[Federal Register Volume 75, Number 173 (Wednesday, September 8, 2010)]
[Proposed Rules]
[Pages 54546-54560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22254]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 20

[WT Docket No. 07-250; FCC 10-145]


Amendment of the Commission's Rules Governing Hearing Aid-
Compatible Mobile Handsets

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document the Commission seeks comment on revisions to 
the Commission's wireless hearing aid compatibility rules. The 
Commission initiates this proceeding to ensure that consumers with 
hearing loss are able to access wireless communications services 
through a wide selection of devices without experiencing disabling 
interference or other technical obstacles.

DATES: Interested parties may file comments on or before October 25, 
2010, and reply comments on or before November 22, 2010.

ADDRESSES: You may submit comments, identified by WT Docket No. 07-250; 
FCC 10-145, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     Mail: Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although the Commission continues to experience 
delays in receiving U.S. Postal Service mail). All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
     People With Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: fcc.gov">FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: John Borkowski, Wireless 
Telecommunications Bureau, (202) 418-0626, e-mail 
fcc.gov">John.Borkowski@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking (FNPRM) in WT Docket No. 07-250; 
FCC 10-145, adopted August 5, 2010, and released on August 5, 2010. 
This summary should be read with its companion document, the Policy 
Statement and Second Report and Order summary published elsewhere in 
this issue of the Federal Register. The full text of the FNPRM is 
available for public inspection and copying during business hours in 
the FCC Reference Information Center, Portals II, 445 12th Street, SW., 
Room CY-A257, Washington, DC 20554. It also may be purchased from the 
Commission's duplicating contractor at Portals II, 445 12th Street SW., 
Room CY-B402, Washington, DC 20554; the contractor's Web site, http://www.bcpiweb.com; or by calling (800) 378-3160, facsimile (202) 488-
5563, or e-mail [email protected]. Copies of the Further Notice also may 
be obtained via the Commission's Electronic Comment

[[Page 54547]]

Filing System (ECFS) by entering the docket number WT Docket No. 07-
250. Additionally, the complete item is available on the Federal 
Communications Commission's Web site at http://www.fcc.gov.

Synopsis of the Further Notice of Proposed Rulemaking

I. Introduction

    In this FNPRM the Commission seeks comment on potential changes to 
its hearing aid compatibility rules in three respects. First, the 
Commission proposes to extend the scope of the rules beyond the current 
category of Commercial Mobile Radio Service (CMRS) to include handsets 
used to provide wireless voice communications over any type of network 
among members of the public or a substantial portion of the public. The 
Commission seeks comment on this proposal, on whether considerations of 
technological feasibility or marketability prevent application of its 
hearing aid compatibility requirements to any class of these handsets, 
and on what transition period is appropriate for applying the 
requirements to newly covered handsets. Second, the Commission seeks 
further comment on whether to extend its in-store testing requirement 
beyond retail stores owned or operated by service providers to some or 
all other retail outlets. Third, the Commission seeks comment on 
whether to extend to all circumstances the ability to meet hearing aid 
compatibility standards for radio frequency (RF) interference reduction 
for GSM operations in the 1900 MHz band through software that enables 
the user to reduce maximum power output by up to 2.5 decibels (dB).

II. Discussion

A. Extension of Hearing Aid Compatibility Rules to New Technologies and 
Networks

    2. The Commission has concluded that its wireless hearing aid 
compatibility rules must provide people who use hearing aids and 
cochlear implants with continuing access to the most advanced and 
innovative communications technologies as they develop, while at the 
same time maximizing the conditions for innovation and investment. 
Consistent with this principle, the Commission proposes that its 
hearing aid compatibility requirements should apply to all customer 
equipment used to provide wireless voice communications over any type 
of network among members of the public or a substantial portion of the 
public via a built-in speaker where the equipment is typically held to 
the ear, so long as meeting hearing aid compatibility standards is 
technologically feasible and would not increase costs to an extent that 
would preclude successful marketing.
    3. Statutory Scope. First, the Commission proposes to find that the 
scope of the Hearing Aid Compatibility Act broadly encompasses devices 
used to provide voice communications. The Hearing Aid Compatibility 
Act, 47 U.S.C. 610, directs the Commission to establish regulations to 
ensure reasonable access by persons with hearing loss to ``telephone 
service.'' To achieve this end, the Act directs that the Commission 
require ``telephones'' to meet hearing aid compatibility standards. The 
Act provides exemptions for, among other things, ``telephones used with 
public mobile services'' and ``telephones used with private radio 
services,'' but stipulates, that the Commission should periodically 
review these exemptions and revoke or limit them if necessary to 
reflect developments over time in technology and usage patterns. The 
Commission modified the exemption for wireless phones in 2003.
    4. Neither the Hearing Aid Compatibility Act nor the broader 
Communications Act defines the terms ``telephone'' or ``telephone 
service.'' In view of the other provisions in the Act, however, the 
Commission proposes to interpret the term ``telephone,'' as used in the 
Hearing Aid Compatibility Act, to encompass anything that is commonly 
understood to be a telephone or to provide telephone service, as that 
understanding may evolve over time, regardless of regulatory 
classifications evoked elsewhere in the Communications Act. The 
Commission seeks comment on this proposed finding and whether such a 
reading best fulfills the Congressional intent that ``all persons 
should have available the best telephone service which is 
technologically and economically feasible.'' Moreover, the Commission 
seeks comment on whether an evolving definition of ``telephone,'' for 
purposes of the Hearing Aid Compatibility Act, is consistent with the 
directive that the Commission revoke or limit the exemptions for public 
mobile services and private radio services over time to reflect 
developments in technology and usage patterns.
    5. Through the Hearing Aid Compatibility Act, Congress charged the 
Commission with the responsibility of establishing regulations as 
necessary to ensure access to telephone service by persons with hearing 
loss. As cell phone use became integrated into everyday American life, 
the Commission lifted the prior exemption for digital wireless 
telephones and subjected them to hearing aid compatibility requirements 
under its rules. The Commission proposes to find that to carry out 
Congress's mandate to ensure access to telephone service by persons 
with hearing loss, it would serve the public interest to interpret the 
definition of telephone to include wireless handsets that are used for 
voice communications among members of the public or a substantial 
portion of the public, regardless of whether the services provisioned 
through the handset may fall beyond the currently covered category of 
CMRS. The Commission seeks comment on this proposed finding.
    6. In addition, the Commission proposes to find that this broad 
interpretation of the definition of telephone should include multi-use 
devices that can function as traditional telephones typically used by 
being held to the ear, but which may have other capabilities and serve 
additional purposes. While the Commission recognizes that rendering the 
telephone feature of such a device hearing aid-compatible may require 
adjustments to other features over which the Commission might otherwise 
not have jurisdiction, the Commission proposes to find that under these 
circumstances, the Commission nevertheless would have authority to 
require adjustments to both telephone features and other aspects of the 
device in order to render the device hearing aid-compatible. Under the 
Hearing Aid Compatibility Act, the Commission is specifically directed 
to establish such regulations as are necessary to ensure access to 
telephone service by persons with hearing loss. To the extent 
achievement of this goal may require imposing hearing aid compatibility 
requirements on multi-use devices with telephonic capabilities, as 
described above, the Commission proposes to find that it has 
jurisdiction to require hearing aid compatibility for such devices, and 
the Commission seeks comment on this proposed finding.
    7. Scope of Proposed Rule. The Commission's proposal herein to 
extend the scope of the hearing aid compatibility rules is limited to 
wireless handsets that afford an opportunity to communicate by voice 
with members of the public or with users of a network that is open to 
the public or a substantial portion of the public. Thus, in a manner 
broadly consistent with the distinction drawn in the Hearing Aid 
Compatibility Act between ``public

[[Page 54548]]

