconnected VoIP providers themselves. (By 
``numbering partner,'' the Commission means the carrier from which an 
interconnected VoIP provider obtains numbering resources.) 
Specifically, the ability of end users to retain their NANP telephone 
numbers when changing service providers gives customers flexibility in 
the quality, price, and variety of services they can choose to 
purchase. Allowing customers to respond to price and service changes 
without changing their telephone numbers will enhance competition, a 
fundamental goal of section 251 of the Act, while helping to fulfill 
the Act's goal of facilitating ``a rapid, efficient, Nation-wide, and 
world-wide wire and radio communication service.'' Additionally, the 
Commisison extends to interconnected VoIP providers the obligation to 
contribute to shared numbering administration costs. The Commission 
believes that the steps the Commission takes today to ensure regulatory 
parity among providers of similar services will minimize marketplace 
distortions arising from regulatory advantage.

A. Scope

    3. Consistent with the Commission's previous decisions in the IP-
Enabled Services proceeding, the Commission limits its decision to 
interconnected VoIP providers, in part because, unlike certain other 
IP-enabled services, the Commission continues to believe that 
interconnected VoIP service ``is increasingly used to replace analog 
voice service,'' including, in some cases, local exchange service. 
Indeed, as interconnected VoIP service improves and proliferates, 
consumers' expectations for these services trend toward their 
expectations for other telephone services. Thus, consumers reasonably 
expect interconnected VoIP services to include regulatory protections 
such as emergency 911 service and LNP.
    4. These characteristics of interconnected VoIP service support a 
finding that it is appropriate to extend LNP obligations to include 
such services, in light of the statute and Commission precedent. 
Congress expressly directed the Commission to prescribe requirements 
that all local exchange carriers (LECs) must meet to satisfy their 
statutory LNP obligations. In doing so, the Commission has required 
service providers that have not been found to be LECs but that are 
expected to compete against LECs to comply with the LNP obligations set 
forth in section 251(b)(2). In extending LNP rules to such providers, 
the Commission concluded, among other things, that imposing such 
obligations would ``promote competition between providers of local 
telephone services and thereby promote competition between providers of 
interstate access services.'' Specifically, the Commission found that 
the availability of LNP would ``eliminat[e] one major disincentive to 
switch carriers,'' and thus would facilitate ``the successful entrance 
of new service providers'' covered by the LNP rules. Indeed, the 
Commission determined that LNP not only would facilitate competition 
between such new service providers and wireline telecommunications 
carriers, but also would facilitate competition among the new service 
providers themselves. The Commission anticipated that the enhanced 
competition resulting from LNP would ``stimulate the development of new 
services and technologies, and create incentives for carriers to lower 
prices and costs.'' The Commission further concluded that 
implementation of long-term LNP by these providers would help ensure 
``efficient use and uniform administration'' of numbering resources. 
For these same policy reasons, the Commission extends the LNP 
obligations to interconnected VoIP providers.
    5. To effectuate this policy, the Commission must address both the 
obligations of interconnected VoIP providers as well as the obligations 
of telecommunications carriers that serve interconnected VoIP providers 
as their numbering partners. Thus, the Commission takes this 
opportunity to reaffirm that only carriers, absent a Commission waiver, 
may access numbering resources directly from the North American 
Numbering Plan Administrator (NANPA) or the Pooling Administrator (PA). 
Section 52.15(g)(2) of the Commission's rules limits access to the NANP 
numbering resources to those applicants that are: (1) ``authorized to 
provide service in the area for which the numbering resources are being 
requested''; and (2) ``[are] or will be capable of providing service 
within sixty (60) days of the numbering resources activation date.'' It 
is well established that the Commission's rules allow only carriers 
direct access to NANP numbering resources to ensure that the numbers 
are used efficiently and to avoid number exhaust. Thus, many 
interconnected VoIP providers may not obtain numbering resources 
directly from the NANPA because they will not have obtained a license 
or a certificate of public convenience and necessity from the relevant 
states. Interconnected VoIP providers that have not obtained a license 
or certificate of public convenience and necessity from the relevant 
states or otherwise are not eligible to receive numbers directly from 
the administrators may make numbers available to their customers 
through commercial arrangements with carriers (i.e., numbering 
partners). The Commission emphasizes that ensuring compliance with the 
Commission's numbering rules, including LNP requirements, in such cases 
remains the responsibility of the carrier that obtains the numbering 
resource from the numbering administrator as well as the responsibility 
of the interconnected VoIP provider. Additionally, with this

[[Page 9465]]

Order, the Commission clarifies that LECs and CMRS providers have an 
obligation to port numbers to interconnected VoIP providers and their 
numbering partners subject to a valid port request.

B. Authority

    6. In this Order, the Commission concludes that the Commission has 
ample authority to extend LNP obligations and numbering administration 
support obligations to interconnected VoIP providers. Specifically, the 
Commission concludes that it has authority to extend LNP obligations 
and numbering administration support obligations to interconnected VoIP 
providers and their numbering partners under the Commission's plenary 
numbering authority pursuant to section 251(e) of the Act. The 
Commission further finds authority in section 251(b)(2) of the Act for 
the obligations it extends to numbering partners that serve 
interconnected VoIP providers. Separately, the Commission analyzes the 
extension of the Commission's rules to interconnected VoIP providers 
under the Commission's Title I ancillary jurisdiction.
    7. Plenary Numbering Authority. Consistent with Commission 
precedent, the Commission finds that the plenary numbering authority 
that Congress granted this Commission under section 251(e)(1) provides 
ample authority to extend the LNP requirements set out in this Order to 
interconnected VoIP providers and their numbering partners. 
Specifically, in section 251(e)(1) of the Act, Congress expressly 
assigned to the Commission exclusive jurisdiction over that portion of 
the NANP that pertains to the United States. The Commission retained 
its ``authority to set policy with respect to all facets of numbering 
administration in the United States.'' To the extent that an 
interconnected VoIP provider provides services that offer its customers 
NANP telephone numbers, both the interconnected VoIP provider and the 
telecommunications carrier that secures the numbering resource from the 
numbering administrator subject themselves to the Commission's plenary 
authority under section 251(e)(1) with respect to those numbers.
    8. Section 251(b)(2) Authority over Telecommunications Carriers. 
The Commission finds that section 251(b)(2) provides an additional 
source of authority to impose LNP obligations on the LEC numbering 
partners of interconnected VoIP providers. Section 251(b)(2) states 
that all LECs have a ``duty to provide, to the extent technically 
feasible, number portability in accordance with the requirements 
prescribed by the Commission.'' The Commission has long held that it 
has ``authority to require that number portability be implemented `to 
the extent technically feasible' and that the Commission's authority 
under section 251(b)(2) encompasses all forms of number portability.'' 
The Commission's application of this authority is informed by the Act's 
focus on protecting consumers through number portability. Section 3 of 
the Act defines ``number portability'' as ``the ability of users of 
telecommunications services to retain, at the same location, existing 
telecommunications numbers without impairment of quality, reliability, 
or convenience when switching from one telecommunications carrier to 
another.'' (emphasis added) In this Order, the Commission prescribes 
requirements that expand number portability to include ports to and 
from interconnected VoIP providers, and therefore find that section 
251(b)(2) grants the Commission authority to impose obligations on the 
interconnected VoIP providers' LEC numbering partners to effectuate 
those requirements. By holding the LEC numbering partner responsible 
for ensuring a porting request is honored to the extent technically 
feasible, the Commission thus abides by this statutory mandate. The 
Commission interprets section 251(b)(2) to include a number porting 
obligation even when the switching of ``carriers'' occurs at the 
wholesale rather than retail level. Given Congress's imposition of the 
number portability obligations on all such carriers and the broad terms 
of the obligation itself, the Commission believes that its 
interpretation is a reasonable interpretation of the statute. To find 
otherwise would permit carriers to avoid numbering obligations simply 
by creating an interconnected VoIP provider affiliate and assigning the 
number to such affiliate. Further, to ensure that consumers retain this 
benefit as technology evolves, the Commission continues to believe that 
Congress's intent is that number portability be a ``dynamic concept'' 
that accommodates such changes. The Commission previously has found 
that it has the authority to alter the scope of porting obligations due 
to technological changes in how numbers are ported. Similarly, the Act 
provides ample authority for the logical extension of porting 
obligations due to technological changes in how telephone service is 
provided to end-user customers. The Commission exercises its authority 
under the Act to ensure that consumers' interests in their existing 
telephone numbers are adequately protected whether the customer is 
using a telephone number obtained from a LEC directly or indirectly via 
an interconnected VoIP provider. In either case, the LEC or LEC 
numbering partner must comply with the Commission's LNP rules.
    9. Ancillary Jurisdiction over Interconnected VoIP Services. The 
Commission further concludes that the Commission has a separate 
additional source of authority under Title I of the Act to impose LNP 
obligations and numbering administration support obligations on 
interconnected VoIP providers. Ancillary jurisdiction may be employed, 
in the Commission's discretion, when Title I of the Act gives the 
Commission subject matter jurisdiction over the service to be regulated 
and the assertion of jurisdiction is ``reasonably ancillary to the 
effective performance of [its] various responsibilities.'' Both 
predicates for ancillary jurisdiction are satisfied here.
    10. First, as the Commission concluded in previous orders, 
interconnected VoIP services fall within the subject matter 
jurisdiction granted to the Commission in the Act. Section 1 of the 
Act, moreover, charges the Commission with responsibility for making 
available ``a rapid, efficient, Nation-wide, and world-wide wire and 
radio communication service.'' Thus, section 1, in conjunction with 
section 251, creates a significant federal interest in the efficient 
use of numbering resources. Second, the Commission finds that requiring 
interconnected VoIP providers to comply with LNP rules and cost 
recovery mechanisms is reasonably ancillary to the effective 
performance of the Commission's fundamental responsibilities. As noted 
above, section 251(b)(2) of the Act requires LECs to provide number 
portability in accordance with the requirements prescribed by the 
Commission to the extent technically feasible. Further, section 
251(e)(2) requires all carriers to bear the costs of numbering 
administration and number portability on a competitively neutral basis 
as defined by the Commission, and thereby seeks to prevent those costs 
from undermining competition. The Commission has interpreted section 
251(e)(2) broadly to extend to all carriers that utilize NANP telephone 
numbers and benefit from number portability. In addition, as discussed 
above, section 1 of the Act charges the Commission with responsibility 
for making available ``a rapid, efficient, Nation-wide, and world-wide 
wire and radio communication service.'' Because

