Comments submitted in writing or in electronic form will be posted on the NRC Web site and on the Federal rulemaking Web site, http://www.regulations.gov. Because your comments will not be edited to remove any identifying or contact information, the NRC cautions you against including any information in your submission that you do not want to be publicly disclosed. The NRC requests that any party soliciting or aggregating comments received from other persons for submission to the NRC inform those persons that the NRC will not edit their comments to remove any identifying or contact information, and therefore, they should not include any information in their comments that they do not want publicly disclosed.

You can access publicly available documents related to this action using the following methods:

NRC's Public Document Room (PDR): The public may examine and have copied for a fee publicly available documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

NRC's Agencywide Documents Access and Management System (ADAMS): Publicly available documents created or received at the NRC are available electronically at the NRC's Electronic Reading Room at http://www.nrc.gov/reading-rm/adams.html. From this page, the public can gain entry into ADAMS, which provides text and image files of NRC's public documents. If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the NRC's PDR reference staff at 1-800-397-4209, or 301-415-4737, or by e-mail to PDR.Resource@nrc.gov.

Federal rulemaking Web site: Public comments and supporting materials related to this proposed rule can be found at http://www.regulations.gov by searching on Docket ID NRC-2008-0415.

In a final rulemaking published in the Federal Register on January 14, 2004, 69 FR 2181 (2004 part 2 revisions), the NRC substantially modified its rules of practice governing agency adjudications—Title 10 of the Code of Federal Regulations (10 CFR) part 2. Portions of 10 CFR parts 1, 50, 51, 52, 54, 60, 63, 70, 72, 73, 75, 76 and 110 also were amended at that time. On May 11, 2004 (69 FR 25997), the NRC corrected errors in 10 CFR part 2, Appendix D.

Since the new rules of practice became effective, provisions requiring correction or clarification of ambiguities, and several areas where further improvements could be achieved, have been identified. Therefore, the NRC is publishing this proposed rule to solicit public comments on proposed corrections of those errors and proposed improvements to the rules governing its adjudicatory proceedings. Participants in NRC adjudicatory proceedings who will use these rules should note that several revisions to 10 CFR part 2 also were adopted in recent years:

• Licenses, Certifications, and Approvals for Nuclear Power Plants (72 FR 4935; August 28, 2007) (Part 52 Rule);

• Use of Electronic Submissions in Agency Hearings (72 FR 49139; August 28, 2007) (E-Filing Rule);

• Limited Work Authorizations for Nuclear Power Plants (72 FR 57415; October 9, 2007);

• Delegated Authority To Order Use of Procedures for Access to Certain Sensitive Unclassified Information (73 FR 10978; February 29, 2008);

• Interlocutory Review of Rulings on Requests by Potential Parties for Access to Sensitive Unclassified Non-Safeguards Information and Safeguards Information (73 FR 12627; March 10, 2008); and

• Protection of Safeguards Information (73 FR 63545; October 24, 2008).

The amendments in this proposed rulemaking are procedural rules exempt from the notice and comment requirements of the Administrative Procedure Act (APA) and NRC regulations. 5 U.S.C. 553(b)(3)(A) and 10 CFR 2.804(d)(1). Nonetheless, the NRC is issuing this rulemaking as a proposed rule for public comment in order to benefit from stakeholder input.

The new and amended requirements in the final rule would not be retroactively applied to presiding officer determinations and decisions issued prior to the effective date of the final rule ( e.g., a presiding officer order in response to a petition or motion), nor would these requirements be retroactively imposed on parties, such that a party would have to compensate for past activities that were accomplished in conformance with the requirements in effect at the time, but would no longer meet the new or amended requirements in the final rule. Further, in ongoing adjudicatory proceedings if there is a dispute over an adjudicatory obligation or situation arising prior to the effective date of the new rule, such disputes would be governed by the former rule provisions. However, the new or amended requirements would be effective and govern all obligations and disputes that arise after the effective date of the final rule. For example, if a Board issues, prior to the effective date of the final rule, a scheduling order incorporating by reference § 2.336(d), which requires parties to update their disclosures every 14 days, that obligation would change to 30 days once the effective date of the rule is reached. Therefore, Licensing Boards should be aware of the effectiveness of the final rule and take the necessary steps to notify parties of their obligations once the final rule becomes effective.

The current title of 10 CFR part 2, Rules of Practice for Domestic Licensing Proceedings and Issuance of Orders, does not accurately reflect the scope, nor does it track the language of the APA. The NRC is proposing a new title for 10 CFR part 2: Agency Rules of Practice and Procedure, which would better reflect the scope of its subparts and would mirror the language of the APA.

1. Section 2.305—Service of documents; methods; proof.

Section 2.305(c)(4) currently refers to “any paper,” which could be interpreted to exclude electronic documents filed through the NRC's E-Filing system. The NRC is therefore proposing to clarify that a signed certificate of service must be included with “any document” served upon the parties in a proceeding under 10 CFR part 2. Under this rule, the certificate of service must include the name and address of each person upon whom service is being made (which for electronic submissions under the E-Filing system should include, at a minimum, the name and e-mail address used for service of each person in the E-Filing system service list for a proceeding upon whom service needs to be made) and the date and method of service. Because it is the responsibility of a participant submitting a document to the E-Filing system to comply with the service requirements, a certificate of service that simply states the document is being served “per the service list in the E-Filing system” without listing the names and addresses of each of those being served is insufficient to comply with § 2.305(c)(4). The NRC notes that § 2.304 requires that electronic documents be signed using a participant's digital certificate; in such circumstances it is not necessary to submit an electronic copy of the document that includes an actual signature.

Paragraph 2.305(g)(1) does not currently provide an address for service upon the NRC staff when a filing is not being made through the E-Filing system and no attorney representing the NRC staff has filed a notice of appearance in the proceeding. The proposed paragraph (g)(1) would provide addresses to be used to accomplish service on the NRC staff in these circumstances.

2. Section 2.309—Hearing requests, petitions to intervene, requirements for standing, and contentions.

Section 2.309 contains the generally applicable procedures for requesting hearings and submitting petitions to intervene in NRC proceedings, and sets forth the requirements for submitting contentions and establishing legal standing to participate in NRC proceedings. The NRC is proposing to make several changes to § 2.309.

a. Section 2.309(b)—Timing.

Section 2.309(b)(5) currently references orders issued under § 2.202, but does not reference notices of violation imposing a civil penalty issued under § 2.205. Section 2.205 notices of violation, like § 2.202 orders, provide “twenty (20) days * * * or other time specified in the notice” for individuals to file an answer. This provision does not match the 60 days allowed by § 2.309(b), which could be interpreted as applying to § 2.205 notices of violation. The proposed § 2.309(b)(5) would correct this omission by adding a reference to § 2.205 to reflect that notices of violation issued in § 2.205 civil penalty proceedings have timing requirements similar to those of § 2.202 orders.

b. Sections 2.309(c) and (f)—Subsequent Submission of Petition/Request or New or Amended Contentions.

Current § 2.309(c)(1) contains eight balancing factors that determine whether to grant or admit “nontimely” hearing requests, intervention petitions, or contentions. These factors include the three factors for standing—also found at § 2.309(d)(1)(ii) through (iv)—and the following five factors: Good cause for the failure to file on time; the availability of other means to protect the requestor's or petitioner's interest; the extent to which the requestor's or petitioner's interest will be represented by other parties; the extent to which the requestor's or petitioner's interest will broaden the issues or delay the proceeding; and the extent to which the requestor's or petitioner's participation may reasonably be expected to assist in developing a sound record. The “good cause” factor is given the most weight, and “[i]f a petitioner cannot show good cause, then its demonstration on the other factors must be `compelling.'” Dominion Nuclear Connecticut, Inc. (Millstone Nuclear Power Station, Units 2 and 3), CLI-05-24, 62 NRC 551, 564-65 (2005) (footnote with citation omitted).

Good cause is not defined in the regulations, but has been defined by the NRC in case law as a showing that the petitioner “not only * * * could not have filed within the time specified in the notice of opportunity for hearing, but also that it filed as soon as possible thereafter.” Id. In addition, § 2.309(f)(2) identifies three factors to be considered in determining whether to admit a new or amended contention. These factors include whether the new or amended contention is based on information that was not previously available. For example, if a document has not been prepared and is referred to as a forthcoming document, the appropriate time to file a contention based upon the document is after its publication. The two remaining factors in § 2.309(f)(2) include whether the information that was not previously available is materially different from information that was previously available, and whether the new or amended contention has been submitted in a timely fashion after the availability of the new information. The § 2.309(f) three factor test appears to be a specific application of the case law definition of “good cause.”

Thus, in practice, the admissibility of late-filed contentions usually depends on whether good cause is found. A showing that many of the other factors support the admission of a late-filed contention is rarely sufficient to overcome a lack of good cause. See, e.g., Private Fuel Storage (Independent Spent Fuel Storage Installation), LBP-00-28, 52 NRC 226, 239-240 (2000) and Tennessee Valley Authority (Watts Bar Nuclear Plant, Unit 2), CLI-10-12, __ NRC __ (Mar. 26 2010) (slip op.) (the Commission noted that “it would be a rare case where we would excuse a non-timely petition absent good cause”) Id. at 2. And in other cases, the NRC's determination on the existence of good cause appears to turn on one or two factors unique to that proceeding, with a generic recitation or cursory acknowledgement of the other factors and how they offset each other. See, e.g., Crow Butte Resources (North Trend Expansion Project) LBP-08-06, 67 NRC 241, 259-260 (2008).

The proposed rule would simplify the requirements governing requests for hearing, intervention petitions, or new or amended contentions filed after the deadlines in § 2.309(b) by: (1) Making good cause the sole factor to be considered when evaluating whether to review the admissibility of a new or amended contention, petition, or hearing request; (2) defining good cause as those factors currently in § 2.309(f)(2)(i) through (iii); (3) adding clarifying information regarding the need to address interest and standing; and (4) referring to “nontimely” contentions as “new or amended.” Although we would no longer use the terms “late-filed” or “nontimely” and would use the term “new or amended” to refer to contentions filed after the initial filing date for contentions had expired, the current NRC case law would continue to be applied in ruling on those requests.

The proposed amendments to § 2.309 would apply the good cause factor to all filings after the initial filing deadline and would adopt the current § 2.309(f)(2)(i) through (iii) factors as the standards to be applied when evaluating whether good cause exists. This change would simplify the review of filings after the deadlines in § 2.309(b). These changes would allow the parties, participants, and the presiding officer to focus their resources on the most relevant questions related to the admissibility of new or amended contentions ( i.e., whether good cause exists and whether the contentions meet the admissibility requirements of § 2.309(f)).

Section 2.309(c)(1) would require a requestor or petitioner to provide a justification supporting the filing after the deadlines in § 2.309(b), consisting of “good cause” as defined in § 2.309(c)(2). Paragraph (c)(2) would treat the three criteria for considering new or amended contentions that are currently contained in paragraph (f)(2) as the factors that must be considered under the good cause determination of proposed paragraph (c)(1). The NRC believes that the factors in current § 2.309(f)(2)(i) through (iii) are a useful, specific application of “good cause.” Presiding officers should evaluate whether a filing after the deadlines in § 2.309(b) satisfies the factors in § 2.309(c)(2)(i) through (iii) to determine whether a petitioner has demonstrated good cause.

Proposed paragraph (c)(3) would make clear that, apart from demonstrating good cause, a petitioner seeking admission to the proceeding after the deadlines in § 2.309(b) would need to satisfy standing and contention admissibility requirements. Paragraph (c)(4) would apply to a participant or a party who seeks admission of a new or amended contention, and who has already satisfied the standing requirements in § 2.309(d).

This revision would, in part, adopt a line of reasoning first proposed by an Atomic Safety and Licensing Board in the Vermont Yankee power uprate proceeding; the Board concluded that new or amended contentions filed after the initial filing need not satisfy the § 2.309(c)(1) factors if the § 2.309(f)(2)(i) through (iii) factors are met. Entergy Nuclear Vermont Yankee LLC (Vermont Yankee Nuclear Power Station), LBP-05-32, 62 NRC 813 (2005). The NRC believes that this should be the appropriate standard for presiding officers to apply when evaluating whether good cause exists.

The NRC invites comments on the effect (if any) of eliminating the other late-filing factors and relying solely on good cause. As discussed above, case law has shown that good cause is given the most weight when evaluating new or amended contentions, and absent good cause, the other factors must be—but are rarely found to be—compelling. Would limiting the late-filing criteria to good cause have a detrimental effect on a petitioner's ability to have new or amended contentions admitted? How often, without showing good cause, have petitioners been able to rely on the other factors to meet the requirements of § 2.309(c)? Should the NRC consider removing only some of the other late-filing requirements? If so, which ones?

c. Section 2.309(d)—Standing.

Section 2.309(d) sets forth the standing requirements and also contains some requirements that do not generally relate to standing. To clarify and to better articulate the generally applicable standing requirements, several revisions to § 2.309(d) are being proposed. The general standing criteria in § 2.309(d)(1) would remain the same. A revised § 2.309(d)(2) would adopt the requirements of the first sentence of current § 2.309(d)(3), which requires the presiding officer to consider the paragraph (d)(1) factors when determining whether the petitioner has an interest affected by the proceeding. Revised paragraph (d)(3) would retain the existing provision that in enforcement proceedings the licensee or other person against whom the action is taken is deemed to have standing. Current § 2.309(d)(2) contains special requirements for States, local governmental bodies, and Federally-recognized Indian Tribes that seek status as parties in proceedings. But some of these requirements ( e.g., the need to propose one or more contentions; the need to designate a single representative) do not relate to standing. The present § 2.309(d)(2) provisions would be revised and would be moved to a new § 2.309(h), which is discussed in the next section.

d. Section 2.309(d)(2) moved to 2.309(h)—State, local governmental body, and Federally-recognized Indian Tribe.

As stated, the present § 2.309(d)(2) provisions for government participation, which do not contain generally applicable standing requirements like the rest of § 2.309, would be revised and moved to a new § 2.309(h). The proposed § 2.309(h)(1), based on the existing § 2.309(d)(2)(i), would require any State, local governmental body or Federally-recognized Indian Tribe seeking to participate as a party to submit at least one admissible contention. This section would also include the requirement that each governmental entity designate a single representative for the hearing. If a request for hearing or petition to intervene were granted, the NRC would admit as a party a single designated representative of the State, a single designated representative for each local governmental body (county, municipality, or other subdivision), and a single designated representative for each Federally-recognized Indian Tribe, as applicable. This proposed section would also require, as provided in the statement of considerations for the 2004 part 2 revisions, that:

The proposed § 2.309(h)(2) would be based on the existing § 2.309(d)(2)(ii), which states that in any potential proceeding for a facility (the term “facility” is defined in § 2.4) located within its boundaries, the State, local governmental body or Federally-recognized Indian Tribe seeking party status need not further establish its standing. As revised, proposed § 2.309(h)(1) and (h)(2) would delete the word “affected” from the phrase “Federally-recognized Indian Tribe.” The use of “affected” in this context is proper only in a high-level radioactive waste disposal proceeding. For the same reason, the NRC proposes to remove “affected” from § 2.315(c) (regarding interested government participation) and from the definition of “Participant” added to § 2.4 in the E-Filing Rule (August 28, 2007; 49139, 49149). Existing § 2.309(d)(2)(iii) would be redesignated as § 2.309(h)(3).

e. Section 2.309(h) moved to 2.309(i)—Answers to requests for hearing and petitions to intervene; Replies to answers.

The present § 2.309(h), governing the filing of answers and replies to hearing requests and petitions to intervene, would be redesignated as § 2.309(i) and would be further revised. The current § 2.309(h)(1) refers to “proffered contentions,” the preamble of current § 2.309(h) limits paragraph (h) to filing deadlines for hearing requests and intervention petitions, and there is no clear reference to contentions submitted after the initial filing. The NRC believes that the same deadlines should apply to answers and replies for new or amended contentions as apply to intervention petitions and hearing requests filed after the deadlines in § 2.309(b). The NRC is therefore proposing to amend this section to include answers and replies to requests to admit new or amended contentions after the initial filing. Because this change would cover all filings after the deadlines in § 2.309(b), the reference to “proffered contentions” in paragraph (h)(1) (proposed paragraph (i)(1)) would no longer be necessary and would be removed. The reference in current paragraph (h)(1) to “paragraphs (a) through (g)” would be changed to “paragraphs (a) through (h)” due to the addition of proposed new paragraph (h).

f. Section 2.309(i) moved to new 2.309(j)—Decision on request/petition.

The current § 2.309(i) would be redesignated as § 2.309(j). The redesignated § 2.309(j) would contain a new citation reference made necessary by the new § 2.309(h). Also, proposed § 2.309(j) would be revised to provide that if the presiding officer cannot issue a decision on each request for hearing or petition to intervene within 45 days of the conclusion of the pre-hearing conference, the presiding officer shall issue a notice advising the Commission and the parties as to when the decision will issue. If no pre-hearing conference is conducted, the 45-day period begins after the filing of answers and replies under § 2.309(i).

3. Section 2.311—Interlocutory review of rulings on requests for hearings/petitions to intervene, selection of hearing procedures, and requests by potential parties for access to sensitive unclassified non-safeguards information and safeguards information.

Section 2.311(b) allows parties to appeal orders of the presiding officer to the Commission concerning a request for hearing, petition to intervene, or a request to access SUNSI or SGI within ten days after the service of the order. Any party who opposes the appeal may file a brief in opposition within ten days after service of the appeal. Experience has demonstrated that the filing time provided under this section is unnecessarily short, and sometimes results in superficial appellate briefs. Most adjudicatory bodies allow substantially more time for litigants to frame appellate arguments and to perform the necessary research and analysis. Well-considered briefs enable the appellate body, here the Commission, to make faster and better-reasoned decisions. The NRC is therefore proposing to extend the time to file an appeal and a brief in opposition to an appeal from ten to 25 days. The NRC does not expect the proposed change in appeal deadlines to result in any delays in licensing. For one thing, higher-quality briefs should expedite appellate decision-making. Moreover, most of the appellate litigation at the NRC is preliminary to any final licensing decisions; it takes place before the NRC staff finishes its safety and environmental reviews and generally does not affect the timing of those reviews.

4. Section 2.314—Appearance and practice before the Commission in adjudicatory proceedings.

Paragraph 2.314(c)(3) allows anyone disciplined under § 2.314(c) to file an appeal with the Commission within ten days after issuance of the order. Experience since the 2004 revisions of part 2 has demonstrated that ten days frequently is not adequate for parties to prepare quality appeals. The NRC is therefore proposing to extend the time to file an appeal of an order disciplining a party from ten to 25 days. The NRC believes that extending the time for appeals will result in higher-quality appeals.

5. Section 2.315—Participation by a person not a party.

Current § 2.315(c) allows interested State, local governmental bodies, and Federally-recognized Indian Tribes that have not been admitted as parties under § 2.309 a reasonable opportunity to participate in hearings. The NRC is proposing to amend § 2.315(c) to clarify that States, local governmental bodies, or Federally-recognized Indian Tribes that are allowed to participate in hearings take the proceeding as they find it, consistent with longstanding NRC case law. See, e.g., Pacific Gas and Electric Co. (Diablo Canyon Nuclear Power Plant, Units 1 and 2), ALAB-600, 12 NRC 3, 8 (1980); Long Island Lighting Co. (Shoreham Nuclear Power Station, Unit 1), LBP-83-13, 17 NRC 469, 471-72 (1983), citing 10 CFR 2.714(c) (current 2.315(c)); Cincinnati Gas and Electric Co. (Wm. H. Zimmer Nuclear Station), LBP-80-6, 11 NRC 148, 151 (1980).

6. Section 2.319—Power of the presiding officer.

As part of the 2004 revisions to part 2, the NRC eliminated “redundant or duplicate provisions in Subpart J that would be covered by the generally applicable provisions in Subpart C” (69 FR 2212; January 14, 2004). Section 2.319(l) would be updated to clarify the scope of the power of the presiding officer to refer rulings or certify questions to the Commission, consistent with the change to § 2.323, discussed in the next section.

7. Section 2.323—Motions.

The NRC proposes to amend § 2.323(f) to clarify the criteria for referrals in this paragraph, and to make the referral criteria consistent with the Commission's standards for consideration of such referrals. The criterion on “prompt decision * * * necessary to prevent detriment to the public interest or unusual delay or expense” would be removed to make clear that this criterion concerns the prompt decision of the Commission. The second criterion on “the decision or ruling involves a novel issue that merits Commission review” would be revised to make clear that: (1) This criterion concerns the presiding officer's decision, and (2) the presiding officer's decision must raise or create “significant and novel” issues that may be either “legal or policy” in nature.

8. Section 2.335—Consideration of Commission rules and regulations in adjudicatory proceedings.

Section 2.335 details the procedures through which a challenge to the Commission's regulations may be raised as part of an adjudicatory proceeding. The current text of the rule limits these challenges to “a party to an adjudicatory proceeding,” which would seem to exclude petitioners from challenging the Commission's regulations. The Commission recognizes that challenges to the Commission's regulations are frequently contained in petitions to intervene and requests for hearing. Further, the Commission recognizes that petitioners may have a legitimate interest in raising such challenges before they are granted party status and that Atomic Safety and Licensing Boards have allowed petitioners to raise these concerns before being admitted as parties. See, e.g., Carolina Power and Light Co. (Shearon Harris Nuclear Power Plant, Unit 1), LBP-07-11, 66 NRC 41, 57-58 (2007).

The NRC is therefore proposing to amend this section to clarify that, in accordance with NRC practice, “participants to an adjudicatory proceeding,” not just parties, may seek a waiver or an exception for a particular proceeding.

9. Section 2.336—General Discovery.

Section 2.336(d) currently requires parties to update their mandatory disclosures every 14 days. Experience with adjudications since early 2004 has demonstrated that the current disclosure provisions are much more burdensome for litigants than was initially anticipated. Part of the burden is the frequency of required updates to the mandatory disclosures. The NRC is therefore proposing to replace the requirement to disclose information or documents within 14 days of discovery with a continuing duty to provide a disclosure update every 30 days. The Commission is also considering an alternative timeline to the proposed rule for disclosure updates. Like the proposed rule, this approach would require disclosure updates every thirty days, but, as specified hearing milestones approach, this would mirror the 14-day disclosure requirements of the current version of § 2.336(d). This hearing-sensitive timeline would mitigate the burdens of the current rule, while preserving the utility of more frequent disclosure updates as hearing milestones approach.

Each update under the proposed versions of § 2.336(d) would include documents subject to disclosure under this section that have not been disclosed in a prior update and that are developed, obtained, or discovered during the period that runs from five business days before the last disclosure update to five business days before the filing of the update. It is anticipated that this change to § 2.336(d) would reduce the burden and increase the robustness of updated disclosures. The NRC also proposes to add a sentence to the end of § 2.336(d), stating that the duty of mandatory disclosure with respect to new information or documents relevant to a contention ends when the presiding officer issues a decision on that contention, or when otherwise specified by the presiding officer or the Commission.

10. Section 2.340—Initial decision in certain contested proceedings; immediate effectiveness of initial decisions; issuance of authorizations, permits, and licenses.

Sections 2.340(a) and (b) currently imply that the presiding officer must reach a decision prior to the issuance of a license or license amendment. But this is not necessarily the case. For operating licenses associated with production and utilization facilities, both the Atomic Energy Act and the NRC's regulations allow for the issuance of a license amendment upon a determination of “no significant hazards consideration.” See, e.g., 42 U.S.C. 2239, 10 CFR 50.91. Further, subparts L and N of 10 CFR part 2 allow the staff to act on an application, including an application for an initial or renewed operating license or operating license amendment, and in proceedings for an initial license or license amendment not involving a production and utilization facility, prior to the completion of any contested hearing, assuming that all other relevant regulatory requirements are met. 10 CFR 2.1202(a), 2.1210(c)(3), and 2.1403(a). The NRC is proposing to revise § 2.340 to clarify that production and utilization facility applications—for an initial license, a renewed license, or a license amendment where the NRC has made a determination of no significant hazards consideration—could be acted upon prior to the completion of a contested hearing. The NRC also would make conforming amendments to paragraphs (d) and (e) of this section to clarify that in proceedings involving a manufacturing license under subpart C of 10 CFR part 52, and in proceedings not involving production and utilization facilities, the NRC staff—provided it is able to make all of the necessary findings associated with the licensing action—may act on a license, permit, or license amendment prior to the completion of a contested hearing.

Finally, this section would be amended to clarify that the presiding officer could make findings of fact and conclusions of law on any matter not put into controversy by the parties, but only to the extent that the presiding officer determines that a serious safety, environmental or common defense and security matter exists, and only to the extent the Commission, upon a required referral by the presiding officer, approves an examination of and decision on the referred matters.

11. Section 2.341—Review of decisions and actions of a presiding officer.

a. Section 2.341(b)—Petitions for review.

Section 2.341 contains requirements pertaining to the review of decisions and actions of a presiding officer by the Commission. Current § 2.341(b)(1) allows parties to file a petition for review of a full or partial initial decision by a presiding officer or any other decision or action by a presiding officer with respect to which a petition for review is authorized by this part. Under the current regulations a petition for review must be filed with the Commission within 15 days of service of the decision. Similarly, § 2.341(b)(3) allows other parties to file an answer supporting or opposing Commission review within ten days after service of a petition for review. And the petitioning party is allowed to file a reply brief within five days of service of any answer. Experience has demonstrated that the time the NRC's rules allow for petitions for review of an order of a presiding officer (15 days) is unnecessarily short, and sometimes results in superficial appellate briefs. Most adjudicatory bodies allow substantially more time for litigants to frame appellate arguments and to perform the necessary research and analysis. Well-considered briefs enable the appellate body, here the Commission, to make faster and better-reasoned decisions. The NRC is therefore proposing to extend the time to file a petition for review and an answer to the petition from ten to 25 days. The NRC also is proposing to extend the time to file a reply to an answer from five to ten days.

The NRC does not expect the proposed change in appeal deadlines to result in any unnecessary delays in licensing. For one thing, higher-quality briefs should expedite appellate decisionmaking. Moreover, most of the appellate litigation at the NRC is preliminary to any final licensing decisions; it takes place before the NRC staff finishes its safety and environmental reviews and generally does not affect the timing of those reviews. Finally, even when a final presiding officer decision approving a license comes before the Commission on a petition for review, the license can be issued immediately, notwithstanding the pendency of a petition for review. See 10 CFR 2.340(f), 2.341(e).

b. Section 2.341(c)—Petitions for review not acted upon deemed denied.

As stated in the 2004 part 2 revisions, § 2.341 was intended to essentially restate the provisions of former § 2.786 ( See 69 FR 2225; January 14, 2004). But the provisions of former § 2.786(c), under which petitions for Commission review not acted upon were deemed denied, were inadvertently omitted from § 2.341. Accordingly, the NRC proposes to add a new § 2.341(c)(1); existing § 2.341(c)(1) would be redesignated as § 2.341(c)(2), and existing § 2.341(c)(2) would be redesignated as § 2.341(c)(3). Proposed § 2.341(c)(1) would adopt the deemed denied provisions of the former § 2.786(c) with the exception of the 30-day time limit, which would be extended to allow 120 days for Commission review. As a practical matter, the 30-day timeframe has necessitated extensions of time in most proceedings, as the prescribed briefing period comprehends 30 days. A 120-day Commission review period would allow for sufficient time to review the filings at the outset, without the unintended consequence of the frequent need for extensions. The NRC therefore is proposing to adopt the deemed denied provisions of former § 2.786 with a 120-day time limit as a new § 2.341(c)(1).

c. Section 2.341(a)—Time to act on a petition for review.

Section 2.341(a)(2) currently provides the Commission with 40 days to act on a decision of a presiding officer or a petition for review. The current 40-day timeframe has necessitated extensions of time in most proceedings, as the prescribed briefing period comprehends 30 days, often leaving the Commission insufficient time for an effective review of the filings. As discussed above with respect to the “deemed denied” provision, a 120-day Commission review period provides for a reasonable period to review the filings without the unintended consequence of the frequent need for extensions. The NRC therefore is proposing to extend the time for Commission review from 40 days to 120 days. As has always been the case, the Commission may act before that time or extend that period as it deems necessary.

d. Section 2.341(f)—Standards for Atomic Safety Licensing Board certifications and referrals.