mobile services'' and ``private radio services,'' the Commission 
proposes not to extend the rules to certain non-interconnected systems 
that are used solely for internal communications, such as public safety 
or dispatch networks. While the Commission recognizes that there may be 
important interests in affording access to these systems to employees 
who use hearing aids, the Commission tentatively concludes that given 
the very different circumstances of the market for these handsets, and 
in the absence of an existing universe of handsets meeting hearing aid 
compatibility standards, the burdens on manufacturers and system 
operators of satisfying hearing aid compatibility requirements would 
outweigh the public benefits. The Commission seeks comment on this 
analysis, and in particular on whether the four criteria for revoking 
or limiting the wireless exemption are satisfied for any such internal 
systems.
    8. At the same time, the Commission's proposal would include all 
otherwise covered handsets that are used for voice communication with 
members of the public or a substantial portion of the public, including 
those that may not be interconnected with the public switched telephone 
network but can access another network that is open to members of the 
public. To the extent a handset otherwise used for internal 
communications can also be used for voice communications with members 
of the public outside the internal network, it would also be covered 
under this proposal. In addition, this proposal would cover handsets 
used for Mobile Satellite Service (MSS) that otherwise fall within the 
scope of the rule. In addressing the four criteria set forth below, 
commenters should consider whether the circumstances surrounding these 
or any other classes of handset should cause such handsets to be 
excluded from the rule.
    9. Statutory Criteria. Under the Hearing Aid Compatibility Act, the 
Commission is to revoke or limit the wireless exemption if four 
criteria are satisfied: (1) Such revocation or limitation is in the 
public interest; (2) continuation of the exemption without such 
revocation or limitation would have an adverse effect on individuals 
with hearing loss; (3) compliance with the requirements adopted is 
technologically feasible for the telephones to which the exemption 
applies; and (4) compliance with the requirements adopted would not 
increase costs to such an extent that the telephones to which the 
exemption applies could not be successfully marketed. The Commission 
seeks comment on whether these criteria are met with respect to 
handsets used for voice communications with members of the public or a 
substantial portion of the public.
    10. Adverse Effect on People with Hearing Loss. The Commission 
proposes to find that failure to extend hearing aid compatibility 
requirements broadly to handsets used for voice communications with 
members of the public or a substantial portion of the public would have 
an adverse effect on people with hearing loss. In the 2003 Hearing Aid 
Compatibility Order,\1\ the Commission determined that continuing to 
exempt handsets providing certain CMRS from hearing aid compatibility 
requirements would have an adverse effect on individuals with hearing 
loss because the lack of hearing aid-compatible digital phones rendered 
them unable to take advantage of features of these phones that were 
becoming increasingly central to American life. The Commission proposes 
to find that this is now true broadly for the range of handsets used to 
provide wireless voice communications, including those operating over 
new and developing technologies. If these new handsets are not made 
hearing aid-compatible, consumers with hearing loss would be largely 
denied the opportunity to use advanced functionalities and services 
that are rapidly becoming commonplace in our society. Given the rapid 
pace of technological innovation and the development of new modes of 
wireless voice communication, the Commission is concerned about the 
consequences of waiting until a particular technology is in widespread 
use before beginning a proceeding to determine that lack of access to 
that technology adversely affects individuals with hearing loss. 
Rather, the Commission suggests that it is the inability to access 
innovative technologies as they develop that has an adverse effect. The 
Commission therefore proposes, in order to encourage manufacturers to 
consider hearing aid compatibility at the earliest stages of the 
product design process, to establish a broad scope for hearing aid 
compatibility obligations that is not dependent on particular forms of 
network technology. The Commission proposes to find that this broad 
scope is necessary to fulfill the goal of the Hearing Aid Compatibility 
Act that people who use hearing aids and cochlear implants have access 
to the fullest feasible extent to all means of voice communication. The 
Commission seeks comment on this analysis.
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    \1\ The Commission's Rules Governing Hearing Aid-Compatible 
Telephones, WT Docket 01-309, Report and Order, 18 FCC Rcd 16753 
(2003) (2003 Hearing Aid Compatibility Order).
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    11. Public Interest. The Commission also proposes to find that 
expanding the scope of its hearing aid compatibility requirements as 
described would serve the public interest. In 2003, the Commission 
found that modifying the wireless hearing aid compatibility exemption 
promoted the public interest because, among other reasons, it enabled 
people with hearing loss to enjoy the public safety and other benefits 
of digital wireless phones and it enabled all consumers to communicate 
more easily with those who have hearing loss. The Hearing Aid 
Compatibility Act makes clear that consumers with hearing loss should 
be afforded equal access to communications networks to the fullest 
extent feasible. To ensure the public interest is served in such 
fashion, the Commission's stated policy is to encourage manufacturers 
to consider hearing aid compatibility at the earliest stages of the 
product design process. Commenters should address the Commission's 
proposed finding that further modification of the exemption to reach 
handsets using new technologies is in the public interest today.
    12. In addition, the Commission is unconvinced to date by arguments 
that applying hearing aid compatibility requirements to MSS would not 
confer significant public benefits. To the contrary, even if MSS has 
relatively few consumer users, both users who subscribe as individuals 
and those who are provided access to MSS by their employers would 
benefit from the option to obtain hearing aid-compatible telephones. 
Furthermore, the usage of MSS may increase. Indeed, due to its 
ubiquitous coverage and its resistance to disruption from terrestrial 
disasters, in some situations MSS has important advantages over 
terrestrial wireless service. Therefore, the Commission proposes to 
find that failure to apply hearing aid compatibility requirements to 
MSS handsets would adversely affect individuals with hearing loss, and 
that it would serve the public interest to ensure that individuals with 
hearing loss have access to hearing aid-compatible MSS handsets. The 
Commission seeks comment on this analysis.
    13. Technological Feasibility. In the 2003 Hearing Aid 
Compatibility Order, the Commission found that meeting hearing aid 
compatibility standards was technologically feasible for the telephones 
covered by that order in large part because several handsets were 
already on the market that met those

[[Page 54549]]

standards. To the extent that handsets are currently on the market or 
are planned for introduction that fall within the rule coverage that 
the Commission proposes today, but that are not covered by the existing 
rule, the Commission seeks comment on whether they would meet the 
existing American National Standards Institute (ANSI) standard (or a 
similar performance standard, for frequency bands and air interfaces 
that are not addressed by the existing standard). Moreover, because the 
hearing aid compatibility standards are already being met for handsets 
that operate on a variety of 2G and 3G air interfaces over two well 
separated frequency bands, the Commission considers it likely, in the 
absence of evidence to the contrary, that the same standards could also 
be met for handsets used for similar services that are not within the 
class of currently covered CMRS. While the Commission recognizes that 
technological feasibility cannot be predicted with certainty for future 
handsets, the Commission notes that the Hearing Aid Compatibility Act 
expressly provides for waivers for new telephones or telephones 
associated with a new technology or service in cases of technological 
infeasibility. Therefore, absent evidence that meeting hearing aid 
compatibility standards is not technologically feasible for any class 
of handsets or service, the Commission anticipates that compliance will 
be technologically feasible. Commenters arguing that compliance is not 
technologically feasible should provide specific engineering evidence 
related to a defined class of handsets.
    14. The Commission seeks comment on how its hearing aid 
compatibility rules should address circumstances where voice capability 
may be enabled on a handset by a party other than the manufacturer, 
particularly where adding the new voice capability may affect operating 
parameters of the handset such as the frequency range, modulation type, 
maximum output power, or other parameters specified in the Commission's 
rules. The Commission's rules for equipment authorization hold the 
grantee to be the responsible party to ensure continued compliance of 
the handset and require the grantee to inform the Commission if these 
parameters change. The Commission seeks comment on the proper 
procedures for a manufacturer to test the hearing aid compatibility of 
voice functions that are not initially installed into the phone but may 
be enabled, for example, by the installation of a software program that 
affects the circumstances under which the transmitter operates. The 
Commission seeks comment on whether there are other ways to ascertain 
and regulate the hearing aid compatibility of such functions, for 
example, at the time the service provider or applications store enables 
that software. The Commission also seeks comment on the appropriate 
regulatory treatment if the hearing aid compatibility of these 
functions cannot be tested; in particular, whether a handset that meets 
hearing aid compatibility standards for all voice operations built into 
the phone but can also accommodate software-added voice operations that 
cannot be tested may be counted as hearing aid-compatible. Commenters 
should consider handsets that can provide additional voice capabilities 
to those already available in the off-the-shelf handset via the 
installation of software, as well as handsets whose only, or initial, 
voice capability is not incorporated off the shelf but is instead 
available through commercial sources. In addressing these issues, 
commenters should consider how voice services may be offered over new 
technologies such as WiMax and LTE interfaces and who may manage these 
capabilities.
    15. Marketability. The Commission previously found that the costs 
of compliance would not preclude successful marketing for phones 
covered under the current rules because some phones meeting the 
standard for acoustic coupling compliance were already being marketed, 
the modifications needed to achieve inductive coupling capability did 
not appear unduly costly, and increased demand was anticipated to drive 
down production costs. Based on the number of hearing aid-compatible 
models that are already being successfully marketed across multiple air 
interfaces and frequency bands, the Commission anticipates, in the 
absence of convincing evidence to the contrary, that other telephones 
offering similar capabilities and meeting the same or comparable 
compliance standards could also be successfully marketed. The 
Commission seeks comment, supported by evidence, on whether this is so, 
and whether there is any class of handsets for which the cost of 
achieving compliance would preclude successful marketing. Again, the 
Commission notes the availability of waivers in the event future new 
telephones or telephones used with new technologies could not be 
successfully marketed due to hearing aid compatibility compliance 
costs.
    16. Absent convincing evidence of technological infeasibility or 
costs that preclude marketability, the Commission intends to apply to 
all handsets that will be covered under its broadened rule, after an 
appropriate transition period, the same hearing aid compatibility 
requirements that apply to currently covered handsets. The Commission 
seeks comment on whether, for reasons of technological infeasibility or 
prohibitive costs, these numerical benchmarks or other rule provisions 
cannot be applied to any class of handsets. Again, the Commission seeks 
specific evidence as to why particular requirements cannot be met and 
what alternative requirements would be feasible and appropriate.
    17. Transition Period. Ever since the Commission adopted the first 
wireless hearing aid compatibility rules in 2003, the Commission has 
consistently recognized that it takes time for handsets with new 
specifications to be designed, produced, and brought to market, and 
accordingly the Commission has afforded meaningful transition periods 
before new hearing aid-compatible handset deployment benchmarks and 
other requirements have become effective. The Commission seeks comment 
on the appropriate transition period for applying hearing aid 
compatibility benchmarks and other requirements to lines of handsets 
that are outside the subset of CMRS that is currently covered by 
Section 20.19(a). Would a two-year transition be appropriate, 
consistent with the lead time the Commission afforded to comply with 
the original requirements for acoustic coupling compatibility? Would a 
shorter period, such as one year, be reasonable given that 
manufacturers are already meeting hearing aid compatibility 
requirements for currently covered classes of handsets, and many of the 
engineering solutions reached for those handsets may be transferrable 
to others? Is it likely that many handsets will already meet hearing 
aid compatibility standards either as already marketed or as currently 
planned, and therefore all that will be required is testing of existing 
handsets rather than introduction of new products? On the other hand, 
are there special design difficulties that may render a longer 
transition period necessary for some classes of handsets? For example, 
are there any special characteristics of satellite transmission that 
may require particular transition rules for MSS? In consideration of 
the time needed for phones to progress from the production line to 
service providers' offerings, should the transition period be longer 
for service providers than for manufacturers, and should it be longer 
for smaller service providers than for

[[Page 54550]]

nationwide carriers? Parties are invited to comment on these and any 
other transition issues, either for all newly covered handsets or some 
subset of those handsets.