[[Page 9466]]

interconnected VoIP service operates through the use of NANP telephone 
numbers and benefits from NANP administration and because this service 
is ``increasingly used to replace analog voice service''--a trend that 
the Commission expects to continue--it is important that the Commission 
take steps to ensure that interconnected VoIP service use of NANP 
numbers does not disrupt national policies adopted pursuant to section 
251. As the Commission previously has stated, the Commission 
``believe[s] it is important that [the Commission] adopt uniform 
national rules regarding number portability implementation and 
deployment to ensure efficient and consistent use of number portability 
methods and numbering resources on a nationwide basis. Implementation 
of number portability, and its effect on numbering resources, will have 
an impact on interstate, as well as local, telecommunications 
services.'' Additionally, the Commission has found that those providers 
that benefit from number resources should also bear the costs.
    11. Extending LNP obligations to interconnected VoIP providers is 
``reasonably ancillary'' to the performance of the Commission's 
obligations under section 251 and section 1 of the Act. If the 
Commission failed to do so, American consumers might not benefit from 
new technologies because they would be unable to transfer their NANP 
telephone numbers between service providers and thus would be less 
likely to want to use a new provider. As a result, the purposes and 
effectiveness of section 251, as well as section 1, would be greatly 
undermined. The ability of end users to retain their NANP telephone 
numbers when changing service providers gives customers flexibility in 
the quality, price, and variety of services they can choose to 
purchase. Allowing customers to respond to price and service changes 
without changing their telephone numbers will enhance competition, a 
fundamental goal of section 251 of the Act, while helping to fulfill 
the Act's goal of facilitating ``a rapid, efficient, Nation-wide, and 
world-wide wire and radio communication service.''
    12. Further, if the Commission failed to exercise its ancillary 
jurisdiction, interconnected VoIP providers would sustain a competitive 
advantage against telecommunications carriers through the use and 
porting of NANP telephone numbers without bearing their share of the 
costs of LNP and NANP administration, thus defeating the critical 
requirement under section 251(e) that carriers bear such costs on a 
competitively neutral basis. Additionally, the Commission extends the 
LNP obligations to interconnected VoIP providers because doing so will 
have a positive impact on the efficient use of the Commission's limited 
numbering resources. The Commission avoids number waste by preventing 
an interconnected VoIP provider from porting-in a number from a carrier 
(often through its numbering partner) and then later refusing to port-
out at the customer's request by arguing that no such porting 
obligation exists. Failure to extend LNP obligations to interconnected 
VoIP providers and their numbering partners would thwart the effective 
and efficient administration of the Commission's numbering 
administration responsibilities under section 251 of the Act. 
Therefore, extending the LNP and numbering administration support 
obligations to interconnected VoIP providers is ``reasonably ancillary 
to the effective performance of the Commission's * * * 
responsibilities'' under sections 251 and 1 of the Act and ``will 
`further the achievement of long-established regulatory goals'' ' to 
make available an efficient and competitive communication service.
    13. The Commission believes that the language in section 251(e)(2), 
which phrases the obligation to contribute to the costs of numbering 
administration as applicable to ``all telecommunications carriers,'' 
reflects Congress's intent to ensure that no telecommunications 
carriers were omitted from the contribution obligation, and does not 
preclude the Commission from exercising its ancillary authority to 
require other providers of comparable services to make such 
contributions. Thus, the language does not circumscribe the class of 
carriers that may be required to support numbering administration. The 
legislative history of the Telecommunications Act of 1996 (1996 Act) 
supports this view and indicates that Congress desired that such costs 
be borne by ``all providers.'' Because interconnected VoIP services are 
increasingly being used as a substitute for traditional telephone 
service, the Commission finds that its exercise of ancillary authority 
to require contributions from interconnected VoIP providers is 
consistent with this statutory language and Congressional intent. The 
statutory construction maxim of expressio unius est exclusio alterius--
the mention of one thing implies the exclusion of another--does not 
require a different result. This maxim is non-binding and ``is often 
misused.'' ``The maxim's force in particular situations depends 
entirely on context, whether or not the draftsmen's mention of one 
thing, like a grant of authority, does really necessarily, or at least 
reasonably, imply the preclusion of alternatives.'' Here, the 
Commission believes that the relevant language in section 251(e)(2) was 
designed to ensure that no telecommunications carriers were omitted 
from the contribution obligation, and not to preclude the Commission 
from exercising its ancillary authority to require others to make such 
contributions. Absent any affirmative evidence that Congress intended 
to limit the Commission's judicially recognized ancillary jurisdiction 
in this area, the Commission finds that the expressio unius maxim ``is 
simply too thin a reed to support the conclusion that Congress has 
clearly resolved [the] issue.''
    14. The Commission also notes that its actions here are consistent 
with other provisions of the Act. For example, the Commission is guided 
by section 706 of the 1996 Act, which, among other things, directs the 
Commission to encourage the deployment of advanced telecommunications 
capability to all Americans by using measures that ``promote 
competition in the local telecommunications market.'' The extension of 
the LNP obligations to interconnected VoIP providers may spur consumer 
demand for their service, in turn driving demand for broadband 
connections, and consequently encouraging more broadband investment and 
deployment consistent with the goals of section 706.

C. Local Number Portability Obligations

    15. As the Commission discusses in detail above, imposing LNP and 
numbering administration support requirements on interconnected VoIP 
providers and their numbering partners is consistent with both the 
language of the Act and the Commission's policies implementing the LNP 
obligations. To ensure that consumers enjoy the full benefits of LNP 
and to maintain competitively neutral funding of numbering 
administration, the Commission imposes specific requirements to 
effectuate this policy.
    16. Porting Obligations of an Interconnected VoIP Provider and its 
Numbering Partner. As discussed above, section 3 of the Act defines 
local ``number portability'' as ``the ability of users of 
telecommunications services to retain, at the same location, existing 
telecommunications numbers without impairment of quality, reliability, 
or convenience when switching from one

[[Page 9467]]

telecommunications carrier to another.'' The Commission finds that the 
``user'' in this context is the end-user customer that subscribes to 
the interconnected VoIP service and not the interconnected VoIP 
provider. To find otherwise would contravene the LNP goals of 
``allowing customers to respond to price and service changes without 
changing their telephone numbers.'' Thus, it is the end-user customer 
that retains the right to port-in the number to an interconnected VoIP 
service or to port-out the number from an interconnected VoIP service.
    17. As discussed above, both an interconnected VoIP provider and 
its numbering partner must facilitate a customer's porting request to 
or from an interconnected VoIP provider. By ``facilitate,'' the 
Commission means that the interconnected VoIP provider has an 
affirmative legal obligation to take all steps necessary to initiate or 
allow a port-in or port-out itself or through its numbering partner on 
behalf of the interconnected VoIP customer (i.e., the ``user''), 
subject to a valid port request, without unreasonable delay or 
unreasonable procedures that have the effect of delaying or denying 
porting of the number. The Commission recognizes that when an 
interconnected VoIP provider obtains NANP telephone numbers and LNP 
capability through a numbering partner, the interconnected VoIP 
provider does not itself execute the port of the number from a 
technical perspective. In such situations, the interconnected VoIP 
provider must take any steps necessary to facilitate its numbering 
partner's technical execution of the port.
    18. The Commission also finds that interconnected VoIP providers 
and their numbering partners may not enter into agreements that would 
prohibit or unreasonably delay an interconnected VoIP service end user 
from porting between interconnected VoIP providers, or to or from a 
wireline carrier or a covered CMRS provider. Because LNP promotes 
competition and consumer choice, the Commission finds that any 
agreement by interconnected VoIP providers or their numbering partners 
that prohibits or unreasonably delays porting could undermine the 
benefits of LNP to consumers. Additionally, because the Commission 
determines that the carrier that obtains the number from the NANPA is 
also responsible for ensuring compliance with these obligations, such 
porting-related restrictions would contravene that carrier's section 
251(b)(2) obligation. To the extent that carriers with direct access to 
numbers do not have an LNP obligation, that exemption from LNP only 
extends to the exempt service and not to that carrier's activities as a 
numbering partner for an interconnected VoIP provider. If an 
interconnected VoIP provider or its numbering partner attempts to 
thwart an end user's valid porting request, that provider or carrier 
will be subject to Commission enforcement action for a violation of the 
Act and the Commission's LNP rules. Further, no interconnected VoIP 
provider may contract with its customer to prevent or hinder the rights 
of that customer to port its number because doing so would violate the 
LNP obligations placed on interconnected VoIP providers in this Order. 
To the extent that interconnected VoIP providers have existing 
contractual provisions that have the effect of unreasonably delaying or 
denying porting, such provisions do not supersede or otherwise affect 
the porting obligations established in this Order.
    19. Scope of Porting Obligations. The Commission's porting 
obligations vary depending on whether a service is provided by a 
wireline carrier or a covered CMRS provider. As described above, 
interconnected VoIP providers generally obtain NANP telephone numbers 
through commercial arrangements with one or more traditional 
telecommunications carriers. As a result, the porting obligations to or 
from an interconnected VoIP service stem from the status of the 
interconnected VoIP provider's numbering partner and the status of the 
provider to or from which the NANP telephone number is ported. For 
example, subject to a valid port request on behalf of the user, an 
interconnected VoIP provider that partners with a wireline carrier for 
numbering resources must, in conjunction with its numbering partner, 
port-out a NANP telephone number to: (1) A wireless carrier whose 
coverage area overlaps with the geographic location of the porting-out 
numbering partner's rate center; (2) a wireline carrier with facilities 
or numbering resources in the same rate center; or (3) another 
interconnected VoIP provider whose numbering partner meets the 
requirements of (1) or (2). Similarly, subject to a valid port request 
on behalf of the user, an interconnected VoIP provider that partners 
with a covered CMRS provider for numbering resources must, in 
conjunction with its numbering partner, port-out a NANP telephone 
number to: (1) Another wireless carrier; (2) a wireline carrier within 
the telephone number's originating rate center; or (3) another 
interconnected VoIP provider whose numbering partner meets the 
requirements of (1) or (2).
    20. The Commission notes that because interconnected VoIP providers 
offer telephone numbers not necessarily based on the geographic 
location of their customers--many times at their customers' requests--
there may be limits to number porting between providers. The Act only 
provides for service provider portability and does not address service 
or location portability. See First Number Portability Order, 11 FCC Rcd 
at 8447, para. 181. Thus, for example, if an interconnected VoIP 
service customer selects a number outside his current rate center, or 
if the interconnected VoIP service customer selects a number within his 
geographic rate center and moves out of that rate center, and then 
requests porting to a wireline carrier in his new rate center, the 
customer would not be able to port the number. See 47 CFR 52.26(a). The 
Commission expects interconnected VoIP providers to fully inform their 
customers about these limitations, particularly limitations that result 
from the portable nature of, and use of non-geographic numbers by, 
certain interconnected VoIP services.
    21. The Commission also clarifies that carriers have an obligation 
under the Commission's rules to port-out NANP telephone numbers, upon 
valid request, for a user that is porting that number for use with an 
interconnected VoIP service. For example, subject to a valid port 
request on behalf of the user, a wireline carrier must port-out a NANP 
telephone number to: (1) An interconnected VoIP provider that partners 
with a wireless carrier for numbering resources, where the partnering 
wireless carrier's coverage area overlaps with the geographic location 
of the porting-out wireline carrier's rate center; or (2) an 
interconnected VoIP provider that partners with a wireline carrier for 
numbering resources, where the partnering wireline carrier has 
facilities or numbering resources in the same rate center as the 
porting-out wireline carrier. Similarly, subject to a valid port 
request on behalf of the user, a wireless carrier must port-out a NANP 
telephone number to: (1) An interconnected VoIP provider that partners 
with a wireless carrier; or (2) an interconnected VoIP provider that 
partners with a wireline carrier for numbering resources, where the 
partnering wireline carrier is within the number's originating rate 
center. The Commission clarifies that carriers must port-out NANP 
telephone numbers upon valid requests from an interconnected VoIP 
provider (or from its associated numbering partner). To