The NRC proposes to revise paragraph (f) of this section to address a perceived inconsistency in the standards for Atomic Safety Licensing Board certifications and referrals to the Commission and Commission review of these issues. Section 2.323(f) currently allows a presiding officer to refer a ruling to the Commission if prompt decision is necessary to prevent detriment to the public interest or unusual delay or expense, or if the presiding officer determines that the decision or ruling involves a novel issue that merits Commission review at the earliest opportunity. Current § 2.341(f) states that referred or certified rulings “will be reviewed” by the Commission only if the referral or certification “raises significant and novel legal or policy issues, and resolution of the issues would materially advance the orderly disposition of the proceeding” (emphasis added). This language has been interpreted as allowing the Commission to accept referrals or certifications only if both standards in § 2.341(f) are met, even though § 2.323(f) allows a presiding officer to refer or certify a question or ruling if either of the comparable criteria in § 2.323(f) is met. Tennessee Valley Authority (Bellefonte Nuclear Power Plant, Units 3 and 4), CLI-09-3, 69 NRC 68, 72 (2009). The proposed revision to § 2.341(f) would provide the Commission with maximum flexibility by allowing, but not requiring, the Commission to review an issue if it raises significant legal or policy issues, or if resolution of the issue would materially advance the orderly disposition of the proceeding, or if both standards are met.

12. Section 2.346—Authority of the Secretary.

Currently, § 2.346(j) authorizes the Secretary to “[t]ake action on minor procedural matters.” Since 2004, experience with the subpart C hearing procedures has shown that greater efficiencies could be achieved if the Secretary is given explicit authority to take action on more than minor procedural matters. The NRC is therefore proposing to authorize the Secretary to “take action on procedural or other minor matters.” This change would allow the Secretary to take action on a variety of non-substantive procedural matters, such as motions raising matters that do not explicitly fit within the Secretary's existing authority ( e.g., a motion to suspend a hearing notice or the unopposed withdrawal of construction and operating license applications). Time is frequently of the essence on some minor matters; requiring Commission orders and affirmation sessions can sometimes result in undesirable delay in issuing needed procedural directives because of the need to schedule affirmation sessions. Accordingly, the NRC is proposing to amend § 2.346(j) to give the Secretary the authority to “take action on procedural or other minor matters.” The NRC is also proposing removing the reference to § 2.311 in paragraph (e). Requests for review under § 2.311 are termed “appeals” rather than “petitions for review.” Moreover, there are no deadlines for Commission action on appeals under § 2.311.

13. Section 2.347—Ex parte communications.

Section 2.347 prohibits what are known as ex parte communications between persons outside the NRC and NRC adjudicatory personnel on matters relevant to the merits of an ongoing hearing; this section currently applies to § 2.204 demands for information. Unlike the NRC actions subject to §§ 2.104(a), 2.105(e)(2), 2.202(c), 2.205(e) and 2.312 (which would continue to be referenced in § 2.347(e)(1)(i) and (ii)), hearing rights do not attach to a demand for information because it is not an order; it is a pre-enforcement document requesting information. 56 FR 40663, 40670, 40682; August 15, 1991. The NRC is therefore proposing to amend the ex parte communication provisions in § 2.347(e)(1)(i) and (ii) by deleting the two references to § 2.204. Formerly, § 2.204 pertained to orders for modification of licenses and orders to show cause, and these orders did involve the right to a hearing. (50 FR 38113; September 20, 1985). Thus, when § 2.780—the precursor to § 2.347—was established in 1988, the references to § 2.204 were proper. But in 1991 the references became erroneous when the provisions for orders for modification of licenses were deleted and replaced by the § 2.204 provisions regarding demands for information. Accordingly, the NRC is proposing conforming changes to § 2.347(e)(1)(i) and (ii).

14. Section 2.348—Separation of functions.

The separation of functions provisions in § 2.348 prohibit certain communications between specified sets of NRC personnel on matters relevant to the merits of an ongoing adjudicatory hearing. Similar to the § 2.347 proposal discussed above, the NRC is proposing to correct the separation of functions provisions in § 2.348(d)(1)(i) and (ii) by deleting the two references to § 2.204. As explained above, unlike the other specified NRC actions, hearing rights do not attach to a demand for information. When § 2.781—the precursor to § 2.348—was established in 1988, the references to § 2.204 were proper. But the references became erroneous in 1991 for the reasons stated above with respect to § 2.347(e)(1)(i) and (ii). Accordingly, the NRC is now proposing the conforming changes to § 2.348(d)(1)(i) and (ii).

1. Section 2.704—Discovery—required disclosures.

Sections 2.704(a) through (c) set forth the required disclosures that parties other than the NRC staff must make in formal NRC adjudications. To conform with the timing provisions of § 2.336(d), a change in § 2.704(a)(3) is being proposed. Presently, § 2.704(a)(3) requires that the initial disclosures be made within 45 days after a prehearing conference order following the initial prehearing conference specified in § 2.329. And § 2.704(e) requires a party that has made a disclosure under § 2.704 to supplement its disclosure if the party learns that in some material respect the information disclosed was incomplete or incorrect (provided the additional or new information was not made available to other parties during the discovery process or in writing). In addition, with respect to the testimony of an expert from whom a report is required under § 2.704(b), the duty to supplement under § 2.704(e) extends to both the information contained in the report and provided through a deposition of the expert. The proposed § 2.704(a)(3) would require that unless otherwise stipulated or directed by order of the presiding officer, a party's initial disclosures must be made within 30 days of the order granting a hearing and that parties must provide disclosure updates every 30 days. Each update would include documents subject to disclosure under this section that have not been disclosed in a prior update, and that are developed, obtained, or discovered during the period that runs from the last disclosure update to 5 business days before the filing of the update.

2. Section 2.705—Discovery—additional methods.

Section 2.705(b)(2) allows the presiding officer to “alter the limits in these rules on the number of depositions and interrogatories.” But the rules do not limit the number of depositions or interrogatories. The NRC is therefore proposing to amend this section to allow the presiding officer to set reasonable limits on the number of interrogatories and depositions. This proposed change would remove the confusion in this section and improve the efficiency of NRC adjudicatory proceedings.

3. Sections 2.709—Discovery against NRC staff and 2.336—General Discovery.

a. Sections 2.709(a)(6)—Required initial disclosures in enforcement proceedings and 2.336—General Discovery.

The NRC is proposing to amend the NRC staff's mandatory disclosure obligations for enforcement proceedings conducted under subpart G of 10 CFR part 2. The current regulation that applies to these proceedings, § 2.336, requires the disclosure of documents that are outside of the scope of the enforcement proceeding, which results in the inclusion of many unrelated documents in the mandatory disclosures. Therefore, the NRC is proposing to amend § 2.336(b) to remove subpart G enforcement proceedings from the general discovery requirements; a corresponding amendment would be made to § 2.709 to specify the staff's disclosure obligations in a subpart G enforcement proceeding. This amended section would limit the scope of the staff's disclosures to documents relevant to disputed issues alleged with particularity in the pleadings. Not only would these amended disclosure requirements benefit the NRC staff (by reducing the resources necessary to review, prepare, and provide the required documents), but they would also aid the other parties to the proceeding (by reducing the number of documents they need to review to only documents that are relevant to the issues in the proceeding).

Further, this disclosure requirement would parallel the initial document disclosure requirement in § 2.704(a)(2) for parties other than the NRC staff. Although parties other than the NRC staff are also required by § 2.704(a)(1) to identify individuals likely to have discoverable information relevant to disputed issues, the NRC considers a similar disclosure requirement for the NRC staff to be unnecessary. The discoverable portions of any pertinent Office of Investigations report or related inspection report should identify many of the individuals likely to have discoverable information relevant to disputed issues.

Proposed § 2.709(a)(6)(i) would also require that if a claim of privilege or protected status is made by the NRC staff for any documents, a list of these documents must be provided with sufficient information for assessing the claim of privilege or protected status. Finally, proposed § 2.709(a)(6)(ii) would require the NRC staff to provide disclosure updates every 30 days. Each update would include documents subject to disclosure under this section that have not been disclosed in a prior update and that are developed, obtained, or discovered during the period that runs from 5 business days before the last disclosure update to 5 business days before the filing of the update, as would be required of other parties by proposed § 2.704(a)(3).

b. Section 2.709(a)(7)—Form and type of NRC staff disclosures.

Proposed § 2.709(a)(7) would specify the manner in which the NRC staff may disclose information in subpart G proceedings. For publicly available documents, data compilations, or other tangible things, the NRC staff's duty to disclose such information to the other parties and the presiding officer would be met by identifying the location, the title, and a page reference to the subject information. If the publicly available documents, data compilations, or other tangible things can be accessed at either the NRC Web site, http://www.nrc.gov, or at the NRC Public Document Room, the staff would provide the parties and the presiding officer with any citations necessary to access this information. This addition parallels § 2.704(a)(2) for disclosures by parties other than the NRC Staff.

1. Subpart L—Title.

Subpart L of 10 CFR part 2 contains the adjudicatory procedures that the NRC uses to conduct most of its licensing proceedings. The procedures in subpart L were substantially revised in 2004 (69 FR 2182; January 14, 2004), and are intended to be used with the generally applicable provisions in subpart C of 10 CFR part 2. Under the provisions of 10 CFR part 2 as revised in 2004, a hearing conducted under subpart L meets the APA requirements for an “on the record” or “formal” hearing. Citizens Awareness Network, Inc. v. NRC, 391 F.3d 338, 351 (2004). This is true despite the fact that the NRC also provides more formal adjudicatory procedures under subpart G of part 2. However, the title of subpart L was not revised in 2004 to reflect the changed ( i.e., less formal) character of its procedures. To eliminate any confusion caused by the current title of subpart L, the NRC proposes to revise the title of subpart L to “Simplified Hearing Procedures for NRC Adjudications.” The revised title would reflect that these proceedings are less formal than the formal part 2 subpart G hearings, but are still formal “on the record” hearings under the APA, and not “informal” hearings as might be inferred from the current title.

2. Section 2.1202—Authority and role of NRC staff.

Section 2.1202 pertains to the authority and role of the NRC staff in less formal hearings. The introductory text of § 2.1202(a) could be erroneously interpreted as suggesting that the staff is required to advise the presiding officer on the merits of contested matters. The NRC proposes to revise § 2.1202(a) to require that in subpart L proceedings the staff's notice to parties regarding relevant staff licensing actions must include an explanation of why both the public health and safety is protected and the action is in accord with the common defense and security, despite the “pendency of the contested matter before the presiding officer.”

A conforming change to the introductory text of § 2.1403(a) also is being proposed to require the NRC staff to provide this explanation when the same situation arises in subpart N proceedings.

3. Sections 2.1205 and 2.710—Summary disposition; Motions for summary disposition; Authority of the presiding officer to dispose of certain issues on the pleadings.

The summary disposition motion requirements in § 2.1205 do not require the inclusion of a statement of material facts. Before the 2004 amendments to 10 CFR part 2, the NRC's requirements governing motions for summary disposition required these motions to be accompanied by a “separate, short and concise statement of material facts as to which the moving party contends that there is no genuine issue to be heard.” When the summary disposition motion requirements were included in the hearing procedures in 10 CFR part 2, subpart L, the requirement for a statement of material facts was inadvertently omitted from § 2.1205. Proposed § 2.1205 would restore the requirement for a statement of material facts for which the moving party contends that there is no genuine issue. This section would not include the requirement for a “separate” statement of material facts in dispute, as the rule already requires that the statement be “attached” to the motion. The NRC is proposing a conforming change to § 2.710 to remove the word, “separate,” which would ensure that §§ 2.710 and 2.1205 are identical in this regard.

4. Section 2.1209—Findings of fact and conclusions of law.

Section 2.712(c) specifies the format for proposed findings of fact and conclusions of law in subpart G proceedings, but a similar format provision does not exist in subpart L. The NRC, therefore, is proposing to amend § 2.1209 by adding the format requirements now contained in § 2.712(c). These format requirements would aid presiding officers in subpart L proceedings by ensuring that proposed findings of fact and conclusions of law clearly and precisely communicate the parties' positions on the material issues in the proceeding, with exact citations to the factual record.

5. Section 2.1213—No significant hazards consideration determinations not subject to stay provisions.

The proposed amendment to § 2.1213 would add a new paragraph (f). The proposed paragraph would exclude from the stay provisions matters limited to whether a no significant hazards consideration determination for a power reactor license amendment was proper. No significant hazards consideration determinations may be made in license amendment proceedings for production or utilization facilities that are subject to the 10 CFR part 50 requirements; challenges to these determinations are not allowed in accordance with 10 CFR 50.58(b)(6). Excluding no significant hazards consideration determinations from the stay provisions also is consistent with Federal case law holding that these findings are final agency actions, which are not appealable to the Commission. Center for Nuclear Responsibility, Inc. v. U.S. Nuclear Regulatory Comm'n, 586 F.Supp. 579, 580-81 (D.DC 1984).

The following changes are being proposed to subpart M of 10 CFR part 2, which sets forth the procedures that are applicable to hearings on license transfer applications.

1. Sections 2.1300 and 2.1304—Provisions governing hearing procedures for subpart M hearings.

Section 2.1300 states that the provisions of subpart M, together with subpart C, govern all adjudicatory proceedings on license transfers, but current § 2.1304 states that the procedures in subpart M “will constitute the exclusive basis for hearings on license transfer applications.” Section 2.1304, part of the original subpart M, was effectively replaced by § 2.1300 in the 2004 part 2 revisions, and could have been removed as part of that rulemaking. The NRC is now proposing to remove § 2.1304 and amend § 2.1300 to clarify that, in subpart M hearings on license transfers, both the generally applicable intervention provisions in subpart C and the specific subpart M hearing procedures govern.

2. Section 2.1316—Authority and role of NRC staff.

Section 2.1316(c) provides the procedures for the NRC staff to participate as a party in subpart M hearings. These procedures would be updated to mirror the requirements of § 2.1202(b)(2) and (3), which set forth the NRC staff's authority and role in subpart L hearings. Proposed § 2.1316(c)(1) would require the NRC staff—within 15 days of the issuance of an order granting requests for hearing or petitions to intervene and admitting contentions—to notify the presiding officer and the parties whether it desires to participate as a party in the proceeding. If the staff decides to participate as a party, its notice would identify the contentions on which it will participate as a party. If the NRC staff later desires to be a party, the NRC staff would notify the presiding officer and the parties, and identify the contentions on which it wished to participate as a party, and would make the disclosures required by § 2.336(b)(3) through (5) unless accompanied by an affidavit explaining why the disclosures cannot be provided to the parties with the notice. Once the NRC staff chooses to participate as a party in a subpart M license transfer proceeding, it would have all the rights and responsibilities of a party with respect to the admitted contention or matter in controversy on which the staff chose to participate. As with § 2.1202, “the NRC staff must take the proceeding in whatever posture the hearing may be at the time that it chooses to participate as a party.” (69 FR 2228; January 14, 2004).

Section 2.1407—Appeal and Commission review of initial decision.

Current § 2.1407(a)(1) allows parties to appeal orders of the presiding officer to the Commission within 15 days after the service of the order. Similarly, § 2.1407(a)(3) allows parties that are opposed to an appeal to file a brief in opposition within 15 days of the filing of the appeal. Experience has demonstrated that the time the NRC's rules allow for appeals from an order of a presiding officer is unnecessarily short, and sometimes results in superficial appellate briefs. Most adjudicatory bodies allow substantially more time for litigants to frame appellate arguments and to perform the necessary research and analysis. Well-considered briefs enable the appellate body, here the Commission, to make faster and better-reasoned decisions. The NRC is therefore proposing to extend the time to file an appeal and a brief in opposition to an appeal from 15 to 25 days. The NRC does not expect the proposed change in appeal deadlines to result in any delays in licensing. For one thing, higher-quality briefs should expedite appellate decision-making. Moreover, most of the appellate litigation at the NRC is preliminary to any final licensing decisions; it takes place before the NRC staff finishes its safety and environmental reviews and generally does not affect the timing of those reviews.

1. Section 2.4—Definitions.

The current definition of “Participant” applies to an “individual or organization,” and does not explicitly apply to governmental entities that have petitioned to intervene in a proceeding. The NRC proposes to correct this definition by adding a parenthetical reference to “individual or organization” so that it reads: “individual or organization (including governmental entities).”

The current definition of “NRC personnel” in § 2.4 contains outdated references to §§ 2.336 and 2.1018. The proposed revision of “NRC personnel” would update this definition by removing references to §§ 2.336 and 2.1018, neither of which references the term “NRC personnel.”

2. Section 2.101—Filing of application.

In 2005, § 2.101 was amended to remove paragraph (e) and redesignate (f) and (g) as paragraphs (e) and (f). (70 FR 61887; October 27, 2005) The internal references to paragraph (g) were not updated to reflect the new paragraph designations. References in this section to § 2.101(g) would be corrected to reference § 2.101(f). There are no references to former § 2.101(f) in this section.

3. Section 2.105—Notice of proposed action.

Proposed § 2.105 would make three changes to the current regulation: (1) The introductory text of paragraph (a) would be revised by inserting a reference to the NRC's Web site; (2) The introductory text of paragraph (b) would be clarified by specifying that the referenced notice pertains to one published in the Federal Register ; and, (3) The introductory text of paragraph (d) would be corrected to reference the time period stated in § 2.309(b).

4. Section 2.802—Petition for rulemaking.

The proposed § 2.802(d), in accordance with the proposed definition of “Participant” in § 2.4 and the proposed amendment to the procedures for challenging the NRC's regulations in § 2.335, would replace the word “party” with “participant.”

5. Corrections of other outdated and incorrect references.

Section 51.102(c) contains an outdated reference to “Subpart G of Part 2.” The reference would be corrected to refer generally to part 2. Also, the reference to the former Atomic Safety and Licensing Appeal Board would be removed from § 51.102.

Sections 51.4, 51.34, 51.109(f), and 51.125 contain outdated references to the former Appeal Board, which would be removed from these sections.

6. Section 54.27—Hearings.

Section 54.27 (pertaining to license renewal hearings for nuclear power reactors) contains an outdated reference to a 30-day period to request a hearing. As discussed in the 2004 part 2 revisions, except for license transfer and HLW proceedings, the time in which to request a hearing was extended to 60 days from the date a notice of opportunity for hearing is published (either in the Federal Register or on the NRC's Web site). (January 4, 2004; 69 FR 2200). The proposed § 54.27 would be corrected to reflect the proper 60-day period to request a hearing, and a reference to 10 CFR 2.309 would be added. The proposed § 54.27 would retain the provision that in the absence of any hearing requests, a renewed operating license may be issued without a hearing upon 30-day notice and publication in the Federal Register .

7. Part 2—Rules of Practice for Domestic Licensing Proceedings and Issuance of Orders.

Throughout 10 CFR part 2, the terms “Presiding Officer” and “presiding officer” are used interchangeably, but with different capitalization, unlike 10 CFR part 51, which uses the term “presiding officer” uniformly without capitalization. This proposed rule would change all references to the term “Presiding Officer” to “presiding officer” to bring 10 CFR part 2 into conformance with 10 CFR part 51.

Section 2.336 contains the general procedures governing disclosure of information before a hearing in contested NRC adjudicatory proceedings. The NRC is soliciting public comment on whether it should revise the § 2.336 mandatory disclosures to focus the staff's disclosure obligations under § 2.336(b)(3) on documents related to the parties' admitted contentions. Section 2.336(b) contains the NRC staff's mandatory disclosure obligations. Specifically, under § 2.336(b)(3) the NRC staff must disclose all documents supporting the staff's review of the application or proposed action that is the subject of the proceeding without regard to whether the documents are relevant to the admitted contentions.

The 2004 revision to part 2 imposed mandatory disclosure provisions on all parties that were intended to reduce the overall discovery burden in NRC adjudicatory proceedings. The NRC is concerned that this has not been the case and that the overall discovery burden has not been reduced. The NRC believes that the primary source of the burden stems from the disclosure of hundreds or thousands of documents by the NRC staff that are unrelated to any admitted contention; disclosure of voluminous material by the staff also burdens other parties to the proceeding with searching through hundreds or thousands of unrelated documents to find the material that is relevant to the issues in dispute (other parties' disclosures are already limited to documents relevant to the admitted contentions; the staff's disclosures are not).

All parties also are required to produce privilege logs (a list of discoverable documents that are not being disclosed because the party asserts a privilege to protect the documents). Due to the large number of documents that are captured by the current regulations, the NRC staff must prepare a log of privileged documents, most of which are entirely unrelated to the contentions. Limiting the disclosure obligations to the issues in dispute would reduce the number of documents produced by the NRC staff, and also would provide the other parties to the proceeding with a list of relevant documents that were withheld, which would make it easier for the parties to identify any withheld documents that they may seek to obtain. This change would also align the scope of the NRC staff's disclosure obligations with those of the other parties to the proceeding. At the same time, the parties' opportunity to obtain publicly available documents would not be affected, as these proposed changes would not affect the full scope of documents that will be available to parties and other members of the public through ADAMS.

The NRC is also seeking comments on whether it should add a new requirement to the end of § 2.336(d) to clarify that the duty of mandatory disclosure with respect to new information or documents relevant to a contention ends when the presiding officer issues a decision on that contention or when specified by the presiding officer or the Commission.

(a) Would applying NRC staff disclosures under § 2.336(b)(3) to documents related only to the admitted contentions aid parties other than the NRC staff by reducing the scope of documents they receive and review through the mandatory disclosures?

(b) Is the broad disclosure obligation imposed on the NRC staff by current Section 2.336(b) warranted in light of (a) the other parties' more limited disclosure obligations and (b) the parties' ability to find these same documents in an ADAMS search?

(c) Would a shorter, more relevant privilege log aid parties to the proceeding?

(d) Would potential parties prefer to maintain the status quo?

(e) Would limiting the mandatory disclosures of documents as described in Federal Rule of Civil Procedure 26(a)(1)(A)(ii) be the preferred option?

• Except for proceedings conducted under subpart J of this part (or as otherwise ordered by the Commission, the presiding officer, or the Atomic Safety and Licensing Board assigned to the proceeding), the NRC staff must, within 30 days of the issuance of the order granting a request for hearing or petition to intervene and without further order or request from any party, disclose and make available the following documents:

○ The application and applicant or licensee requests associated with the application or proposed action that is the subject of the proceeding;

○ NRC correspondence (including e-mail) with the applicant or licensee associated with the application or proposed action that is the subject of the proceeding;

○ All documents (including documents that provide support for, or opposition to, the application or proposed action) supporting the NRC staff's review of the application or proposed action that are relevant to the contentions that have been admitted into the proceeding;

○ Any NRC staff documents (except those documents for which there is a claim of privilege or protected status) representing the NRC staff's determination on the application or proposal that is the subject of the proceeding. Documents representing the NRC staff's determination include published NRC reports and published draft or final environmental impact statements or environmental assessments; and

○ A list of all otherwise-discoverable documents for which a claim of privilege or protected status is being made, together with sufficient information for assessing the claim of privilege or protected status of the documents.

The NRC is seeking public comments as to whether to amend 10 CFR part 2 regarding interlocutory review of rulings by a presiding officer granting or denying a request for hearing or intervention petition, including late-filed requests or petitions. Currently, § 2.311(c) effectively allows the requestor or petitioner to appeal an order wholly denying an intervention petition or request for hearing. Therefore, if the presiding officer grants the intervention petition and denies the admissibility of one or more proposed contentions, the petitioner may not appeal the denial of any proposed contentions until the presiding officer issues a final decision at the end of the proceeding. Conversely, any party other than the petitioner may immediately appeal the order on the grounds that the requestor or petitioner lacks standing or that all of their proposed contentions were inadmissible. Although this basic scheme for interlocutory review of intervention petitions and requests for hearing has been in place since 1972 ( see 37 FR 28710; December 29, 1972), there have been some suggestions that a change to the current practice might be warranted to either provide earlier appellate review of contention admissibility or, alternatively, to discourage frivolous appeals. The NRC is considering two options for a potential amendment. The NRC requests comment on the options and on the possible rule language that would implement each option, including comments on the resource implications of both options for all parties and for the Commission.

The first option would amend § 2.311(c) and (d) to allow any party to appeal an order granting a request for hearing or petition to intervene in whole or in part within 25 days of the presiding officer's issuance of the order. This amendment would effectively allow all parties to immediately appeal rulings on the admissibility of any particular contention (including late-filed contentions).

The potential advantage of amending § 2.311 is that it allows early resolution of contention admissibility issues. Specifically, it eliminates the possibility that, after a Board has issued its final order in the proceeding, the Commission on appeal will remand the proceeding to the Board for consideration of a contention that the Commission has determined should have been admitted and thereby prolong the proceeding. Consistent with the general principles applied by courts and agencies that favor limited interlocutory review, the disadvantages of departing from the current practice under § 2.311 include the potential increase in the Commission's appellate workload at the early stage of a proceeding and the attention given to matters that it may prove unnecessary to address at all if a party decides not to pursue the matter at the conclusion of the proceeding or if further developments, such as settlement, obviate the need to address the admissibility question. This amendment would not alter a party's ability to appeal orders on the question of standing.

The second option would delete § 2.311(d)(1) in order to remove the right of parties other than the petitioner to appeal orders granting an intervention petition. This would leave all parties with the same appellate rights, including the right to seek interlocutory review under § 2.341(f)(2). The potential advantage of this option is that it would reduce the Commission's appellate workload by removing any incentive for parties other than the petitioner to oppose all proffered contentions solely to preserve their right to appeal. The main disadvantage would be removing the means by which an early determination can be made as to the proper admission of some contentions.

Section 2.4—Definitions.

This section would modify the definition of Participant in § 2.4, which currently applies to individuals or organizations that petition to intervene or request a hearing, but are not yet parties. The new definition would clarify that any individual or organization—including States, local governments, and Federally-recognized Indian Tribes—that petitions to intervene or requests a hearing shall be considered a participant. Further, Federally-recognized Indian Tribes do not have to be “affected” Federally-recognized Indian Tribes to participate in NRC licensing actions. “Affected” is reserved for Federally-recognized Indian Tribes that seek to participate in the high-level waste proceeding; it does not apply to the NRC's other licensing actions. The current definition also indicates that States, local governmental bodies, or affected Federally-recognized Indian Tribes that seek to participate under § 2.315(c) shall be considered participants. This section does not grant these governmental bodies § 2.315(c) participant status; this status is only obtained when the interested governmental body is afforded the opportunity to participate in the proceeding by the presiding officer. Governmental bodies that have requested § 2.315(c) participant status, but have not yet been granted or denied such status by the presiding officer, are only entitled to participate in a proceeding as a § 2.4 participant. This section also would modify the definition of “NRC personnel,” which contains outdated references to §§ 2.336 and 2.1018; the proposed revision would remove these references.”

1. Section 2.101—Filing of application.

This section would be amended to correct references to § 2.101(g), which should reference § 2.101(f). These changes would not alter the meaning or intent of this regulation.

2. Section 2.105—Notice of proposed action.

This section would be updated to include a reference to the NRC's Web site. Paragraph (b) of this section would be updated to clarify that the referenced “notice” is one that is published in the Federal Register , and paragraph (d) would be amended to include a reference to the time period included in § 2.309(b).

1. Section 2.305—Service of documents; methods; proof.

Section 2.305, which currently requires any paper served in an NRC proceeding to include a signed certificate of service, would be amended to clarify that a signed certificate of service must be filed with any document filed with the NRC. Under § 2.304(d)(1) persons submitting electronic documents to the NRC through the E-Filing system do not need to physically sign their documents; signature with a participant's digital ID certificate satisfies the requirement that a document be signed.

Section 2.305(g)(1), which does not currently provide an address for service upon the NRC staff when a filing is not being made through the E-Filing system and no attorney representing the NRC staff has filed a notice of appearance, would be updated to provide participants with an address to use in these circumstances.

2. Section 2.309—Hearing requests, petitions to intervene, requirements for standing, and contentions.

a. Section 2.309(b)—Timing.

Section 2.309(b), which does not provide a time for answers to § 2.205(c) orders, would be amended to clarify that recipients of § 2.205(c) orders have the time specified in the order to file their answers.

b. Section 2.309(c) and (f)—Subsequent Submission of Petition/Request or New or Amended Contentions.