B. In-Store Testing Requirement for Independent Retailers

    18. Section 20.19(c) and (d) of the Commission's rules requires 
that wireless service providers make their hearing aid-compatible 
handset models available for consumer testing in each retail store that 
they own or operate. This testing requirement does not apply to non-
service providers, such as individuals, independent retailers, 
importers, or manufacturers.
    19. The Commission seeks targeted comment on whether the in-store 
testing requirement should be extended to some or all retail outlets 
other than those owned or operated by service providers. Given the 
growth of new channels of distribution, extension of the in-store 
testing requirement would help to ensure that consumers have the 
information they need to choose a handset that will operate correctly 
with their hearing aid or cochlear implant. The Commission seeks 
comment as to whether, if the Commission does extend the in-store 
testing requirement to some retail stores other than those owned or 
operated by service providers, the Commission should extend it to all 
entities that sell handsets to consumers through physical locations or 
whether some of these retailers should be excluded from the requirement 
based on their general customer service practices, the types or numbers 
of handsets that they sell, their size, or other considerations.
    20. In addition to allowing consumers to test handsets, the 
Commission seeks comment on whether it should require independent 
retailers to allow a customer with hearing loss to return a handset 
without penalty, either instead of or in addition to an in-store 
testing requirement. The Commission notes that the Commission 
previously encouraged wireless service providers to provide a 30 day 
trial period or otherwise be flexible on their return policies for 
consumers seeking access to compliant phones. The Commission reiterates 
that a flexible return policy could help consumers with hearing loss by 
providing them with additional time and opportunity to ensure that 
their handset is compatible with their hearing aid.
    21. The Commission also seeks comment on the Commission's authority 
to extend the in-store testing requirement beyond service providers. 
First, the Commission seeks comment on interpreting Sections 1 and 2 of 
the Communications Act, coupled with that Act's Section 3 definition of 
``radio communications,'' to cover retail operations that have become 
enmeshed in the provision of wireless service. The Commission seeks 
comment on whether a retailer engaged in the sale of wireless handsets 
is subject to the Commission's general jurisdictional grant because it 
is engaged in providing ``services,'' including the sale of 
``instrumentalities, facilities, [and] apparatus * * * incidental to * 
* * transmission, within the meaning of Section 3.''
    22. Further, Section 302a of the Act authorizes the Commission to 
``make reasonable regulations * * * governing the interference 
potential of handsets which in their operation are capable of emitting 
radio frequency energy * * * in sufficient degree to cause harmful 
interference to radio communications * * *'' Section 302a further 
provides that ``[n]o person shall * * * sell, offer for sale, * * *, or 
use devices, which fail to comply with regulations promulgated pursuant 
to this section.'' The Commission seeks comment on whether expanding 
in-store testing requirements to help consumers operate equipment in a 
manner that does not cause interference to their hearing aids would 
fall within its jurisdiction under these provisions. In addition, the 
language of the Hearing Aid Compatibility Act itself is expansive, and 
it clearly envisions that the Commission should exercise its mandate 
broadly by ``establish[ing] such regulations as are necessary'' to 
ensure access to telephone service by persons with hearing loss. The 
Commission seeks comment on whether this language provides a basis for 
exercising its jurisdiction over additional parties so that the 
Commission may continue to fulfill the mandate of the Hearing Aid 
Compatibility Act.

C. GSM Operations at 1900 MHz

    23. In the accompanying Second Report and Order, the Commission 
amends its rules so that a manufacturer or service provider that offers 
one or two handset models over the GSM air interface, which would not 
have to offer any hearing aid-compatible GSM models but for its size, 
may meet its hearing aid compatibility deployment obligation by 
offering one handset that allows consumers to reduce the maximum 
transmit power only for operations over the GSM air interface in the 
1900 MHz band by up to 2.5 decibels and that meets the criteria for an 
M3 rating for RF interference reduction after such power reduction. The 
Commission here seeks comment on whether it should treat such handsets 
as hearing aid-compatible for all purposes.
    24. Section 20.19(b) of the Commission's rules provides that a 
newly certified handset is hearing aid-compatible if it meets the 
standard set forth in the 2007 revision of ANSI Standard C63.19, and 
that standard states that the handset must be tested using its maximum 
rated RF output power. The requirement to test for hearing aid 
compatibility at full power serves the important goal of ensuring that 
people with hearing loss have equal access to all of the service 
quality and performance that a given wireless phone provides. At the 
same time, meeting the RF interference reduction standard for phones 
operating over the GSM air interface in the 1900 MHz band poses 
significant technical challenges, particularly for phones with certain 
desirable form factors. Moreover, as a legacy 2G network, GSM is in the 
process of being supplanted by newer and more powerful technologies. 
Under these circumstances, the Commission seeks comment on whether it 
is in the public interest to relax the requirement to test handsets for 
hearing aid compatibility at full power in order to facilitate the 
near-term availability of desirable handsets to consumers. The 
Commission welcomes data on the effects that a 2.5 dB reduction in 
maximum power output will have on coverage, as well as any other 
effects on consumers with or without hearing loss. In addition, the 
Commission asks commenters to address how the proposed revision of ANSI 
Standard C63.19, which would make it approximately 2.2 dB easier for a 
GSM phone to achieve an M3 rating, should affect the Commission's 
analysis. Does the expected revision, by making it likely that many 
handsets will no longer need to reduce their power to meet the M3 
criteria, ameliorate any negative effects of a rule change by rendering 
it less likely that companies will use that rule change beyond the near 
term? Or does the imminent prospect of a standards change that may 
largely eliminate the apparent problem counsel against further 
adjustments to the Commission's rules to address that problem?
    25. The Commission proposes to find that if the Commission were to 
extend the ability to meet hearing aid compatibility standards by 
allowing the user to reduce the maximum power for GSM operations in the 
1900 MHz band, the Commission would do so subject to the same 
conditions that it has imposed in the context of the de minimis rule. 
Thus, the handset would have to

[[Page 54551]]

operate at full power when calling 911, and the manufacturer or service 
provider would have to disclose that activation of a special mode is 
required to meet the hearing aid compatibility standard and must 
explain how to activate the special mode and the possibility of a loss 
of coverage in the device manual or product insert. The Commission 
seeks comment on these and any other possible conditions.

III. Procedural Matters

A. Initial Regulatory Flexibility Analysis

    26. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA),\2\ the Commission has prepared this present Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on a substantial number of small entities of the 
policies and rules proposed in this Further Notice of Proposed Rule 
Making (FNPRM). Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the FNPRM provided in Section III.C.2. 
of this summary. The Commission will send a copy of the FNPRM, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration (SBA).\3\
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    \2\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA), Pub. L. 104-121, Title II, 110 Stat. 857 (1996).
    \3\ See 5 U.S.C. 603(a).
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    27. Although Section 213 of the Consolidated Appropriations Act of 
2000 provides that the RFA shall not apply to the rules and competitive 
bidding procedures for frequencies in the 746-806 MHz Band,\4\ the 
Commission believes that it would serve the public interest to analyze 
the possible significant economic impact of the proposed policy and 
rule changes in this band on small entities. Accordingly, this IRFA 
contains an analysis of this impact in connection with all spectrum 
that falls within the scope of this Further Notice, including spectrum 
in the 746-806 MHz Band.
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    \4\ In particular, this exemption extends to the requirements 
imposed by Chapter 6 of Title 5, United States Code, Section 3 of 
the Small Business Act (15 U.S.C. 632) and Section 3507 and 3512 of 
Title 44, United States Code. Consolidated Appropriations Act 2000, 
Pub. L. 106-113, 113 Stat. 2502, App. E, Sec. 213(a)(4)(A)-(B); see 
145 Cong. Rec. H12493-94 (Nov. 17, 1999); 47 U.S.C.A. 337 note at 
Section 213(a)(4)(A)-(B).
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1. Need for, and Objectives of, the Proposed Rules
    28. The FNPRM proposes to find that the scope of the Commission's 
hearing aid compatibility rules should be extended so as to cover all 
customer equipment used to provide wireless communications among 
members of the public or a substantial portion of the public via a 
built-in speaker where the equipment is typically held to the ear, so 
long as meeting hearing aid compatibility standards is technologically 
feasible and would not raise costs to an extent that would preclude 
successful marketing of the equipment. The FNPRM seeks comment on: (1) 
Whether considerations of technological feasibility or marketability 
prevent application of the hearing aid compatibility requirements, or 
require modification of those requirements, as to any class of 
handsets; and (2) what transition period is appropriate for applying 
the requirements to newly covered handsets. This proposed rule change 
would ensure that people with hearing loss will have access to new and 
advanced handsets regardless of the frequency over which they operate 
or the voice technology mode deployed, while maintaining consistency 
with the technological feasibility and marketability criteria set forth 
in the Hearing Aid Compatibility Act.\5\
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    \5\ 47 U.S.C. 610.
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    29. The FNPRM also seeks comment on whether the current requirement 
to make hearing aid-compatible handsets available in-store for consumer 
testing should be extended to some or all retail outlets other than 
those owned or operated by service providers. The Commission seeks 
comment on how to define the class of independent retailers that would 
be required to make hearing aid-compatible handsets available for in-
store testing. This rule change would ensure that consumers have the 
information they need to choose a handset that will operate correctly 
with their hearing aid or cochlear implant.
    30. Additionally, the FNPRM seeks comment on whether the Commission 
should treat handsets that allow consumers to reduce the maximum 
transmit power only for operations over the GSM air interface in the 
1900 MHz band by up to 2.5 decibels, except for calls to 911, and that 
meet the criteria for an M3 rating after such power reduction, as 
hearing aid-compatible for all purposes. This rule change would help 
ensure the near-term availability of desirable handsets over the legacy 
GSM air interface while still affording substantial access to people 
with hearing loss. The Commission also proposes, for all such handsets, 
that the manufacturer or service provider would have to disclose that 
activation of a special mode is required to meet the hearing aid 
compatibility standard, how to activate the special mode, and the 
possibility of a loss of coverage if the special mode is activated. 
This rule change would ensure that consumers have the information they 
need to choose and operate a handset that will best function with their 
hearing aid or cochlear implant.
2. Legal Basis
    31. The potential actions about which comment is sought in this 
FNPRM would be authorized pursuant to the authority contained in 
Sections 4(i), 303(r), and 710 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303(r), and 610.
3. Description and Estimate of the Number of Small Entities To Which 
the Proposed Rules Would Apply
    32. 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 proposed rules.\6\ The RFA generally defines the term 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' \7\ In addition, the term ``small business'' has the 
same meaning as the term ``small business concern'' under the Small 
Business Act.\8\ A ``small business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
Small Business Administration (``SBA'').\9\ To assist the Commission in 
analyzing the total number of potentially affected small entities, the 
Commission requests commenters to estimate the number of small entities 
that may be affected by any rule changes that might result from this 
FNPRM.
---------------------------------------------------------------------------

    \6\ 5 U.S.C. 604(a)(3).
    \7\ 5 U.S.C. 601(6).
    \8\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small business concern'' in the Small Business Act, 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \9\ 15 U.S.C. 632.
---------------------------------------------------------------------------

    33. Small Businesses. Nationwide, there are a total of 
approximately 29.6 million small businesses, according to the SBA.\10\
---------------------------------------------------------------------------

    \10\ See SBA, Office of Advocacy, ``Frequently Asked 
Questions,'' http://web.sba.gov/faqs (last visited Jan. 2009).
---------------------------------------------------------------------------