[[Page 9468]]

the extent that an interconnected VoIP provider is certificated or 
licensed as a carrier, then the Title II LNP obligations to port-in or 
port-out to the carrier are already determined by existing law. See, 
e.g., 47 CFR 52.26(a).
    22. The Commission declines to adopt new porting intervals that 
apply specifically to ports between interconnected VoIP providers and 
other providers through a numbering partner. The intervals that would 
be applicable to ports between the numbering partner and the other 
provider, if the port were not related to an interconnected VoIP 
service, will apply to the port of the NANP telephone number between 
the numbering partner and the other provider (or the other provider's 
numbering partner) when the end user with porting rights is a customer 
of the interconnected VoIP provider.
    23. The Commission takes seriously its responsibilities to 
safeguard the Commission's scarce numbering resources and to implement 
LNP obligations for the benefit of consumers. Consumers, carriers, or 
interconnected VoIP providers may file complaints with the Commission 
if they experience unreasonable delay or denial of number porting to or 
from an interconnected VoIP provider in violation of the Commission's 
LNP rules. The Commission will not hesitate to enforce its LNP rules to 
ensure that consumers are free to choose among service providers, 
subject to its LNP rules, without fear of losing their telephone 
numbers.
    24. Allocation of LNP Costs. Section 251(e)(2) provides that 
``[t]he cost of establishing telecommunications numbering 
administration arrangements and number portability shall be borne by 
all telecommunications carriers on a competitively neutral basis as 
determined by the Commission.'' Because interconnected VoIP providers 
benefit from LNP, the Commission finds that they should contribute to 
meet the shared LNP costs. Further, similar to the Commission's finding 
in its Cost Recovery Reconsideration Order, the Commission also 
believes that interconnected VoIP providers may find it costly and 
administratively burdensome to develop region-specific attribution 
systems for all of their end-user services, and thus the Commission 
allows these providers to use a proxy based on the percentage of 
subscribers a provider serves in a particular region for reaching an 
estimate for allocating their end-user revenues to the appropriate 
regional LNPA. Providers that submit an attestation certifying that 
they are unable to divide their traffic and resulting end-user revenue 
among the seven LNPA regions precisely will be allowed to divide their 
end-user revenue among these regions based on the percentage of 
subscribers served in each region. Providers may use their billing 
databases to identify subscriber location.

D. Numbering Administration Cost Requirements

    25. Although interconnected VoIP providers do not have any specific 
numbering administration requirements (e.g., pooling requirements), 
they do require the use of NANP numbering resources to provide an 
interconnected VoIP service, and thereby benefit from and impose costs 
related to numbering administration. Thus, the Commission requires 
interconnected VoIP providers to contribute to meet the shared 
numbering administration costs on a competitively neutral basis.

E. Implementation

    26. The LNP obligations adopted in this Order for interconnected 
VoIP providers and their numbering partners become effective 30 days 
after Federal Register publication. The reporting requirements for 
determining interconnected VoIP providers' contribution to the shared 
costs of numbering administration and LNP require interconnected VoIP 
providers to file an annual FCC Form 499-A. To ensure that 
interconnected VoIP providers' contributions for numbering 
administration and LNP are allocated properly, interconnected VoIP 
providers should include in their annual FCC Form 499-A filing 
historical revenue information for the relevant year, including all 
information necessary to allocate revenues across the seven LNPA 
regions (e.g., January 2007 through December 2007 revenue information 
for the April 2008 filing). The Commission will revise FCC Form 499-A 
at a later date, consistent with the rules and policies outlined in 
this Order. Interconnected VoIP providers, however, should familiarize 
themselves with the FCC Form 499-A and the accompanying instructions in 
preparation for this filing. Based on these filings, the appropriate 
administrators will calculate the funding base and individual 
contributions for each support mechanism, and provide an invoice to 
each interconnected VoIP provider for its contribution to the shared 
costs of the respective support mechanism. The Commission finds that 
USAC should be prepared to collect this information with the next 
annual filing, and that the LNPA and the NANP billing and collection 
agent should be prepared to include interconnected VoIP provider 
revenues in their calculations for the 2008 funding year based on the 
next annual FCC Form 499-A filings.

Synopsis of Order on Remand

    27. In its 2003 Intermodal Number Portability Order (68 FR 68831, 
Dec. 10, 2003), the Commission clarified that porting from a wireline 
carrier to a wireless carrier is required where the requesting wireless 
carrier's coverage area overlaps the geographic location in which the 
wireline number is provisioned, provided that the porting-in carrier 
maintains the number's original rate center designation following the 
port. On March 11, 2005, the United States Court of Appeals for the 
District of Columbia Circuit remanded the Intermodal Number Portability 
Order to the Commission. The court determined that the Intermodal 
Number Portability Order resulted in a legislative rule, and that the 
Commission had failed to prepare a FRFA regarding the impact of that 
rule on small entities, as required by the RFA. The court accordingly 
directed the Commission to prepare the required FRFA, and stayed future 
enforcement of the Intermodal Number Portability Order ``as applied to 
carriers that qualify as small entities under the RFA'' until the 
agency prepared and published that analysis. On April 22, 2005, the 
Commission issued a Public Notice seeking comment on an IRFA of the 
Intermodal Number Portability Order (70 FR 41655, July 20, 2005).
    28. In accordance with the requirements of the RFA, the Commission 
has considered the potential economic impact of the intermodal porting 
rules on small entities and concludes that wireline carriers qualifying 
as small entities under the RFA will be required to provide wireline-
to-wireless intermodal porting where the requesting wireless carrier's 
``coverage area'' overlaps the geographic location in which the 
customer's wireline number is provisioned, provided that the porting-in 
carrier maintains the number's original rate center designation 
following the port. The Commission has prepared a FRFA as directed by 
the court, which is the second of two FRFAs set forth below.

Final Regulatory Flexibility Analysis, WC Docket No. 04-36 
(Interconnected VoIP Services)

    1. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the

[[Page 9469]]

IP-Enabled Services Notice in WC Docket No. 04-36 (69 FR 16193, Mar. 
29, 2004). The Commission sought written public comment on the 
proposals in the notice, including comment on the IRFA. The Commission 
received comments specifically directed toward the IRFA from three 
commenters in WC Docket No. 04-36. These comments are discussed below. 
This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

A. Need for, and Objectives of, the Rules

    2. This Report and Order extends LNP obligations to interconnected 
voice over Internet Protocol (VoIP) providers to ensure that customers 
of such VoIP providers may port their North American Numbering Plan 
(NANP) telephone numbers when changing providers. Consumers will now be 
able to take advantage of new telephone services without losing their 
telephone numbers, which should in turn facilitate greater competition 
among telephony providers by allowing customers to respond to price and 
service changes. Additionally, this Report and Order extends to 
interconnected VoIP providers the obligation to contribute to shared 
numbering administration and number portability costs. The Commission 
believes these steps it takes to ensure regulatory parity among 
providers of similar services will minimize marketplace distortions 
arising from regulatory advantage.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    3. In this section, the Commission responds to comments filed in 
response to the IRFA. To the extent the Commission received comments 
raising general small business concerns during this proceeding, those 
comments are discussed throughout the Report and Order.
    4. The Small Business Administration (SBA) comments that the 
Commission's Notice does not contain concrete proposals and is more 
akin to an advance notice of proposed rulemaking or a notice of 
inquiry. The Commission disagrees with the SBA and Menard that the 
Commission should postpone acting in this proceeding--thereby 
postponing extending the application of the LNP and numbering 
administration support obligations to interconnected VoIP services--and 
instead should reevaluate the economic impact and the compliance 
burdens on small entities and issue a further notice of proposed 
rulemaking in conjunction with a supplemental IRFA identifying and 
analyzing the economic impacts on small entities and less burdensome 
alternatives. The Commission believes these additional steps suggested 
by SBA and Menard are unnecessary because small entities already have 
received sufficient notice of the issues addressed in today's Report 
and Order, and because the Commission has considered the economic 
impact on small entities and what ways are feasible to minimize the 
burdens imposed on those entities, and, to the extent feasible, has 
implemented those less burdensome alternatives. The IP-Enabled Services 
Notice specifically sought comment on whether numbering obligations are 
appropriate in the context of IP-enabled services and whether action 
relating to numbering resources is desirable to facilitate the growth 
of IP-enabled services, while at the same time continuing to maximize 
the use and life of numbering resources in the North American Numbering 
Plan. The Commission published a summary of that notice in the Federal 
Register. See Regulatory Requirements for IP-Enabled Services, WC 
Docket No. 04-36, Notice of Proposed Rulemaking, 69 FR 16193 (Mar. 29, 
2004). The Commission notes that a number of small entities submitted 
comments in this proceeding.

C. Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply

    5. 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 rules adopted herein. 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 SBA.
    6. Small Businesses. Nationwide, there are a total of approximately 
22.4 million small businesses according to SBA data.
    7. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.
    8. Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand.'' Census Bureau data for 2002 
indicate that there were 87,525 local governmental jurisdictions in the 
United States. The Commission estimates that, of this total, 84,377 
entities were ``small governmental jurisdictions.'' Thus, the 
Commission estimates that most governmental jurisdictions are small.
 1. Telecommunications Service Entities
a. Wireline Carriers and Service Providers
    9. The Commission has included small incumbent local exchange 
carriers (LECs) in this present RFA analysis. As noted above, a ``small 
business'' under the RFA is one that, inter alia, meets the pertinent 
small business size standard (e.g., a telephone communications business 
having 1,500 or fewer employees) and ``is not dominant in its field of 
operation.'' The SBA's Office of Advocacy contends that, for RFA 
purposes, small incumbent LECs are not dominant in their field of 
operation because any such dominance is not ``national'' in scope. The 
Commission has therefore included small incumbent LECs in this RFA 
analysis, although the Commission emphasizes that this RFA action has 
no effect on Commission analyses and determinations in other, non-RFA 
contexts.
    10. Incumbent LECs. Neither the Commission nor the SBA has 
developed a small business size standard specifically for incumbent 
LECs. The appropriate size standard under SBA rules is for the category 
Wired Telecommunications Carriers. Under that size standard, such a 
business is small if it has 1,500 or fewer employees. According to 
Commission data, 1,303 carriers have reported that they are engaged in 
the provision of incumbent local exchange services. Of these 1,303 
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of incumbent local exchange service are small businesses 
that may be affected by the Commission's action.
    11. Competitive LECs, 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. The 
appropriate size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. According to Commission 
data, 859 carriers have reported that they are engaged in the provision 
of either competitive access provider services or

[[Page 9470]]

competitive LEC services. Of these 859 carriers, an estimated 741 have 
1,500 or fewer employees and 118 have more than 1,500 employees. 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. In addition, 44 carriers have reported that they are ``Other 
Local Service Providers.'' Of the 44, an estimated 43 have 1,500 or 
fewer employees and one has more than 1,500 employees. Consequently, 
the Commission estimates that most providers of competitive local 
exchange service, competitive access providers, ``Shared-Tenant Service 
Providers,'' and ``Other Local Service Providers'' are small entities.
    12. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 184 carriers have reported 
that they are engaged in the provision of local resale services. Of 
these, an estimated 181 have 1,500 or fewer employees and three have 
more than 1,500 employees. Consequently, the Commission estimates that 
the majority of local resellers are small entities that may be affected 
by the Commission's action.
    13. Toll Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 881 carriers have reported 
that they are engaged in the provision of toll resale services. Of 
these, an estimated 853 have 1,500 or fewer employees and 28 have more 
than 1,500 employees. Consequently, the Commission estimates that the 
majority of toll resellers are small entities that may be affected by 
the Commission's action.
    14. Payphone Service Providers (PSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
payphone services providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 657 carriers have reported 
that they are engaged in the provision of payphone services. Of these, 
an estimated 653 have 1,500 or fewer employees and four have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of payphone service providers are small entities that may be 
affected by the Commission's action.
    15. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
providers of interexchange services. The appropriate size standard 
under SBA rules is for the category Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 330 carriers have 
reported that they are engaged in the provision of interexchange 
service. Of these, an estimated 309 have 1,500 or fewer employees and 
21 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of IXCs are small entities that may be 
affected by the Commission's action.
    16. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator service providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 23 carriers have reported that 
they are engaged in the provision of operator services. Of these, an 
estimated 22 have 1,500 or fewer employees and one has more than 1,500 
employees. Consequently, the Commission estimates that the majority of 
OSPs are small entities that may be affected by the Commission's 
action.
    17. Prepaid Calling Card Providers. Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
prepaid calling card providers. The appropriate size standard under SBA 
rules is for the category Telecommunications Resellers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 104 carriers have reported that they are 
engaged in the provision of prepaid calling cards. Of these, 102 are 
estimated to have 1,500 or fewer employees and two have more than 1,500 
employees. Consequently, the Commission estimates that all or the 
majority of prepaid calling card providers are small entities that may 
be affected by the Commission's action.
    18. 800 and 800-Like Service Subscribers. These toll-free services 
fall within the broad economic census category of Telecommunications 
Resellers. This category ``comprises establishments engaged in 
purchasing access and network capacity from owners and operators of 
telecommunications networks and reselling wired and wireless 
telecommunications services (except satellite) to businesses and 
households. Establishments in this industry resell telecommunications; 
they do not operate transmission facilities and infrastructure.'' The 
SBA has developed a small business size standard for this category, 
which is: all such firms having 1,500 or fewer employees. Census Bureau 
data for 2002 show that there were 1,646 firms in this category that 
operated for the entire year. Of this total, 1,642 firms had employment 
of 999 or fewer employees, and four firms had employment of 1,000 
employees or more. Thus, the majority of these firms can be considered 
small. Additionally, it may be helpful to know the total numbers of 
telephone numbers assigned in these services. Commission data show 
that, as of June 2006, the total number of 800 numbers assigned was 
7,647,941, the total number of 888 numbers assigned was 5,318,667, the 
total number of 877 numbers assigned was 4,431,162, and the total 
number of 866 numbers assigned was 6,008,976.
b. International Service Providers
    19. The Commission has not developed a small business size standard 
specifically for providers of international service. The appropriate 
size standards under SBA rules are for the two broad census categories 
of ``Satellite Telecommunications'' and ``Other Telecommunications.'' 
Under both categories, such a business is small if it has $13.5 million 
or less in average annual receipts.
    20. The first category of Satellite Telecommunications ``comprises 
establishments primarily engaged in providing point-to-point 
telecommunications services to other establishments in the 
telecommunications and broadcasting industries by forwarding and 
receiving communications signals via a system of satellites or 
reselling satellite telecommunications.'' For this category, Census 
Bureau data for 2002 show that there were a total of 371 firms that 
operated for the entire year. Of this total, 307 firms had annual 
receipts of under $10 million, and 26 firms had receipts of $10 million 
to $24,999,999. Consequently, the Commission estimates that the 
majority of Satellite Telecommunications firms are small entities that 
might be affected by the Commission's action.
    21. The second category of Other Telecommunications ``comprises 
establishments primarily engaged in (1) providing specialized 
telecommunications applications, such as satellite tracking, 
communications

[[Page 9471]]

telemetry, and radar station operations; or (2) 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.'' For this category, Census Bureau data for 2002 
show that there were a total of 332 firms that operated for the entire 
year. Of this total, 259 firms had annual receipts of under $10 million 
and 15 firms had annual receipts of $10 million to $24,999,999. 
Consequently, the Commission estimates that the majority of Other 
Telecommunications firms are small entities that might be affected by 
the Commission's action.
c. Wireless Telecommunications Service Providers
    22. Below, for those services subject to auctions, the Commission 
notes that, as a general matter, the number of winning bidders that 
qualify as small businesses at the close of an auction does not 
necessarily represent the number of small businesses currently in 
service. Also, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated.
    23. 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. For the census category of 
Paging, Census Bureau data for 2002 show that there were 807 firms in 
this category that operated for the entire year. Of this total, 804 
firms had employment of 999 or fewer employees, and three firms had 
employment of 1,000 employees or more. Thus, under this category and 
associated small business size standard, the majority of firms can be 
considered small. For the census category of Cellular and Other 
Wireless Telecommunications, Census Bureau data for 2002 show that 
there were 1,397 firms in this category that operated for the entire 
year. Of this total, 1,378 firms had employment of 999 or fewer 
employees, and 19 firms had employment of 1,000 employees or more. 
Thus, under this second category and size standard, the majority of 
firms can, again, be considered small.
    24. Cellular Licensees. The SBA has developed a small business size 
standard for wireless firms within the broad economic census category 
``Cellular and Other Wireless Telecommunications.'' Under this SBA 
category, a wireless business is small if it has 1,500 or fewer 
employees. For the census category of Cellular and Other Wireless 
Telecommunications, Census Bureau data for 2002 show that there were 
1,397 firms in this category that operated for the entire year. Of this 
total, 1,378 firms had employment of 999 or fewer employees, and 19 
firms had employment of 1,000 employees or more. Thus, under this 
category and size standard, the majority of firms can be considered 
small. Also, according to Commission data, 437 carriers reported that 
they were engaged in the provision of cellular service, Personal 
Communications Service (PCS), or Specialized Mobile Radio (SMR) 
Telephony services, which are placed together in the data. The 
Commission has estimated that 260 of these are small under the SBA 
small business size standard.
    25. Paging. The SBA has developed a small business size standard 
for the broad economic census category of ``Paging.'' Under this 
category, the SBA deems a wireless business to be small if it has 1,500 
or fewer employees. Census Bureau data for 2002 show that there were 
807 firms in this category that operated for the entire year. Of this 
total, 804 firms had employment of 999 or fewer employees, and three 
firms had employment of 1,000 employees or more. In addition, according 
to Commission data, 365 carriers have reported that they are engaged in 
the provision of ``Paging and Messaging Service.'' Of this total, the 
Commission estimates that 360 have 1,500 or fewer employees, and five 
have more than 1,500 employees. Thus, in this category the majority of 
firms can be considered small.
    26. The Commission also notes that, in the Paging Second Report and 
Order (62 FR 11616, Mar. 12, 1997), the Commission adopted a size 
standard for ``small businesses'' for purposes of determining their 
eligibility for special provisions such as bidding credits and 
installment payments. In this context, 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. The SBA has approved this definition. An auction of 
Metropolitan Economic Area (MEA) licenses commenced on February 24, 
2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985 
were sold. Fifty-seven companies claiming small business status won 440 
licenses. An auction of MEA and Economic Area (EA) licenses commenced 
on October 30, 2001, and closed on December 5, 2001. Of the 15,514 
licenses auctioned, 5,323 were sold. One hundred thirty-two companies 
claiming small business status purchased 3,724 licenses. A third 
auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 
licenses in all but three of the 51 MEAs commenced on May 13, 2003, and 
closed on May 28, 2003. Seventy-seven bidders claiming small or very 
small business status won 2,093 licenses. The Commission also notes 
that, currently, there are approximately 74,000 Common Carrier Paging 
licenses.
    27. 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 or less for each 
of the three preceding years, and a ``very small business'' is an 
entity with average gross revenues of $15 million or less 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.
    28. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services (PCS), and specialized mobile radio 
(SMR) telephony carriers. As noted earlier, the SBA has developed a 
small business size standard for ``Cellular and Other Wireless 
Telecommunications'' services. Under that SBA small business size 
standard, a business is small if it has 1,500 or fewer employees. 
According to Commission data, 432 carriers reported that they were 
engaged in the provision of wireless telephony. The Commission has 
estimated that 221 of these are small under the SBA small business size 
standard.
    29. 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

[[Page 9472]]