Section 2.309(c) would be updated to consolidate the nontimely filing requirements and to clarify the intent of the regulations. Amended § 2.309(c) would incorporate the § 2.309(f)(2)(i) through (iii) factors into amended § 2.309(c)(2)(i) through (iii) as the factors to be considered in evaluating a filing after the deadlines in § 2.309(b). Thus, unlike the current requirement where both the § 2.309(c) and § 2.309(f)(2) factors must be individually addressed, the proposed amendment incorporates the § 2.309(f)(2) factors into amended § 2.309(c)(2)(i) through (iii). Meeting these three factors would provide sufficient justification for the filing after the deadlines in § 2.309(b). Section 2.309(c)(2)(i) would require the requestor or petitioner to demonstrate that the information upon which the new or amended contention is based was not previously available. The phrase “not previously available” in this paragraph means that a requestor or petitioner cannot base a contention on a document or a report that does not yet exist. For example, if at the time of requestor or petitioner's filing, an agency or organization was working on a report scheduled for publication in six months, the requestor or petitioner could not anticipate this publication and rely on the report in the submission of contentions. Also, § 2.309(c)(2)(ii) would require the information that supports the filing after the deadlines in § 2.309(b) to be materially different from information previously available. And § 2.309(c)(2)(iii) would require a requestor or petitioner to submit this filing in a timely fashion based on the availability of the subsequent information. But this interpretation does not mean that a petitioner or requestor could not submit a filing after the publication of a report, provided that the report contains information that meets both the filing criteria in § 2.309(c) and the admissibility criteria in § 2.309(f).

Section 2.309(c)(3) would clarify that any new or amended intervention petition must include new or amended contentions if the petitioner seeks admission as a party, and requires a petitioner to meet the standing and admissibility requirements in §§ 2.309(d) and (f); a petitioner that has already satisfied the § 2.309(d) standing requirements would not have to do so again.

Section 2.309(c)(4) would require any new or amended contentions filed by a party to meet the admissibility requirements in § 2.309(f), and would clarify that a party or a participant who has already demonstrated standing does not need to satisfy the standing requirements in § 2.309(d) again.

Section 2.309(c)(5) would clarify that new or amended contentions arising under the National Environmental Policy Act also must meet the filing requirements of § 2.309(c)(1) through (c)(2).

c. Section 2.309(h)—Requirements applicable to States, local governmental bodies, and Federally-recognized Indian Tribes seeking party status.

Paragraphs (d)(2)(i) and (ii) apply only to “affected” Federally-recognized Indian Tribes, which is only proper in the context of a high-level radioactive waste disposal proceeding. Proposed § 2.309(h), which is the current § 2.309(d)(2), would be revised to clarify that, in the case of § 2.309(h)(1) and (2), any Federally-recognized Indian Tribe that wishes to participate in any potential proceeding for a facility located within its boundaries does not need to further establish its standing. Section 2.309(h)(3), which is the current § 2.309(d)(2)(iii), would only apply to a high-level waste disposal proceeding and would retain the references to affected Federally-recognized Indian Tribes; the references in this section would mirror the language used in the § 2.1001 definition of Party.

3. Section 2.311—Interlocutory review of rulings on requests for hearings/petitions to intervene, selection of hearing procedures, and requests by potential parties for access to sensitive unclassified non-safeguards information and safeguards information.

Proposed § 2.311(b) would extend the time to file an appeal and a brief in opposition to an appeal from ten to 25 days.

4. Section 2.314—Appearance and practice before the Commission in adjudicatory proceedings.

Proposed § 2.314(c)(3) would extend the time to file an appeal to an order disciplining a party from ten to 25 days.

5. Section 2.315—Participation by a person not a party.

Proposed § 2.315(c) would clarify that interested States, local government bodies, and Federally-recognized Tribes, who are not parties admitted to a hearing under § 2.309 and seek to participate in the hearing, must take the proceeding as they find it. Consistent with NRC case-law, § 2.315(c) participants would not be able to raise issues related to contentions or issues that were resolved prior to their entry as § 2.315(c) participants in the proceeding—if a State, local governmental body, or Federally-recognized Indian Tribe chooses to participate in a proceeding late in the process, their participation is subject to any orders already issued and should not interfere with the schedule established for the proceeding.

6. Section 2.319—Power of the presiding officer.

Proposed § 2.319(r) would reincorporate former § 2.1014(h) without any changes to the original language or intent. This section would require that an admitted contention that constitutes pure issues of law, as determined by the presiding officer, must be decided on the basis of briefs or oral argument.

7. Section 2.323—Motions.

Proposed § 2.323(f) would allow the presiding officer to independently, or in response to a petition from a party, certify questions or refer rulings to the Commission if the issue satisfies one of the two § 2.323(f)(1) criteria. In each case, the presiding officer would make the initial determination as to whether the issue or petition raises significant and novel legal or policy issues, or if prompt decision by the Commission is necessary to materially advance the orderly disposition of the proceeding.

8. Section 2.335—Consideration of Commission rules and regulations in adjudicatory proceedings.

Section 2.335 limits the requests for waivers or exceptions from NRC regulations to parties to a proceeding. Proposed § 2.335 would clarify that participants to an adjudicatory proceeding, including petitioners, may seek a waiver or exception to the NRC's regulations for a particular proceeding. This change would adopt the NRC's practice of allowing petitions to intervene and requests for hearing to contain § 2.335 requests for waivers or exceptions from the NRC's regulations.

9. Section 2.336—General Discovery.

This section, which currently requires an update within 14 days of obtaining or discovering disclosable material, would be amended to require the filing of a mandatory disclosure update every 30 days. These updates would include all disclosable documents and information developed during the period that runs from five business days before the last disclosure update to 5 business days before the filing of the update. Parties not disclosing any documents or information are expected to file an update informing the presiding officer and the other parties that no documents or information are being disclosed. The duty of mandatory disclosure with respect to new information or documents relevant to a contention would end when the presiding officer issues a decision on that contention, or as specified by the presiding officer or the Commission.

10. Section 2.340—Initial decision in certain contested proceedings; immediate effectiveness of initial decisions; issuance of authorizations, permits, and licenses.

Proposed § 2.340 would clarify that in some circumstances the NRC may act on a license, a renewed license, or on a license amendment prior to the completion of any contested hearing.

Paragraphs (a) and (b) concern construction and operating licenses, renewed licenses, combined licenses, and amendments to these licenses. These paragraphs would be amended to clarify that, in the case of a license amendment involving a power reactor, the NRC may complete action on the amendment request without waiting for the presiding officer's initial decision once the NRC makes a determination that the amendment involves no significant hazards consideration. In initial power reactor licensing cases and in cases where the NRC has not made a determination of no significant hazards consideration, these paragraphs would be amended to clarify that the NRC may not act on the application until the presiding officer issues an initial decision in the contested proceeding.

Paragraph (c), which deals with initial decisions under 10 CFR 52.103(g), would be amended to clarify that the presiding officer may make findings of fact and conclusions of law on the matters put into controversy by the parties, and any matter designated by the Commission to be decided by the presiding officer. Further, the amended paragraph would clarify that matters not put into controversy by the parties shall be referred to the Commission for its consideration. The Commission could, in its discretion, treat any of these referred matters as a request for action under § 2.206 and would process the matter in accordance with § 52.103(f).

Paragraphs (d) and (e), which concern manufacturing licenses under 10 CFR part 52 and proceedings not involving production or utilization facilities, would be amended to clarify that the NRC will issue, deny, or condition any permit, license, or amendment in accordance with a presiding officer's initial decision. These paragraphs also would be amended to clarify that the NRC may issue a license amendment before a presiding officer's initial decision becomes effective.

This proposed revision would clarify that in all cases the presiding officer is limited to matters placed into controversy by the parties, and serious matters not put into controversy by the parties that concern safety, common defense and security, or the environment and that are referred to, and consideration of which is approved by, the Commission.

11. Section 2.341—Review of decisions and actions of a presiding officer.

a. Extension of time to file a petition for review, answer, and reply.

Proposed § 2.341(b) would extend the time to file a petition for review and an answer to a petition from 15 to 25 days, and the time to file a reply to an answer from five to ten days.

b. Petitions for Commission review not acted upon deemed denied.

Section 2.341 would reincorporate the “deemed denied” provision of former § 2.786(c), with an additional 90 days for Commission review before petitions for review are deemed denied. The additional 90 days would allow the Commission 120 days of review time before a petition for review is deemed denied.

Similarly, the time for the Commission to act on a decision of a presiding officer or a petition for review would be expanded to 120 days to bring this section into alignment with the new timeline in proposed § 2.341(c)(1).

c. Interlocutory review.

Section 2.341(f) would allow, but not require, the Commission to review certifications or referrals that meet any of the standards in this paragraph.

12. Section 2.346—Authority of the Secretary.

This proposed section would make explicit the Secretary's authority under § 2.346(j), which is currently limited to minor procedural matters, to include non-minor procedural matters—such as the unopposed withdrawal of construction and operating license applications—which would avoid the need for formal Commission orders and affirmation sessions to issue procedural directives. Also, the reference in paragraph (e) to § 2.311 has been removed because appeals under § 2.311 do not have, associated with them, deadlines for Commission action.

13. Sections 2.347 and 2.348—Ex parte communications; Separation of functions.

These sections currently reference § 2.204 demands for information, which are not orders and do not entail hearing rights. Because demands for information are not adjudicatory matters, the restrictions on ex parte communications and the separation of functions limitations do not apply. The references to § 2.204 would be removed from both sections.

1. Section 2.704—Discovery—required disclosures.

This section, which currently requires initial disclosures to be made within 45 days after the issuance of a prehearing conference order following the initial prehearing conference, would be amended to require the filing of a mandatory disclosure update every 30 days. These updates would include all disclosable documents and information obtained up to 5 business days before the disclosure update. Any documents or information obtained or developed during the period that runs from the last disclosure update to 5 business days before the filing of the update would be included in the next update. Parties not disclosing any documents or information are expected to file an update informing the presiding officer and the other parties that no documents or information are being disclosed.

2. Section 2.705—Discovery—additional methods.

This section, which currently allows the presiding officer to “alter the limits * * * on the number of depositions and interrogatories,” would be amended to remove the impression that these rules impose a limit on the number of depositions and interrogatories—they do not. Instead, the new rule would clarify that the presiding officer “may set limits on the number of depositions and interrogatories.”

3. Section 2.709—Discovery against NRC staff.

a. Section 2.709(a)(6)—Initial disclosures.

This new paragraph would require the NRC staff to provide initial disclosures within 30 days of the order granting a hearing and without awaiting a discovery request. The NRC staff disclosures would include all NRC staff documents relevant to disputed issues alleged with particularity in the proceedings, including any Office of Investigations Report and supporting Exhibits, and any Office of Enforcement documents regarding the order. The staff would also be required to file a mandatory disclosure update every 30 days. These updates would include all disclosable documents and information obtained or developed during the period that runs from the last disclosure update to 5 business days before the filing of the update. Any documents or information obtained or developed during the period between the 5 business day cutoff and the update would be included in the next update. If the staff does not disclose any documents or information, it would be expected to file an update informing the presiding officer and the other parties that no documents or information are being disclosed. The staff also would be required to provide, with initial disclosures and disclosure updates, a privilege log listing the withheld documents that includes sufficient information to assess the claim of privilege or protected status. These requirements parallel the § 2.704 requirements for parties other than the NRC staff.

b. Section 2.709(a)(7)—Form and type of NRC staff disclosures.

Section 2.709(a)(7) is a new paragraph that would allow the staff to satisfy its disclosure obligations for publicly available documents by providing the title, date, and NRC ADAMS accession number for the document. This change would mirror the procedures now used by parties other than the NRC staff to disclose publicly available documents.

4. Section 2.710—Motions for summary disposition.

This section would be amended to conform to the proposed amendments to § 2.1205, which would require parties to attach a statement of material facts to a motion for summary disposition. This proposed change would have no effect on the current practice of including a statement of material facts with a motion; it would clarify that the statement needs to be attached to the motion and does not have to be “separate.”

1. Section 2.802—Petition for rulemaking.

This section currently allows petitioners for a rulemaking to request the suspension of an adjudicatory proceeding to which they are a party. This section would be amended to allow any petitioner for a rulemaking that is a participant in a proceeding (as defined by § 2.4) to request suspension of that proceeding.

2. Section 2.1202—Authority and role of NRC staff.

This section currently requires the NRC staff to include its position on the matters in controversy when it notifies the presiding officer of its decision on a licensing action, which could be incorrectly interpreted as requiring the staff to advise the presiding officer on the merits of the contested matters. This amended section would clarify the authority and role of the NRC staff in less formal hearings; staff notices regarding licensing actions would have to include an explanation of why both the public health and safety is protected and the action is in accord with the common defense and security, despite the “pendency of the contested matter before the presiding officer.”

3. Section 2.1209—Findings of fact and conclusions of law.

This section currently does not specify the formatting requirements for findings of fact and conclusions of law. Amended § 2.1209 would incorporate the § 2.712(c) formatting requirements for findings of fact and conclusions of law to ensure that proposed findings of fact and conclusions of law clearly and precisely communicate the parties' positions on the material issues in the proceeding, with exact citations to the factual record.

4. Section 2.1213—Application for a stay.

Section 2.1213 does not currently exclude matters limited to whether a “no significant hazards consideration” determination for a power reactor license amendment was proper from the stay provisions. Section 50.58(b)(6) prohibits challenges to these determinations; section 2.1213 would therefore be amended to exclude from the stay provisions matters limited to whether a no significant hazards consideration determination was proper.

1. Section 2.1300—Scope of subpart M.

The NRC is proposing to remove § 2.1304 and to amend § 2.1300 to clarify that the generally applicable intervention provisions in subpart C and the specific provisions in subpart M govern in subpart M proceedings.

2. Section 2.1304—Hearing procedures.

The NRC is proposing to remove § 2.1304 and to amend § 2.1300 to clarify that the generally applicable intervention provisions in subpart C and the specific provisions in subpart M govern in subpart M proceedings.

3. Section 2.1316—Authority and role of NRC staff.

This section currently allows the NRC staff to submit a simple notification at any point in the proceeding to become a party. The NRC is proposing to adopt the requirements in § 2.1202(b)(2) and (3), which require the NRC staff, within 15 days of the issuance of an order granting requests for hearing or petitions to intervene and admitting contentions, to notify the presiding officer and the parties whether it desires to participate as a party in the proceeding. The staff's notice would identify the contentions on which it will participate as a party; the staff would be allowed to join the proceeding at a later stage by providing notice to the presiding officer, identifying the contentions on which it wishes to participate as a party, and making the disclosures required by § 2.336(b)(3) through (5).

1. Section 2.1403—Authority and role of the NRC staff.

This section, which is essentially identical to § 2.1202, would be amended to mirror the changes to that section.

This section would also be updated to correct the reference to § 2.101(f)(8), which should reference § 2.101(e)(8); this change would not alter the meaning or intent of this regulation.

2. 2.1407—Appeal and Commission review of initial decision.

Proposed § 2.1407(a) would extend the time to file an appeal and an answer to an appeal from 15 to 25 days.

1. Section 51.4—Definitions.

This section would be amended to remove an outdated reference to the former Atomic Safety and Licensing Appeal Board in the definition of NRC Staff. This change would not alter the meaning or intent of this regulation.

2. Section 51.34—Preparation of finding of no significant impact.

This section would be amended to remove outdated references to “Subpart G of Part 2” and to the former Atomic Safety and Licensing Appeal Board. These changes would not alter the meaning or intent of this regulation.

3. Section 51.102—Requirement to provide a record of decision; preparation.

This section would be amended to remove outdated references to “Subpart G of Part 2” and to the former Atomic Safety and Licensing Appeal Board. These changes would not alter the meaning or intent of this regulation.

4. Section 51.109—Public hearings in proceedings for issuance of materials licensed with respect to a geologic repository.

This section would be amended to remove an outdated reference to the former Atomic Safety and Licensing Appeal Board. This change would not alter the meaning or intent of this regulation.

5. Section 51.125—Responsible official.

This section would be amended to remove outdated references to “Subpart G of Part 2” and to the former Atomic Safety and Licensing Appeal Board. These changes would not alter the meaning or intent of this regulation.

6. Section 54.27—Hearings.

This section would be amended to replace an outdated reference to a 30-day period to request a hearing with a reference to the correct 60-day period to request a hearing. This section would retain the provision that in the absence of any hearing requests, a renewed operating license may be issued without a hearing upon 30-day notice published in the Federal Register .

The Presidential memorandum dated June 1, 1998, entitled “Plain Language in Government Writing” directed that the government's documents be written in clear and accessible language. This memorandum was published on June 10, 1998 (63 FR 31883). In complying with this directive, editorial changes have been made to 10 CFR part 2 to improve the organization and readability of the sections being revised. These types of changes are not discussed further in this document. The NRC requests comments on the proposed rule specifically with respect to the clarity and effectiveness of the language used. Comments should be sent to the NRC as explained in the ADDRESSES Section of this document.

The National Technology Transfer and Advancement Act of 1995, Public Law 104-113, requires that Federal agencies use technical standards that are developed by voluntary, private sector, consensus standards bodies unless using such a standard is inconsistent with applicable law or is otherwise impractical. In this rule, the NRC is approving changes to its procedures for the conduct of hearings in 10 CFR part 2. This action does not constitute the establishment of a government-unique standard as defined in Office of Management and Budget (OMB) Circular A-119 (1998).

The proposed rule involves an amendment to 10 CFR part 2, and thus qualifies as an action for which no environmental review is required under the categorical exclusion set forth in 10 CFR 51.22(c)(1). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this rulemaking.

This rule does not contain any information collection requirements and, therefore, is not subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.

The proposed rule emanates from the desire to make corrections, clarifications, and conforming changes to the NRC's rules of practice and to improve the hearing process. Those amendments that merely reflect either clarifications or corrections to the adjudicatory regulations are not changes to the existing processes. These amendments would not result in a cost to the NRC or to participants in NRC adjudicatory proceedings, and a benefit would accrue to the extent that potential confusion over the meaning of the NRC's regulations is removed.

The more substantial changes suggested in the proposed rule would likewise not impose costs upon either the NRC or participants in NRC adjudications, but would instead bring benefits. Allowing 30 days for the updating of disclosures made under § 2.336(d) would, in fact, reduce burdens on the parties. Fairness and equitable treatment would be furthered by the changes made to the 10 CFR 2.309 filing provisions and to the 10 CFR part 2 discovery provisions. These discovery amendments would improve adjudicatory efficiency, as would the amendments made to the format requirements for findings in final § 2.1209.

The NRC does not believe the option of preserving the status quo is a preferred option. Failing to correct errors and clarify ambiguities will result in continuing confusion over the meaning of the rules, which could lead to the unnecessary waste of resources. Also, experience has shown that the agency hearing process can be improved through appropriate rule changes. The NRC believes that the proposed rule would improve the fairness, efficiency, and openness of NRC hearings without imposing costs on either the NRC or on participants in NRC adjudicatory proceedings. This constitutes the regulatory analysis for the proposed rule.

In accordance with the Regulatory Flexibility Act, as amended, 5 U.S.C. 605(b), the NRC certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities. This rule would apply in the context of NRC adjudicatory proceedings concerning nuclear reactors or nuclear materials. Reactor licensees are large organizations that do not fall within the definition of a small business found in Section 3 of the Small Business Act, 15 U.S.C. 632, within the small business standards set forth in 13 CFR part 121, or within the size standards established by the NRC (10 CFR 2.810). Based upon the historically low number of requests for hearings involving materials licensees, it is not expected that this rule would have any significant economic impact on a substantial number of small businesses.

The NRC has determined that the backfit rule does not apply to the proposed rule amendments because they do not involve any provisions that would impose backfits as defined in 10 CFR Chapter I. Therefore, a backfit analysis is not required for this proposed rule.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552, the NRC is proposing to adopt the following amendments to 10 CFR parts 2, 51, and 54.

The Petition

Title 10 of the Code of Federal Regulations (10 CFR), Section 2.802, Petition for rulemaking, provides an opportunity for any interested person to petition the Commission to issue, amend, or rescind any regulation. On February 2, 2010, Dan Kane submitted a PRM requesting that the NRC rescind 10 CFR 51.23, Temporary storage of spent fuel after cessation of reactor operation—generic determination of no significant environmental impact, also known as the Waste Confidence Rule. (ADAMS Accession No. ML100570095 (Petition)).

Mr. Kane believes that rescinding 10 CFR 51.23 would require the NRC to cease licensing new nuclear power plants and to suspend the licenses of existing power plants. He argues that the Waste Confidence Rule is no longer valid because the Department of Energy has filed a motion to withdraw its application for a spent nuclear fuel (SNF) and high-level waste (HLW) disposal facility at Yucca Mountain and because he believes that the Commission must “adequately anticipate and address future political considerations with regard to waste disposal” as part of its Waste Confidence Decision and Rule. (Petition at 3). The NRC reviewed Mr. Kane's petition and determined that the petition met the minimum sufficiency requirements of 10 CFR 2.802. Accordingly, the NRC docketed the request as PRM-51-13 on February 25, 2010; the NRC notified the public of the opportunity to submit comments on the petition in the Federal Register notice announcing the docketing of the petition. (75 FR 16360; April 1, 2010). The NRC received 10 comments on the PRM: five comments supported granting the petition, one asked the NRC to provide additional information on the basis for the Waste Confidence Decision and Rule, and four argued that the petition should be denied.

In his February 2, 2010 PRM, Dan Kane requested that the NRC “[c]ease licensing of new nuclear power plants and begin an orderly phase out of existing operating nuclear power plants until the Commission can be assured not only of the technical and economic certainties of a waste disposition decision, but also of the political certainties associated with that disposition.” (Petition at 3). Mr. Kane believes that the uncertainty regarding the licensing of a nuclear waste repository at Yucca Mountain undermines the basis for the NRC's regulations at 10 CFR 51.23, which he believes provide the basis for the continued operation and licensing of nuclear power plants. ( Id. ) He contends that the then proposed revisions to Finding 2 (of the five findings in the Waste Confidence Decision), which provides part of the basis for 10 CFR 51.23, “was grounded in the belief that the Yucca Mountain repository would become available within the first quarter of the twenty-first century or perhaps a few years later.” ( Id. at 2). Mr. Kane also believes that the NRC has not complied with its obligations under the National Environmental Policy Act (NEPA) because “[t]he spirit of NEPA compliance cannot be satisfied by assuming some unknown future solution to an existing challenge.” ( Id. ) As discussed above, Mr. Kane believes that this existing challenge is political. ( Id. at 2-3). Further, Mr. Kane argues that the deficiency in the Waste Confidence Decision and Rule results from the inability of the Commission to “adequately anticipate and address future political considerations with regard to waste disposal.” ( Id. at 3).

The NRC does not agree with Mr. Kane that 10 CFR 51.23 should be rescinded.

The basis for Mr. Kane's petition to revoke the Waste Confidence Rule is the Department of Energy's motion to withdraw the Yucca Mountain license application and the Obama Administration's decision not to seek further funding for the program. (Petition at 2). Despite Mr. Kane's assertions to the contrary, the Commission has stated on numerous occasions that the Waste Confidence Decision and Rule are not based on an assumption that Yucca Mountain will become available. In fact, the Waste Confidence Decision and Rule assume that Yucca Mountain will not be built. ( See, e.g., 55 FR 38494; September 18, 1990, 75 FR 81040; December 23, 2010). Therefore, Mr. Kane's argument that the Waste Confidence Decision and Rule should be revoked because they relied upon the eventual availability of Yucca Mountain must be rejected because it does not accurately consider the basis for the Decision and Rule.

Mr. Kane is correct that the Commission cannot speculate when the political and societal obstacles to the successful completion of a repository program will be overcome. The Commission has acknowledged these difficulties in the recently published update to its Waste Confidence Decision and Rule. ( See, 75 FR 81048 and 81063). However, it does not follow from the Commission's acknowledgement of the societal and political obstacles to a successful repository program that the Commission cannot have reasonable assurance that disposal capacity will be available when needed as expressed in the Waste Confidence Decision and Rule. Although the Commission cannot specifically predict when a repository will become available, the Commission can have reasonable assurance that a repository will become available when necessary and that the SNF and HLW in on-site and off-site storage facilities can be stored safely and without significant environmental impacts for at least 60 years after the licensed life of operation for any reactor. ( Id. at 81048, 81063, and 81069-81074). As discussed in the analysis of Finding 2 of the Waste Confidence Decision, the Commission continues to have reasonable assurance that a repository can be licensed, opened, and in operation within 25-35 years of a Federal decision to begin a repository program. ( Id. at 81063).

Further, the political obstacles associated with the licensing of Yucca Mountain or any other repository are not fatal to the Commission's Waste Confidence Decision and Rule. As stated above, the Commission assumed that Yucca Mountain would not be licensed in both the proposed and final updates to the Waste Confidence Decision and Rule. ( See, e.g., 75 FR 81040). As also discussed above, the Commission's analysis in the Waste Confidence Decision—which serves as the Environmental Assessment (the NEPA analysis) for the Waste Confidence Rule—does consider and acknowledge the political difficulties associated with the successful completion of a project to license and operate a nuclear waste repository. These difficulties informed the Commission's decision to remove a target date from Finding 2 and 10 CFR 51.23, and to adopt the “when necessary” standard in the current Finding 2 and 10 CFR 51.23. The Commission also acknowledged that if a repository is not available as the end of the 60-years of post-licensed life storage nears, it will be necessary to revisit the Waste Confidence Decision and Rule (if a subsequent update has not occurred by that time). (75 FR 81035). Further, in its September 15, 2010 Staff Requirements Memorandum approving the final update to the Waste Confidence Decision and Rule, the Commission directed the NRC staff to begin a separate longer-term rulemaking (to be supported by an Environmental Impact Statement) to assess the long-term storage of SNF and HLW. (ADAMS Accession No. ML102580229).

Contrary to Mr. Kane's assertions that the NRC has neglected its responsibilities under NEPA “by assuming some unknown future solution to an existing challenge,” the NRC has not assumed some unknown future solution. The Waste Confidence Decision and Rule demonstrate that a solution—deep geologic disposal—does exist and is technically feasible. ( See, e.g., 75 FR 81058-81060). The unknown that prevents the Commission from providing a target date is the political and societal uncertainty surrounding the nuclear waste disposal program; the Commission addressed this uncertainty in its update to the Waste Confidence Decision. (75 FR 81062-81067). Further, the U.S. government as a whole has demonstrated its continued commitment to finding a long-term solution to the nuclear waste disposal problem. The NRC continues to have confidence that SNF and HLW can be stored safely until a disposal solution becomes available. The United States is actively examining potential solutions. The Blue Ribbon Commission on America's Nuclear Future is assessing disposal options and is expected to publish a report with recommendations at the beginning of 2012. Just because the Obama Administration has expressed a desire to abandon one specific option for SNF and HLW disposal does not mean that progress is not being made toward an ultimate disposal solution.

Even if the Commission were to rescind 10 CFR 51.23, it does not follow that the operation and licensing of nuclear power plants would have to cease. The Waste Confidence Rule satisfies the Commission's NEPA responsibilities for the period of time after the expiration of a license. Without the generic determination in the Waste Confidence Rule, the NRC could satisfy its NEPA obligations by including the post-licensed-life storage of SNF in the NEPA analysis for each nuclear power plant or ISFSI licensing action.

Further, the Commission's Waste Confidence Decision and Rule are not dependent on the NRC's ability to predict when the political and societal obstacles that stand in the way of opening a disposal site will be resolved. Rather, as discussed by the Court of Appeals for the DC Circuit in Minnesota v. NRC, 602 F.2d 412 (1979), the question that has to be considered by the NRC is “whether there is reasonable assurance that an off-site storage solution will be available by the years 2007-09  1 , * * * and if not , whether there is reasonable assurance that the fuel can be stored safely at the sites beyond those dates.” ( Id. at 418 (emphasis added)). The Court further “agree[d] with the Commission that it may proceed in these matters by generic determinations.” ( Id. at 419). The first Waste Confidence Decision and Rule were issued in 1984, and updated in 1990 and 2010. The Commission continues to use the Decision and Rule to satisfy both the direction of the Court (to determine whether there is reasonable assurance that fuel can be stored safely beyond the expiration of the license) and to provide a generic determination of its obligations under NEPA to assess the environmental impacts of the storage of SNF and HLW waste after the expiration of a license.

Based upon its analysis of Mr. Kane's petition, the NRC has concluded that the petition should be denied. The petition does not provide sufficient justification to support the assertion that 10 CFR 51.23 should be rescinded because the Commission's analysis does not consider political issues and because the Yucca Mountain repository program is no longer being funded. As discussed above, the NRC has shown that the Commission's analysis supporting the Waste Confidence Update and Rule does not depend on the availability of Yucca Mountain and does consider the political issues associated with a repository program. The NRC has also demonstrated that both the 1990 and 2010 updates to the Waste Confidence Decision and Rule assumed that Yucca Mountain would not be built. The cessation of the Yucca Mountain program, whether for political, technical, or other reasons, is irrelevant to the continued viability of the Waste Confidence Decision and Rule because, for the purposes of the Waste Confidence Decision and Rule, the NRC has consistently assumed that Yucca Mountain would not be built. The NRC is therefore denying Mr. Kane's petition for rulemaking.

The NRC received 10 comments on this petition for rulemaking.