    34. Cellular Licensees. The SBA has developed a small business size 
standard for small businesses in the

[[Page 54552]]

category ``Wireless Telecommunications Carriers (except satellite).'' 
\11\ Under that SBA category, a business is small if it has 1,500 or 
fewer employees.\12\ The census category of ``Cellular and Other 
Wireless Telecommunications'' is no longer used and has been superseded 
by the larger category ``Wireless Telecommunications Carriers (except 
satellite)''. However, since currently available data was gathered when 
``Cellular and Other Wireless Telecommunications'' was the relevant 
category, earlier Census Bureau data collected under the category of 
``Cellular and Other Wireless Telecommunications'' will be used here. 
Census Bureau data for 2002 show that there were 1,397 firms in this 
category that operated for the entire year.\13\ Of this total, 1,378 
firms had employment of 999 or fewer employees, and 19 firms had 
employment of 1,000 employees or more.\14\ Thus, under this category 
and size standard, the majority of firms can be considered small.
---------------------------------------------------------------------------

    \11\ 13 CFR 121.201, North American Industry Classification 
System (NAICS) code 517210.
    \12\ Id.
    \13\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 5, NAICS code 517212 (issued Nov. 2005).
    \14\ Id. The census data do not provide a more precise estimate 
of the number of firms that have employment of 1,500 or fewer 
employees; the largest category provided is for firms with ``1000 
employees or more.''
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    35. 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 has created a small business 
size standard for Blocks C and F as an entity that has average gross 
revenues of less than $40 million in the three previous calendar 
years.\15\ For Block F, an additional small business size standard for 
``very small business'' was added and is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years.\16\ These 
small business size standards, in the context of broadband PCS 
auctions, have been approved by the SBA.\17\ 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 C Block 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.\18\ On March 23, 
1999, the Commission reauctioned 155 C, D, E, and F Block licenses; 
there were 113 small business winning bidders.\19\
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    \15\ See Amendment of Parts 20 and 24 of the Commission's 
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile 
Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824, 7850-
7852 paras. 57-60 (1996); see also 47 CFR 24.720(b).
    \16\ See Amendment of Parts 20 and 24 of the Commission's 
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile 
Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824, 7852 
para. 60.
    \17\ See Letter from Aida Alvarez, Administrator, Small Business 
Administration, to Amy Zoslov, Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, dated December 2, 1998.
    \18\ FCC News, ``Broadband PCS, D, E and F Block Auction 
Closes,'' No. 71744 (rel. Jan. 14, 1997).
    \19\ See ``C, D, E, and F Block Broadband PCS Auction Closes,'' 
Public Notice, 14 FCC Rcd 6688 (WTB 1999).
---------------------------------------------------------------------------

    36. On January 26, 2001, the Commission completed the auction of 
422 C and F Block PCS licenses in Auction 35.\20\ 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. In 2005, the Commission completed 
an auction of 188 C block licenses and 21 F block licenses in Auction 
58. There were 24 winning bidders for 217 licenses.\21\ Of the 24 
winning bidders, 16 claimed small business status and won 156 licenses. 
In 2007, the Commission completed an auction of 33 licenses in the A, 
C, and F Blocks in Auction 71.\22\ Of the 14 winning bidders, six were 
designated entities.\23\ In 2008, the Commission completed an auction 
of 20 Broadband PCS licenses in the C, D, E and F Block licenses in 
Auction 78.\24\
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    \20\ See ``C and F Block Broadband PCS Auction Closes; Winning 
Bidders Announced,'' Public Notice, 16 FCC Rcd 2339 (2001).
    \21\ See ``Broadband PCS Spectrum Auction Closes; Winning 
Bidders Announced for Auction No. 58,'' Public Notice, 20 FCC Rcd 
3703 (2005).
    \22\ See ``Auction of Broadband PCS Spectrum License Closes; 
Winning Bidders Announced for Auction No. 71,'' Public Notice, 22 
FCC Rcd 9247 (2007).
    \23\ Id.
    \24\ See Auction of AWS-1 and Broadband PCS Licenses Rescheduled 
For August 13, 2008, Notice of Filing Requirements, Minimum Opening 
Bids, Upfront Payments and Other Procedures For Auction 78, Public 
Notice, 23 FCC Rcd 7496 (2008) (AWS-1 and Broadband PCS Procedures 
Public Notice).
---------------------------------------------------------------------------

    37. Specialized Mobile Radio. The Commission awards ``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.\25\ The Commission awards ``very small entity'' bidding 
credits to firms that had revenues of no more than $3 million in each 
of the three previous calendar years.\26\ The SBA has approved these 
small business size standards for the 900 MHz Service.\27\ The 
Commission has held auctions for geographic area licenses in the 800 
MHz and 900 MHz bands. The 900 MHz SMR auction began on December 5, 
1995, and closed on April 15, 1996. Sixty bidders claiming that they 
qualified as small businesses under the $15 million size standard won 
263 geographic area licenses in the 900 MHz SMR band. The 800 MHz SMR 
auction for the upper 200 channels began on October 28, 1997, and was 
completed on December 8, 1997. Ten bidders claiming that they qualified 
as small businesses under the $15 million size standard won 38 
geographic area licenses for the upper 200 channels in the 800 MHz SMR 
band.\28\ A second auction for the 800 MHz band was held on January 10, 
2002 and closed on January 17, 2002 and included 23 licenses. One 
bidder claiming small business status won five licenses.\29\
---------------------------------------------------------------------------

    \25\ 47 CFR 90.814(b)(1).
    \26\ Id.
    \27\ See Letter from Aida Alvarez, Administrator, Small Business 
Administration, to Thomas Sugrue, Chief, Wireless Telecommunications 
Bureau, Federal Communications Commission, dated August 10, 1999.
    \28\ See ``Correction to Public Notice DA 96-586 `FCC Announces 
Winning Bidders in the Auction of 1020 Licenses to Provide 900 MHz 
SMR in Major Trading Areas,' '' Public Notice, 18 FCC Rcd 18367 (WTB 
1996).
    \29\ See ``Multi-Radio Service Auction Closes,'' Public Notice, 
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

    38. The auction of the 1,053 800 MHz SMR geographic area licenses 
for the General Category channels began on August 16, 2000, and was 
completed on September 1, 2000. Eleven bidders that won 108 geographic 
area licenses for the General Category channels in the 800 MHz SMR band 
qualified as small businesses under the $15 million size standard. In 
an auction completed on December 5, 2000, a total of 2,800 Economic 
Area licenses in the lower 80 channels of the 800 MHz SMR service were 
sold. Of the 22 winning bidders, 19 claimed ``small business'' status 
and won 129 licenses. Thus, combining all three auctions, 40 winning 
bidders for geographic licenses in the 800 MHz SMR band claimed status 
as small business.
    39. In addition, there are numerous incumbent site-by-site SMR 
licensees and licensees with extended

[[Page 54553]]

implementation authorizations in the 800 and 900 MHz bands. The 
Commission does not know how many firms provide 800 MHz or 900 MHz 
geographic area SMR services 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. In 
addition, the Commission does not know how many of these firms have 
1,500 or fewer employees. The Commission assumes, for purposes of this 
analysis, that all of the remaining existing extended implementation 
authorizations are held by small entities.
    40. Advanced Wireless Services. In 2008, the Commission conducted 
the auction of Advanced Wireless Services (``AWS'') licenses.\30\ This 
auction, which was designated as Auction 78, offered 35 licenses in the 
AWS 1710-1755 MHz and 2110-2155 MHz bands (``AWS-1''). The AWS-1 
licenses were licenses for which there were no winning bids in Auction 
66. That same year, the Commission completed Auction 78. A bidder with 
attributed average annual gross revenues that exceeded $15 million and 
did not exceed $40 million for the preceding three years (``small 
business'') received a 15 percent discount on its winning bid. A bidder 
with attributed average annual gross revenues that did not exceed $15 
million for the preceding three years (``very small business'') 
received a 25 percent discount on its winning bid. A bidder that had a 
combined total assets of less than $500 million and combined gross 
revenues of less than $125 million in each of the last two years 
qualified for entrepreneur status.\31\ Four winning bidders that 
identified themselves as very small businesses won 17 licenses.\32\ 
Three of the winning bidders that identified themselves as small 
business won five licenses. Additionally, one other winning bidder that 
qualified for entrepreneur status won 2 licenses.
---------------------------------------------------------------------------

    \30\ See AWS-1 and Broadband PCS Procedures Public Notice, 23 
FCC Rcd 7496. Auction 78 also included an auction of Broadband PCS 
licenses.
    \31\ Id. at 7521-22.
    \32\ See ``Auction of AWS-1 and Broadband PCS Licenses Closes, 
Winning Bidders Announced for Auction 78, Down Payments Due 
September 9, 2008, FCC Forms 601 and 602 Due September 9, 2008, 
Final Payments Due September 23, 2008, Ten-Day Petition to Deny 
Period'', Public Notice, 23 FCC Rcd 12749 (2008).
---------------------------------------------------------------------------

    41. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service.\33\ A significant subset of the Rural Radiotelephone Service 
is the Basic Exchange Telephone Radio System (``BETRS'').\34\ In the 
present context, the Commission will use the SBA small business size 
standard applicable to Wireless Telecommunication Carriers (except 
satellite), i.e., an entity employing no more than 1,500 persons.\35\ 
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.
---------------------------------------------------------------------------

    \33\ The service is defined in Sec.  22.99 of the Commission's 
rules, 47 CFR 22.99.
    \34\ BETRS is defined in Sec. Sec.  22.757 and 22.759 of the 
Commission's rules, 47 CFR 22.757 and 22.759.
    \35\ 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

    42. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses in the 2305-2320 MHz and 2345-2360 MHz bands. The Commission 
defined ``small business'' for the wireless communications services 
(WCS) auction as an entity with average gross revenues of $40 million 
or less for each of the three preceding years, and a ``very small 
business'' as an entity with average gross revenues of $15 million or 
less for each of the three preceding years.\36\ The SBA has approved 
these definitions.\37\ The Commission auctioned geographic area 
licenses in the WCS service. In the auction, which commenced on April 
15, 1997, and closed on April 25, 1997, there were seven bidders that 
won 31 licenses that qualified as very small business entities, and one 
bidder that won one license that qualified as a small business entity.
---------------------------------------------------------------------------