$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. Of the 35 winning bidders 
in this auction, 29 qualified as ``small'' or ``very small'' 
businesses. Subsequent events, concerning Auction 35, including 
judicial and agency determinations, resulted in a total of 163 C and F 
Block licenses being available for grant.
    30. Narrowband Personal Communications Services. The Commission 
held an auction for Narrowband PCS licenses that commenced on July 25, 
1994, and closed on July 29, 1994. A second auction commenced on 
October 26, 1994 and closed on November 8, 1994. For purposes of the 
first two Narrowband PCS auctions, ``small businesses'' were entities 
with average gross revenues for the prior three calendar years of $40 
million or less. Through these auctions, the Commission awarded a total 
of 41 licenses, 11 of which were obtained by four small businesses. To 
ensure meaningful participation by small business entities in future 
auctions, the Commission adopted a two-tiered small business size 
standard in the Narrowband PCS Second Report and Order (65 FR 35875, 
Jun. 6, 2000). 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. A third auction commenced on October 3, 2001 and closed 
on October 16, 2001. Here, five bidders won 317 (Metropolitan Trading 
Areas and nationwide) licenses. Three of these claimed status as a 
small or very small entity and won 311 licenses.
    31. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. Phase I licensing was conducted 
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized 
to operate in the 220 MHz band. The Commission has not developed a 
small business size standard for small entities specifically applicable 
to such incumbent 220 MHz Phase I licensees. To estimate the number of 
such licensees that are small businesses, the Commission applies the 
small business size standard under the SBA rules applicable to 
``Cellular and Other Wireless Telecommunications'' companies. This 
category provides that a small business is a wireless company employing 
no more than 1,500 persons. For the census category Cellular and Other 
Wireless Telecommunications, Census Bureau data for 1997 show that 
there were 977 firms in this category, total, that operated for the 
entire year. Of this total, 965 firms had employment of 999 or fewer 
employees, and an additional 12 firms had employment of 1,000 employees 
or more. Thus, under this second category and size standard, the 
majority of firms can, again, be considered small. Assuming this 
general ratio continues in the context of Phase I 220 MHz licensees, 
the Commission estimates that nearly all such licensees are small 
businesses under the SBA's small business size standard. In addition, 
limited preliminary census data for 2002 indicate that the total number 
of cellular and other wireless telecommunications carriers increased 
approximately 321 percent from 1997 to 2002.
    32. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. The Phase II 220 MHz service is 
a new service and is subject to spectrum auctions. In the 220 MHz Third 
Report and Order (62 FR 16004, Apr. 3, 1997), the Commission 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. Auctions of Phase II 
licenses commenced on September 15, 1998, and closed on October 22, 
1998. In the first auction, 908 licenses were auctioned in three 
different-sized geographic areas: three nationwide licenses, 30 
Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) 
Licenses. Of the 908 licenses auctioned, 693 were sold. Thirty-nine 
small businesses won licenses in the first 220 MHz auction. The second 
auction included 225 licenses: 216 EA licenses and 9 EAG licenses. 
Fourteen companies claiming small business status won 158 licenses.
    33. 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. These bidding credits apply to SMR 
providers in the 800 MHz and 900 MHz bands that either hold geographic 
area licenses or have obtained extended implementation authorizations. 
The Commission does not know how many firms provide 800 MHz or 900 MHz 
geographic area SMR service pursuant to extended implementation 
authorizations, nor how many of these providers have annual revenues of 
no more than $15 million. One firm has over $15 million in revenues. 
The Commission assumes, for purposes here, that all of the remaining 
existing extended implementation authorizations are held by small 
entities, as that term is defined by the SBA. 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.
    34. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order, 
the Commission 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

[[Page 9473]]

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. Of the 104 licenses auctioned, 96 licenses were 
sold to nine bidders. Five of these bidders were small businesses that 
won a total of 26 licenses. A second auction of 700 MHz Guard Band 
licenses commenced on February 13, 2001 and closed on February 21, 
2001. All eight of the licenses auctioned were sold to three bidders. 
One of these bidders was a small business that won a total of two 
licenses.
    35. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio System (BETRS). The Commission uses 
the SBA's small business size standard applicable to ``Cellular and 
Other Wireless Telecommunications,'' i.e., an entity employing no more 
than 1,500 persons. There are approximately 1,000 licensees in the 
Rural Radiotelephone Service, and the Commission estimates that there 
are 1,000 or fewer small entity licensees in the Rural Radiotelephone 
Service that may be affected by the rules and policies adopted herein.
    36. Air-Ground Radiotelephone Service. The Commission has not 
adopted a small business size standard specific to the Air-Ground 
Radiotelephone Service. The Commission will use SBA's small business 
size standard applicable to ``Cellular and Other Wireless 
Telecommunications,'' i.e., an entity employing no more than 1,500 
persons. There are approximately 100 licensees in the Air-Ground 
Radiotelephone Service, and the Commission estimates that almost all of 
them qualify as small under the SBA small business size standard.
    37. 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. The Commission has not developed a small business size 
standard specifically applicable to these small businesses. For 
purposes of this analysis, the Commission uses the SBA small business 
size standard for the category ``Cellular and Other 
Telecommunications,'' which is 1,500 or fewer employees. Most 
applicants for recreational licenses are individuals. Approximately 
581,000 ship station licensees and 131,000 aircraft station licensees 
operate domestically and are not subject to the radio carriage 
requirements of any statute or treaty. For purposes of the Commission's 
evaluations in this analysis, the Commission estimates that there are 
up to approximately 712,000 licensees that are small businesses (or 
individuals) under the SBA standard. 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, had 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, had 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.
    38. 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. The Commission is unable to estimate at this time the number 
of licensees that would qualify as small under the SBA's small business 
size standard for ``Cellular and Other Wireless Telecommunications'' 
services. Under that SBA small business size standard, a business is 
small if it has 1,500 or fewer employees.
    39. 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. 
Consequently, the Commission estimates that 18 or fewer 39 GHz 
licensees are small entities that may be affected by the rules and 
polices adopted herein.
    40. Wireless Cable Systems. Wireless cable systems use 2 GHz band 
frequencies of the Broadband Radio Service (``BRS''), formerly 
Multipoint Distribution Service (``MDS''), and the Educational 
Broadband Service (``EBS''), formerly Instructional Television Fixed 
Service (``ITFS''), to transmit video programming and provide broadband 
services to residential subscribers. These services were originally 
designed for the delivery of multichannel video programming, similar to 
that of traditional cable systems, but over the past several years 
licensees have focused their operations instead on providing two-way 
high-speed Internet access services. The Commission estimates that the 
number of wireless cable subscribers is approximately 100,000, as of 
March 2005. Local Multipoint Distribution Service (``LMDS'') is a fixed 
broadband point-to-multipoint microwave service that provides for two-
way video telecommunications. As described below, the SBA small 
business size standard for the broad census category of Cable and Other 
Program Distribution, which consists of such entities generating $13.5 
million or less in annual receipts, appears applicable to MDS, ITFS and 
LMDS. Other standards also apply, as described.
    41. The Commission has defined small MDS (now BRS) and LMDS 
entities in the context of Commission license auctions. In the 1996 MDS 
auction, the Commission defined a small business as an entity that had 
annual average gross revenues of less than $40 million in the previous 
three calendar years. This definition of a small entity in the context 
of MDS auctions has been approved by the SBA. In the MDS auction, 67 
bidders won 493 licenses. Of the 67 auction winners, 61 claimed status 
as a small business. At this time, the Commission estimates that of the 
61 small business MDS auction winners, 48 remain small business 
licensees. In addition to the 48 small businesses that hold BTA 
authorizations, there are approximately 392 incumbent MDS licensees 
that have gross revenues that are not more than $40 million and are 
thus considered small entities. MDS licensees and wireless cable 
operators that did not receive their licenses as a result of the MDS 
auction fall under the SBA small

[[Page 9474]]

business size standard for Cable and Other Program Distribution. 
Information available to the Commission indicates that there are 
approximately 850 of these licensees and operators that do not generate 
revenue in excess of $13.5 million annually. Therefore, the Commission 
estimates that there are approximately 850 small entity MDS (or BRS) 
providers, as defined by the SBA and the Commission's auction rules.
    42. Educational institutions are included in this analysis as small 
entities; however, the Commission has not created a specific small 
business size standard for ITFS (now EBS). The Commission estimates 
that there are currently 2,032 ITFS (or EBS) licensees, and all but 100 
of the licenses are held by educational institutions. Thus, the 
Commission estimates that at least 1,932 ITFS licensees are small 
entities.
    43. In the 1998 and 1999 LMDS auctions, the Commission defined a 
small business as an entity that has annual average gross revenues of 
less than $40 million in the previous three calendar years. Moreover, 
the Commission added an additional classification for a ``very small 
business,'' which was defined as an entity that had annual average 
gross revenues of less than $15 million in the previous three calendar 
years. These definitions of ``small business'' and ``very small 
business'' in the context of the LMDS auctions have been approved by 
the SBA. In the first LMDS auction, 104 bidders won 864 licenses. Of 
the 104 auction winners, 93 claimed status as small or very small 
businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based 
on this information, the Commission believes that the number of small 
LMDS licenses will include the 93 winning bidders in the first auction 
and the 40 winning bidders in the re-auction, for a total of 133 small 
entity LMDS providers as defined by the SBA and the Commission's 
auction rules.
    44. 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 LMDS licenses began on February 18, 1998 and 
closed on March 25, 1998. The Commission established a small business 
size standard for LMDS licensees 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, the Commission concludes 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.
    45. 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. In the 
218-219 MHz Report and Order and Memorandum Opinion and Order (64 FR 
59656, Nov. 3, 2999), the Commission established a small business size 
standard for a ``small business'' as an entity that, together with its 
affiliates and persons or entities that hold interests in such an 
entity and their affiliates, has average annual gross revenues not to 
exceed $15 million for the preceding three years. A ``very small 
business'' is defined as an entity that, together with its affiliates 
and persons or entities that hold interests in such an entity and its 
affiliates, has average annual gross revenues not to exceed $3 million 
for the preceding three years. The Commission cannot estimate, however, 
the number of licenses that will be won by entities qualifying as small 
or very small businesses under the Commission's rules in future 
auctions of 218-219 MHz spectrum.
    46. 24 GHz--Incumbent Licensees. This analysis may affect incumbent 
licensees who were relocated to the 24 GHz band from the 18 GHz band 
and applicants who wish to provide services in the 24 GHz band. The 
applicable SBA small business size standard is that of ``Cellular and 
Other Wireless Telecommunications'' companies. This category provides 
that such a company is small if it employs no more than 1,500 persons. 
According to Census Bureau data for 1997, there were 977 firms in this 
category, total, that operated for the entire year. Of this total, 965 
firms had employment of 999 or fewer employees, and an additional 12 
firms had employment of 1,000 employees or more. Thus, under this size 
standard, the great majority of firms can be considered small. These 
broader census data notwithstanding, the Commission believes that there 
are only two licensees in the 24 GHz band that were relocated from the 
18 GHz band, Teligent and TRW, Inc. It is the Commission's 
understanding that Teligent and its related companies have less than 
1,500 employees, though this may change in the future. TRW is not a 
small entity. Thus, only one incumbent licensee in the 24 GHz band is a 
small business entity.
    47. 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 standards. These 
size standards will apply to the future auction, if held.
2. Cable and OVS Operators
    48. Cable Television Distribution Services. Since 2007, these 
services have been defined within the broad economic census category of 
Wired Telecommunications Carriers; that category is defined as follows: 
``This industry comprises establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' The SBA has developed a small business size standard 
for this category, which is: all such firms having 1,500 or fewer 
employees. To gauge small business prevalence for these cable services 
the Commission must, however, use current census data that are based on 
the previous category of Cable and Other Program Distribution and its 
associated size standard; that size standard was: All such firms having 
$13.5 million or less in annual receipts. According to Census Bureau 
data for 2002, there were a total of 1,191 firms in this previous 
category that operated for the entire year. Of this total, 1,087 firms 
had annual receipts of under $10 million, and 43 firms had receipts of