Neal Hunemuller submitted a comment asking that the NRC address the laws that provided the basis for the Waste Confidence Decisions (49 FR 34658; August 31, 1984, 55 FR 38474; September 18, 1990, and 75 FR 81037).

The Commission developed the Waste Confidence Decision and Rule as a result of several cases that set out the NRC's obligations with respect to safe storage and disposal of SNF and HLW under the Atomic Energy Act of 1954, Public Law 83-703, 68 Stat. 26 (codified as amended in scattered sections of 42 U.S.C.) (AEA) and NEPA. The AEA requires the NRC to establish standards to govern the civilian use of nuclear material and facilities, as the Commission may deem necessary to protect public health and safety and the common defense and security; and NEPA directs Federal agencies to evaluate the environmental impacts of major Federal actions that significantly affect the quality of the human environment. In 1978, the Court of Appeals for the Second Circuit held that the NRC was not required to withhold action on pending or future applications for nuclear power reactor operating licenses until it makes a determination that high-level radioactive wastes can be permanently disposed of safely. ( NRDC v. NRC, 582 F.2d 166, 175 (2d Cir. 1978)). In 1979, the Court of Appeals for the DC Circuit considered whether the NRC “must take into account the safety and environmental implications of maintaining the reactor site as a nuclear waste disposal site after the expiration of the license term” if no off-site interim storage facility or ultimate disposal solution is available. ( State of Minnesota v. NRC, 602 F.2d 412, 416 (1979)). The Court remanded the issue to the NRC and instructed the agency to consider “whether there is reasonable assurance that an off-site storage solution will be available by the years 2007-09 * * * and if not, whether there is reasonable assurance that the fuel can be stored safely at the sites beyond those dates.” ( Id. at 418). Further, the Court held that this finding could be made by a generic determination ( Id. at 419). This generic determination was promulgated as the NRC's 1984 Waste Confidence Decision and Rule (49 FR 34658 and 34688).

Jason Hout submitted a comment opposing the petition. He argued that because operating nuclear power plants can safely store SNF, their operation should not be directly tied to the availability of SNF disposal.

The NRC agrees that the petition should be denied. As noted above, recent developments regarding the development and licensing of the repository at Yucca Mountain, including the Department of Energy's motion to withdraw its application, do not mean that the recent Waste Confidence Decision and Rule are invalid; the Waste Confidence Decision and Rule assume that the repository at Yucca Mountain will not be built.

Paul M. Krishna submitted a comment supporting the petition, which stated that the Secretary of Energy's direction to the Blue Ribbon Commission (BRC) to not consider mined geologic disposal flies in the face of the Waste Confidence Rule. He argued that the DOE's motion to withdraw the Yucca Mountain licensing application potentially results in nuclear power plant licenses violating the Waste Confidence Rule and that this violation should affect the granting of any construction permits, operating licenses, or combined construction permit and operating licenses for any future nuclear power plants. Mr. Krishna stated that the NRC needs to either grant DOE's motion to withdraw the Yucca Mountain license application and stop licensing all future nuclear power plants, or deny the motion and continue the licensing process for Yucca Mountain. Finally, Mr. Krishna questioned whether the NRC was planning to “come up with another waste confidence rule which states that on-site storage of SNF and HLW is safe and secure for another 100 years, by which time we might have a repository,” which he claims “will not work.”

The NRC believes that Mr. Krishna has misinterpreted the Secretary of Energy's direction to the BRC; the BRC was not directed to refrain from considering geologic disposal. Instead, the BRC charter specifically directs it to, “provide advice, evaluate alternatives, and make recommendations for a new plan to address these issues, including * * * Options for permanent disposal of used fuel and/or high-level nuclear waste, including deep geologic disposal * * *” (emphasis added) See, http://brc.gov/pdfFiles/BRC_Charter.pdf.

The NRC also disagrees with Mr. Krishna's assertion that the withdrawal of the Yucca Mountain license application would result in current or future power plant licenses violating the Waste Confidence Rule. As discussed above, the Waste Confidence Rule is a generic determination of the environmental impacts of post-licensed life storage, which does not depend on a disposal site at Yucca Mountain. Further, both the Waste Confidence Decision and Rule assume that Yucca Mountain will not be built. For the purposes of the update to the Waste Confidence Decision and Rule, the Commission has consistently assumed, in both the proposed and final Rule and Decision, that Yucca Mountain would not be built (73 FR 59556; October 9, 2008 and 75 FR 81040). The Waste Confidence Decision and Rule are based on technological developments, increased scientific understanding, and a review of international experience and progress with repositories, not the ultimate availability of the Yucca Mountain repository (75 FR 81032 and 81037).

As noted previously, the Waste Confidence Decision and Rule are separate from the Yucca Mountain licensing decision—they assume that a repository is not constructed at the Yucca Mountain site. It does not follow from the NRC's pending decision on the DOE's motion to withdraw the Yucca Mountain application that the licensing of new nuclear power plants would have to cease if the DOE's motion is granted. Whatever decision the Commission eventually makes in the Yucca Mountain proceeding will have no direct effect on the Waste Confidence Decision and Rule.

Mr. Krishna also questioned whether the NRC plans to conduct another Waste Confidence rulemaking to look at storage for more than 60 years after the end of licensed life. In the Staff Requirements Memorandum for the recent update to the Waste Confidence Decision and Rule, the Commission instructed the staff to prepare a plan for a longer-term rulemaking that would update the Waste Confidence Decision and Rule to address the impacts of storing SNF for more than the 120 years considered in the current Waste Confidence Rule. (ADAMS Accession No. ML102580229). Mr. Krishna's assertion that a longer-term Waste Confidence Rule would not work is speculative. NRC rulemakings are conducted in a manner to ensure that the agency's actions comply with applicable laws ( e.g., the AEA, the Administrative Procedure Act, and NEPA). NRC rulemaking procedures will provide an opportunity for public comment when Mr. Krishna can comment on the actual substance of a proposed rule once it is developed.

James Blaylock commented that continued nuclear power generation is based on a solution to nuclear waste disposal, and that without a defined program the Federal government has now invalidated that commitment. Mr. Blaylock stated that long-term storage is not an acceptable approach, and that he supports the petition.

As noted in Finding 4 of the Commission's Waste Confidence Decision, the Commission finds reasonable assurance that SNF generated in any reactor can be stored safely without significant environmental impacts for at least 60 years beyond the licensed life for operation (which may include the term of a revised or renewed license) of that reactor in a combination of storage in its SNF storage basin and either onsite or offsite independent spent fuel storage installations.

The Commission does not agree that the Federal government has invalidated its commitment to provide for SNF disposal. The Federal government continues to evaluate options for the ultimate disposal of SNF and HLW; the Waste Confidence Decision does not consider the indefinite storage of SNF; disposal is still the ultimate goal (75 FR 81041); and the Nuclear Waste Policy Act is still the law. The Act continues to mandate disposal in a repository, the collection of funds for the Nuclear Waste Fund, and that the Federal Government “has the responsibility to provide for the permanent disposal of” HLW and SNF. (42 U.S.C. 10131 (2006)). Concurrent with its recent motion to withdraw the Yucca Mountain application, the Secretary of Energy created the Blue Ribbon Commission on America's Nuclear Future to evaluate, assess, and advise on possible alternatives for storage, management, and ultimate disposal of SNF and HLW (part of this evaluation will explore the need for additional or amended legislation). ( http://brc.gov/pdfFiles/BRC_Charter.pdf ). These measures demonstrate the Federal government's continued commitment to addressing the nuclear waste disposal problem even in the absence of the development of a repository at Yucca Mountain.

David Hathcock submitted a comment, which stated in full: “I agree with this Proposed Rule change. I am a concerned individual.”

Although Mr. Hathcock expressed support for the petition, the NRC believes that its decision to deny the petition is correct. As stated above:

(1) The Department of Energy's decision to withdraw its application for a repository at Yucca Mountain does not mean that the Waste Confidence Decision and Rule should be revoked. The Waste Confidence Decision and Rule assume that Yucca Mountain will not be built.

(2) Revocation of 10 CFR 51.23 would not result in the end of reactor licensing or relicensing. Without the Waste Confidence Decision and Rule, the NEPA evaluation of post-licensed life storage of SNF would be included in each individual licensing action.

Winston Hamilton Jr., P.E. submitted a comment opposing the petition. Mr. Hamilton argued that cutting the funding to the Yucca Mountain project is not directly related to the nuclear industry. He also stated that he was “surprised” to see such a notice published in the Federal Register by the NRC.

The NRC agrees that the petition should be denied. As noted above, the Waste Confidence Decision and Rule assume that a repository is not built at Yucca Mountain.

The NRC also agrees that cutting the funding for the Yucca Mountain project does not immediately affect operating reactor performance. As noted in Finding 3 of the Waste Confidence Decision, the Commission finds reasonable assurance that HLW and SNF will be managed in a safe manner until sufficient repository capacity is available to assure the safe disposal of all HLW and SNF. (75 FR 81067).

With respect to publication of the PRM, the NRC published the PRM because, in accordance with 10 CFR 2.802(e), the NRC found that the petition satisfied the requirements of § 2.802(c).

Noah Miska submitted a comment supporting the petition. Mr. Miska expressed support for the ultimate goal of the petition—the cessation of new reactor licensing and the phasing out of existing plants—because he believes that granting the petition is “necessary to make up for the loss of the proposed Yucca Mountain nuclear waste storage facility.” Further, Mr. Miska argued that granting the petition would result in the end of the production of new SNF and HLW, which he believes represents “too great a risk to the public's well being to justify their existence.” Mr. Miska also noted that the reduction in nuclear power capacity could be offset by “investments in wind and/or solar infrastructure, which could potentially create many thousands of new jobs.”

As noted in the response to Mr. Kane's petition, the revocation of the Waste Confidence Rule would not result in the end of nuclear reactor licensing or relicensing. Rather, the NEPA evaluation of post-licensed-life storage would shift from the generic determination in the Waste Confidence Rule to individual licensing proceedings.

Mr. Miska is correct that reaching the ultimate goal of the petition—the cessation of new reactor licensing and the phasing out of existing plants—would result in the end of the production of civilian SNF. But as discussed generically in the Waste Confidence Decision and specifically in each licensing decision, the NRC has evaluated the risks of licensing these facilities and has determined that the facilities can be licensed in accordance with its regulations. To the extent that Mr. Miska believes that no risk from nuclear power is acceptable, Congress has spoken otherwise: The NRC has been directed by Congress in the AEA to establish regulations that allow for the licensing of nuclear power plants and provide reasonable assurance of the protection of the public health and safety and common defense and security.

Finally, the NRC acknowledges that a reduction in nuclear power capacity could be offset by increased use of wind or solar power (although the amount to which the base-load power provided by nuclear power could be offset by solar and wind power is still uncertain). These matters, however, are matters of national energy policy and are not within the NRC's jurisdiction to consider. The NRC does not promote the use of nuclear power or any other means of producing power. Rather, NRC is charged with making sure that as long as national energy policy includes nuclear power, nuclear power plants are operated safely and securely and in compliance with regulatory requirements.

The Nuclear Energy Institute (NEI) submitted comments opposing the petition on several grounds. NEI first argued that any NRC consideration of the impacts of recent developments in the Yucca Mountain project should be considered within the then ongoing Waste Confidence proceeding. Second, NEI argued that as rulemakings consider issues generically, it is inappropriate to consider Mr. Kane's request for cessation of new plant licensing and the phase-out of currently operating plants.

The NRC agrees that the petition should be denied. As noted previously, the Waste Confidence Decision and Rule do not depend upon the availability of the repository at Yucca Mountain. Although the NRC agrees with NEI that separate consideration of an ongoing rulemaking on individual dockets is inappropriate, Entergy Nuclear Operations (Indian Point, Units 2 and 3), CLI-10-19, 72 NRC __ (July 8, 2010) (slip op. at 2-3) (“Under longstanding NRC policy, licensing boards should not accept in individual license proceedings contentions which are (or are about to become) the subject of general rulemaking by the Commission” (citation omitted)), Mr. Kane has not requested that his petition be considered in individual dockets, but has instead requested generic relief.

Thus, the NRC does not agree with NEI's suggestion that the petition should be denied because it seeks resolution of a generic issue on individual dockets.

The DOE submitted comments opposing the petition. The Department argued that the issues raised in the petition fall squarely within the Commission's recently concluded Waste Confidence rulemaking, and that the Waste Confidence rulemaking is not dependent upon the availability of Yucca Mountain for waste disposal. The DOE also noted that dry storage technology provides DOE with sufficient time to meet its obligations for a permanent waste disposal under the Nuclear Waste Policy Act.

The NRC agrees that the petition should be denied. As noted previously, the Waste Confidence Decision and Rule do not depend upon the availability of the repository at Yucca Mountain. Further, both the Waste Confidence Decision and Rule assume that Yucca Mountain will not be built. In its recent Waste Confidence Decision and Rule, the Commission affirmed its position on the temporary storage of SNF pending the construction of a repository. Whether DOE has met its obligations under the Nuclear Waste Policy Act is outside the scope of the Commission's Waste Confidence Decision and Rule.

J. Russell Dyer submitted a comment supporting the petition. He raised two concerns: intergenerational equity and the effect of social and political stability on the long-term storage and eventual disposal of SNF and HLW. Mr. Dyer argued that without a “considered national policy to replace the Nuclear Waste Policy Act” the United States should cease generating the hazardous burden of SNF and HLW. Mr. Dyer urged the NRC to suspend existing reactor licenses, curtail license extension actions, and refrain from granting new construction or operating licenses.

Mr. Dyer is correct that intergenerational equity was considered in the Nuclear Waste Policy Act and the Commission's Waste Confidence Decision. (42 U.S.C. 10131 (2006) and 75 FR 81048). But intergenerational equity does not dictate that a disposal facility must be available when a nuclear power plant is licensed; as noted in the Waste Confidence Decision: “The Commission's approach in Findings 2 and 4 acknowledges the need for permanent disposal, and for the generations that benefit from nuclear energy to bear the responsibility for providing an ultimate disposal for the resulting waste.” (75 FR 81048). Further, this concern was evaluated by the Court of Appeals for the Second Circuit in NRDC v. NRC. In that case, the Court held that the AEA did not require the NRC to make a finding that safe permanent disposal was available when a license is issued. ( NRDC v. NRC, 582 F.2d 166, 175 (2d Cir. 1978)). Consistent with that decision, in the Waste Confidence Decision and Rule, the NRC found reasonable assurance of safe storage of SNF for at least 60 years beyond the licensed life for operation of any reactor and that repository capacity will be available when necessary. (75 FR 81067).

The Federal government continues to evaluate options for the ultimate disposal of SNF and HLW. Although the Waste Confidence Decision does not consider the indefinite storage of SNF, disposal in a geologic repository is still the ultimate goal (75 FR 81041). The Nuclear Waste Policy Act is still the law: The Act continues to mandate disposal in a repository, the collection of funds for the Nuclear Waste Fund, and that the Federal Government “has the responsibility to provide for the permanent disposal of” HLW and SNF. 42 U.S.C. 1013 (2006). Concurrent with its recent motion to withdraw the Yucca Mountain application, the Department of Energy created the Blue Ribbon Commission on America's Nuclear Future to evaluate, assess, and advise on possible alternatives for storage, management, and ultimate disposal of SNF and HLW (part of this evaluation will explore the need for additional or amended legislation). ( http://brc.gov/pdfFiles/BRC_Charter.pdf ). These measures demonstrate the Federal government's continued commitment to addressing the nuclear waste disposal problem in this generation.

Mr. Dyer's comment links political and social stability with the ability to determine and implement a final disposal solution. As explained in the Waste Confidence Decision and Rule, the Commission has confidence that the political and institutional hurdles to determining a path forward can be overcome. (75 FR 81049). This conclusion is supported by a review of international progress on licensing a deep geologic repository. ( See 75 FR at 81065-81066). In addition to benefiting from international experience, any new repository program would benefit from the lessons learned through the preparation and review of the Yucca Mountain license application. Although the Commission recognizes the need for broad public support before a successful repository program can be achieved (75 FR 81066), the ongoing efforts of the NRC and other Federal entities provide reasonable assurance that this generation will deal with the ultimate disposal of SNF and HLW.

For reasons discussed above, the NRC denies PRM-51-13.

I. Background

The Commission's licensing requirements for the disposal of LLW in near-surface [approximately the uppermost 30 meters (100 feet)] facilities reside in part 61. These regulations were published in the Federal Register on December 27, 1982 (47 FR 57446). The rule applies to any near-surface LLW disposal technology, including shallow-land burial, engineered land disposal methods such as below-ground vaults, earth-mounded concrete bunkers, and augered holes. The regulations emphasize an integrated systems approach to the disposal of commercial LLW, including site selection, disposal facility design and operation, minimum waste form requirements, and disposal facility closure. To lessen the burden on society over the long periods of time contemplated for the control of the radioactive material, and thus lessen reliance on institutional controls, part 61 emphasizes passive rather than active systems to limit and retard releases to the environment.

Development of the part 61 regulation in the early 1980s was based on several assumptions as to the types of wastes likely to go into a commercial LLW disposal facility. To better understand what the likely inventory of wastes available for disposal might be, the NRC conducted a survey of existing LLW generators. The survey, documented in Chapter 3 of NUREG-0782—the Draft part 61 Environmental Impact Statement (DEIS)—revealed that there were about 36 distinct commercial waste streams consisting of about 24 radionuclides of potential regulatory interest. The specific waste streams in question were representative of the types of commercial LLW being generated at the time. Waste streams associated with DOE's nuclear defense complex were not considered as part of the survey, since disposal of those wastes, at that time, was to be conducted at the DOE-operated sites. Over the last several years there have been a number of developments that have called into question some of the key assumptions made in connection with the earlier part 61 DEIS, including:

• The emergence of potential LLW streams that were not considered in the original part 61 rulemaking, including large quantities of depleted uranium, and possibly incidental wastes associated with the commercial reprocessing of spent nuclear fuel; and

• DOE's increasing use of commercial facilities for the disposal of defense-related LLW streams; and

• Extensive international operational experience in the management of LLW and intermediate-level radioactive wastes that did not exist at the time part 61 was promulgated.

The developments described above will need to be considered if the staff undertakes a revision of part 61. Waste from the Nation's defense programs has been managed by DOE and is not subject to part 61. Instead, DOE has used DOE Order 435.1 to specify the disposal requirements for this waste. The current version of this Order has been in place for about 11 years and applies to management of radioactive waste within the DOE complex. Like part 61, Order 435.1 places a heavy emphasis on performance assessment as part of its radioactive waste management decision-making. DOE recently started a comprehensive revision of Order 435.1, which it plans to complete sometime in 2011. The staff plans to consider any modifications to Order 435.1 as part of a comprehensive revision to part 61.

In SRM-M100617B (ADAMS ML1018203015), the Commission directed the staff to outline its approach to initiate activities in connection with a possible revision to part 61 that is risk-informed, performance-based. However, before the start of any rulemaking process, the staff recommended that it engage stakeholders and solicit their views on whether there should be amendments to the current part 61 and if so, what the nature of those amendments should be. This approach is consistent with NRC's openness policy and with the type of public outreach used by the staff to develop part 61.

The purpose of this workshop is to gather information from a broad spectrum of stakeholders concerning the NRC's proposed options for a comprehensive revision to NRC's and DOE's waste regulations. They include: (1) Risk-inform the current part 61 waste classification framework, (2) comprehensive revision to part 61, (3) site-specific waste acceptance criteria, (4) international alignment, and (5) supersede direction given in Staff Requirements Memorandum (SRM)-08-0147. This workshop will be conducted jointly with DOE who is also considering revisions to its Management Directive DOE Order 435.1 ( Radioactive Waste Management ).

The joint public workshop will be organized in two sessions (one for each agency), followed by a joint “Panel Discussion” Session. Session I will address DOE Order 435.1. Session I will also include an opportunity for stakeholder feedback and comments. Session II will address the NRC staff's proposed options for any potential rulemaking actions with respect to revision of 10 CFR part 61 ( Licensing Requirements for Land Disposal of Radioactive Waste ) as discussed in the NRC Commission Paper SECY-10-0165. This SECY paper is available on the NRC Web site at http://www.nrc.gov/reading-rm/doc-collections/commission/secys/2010/. Session II will also include background presentations on SECY-10-0165 by NRC staff. Following Session II, there will be a joint DOE/NRC Panel Discussion to explain the agencies' respective positions, future plans, and specific views regarding the LLW management framework. The panel will also address public and stakeholder suggestions and comments.

The public workshop will be held on March 4, 2011, from 8:30 a.m. to 5:30 p.m. at the Hyatt Regency Phoenix Hotel, 122 North Second Street, Phoenix, Arizona 85004. Pre-registration for this meeting is not necessary. Members of the public choosing to participate in this meeting remotely can do so in one of two ways—online, via Webex, or via a telephone (audio) connection. Instructions for remote participation in this meeting are described below.

1. Go to https://pec.webex.com/pec/j.php?ED=7975058&UID=32785548&PW=NNzA2ZGNlOGYx&RT=MiM1.

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To view in other time zones or languages, please click the link: https://pec.webex.com/pec/j.php?ED=7975058&UID=32785548&PW=NNzA2ZGNlOGYx&ORT=MiM1.

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The agenda for the public meeting will be noticed no fewer than ten (10) days prior to the meeting on the NRC's electronic public workshop schedule at http://www.nrc.gov/public-involve/public-meetings/index.cfm.

NRC staff is seeking stakeholder input to the following three questions that will be discussed at the public workshop:

(1) Should the staff revise the existing 10 CFR part 61?

(2) What recommendations do you have for specific changes to the current rule?

(3) What are your suggestions for possible new approaches to commercial LLW management?

NRC plans to consider stakeholder views in the development of a revised draft of part 61. The staff expects to issue a Commission Paper summarizing stakeholder views along with a recommendation for any future part 61 rulemaking in calendar year 2012. Written comments may be sent to the address listed in the ADDRESSES section. Questions about participation in the public workshops should be directed to the points of contact listed in the FOR FURTHER INFORMATION CONTACT section.

1. The Federal Energy Regulatory Commission is issuing this Notice of Inquiry to seek comments on its procedures with respect to the assessment of annual charges for the use of government lands by hydropower projects. In particular, the Commission is interested in identifying administratively practical methods for assessing reasonable annual charges that compensate the United States for the use of its lands.

2. Section 10(e)(1) of the Federal Power Act (FPA)  1 requires Commission hydropower licensees using Federal lands to:

In other words, where hydropower licensees use and occupy Federal lands for project purposes, they must compensate the United States through payment of an annual fee, to be established by the Commission. 2

3. The Commission has employed various methodologies to determine the charges. The touchstone has been to find an administratively practical methodology which results in reasonably accurate land valuations.

4. Beginning in 1938, annual charges for use of government land were based on project-by-project appraisals. 3 That proved uneconomical because the cost of conducting individual appraisals was in excess of the value of the land involved. 4 In 1942, the Commission's predecessor, the Federal Power Commission (FPC), developed a national average value of $50 per acre, to which it applied a four percent rate of return to derive an annual land use charge of $2.00 per acre. 5 The FPC had determined that a national average was superior to regional or State land values because use of the national average would simplify the administrative task of Commission staff and reduce the costs associated with yearly land use charge determinations. 6 The FPC recognized that regional or State averages had the advantage of greater localization, but concluded that any speculative improvement in land value accuracy would not be significant enough to outweigh the obvious administrative economies accruing when a single nationwide figure is used as the basis for annual charges. 7

5. In 1962, the FPC increased the national average land value to $60 per acre, and in 1976 to $150 per acre. In 1976, the FPC also adopted a fluctuating interest rate to ensure that the rate of return would remain current. 8

6. In 1985, the Inspector General of the Department of Energy concluded that the Commission's existing methodology resulted in an under-collection of over $15 million per year because it used outdated land values. The Inspector General also found that the wide variation in land values made the use of a zone index preferable to a national average. The Inspector General recommended that the Commission: (1) Base land use charges on the current fair market value of the land being used; (2) use current long-term interest rates in its calculations; and (3) replace the national average land value with State-by-State averages. 9

7. In response, the Commission instituted a rulemaking for several purposes, including to impose Federal land use fees that better approximated the fair market value of the use of those lands. In the Notice of Proposed Rulemaking, the Commission noted that it had found no existing index of land values that accurately reflected current economic conditions and conformed precisely to the context of land used for hydropower projects. 10 The Commission stated that it was considering several proposals for assessing land use charges, including: (1) Using, with modifications, the “Agricultural Land Values and Market Outlook and Situation Report,” published by the Department of Agriculture, which provided State-by-State average farm land and building values; (2) conducting individual appraisals; or (3) using fees based on a licensed project's gross income or on its power generation. 11 In a subsequent notice requesting supplemental comments, the Commission posited another alternative that had recently become available: basing land use fees on a rental schedule for linear rights-of-way being developed jointly by the U.S. Department of Agriculture's Forest Service and the U.S. Department of Interior's Bureau of Land Management (BLM). 12 The Commission explained that, although the rental schedule concerned linear rights-of-way, it might be more representative of the value of land used for hydropower projects than valuation of farm lands or any other then currently-published information. 13

8. In its final rule, the Commission explained that its existing methodology had resulted in under-collection of land use charges and was no longer reasonable because it used outdated land values, that the wide variation in land values across the country made use of a zone index preferable to a national average, and that its previous decision not to use such an index because of the burden on the Commission to determine the value of Forest Service lands was no longer an issue because the Forest Service and BLM had begun promulgating an index setting forth those values. 14 The Commission agreed with the majority of commenters that the BLM-Forest Service index more accurately reflected typical hydropower project lands, and so decided to use that index rather than the farm values index. 15

9. The Commission explained that the BLM-Forest Service methodology was based on a survey of the various types of lands that the Forest Service has allowed to be occupied by linear rights-of-way. The schedule was divided into regional zones, and provided per acre rental fees listed by State and county. 16 The Commission decided to continue its past practice of doubling the linear right-of-way fee in order to establish the annual fees for the use of Federal lands for project works other than transmission lines ( e.g., dams, powerhouse, and reservoirs) because lands used for transmission line rights-of-way would remain available for multiple uses, while other Federal lands occupied by hydropower project works would not. 17

10. The Commission found no merit to claims that charging fair market value for Federal lands is prohibited by the FPA:

The Commission stated that “the Forest Service index is the best approximation of reasonable land charges” and explained that “the Forest Service index will be adopted and published each year by the Commission.”  19

11. The Commission rejected the proposal to use the agricultural lands value index published by the U.S. Department of Agriculture, which used a State-by-State average value per acre of farm land and buildings. The Commission concluded that the agricultural index would require such major adjustments that it would not be an efficient measure of land value for hydropower projects. 20 The Commission also rejected using a fee based on the percentage of gross sales or a rate per kilowatt hour. The Commission concluded that a percentage of gross sales fee or flat rate is not a reasonable method because it would charge a royalty as though the Federal land being used was producing power, which overlooks the fact that power output is the result of many factors ( e.g., water rights, head, project structures), and not just the acreage of the Federal land involved. 21 Finally, the Commission rejected the proposal to use individual project appraisals, concluding that the FPC had abandoned the appraisal method in 1942, and again after reconsideration in 1976, because the cost of individual project appraisals was excessive compared to the value of the Federal land at issue. Thus, the Commission concluded that individual appraisals would be too costly and result in time-consuming litigation. 22

12. Based on these findings, the Commission promulgated a regulation stating, inter alia, that annual charges for the use of government lands would be set on the basis of the schedule of rental fees for linear rights-of-way (the BLM-Forest Service schedule); that annual charges for government lands occupied by project transmission lines would be based directly on the schedule, while charges for lands used for other project purposes would be twice the charges set forth in the schedule; and that the Commission, by its designee the Executive Director, would update its fees schedule to reflect changes in land values established by the Forest Service. 23

13. From 1987 until 2008, BLM and the Forest Service did not change the 1987 linear right-of-way schedule, other than to make an adjustment to the fees each year to account for inflation. Likewise, the only change in the Commission's implementation of its annual charges during this period was an annual fee update schedule to reflect the inflation adjustment. 24 In 2005, Congress passed the Energy Policy Act of 2005 that required BLM “to update [the schedule] to revise the per acre rental fee zone value schedule by State, county, and type of linear right-of-way use to reflect current values of land in each zone.” 25 Congress further ordered that “the Secretary of Agriculture shall make the same revision for linear rights-of-way * * * on National Forest System land.”