    \36\ Amendment of the Commission's Rules to Establish Part 27, 
the Wireless Communications Service (WCS), Report and Order, 12 FCC 
Rcd 10785, 10879 para. 194 (1997).
    \37\ See Letter from Aida Alvarez, Administrator, Small Business 
Administration, to Amy Zoslov, Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, dated December 2, 1998.
---------------------------------------------------------------------------

    43. 700 MHz Guard Bands Licenses. In the 700 MHz Guard Bands Order, 
the Commission adopted size standards for ``small businesses'' and 
``very small businesses'' for purposes of determining their eligibility 
for special provisions such as bidding credits and installment 
payments.\38\ A small business in this service is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues not exceeding $40 million for the preceding three 
years.\39\ 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 $15 million for the preceding 
three years.\40\ SBA approval of these definitions is not required.\41\ 
An auction of 52 Major Economic Area (MEA) licenses for each of two 
spectrum blocks commenced on September 6, 2000, and closed on September 
21, 2000.\42\ 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 remaining 700 MHz Guard Bands 
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.\43\ Subsequently, in the 700 MHz Second Report and Order, the 
Commission reorganized the licenses pursuant to an agreement among most 
of the licensees, resulting in a spectral relocation of the first set 
of paired spectrum block licenses, and an elimination of the second set 
of paired spectrum block licenses (many of which were already vacant, 
reclaimed by the Commission from Nextel).\44\ A single licensee that 
did not participate in the agreement was grandfathered in the initial 
spectral location for its two licenses in the second set of paired 
spectrum blocks.\45\ Accordingly, at this time there are 54 licenses in 
the 700 MHz Guard Bands.
---------------------------------------------------------------------------

    \38\ See Service Rules for the 746-764 MHz Bands, and Revisions 
to Part 27 of the Commission's Rules, Second Report and Order, 15 
FCC Rcd 5299 (2000).
    \39\ Id. at 5343 para. 108.
    \40\ Id.
    \41\ Id. at 5343 para. 108 n.246 (for the 746-764 MHz and 776-
704 MHz bands, the Commission is exempt from 15 U.S.C. 632, which 
requires Federal agencies to obtain Small Business Administration 
approval before adopting small business size standards).
    \42\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders 
Announced,'' Public Notice, 15 FCC Rcd 18026 (WTB 2000).
    \43\ See ``700 MHz Guard Bands Auctions Closes: Winning Bidders 
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
    \44\ See In the Matter of Service Rules for the 698-746, 747-762 
and 777-792 MHz Bands, WT Docket 06-150, Second Report and Order, 22 
FCC Rcd 15289, 15339-15344 paras. 118-134 (2007) (700 MHz Second 
Report and Order).
    \45\ Id.
---------------------------------------------------------------------------

    44. 700 MHz Band Commercial Licenses. There is 80 megahertz of non-
Guard Band spectrum in the 700 MHz Band that is designated for 
commercial use: 698-757, 758-763, 776-787, and 788-793 MHz Bands. With 
one exception, the Commission adopted criteria for defining two groups 
of small businesses for purposes of determining their eligibility for 
bidding credits at auction. These two categories are: (1) ``Small 
business,'' which is defined as an entity with attributed average 
annual

[[Page 54554]]

gross revenues that exceed $15 million and do not exceed $40 million 
for the preceding three years; and (2) ``very small business,'' which 
is defined as an entity with attributed average annual gross revenues 
that do not exceed $15 million for the preceding three years.\46\ In 
Block C of the Lower 700 MHz Band (710-716 MHz and 740-746 MHz), which 
was licensed on the basis of 734 Cellular Market Areas, the Commission 
adopted a third criterion for determining eligibility for bidding 
credits: an ``entrepreneur,'' which is defined as 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.\47\ The SBA has approved these small size standards.\48\
---------------------------------------------------------------------------

    \46\ See Auction of 700 MHz Band Licenses Scheduled for Jan. 24, 
2008, AU Docket No. 07-157, Notice and Filing Requirements, Minimum 
Opening Bids, Reserve Prices, Upfront Payments, and Other Procedures 
for Auctions 73 and 76, DA 07-4171 at para. 70 (WTB rel. Oct. 5, 
2007); Reallocation and Service Rules for the 698-746 MHz Spectrum 
Band (Television Channels 52-59), Report and Order, 17 FCC Rcd 1022, 
1087-88 (2002).
    \47\ Id. at 1088.
    \48\ See Letter from Aida Alvarez, Administrator, Small Business 
Administration, to Thomas Sugrue, Chief, Wireless Telecommunications 
Bureau, Federal Communications Commission, dated August 10, 1999.
---------------------------------------------------------------------------

    45. An auction of 740 licenses for Blocks C (710-716 MHz and 740-
746 MHz) and D (716-722 MHz) of the Lower 700 MHz Band commenced on 
August 27, 2002, and closed on September 18, 2002. Of the 740 licenses 
available for auction, 484 licenses were sold to 102 winning bidders. 
Seventy-two of the winning bidders claimed small business, very small 
business, or entrepreneur status and won a total of 329 licenses.\49\ A 
second auction commenced on May 28, 2003, and closed on June 13, 2003, 
and included 256 licenses: Five EAG licenses and 251 CMA licenses.\50\ 
Seventeen winning bidders claimed small or very small business status 
and won 60 licenses, and nine winning bidders claimed entrepreneur 
status and won 154 licenses.\51\
---------------------------------------------------------------------------

    \49\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
17 FCC Rcd 17272 (WTB 2002).
    \50\ See ``Lower 700 MHz Band Auction Closes,'' Public Notice, 
18 FCC Rcd 11873 (WTB 2003).
    \51\ Id.
---------------------------------------------------------------------------

    46. The remaining 62 megahertz of commercial spectrum was auctioned 
on January 24 through March 18, 2008. As explained above, bidding 
credits for all of these licenses were available to ``small 
businesses'' and ``very small businesses.'' Auction 73 concluded with 
1090 provisionally winning bids covering 1091 licenses and totaling 
$19,592,420,000. The provisionally winning bids for the A, B, C, and E 
Block licenses exceeded the aggregate reserve prices for those blocks. 
The provisionally winning bid for the D Block license, however, did not 
meet the applicable reserve price and thus did not become a winning 
bid. Approximately 55 small businesses had winning bids.\52\ Currently, 
the 10 remaining megahertz associated with the D block have not yet 
been assigned.\53\
---------------------------------------------------------------------------

    \52\ See ``Auction of 700 MHz Band Licenses Closes,'' Public 
Notice, 23 FCC Rcd 4572 (WTB 2008).
    \53\ See fcc.gov website at http://wireless.fcc.gov/auctions/default.htm?job=auction_summary&id=73.
---------------------------------------------------------------------------

    47. 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.\54\ There is presently one licensee in this service. 
The Commission does not have information whether that licensee would 
qualify as small under the SBA's small business size standard for 
Wireless Telecommunications Carriers (except Satellite) services.\55\ 
Under the SBA small business size standard, a business is small if it 
has 1,500 or fewer employees.\56\
---------------------------------------------------------------------------

    \54\ This service is governed by subpart I of part 22 of the 
Commission's rules. See 47 CFR 22.1001-22.1037.
    \55\ 13 CFR 121.201, NAICS code 517210.
    \56\ Id.
---------------------------------------------------------------------------

    48. Broadband Radio Service and Educational Broadband Service. The 
Broadband Radio Service (``BRS''), formerly known as the Multipoint 
Distribution Service (``MDS''),\57\ and the Educational Broadband 
Service (``EBS''), formerly known as the Instructional Television Fixed 
Service (``ITFS''),\58\ use 2 GHz band frequencies to transmit video 
programming and provide broadband services to residential 
subscribers.\59\ These services, collectively referred to as ``wireless 
cable,'' 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.\60\ 
The Commission estimates that the number of wireless cable subscribers 
is approximately 100,000, as of March 2005. 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 and ITFS.\61\ 
Note that the census category of ``Cable and Other Program 
Distribution'' is no longer used and has been superseded by the larger 
category ``Wireless Telecommunications Carriers (except satellite). 
This category provides that a small business is a wireless company 
employing no more than 1,500 persons.\62\ However, since currently 
available data was gathered when ``Cable and Other Program 
Distribution'' was the relevant category, earlier Census Bureau data 
collected under the category of ``Cable and Other Program 
Distribution'' will be used here. Other standards also apply, as 
described.
---------------------------------------------------------------------------

    \57\ See 47 CFR part 21, subpart K; Amendment of Parts 1, 21, 
73, 74 and 101 of the Commission's Rules to Facilitate the Provision 
of Fixed and Mobile Broadband Access, Educational and Other Advanced 
Services in the 2150-2162 and 2500-2690 MHz Bands; Part 1 of the 
Commission's Rules--Further Competitive Bidding Procedures; 
Amendment of Parts 21 and 74 to Enable Multipoint Distribution 
Service and the Instructional Television Fixed Service Amendment of 
Parts 21 and 74 to Engage in Fixed Two-Way Transmissions; Amendment 
of Parts 21 and 74 of the Commission's Rules With Regard to 
Licensing in the Multipoint Distribution Service and in the 
Instructional Television Fixed Service for the Gulf of Mexico, 19 
FCC Rcd 14165 (2004).
    \58\ See 47 CFR part 74, subpart I; MDS/ITFS Order, 19 FCC Rcd 
14165 (2004).
    \59\ See Annual Assessment of the Status of Competition in the 
Market for the Delivery of Video Programming, Eleventh Annual 
Report, 20 FCC Rcd 2507, 2565 para. 131 (2006).
    \60\ Id.
    \61\ 13 CFR 121.201, NAICS code 515210.
    \62\ 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

    49. The Commission has defined small MDS (now BRS) entities in the 
context of Commission license auctions. In the 1996 MDS auction,\63\ 
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.\64\ This definition of a small entity in the context of 
MDS auctions has been approved by the SBA.\65\ 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 hundreds of MDS licensees and wireless cable 
operators that did not receive their licenses as a result of the MDS 
auction

[[Page 54555]]

and that fall under the former SBA small business size standard for 
Cable and Other Program Distribution.\66\ Information available to us 
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 of these small entity MDS (or BRS) providers, as 
defined by the SBA and the Commission's auction rules.
---------------------------------------------------------------------------