[[Page 9475]]

$10 million or more but less than $25 million. Thus, the majority of 
these firms can be considered small.
    49. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide. Industry data 
indicate that, of 1,076 cable operators nationwide, all but eleven are 
small under this size standard. In addition, under the Commission's 
rules, a ``small system'' is a cable system serving 15,000 or fewer 
subscribers. Industry data indicate that, of 7,208 systems nationwide, 
6,139 systems have under 10,000 subscribers, and an additional 379 
systems have 10,000-19,999 subscribers. Thus, under this second size 
standard, most cable systems are small.
    50. Cable System Operators. 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 has determined that an operator serving 
fewer than 677,000 subscribers shall be deemed a small operator, if its 
annual revenues, when combined with the total annual revenues of all 
its affiliates, do not exceed $250 million in the aggregate. Industry 
data indicate that, of 1,076 cable operators nationwide, all but ten 
are small under this size standard. The Commission notes that 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 the Commission is unable to 
estimate more accurately the number of cable system operators that 
would qualify as small under this size standard.
    51. Open Video Systems (OVS). In 1996, Congress established the 
open video system (OVS) framework, one of four statutorily recognized 
options for the provision of video programming services by local 
exchange carriers (LECs). The OVS framework provides opportunities for 
the distribution of video programming other than through cable systems. 
Because OVS operators provide subscription services, OVS falls within 
the SBA small business size standard of Cable and Other Program 
Distribution Services, which consists of such entities having $13.5 
million or less in annual receipts. The Commission has certified 25 OVS 
operators, with some now providing service. Broadband service providers 
(BSPs) are currently the only significant holders of OVS certifications 
or local OVS franchises. As of June, 2005, BSPs served approximately 
1.4 million subscribers, representing 1.5 percent of all MVPD 
households. Affiliates of Residential Communications Network, Inc. 
(RCN), which serves about 371,000 subscribers as of June, 2005, is 
currently the largest BSP and 14th largest MVPD. RCN received approval 
to operate OVS systems in New York City, Boston, Washington, DC and 
other areas. The Commission does not have financial information 
regarding the entities authorized to provide OVS, some of which may not 
yet be operational. The Commission thus believes that at least some of 
the OVS operators may qualify as small entities.
3. Internet Service Providers
    52. 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 $23 million or less. According to Census Bureau data for 
2002, there were 2,529 firms in this category that operated for the 
entire year. Of these, 2,437 firms had annual receipts of under $10 
million, and an additional 47 firms had receipts of between $10 million 
and $24, 999,999. Consequently, the Commission estimates that the 
majority of these firms are small entities that may be affected by the 
Commission's action.
4. Other Internet-Related Entities
    53. Web Search Portals. The Commission's action pertains to VoIP 
services, which could be provided by entities that provide other 
services 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 $6.5 million or less in average annual receipts. 
According to Census Bureau data for 2002, there were 342 firms in this 
category that operated for the entire year. Of these, 303 had annual 
receipts of under $5 million, and an additional 15 firms had receipts 
of between $5 million and $9,999,999. Consequently, the Commission 
estimates that the majority of these firms are small entities that may 
be affected by the Commission's action.
    54. 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 $23 million or less 
in average annual receipts. According to Census Bureau data for 2002, 
there were 6,877 firms in this category that operated for the entire 
year. Of these, 6,418 had annual receipts of under $10 million, and an 
additional 251 firms had receipts of between $10 million and 
$24,999,999. Consequently, the Commission estimates that the majority 
of these firms are small entities that may be affected by the 
Commission's action.
    55. All Other Information Services. ``This industry comprises 
establishments primarily engaged in providing other information 
services (except new syndicates and libraries and archives).'' The 
Commission's action pertains to VoIP services, which could be provided 
by entities that provide other services such as email, 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 $6.5 million or less 
in average annual receipts. According to Census Bureau data for 2002, 
there were 155 firms in this category that operated for the entire 
year. Of these, 138 had annual receipts of under $5 million, and an 
additional four firms had receipts of between $5 million and 
$9,999,999. Consequently, the Commission estimates that the majority of 
these firms are small entities that may be affected by the Commission's 
action.
    56. 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

[[Page 9476]]

content that they publish or broadcast.'' The SBA has developed a small 
business size standard for this census category; that size standard is 
500 or fewer employees. According to Census Bureau data for 2002, there 
were 1,362 firms in this category that operated for the entire year. Of 
these, 1,351 had employment of 499 or fewer employees, and six firms 
had employment of between 500 and 999. Consequently, the Commission 
estimates that the majority of these firms small entities that may be 
affected by the Commission's action.
    57. 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 specific users. The SBA has developed a small business size standard 
of $23 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 2002 indicate that there were 6,155 
firms in the category that operated for the entire year. Of these, 
7,633 had annual receipts of under $10 million, and an additional 403 
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 32,269 firms that operated for the entire 
year. Of these, 31,416 had annual receipts of under $10 million, and an 
additional 565 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 6,357 firms that operated 
for the entire year. Of these, 6,187 had annual receipts of under $10 
million, and an additional 101 firms had receipts of between $10 
million and $24,999,999. Consequently, the Commission estimates that 
the majority of the firms in each of these three categories are small 
entities that may be affected by the Commission's action.
5. Equipment Manufacturers
    58. SBA small business size standards are given in terms of 
``firms.'' Census Bureau data concerning computer manufacturers, on the 
other hand, are given in terms of ``establishments.'' The Commission 
notes that the number of ``establishments'' is a less helpful indicator 
of small business prevalence in this context than would be the number 
of ``firms'' or ``companies,'' because the latter take into account the 
concept of common ownership or control. Any single physical location 
for an entity is an establishment, even though that location may be 
owned by a different establishment. Thus, the census numbers provided 
below may reflect inflated numbers of businesses in the given category, 
including the numbers of small businesses.
    59. 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, there were 485 establishments in this category that operated with 
payroll during 2002. Of these, 476 had employment of under 1,000, and 
an additional four establishments had employment of 1,000 to 2,499. 
Consequently, the Commission estimates that the majority of these 
establishments are small entities.
    60. 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, there were 170 
establishments in this category that operated with payroll during 2002. 
Of these, 164 had employment of under 500, and five establishments had 
employment of 500 to 999. Consequently, the Commission estimates that 
the majority of these establishments are small entities
    61. 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, there were 71 
establishments in this category that operated with payroll during 2002, 
and all of the establishments had employment of under 1,000. 
Consequently, the Commission estimates that all of these establishments 
are small entities.
    62. 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, there were 
860 establishments in this category that operated with payroll during 
2002. Of these, 851 had employment of under 1,000, and an additional 
five establishments had employment of 1,000 to 2,499. Consequently, the 
Commission estimates that the majority of these establishments are 
small entities.
    63. 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, there were 571 
establishments in this category that operated with payroll during 2002. 
Of these, 560 had employment of under 500, and ten establishments had 
employment of 500 to 999. Consequently, the Commission estimates that 
the majority of these establishments are small entities.
    64. 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, there were 102 
establishments in this category that operated with payroll during 2002. 
Of these, 97 had employment of under 500, and one establishment had 
employment of 500 to 999. Consequently, the Commission estimates that 
the majority of these establishments are small entities.
    65. 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, there were 936 establishments in this category 
that operated with payroll during 2002. Of these, 922 had employment of 
under 500, and 12 establishments had employment of 500 to 999.

[[Page 9477]]

Consequently, the Commission estimates that the majority of these 
establishments are small entities.
    66. Semiconductor and Related Device Manufacturing. Examples of 
manufactured devices in this category include ``integrated circuits, 
memory chips, microprocessors, diodes, transistors, solar cells and 
other optoelectronic devices.'' 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, there were 
1,032 establishments in this category that operated with payroll during 
2002. Of these, 950 had employment of under 500, and 42 establishments 
had employment of 500 to 999. Consequently, the Commission estimates 
that the majority of these establishments are small entities.
    67. 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, there were 104 
establishments in this category that operated with payroll during 2002. 
Of these, 101 had employment of under 500, and two establishments had 
employment of 500 to 999. Consequently, the Commission estimates that 
the majority of these establishments are small entities.
    68. 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, there were 79 establishments in this category 
that operated with payroll during 2002. All of these establishments had 
employment of under 500. Consequently, the Commission estimates that 
all of these establishments are small entities.
    69. 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, there were 365 
establishments in this category that operated with payroll during 2002. 
All of these establishments had employment of under 500. Consequently, 
the Commission estimates that all of these establishments are small 
entities.
    70. 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, there were 321 establishments in this category 
that operated with payroll during 2002. Of these, 315 had employment of 
under 500, and three establishments had employment of 500 to 999. 
Consequently, the Commission estimates that the majority of these 
establishments are small entities.
    71. 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, there were 868 
establishments in this category that operated with payroll during 2002. 
Of these, 839 had employment of under 500, and 18 establishments had 
employment of 500 to 999. Consequently, the Commission estimates that 
the majority of these establishments are small entities.
    72. Other Electronic Component Manufacturing. 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, there were 1,627 establishments in this category that operated 
with payroll during 2002. Of these, 1,616 had employment of under 500, 
and eight establishments had employment of 500 to 999. Consequently, 
the Commission estimates that the majority of these establishments are 
small entities.
    73. 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, there were 96 
establishments in this category that operated with payroll during 2002. 
Of these, 95 had employment of under 1,000, and one establishment had 
employment of 1,000 to 2,499. Consequently, the Commission estimates 
that the majority or all of these establishments are small entities.
    74. 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, there were 
356 establishments in this category that operated with payroll during 
2002. Of these, 353 had employment of under 1,000, and three 
establishments had employment of 1,000 to 2,499. Consequently, the 
Commission estimates that the majority or all of these establishments 
are small entities.

D. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    75. In this Report and Order, the Commission is requiring 
telecommunications carriers and providers of interconnected VoIP 
service to collect certain information and take other actions to comply 
with LNP and other numbering administration obligations. Specifically, 
the Commission is requiring both traditional telecommunications 
carriers as well as interconnected VoIP providers and their numbering 
partners to facilitate a customer's porting request to or from an 
interconnected VoIP provider. This means, for example, that 
interconnected VoIP providers have an affirmative legal obligation to 
take all steps necessary to initiate or allow a port-in or port-out 
itself or through its numbering partner on behalf of the interconnected 
VoIP customer, subject to a valid port request, without unreasonable 
delay or unreasonable procedures that have the effect of delaying or 
denying porting of the number. The Commission also prohibits 
interconnected VoIP providers and their numbering partners from 
entering into agreements that would prohibit or unreasonably delay an 
interconnected VoIP service end user from porting between 
interconnected VoIP providers, or to or from a wireline carrier or a 
covered CMRS provider. Further, the Commission expects interconnected 
VoIP providers to fully inform their customers about limitations on 
porting between providers, particularly limitations that result from 
the portable nature of, and use of non-geographic numbers by, certain 
interconnected VoIP services.

[[Page 9478]]

    76. The Commission is also requiring interconnected VoIP providers 
to contribute to meet shared numbering administration and LNP costs. 
The reporting requirements for determining interconnected VoIP 
providers' contribution to the shared cost of numbering administration 
and LNP require interconnected VoIP providers to file an annual FCC 
Form 499-A. The Commission requires interconnected VoIP providers to 
include in their annual FCC Form 499-A filing historical revenue 
information for the relevant year, including all information necessary 
to allocate revenues across the seven LNPA regions. To alleviate the 
burdens of attributing costs among the seven LNPA regions, the 
Commission allows these providers to use a proxy based on the 
percentage of subscribers a provider serves in a particular region for 
reaching an estimate for allocating their end-user revenues to the 
appropriate regional LNPA.

E. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    77. 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.
    78. The IP-Enabled Services Notice sought comment on whether 
numbering obligations should be extended to IP-enabled services, and 
invited comment on the effect various proposals would have on small 
entities, as well as the effect alternative rules would have on these 
entities. However, the Commission must assess the interests of small 
businesses in light of the overriding public interest in ensuring that 
all consumers benefit from local number portability. In the Report and 
Order, the Commission found that allowing customers of interconnected 
VoIP services to receive the benefits of LNP is fundamentally important 
for the protection of consumers and benefits not only customers, but 
the interconnected VoIP providers themselves. Specifically, the 
Commission found that the ability of end users to retain their NANP 
telephone numbers when changing service providers gives customers 
flexibility in the quality, price, and variety of services they can 
choose to purchase. Allowing customers to respond to price and service 
changes without changing their telephone numbers will enhance 
competition, a fundamental goal of section 251 of the Act. In addition, 
the Commission found that failure to extend LNP obligations to 
interconnected VoIP providers and their numbering partners would thwart 
the effective and efficient administration of the Commission's number 
administration responsibilities under section 251 of the Act.
    79. The Commission concluded that because interconnected VoIP 
providers, including small businesses, benefit from LNP, all 
interconnected VoIP providers, including small businesses, should 
contribute to meet shared LNP costs. However, to alleviate costs 
involved in the attribution systems for all of their end-user services, 
when filing FCC Form 499-A, the Commission allowed interconnected VoIP 
providers, including small businesses, to use a proxy based on the 
percentage of subscribers a provider serves in a particular region for 
allocating their end-user revenues to the appropriate regional LNPA.
    80. Report to Congress: The Commission will send a copy of the 
Order, including this FRFA, in a report to be sent to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act. A copy of the Order and FRFA (or summaries thereof) will also be 
published in the Federal Register.

Final Regulatory Flexibility Analysis, CC Docket No. 95-116 (Intermodal 
Local Number Portability)

    1. As required by the Regulatory Flexibility Act, as amended (RFA), 
an Initial Regulatory Flexibility Analysis (IRFA) was published for the 
Intermodal Number Portability Order (70 FR 41655, July 20, 2005). The 
Commission sought written public comment on the IRFA. The Commission 
received comments specifically directed toward the IRFA, which are 
discussed below. This Final Regulatory Flexibility Analysis (FRFA) 
conforms to the RFA.

A. Need for, and Objectives of, the Rules

    2. Section 251(b) of the Communications Act requires local exchange 
carriers to provide number portability, to the extent technically 
feasible, in accordance with the requirements prescribed by the 
Commission. In the Intermodal Number Portability Order (68 FR 68831, 
Dec. 10, 2003), the Commission found that porting from a wireline 
carrier to a wireless carrier is required where the requesting wireless 
carrier's coverage area overlaps the geographic location in which the 
customer's wireline number is provisioned, provided that the porting-in 
carrier maintains the number's original rate center designation 
following the port. The United States Court of Appeals for the District 
of Columbia remanded the Intermodal Number Portability Order to the 
Commission to prepare the required FRFA on the impact of the order on 
carriers that qualify as small entities under the RFA. After 
considering information received from commenters in response to the 
IRFA, the Commission concludes that wireline carriers qualifying as 
small entities under the RFA will be required to provide wireline-to-
wireless intermodal porting where the requesting wireless carrier's 
coverage area overlaps the geographic location in which the customer's 
wireline number is provisioned, provided that the porting-in carrier 
maintains the number's original rate center designation following the 
port.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    3. In this section, the Commission responds to comments filed in 
response to the IRFA. To the extent the Commission received comments 
raising general small business concerns during this proceeding, those 
comments are discussed throughout the Intermodal Number Portability 
Order.
    4. As an initial matter, the Commission rejects arguments that 
carriers that qualify as ``small entities'' should not have to comply 
with the intermodal porting requirements until the Commission addresses 
issues pertaining to rating and routing that are pending in the 
intercarrier compensation proceeding. The issues that have been raised 
in this proceeding with respect to transporting calls to ported numbers 
are also before the Commission in the context of all numbers (without 
distinguishing between ported or non-ported numbers) in the 
intercarrier compensation proceeding. Further, as the Commission found 
in the Intermodal Number Portability Order, the issue of transport 
costs associated with calls to ported numbers is outside the scope of 
this proceeding and not relevant to the application of the LNP 
obligations under the Act.
    5. The Commission also rejects recommendations that the Commission

[[Page 9479]]

create a partial or blanket exemption for small carriers from the 
wireline-to-wireless intermodal porting requirements based on the high 
costs of implementation. The Commission finds that small carriers have 
not demonstrated such significant costs associated with implementation 
of LNP to warrant an exemption. Several small carriers claim that they 
may face a variety of costs associated with wireline-to-wireless 
intermodal porting, which would be excessive in light of their small 
customer bases. However, other commenters point out that the cost 
information these carriers present shows a large range of cost 
estimates, and in fact, even when the estimates are taken at face 
value, they indicate that the cost of wireline-to-wireless intermodal 
LNP does not impose a significant economic burden on small entities. In 
addition, the Commission is not persuaded based on this record that the 
costs of implementing LNP are as large as the commenters suggest, given 
the scant support they provide for their estimates and their failure to 
demonstrate that all the estimated costs are of the sort that the 
Commission would allow to be attributed to the LNP end-user charge. For 
example, some commenters cite their estimated costs associated with 
transporting calls to ported numbers. However, as discussed above, the 
Commission previously declined to consider these as LNP-related costs, 
rather than costs of interconnection more generally, and the commenters 
here do not demonstrate that the Commission should reverse that 
conclusion.
    6. Further, in response to small carrier concerns about LNP 
implementation costs, the Commission notes that wireline carriers 
generally only are required to provide LNP upon receipt of a specific 
request for the provision of LNP by another carrier. Thus, many of the 
small carriers may not be required to implement LNP immediately because 
there is no request to do so. Indeed, as the Commission found in the 
First Number Portability Order on Reconsideration (62 FR 18280, Apr. 
15, 1997), these rights effectively constitute steps that minimize the 
economic impact of LNP on small entities. Further, carriers have the 
ability to petition the Commission for a waiver of their obligation to 
port numbers to wireless carriers if they can provide substantial, 
credible evidence that there are special circumstances that warrant a 
departure from existing rules. In addition, under section 251(f)(2), a 
LEC with fewer than two percent of the nation's subscriber lines 
installed in the aggregate nationwide may petition the appropriate 
state commission for suspension or modification of the requirements of 
section 251(b). The Commission finds these existing safeguards further 
address commenters' concerns regarding the costs on small entities to 
implement LNP.

C. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply

    7. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the rules 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 section 3 of the 
Small Business Act. Under the Small Business Act, a ``small business 
concern'' is one that: (1) Is independently owned and operated; (2) is 
not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the Small Business Administration 
(SBA).
    8. Wired Telecommunications Carriers. The SBA has developed a small 
business size standard for wireline firms within the broad economic 
census category, ``Wired Telecommunications Carriers.'' Under this 
category, the SBA deems a wireline business to be small if it has 1,500 
or fewer employees. Census Bureau data for 2002 show that there were 
2,432 firms in this category that operated for the entire year. Of this 
total, 2,395 firms had employment of 999 or fewer employees, and 37 
firms had employment of 1,000 employees or more. Thus, under this 
category and associated small business size standard, the majority of 
firms can be considered small.
    9. Incumbent Local Exchange Carriers. The Commission has included 
small incumbent local exchange carriers (LECs) in this RFA analysis. 
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 of Wired 
Telecommunications Carriers. As noted above, a ``small business'' under 
the RFA is one that, inter alia, meets the pertinent small business 
size standard (e.g., a telephone communications business having 1,500 
or fewer employees), and ``is not dominant in its field of operation.'' 
The SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. The Commission has 
therefore included small incumbent LECs in this RFA analysis, although 
the Commission emphasizes that this RFA action has no effect on the 
Commission's analyses and determinations in other, non-RFA contexts. 
According to Commission data, 1,307 carriers have reported that they 
are engaged in the provision of incumbent local exchange services. Of 
these 1,307 carriers, an estimated 1,019 have 1,500 or fewer employees 
and 288 have more than 1,500 employees. Consequently, the Commission 
estimates that most providers of incumbent local exchange service are 
small entities.
    10. Competitive Local Exchange Carriers, 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. The appropriate size standard under SBA rules is for the 
category Wired Telecommunications Carriers. Under that size standard, 
such a business is small if it has 1,500 or fewer employees. According 
to Commission data, 859 carriers have reported that they are engaged in 
the provision of either competitive access provider services or 
competitive LEC services. Of these 859 carriers, an estimated 741 have 
1,500 or fewer employees and 118 have more than 1,500 employees. 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. In addition, 44 carriers have reported that they are ``Other 
Local Service Providers.'' Of the 44, an estimated 43 have 1,500 or 
fewer employees and one has more than 1,500 employees. Consequently, 
the Commission estimates that most providers of competitive local 
exchange service, competitive access providers, ``Shared-Tenant Service 
Providers,'' and ``Other Local Service Providers'' are small entities.