14. On April 27, 2006, BLM issued an advance notice of proposed rulemaking proposing to update the fee schedule. 26 BLM stated that it was considering using existing published information or statistical data, such as information published by the National Agricultural Statistic Service (NASS), for updating the schedule. On December 11, 2007, BLM issued a proposed rule updating the rental fee schedule, 27 and on October 31, 2008, it issued a final rule. 28 The rule based the updated fee on the NASS information, as BLM had proposed. BLM noted that the four commenters who had addressed the issue had supported use of the NASS data. The Forest Service subsequently adopted the BLM revisions. 29

15. In January 2009, the Commission sent letters to all of its licensees, explaining that the Forest Service had revised its fee schedule in response to direction from Congress and that consequently “for many projects, the [fiscal year] 2009 Federal land use charges will increase substantially.” The Commission asked licensees to confirm by county the Federal acres that the Commission believed to be occupied by each project. 30

16. On February 17, 2009, the Commission issued notice of the Fee Update Schedule and based the schedule, as in previous years, on the BLM's and Forest Service's land valuations (February 17 Notice). 31 Because of the BLM-Forest Service revisions, this resulted, in some cases, in significantly higher fees being assessed. 32 In calculating the 2009 fees, the Commission used the same methodology that it has used for the past 21 years: it took the land values published by Forest Service and BLM, used the information in its files showing Federal acreage occupied by individual projects, and applied the values for the counties in which individual projects were located, doubling the values for acreage occupied by non-transmission line portions of hydropower projects.

17. On March 6, 2009, the Federal Lands Group, a group of licensees composed of both municipal and private entities, filed a request for rehearing of the February 17 Notice. The group alleged that the February 17 Notice amounted to a rulemaking, improperly issued without notice and an opportunity for comment, and that the Commission had improperly delegated its authority to set annual charges to BLM and the Forest Service. The group asked the Commission to vacate the February 17 Notice, rescind annual charge bills that had been sent out in accordance with it, and reissue bills calculated under the prior fees schedule.

18. On October 30, 2009, the Commission denied rehearing. 33 On December 18, 2009, the Federal Lands Group filed a petition for review with the United States Court of Appeals for the District of Columbia Circuit. On January 4, 2011, the Court granted the petition for review and vacated the 2009 Update. 34 The Court stated that the Commission is required by the Administrative Procedure Act to seek notice and comment on the methodology used to calculate annual charges because the Commission's fee schedule is based on the Forest Service's land value index, and the Forest Service has made changes to the methodology underlying its index. We begin that process here.

19. As recounted above, the Commission has employed various methodologies over the course of its history to determine annual charges for the use of government lands by hydropower projects. The touchstone has been to find an administratively-practical methodology, which results in reasonably accurate land valuations. In seeking this goal, the methodology has been modified on occasion in response to concerns such as the cost of administering the methodology ( e.g., rejecting individual appraisals), the administrative burden on the Commission ( e.g., rejecting creation of our own index), and the accurate collection of fair market value ( e.g., implementing updates in response to the contention that Commission had been under-collecting). At times, however, a previously-rejected approach has been revisited and adopted ( e.g., Forest Service-BLM index adopted with adjustments because Commission would not be subject to administrative burden of creating its own index). The Commission now seeks suggestions for creating an administratively-practical methodology for assessing annual charges for the use of government lands that will result in reasonably accurate land valuations. The Commission specifically seeks comment on existing indices that could be used as the basis for establishing annual land use charges, and whether particular indices are better suited for that purpose than others. We outline below the major objectives in considering a new annual charges methodology, and request that commenters address how any methodology they suggest would be consistent with each of those objectives.

20. Any proposed methodology should be uniformly applicable to all hydropower licensees. This means that the Executive Director should be able to take the information in the Commission's files showing Federal acreage occupied by individual projects, apply the adopted methodology, and create an annual charge for the use of government lands for each licensed project. This has previously been possible, for instance, from 1987 to 2008, with the use of an existing index created by the Forest Service and BLM, modified as necessary, and updated automatically by the Forest Service for inflation.

21. The administration of any proposed methodology must not impose exorbitant costs on the Commission. Collection of annual charges and application of the ultimate methodology should be an annual, routine ministerial process that requires reasonable, but not overly burdensome, staff effort.

22. Any proposed methodology, once adopted, should not be subject to review on an individual case-by-case basis. Licensees will have the opportunity to challenge computational errors by the Executive Director in calculating the annual charge or the relevant county land acreage, but case-by-case challenges to the methodology would add significantly to the administrative cost and burden of collecting annual charges.

23. At times in the Commission's history, it has been determined that the Commission had not been collecting fair market value for the use of government lands, which resulted in a substantial under-collection. 35 To ensure that the Commission recovers “reasonable annual charges,” any proposed methodology must reflect reasonably accurate land valuations.

Throughout this document “we,” “us,” or “our” refer to EPA. This section provides additional information by addressing the following questions:

When submitting comments, remember to:

1. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

2. Follow directions—EPA may ask you to respond to specific questions or organize comments by referencing Code of Federal Regulations (CFR) part or section number.

3. Explain why you agree or disagree; suggest alternative and substitute language for your requested change.

4. Describe any assumptions and provide any technical information and/or data you used.

5. If you estimate potential cost or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

6. Provide specific examples to illustrate your concerns, and suggest alternatives.

7. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

8. Make sure to submit your comments by the comment period deadline identified in the proposed rule.

EPA is proposing to determine that the St. Louis (MO-IL) metropolitan 1997 8-hour ozone nonattainment area has attained the 1997 8-hour ozone NAAQS. EPA received a request from the Missouri Department of Natural Resources to determine that the St. Louis metropolitan nonattainment area has attained the 1997 8-hour ozone standard of 0.08 parts per million (ppm). This request is based upon the most recent three years of complete, quality assured ambient air monitoring data for Missouri and Illinois showing that the area has attained the NAAQS during the 2008-2010 monitoring period.

On March 27, 2008 (73 FR 16436), EPA promulgated a revised 8-hour ozone standard of 0.075 ppm. On January 6, 2010, EPA again addressed this 2008 revised standard and proposed to set the primary 8-hour ozone standard within the range of 0.060 to 0.070 ppm, rather than at 0.075 ppm. EPA is working to complete reconsideration of the standard and thereafter will proceed with designations. Today's proposed rulemaking relates only to a determination of attainment for the 1997 8-hour ozone standard and is not affected by the ongoing process of reconsidering the revised 2010 standard.

The monitors and design values are displayed in Table 1. The table summarizes the annual fourth-high daily maximum 8-hour ozone concentrations and their 3-year (2008-2010) averages for all monitors in the St. Louis (MO-IL) metropolitan nonattainment area. These data reflect peak ozone concentrations quality assured and reported by the States of Illinois and Missouri.

Throughout this document, the terms “we,” “us,” and “our” refer to EPA. This supplementary information is organized as follows:

Particulate matter with an aerodynamic diameter of less than or equal to 10 micrometers (“PM-10”) is the subject of this proposed action. The NAAQS are limits for certain ambient air pollutants set by EPA to protect public health and welfare. PM-10 is among the ambient air pollutants for which EPA has established a health-based standard.

On July 1, 1987 (52 FR 24634), EPA revised the particulate matter (“PM”) NAAQS to replace Total Suspended Particulate (“TSP”) with PM-10 as the PM indicator. The 24-hour primary PM-10 standard was set at 150 micrograms per cubic meter (µg/m 3 ) with no more than one expected exceedance per year. The annual primary PM-10 standard was set at 50 µg/m 3 as an annual arithmetic mean. The secondary PM-10 standards were identical to the primary standards. 1

On October 17, 2006, EPA revised the primary PM-10 standards by revoking the annual standard of 50 µg/m 3 but retained the 24-hour standard of 150 µg/m 3 . EPA also revoked the annual secondary PM-10 standard. The revised PM-10 NAAQS became effective on December 18, 2006. See 71 FR 61144 and 40 CFR 50.6. Thus, for PM-10, the level of both the primary and secondary 24-hour NAAQS  2 is 150 µg/m 3 . 40 CFR 50.6(a).

The Truckee Meadows PM-10 nonattainment area  3 lies in the far southern part of Washoe County, which is located in the northwestern portion of Nevada and is bordered by the State of California to the west and the State of Oregon to the north. Within the State of Nevada, the counties of Humboldt, Pershing, Storey, Churchill, Lyon, and the city of Carson City border Washoe County to the east and south. Located at an average elevation of 4,500 feet above sea level, Truckee Meadows encompasses a land area of approximately 200 square miles and is surrounded by mountain ranges, which can lead to persistent wintertime temperature inversions where a layer of cold air is trapped in the valley. Warmer air above the inversion acts as a lid, containing and concentrating air pollutants at ground level.

Much of Washoe County's urban population lives in the Truckee Meadows PM-10 nonattainment area. Anthropogenic activities, such as automobile use and residential wood combustion, are also concentrated here. In the last quarter of the twentieth century, Truckee Meadows experienced rapid growth in population, increasing from approximately 150,000 in 1980 to approximately 330,000 in 2009, an increase of 120 percent over that 29-year period. The two major cities in the area are Reno and Sparks.

EPA initially designated the Truckee Meadows area as nonattainment for the TSP NAAQS in 1978. See 43 FR 8962, 9012 (March 3, 1978). Following EPA's 1987 revisions to the PM NAAQS to replace TSP with PM-10 as the PM indicator, Truckee Meadows was designated and classified by operation of law under the CAA Amendments of 1990 as a moderate nonattainment area for the PM-10 NAAQS. See 56 FR 11101 (March 15, 1991); 56 FR 56694 (November 6, 1991). Effective February 7, 2001, EPA determined that the area had failed to attain both the annual and the 24-hour PM-10 NAAQS  4 by the CAA mandated attainment date for moderate nonattainment areas of December 31, 1994, and reclassified the area under CAA 188(b)(2) by operation of law as a serious nonattainment area for the PM-10 NAAQS. See 66 FR 1268 (January 8, 2001).

Air quality planning and monitoring in Truckee Meadows is the responsibility of the Washoe County District Board of Health (“District”), which administers air quality programs in Washoe County through the District Health Department's Air Quality Management Division (“WCAQMD”).

A determination of whether an area's air quality meets the PM-10 NAAQS is generally based upon the most recent three years of complete, quality-assured data gathered at established National Air Monitoring Stations (“NAMS”) or State and Local Air Monitoring Stations (“SLAMS”) in the nonattainment area and entered into the EPA Air Quality System (“AQS”) database. Data from air monitors operated by State/local agencies in compliance with EPA monitoring requirements must be submitted to the EPA AQS database. Heads of monitoring agencies annually certify that these data are accurate to the best of their knowledge. Accordingly, EPA relies primarily on data in its AQS database when determining the attainment status of areas. See 40 CFR 50.6; 40 CFR part 50, appendix J; 40 CFR part 53; 40 CFR part 58, appendices A, C, D and E. All data are reviewed to determine the area's air quality status in accordance with 40 CFR part 50, appendix K.

The 24-hour PM-10 standard is attained when the expected number of days per calendar year with a 24-hour concentration in excess of the standard (referred to herein as “exceedance”  5 ), as determined in accordance with 40 CFR part 50, appendix K, is equal to or less than one. 6 See 40 CFR 50.6 and 40 CFR part 50, appendix K. Three consecutive years of complete air quality data are necessary to show attainment of the 24-hour standard for PM-10. See 40 CFR part 50, appendix K. A complete year of air quality data, as referred to in 40 CFR part 50, appendix K, includes all four calendar quarters with each quarter containing data from at least 75 percent of the scheduled sampling days. Id.

Sections 179(c)(1) and 188(b)(2) of the Act require for any PM-10 nonattainment area that EPA determine, within 6 months following the applicable attainment date, whether the area attained the standard by that date. Under section 188(c)(2) of the Act, the latest applicable attainment date for a serious PM-10 nonattainment area that was initially designated as nonattainment by operation of law under the CAA Amendments of 1990, such as the Truckee Meadows area, was December 31, 2001.

To determine whether the Truckee Meadows area attained the PM-10 standard by the applicable attainment date, we reviewed AQS monitoring data from the 1999-2001 period. The AQS database contains three consecutive years of complete, quality-assured and certified PM-10 data for the 1999-2001 period from the four monitors then operating in Truckee Meadows. 7 We have reviewed the monitoring data for this period and found that the Truckee Meadows area experienced two exceedances of the PM-10 standard in 1999 which resulted in an average expected exceedance rate of more than one during the 1999-2001 period, thereby violating the PM-10 standard during that period. 8

Table 1 provides the highest measured PM-10 concentrations and the number of expected exceedances in Truckee Meadows during the 1999-2001 period.

Thus, based on complete, quality-assured and certified monitoring data from the 1999-2001 period, we propose to determine under sections 179(c)(1) and 188(b)(2) of the Act that the Truckee Meadows serious PM-10 nonattainment area failed to attain the PM-10 standard by the applicable attainment date of December 31, 2001.

The WCAQMD currently operates six SLAMS in the Truckee Meadows PM-10 nonattainment area. See Washoe County Air Quality Management Division, “2009 Ambient Air Monitoring Network Plan, Submitted to EPA Region IX July 1, 2010” (“2009 Monitoring Network Plan”). The six PM-10 monitors in Truckee Meadows are located as follows. In the City of Reno, the “Reno3” and “Galetti” monitoring sites are located at the corners of paved parking lots, in downtown Reno and just south of Interstate 80, respectively; the “Plumb-Kit” site is in a graveled area close to residences, about half a mile west of Interstate 580 and the Reno-Tahoe International Airport; and the “Toll” site is located along State Route 341, at the corner of the Washoe County School District parking lot. In South Reno, the “South Reno” monitoring site is located in an unpaved, vegetated area at the northeast corner of the Nevada Energy campus. Finally, in the City of Sparks, the “Sparks” monitoring site is located along a paved parking lot about half a mile north of Interstate 80. See generally 2009 Monitoring Network Plan. All of these PM-10 monitor sites are operated on a one-in-six day schedule, except that at the Reno3 site the sampling frequency was recently increased to one-in-three days. Id. at 6.

PM-10 data from these six monitors are quality-assured and reported by the WCAQMD to the EPA AQS database. Id. at 3. EPA has approved the WCAQMD's monitoring network as satisfying the network design and data adequacy requirements of 40 CFR part 58. See letter dated September 29, 2009, from Joseph Lapka, Acting Manager, Air Quality Analysis Office, EPA Region 9, to Andrew Goodrich, Director, Washoe County District Health Department, Washoe County AQMD. The WCAQMD annually certifies that the data it submits to AQS are complete and quality-assured. See, e.g., letter dated April 23, 2010, from Craig Petersen, Senior Air Quality Specialist, WCAQMD, to David Lutz, Data Certification Contact, EPA, “Re: CY2009 Ambient Air Monitoring Data Certification.”

The AQS database contains three consecutive years of complete, quality-assured and certified PM-10 data for the 2007-2009 period, the most recent three-year period of such data for Truckee Meadows. We have reviewed the monitoring data for this period and found that no exceedances of the PM-10 NAAQS were recorded in the Truckee Meadows area during this time. The expected exceedance rate for this period was less than one, which means that the area attained the 24-hour PM-10 standard during this time.

Table 2 provides the highest measured PM-10 concentrations and the number of expected exceedances in Truckee Meadows during the 2007-2009 period.

Thus, based on complete, quality-assured and certified monitoring data from the 2007-2009 period, we propose to find that the Truckee Meadows PM-10 nonattainment area is currently attaining the PM-10 NAAQS. Preliminary data available to date for calendar year 2010 also indicate that no monitor in the area has measured an exceedance of the PM-10 standard during 2010. See Table 3.

Moreover, historical data show consistent attainment in the Truckee Meadows area for each three-year period since 2000-2002. According to these data, Truckee Meadows experienced only one measured exceedance (not constituting a violation) of the PM-10 standard during the ten years since 2000, in 2005. No violations have occurred during this time period. EPA's review of quality-assured AQS data since 2000 thus confirms that the area attained the 24-hour PM-10 NAAQS in 2002 and has continued in attainment since then. 9 See Table 4, below and Tables 2 and 3, above.

Thus, the area's monitoring history over the past ten years shows that the Truckee Meadows area has consistently met the 24-hour PM-10 NAAQS, and the most recent three years of complete, quality-assured data show that the area continues to attain the PM-10 standard.

The air quality planning requirements for serious PM-10 nonattainment areas, such as Truckee Meadows, are set out in part D, subparts 1 and 4 of title I of the Act. EPA has issued guidance in a General Preamble  10 describing how we will review State implementation plans (SIPs) and SIP revisions submitted under title I of the Act, including those containing serious PM-10 nonattainment area SIP provisions.

The subpart 1 requirements include, among other things, provisions for reasonably available control measures (“RACM”), reasonable further progress (“RFP”), emissions inventories, a permit program for construction and operation of new or modified major stationary sources in the nonattainment area (“NSR”), contingency measures, conformity, and additional SIP revisions providing for attainment where EPA determines that the area has failed to attain the standard by the applicable attainment date.

Subpart 4 requirements in CAA section 189 apply specifically to PM-10 nonattainment areas. The requirements for serious PM-10 nonattainment areas include: (1) An NSR program defining “major source” or “major stationary source” to include any source that emits or has the potential to emit at least 70 tons per year of PM-10; (2) an attainment demonstration; (3) provisions for RACM; (4) provisions for Best Available Control Measures (“BACM”); (5) quantitative milestones demonstrating RFP toward attainment by the applicable attainment date; (6) in the case of a serious nonattainment area that fails to attain by the applicable attainment date, plan revisions providing for attainment and for annual reductions in PM-10 or PM-10 precursor emissions within the area of not less than five percent of the amount of such emissions as reported in the most recent inventory (“189(d) plans”); and (7) provisions to ensure that the control requirements applicable to major stationary sources of PM-10 also apply to major stationary sources of PM-10 precursors except where the Administrator has determined that such sources do not contribute significantly to PM-10 levels which exceed the NAAQS in the area.

For nonattainment areas where EPA determines that monitored data show that the NAAQS have already been achieved, EPA's interpretation, upheld by the Courts, is that the obligation to submit certain requirements of part D, subparts 1, 2 and 4 of the Act are suspended for so long as the area continues to attain. These include requirements for attainment demonstrations, RFP, RACM, and contingency measures, because these provisions have the purpose of helping achieve attainment of the NAAQS. Certain other obligations for PM-10 nonattainment areas, however, are not suspended, such as the NSR and BACM requirements.

This interpretation of the CAA is known as the Clean Data Policy. It is the subject of several EPA memoranda and regulations, and numerous rulemakings that have been published in the Federal Register over more than fifteen years. EPA finalized the statutory interpretation set forth in the policy in its final 8-hour ozone implementation rule, 40 CFR 51.918, as part of its “Final Rule to Implement the 8-hour Ozone National Ambient Air Quality Standard—Phase 2” (Phase 2 Final Rule). See discussion in the preamble to the rule at 70 FR 71612, 71645-46 (November 29, 2005). The DC Circuit upheld this Clean Data regulation as a valid interpretation of the CAA. NRDC v. EPA, 571 F. 3d 1245 (DC Cir. 2009). EPA also finalized its interpretation in an implementation rule for the NAAQS for particulate matter of 2.5 microns or less (PM 2.5 ). 40 CFR 51.1004(c). Thus, EPA has codified the policy when it established final rules governing implementation of new or revised NAAQS for the pollutants. 70 FR 71612, 71644-46 (November 29, 2005); 72 FR 20585, 20665 (April 25, 2007) (PM 2.5 Implementation Rule). Otherwise, EPA applies the policy in individual rulemakings related to specific nonattainment areas. See, e.g., 75 FR 27944 (May 19, 2010) (determination of attainment of the PM-10 standard in Coso Junction, California); 75 FR 6571 (February 10, 2010) (determination of attainment of the 1-hour ozone standard in Baton Rouge, Louisiana).

In its many applications of the Clean Data Policy interpretation to PM-10, EPA has explained that the legal bases set forth in detail in our Phase 2 Final rule, our May 10, 1995 memorandum from John S. Seitz, entitled “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” our PM 2.5 Implementation Rule, and our December 14, 2004 memorandum from Stephen D. Page entitled “Clean Data Policy for the Fine Particle National Ambient Air Quality Standards,” are equally pertinent to the interpretation of provisions of subparts 1 and 4 applicable to PM-10. See, e.g., 71 FR 6352 (February 8, 2006) (Ajo, Arizona area); 71 FR 13021 (March 14, 2006) (Yuma, Arizona area); 71 FR 40023 (July 14, 2006) (Weirton, West Virginia area); 71 FR 44920 (August 8, 2006) (Rillito, Arizona area); 71 FR 63642 (October 30, 2006) (San Joaquin Valley, California area); 72 FR 14422 (March 28, 2007) (Miami, Arizona area); and 75 FR 27944 (May 19, 2010) (Coso Junction, California area). EPA's interpretation that the obligation to submit an attainment demonstration, RACM, RFP contingency measures, and other measures related to attainment under part D of title I of the CAA, pertains whether the standard is PM-10, ozone or PM-2.5.

In our proposed and final rulemakings determining that the San Joaquin Valley nonattainment area attained the PM-10 standard, EPA set forth at length our rationale for applying the Clean Data Policy to PM-10. The Ninth Circuit subsequently upheld this rulemaking, and specifically EPA's Clean Data Policy in the context of the PM-10 standard. Latino Issues Forum v. EPA, Nos. 06-75831 and 08-71238 (9th Cir.), Memorandum Opinion, March 2, 2009. In rejecting petitioner's challenge to the Clean Data Policy for PM-10, the Court stated:

EPA noted in its prior PM-10 rulemakings that the reasons for relieving an area that has attained the relevant standard of certain obligations under part D, subparts 1 and 2, apply equally to part D, subpart 4, which contains specific attainment demonstration and RFP provisions for PM-10 nonattainment areas. In EPA's Phase 2 8-Hour Ozone Final Rule and ozone and PM-2.5 Clean Data memoranda, EPA established that it is reasonable to interpret provisions regarding RFP and attainment demonstrations, along with related requirements, so as not to require SIP submissions if an area subject to those requirements is already attaining the NAAQS ( i.e. attainment of the NAAQS is demonstrated with three consecutive years of complete, quality-assured air quality monitoring data). Every U.S. Circuit Court of Appeals that has considered the Clean Data Policy has upheld EPA rulemakings applying its interpretation, for both ozone and PM-10. Sierra Club v. EPA, 99 F.3d 1551 (10th Cir. 1996); Sierra Club v. EPA, 375 F. 3d 537 (7th Cir. 2004); Our Children's Earth Foundation v. EPA, N. 04-73032 (9th Cir. June 28, 2005) (memorandum opinion), Latino Issues Forum, supra.

It has been EPA's longstanding interpretation that the general provisions of part D, subpart 1 of the Act (sections 171 and 172) do not require the submission of SIP revisions concerning RFP for areas already attaining the ozone NAAQS. In the General Preamble, we stated:

With respect to RFP, section 171(1) states that, for purposes of part D of title I, RFP “means such annual incremental reductions in emissions of the relevant air pollutant as are required by this part or may reasonably be required by the Administrator for the purpose of ensuring attainment of the applicable NAAQS by the applicable date.” Thus, whether dealing with the general RFP requirement of section 172(c)(2), the ozone-specific RFP requirements of sections 182(b) and (c), or the specific RFP requirements for PM-10 areas of part D, subpart 4, section 189(c)(1), the stated purpose of RFP is to ensure attainment by the applicable attainment date. Section 189(c)(1) states that:

Although this section states that revisions shall contain milestones which are to be achieved until the area is redesignated to attainment, such milestones are designed to show reasonable further progress “toward attainment by the applicable attainment date,” as defined by section 171. Thus, it is clear that once the area has attained the standard, no further milestones are necessary or meaningful. This interpretation is supported by language in section 189(c)(3), which mandates that a State that fails to achieve a milestone must submit a plan that assures that the State will achieve the next milestone or attain the NAAQS if there is no next milestone. Section 189(c)(3) assumes that the requirement to submit and achieve milestones does not continue after attainment of the NAAQS.

In the General Preamble, we noted with respect to section 189(c) that the purpose of the milestone requirement “is `to provide for emission reductions adequate to achieve the standards by the applicable attainment date' (H.R. Rep. No. 490 101st Cong., 2d Sess. 267 (1990)).” 57 FR 13539 (April 16, 1992). If an area has in fact attained the standard, the stated purpose of the RFP requirement will have already been fulfilled. 11 EPA took this position with respect to the general RFP requirement of section 172(c)(2) in the April 16, 1992 General Preamble and also in the May 10, 1995 memorandum with respect to the requirements of sections 182(b) and (c). In our prior applications of the Clean Data Policy to PM-10, we have extended that interpretation to the specific provisions of part D, subpart 4. See, e.g., 71 FR 40952 and 71 FR 63642 (proposed and final determination of attainment for San Joaquin Valley); 75 FR 13710 and 75 FR 27944 (proposed and final determination of attainment for Coso Junction).

In the General Preamble, we stated, in the context of a discussion of the requirements applicable to the evaluation of requests to redesignate nonattainment areas to attainment, that the “requirements for RFP will not apply in evaluating a request for redesignation to attainment since, at a minimum, the air quality data for the area must show that the area has already attained. Showing that the State will make RFP towards attainment will, therefore, have no meaning at that point.” 57 FR 13564. See also our September 4, 1992 memorandum from John Calcagni, entitled “Procedures for Processing Requests to Redesignate Areas to Attainment” (Calcagni memo), p. 6.

Similarly, the requirements of section 189(c)(2) with respect to milestones no longer apply so long as an area has attained the standard. Section 189(c)(2) provides in relevant part that:

Where the area has attained the standard and there are no further milestones, there is no further requirement to make a submission showing that such milestones have been met. As noted above, this is consistent with the position that EPA took with respect to the general RFP requirement of section 172(c)(2) in the April 16, 1992 General Preamble and also in the May 10, 1995 Seitz memorandum with respect to the requirements of section 182(b) and (c). In the May 10, 1995 Seitz memorandum, EPA also noted that section 182(g), the milestone requirement of subpart 2, which is analogous to provisions in section 189(c), is suspended upon a determination that an area has attained. The memorandum, also citing additional provisions related to attainment demonstration and RFP requirements, stated:

With respect to the attainment demonstration requirements of section 189(a)(1)(B), an analogous rationale leads to the same result. Section 189(a)(1)(B) requires that the plan provide for “a demonstration (including air quality modeling) that the [SIP] will provide for attainment by the applicable attainment date * * *.” As with the RFP requirements, if an area is already monitoring attainment of the standard, EPA believes there is no need for an area to make a further submission containing additional measures to achieve attainment. This is also consistent with the interpretation of the section 172(c) requirements provided by EPA in the General Preamble, the Page memo, and the section 182(b) and (c) requirements set forth in the Seitz memo. As EPA stated in the General Preamble, no other measures to provide for attainment would be needed by areas seeking redesignation to attainment since “attainment will have been reached.” 57 FR at 13564.

Other SIP submission requirements are linked with these attainment demonstration and RFP requirements, and similar reasoning applies to them. These requirements include the contingency measure requirements of sections 172(c)(9) and 182(c)(9). We have interpreted the contingency measure requirements of sections 172(c)(9) and 182(c)(9) as no longer applying when an area has attained the standard because those “contingency measures are directed at ensuring RFP and attainment by the applicable date.” 57 FR at 13564; Seitz memo, pp. 5-6.

Both sections 172(c)(1) and 189(a)(1)(C) require “provisions to assure that reasonably available control measures” ( i.e., RACM) are implemented in a nonattainment area. The General Preamble, 57 FR at 13560 (April 16, 1992), states that EPA interprets section 172(c)(1) so that RACM requirements are a “component” of an area's attainment demonstration. Thus, for the same reason the attainment demonstration no longer applies by its own terms, the requirement for RACM no longer applies. EPA has consistently interpreted this provision to require only implementation of potential RACM measures that could contribute to reasonable further progress or to attainment. General Preamble, 57 FR at 13498. Thus, where an area is already attaining the standard, no additional RACM measures are required. 12 EPA is interpreting section 189(a)(1)(C) consistent with its interpretation of section 172(c)(1). 13

Finally, in the case of a serious PM-10 nonattainment area that does not attain the PM-10 standard by the applicable attainment date, sections 189(d) and section 179(d) require the State to submit additional SIP revisions providing for attainment of the standard. Section 189(d), which applies to any serious PM-10 nonattainment area that fails to attain by the applicable attainment date, requires the State to submit “plan revisions which provide for attainment of the PM-10 air quality standard and, from the date of such submission until attainment, for an annual reduction in PM-10 or PM-10 precursor emissions within the area of not less than 5 percent” of inventoried PM-10 and PM-10 precursor emissions. Section 179(d), which applies to any nonattainment area for which EPA has made a determination under section 179(c) of failure to attain by the applicable attainment date, requires the State to submit plan revisions meeting the requirements of CAA sections 110 and 172 and “such additional measures as the Administrator may reasonably prescribe” including measures that can be feasibly implemented in the area.