    \63\ MDS Auction No. 6 began on November 13, 1995, and closed on 
March 28, 1996. (67 bidders won 493 licenses.)
    \64\ 47 CFR 21.961(b)(1).
    \65\ See Amendment of Parts 21 and 74 of the Commission's Rules 
with Regard to Filing Procedures in the Multipoint Distribution 
Service and in the Instructional Television Fixed Service and 
Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, Docket No. 94-131, Report and Order, 10 FCC Rcd 
9589 (1995).
    \66\ Hundreds of stations were licensed to incumbent MDS 
licensees prior to implementation of Section 309(j) of the 
Communications Act of 1934, 47 U.S.C. 309(j). For these pre-auction 
licenses, the applicable standard is SBA's small business size 
standard for ``Cable and Other Program Distribution'' (annual 
receipts of $13.5 million or less). See 13 CFR 121.201, NAICS code 
515210.
---------------------------------------------------------------------------

    50. 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).\67\ The Commission estimates 
that there are currently 2,452 EBS licenses, held by 1,524 EBS 
licensees, and all but 100 of the licenses are held by educational 
institutions. Thus, the Commission estimates that at least 1,424 EBS 
licensees are small entities.
---------------------------------------------------------------------------

    \67\ In addition, the term ``small entity'' under SBREFA applies 
to small organizations (nonprofits) and to small governmental 
jurisdictions (cities, counties, towns, townships, villages, school 
districts, and special districts with populations of less than 
50,000). 5 U.S.C. 601(4)-(6). The Commission does not collect annual 
revenue data on EBS licensees.
---------------------------------------------------------------------------

    51. Government Transfer Bands. The Commission adopted small 
business size standards for the unpaired 1390-1392 MHz, 1670-1675 MHz, 
and the paired 1392-1395 MHz and 1432-1435 MHz bands.\68\ Specifically, 
with respect to these bands, the Commission defined an entity with 
average annual gross revenues for the three preceding years not 
exceeding $40 million as a ``small business,'' and an entity with 
average annual gross revenues for the three preceding years not 
exceeding $15 million as a ``very small business.'' \69\ SBA has 
approved these small business size standards for the aforementioned 
bands.\70\ Correspondingly, the Commission adopted a bidding credit of 
15 percent for ``small businesses'' and a bidding credit of 25 percent 
for ``very small businesses.'' \71\ This bidding credit structure was 
found to have been consistent with the Commission's schedule of bidding 
credits, which may be found at Section 1.2110(f)(2) of the Commission's 
rules.\72\ The Commission found that these two definitions will provide 
a variety of businesses seeking to provide a variety of services with 
opportunities to participate in the auction of licenses for this 
spectrum and will afford such licensees, who may have varying capital 
costs, substantial flexibility for the provision of services.\73\ The 
Commission noted that it had long recognized that bidding preferences 
for qualifying bidders provide such bidders with an opportunity to 
compete successfully against large, well-financed entities.\74\ The 
Commission also noted that it had found that the use of tiered or 
graduated small business definitions is useful in furthering its 
mandate under Section 309(j) to promote opportunities for and 
disseminate licenses to a wide variety of applicants.\75\ An auction 
for one license in the 1670-1674 MHz band commenced on April 30, 2003 
and closed the same day. One license was awarded. The winning bidder 
was not a small entity.
---------------------------------------------------------------------------

    \68\ See Amendments to Parts 1, 2, 27 and 90 of the Commission's 
Rules to License Services in the 216-220 MHz, 1390-1395 MHz, 1427-
1429 MHz, 1429-1432 MHz, 1432-1435 MHz, 1670-1675 MHz, and 2385-2390 
MHz Government Transfer Bands, 17 FCC Rcd 9980 (2002) (Government 
Transfer Bands Service Rules Report and Order).
    \69\ See Reallocation of the 216-220 MHz, 1390-1395 MHz, 1427-
1429 MHz, 1429-1432 MHz, 1432-1435 MHz, 1670-1675 MHz, and 2385-2390 
MHz Government Transfer Bands, WT Docket No. 02-8, Notice of 
Proposed Rulemaking, 17 FCC Rcd 2500, 2550-51 paras. 144-146 (2002). 
To be consistent with the size standard of ``very small business'' 
proposed for the 1427-1432 MHz band for those entities with average 
gross revenues for the three preceding years not exceeding $3 
million, the Service Rules Notice proposed to use the terms 
``entrepreneur'' and ``small business'' to define entities with 
average gross revenues for the three preceding years not exceeding 
$40 million and $15 million, respectively. Because the Commission is 
not adopting small business size standards for the 1427-1432 MHz 
band, it instead uses the terms ``small business'' and ``very small 
business'' to define entities with average gross revenues for the 
three preceding years not exceeding $40 million and $15 million, 
respectively.
    \70\ See Letter from Hector V. Barreto, Administrator, Small 
Business Administration, to Margaret W. Wiener, Chief, Auctions and 
Industry Analysis Division, Wireless Telecommunications Bureau, 
Federal Communications Commission, dated Jan. 18, 2002.
    \71\ Such bidding credits are codified for the unpaired 1390-
1392 MHz, paired 1392-1395 MHz, and the paired 1432-1435 MHz bands 
in 47 CFR 27.807. Such bidding credits are codified for the unpaired 
1670-1675 MHz band in 47 CFR 27.906.
    \72\ In the Part 1 Third Report and Order, the Commission 
adopted a standard schedule of bidding credits, the levels of which 
were developed based on its auction experience. Part 1 Third Report 
and Order, 13 FCC Rcd at 403-04 para. 47; see also 47 CFR 
1.2110(f)(2).
    \73\ See Service Rules Notice, 17 FCC Rcd at 2550-51 para. 145.
    \74\ See, e.g., Revision of Part 22 and Part 90 of the 
Commission's Rules to Facilitate Future Development of Paging 
Systems; Implementation of Section 309(j) of the Communications 
Act--Competitive Bidding, WT Docket No. 96-18, PR Docket No. 93-253, 
Memorandum Opinion and Order on Reconsideration and Third Report and 
Order, 14 FCC Rcd 10030, 10091 para. 112 (1999).
    \75\ 47 U.S.C. 309(j)(3)(B), (4)(C)-(D). The Commission will 
also not adopt special preferences for entities owned by minorities 
or women, and rural telephone companies. The Commission did not 
receive any comments on this issue, and it does not have an adequate 
record to support such special provisions under the current 
standards of judicial review. See Adarand Constructors v. 
Pe[ntilde]a, 515 U.S. 200 (1995) (requiring a strict scrutiny 
standard of review for government mandated race-conscious measures); 
United States v. Virginia, 518 U.S. 515 (1996) (applying an 
intermediate standard of review to a state program based on gender 
classification).
---------------------------------------------------------------------------

    52. Mobile Satellite Service Carriers. Neither the Commission nor 
the U.S. Small Business Administration has developed a small business 
size standard specifically for mobile satellite service licensees. The 
appropriate size standard is therefore the SBA standard for Satellite 
Telecommunications. The category of Satellite Telecommunications 
``comprises establishments primarily engaged in providing 
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.'' \76\ The category has a small 
business size standard of $15 million or less in average annual 
receipts, under SBA rules.\77\ For this category, Census Bureau data 
for 2002 show that there were a total of 371 firms that operated for 
the entire year.\78\ Of this total, 307 firms had annual receipts of 
under $10 million, and 26 firms had receipts of $10 million to 
$24,999,999.\79\ Consequently, the Commission estimates that the 
majority of Satellite Telecommunications firms are small entities that 
might be affected by its action.
---------------------------------------------------------------------------

    \76\ U.S. Census Bureau, 2007 NAICS Definitions, ``517410 
Satellite Telecommunications''; http://www.census.gov/naics/2007/def/ND517410.HTM.
    \77\ 13 CFR 121.201, NAICS code 517410.
    \78\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 517410 (issued Nov. 2005).
    \79\ Id. An additional 38 firms had annual receipts of $25 
million or more.
---------------------------------------------------------------------------

    53. Internet Service Providers. In the Notice, the Commission seeks 
comment on whether to extend hearing aid compatibility requirements to 
entities offering access to Voice over Internet Protocol (VoIP) 
applications over Wi-Fi \80\ and other wireless technologies that may 
fall outside the definition of CMRS and/or the criteria in Section 
20.19(a), such as those operating on networks that do not employ ``an 
in-network switching facility that enables

[[Page 54556]]

the provider to reuse frequencies and accomplish seamless hand-offs.'' 
Such applications may be provided, for example, by Internet Service 
Providers (ISPs). ISPs are Internet Publishing and Broadcasting and Web 
Search Portals \81\ that 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. To gauge small business prevalence for these Internet 
Publishing and Broadcasting and Web Search Portals, the Commission 
must, however, use current census data that are based on the previous 
category of Internet Service Providers and its associated size 
standard. That standard was: All such firms having $23.5 million or 
less in annual receipts. Accordingly, to use data available to us under 
the old standard and Census Bureau data for 2002, there were 2,529 
firms in this category that operated for the entire year.\82\ 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 its action.
---------------------------------------------------------------------------

    \80\ Wi-Fi (Wireless Fidelity) is a wireless technology that is 
based on the Institute of Electrical and Electronics Engineers 
802.11 standards.
    \81\ U.S. Census Bureau, ``Internet Publishing and Broadcasting 
and Web Search Portals,'' NAICS code 519130.
    \82\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 518111 (issued Nov. 2005).
---------------------------------------------------------------------------

    54. All Other Information Services. ``This industry comprises 
establishments primarily engaged in providing other information 
services (except new syndicates and libraries and archives).'' \83\ 
VoIP services over wireless technologies 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.\84\ According to Census Bureau data for 1997, there were 195 
firms in this category that operated for the entire year.\85\ Of these, 
172 had annual receipts of under $5 million, and an additional nine 
firms had receipts of between $5 million and $9,999,999. Consequently, 
the Commission estimates that the majority of these firms are small 
entities that may be affected by its action.
---------------------------------------------------------------------------

    \83\ U.S. Census Bureau, ``2002 NAICS Definitions: 519190 All 
Other Information Services'' (Feb. 2004) http://www.census.gov. The 
Commission notes that the Commission has not reached conclusions as 
to whether, or under what conditions, VoIP services constitute 
communications or information services under the Communications Act, 
and our identification of this group of small entities as providers 
of ``information services'' under the Census Bureau definition is 
not intended to indicate any conclusions in this regard.
    \84\ 13 CFR 121.201, NAICS code 519190.
    \85\ U.S. Census Bureau, 1997 Economic Census, Subject Series: 
Information, ``Establishment and Firm Size (Including Legal Form of 
Organization),'' Table 4, NAICS code 514199 (issued Oct. 2000). This 
category was created for the 2002 Economic Census by taking a 
portion of the superseded 1997 category, ``All Other Information 
Services,'' NAICS code 514199. The data cited in the text above are 
derived from the superseded category.
---------------------------------------------------------------------------