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    11. There are no significant reporting, recordkeeping or other 
compliance requirements imposed on small entities by the Intermodal 
Number Portability Order.

[[Page 9480]]

E. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    12. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its 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.
    13. The Commission invited comment on the intermodal porting rules 
with respect to their application to small entities in light of the RFA 
requirements. In accordance with the requirements of the RFA, the 
Commission has considered the potential economic impact of the 
intermodal porting rules on small entities and conclude that wireline 
carriers qualifying as small entities under the RFA will be required to 
provide wireline-to-wireless intermodal porting where the requesting 
wireless carrier's coverage area overlaps the geographic location in 
which the customer's wireline number is provisioned, provided that the 
porting-in carrier maintains the number's original rate center 
designation following the port. The Commission finds that this approach 
best balances the impact of the costs that may be associated with the 
wireline-to-wireless intermodal porting rules for small carriers and 
the public interest benefits of those requirements.
    14. Specifically, in the Intermodal Number Portability Order, the 
Commission considered limiting the scope of intermodal porting based on 
the small carrier concern that requiring porting to a wireless carrier 
that does not have a physical point of interconnection or numbering 
resources in the rate center associated with the ported number would 
give wireless carriers an unfair competitive advantage. The Commission 
found, however, that these considerations did not justify denying 
wireline consumers the benefit of being able to port their numbers to 
wireless carriers. In addition, the order noted that each type of 
service offers its own advantages and disadvantage and that consumers 
would consider these attributes in determining whether or not to port 
their numbers. The order also considered the concern expressed by small 
carriers that requiring porting beyond wireline rate center boundaries 
would lead to increased transport costs. The Commission concluded that 
such concerns were outside the scope of the number portability 
proceeding and noted that the rating and routing issues raised by the 
rural wireline carriers were also implicated in the context of non-
ported numbers and were before the Commission in other proceedings.
    15. Further, if there is a particular case where a carrier faces 
extraordinary costs, other regulatory avenues for relief are available. 
Specifically, a carrier may petition the Commission for additional time 
or waiver of the intermodal porting requirements if it can provide 
substantial, credible evidence that there are special circumstances 
that warrant departure from existing rules. In addition, under section 
251(f)(2), a LEC with fewer than two percent of the nation's subscriber 
lines installed in the aggregate nationwide may petition the 
appropriate state commission for suspension or modification of the 
requirements of section 251(b). Although some commenters have 
complained about the time and expense associated with the section 
251(f)(2) mechanism, several others have indicated that the 251(f)(2) 
mechanism has been an effective method of addressing the potential 
burdens on small carriers. Further, in response to small carriers' 
concerns about LNP implementation costs, the Commission notes that 
wireline carriers generally only are required to provide LNP upon 
receipt of a specific request for the provision of LNP by another 
carrier. Thus, many of the small carriers may not be required to 
implement LNP immediately because there is no request to do so. Indeed, 
as the Commission found in the First Number Portability Order on 
Reconsideration, these rights effectively constitute steps that 
minimize the economic impact of LNP on small entities. The Commission 
finds these existing safeguards further address commenters' concerns 
regarding the costs on small entities to implement LNP.
    16. While the Commission recognizes that wireline carriers will 
still incur implementation and recurrent costs, the Commission 
concludes that the benefits to the public of requiring wireline-to-
wireless intermodal LNP outweigh the economic burden imposed on these 
carriers. Creating a partial or blanket exemption from the wireline-to-
wireless intermodal porting requirements for small entities would harm 
consumers in small and rural areas across the country by preventing 
them from being able to port on a permanent basis. It might also 
discourage further growth of competition between wireless and wireline 
carriers in smaller markets across the country. The Commission 
continues to believe that the intermodal LNP requirements are important 
for promoting competition between the wireless and wireline industries 
and generating innovative service offerings and lower prices for 
consumers. Wireless number porting activity since the advent of porting 
has been significant and evidence shows that the implementation of LNP 
has, in fact, yielded important benefits for consumers, such as 
improved customer retention efforts by carriers. By reinstating, 
immediately, the wireline-to-wireless intermodal porting requirement, 
this approach ensures that more consumers in small and rural 
communities will be able to port and experience the competitive 
benefits of LNP.

F. Report to Congress

    17. The Commission will send a copy of this FRFA in a report to be 
sent to Congress and the Government Accountability Office pursuant to 
the Congressional Review Act. A copy of the FRFA (or a summary thereof) 
will also be published in the Federal Register.

Final Paperwork Reduction Act of 1995 Analysis

    This document does not contain new or modified information 
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, therefore, it does not contain any new 
or modified ``information collection burden for small business concerns 
with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4).

Congressional Review Act

    The Commission will send a copy of this Report and Order on Remand 
in a report to be sent to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A).

Ordering Clauses

    29. Accordingly, it is ordered that pursuant to sections 1, 4(i), 
4(j), 251, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 154(i)-(j), 251, 303(r), the Report and Order in WC Docket 
No. 04-36 and CC Docket Nos. 95-116 and 99-200 is adopted, and that 
Part 52 of the

[[Page 9481]]

Commission's Rules, 47 CFR parts 52, is amended as set forth in 
Appendix B. The Report and Order shall become effective 30 days after 
publication in the Federal Register.
    30. It is further ordered that pursuant to section 1, 4(i), 4(j), 
251, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 154(i)-(j), 251, 303(r), the Order on Remand in CC Docket 
No. 95-116 is adopted. The Order on Remand shall become effective 30 
days after publication in the Federal Register.
    31. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order, Declaratory Ruling, Order on Remand, and 
Notice of Proposed Rulemaking, including the two Final Regulatory 
Flexibility Analyses and the Initial Regulatory Flexibility Analysis, 
to the Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 52

    Communications common carriers, telecommunications, telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends Part 52 of Title 47 of the Code of 
Federal Regulations as follows:

PART 52--NUMBERING

0
1. The authority citation for part 52 is revised to read as follows:

    Authority: Secs. 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 
U.S.C. 151, 152, 154 and 155 unless otherwise noted. Interpret or 
apply secs. 3, 4, 201-05, 207-09, 218, 225-27, 251-52, 271 and 332, 
48 Stat. 1070, as amended, 1077; 47 U.S.C. 153, 154, 201-05, 207-09, 
218, 225-27, 251-52, 271 and 332 unless otherwise noted.

0
2. Section 52.12(a)(1)(i) introductory text is revised to read as 
follows:


Sec.  52.12  North American Numbering Plan Administrator and B&C Agent.

* * * * *
    (a)(1) * * *
    (i) The NANPA and B&C Agent may not be an affiliate of any 
telecommunications service provider(s) as defined in the 
Telecommunications Act of 1996, or an affiliate of any interconnected 
VoIP provider as that term is defined in Sec.  52.21(h). ``Affiliate'' 
is a person who controls, is controlled by, or is under the direct or 
indirect common control with another person. A person shall be deemed 
to control another if such person possesses, directly or indirectly--
* * * * *

0
3. Section 52.16 is amended by adding paragraph (g) to read as follows:


Sec.  52.16  Billing and Collection Agent.

* * * * *
    (g) For the purposes of this rule, the term ``carrier(s)'' shall 
include interconnected VoIP providers as that term is defined in Sec.  
52.21(h).

0
4. Section 52.17 is amended by adding paragraph (c) to read as follows:


Sec.  52.17  Costs of number administration.

* * * * *
    (c) For the purposes of this section, the term ``telecommunications 
carrier'' or ``carrier'' shall include interconnected VoIP providers as 
that term is defined in Sec.  52.21(h).

0
5. Section 52.21 is amended by redesignating paragraphs (h) through (r) 
as paragraphs (i) through (s), and by adding new paragraph (h) to read 
as follows:


Sec.  52.21  Definitions.

* * * * *
    (h) The term ``interconnected VoIP provider'' is an entity that 
provides interconnected VoIP service as that term is defined in 47 CFR 
9.3.
* * * * *

0
6. Section 52.23 is amended by adding paragraph (h) to read as follows:


Sec.  52.23  Deployment of long-term database methods for number 
portability by LECs.

* * * * *
    (h)(1) Porting from a wireline carrier to a wireless carrier is 
required where the requesting wireless carrier's ``coverage area,'' as 
defined in paragraph (h)(2) of this section, overlaps the geographic 
location in which the customer's wireline number is provisioned, 
provided that the porting-in carrier maintains the number's original 
rate center designation following the port.
    (2) The wireless ``coverage area'' is defined as the area in which 
wireless service can be received from the wireless carrier.

0
7. Section 52.32 is amended by adding paragraph (e) to read as follows:


Sec.  52.32  Allocation of the shared costs of long-term number 
portability.

* * * * *
    (e) For the purposes of this section, the term ``telecommunications 
carrier'' shall include interconnected VoIP providers as that term is 
defined in Sec.  52.21(h); and ``telecommunications service'' shall 
include ``interconnected VoIP service'' as that term is defined in 47 
CFR 9.3.

0
8. Section 52.33(b) is revised to read as follows:


Sec.  52.33  Recovery of carrier-specific costs directly related to 
providing long-term number portability.

* * * * *
    (b) All interconnected VoIP providers and telecommunications 
carriers other than incumbent local exchange carriers may recover their 
number portability costs in any manner consistent with applicable state 
and federal laws and regulations.

0
9. Section 52.34 is added to read as follows:


Sec.  52.34  Obligations regarding local number porting to and from 
interconnected VoIP providers.

    (a) An interconnected VoIP provider must facilitate an end-user 
customer's valid number portability request, as it is defined in this 
subpart, either to or from a telecommunications carrier or another 
interconnected VoIP provider. ``Facilitate'' is defined as the 
interconnected VoIP providers' affirmative legal obligation to take all 
steps necessary to initiate or allow a port-in or port-out itself or 
through the telecommunications carriers, if any, that it relies on to 
obtain numbering resources, subject to a valid port request, without 
unreasonable delay or unreasonable procedures that have the effect of 
delaying or denying porting of the NANP-based telephone number.
    (b) An interconnected VoIP provider may not enter into any 
agreement that would prohibit an end-user customer from porting between 
interconnected VoIP providers, or to or from a telecommunications 
carrier.

 [FR Doc. E8-3130 Filed 2-20-08; 8:45 am]
BILLING CODE 6712-01-P