As discussed above in section II of this document, the Truckee Meadows is a serious nonattainment area that did not attain the PM-10 standard by the applicable attainment date of December 31, 2001. See CAA 188(c)(2). 14 However, as discussed in section III.A of this document, the area did attain the PM-10 standard beginning in 2002, and has continued in attainment during the decade that followed. As explained at length in the memoranda and rulemakings cited above, the obligations to submit SIPs for RFP, attainment demonstrations, and certain related SIP submissions are suspended once EPA determines an area has attained the standard, since their purpose, to achieve attainment, will already have been fulfilled. Section 189(d) requires submittal of plan revisions “which provide for attainment of the PM-10 air quality standard” and annual emission reductions of at least five percent “until attainment.” Similarly, section 179(d) requires submittal of plan revisions meeting the requirements of section 110 and section 172, which requires generally that submitted plan provisions “provide for attainment of the national primary ambient air quality standards.” Because these requirements apply to nonattainment areas that have failed to attain a standard by the applicable attainment date and are directed at achieving attainment, we believe that the obligations to submit plans under these requirements are suspended when EPA determines that the area has attained the standard, for as long as the area continues to attain. Thus, based on our proposed determination that the Truckee Meadows area is now attaining the PM-10 NAAQS in section III.A above, we propose to suspend the requirement for additional SIP submittals under sections 189(d) and 179(d).

We emphasize that the suspension of the obligation to submit SIP revisions concerning these RFP, attainment demonstration, RACM, and other related requirements exists only for as long as the Truckee Meadows area continues to monitor attainment of the standard. If EPA determines, after notice-and-comment rulemaking, that the area has monitored a violation of the NAAQS, the basis for the requirements being suspended would no longer exist. In that case, the area would again be subject to a requirement to submit the pertinent SIP revision or revisions and would need to address those requirements. Thus, a final determination that the area need not submit one of the pertinent SIP submittals amounts to no more than a suspension of the requirements for so long as the area continues to attain the standard. Only if and when EPA redesignates the area to attainment would the area be relieved of these submission obligations. Attainment determinations under the Clean Data policy do not shield an area from obligations unrelated to attainment in the area, such as provisions to address pollution transport.

As set forth above, based on our proposed determination that the Truckee Meadows area is currently attaining the PM-10 NAAQS ( see section III.A above), we propose to find that the obligations to submit planning provisions to meet the requirements for an attainment demonstration, reasonable further progress plans, reasonably available control measures, contingency measures, and additional SIP revisions under sections 189(d) and 179(d) no longer apply for so long as the area continues to monitor attainment of the PM-10 NAAQS. 15 If in the future, EPA determines after notice-and-comment rulemaking that the area again violates the PM-10 NAAQS, the basis for the attainment demonstration, RFP, RACM, contingency measure, and additional section 189(d) and 179(d) plan requirements being suspended would no longer exist. In that event, we would notify the State that we have determined that the area is no longer attaining the PM-10 standard and provide notice to the public in the Federal Register.

Pursuant to CAA sections 188(b)(2) and 179(c)(1) and based on complete, quality-assured data for the 1999-2001 period meeting the requirements of 40 CFR part 50, appendix K, we propose to determine that the Truckee Meadows nonattainment area failed to attain the 24-hour PM-10 NAAQS by the applicable attainment date of December 31, 2001. Failure by a “serious” nonattainment area such as Truckee Meadows to attain the PM-10 NAAQS by the applicable attainment date triggers a requirement for the State to submit additional plan revisions providing for attainment under CAA sections 189(d) and 179(d).

Separately and independently of the determination proposed above, we also propose to determine, based on the most recent three years of complete, quality-assured data meeting the requirements of 40 CFR part 50, appendix K, that the Truckee Meadows area is currently attaining the 24-hour PM-10 NAAQS. In conjunction with and based upon our proposed determination that Truckee Meadows is currently attaining the standard, EPA proposes to determine that the obligation to submit the following CAA requirements is not applicable for so long as the area continues to attain the PM-10 standard: The part D, subpart 4 obligations to provide an attainment demonstration pursuant to section 189(a)(1)(B), the RACM provisions of section 189(a)(1)(C), the RFP provisions of section 189(c), the requirement for 189(d) plans, the attainment demonstration, RACM, RFP and contingency measure provisions of part D, subpart 1 contained in section 172 of the Act, and the requirement for additional plan revisions in section 179(d) of the Act.

This proposed action, if finalized, would not constitute a redesignation to attainment under CAA section 107(d)(3) because we would not yet have approved a maintenance plan as required under section 175A of the CAA or determined that the area has met the other CAA requirements for redesignation. The classification and designation status in 40 CFR part 81 would remain serious nonattainment for this area until such time as EPA determines that Nevada meets the CAA requirements for redesignation of the Truckee Meadows area to attainment.

This action proposes to make two separate determinations regarding attainment based on air quality, and would, if finalized, result in the suspension of certain Federal requirements, and/or would not impose additional requirements beyond those imposed by State law or by the Clean Air Act. For that reason, this proposed action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate, and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this proposed rule does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP obligations discussed herein do not apply to Indian Tribes and thus will not impose substantial direct costs on Tribal governments or preempt Tribal law.

Status: The meeting will be open to the public.

Purpose: The purpose of the Negotiated Rulemaking Committee on Designation of Medically Underserved Populations and Health Professional Shortage Areas (Committee) is to establish criteria and a comprehensive methodology for Designation of Medically Underserved Populations and Primary Care Health Professional Shortage Areas, using a Negotiated Rulemaking (NR) process. It is hoped that use of the NR process will yield consensus among technical experts and stakeholders on a new rule for designation of medically underserved populations and primary care health professions shortage areas, which would be published as an Interim Final Rule in accordance with Section 5602 the Affordable Care Act, Public Law 111-148.

Agenda: The meeting will be held on Tuesday, March 8; Wednesday, March 9; and Thursday, March 10. It will include a discussion of various components of a possible methodology for identifying areas of shortage and underservice, based on the recommendations of the Committee in the previous meeting. The Thursday meeting will also include development of the agenda for the next meeting. Members of the public will have the opportunity to provide comments during the meeting on Thursday afternoon, March 10.

Requests from the public to make oral comments or to provide written comments to the Committee should be sent to Nicole Patterson at the contact address above at least 10 days prior to the first day of the meeting, Wednesday, March 8. The meeting will be open to the public as indicated above, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the contact person listed above at least 10 days prior to the meeting.

The Committee is working to meet the requirement in the Affordable Care Act under tight timeframes. As work has progressed, it has been determined that more time will be needed to complete the assignment due to its complexity, resulting in the Committee's decision to extend planned meetings. As a result, the logistical challenges encountered with extending planned meetings and scheduling additional meetings hindered an earlier publishing of the meeting notice.

Section 224(a) of the Public Health Service (PHS) Act (42 U.S.C. 233(a)) provides that the remedy against the United States provided under the Federal Tort Claims Act (FTCA) resulting from the performance of medical, surgical, dental or related functions by any commissioned officer or employee of the PHS while acting within the scope of his office or employment shall be exclusive of any other related civil action or proceeding. The Federally Supported Health Centers Assistance Act of 1992 (Pub. L. 102-501), as amended in 1995 (FSHCAA), provides that, subject to its provisions, certain entities receiving funds under section 330 of the PHS Act, as well as any officers, governing board members, and employees, and certain contractors of these entities, shall be deemed for the purposes of medical malpractice liability to be employees of the PHS within the exclusive remedy provision of section 224(a) of the PHS Act.

A final rule implementing Public Law 102-501 was published in the Federal Register (60 FR 22530) on May 8, 1995, and added a new part 6 to 42 CFR chapter 1, subchapter A. This rule describes the eligible entities and the covered individuals who are or may be determined by the Secretary to be within the scope of the FTCA protection afforded by the Act.

Section 6.6, also published in the May 8, 1995 rule, describes acts and omissions that are covered by FSHCAA (covered activities or covered services). Subsection 6.6(d) restates the statutory criteria that may support a determination of coverage for services provided to individuals who are not patients of the covered entity.

Subsection 6.6(e) provides examples of situations within the scope of subsection 6.6(d). Questions were raised, however, about the specific situations encompassed by 6.6(d) and 6.6(e) and about the process for the Secretary to make the determinations provided by those subsections.

HRSA decided that it would be impractical and burdensome to require a separate application and determination of coverage for certain situations described in the examples set forth in 6.6(e), as further discussed in the September 1995 Notice (60 FR 49417). For those situations, the Department has set forth its determination that coverage is provided under 42 CFR 6.6(d) without the need for a separate application, so long as other requirements for coverage are met, such as a determination that the entity is a covered entity, a determination that the individual is a covered individual, and that the acts or omissions by those individuals occur within the scope of employment.

HRSA proposes including the key text and examples of the September 1995 Notice in 42 CFR 6.6(e), replacing the current regulatory text at 42 CFR 6.6(e). HRSA also proposes updating the “Immunization Campaign” example to clarify that this covered situation includes events to immunize individuals against infectious illnesses and does not limit coverage to only childhood vaccinations. In addition, HRSA proposes adding the following additional new example as subsection 6.6(e)(4) to set forth its determination of FTCA coverage for services to non-health center patients in certain individual emergency situations. This addition is expected to provide assurance of FTCA coverage in these situations and encourage reciprocal assistance by non-health center clinicians for health center patients in similar emergencies.

We will consider comments on this proposed rule that are received within 60 days of publication of this notice in the Federal Register . After the comment period closes, we will publish a final rule in the Federal Register . The document will include a discussion of any comments we receive and any changes.

HRSA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. HRSA has determined that the proposed rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, HRSA has concluded that the proposed rule does not contain policies that have Federalism implications as defined in the Executive Order and, consequently, a Federalism summary impact statement is not required.

HRSA has examined the impacts of the proposed rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). HRSA believes that this proposed rule is not a significant regulatory action under the Executive Order.

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this proposed rule simply updates an existing regulation to add further details to the description of certain situations that are covered by the FTCA, and because such coverage is provided for under Federal law, HRSA certifies that the rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” HRSA does not expect this proposed rule to result in any one-year expenditure that would meet or exceed this amount.

This rule does not contain any new information collection or recordkeeping requirements that fall under the purview of the Paperwork Reduction Act of 1995. The recordkeeping requirements contained in this rule are part of normal business practice and do not require the collection of new information or impose additional requirements beyond current routine practice.

For the reasons stated in the preamble, we are proposing to amend 42 CFR part 6 as follows:

This is a synopsis of the Commission's Notice of Proposed Rulemaking in WC Docket Nos. 07-38, 09-190, 10-132 and 11-10, adopted and released on February 8, 2011. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The document may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone (800) 378-3160 or (202) 863-2893, facsimile (202) 863-2898, or via the Internet at http://www.bcpiweb.com. It is also available on the Commission's Web site at http://www.fcc.gov.

Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. 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, May 1, 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.

○ For ECFS filers, if multiple docket or rulemaking numbers appear in the caption of this proceeding, filers must transmit one electronic copy of the comments for each docket or rulemaking number referenced in the caption. In completing the transmittal screen, filers should include their full name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions, filers should send an e-mail to 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. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although we continue to experience 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.

○ The Commission's contractor will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.

○ Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

○ U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th Street, SW., Washington, DC 20554.

People with Disabilities: 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). Contact the FCC to request reasonable accommodations for filing comments (accessible format documents, sign language interpreters, CART, etc. ) by e-mail: fcc504@fcc.gov; phone: (202) 418-0530 or (202) 418-0432 (TTY).

In addition, one copy of each pleading must be sent to each of the following:

○ The Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20554; Web site: http://www.bcpiweb.com; phone: 1-800-378-3160; and

○ Jeremy Miller, Competition Policy Division, Industry Analysis and Technology Division, 445 12th Street, SW., Room 5-B145, Washington, DC 20554; e-mail: Jeremy.Miller@fcc.gov or telephone number (202) 418-1507.

Filings and comments are also available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC, 20554. Copies may also be purchased from the Commission's duplicating contractor, BCPI, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI through its Web site: http://www.bcpiweb.com, by e-mail at fcc@bcpiweb.com, by telephone at (202) 488-5300 or (800) 378-3160 (voice), (202) 488-5562 (TTY), or by facsimile at (202) 488-5563.

Comments and reply comments must include a short and concise summary of the substantive arguments raised in the pleading. Comments and reply comments must also comply with § 1.49 and all other applicable sections of the Commission's rules. We direct all interested parties to include the name of the filing party and the date of the filing on each page of their comments and reply comments. All parties are encouraged to utilize a table of contents, regardless of the length of their submission. We also strongly encourage parties to track the organization set forth in the NPRM in order to facilitate our internal review process.

This document proposes new or revised information collection requirements. The reporting requirements, if any, that might be adopted pursuant to this NPRM are too speculative at this time to request comment from the OMB or interested parties under section 3507(d) of the Paperwork Reduction Act, 44 U.S.C. 3507(d). Therefore, if the Commission determines that reporting is required, it will seek comment from the OMB and interested parties prior to any such requirements taking effect. Nevertheless, interested parties are encouraged to comment on whether any new or revised information collection is necessary, and if so, how the Commission might minimize the burden of any such collection. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, we will seek specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” Nevertheless, interested parties are encouraged to comment on whether any new or revised information collection is necessary, and if so, how the Commission might minimize the burden of any such collection.

1. In this Notice of Proposed Rulemaking (NPRM), we seek comment on whether and how to reform the Form 477 data program to improve the Commission's ability to carry out its statutory duties, while streamlining and minimizing the overall costs of the program, including the burdens imposed on service providers. This NPRM is an important part of our larger Data Innovation Initiative to modernize and streamline how we collect, use, and disseminate data, and to ensure that all of the data we collect is useful for supporting informed policymaking, promoting competition, and protecting consumers. We are focused on giving careful consideration to the benefits and burdens of our data collections, and eliminating unnecessary collections where possible. For example, the Initiative already has identified over twenty data collections across the entire Commission that may be outdated and ripe for elimination, as well as a number of statutory reporting obligations that may have outlived their usefulness. Similarly, for each type of data discussed in this NPRM, we will consider the burdens and benefits of any proposed changes. Our goal is to ensure that the Commission has the data it needs, while minimizing the overall burdens of data collection.

2. Established in 2000, Form 477 is the Commission's primary tool for collecting data about broadband and local telephone networks and services. The form requires providers of broadband service, local telephone service, interconnected Voice over Internet Protocol (VoIP) service, and mobile telephone service to report the number of subscribers they have in their respective service areas. But the Commission has in the past noted shortcomings of the data collected using Form 477, and after more than a decade of rapid innovation in the market for broadband and telephone services, and consistent with the Government Accountability Office's (GAO) recent finding that the Commission's broadband data collection fails to collect key data required to inform policy decisions and generally needs improvement, we believe it may be time to modify Form 477 to better serve the needs of the Commission, Congress, service providers, and consumers. In fact, since the last modification of Form 477, Congress directed the FCC to collect additional information to supplement its analysis of broadband deployment and availability. As we have noted before, Form 477 collects data that are “a critical precursor” to the Commission's ability to fulfill its statutory duties, and provides the Commission with “a set of data of uniform quality and reliability” superior to other publicly available information sources. Form 477 also enables us to fulfill our obligation to reduce government regulation wherever possible, by providing “a factual basis to evaluate the nature and impact of our existing regulation and, in particular, to identify areas where competition has developed sufficiently to justify deregulation.”

3. Development of FCC Form 477. The Commission initiated the Form 477 data program in May 2000 to “materially improve its ability to develop, evaluate, and revise policy” for broadband and telephone services, and “to provide valuable benchmarks for Congress, the Commission, other policy makers, and consumers.” The Commission designed the program as a standardized collection, with separate sections on subscriptions to broadband services, local telephone service competition, and mobile telephony services.

4. In establishing the Form 477 framework for broadband data, the Commission anticipated that a “regular and consistent survey of broadband deployment” would substantially assist it in fulfilling its statutory duty under Section 706 of the Telecommunications Act to report to Congress on broadband deployment and availability, and to encourage the deployment of broadband to all Americans. To that end, the initial Form 477 collected broadband subscribership data. Specifically, the form collected data from facilities-based providers on the numbers of connections to the Internet in service to consumers in each State, and whether such connections used the provider's own facilities, unbundled network elements (UNEs), special-access lines or other leased lines, or wireless channels. The Commission established 200 kilobits per second (kbps) as the minimum transfer-speed threshold for the connections it would track, and required providers to identify the technology used to provide the connections, the percentage of connections offered to residential customers and small businesses, and each ZIP code in which the providers had at least one connection in service.

5. The initial Form 477 likewise collected subscribership data for local telephone service, including data from incumbent local exchange carriers (LECs) and competitive LECs on the number of voice-grade equivalent lines and fixed wireless channels in service for the provision of local exchange or exchange access service to end-user customers and for resale. The original Form 477 required LECs to report the five-digit ZIP codes in which customers served, by reported lines and wireless channels. Mobile telephony providers were required to report their total subscribers by State, and the percentage of customers billed directly by the reporting provider.

6. The initial Form 477 program did not require small providers to file reports. Specifically, broadband service providers with fewer than 250 connections in service in a State were not required to file the form. LECs with fewer than 10,000 voice-grade equivalent lines or wireless channels in service, and mobile telephony providers with fewer than 10,000 subscribers were similarly not required to file.

7. Revisions to Form 477. The Commission has twice modified Form 477. First, in 2004, the Commission revised the Form 477 program to require submissions from all facilities-based providers of broadband connections, in order to capture a more comprehensive picture of broadband deployment in rural areas. Further, the Commission required filers to report the percentage of their connections that fell into five speed tiers. The Commission also required all wired and fixed wireless providers to report the technologies used to provide service in the ZIP codes in which at least one connection was in service. The Commission acknowledged that mobile broadband service differs in some respects from fixed broadband service, and required filers reporting mobile wireless broadband subscribers to list the ZIP codes that “best represent the filers' mobile wireless broadband coverage areas.”

8. The Commission next refined the Form 477 data program in 2008, establishing the framework that is currently in place. The Commission decided to collect more granular subscription and speed data, and to improve the quality of data on mobile wireless broadband services. All wireline and terrestrial-fixed wireless broadband service providers must now report the numbers of subscribers at the census-tract level, broken down by technology and more disaggregated speed tiers; and the percentage of subscribers that are residential. Incumbent LECs must continue to report the percentage of their service areas where DSL connections are available to residential premises, and cable system operators must do the same with regard to cable modem service availability. Providers of terrestrial mobile wireless broadband services must continue to submit their broadband subscriber totals on a State-by-State basis, rather than at the census-tract level, and must report on the census tracts that “best represent” their broadband service footprint for each speed tier in which they offer service.

9. The 2008 Broadband Data Gathering Order and Further NPRM, 73 FR 37911, July 2, 2008, also required providers of interconnected VoIP services to report the number of subscribers in each State, the number of subscribers who purchase the service in conjunction with the purchase of a broadband connection and, of those, the types of connections purchased. Interconnected VoIP providers also must report the percentage of subscribers who can use the service over any broadband connection.

10. 2008 Further NPRM. The Commission sought comment in 2008 on further revisions to Form 477, including whether and how to institute a national broadband availability mapping program. The Commission tentatively concluded that it “should collect information that providers use to respond to prospective customers to determine on an address-by-address basis whether service is available.” The Commission sought comment on standardized collection formats; whether it should collect information on pricing and actual speeds of broadband services; how generally to maintain the confidentiality of broadband data; whether the Commission should conduct and publish periodic consumer surveys on broadband services; and whether it should require LECs and interconnected VoIP providers to report the number of subscribers in geographic units below the State level, either by ZIP code or census tract.

11. Since the adoption of the 2008 Broadband Data Gathering Order and Further NPRM, 73 FR 37911, July 2, 2008, a number of legislative and regulatory developments have affected the obligations of the Commission and other government agencies to collect data related to telephone and broadband services.

12. On October 10, 2008, Congress enacted the Broadband Data Improvement Act (BDIA), expressly finding that “[i]mproving Federal data on the deployment and adoption of broadband service will assist in the development of broadband technology across all regions of the nation.” The BDIA imposed several new obligations on the Commission and other Federal agencies.

13. The BDIA amended Section 706 of the Telecommunications Act of 1996 to improve the quality and quantity of data the Commission collects on the deployment and adoption of broadband services. First, the BDIA requires the Commission to publish its Section 706 reports “annually” instead of “regularly,” as previously required. Second, the BDIA requires the Commission to compile “demographic information for unserved areas” as part of the annual Section 706 inquiry. Specifically, the BDIA requires that the Commission “compile a list of geographical areas not served by any provider of advanced telecommunications capability.” If Census Bureau data are available, the Commission must “determine, for each such unserved area—(1) The population; (2) the population density; and (3) the average per capita income.”

14. The BDIA also requires the Commission to perform an international comparison in its annual broadband deployment report conducted pursuant to Section 706 of the Telecommunications Act. Specifically, Section 1303 of Title 47 now requires the Commission to “include information comparing the extent of broadband service capability (including data transmission speeds and price for broadband service capability) in a total of 75 communities in at least 25 countries abroad for each of the data rate benchmarks for broadband service utilized by the Commission to reflect different speed tiers.”

15. In addition, the BDIA required the GAO's Comptroller General to conduct a study and issue a report on broadband metrics and standards by October 10, 2009. That report evaluated the “broadband metrics that may be used by industry and the Federal Government [including the Commission] to provide users with more accurate information about the cost and capability of their broadband connection[s], and to better compare the deployment and penetration of broadband in the United States with other countries.”

16. The GAO found that current measures of broadband performance “have limitations,” that “views were mixed on potential alternatives, and ongoing [broadband data collection] efforts need improvement.” Further, stakeholders reported to the GAO that the data collected by the FCC Form 477 “[do] not include information on availability, price, or actual delivered speeds, which limits the ability to make comparisons across the country and inform policy or investment decisions.”

17. In February 2009, Congress enacted the American Recovery and Reinvestment Act (ARRA), which directed the Commission to develop a national broadband plan to ensure that all people of the United States have access to broadband. The ARRA also directed the National Telecommunications and Information Administration (NTIA) to develop and maintain a comprehensive nationwide and publicly available map of broadband service capability and availability.

18. Section 6001(k) of the ARRA instructed the Commission to submit to Congress a national broadband plan that would analyze mechanisms for ensuring broadband access by all people of the United States, provide a detailed strategy for achieving affordability and maximum usage, and include a plan for use of broadband to advance national purposes such as education, health care, energy, and public safety. The resulting National Broadband Plan, published on March 16, 2010, noted the necessity for “continuous collection and analysis of detailed data on competitive behavior,” and stressed the need for the Commission to conduct “more thorough data collection to monitor and benchmark competitive behavior.” In particular, recommendation 4.2 of the Plan suggested that the Commission “revise Form 477 to collect data relevant to broadband availability, adoption and competition.”

19. In order to comply with requirements under the BDIA and the ARRA, NTIA in July 2009 established a State Broadband Data and Development Grant Program (SBDD). Through this program, NTIA has awarded grants, funded through 2015, to certain State-designated entities to fund the collection of data from broadband providers. The data collected by NTIA as part of the SBDD program will help populate a national broadband inventory map, which will be made public in February of this year. In accordance with the ARRA, this map will allow consumers to determine broadband “availability” through a Web site that is “interactive and searchable.”

20. On June 29, 2010, the Commission launched the Data Innovation Initiative, designed to modernize and streamline how the Commission collects, uses, and disseminates data. As part of the Initiative, the Wireline Competition, Wireless Telecommunications, and Media Bureaus released public notices seeking input on which existing data collections should be eliminated or improved, and which new ones should be added. Review of the resulting record, along with staff work in the three Bureaus, has identified over twenty data collections that may be outdated and ripe for elimination, as well as a number of statutory reporting obligations that may have outlived their usefulness. We will initiate proceedings to consider elimination of those data collections that are completely within our purview. Recognizing that data collection is essential to fulfill the Commission's central statutory obligations, including advancing universal service, protecting consumers, promoting competition, and ensuring public safety, we also look forward to working with Congress to eliminate any outdated statutory reporting obligations that they choose to relieve us of.

21. The Commission also is conducting its 2010 biennial review of telecommunications regulations, pursuant to Section 11 of the Communications Act of 1934, as amended. This section requires the Commission (1) to review biennially its regulations “that apply to the operations or activities of any provider of telecommunications service,” and (2) to “determine whether any such regulation is no longer necessary in the public interest as the result of meaningful economic competition between providers of such service.” The Commission is directed to repeal or modify any regulations that it finds are no longer in the public interest.

22. The Commission must collect timely and reliable information to carry out its statutory duties. In the eleven years that have passed since the Commission established the Form 477 data program, commenters in a number of proceedings have suggested that the broadband and telephone subscription data we currently collect are insufficient to allow the Commission to fulfill its statutory responsibilities. Telecommunications markets are now in a period of transition to a world in which fixed and mobile broadband networks give consumers access to not only voice communications capability but a myriad of other applications and services. Commission data shows that there are now more than 274 million mobile telephony subscriptions in the United States, and interconnected VoIP subscriptions increased by more than 20% during 2009 while traditional PSTN switched access lines decreased by 6%.

23. The National Broadband Plan recommended that the Commission closely observe this transition from legacy circuit-switched networks to all IP, broadband networks to ensure that legacy regulations and services do not impede the transition to a modern and efficient use of resources, that businesses can plan for and adjust to new standards, and, perhaps most importantly, that consumers do not lose access to statutorily required “adequate facilities at reasonable charges.” Commenters in the National Broadband Plan suggested that the Commission collect data, or seek comment on the need to collect data, on a variety of issues related to this transition, including public safety, service quality, customer satisfaction, and price. Below, we identify a number of important purposes for which the Commission and commenters have noted that we may require more robust data, and seek comment on the data needed to fulfill those purposes.

24. Section 254 of the Act, which governs administration of universal service programs, requires the Commission to base its universal service policies on certain principles, including that “[q]uality services” be “available at just, reasonable, and affordable rates,” and that “[c]onsumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services * * * that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.” A key goal set forth in the National Broadband Plan is to reform the Universal Service Fund (USF) to “accelerate the deployment of broadband to unserved areas,” and the Commission's unanimously adopted Joint Statement on Broadband calls for the USF to be reformed “to increase accountability and efficiency, encourage targeted investment in broadband infrastructure, and emphasize the importance of broadband to the future of these programs.”

25. We seek comment on the data needed to ensure universal service. Numerous stakeholders have asserted that the Commission must collect deployment, price, and service quality data to effectively fulfill its obligations under Section 254 and to modernize the USF to focus on broadband. For example, Verizon has stated that the Commission must have reliable data to identify areas that are truly unserved by broadband to implement USF reform. The National Broadband Plan noted that “[a]cross the four USF programs, there is a lack of adequate data to make critical policy decisions regarding how to better utilize funding to promote universal service objectives.” The Commission itself has noted the importance of having reliable data to measure the performance of the USF and to protect against waste, fraud, and abuse. Would data on deployment, price, service quality, and subscription be required to assess whether the performance goals proposed for the USF high-cost program and Connect America Fund in the NPRM released today are being achieved? Would voice and broadband pricing data be necessary to develop possible rate benchmarks for voice and/or broadband service in order to determine if services are “affordable” and “reasonably comparable to rates in urban areas”? Would determining whether particular areas of the country—including rural, insular, and high-cost areas—should be exempt from aspects of the USF reform program or afforded different treatment require deployment, subscription, price and service quality data?

26. The Communications Act charges the Commission with ensuring that “wire and radio communications service with adequate facilities at reasonable charges” are available for the purpose of, inter alia, “promoting safety of life and property through the use of wire and radio communications.” Congress has further tasked the Commission with a key role in guaranteeing that Americans have access to emergency services via 911. The Commission must be able to monitor the performance of both legacy circuit-switched networks and broadband networks to ensure that consumers can access emergency services as service providers transition from one technology to the other. As noted in the National Broadband Plan, “[a] more reliable [broadband] network would also benefit homeland security, public safety, businesses and consumers, who are increasingly dependent on their broadband communications, including their mobile phones.”

27. We seek comment on what data the Commission needs to fulfill these goals. Would mobile service deployment data, for example, allow the Commission to identify areas where consumers lack access to 911 service, such as rural highways or remote worksites? Would service quality data enable the Commission to identify networks that limit consumers' access to emergency services as a result of excessive downtime? Could customer complaint data likewise serve as an indicator that networks are insufficiently reliable to ensure that consumers can depend on them in an emergency?