    55. Part 15 Handset Manufacturers. Manufacturers of unlicensed 
wireless handsets may also become subject to requirements in this 
proceeding for their handsets used to provide VoIP applications. The 
Commission has not developed a definition of small entities applicable 
to unlicensed communications handset manufacturers. Therefore, the 
Commission will utilize the SBA definition applicable to Radio and 
Television Broadcasting and Wireless Communications Equipment 
Manufacturing. The Census Bureau defines this category as follows: 
``This industry comprises establishments primarily engaged in 
manufacturing radio and television broadcast and wireless 
communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment.'' \86\ The SBA has developed a small business 
size standard for Radio and Television Broadcasting and Wireless 
Communications Equipment Manufacturing, which is: All such firms having 
750 or fewer employees.\87\ According to Census Bureau data for 2002, 
there were a total of 1,041 establishments in this category that 
operated for the entire year.\88\ Of this total, 1,010 had employment 
of less than 500, and an additional 13 had employment of 500 to 
999.\89\ Thus, under this size standard, the majority of firms can be 
considered small.
---------------------------------------------------------------------------

    \86\ U.S. Census Bureau, 2002 NAICS Definitions, ``334220 Radio 
and Television Broadcasting and Wireless Communications Equipment 
Manufacturing''; http://www.census.gov/epcd/naics02/def/NDEF334.HTM#N3342.
    \87\ 13 CFR 121.201, NAICS code 334220.
    \88\ U.S. Census Bureau, American FactFinder, 2002 Economic 
Census, Industry Series, Industry Statistics by Employment Size, 
NAICS code 334220 (rel. May 26, 2005); http://factfinder.census.gov. 
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 
numbers given may reflect inflated numbers of businesses in this 
category, including the numbers of small businesses. In this 
category, the Census breaks out data for firms or companies only to 
give the total number of such entities for 2002, which was 929.
    \89\ Id. An additional 18 establishments had employment of 1,000 
or more.
---------------------------------------------------------------------------

    56. Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. The Census Bureau defines this category as 
follows: ``This industry comprises establishments primarily engaged in 
manufacturing radio and television broadcast and wireless 
communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment.'' The SBA has developed a small business size 
standard for firms in this category, which is: All such firms having 
750 or fewer employees.\90\ According to Census Bureau data for 2002, 
there were a total of 1,041 establishments in this category that 
operated for the entire year. Of this total, 1,010 had employment of 
less than 500, and an additional 13 had employment of 500 to 999. Thus, 
under this size standard, the majority of firms can be considered 
small.
---------------------------------------------------------------------------

    \90\ 13 CFR 121.201, NAICS code 334220.
---------------------------------------------------------------------------

    57. Radio, Television, and Other Electronics Stores. The Census 
Bureau defines this economic census category as follows: ``This U.S. 
industry comprises: (1) Establishments known as consumer electronics 
stores primarily engaged in retailing a general line of new consumer-
type electronic products; (2) establishments specializing in retailing 
a single line of consumer-type electronic products (except computers); 
or (3) establishments primarily engaged in retailing these new 
electronic products in combination with repair services.'' \91\ The SBA 
has developed a small business size standard for Radio, Television, and 
Other Electronics Stores, which is: All such firms having $9 million or 
less in annual receipts.\92\ According to Census Bureau data for 2002, 
there were 10,380 firms in this category that operated for the entire

[[Page 54557]]

year.\93\ Of this total, 10,080 firms had annual sales of under $5 
million, and 177 firms had sales of $5 million or more but less than 
$10 million.\94\ Thus, the majority of firms in this category can be 
considered small.
---------------------------------------------------------------------------

    \91\ U.S. Census Bureau, 2002 NAICS Definitions, ``443112 Radio, 
Television, and Other Electronics Stores''; http://www.census.gov/epcd/naics02/def/NDEF443.HTM.
    \92\ 13 CFR 121.201, NAICS code 443112.
    \93\ U.S. Census Bureau, 2002 Economic Census, Industry Series: 
Retail Trade, Table 4, Sales Size of Firms for the United States: 
2002, NAICS code 443112 (issued Nov. 2005).
    \94\ Id. An additional 123 firms had annual sales of $10 million 
or more. As a measure of small business prevalence, the data on 
annual sales are roughly equivalent to what one would expect from 
data on annual receipts.
---------------------------------------------------------------------------

4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities
    58. The Commission proposes to extend broadly to providers of 
wireless communications among members of the public or a substantial 
portion of the public using equipment that contains a built-in speaker 
and is typically held to the ear, and to the manufacturers of such 
equipment, the same hearing aid compatibility rules that currently 
apply to a defined category of commercial mobile radio service (CMRS). 
These regulations include: (1) Requirements to deploy a certain number 
or percentage of handset models that meet hearing aid compatibility 
standards, (2) ``refresh'' requirements on manufacturers to meet their 
hearing aid-compatible handset deployment benchmarks in part using new 
models, (3) a requirement that service providers offer hearing aid-
compatible handsets with varying levels of functionality, (4) a 
requirement that service providers make their hearing aid-compatible 
models available to consumers for testing at their owned or operated 
stores, (5) point of sale disclosure requirements, (6) requirements to 
make consumer information available on the manufacturer's or service 
provider's Web site, and (7) annual reporting requirements. There is a 
de minimis exception from all of the requirements except reporting for 
small entities, and for all entities during their first two years of 
offering handsets, that offer two or fewer handset models over an air 
interface. The Commission seeks comment on whether there are any 
classes of handsets for which either it is technically infeasible to 
meet the hearing aid compatibility requirements or satisfying those 
requirements would increase costs to the point where the handsets could 
not be successfully marketed. The Commission also seeks comment on the 
appropriate transition period for applying hearing aid compatibility 
requirements to telephones that are outside the currently covered 
subset of CMRS.
    59. The Commission's rules require that wireless service providers 
make their hearing aid-compatible handset models available for consumer 
testing in each retail store that they own or operate. The Commission 
seeks comment on whether it should extend the in-store testing 
requirement to some or all entities that sell handsets to consumers 
through physical locations. In addition, the Commission seeks comment 
about whether it should adopt a rule providing that a return policy 
allowing a customer with hearing loss to return a handset without 
penalty would qualify as an alternative means of satisfying the in-
store testing requirement.
    60. Under the Commission's rules, handsets must be tested for 
hearing aid compatibility at their maximum output power. The Commission 
seeks comment on whether it should treat as hearing aid-compatible for 
all purposes handsets that allow consumers to reduce the maximum 
transmit power only for operations over the GSM air interface in the 
1900 MHz band by up to 2.5 decibels and that meet the criteria for an 
M3 rating after such power reduction. The Commission proposes that if 
it were to extend the ability to meet hearing aid compatibility 
standards in this manner, it should require the handset to operate at 
full power when calling 911, the manufacturer or service provider would 
have to disclose that activation of a special mode is required to meet 
the hearing aid compatibility standard, and the device manual or 
product insert would have to explain how to activate the special mode 
and the possibility of a loss of coverage. The Commission seeks comment 
on these and any other possible conditions on this rule change.
5. Steps Proposed To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    61. The RFA requires an agency to describe any significant, 
specifically small business alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): ``(1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) exemption from 
coverage of the rule, or any part thereof, for small entities.'' \95\
---------------------------------------------------------------------------

    \95\5 U.S.C. 603(c)(1)-(c)(4).
---------------------------------------------------------------------------

    62. The Commission seeks comment generally on the effect the rule 
changes considered in this FNPRM would have on small entities, on 
whether alternative rules should be adopted for small entities in 
particular, and on what effect such alternative rules would have on 
those entities. The Commission invites comment on ways in which it can 
achieve its goals while minimizing the burden on small wireless service 
providers, equipment manufacturers, and other entities.
    63. More specifically, the Commission seeks comment on whether 
there are any classes of handsets that provide wireless communications 
among members of the public or a substantial portion of the public via 
a built-in speaker where the equipment is typically held to the ear for 
which either it is technologically infeasible to meet hearing aid 
compatibility requirements or satisfying those requirements would 
increase costs to the point where the handsets could not be 
successfully marketed. The Commission seeks comment on whether, for 
reasons of technological infeasibility or prohibitive costs, the 
specific numerical benchmarks set forth in the Commission's rules or 
other rule provisions cannot be applied to any class of handsets. The 
Commission seeks specific evidence as to why particular requirements 
cannot be met and what alternative requirements would be feasible and 
appropriate. The Commission also asks commenters to suggest 
alternatives that may further reduce possible burdens on small entities 
regarding meeting the hearing aid compatibility requirements.
    64. The Commission recognizes that it takes time for handsets with 
new specifications to be designed, produced, and brought to market. The 
Commission therefore seeks comment on the appropriate transition period 
for applying hearing aid compatibility requirements to telephones that 
are outside the subset of CMRS that is currently covered by Section 
20.19(a). In recognition that smaller service providers may encounter 
delays in obtaining new model handsets from manufacturers and vendors, 
the Commission specifically asks whether smaller service providers 
should have a longer transition period than Tier I carriers. The 
Commission also asks commenters to suggest other alternative transition 
periods that could further lessen the burden on small businesses.