28. Promoting competition is a core purpose of the Telecommunications Act of 1996, as amended, and as the National Broadband Plan noted, “[c]ompetition is crucial for promoting consumer welfare and spurring innovation and investment in broadband access networks,” and “provides consumers the benefits of choice, better service and lower prices.” Others have noted the importance of competition to consumer welfare. In addition, vibrant competition in a market can reduce or eliminate the need for regulation. For example, competition, properly demonstrated, can be the basis for forbearance from regulations under Section 10 of the Act. As the Commission previously has found in the context of its Section 10 analysis, “competition is the most effective means of ensuring that * * * charges, practices, classifications, and regulations * * * are just and reasonable, and not unjustly or unreasonably discriminatory.” The Commission also is required to annually present its findings regarding the state of competition in the mobile services marketplace pursuant to Congress's instruction in Section 332(c)(1)(C) of the Act.

29. Despite the importance of assessing competition in order to fulfill the Commission's statutory responsibilities, the Commission does not always have sufficient information about voice and broadband services sufficient to assess competition accurately. For example, the Commission has recognized that a lack of comprehensive data on telephone and broadband services has, in certain situations, compromised the rigor of its analysis in proceedings seeking the transfer of Title III licenses and Section 214 authorizations. Similarly, in a decision regarding whether to grant forbearance from network unbundling and other regulations pursuant to Section 10 of the Act, the Commission was unable to make a definitive finding regarding market share in the telephony market when the primary cable operator did not voluntarily file reliable data.

30. The National Broadband Plan also noted that statements from a number of commenters—including officials from the Department of Justice and the Federal Trade Commission—demonstrate that “additional data are needed to more rigorously evaluate broadband competition.” The Plan concluded that to ensure that the right policies are put in place so that the broadband ecosystem benefits from meaningful competition as it evolves, it is “important to have an ongoing, data-driven evaluation of the state of competition.” The National Broadband Plan therefore recommended that the Commission “revise Form 477 to collect data relevant to broadband availability, adoption and competition.” Numerous commenters have made similar observations and recommendations.

31. It is important to note that although more robust deployment and subscription data may give the Commission a view of the potential for competition in an area, the National Broadband Plan and a number of commenters have explained that such data alone would not necessarily reveal the actual extent of competition or the level of benefit that consumers enjoy from any competition that exists, and that price and service quality data could fill these gaps. We seek comment on the need for price and service quality data as well as deployment and subscription data to satisfy relevant statutory goals.

32. As discussed above, Section 706(b) of the Telecommunications Act of 1996, as amended, directs the Commission to annually “initiate a notice of inquiry concerning the availability of advanced telecommunications capability to all Americans” and “determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.” The Commission has noted that information about broadband deployment and availability throughout the nation is essential to fulfill its obligations under Section 706, including the requirement to compile information about demographic information for unserved areas.

33. We seek comment on whether the Commission has data sufficient to effectively fulfill this purpose. The Commission has observed that the data it has collected to date have allowed only limited assessments of broadband deployment and availability. For example, the Commission has used information about the existence of at least one subscriber in a ZIP code or census tract as a proxy for both deployment and availability. But the Commission and commenters have noted that subscription data, particularly when collected above the household level, is an imperfect proxy for network deployment or capability. For example, deployment is overstated when households subscribe in one part of an area (such as a census tract) but service is not offered to households in other parts of the same area, while deployment is understated if no household in an area has chosen to subscribe to any service offering provided by a network, and capability is understated if no household has opted for the highest speed offering.

34. We also note that the Commission has long identified broadband availability as a broader concept than broadband deployment. A number of commenters have suggested that the Commission collect other types of data beyond the Form 477 subscribership data to fulfill its obligations under Section 706, including information on where infrastructure has been deployed, the price of broadband services, and service quality. Would the use of such data sources in conjunction with subscription data provide additional insights into broadband adoption in the United States? If infrastructure data were collected, how could the Commission ensure that sensitive information on critical infrastructure is appropriately shielded and protected?

35. We seek comment on other statutory obligations and Commission efforts that may require the Commission to reform the 477 data program. In addition, we seek comment on whether the subscription data currently collected via Form 477 and the Commission's other data collection programs are sufficient for such obligations, or whether the Commission should collect additional types of data. Commenters who advocate the collection of additional data should explain how collecting specific types of data would result in concrete benefits for consumers, service providers, and other stakeholders, and explain whether the benefits would outweigh the burdens.

36. In the preceding section, we discussed specific statutory obligations of the Commission that, to be performed effectively, may require the collection of better data. We turn now to discussion of what specific data may be necessary to discharge these statutory responsibilities, and whether and (where relevant) how we should collect each type of data using Form 477. After reviewing input from outside parties, we believe that there are five categories of data that may be necessary to meet the Congressional mandates described in the prior section: deployment, pricing, and service quality and customer satisfaction data, which provide measures of supply; subscription data, which provides a measure of consumer demand; and ownership and contact information, which serves multiple statutory purposes. While collecting other categories of data, such as the location of last- and middle-mile infrastructure, could prove useful to the Commission, Form 477 may not be the most appropriate tool for collecting such data. We seek comment on whether there are other types of data necessary for the Commission to complete its mandates that should be collected using Form 477.

37. We recognize that data collections place burdens—and potentially significant burdens—on those required to file, and we actively seek to balance the benefits of data collected against those burdens. We seek comment on whether each of the types of data noted below is necessary for the Commission to fulfill its statutory mandates. Those who suggest that the Commission does not need particular data should specify how the Commission can meet its obligations without such data. For data that the Commission should collect, we seek comment on whether the Commission should gather the data through an OMB-approved data collection or whether there are other sources. For example, are there commercial data sources that would allow the Commission to meet its obligations? Alternatively, would it be practical for Commission staff to collect data from public sources ( e.g., from service providers' Web sites)? Those advocating the use of commercial or publicly available data should discuss any limitations associated with such sources, the resources the Commission would need to devote to the collection method proposed ( e.g., direct costs, staff time), and the impact such a collection method would have on other Commission efforts. Where a data collection is necessary, we seek comment on ways that the Commission can minimize the burden for filers, for example, in the design of the collection or in tools the Commission can provide. Commenters who cite the burden of an OMB-approved collection should quantify the burden they expect and explain their quantification methodology. We seek comment on issues specific to reducing the burden of each collection as they are discussed in the following sections.

38. To reduce production burdens, commenters urge the Commission to ensure that the FCC Form 477 collection process is as “streamlined as possible,” and we agree that streamlining the process where appropriate must be a top priority for the Commission. For example, providers request that the Form 477 interface be redesigned to allow parties to file data on multiple States as a single file. We seek comment on these proposals, and on other steps the Commission can take to streamline the Form 477 data program.

39. Reporting entities already maintain subscriber databases that include address-level information; thus, providing subscribership information at the address level could simplify reporting. At the same time, collection of address-level deployment and availability information would allow the Commission to make policy decisions based on a more granular and accurate understanding of the marketplace. We note that some providers have explicitly requested that they be allowed to submit subscribership data at the address level to reduce their reporting burden. We seek comment whether it would be less burdensome for providers to submit address-level data with respect to the deployment and availability of services. We also seek comment on other ways that the Commission can ease the burden on small- and medium-sized providers.

40. In addition, we seek comment on the extent to which technological tools can reduce the burden of producing information. For example, the Commission now makes available a Census Block Conversions application programming interface (API) that returns a U.S. Census Bureau Census Block number given a passed latitude and longitude. The API also returns the State and county name associated with a block. Among other benefits, we expect that this API will assist providers in assigning subscribers to census-defined geographic areas. What other tools are available to reduce the burdens providers face in complying with our data reporting programs? Are there other tools that the Commission itself should develop?

41. We seek comment on whether and how the Commission can obtain reliable data from third parties and publicly available sources. The Commission in 2007 sought comment on the “availability of commercial sources of broadband deployment data or data-processing programs that could augment or otherwise add value to our use of Form 477 data, or reduce the associated costs and other burdens imposed on reporting providers.” The Commission declined to use any such sources in the 2008 Broadband Data Gathering Order and Further NPRM, 73 FR 37911, July 2, 2008. We note that the Commission currently relies on some third-party data that may be considered authoritative, and seek comment on what other data could be obtained by the Commission from third parties. We also seek comment on whether there are new sources of data that could serve Commission goals.

42. We note that there are limitations associated with third-party data sources. Commercial data sources rarely rely on a census of all data sources of a particular type and more often rely on sampling. The bias associated with sampling, or the use of proprietary methods to create or extrapolate from a sample, could limit the applicability of commercial data. Further, commercial data often include restrictions to data rights that could limit the Commission's ability to publish underlying data or resulting analysis. We seek comment on these potential shortcomings of commercial data, whether there are ways to mitigate them, and the balance between these limitations and the burden that could be avoided by the use of commercial data. The Commission could also cull some information from public sources, such as company Web sites. We note that such data may be unreliable or insufficiently detailed, and seek comment on the extent to which the Commission can base policy on such data. To the extent commenters advocate for the use of commercial or third-party data for a specific collection, we ask that they quantify the resources the Commission would have to devote to procure or process those data. How should the Commission balance the costs of purchasing data or collecting data itself from public sources against the burdens that Form 477 data collection may impose on service providers?

43. Four classes of entities currently file FCC Form 477: facilities-based providers of broadband connections to end user locations; providers of wired or fixed wireless local exchange telephone service; providers of interconnected VoIP service; and providers of mobile telephony services. Some entities may fill out only certain portions of the form.

44. Some of the proposals identified below would have the Commission collect from all providers of voice and broadband services data that may have in the past been collected only from a subset of providers. For example, some of the service quality data some have suggested we should collect from all broadband providers formerly were collected only from price cap carriers. We seek comment on whether there are classes of providers that should be exempted from reporting elements of any proposed data collection. For example, small broadband providers may find it relatively more burdensome to comply with certain data reporting obligations than larger carriers. Any proposals to exempt certain providers should include the legal and policy grounds and the policy implications for such an exemption.

45. We also seek comment on whether additional classes of entities should be required to file FCC Form 477. For example, should we revise our definition of “interconnected VoIP” for the purposes of this collection to include services that permit users to receive calls that originate on the public switched telephone network or to terminate calls to the public switched telephone network? Proposals to require additional classes of entities to file should discuss the Commission's authority to do so.

46. The Commission previously has decided that it can best balance its need for timely information with its desire to minimize the reporting burden on respondents by requiring providers to report data on a semi-annual basis. One commenter has asked the Commission to require quarterly collections “to keep pace with rapidly evolving Internet technology and allow regulators to plan and adjust policies.” Another commenter asks that the Commission synchronize the filing deadlines for FCC Form 477 with those for the NTIA's SBDD. We seek comment on whether FCC Form 477 should be filed more or less frequently.

47. Commenters have identified five categories of data that may help the Commission more effectively carry out its statutory obligations: deployment, price, subscription, service quality and customer satisfaction, and ownership and contact information. We seek comment on whether and how the Commission should collect such data, and the Commission's authority to do so.

48. Those commenting on how to collect data should be as specific as possible. Establishing detailed data reporting requirements is an inherently difficult task. Particular elements of a dataset may be simple to describe conceptually, but difficult to specify as a practical matter. Conversely, a data element may be easily specified, but difficult to explain in plain language. To the extent commenters propose that we collect specific data elements, we ask that commenters both discuss the concept and provide an actual specification of each data element. To the extent particular proposals are offered, are there different data elements that might better achieve our goals, including minimizing production burdens on filers and processing burdens on the Commission?

49. As discussed above, numerous stakeholders have urged the Commission to obtain data that would allow it to understand where providers have deployed networks capable of delivering a given service. We seek comment on whether deployment data are necessary to fulfill several of the purposes discussed above: ensuring universal service by tracking the expansion of broadband networks, identifying areas that lack access to fixed or mobile broadband and assisting the Commission in targeting support to areas that most need it; monitoring telephone and broadband competition by providing insight into the service areas of potential competitors regardless of the technology used; and promoting broadband deployment and availability by providing reliable information about broadband deployment nationwide. In this section, we seek comment on how the Commission might obtain deployment data for voice and broadband services.

50. The Commission currently does not collect data on fixed voice network deployment. And although the national telephone subscription rate has remained high over the last decade, a number of commenters have informed the Commission that residents in some areas of the country—particularly rural, insular, high-cost, and Tribal areas—do not have access to basic fixed telephone service. Other commenters assert that State carrier of last resort obligations are sufficient to ensure that fixed voice networks are ubiquitously deployed. We seek comment on whether the Commission should collect fixed voice network deployment data. If such a collection is warranted, should it be limited to areas in which network deployment has historically been a concern, such as rural, insular, high-cost, and Tribal areas? What geographic area ( e.g., census block or address-level) would be appropriate for reporting such data?

51. The Commission currently licenses a dataset from a commercial source, American Roamer, for data on mobile network deployment. American Roamer provides coverage boundary maps for mobile voice and broadband networks based on information provided to them by mobile wireless network operators. The Commission previously has noted that analysis based on this data “likely overstates the coverage actually experienced by consumers, because American Roamer reports advertised coverage as reported to it by many mobile wireless service providers, each of which uses a different definition of coverage. The data do not expressly account for factors such as signal strength, bit rate, or in-building coverage, and they may convey a false sense of consistency across geographic areas and service providers. Nonetheless, the analysis is useful because it provides a quantitative baseline that can be compared across network types, technologies, and carriers, over time.”

52. We seek comment on whether it is appropriate to continue relying on American Roamer's mobile telephony deployment data. Are alternative datasets available, and if so, how do they compare to the data available to and currently purchased by the Commission? Are such datasets available only as off-the-shelf products, or would it be possible to acquire datasets tailored to the Commission's specifications? For such datasets, what are the likely costs, and how timely is the data? Should the Commission require carriers to submit mobile telephony deployment data, notwithstanding the availability of some data from third parties? If so, what data submissions should be required? Should the Commission collect data that are based on a standardized definition of coverage or a range of signal strengths that would reflect a likely consumer experience? We also seek comment on whether the Commission should collect data on the spectrum bands used for mobile voice network deployment in specific geographic areas, which would help the Commission to fulfill its spectrum management responsibilities under Title III of the Act. How burdensome would the collection of mobile telephony deployment data be for providers? What are the benefits of obtaining such information?

53. The national broadband inventory map under development by the NTIA is an important step toward collecting more robust data about broadband deployment and availability. The GAO's report noted that stakeholders “generally agreed” that this national broadband map “would address some gaps and provide detailed data on availability, subscribership, and actual delivered speeds,” but there were concerns that the data collection mechanism used—which depends on voluntary reporting by providers to State entities whose methods may vary from State to State—could “result in inconsistent data and limit the effectiveness of the effort.”

54. Broadband deployment data collected via Form 477 could address these consistency concerns and provide an ongoing source of data at the conclusion of the SBDD program. Verizon, Sprint, T-Mobile, and NCTA suggest that the Commission consider the extent to which it is necessary to collect broadband deployment data through Form 477 once NTIA's national broadband inventory map is online and the data become available to the Commission. We seek comment on this suggestion. On what data would the Commission rely at the conclusion of the SBDD program, and how would the Commission reliably analyze trends in broadband deployment if there are gaps in data collected by the SBDD program?

55. We seek comment on a number of issues raised by commenters who recommend that the Commission collect data on broadband network deployment.

56. Geographic Area. Parties have proposed varying levels of geographic specificity the Commission should require when collecting deployment information. Currently, the Commission collects subscription data—which it uses as a proxy for deployment—for fixed broadband providers at the census tract level. In the 2008 Broadband Data Gathering Order and Further NPRM, 73 FR 37911, July 2, 2008, the Commission tentatively concluded that it should measure deployment on an address-by-address basis, which would provide the most granular and accurate information. A number of commenters in prior proceedings, particularly State regulatory agencies, have expressed support for collection of broadband deployment data at the address level. These commenters note that address-by-address data would yield the most useful data for the Commission about where broadband is deployed. Some smaller providers also state that reporting at the subscriber address level would ease the burden of reporting. Other commenters, however, have suggested that reporting address-level deployment information would be unduly burdensome for providers, particularly for small- and medium-sized providers that do not maintain such data. We seek comment on the benefits and burdens of requiring address-level deployment data. In addition, we seek comment on how to account for areas where networks are deployed, but there are no homes or businesses with addresses ( e.g., uninhabited highways with mobile network coverage). At least one State (California) already requires address-level reporting for the construction of its broadband map. We seek comment on this and similar State agency initiatives and request any empirical evidence of the burdens and impact of compliance.

57. Some commenters in prior proceedings have suggested that the Commission collect deployment data at the census block level. The California Public Utility Commission (PUC) notes that reporting by census block would yield an average of 22 households, whereas a census tract yields an average of 1,628 households. Census block-level reporting could provide a balance between being more granular than census tract-level reporting and avoiding any privacy issues associated with address-by-address reporting. Commenters have also noted that the utilization of a Census geography facilitates the application and analysis of Census demographic data, such as income, race, age, and household size and composition. We seek comment on whether the burdens imposed by collecting census block-level data are significantly greater than those associated with collecting census tract-level data. Would the burdens imposed by collecting census block-level data be substantially greater than requiring address-level reporting? Are there particular benefits to using census-block level reporting? What were the costs and benefits of initiatives that have used census block-level reporting? What alternative reporting methods could the Commission use to ease the burden on carriers that might find census block-level data to be unduly burdensome, while still collecting comparable and useful data?

58. NTIA's broadband mapping effort sought deployment data for a smaller geographic area than a census block for census blocks larger than two square miles. We seek comment on the benefits and costs of this approach. What unit of measurement should the Commission utilize for larger census blocks if the Commission does not use address-by-address reporting?

59. Speed. The National Broadband Plan noted the importance of speed data to consumers and policymakers, and stakeholders generally acknowledge its usefulness. The Commission currently collects information about advertised broadband speeds in its Form 477 collection. The National Broadband Plan noted, however, that consumers and policymakers would benefit from data on actual speeds. The Commission has sought information about how best to measure actual broadband speeds. Recognizing the difficulty of measuring actual speeds, a number of stakeholders have nonetheless urged the Commission to require providers to report actual speeds. Some have suggested that the Commission require providers to report a statistical sampling of average speeds. Others have suggested requiring providers to report data contention ratios (the ratio of the potential maximum demand to the actual bandwidth available). Broadband providers and their industry associations have argued that actual speeds are affected by a wide variety of factors, many beyond the providers' control, and that measuring speed will be “almost impossible.” We seek comment on whether the Commission should collect data on contention ratios or some other measure of network congestion. We further seek comment on whether the Commission should continue to collect data only on advertised speeds, or whether, for example, providers should provide information about actual speeds by geographic area, or speeds that extend beyond the access network ( e.g., end-to-end speeds that reflect an end user's typical Internet performance). We also seek comment on how to best measure the actual speeds of services that can be provided over a network. The Commission has undertaken a program to measure such speeds directly for a sample of end users of fixed broadband, and is considering a similar program for mobile broadband. We seek comment on whether an approach like this one, a similar approach with more measurements, or some other method is appropriate. Comments on measurements of actual speed should identify the part or parts of the network where speed should be measured. What starting and ending points are most relevant for consumers, providers, and the Commission?

60. The Commission currently collects speed data in eight tiers of advertised download speeds and nine tiers of advertised upload speeds, leading to 72 possible combinations. The SBDD established nine tiers of advertised download speeds and 11 tiers of advertised upload speeds, for 99 possible combinations. We seek comment on whether the FCC and NTIA should conform their speed tiers. Further, while there is value in having speed data broken out at a granular level, relevant speeds are likely to evolve over time, and having 72 or 99 speed-tier combinations may be unnecessarily complex. However, we note that there are benefits to maintaining some continuity in this area to enable tracking data on particular speed-tier combinations over time. Further, measuring the same speed tiers for both business and residential customers may not be appropriate, as they often have different needs for speed. When collecting speed data, should the Commission reduce the number of speed tiers reported by providers? Should we add a tier specifically tied to any speed benchmark that may be required to receive USF or Connect America Fund (CAF) funding? Should any future increase in that potential benchmark result in the addition of a speed tier for that new speed? An alternative approach would be to define tiers by pairs of upstream and downstream speeds. Such an approach would greatly reduce the number of tiers but would lock-in pairings of downstream and upstream speeds. We seek comment on these approaches, including comment on the number of speed tiers and breakpoints.

61. Mobile Issues. Mobile broadband presents additional challenges with respect to geography. We seek comment on whether a mobile service should be treated differently from a fixed service for reporting purposes. For mobile service, a billing address can provide a subscriber's home location but does not reflect the entire coverage area where a mobile broadband network is available; nor would a billing address necessarily be reflective of the primary usage area of the subscriber, particularly in the case of family plans and for businesses. As discussed above, American Roamer produces mobile voice and broadband coverage maps, which the Commission has used to estimate mobile broadband deployment at the census block level. However, these coverage maps have certain drawbacks, including that the data do not account for factors such as signal strength variations. Should the Commission collect some measure of signal strength beyond a simple “signal/no signal” flag? For example, would a “good/better/best” measure for each geographic area be appropriate, or would reported advertised speeds accurately reflect the impact of signal strength? How should reporting account for the variability of signal strength and capacity in a network that includes mobile users? We seek comment on whether billing address, census blocks, or another geographic area should be used to collect data on mobile broadband network coverage areas, separate from the maps obtained from American Roamer. In addition, Sprint has stated it has maps that would allow for the identification of service availability at the street address level, and has suggested that the Commission request such data on a trial basis from providers that currently produce such maps. We seek comment on conducting such a trial.

62. One carrier argues that mobile wireless providers should not be required to report speed data because of the difficulty of measuring factors that can affect mobile data transfer rates. We seek comment on whether we should collect data on mobile connection speed, and whether fixed and mobile services should be treated differently when reporting speed data. In addition we seek comment on the extent to which data from the Commission's mobile broadband speed test could be meaningful in evaluating mobile data transfer rates.

63. Spectrum Issues. We seek comment throughout this NPRM on several issues concerning spectrum usage data, which would help the Commission to fulfill its spectrum management responsibilities under Title III of the Act. How can the Commission best collect such information? Possible methods include requiring providers to indicate the band, radio service code, or call sign used to provide service.

64. Satellite Issues. We seek comment on how best to collect deployment data about satellite-based services. At least one satellite provider has pointed out the near-ubiquity of satellite signals. Should the Commission exempt satellite broadband providers from reporting deployment information, or require only that satellite providers report areas where terrain or other impediments are likely to block line of sight to the satellite?

65. Anchor Institutions. Anchor institutions such as schools, libraries, or hospitals often require broadband offerings with quality of service guarantees not required by at least some retail customers, and Section 254 of the Act places particular emphasis on educational providers, libraries, and health care providers for rural areas. We seek comment on whether to treat anchor institutions like other businesses or whether they should be treated as a different category for the purposes of measuring deployment.

66. We seek comment on whether price data are necessary to fulfill several of the purposes discussed above, including ensuring universal service by determining whether rural consumers are paying affordable and reasonably comparable rates to those in urban areas; monitoring telephone and broadband competition ( e.g., in forbearance proceedings) by providing data regarding the effect, if any, of competition on pricing or by determining whether nominally competitive providers in fact have comparable offerings in the market; reporting a comparison of U.S. and international prices for broadband service capability; and promoting broadband deployment and availability.

67. The Commission previously has considered whether to use Form 477 to collect price information. In the 1999 First Section 706 Report, for example, the Commission sought suggestions on how to measure market demand through “indicia [such] as prices [and] willingness to pay.” In the 2008 Broadband Data Gathering Order and Further NPRM, 73 FR 37911, July 2, 2008, the Commission sought comment on whether to require providers to report the monthly price charged for stand-alone broadband service.

68. Some commenters have argued that broadband providers should not be required to submit price information because prices are competitive; bundled offerings, temporary discounts, different pricing plans, and other service attributes make comparing pricing complex; the production of pricing data is too burdensome; and requiring the production of price data would impose Title II burdens on broadband providers.

69. Others, however, have urged the Commission to require broadband and voice providers to report price information to assess competition, determine whether prices are reasonably comparable in different demographic areas, inform our USF distribution mechanism, and to assess why consumers may not be purchasing broadband where it is available. Such commenters have emphasized the need for the Commission to collect the actual price of broadband services to, for example, allow consumers to compare service prices. Proposals on how to collect price data have varied widely, however, in substance and level of detail. For example, some State regulators have urged the Commission to collect price information for stand-alone and bundled services, and not to consider promotional prices or short term deals. Some have urged the Commission to collect a measure of “price per megabit per second.” Others have urged the Commission to collect “information from commercial carriers regarding their tier pricing, credit and deposit requirements across various communities.” Commenters also have proposed a variety of geographic areas for reporting price, and a variety of reporting periods.

70. We seek comment on the Commission's legal authority to collect price data, whether we should use Form 477 to collect price data, and if so, how we should collect and analyze such data. We acknowledge that there are a number of challenges associated with any approach to collecting price information. We therefore seek detailed comment on the strengths and weaknesses of the approaches we describe below, and on other possible approaches.

71. Price data can be collected in many different ways. For example, the Commission could collect retail prices charged by providers for basic voice and broadband offerings. Given the complexity and variety of bundles and discounts, the Commission could instead define a basket of services and collect, or require providers to post publicly, the price of that basket. Alternatively, the Commission could collect information about all available prices and packages, or seek to determine effective prices that end users pay.

72. Another approach would be to have providers report the total revenue associated with all offerings (including voice, video ( i.e., pay television), and broadband Internet access services), and identify the attributes associated with that revenue, such as the types of services provided ( e.g., voice, video, and broadband) and key descriptors of those services ( e.g., basic video, extended video, very high speed Internet access). The Commission could then determine the average effective price for each attribute in a given area by performing statistical analysis on aggregate revenue and attribute data across areas large enough to generate a significant number of measurements. We seek comment on whether such an approach would yield meaningful results for the purposes outlined above. We also seek comment on how this approach might be specified. For example, how many and what attributes would be needed to support a useful analysis? Given that resolving the price for more attributes will require more measurements of total revenue, how should the number and selection of attributes be balanced against the geographic size of the measurement, given that a sufficiently large sample size for a larger number of attributes will require more measurements and a larger geographic area? Should revenue be inclusive or exclusive of taxes and fees? Should revenue be reported separately for business and residential customers?

73. We note that the Commission has sought comment on the need for price data to set benchmarks in the context of our intercarrier compensation and universal service proceedings. Would any of these approaches provide data suitable for the establishment of such benchmarks, or are more appropriate data available from other sources?

74. If the Commission collects price data, over what geographic area should prices be collected? As discussed in Section V.C below, ECPA may limit the Commission's ability to require providers to report price data from service providers at the household or address level. Should the Commission collect price data at the census block level? Could the Commission collect data using, for example, street segments as the collection geographic area? If so, would it need to guard against collecting single home street segments? How could it do so? What impact would different geographic-level collections have on the value of the data produced? Would collecting data at a more granular level that is consistent with the restrictions imposed by ECPA ( e.g., at the street-segment level) materially improve the quality of the analysis and justify the added complexity of the collection?

75. Were we to collect pricing data for mobile services, how should prices for mobile services be assigned to a geographic area? Assigning a fixed service subscriber to a single census block is a relatively simple process that providers currently use to provide subscribership data at the census-tract level. Assigning price data for mobile services to a geographic area, however, is less straightforward, particularly in light of the billing address issues related to mobile addressed above. Should providers of mobile services use the billing address as the customer's location, and report data for that customer in the corresponding census block? For those that suggest mobile services do not have any inherent location, how should the Commission evaluate substitution of fixed service by mobile? How should the Commission account for various types of pre-paid and family plans that are common in mobile services?

76. The impact of a given price will be very different for consumers, businesses, and anchor institutions. The impact of those prices could vary significantly within those groups as well. For example, schools and libraries may seek a broadband service similar to a community hospital, but may have less funding. Should the Commission specify narrower customer classes ( e.g., small, medium, and large business) when collecting price data? How would any such customer classes be defined?

77. We seek comment on whether subscription data, which the Commission currently collects, are necessary to fulfill several of the purposes discussed above: monitoring telephone and broadband competition by providing a measure of competition's outcome: how many customers subscribe to different providers' services in each area; promoting broadband deployment and availability; ensuring public safety by providing a measure of what networks and providers are relied on by how many customers in each area; monitoring the effects of PSTN-to-IP conversion by providing insight into how many customers are reliant on each type of network technology in each area; and ensuring that affordable voice and broadband services are available to all Americans.