[[Page 54558]]

    65. The Commission also seeks comment as to whether the Commission 
should extend the in-store testing requirement to some or all entities 
other than those owned or operated by service providers that sell 
handsets to consumers through physical locations. The Commission 
further seeks comment, if it decides to extend this requirement to some 
but not all retail outlets, on how the scope of the requirement should 
be defined. Among other things, the Commission asks whether the size of 
an entity should be a factor in this definition. The Commission's goal 
is to arrive at a definition that is clear and easy to apply, and at 
the same time closely identifies those retailers for which the benefits 
of the rule outweigh the burdens while reducing the burden on small 
entities. The Commission also seeks comment on alternatives to 
extending the in-store testing requirement, including whether a return 
policy allowing a customer with hearing loss to return a handset 
without penalty should qualify as an alternative means of satisfying 
the requirement. The Commission asks commenters to suggest alternatives 
that may further reduce the impact on small entities.
    66. Additionally, the FNPRM seeks comment on whether the Commission 
should treat handsets that allow consumers to reduce the maximum 
transmit power only for operations over the GSM air interface in the 
1900 MHz band by up to 2.5 decibels and that meet criteria for an M3 
rating after such power reduction as hearing aid-compatible for all 
purposes. This rule change would ease the burden on small entities by 
making it easier to satisfy hearing aid compatibility requirements for 
this class of handsets.
    67. Finally, if the Commission were to extend the ability to meet 
hearing aid compatibility standards by allowing the user to reduce the 
maximum power for GSM operations in the 1900 MHz band, it proposes to 
do so subject to the same conditions that it has imposed in the context 
of the de minimis rule. Thus, the handset would have to operate at full 
power when calling 911, the manufacturer or service provider would have 
to disclose that activation of a special mode is required to meet the 
hearing aid compatibility standard, and the device manual or product 
insert would have to explain how to activate the special mode and the 
possibility of a loss of coverage. This rule change would ensure that 
consumers have the information they need to choose and operate a 
handset that will best function with their hearing aid or cochlear 
implant. The Commission seeks to receive alternative proposals that 
would achieve this goal while further reducing the burdens on small 
business.
    68. For each of the proposals in the FNPRM, the Commission seeks 
discussion, and where relevant, alternative proposals, on the effect 
that each prospective new requirement, or alternative rules, might have 
on small entities. For each proposed rule or alternative, the 
Commission seeks discussion about the burden that the prospective 
regulation would impose on small entities and how the Commission could 
impose such regulations while minimizing the burdens on small entities. 
For each proposed rule, the Commission asks whether there are any 
alternatives the Commission could implement that could achieve the 
Commission's goals while at the same time minimizing the burdens on 
small entities. For the duration of this docketed proceeding, the 
Commission will continue to examine alternatives with the objectives of 
eliminating unnecessary regulations and minimizing any significant 
economic impact on small entities.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    69. None.

B. Initial Paperwork Reduction Act Analysis

    70. The FNPRM does not contain proposed information collection(s) 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. 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).

C. Other Procedural Matters

1. Ex Parte Presentations
    71. The rulemaking shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must contain summaries of the substance 
of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented generally is required. Other requirements 
pertaining to oral and written presentations are set forth in Section 
1.1206(b) of the Commission's rules.
2. Comment Filing Procedures
    72. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415, 1.419, interested parties may file comments on or before 
October 25, 2010, and reply comments on or before November 22, 2010. 
All filings related to this Further Notice of Proposed Rulemaking 
should refer to WT Docket No. 07-250. Comments may be filed using: (1) 
The Commission's Electronic Comment Filing System (ECFS), (2) the 
Federal Government's eRulemaking Portal, or (3) by filing paper copies. 
See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 
24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers 
should follow the instructions provided on the Web site for submitting 
comments.
     ECFS filers must transmit one electronic copy of the 
comments for WT Docket No. 07-250. In completing the transmittal 
screen, filers should include their full name, U.S. Postal Service 
mailing address, and the applicable docket number. Parties may also 
submit an electronic comment by Internet e-mail. To get filing 
instructions, filers should send an e-mail to fcc.gov">ecfs@fcc.gov, and include 
the following words in the body of the message, ``get form.'' A sample 
form and directions will be sent in response.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail (although the 
Commission continues to experience delays in receiving U.S. Postal 
Service mail). All filings must be addressed to the Commission's 
Secretary, Marlene H. Dortch, Office of the Secretary, Federal 
Communications Commission, 445 12th Street, SW., Washington, DC 20554.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th Street, SW., Room TW-A325, Washington, DC 20554. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300

[[Page 54559]]

East Hampton Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington, DC 20554.
    73. Parties should send a copy of their filings to John Borkowski, 
Federal Communications Commission, Room 6404, 445 12th Street, SW., 
Washington, DC 20554, or by e-mail to fcc.gov">John.Borkowski@fcc.gov. Parties 
shall also serve one copy with the Commission's copy contractor, Best 
Copy and Printing, Inc. (BCPI), Portals II, 445 12th Street, SW., Room 
CY-B402, Washington, DC 20554, (202) 488-5300, or via e-mail to 
[email protected].
    74. Documents in WT Docket No. 07-250 will be available for public 
inspection and copying during business hours at the FCC Reference 
Information Center, Portals II, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554. The documents may also be purchased from BCPI, 
telephone (202) 488-5300, facsimile (202) 488-5563, TTY (202) 488-5562, 
e-mail [email protected].
3. Accessible Formats
    75. To request materials in accessible formats for people with 
disabilities (Braille, large print, electronic files, audio format), 
send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental 
Affairs Bureau at 202-418-0530 (voice) or 202-418-0432 (TTY).

IV. Ordering Clauses

    76. Accordingly, It is ordered that, pursuant to the authority of 
sections 4(i), 303(r), and 710 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303(r), and 610, this Further Notice of 
Proposed Rulemaking is hereby adopted.
    77. It is further ordered that pursuant to applicable procedures 
set forth in Sections 1.415 and 1.419 of the Commission's Rules, 47 CFR 
1.415, 1.419, interested parties may file comments on this Further 
Notice of Proposed Rulemaking on or before October 25, 2010, and reply 
comments on or before November 22, 2010.
    78. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this FNPRM, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 20

    Communications common carriers, Communications equipment, 
Incorporation by reference, and Radio.

Federal Communications Commission.
Bulah P. Wheeler,
Deputy Manager.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 20 as follows:

PART 20--COMMERCIAL MOBILE RADIO SERVICES

    1. The authority citation for part 20 continues to read as follows:

    Authority: 47 U.S.C. 154, 160, 201, 251-254, 303, 332, and 710 
unless otherwise noted.


Sec.  20.19  [Amended]

    2. Amend Sec.  20.19 as follows:
    a. Revise paragraph (a)(1);
    b. Redesignate paragraph (a)(3) as (a)(4);
    c. Add new paragraph (a)(3);
    d. Revise newly designated paragraph (a)(4)(iv);
    e. Add paragraph (a)(4)(v);
    f. Revise paragraph (b) introductory text;
    g. Add paragraph (b)(1)(iii);
    h. Revise paragraph (c)(4);
    i. Revise paragraph (d)(4);
    j. Add paragraph (f)(3); and
    k. Add paragraph (l).


Sec.  20.19  Hearing aid-compatible mobile handsets.

    (a) Scope of section; definitions. (1) The hearing aid 
compatibility requirements of this section apply to providers of 
wireless service that can be used for voice communications among 
members of the public or a substantial portion of the public, where 
such service is provided over frequencies in the 800-950 MHz or 1.6-2.5 
GHz bands using any air interface for which technical standards are 
stated in the standard document ``American National Standard Methods of 
Measurement of Compatibility Between Wireless Communication Devices and 
Hearing Aids,'' American National Standards Institute (ANSI) C63.19-
2007 (June 8, 2007).
* * * * *
    (3) The requirements of paragraph (l) of this section apply to all 
entities that sell wireless handsets that are used in delivery of the 
services specified in paragraph (a)(1) of this section to consumers 
through a physical location, whether or not those entities are included 
in paragraph (a)(1) or (a)(2) of this section.
    (4) * * *
    (iv) Service provider refers to a provider of wireless service to 
which the requirements of this section apply.
    (v) Tier I carrier refers to a service provider that offers 
commercial mobile radio service nationwide.
    (b) Hearing aid compatibility; technical standards. A wireless 
handset used only over the frequency bands and air interfaces 
referenced in paragraph (a)(1) of this section is hearing aid-
compatible with regard to radio frequency interference or inductive 
coupling if it meets the applicable technical standard(s) set forth in 
paragraphs (b)(1) and (b)(2) of this section for all frequency bands 
and air interfaces over which it operates, and the handset has been 
certified as compliant with the test requirements for the applicable 
standard pursuant to Sec.  2.1033(d) of this chapter. A wireless 
handset that incorporates an air interface or operates over a frequency 
band for which no technical standards are stated in ANSI C63.19-2007 
(June 8, 2007) is hearing aid-compatible if the handset otherwise 
satisfies the requirements of this paragraph.
    (1) * * *
    (iii) GSM operations at 1900 MHz. Notwithstanding paragraphs 
(b)(1)(i) and (ii) of this section, a wireless handset that operates 
over the GSM air interface in the 1900 MHz frequency band is hearing 
aid-compatible for radio frequency interference if;
    (A) The handset enables the user optionally to reduce the maximum 
power at which the handset will operate by no more than 2.5 decibels, 
except for emergency calls to 911, only for GSM operations in the 1900 
MHz band;
    (B) The handset would meet, at a minimum, the M3 rating associated 
with the technical standard set forth in ANSI C63.19-2007 (June 8, 
2007) if the power as so reduced were the maximum power at which the 
handset could operate; and
    (C) Customers are informed of the power reduction mode as provided 
in paragraph (f)(3) of this section.
* * * * *
    (c) * * *
    (4) All service providers. Each Tier I carrier and other service 
provider must offer its customers a range of hearing aid-compatible 
models with differing levels of functionality (e.g., operating 
capabilities, features offered, prices). Each provider may determine 
the criteria for determining these differing levels of functionality, 
and must disclose its methodology to the Commission pursuant to 
paragraph (i)(3)(vii) of this section.
    (d) * * *
    (4) All service providers. Each Tier I carrier and other service 
provider must offer its customers a range of hearing aid-compatible 
models with differing

[[Page 54560]]

levels of functionality (e.g., operating capabilities, features 
offered, prices). Each provider may determine the criteria for 
determining these differing levels of functionality, and must disclose 
its methodology to the Commission pursuant to paragraph (i)(3)(vii) of 
this section.
* * * * *
    (f) * * *
    (3) Disclosure requirement relating to handsets that allow the user 
to reduce the maximum power for GSM operation in the 1900 MHz band. 
Handsets that meet the technical standard for radio frequency 
interference pursuant to paragraph (b)(1)(iii) of this section shall be 
labeled as meeting an M3 rating.
* * * * *
    (l) In-store testing. Any entity that sells wireless handsets to 
consumers through a physical location must make available for consumers 
to test, in each retail store that it owns or operates, all of its 
handset models that comply with paragraph (b)(1) or (b)(2) of this 
section.

 [FR Doc. 2010-22254 Filed 9-7-10; 8:45 am]
BILLING CODE 6712-01-P