78. No commenter has asked the Commission to cease collecting subscription data for wireline services. Are there types of subscription data the Commission need not continue to collect? For example, should the Commission continue to require providers to report the percentage of their local exchange telephone service lines for which they are the presubscribed interstate long distance carrier or that are provided over UNE-Platform? One provider has urged the Commission to cease collecting subscription data from wireless service providers, and instead to “seek broadband and telephony data based on coverage areas” like those provided by American Roamer, because coverage areas more accurately indicate where mobile subscribers have access to wireless service than do subscriber billing addresses or area codes. We seek comment on this proposal. Would data collected by coverage area be sufficient to achieve the outcomes discussed in Section III above?

79. Mobile issues. Should the Commission modify its data collection practices with respect to mobile voice or mobile broadband subscribers? For example, if most providers treat each line, telephone number, or device as a separate subscription, to what extent does over-counting result from individuals owning or using more than one device? We also ask that providers comment on the way in which family plans are counted. Is one family plan a subscription, or is each line within the plan counted as a separate subscriber? In addition, certain challenges can arise in collecting data on prepaid subscribers, particularly subscribers to traditional pay-as-you-go prepaid plans. For instance, the address or location of such subscribers is typically unknown, and these subscribers may frequently stop using one device and start using another without the first device being counted as a disconnect. We seek comment on the best way to account for pre-paid plan subscribers given these challenges. In addition, should we collect data on the number of mobile voice and mobile broadband subscriptions by spectrum band, by customer class ( i.e., residential and business), and by technology? Should we require that mobile voice and mobile broadband providers distinguish which subscribers are voice-only, broadband-only, or both voice and broadband? How should we account for mobile data services for non-traditional devices, such as data-only e-readers, machine-to-machine communications, telemetry systems, and others? Are there other ways for the Commission to access this information? How would any proposed changes help us to produce our annual report on mobile wireless competition?

80. Geographic Area. Form 477 currently collects voice telephony subscription data at the State level and broadband subscription data at the census tract level. We seek comment on whether voice and broadband subscription data should be collected at the same level of geographic specificity. Are there differences in the need for such data that would justify continuing to use different levels of specificity? We also seek comment on whether the Commission should require entities to report deployment and subscription levels at the same level of geographic specificity.

81. As discussed above, commenters in prior proceedings have advocated more granular subscribership data for broadband services. Commenters have also suggested that policymakers need more granular data about voice services, particularly in order to address competition issues. Should voice and broadband subscription data be reported at the address level, the census block level or some other level? Is it important for voice and broadband subscription data to be reported at the same geographic level, regardless of which one? As discussed below, the Electronic Communications Privacy Act may be implicated should the Commission collect address-level subscription data from service providers. However, some smaller providers have specifically requested that the Commission allow them to provide address-level data because that “would reduce reporting burdens on small businesses serving high-cost rural areas.” Therefore, we seek comment on the propriety of allowing production of such data at the request of a provider, the benefits and drawbacks to having some, but not all subscribership data at that level of granularity, and whether such collections would violate ECPA.

82. Data on mobile wireless broadband subscribers are currently collected at the State level, while mobile broadband availability is reported at the census tract level. We seek comment on whether we should treat fixed and mobile services differently. How should we account for users of resold or prepaid mobile broadband services, where the address of the end user may be unknown?

83. Residential and Business Subscription Breakdown. Form 477 currently requires that providers report subscriptions separately for residential and business customers. We recognize that this distinction may be imprecise, particularly for mobile plans where lines used primarily for business may be paid for by an individual, or vice versa. We seek comment on whether there are better ways to distinguish residential and business customer classes, for data and voice services. For example, should we require providers to treat all fixed broadband connections with a service-level agreement as “business” and all those without one as “residential?”

84. To the extent the Commission continues to collect subscription data, we seek comment on whether we should modify the way in which we collect that data.

85. Fixed. Should the Commission modify its data collection practices with respect to fixed voice services? For example, should the Commission distinguish among services sold as stand-alone offerings and services that are bundled with a subscription to broadband, video, or mobile services? The Commission currently collects data on the proportion of subscribers that have the filing carrier as their presubscribed interexchange carrier (PIC). Should the Commission collect information on what type of interexchange service plans these subscribers purchase ( e.g., per minute, bundles of minutes, or unlimited local and long distance)?

86. Form 477 currently collects limited data on the extent of facilities-based competition for fixed voice services. Should the Commission distinguish among the types of loops provided under unbundled network element (UNE) arrangements? For example, should the Commission collect data on the number of DS0, DS1, and DS3 loops provided to unaffiliated telecommunications carriers under a UNE loop arrangement? The Commission does not currently collect information for voice services that are provided using special access or other high capacity services/facilities that have not been channelized. Should the Commission collect information on voice services provided in this manner?

87. Interconnected VoIP. Should the Commission modify its requirements concerning interconnected VoIP? For example, should the Commission distinguish among stand-alone, facilities-based interconnected VoIP; stand-alone over-the-top interconnected VoIP; and interconnected VoIP that is bundled with a broadband subscription? Should Form 477 distinguish “nomadic” from “fixed” interconnected VoIP ( i.e., distinguish whether an interconnected VoIP service can be used from one or multiple fixed locations)? Should the Commission begin collecting data on VoIP services that do not meet the definition of interconnected VoIP ( e.g., services that can make calls to or receive calls from the PSTN)?

88. Currently, Form 477 collects data on broadband subscribership at 72 speed tiers for each census tract in the nation. As with deployment data, we seek comment on whether we should reduce the number of speed tiers at which providers report. Should the speed tiers used for deployment and subscription data be the same? Should providers of fixed and mobile broadband services provide the number of subscribers by technology? We also seek comment on whether wireless broadband providers should include information about the spectrum band(s) they use to provide service.

89. We seek comment on whether service quality and customer satisfaction data are necessary to fulfill several of the purposes discussed above: reducing waste, fraud, and abuse and increasing accountability in our universal service programs by ensuring that recipients of government support provide services to their customers that are reliable and of comparable quality to those not provided with government support; ensuring public safety by ensuring that networks remain a reliable means of contacting public safety organizations; monitoring telephone and broadband competition by ensuring that service providers with overlapping footprints provide comparable levels of service; promoting broadband deployment and availability; protecting consumers by ensuring that end users have information about network performance; and tracking the effects of the conversion from PSTN to IP services by providing insight into the performance levels of both networks.

90. Who Should Report. The Commission previously has collected voice service quality and customer satisfaction data from a small subset of the total number of carriers. We seek comment on whether and how such data should be collected from a larger universe of voice and broadband providers.

91. What Data Should Be Collected. If we do collect such data, we seek comment on what aspects of service quality and customer satisfaction are relevant to the purposes described above or otherwise identified by commenters. The Commission could collect, for example, data regarding the number of trouble reports or complaints that customers make regarding network performance or degradation; complaints regarding service provider customer care and billing; installation and repair intervals; and general customer satisfaction. The Commission has conducted surveys that include questions on customer satisfaction. To what extent could data from these surveys and others like it be used to address concerns about service quality, particularly with respect to individual carriers in particular geographic areas? In addition, the Commission could collect direct measures of network performance, such as network downtime and number of customers affected; call blocking; prevalence of dropped calls; and speed, latency, and jitter.

92. To what extent should the Commission specify common metrics for voice and broadband services. For example, should the Commission collect data on gross churn as a measure of customer dissatisfaction? Should the Commission collect data from all providers on the number of complaints made to providers and to State public utility commissions? Should data for residential customers include the time interval for installation and service commitments, the percent of time those commitments are met, and the out-of-service repair interval? How could the Commission ensure that such metrics were comparable for all reporting entities?

93. Geographic Area. We seek comment on over what geographic areas would be appropriate to collect service quality and customer satisfaction data. Given the role States play in regulating some voice services, we seek comment on whether collecting data by provider by State is appropriate. However, some provider networks may cross State boundaries, suggesting that market- or carrier-level information would be more appropriate. It may also be the case that different aspects of the proposed service quality collection will be most meaningful when measured in different geographic areas ( e.g., wireline voice by State; but cable information by system), which suggests that the collection should be made over a smaller geographic area to allow for different levels of aggregation. To the extent commenters suggest the Commission collect data, we ask that they specify the appropriate geographic area for these data, and the relative burden that reporting for different geographic areas might impose.

94. The Commission in 1990 established ARMIS Reports 43-05 and 43-06 in order to monitor whether the implementation of price caps would lead to carriers lowering service quality. In 2008, the Commission granted certain incumbent LECs conditional forbearance from “the current partial and uneven” collection of those reports. The Commission noted, however, “the possibility that service quality and customer satisfaction data * * * might be useful to consumers to help them make informed choices in a competitive market, but only if available from the entire relevant industry,” and tentatively concluded that the Commission should collect this type of information from “facilities-based providers of broadband and/or telecommunications.” Some urge the Commission to adopt this tentative conclusion, while others object, arguing that forbearance was justified and the metrics set forth in those reports are irrelevant and outdated.

95. CWA proposes that the Commission require all providers of voice telecommunications services to file all of the data previously submitted on ARMIS Reports 43-05 and 43-06, and to expand service quality measurements to include answer times for live representatives responding to customer inquiries. We note, however, that all parts of the ARMIS 43-05 and 43-06 collections may not be helpful to fulfillment of the policy objectives discussed in Section III. For example, the California PUC offers a more limited proposal, that the Commission collect data formerly reported on four of the six tables of ARMIS Report 43-05.

96. We seek comment on whether the Commission should use Form 477 to collect service quality and customer satisfaction data for voice networks. Should the Commission collect some or all of the service quality metrics formerly collected through ARMIS, or other measures of voice quality? Should we collect metrics from switched and interconnected VoIP providers, over both fixed and mobile networks? Are there other metrics for service quality and customer satisfaction that would be more appropriate and less burdensome for reporting entities? Should metrics vary depending on the technology over which service is provided?

97. Several commenters have suggested that the Commission collect service quality and customer service data from broadband providers. In contrast, most broadband providers that commented objected to adopting any service quality data requirements. We seek comment on whether Form 477 should be revised to collect service quality and customer satisfaction data from broadband providers, and the authority under which such a collection would be conducted.

98. The metrics set forth in ARMIS Reports 43-05 and 43-06 were not designed with broadband networks in mind, and therefore might not be the best tools for collecting relevant data. To the extent that the Commission decides to extend customer service measurement to broadband services, we seek comment on what metrics should be used to assess broadband network service quality and customer satisfaction. How would the Commission measure network downtime? Should downtime reports include specific locations of outages and the number of customer-hours relating to the outage? Should the Commission collect packet loss, latency, and jitter data? How can it do so in a meaningful way; and over what geographic area would such a collection have meaning? Should the Commission collect data on mobile and fixed traffic volume and network congestion, and if so, how should those metrics be specified? Over what geographic area is such a collection meaningful, and what measure of traffic is most meaningful?

99. We note that the recently adopted Open Internet Order requires broadband providers to publicly disclose the network management practices and performance characteristics of their broadband Internet access services. Are these disclosures adequate to satisfy any need the Commission may have for service quality data? If Form 477 were used to collect information regarding network management practices or performance characteristics, would the benefits outweigh the burdens?

100. We seek comment on whether ownership and contact information are necessary to fulfill one or more of the purposes discussed above, including reducing waste, fraud, and abuse and increasing accountability in our universal service programs by simplifying the process of determining the total amount of public support received by each recipient regardless of corporate structure; ensuring public safety by providing a means for Commission staff to contact network operations centers rapidly in the event of an emergency; and monitoring telephone and broadband competition by revealing whether service providers with overlapping service footprints are in fact under common ownership or control.

101. Currently, we permit Form 477 filers to consolidate data for multiple operations within a State on a single submission. We also permit filers to determine the organizational level at which they submit their filings. For example, a parent or holding company may file on behalf of its subsidiaries or the subsidiaries may file their own Form 477. This provides filers with significant flexibility in how they submit data on Form 477, but may not provide the Commission with a sufficiently detailed picture of the markets for which data are reported.

102. We seek comment on whether we should revise the Form 477 to collect additional ownership information and related data. Would additional ownership information help inform the Commission's overall understanding of the broadband ecosystem? In particular, would additional or different ownership data help us understand the interrelationships among the data on services and thereby improve our ability to evaluate markets and report to the public? Given the importance of broadband competition, would the benefit to the Commission of understanding the relationships between companies that appear to be providing competitive services in a particular area outweigh any burden of producing such information?

103. We also seek comment on the most effective and least burdensome means of collecting additional ownership data. One option could be to require filers to report data such as that collected on FCC Form 602 for wireless carriers, which collects all of a filer's “disclosable interest holders.” Would such an approach be necessary to enable us to evaluate ultimate ownership of, and common control among, filers, or would a more limited dataset be sufficient? Should we require the submission of data on any branding used in the marketing or provision of service? If we require the submission of additional ownership information, should we also collect other reporting identifiers the filers use in making submissions to the Commission, such as the Physical System ID (PSID) used by the Media Bureau for cable systems? These and other measures might allow the Commission more easily to evaluate the actual number of providers offering services in a given area and to report non-confidential information about carriers by the names by which most consumers know them. Are there are ancillary data that would be helpful to include on consumer-facing resources, such as the national broadband inventory map? Would it be useful, for example, to make available a provider's Web site address and other non-confidential data? Should entities that file report their FCC Registration Number (FRN) and Universal Service Administrative Company Study Area Code (SAC)?

104. We also seek comment on revising Form 477 to collect contact information for use in emergency situations. The Commission maintains a voluntary reporting system, the Disaster Information Reporting System (DIRS) that facilitates contact with carriers in emergencies. The Commission also maintains a number of databases that include contact information for other purposes. There is, however, no structured, mandatory collection of contact information in place specifically for use in emergencies affecting telephone or broadband networks. As a mandatory, recurring filing by providers of telephone and broadband service, Form 477 may be a particularly effective vehicle for collecting emergency-contacts data that are comprehensive and current, with a relatively small burden on filers. We seek comment on whether we should revise Form 477 to collect data of this type and, if so, what data would best facilitate emergency communications with providers. Would a telephone number and e-mail address for each provider's Network Operations Center or equivalent be sufficient? Would the current six-month cycle for filing Form 477 be frequent enough to ensure that information was current? Are there any additional steps the Commission should take to collect data of this type?

105. Stakeholders have periodically suggested that the Commission collect other types of data via Form 477. MMTC, for example, suggests that the Commission collect via Form 477 “socioeconomic data,” “social metrics,” data to assess socially and economically disadvantaged businesses and minority or woman-owned business entities, and data on hardware and software availability in underserved areas. What other data should the Commission collect via Form 477 in support of the purposes identified in Section III above? Commenters should explain the purpose for which the Commission would collect such data, the legal authority for the collection, and the extent to which the benefits outweigh the burdens of collecting it.

106. We also note that there are some alternate geographic areas relevant to Commission analysis that cannot be re-created by aggregating even the smallest census geographies. Such alternate areas include, for example, wire centers or study areas. Information about what alternate areas are associated with each reported geography ( i.e., the geography reported with one or more of the possible collections described above) would assist in any analysis related to those areas. We seek comment on the burden to provide information about these alternate geographic areas on those reporting data.

107. The Commission has previously noted it must collect data on the provision of voice and broadband services to fulfill numerous statutory obligations. For example, the Telecommunications Act of 1996 required the Commission to open all telecommunications markets to competition, and to assess the availability of broadband services. The Form 477 program collects data that are “a critical precursor” to the Commission's ability to fulfill these directives. Form 477 also enables us to fulfill our obligation to reduce government regulation wherever possible, by providing “a factual basis to evaluate the nature and impact of our existing regulation and, in particular, to identify areas where competition has developed sufficiently to justify deregulation.” Many other statutory obligations cannot be implemented without the collection of data about the deployment and adoption of communications technologies and the state of relevant marketplaces. For example, the BDIA requires the Commission to collect comparative data reflecting the extent of broadband service capability in other countries, and data for the United States, to inform its annual consideration of whether broadband is being deployed to all Americans on a reasonable and timely basis. We believe our authority to collect the proposed additional data derives from these statutory obligations, as well as additional grants of authority in the Act, including those in Sections 4(i), 4(k), 218 and 403. We invite comment on this conclusion.

108. The Commission has always recognized that the Form 477 broadband and local telephone service data it collects can be of significant value not only to the Commission, but also to the States and to the public. In establishing and administering the Form 477 collection, however, the Commission has also been cognizant of the potential sensitivity of the data collected and has limited their disclosure.

109. We note that the Commission is reviewing its data dissemination practices in connection with the Data Innovation Initiative. How can we best provide stakeholders with useful data while protecting filers' legitimate confidentiality interests? Should the Commission retain the simple check box on the FCC Form 477 that filers can use to request confidential treatment for all data submitted on that form? Are there classes of information that should always be considered public, and, therefore, not be granted confidential treatment? For example, given that SBDD data will be public, are there any reasons to accord confidential treatment to deployment data collected by the Commission? Are there circumstances where data submitted to the Commission should be held confidential, but aggregations of those data be made public, as is currently the case with subscription information? Once deemed confidential, should data always be confidential, or does the passage of time diminish the commercial sensitivity of certain types of data? When data are given confidential treatment, should the Commission establish a program to allow researchers access to those data under certain conditions? How would such a program be administered?

110. We seek comment on any privacy concerns that may arise from the reporting of address-level data. We note that the privacy-based limitations on the government's access to customer information in Title II of ECPA, and the privacy provisions of the Cable Act, may be implicated by collection of address-level subscribership data. We therefore seek comment on ways the Commission could alleviate any privacy concerns while complying with all applicable laws.

111. We also seek comment on whether the Commission could establish a registry or database through which consumers could themselves share data with the Commission or choose to have their providers share data with the Commission. What would be the benefits and drawbacks of such a registry, and how could it be set up both to get useful data and to minimize the burden on consumers and reporting entities? Should consumers provide information directly to the Commission, or through reporting entities that must gain consumer consent? If the latter, what steps could the Commission take to ensure that consumers have provided consent? How could the Commission address any other privacy issues, and any other legal impediments to the creation and maintenance of such a registry?

112. We note that the presence or absence of a network at a particular address does not provide any subscriber-specific information. We seek comment, however, on whether any privacy concerns would arise if providers were required to report deployment data at the address level.

113. The National Broadband Plan identifies the importance of improving data on Tribal lands, and recommends that the Commission “identify methods for collecting and reporting broadband information that is specific to Tribal lands, working with Tribes to ensure that any information collected is accurate and useful.” The Commission's rules identify Federally recognized Tribal lands and define them for particular purposes, such as the eligibility and delivery requirements for universal service support programs. The Commission's definition of Tribal lands identifies the boundaries of land holdings of Federally recognized American Indian Tribal and Alaska Native Village government entities. We acknowledge that American Indian and Alaska Native areas defined as “Native Home Lands” by the U.S. Census Bureau for census taking purposes encompass areas both within and beyond areas defined as Tribal Lands in the Commission's rules. Tribal leaders have asked that we consider disaggregating our analysis of the Census Bureau's “Native Home Land” areas, in part to allow for a more accurate assessment of broadband deployment in the Tribal Lands areas defined under the Commission's rules. In the Seventh Broadband Deployment NOI, we sought comment on how to more accurately report data concerning the lands of Federally recognized American Indians Tribes and Alaska Native Villages, as well as Native Hawaiian Home Lands. Native Hawaiian Home Lands may also be able to be more accurately analyzed, as they are located exclusively within the State of Hawaii.

114. We seek comment on our analysis of broadband deployment and availability on Federally recognized Tribal lands and how we could improve and refine this analysis. We also seek comment on analysis of broadband deployment and availability on Native Hawaiian Home Lands. We note that sources of such data may presently exist within the U.S. Department of Commerce, U.S. Department of the Interior, and from Tribal Government entities. We seek comment on whether there are other sources of data that would help the Commission better understand and analyze the nature of broadband deployment and availability on Tribal Lands and Native Hawaiian Home Lands.

115. As discussed above, the BDIA requires the Commission to include an international comparison in its annual broadband deployment report. The International Bureau has released its first International Broadband Data Report, which presented data and information on international broadband service capability, advertised prices or broadband services, community-level data, and information about the broadband market and broadband regulations in various nations.

116. To conduct a rigorous comparison of the factors that affect broadband deployment in the U.S. and abroad, it is necessary to have comparable, detailed, and geographically disaggregated data. We therefore seek comment on how and whether revisions to the Form 477 program would facilitate comparing the U.S. broadband market to other countries. To what extent would revisions facilitate comparisons between the U.S. and other countries on the basis of a population's income (and variations in income), education (and variations in education), computer literacy, residential computer ownership, household size, and other factors? Should the Form 477 program be modified to collect data on the costs of deploying broadband, including as a function of population density at a geographically disaggregated level? Should the program be modified to collect data on alternative broadband technologies more prevalent in other countries? Should the program allow for or enable an assessment of the number of providers that offer alternative forms of broadband and the advertised and actual speeds that providers offer in local geographic areas? Are there modifications to the subscription data we currently collect that would make those data more suitable for international comparisons? Where U.S. providers offer multiple service packages, should the Commission collect data about the speeds and other service characteristics of these packages? Would information on actual data usage be useful, as well as data on the applications that residential consumers use, such as VoIP services? Finally, would the collection of pricing data facilitate comparisons with offerings in other countries?

117. This proceeding 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 is generally required. Other requirements pertaining to oral and written presentations are set forth in § 1.1206(b) of the Commission's rules.

118. Pursuant to §§ 1.415 and 1.419 of the Commission's rules, interested parties may file comments and reply comments regarding the NPRM on or before the dates indicated on the first page of this document. All filings should refer to WC Docket No. 10-191. Comments may be filed using: (1) The Commission's Electronic Comment Filing System (ECFS); (2) the Federal Government's e-Rulemaking Portal; or (3) by filing paper copies.

119. Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs/ or the Federal e-Rulemaking Portal: http://www.regulations.gov.

120. Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

121. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

122. Effective December 28, 2009, all hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St., SW., Room TW-A325, Washington, DC 20554. 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 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.

123. People with Disabilities: 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 and Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

124. For further information about this rulemaking proceeding, please contact Jeremy Miller, Industry Analysis and Technology Division, Wireline Competition Bureau at (202) 418-0940.

125. Documents in WC Docket No. 11-10 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 fcc@bcpiweb.com.

126. Accordingly, it is ordered that, pursuant to Sections 1-5, 10, 11, 201-205, 211, 214, 215, 218-220, 251-271, 301, 303, 304, 307, 309, 316, 332, 403, 409, 502, and 503 of the Communications Act of 1934, as amended, 47 U.S.C. 151-155, 161, 201-205, 211, 214, 215, 218-220, 251-271, 301, 303, 304, 307, 309, 316, 332, 403, 409, 502, and 503, Section 706 of the Telecommunications Act of 1996, as amended, 47 U.S.C. 1302, and Section 102 of the Broadband Data Improvement Act, 47 U.S.C. 1303, this Notice, with all attachments, is adopted.

127. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this NPRM, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

128. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities from the policies and rules proposed in this Notice of Proposed Rulemaking (NPRM). The Commission requests written public comment on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM provided on the first page of the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register .

129. In the Notice of Proposed Rulemaking, the Commission considers whether and how to reform the Form 477 data program, which serves as the Commission's primary tool for collecting broadband and local telephone data. After more than a decade of rapid innovation in the market for broadband and telephone services, the Commission believes it is time to consider whether modifying Form 477 will better serve the current and future needs of the Commission, Congress, consumers, and other stakeholders. Such reform seeks to improve the Commission's ability to carry out its duties under the Communications Act of 1934, as amended (the Act), and is an important part of the Commission's larger initiative to modernize and streamline how the Commission collects, uses, and disseminates data. Specifically, the Commission seeks comment on five categories of data that may be necessary to collect: (1) Deployment, (2) subscription, (3) price, (4) service quality, and (5) ownership and contact information. The Commission also seeks comment on whether there are other types of data necessary for the Commission to complete its mandates.

130. For these categories of data, the Commission identifies the purposes for which data may be needed, and seeks comment on the specifics of certain approaches to collecting data. For example, the Commission seeks comment on whether the Commission should use Form 477 to collect price data, which could help accomplish several purposes, including modernizing the universal service program to support broadband.

131. In addition, the Commission also seeks comment on whether service quality and customer satisfaction data may be necessary for several purposes, including increasing accountability in the Commission's universal service programs, ensuring public safety, promoting broadband deployment, and protecting consumers. The Commission then identifies certain metrics that could be collected, such as data regarding the number of trouble reports that customers make regarding network performance, and seeks comment.

132. The Commission also seeks comment on collecting ownership and contact information in order to reduce waste, fraud, and abuse in universal service programs and for other purposes.

133. The Commission also seeks comment on the extent to which technological tools and use of commercial and publicly available data can reduce the burden of producing information. The Commission also seeks comment on how to streamline the process in collecting the data it needs to inform its policymaking processes while minimizing the production burden on providers and the processing burden on the Commission.

134. The legal basis for any action that may be taken pursuant to the Notice of Proposed Rulemaking is contained in Sections 1-5, 10, 11, 201-205, 211, 214, 215, 218-220, 251-271, 301, 303, 304, 307, 309, 316, 332, 403, 409, 502, and 503 of the Communications Act of 1934, as amended, 47 U.S.C. 151-155, 161, 201-205, 211, 214, 215, 218-220, 251-271, 301, 303, 304, 307, 309, 316, 332, 403, 409, 502, and 503, Section 706 of the Telecommunications Act of 1996, as amended, 47 U.S.C. 1302, and Section 102 of the Broadband Data Improvement Act, 47 U.S.C. 1303.

135. The RFA directs agencies to provide a description of, and, where feasible, an estimate of, the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

136. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 3,188 firms in this category that operated for the entire year. Of this total, 3,144 had employment of 999 or fewer, and 44 firms had had employment of 1,000 or more. According to Commission data, 1,307 carriers reported that they were incumbent local exchange service providers. Of these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and 301 have more than 1,500 employees. Consequently, the Commission estimates that most providers of local exchange service are small entities that may be affected by the rules and policies proposed in the NPRM. Thus under this category and the associated small business size standard, the majority of these incumbent local exchange service providers can be considered small providers.

137. Competitive Local Exchange Carriers (Competitive LECs), Competitive Access Providers (CAPs), Shared-Tenant Service Providers, and Other Local Service Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 3,188 firms in this category that operated for the entire year. Of this total, 3,144 had employment of 999 or fewer, and 44 firms had had employment of 1,000 employees or more. Thus under this category and the associated small business size standard, the majority of these Competitive LECs, CAPs, Shared-Tenant Service Providers, and Other Local Service Providers can be considered small entities. According to Commission data, 1,442 carriers reported that they were engaged in the provision of either competitive local exchange services or competitive access provider services. Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees and 186 have more than 1,500 employees. In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees. In addition, 72 carriers have reported that they are Other Local Service Providers. Of the 72, seventy have 1,500 or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities that may be affected by rules adopted pursuant to the NPRM.

138. Interexchange Carriers. Neither the Commission nor the SBA has developed a small business size standard specifically for providers of interexchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 3,188 firms in this category that operated for the entire year. Of this total, 3,144 had employment of 999 or fewer, and 44 firms had had employment of 1,000 employees or more. Thus under this category and the associated small business size standard, the majority of these Interexchange carriers can be considered small entities. According to Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services. Of these 359 companies, an estimated 317 have 1,500 or fewer employees and 42 have more than 1,500 employees. Consequently, the Commission estimates that the majority of interexchange service providers are small entities that may be affected by rules adopted pursuant to the NPRM.

139. Operator Service Providers (OSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for operator service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Under that size standard, such a business is small if it has 1,500 or fewer employees a Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 3,188 firms in this category that operated for the entire year. Of this total, 3,144 had employment of 999 or fewer, and 44 firms had had employment of 1,000 employees or more. Thus under this category and the associated small business size standard, the majority of these Interexchange carriers can be considered small entities. According to Commission data, 33 carriers have reported that they are engaged in the provision of operator services. Of these, an estimated 31 have 1,500 or fewer employees and 2 have more than 1,500 employees. Consequently, the Commission estimates that the majority of OSPs are small entities that may be affected by our proposed action.

140. Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000. Thus under this category and the associated small business size standard, the majority of these local resellers can be considered small entities. According to Commission data, 213 carriers have reported that they are engaged in the provision of local resale services. Of these, an estimated 211 have 1,500 or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by rules adopted pursuant to the Notice.

141. Toll Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000. Thus under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services. Of these, an estimated 857 have 1,500 or fewer employees and 24 have more than 1,500 employees. Consequently, the Commission estimates that the majority of toll resellers are small entities that may be affected by our action.

142. Payphone Service Providers (PSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for payphone services providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census Bureau data for 2007, which now supersede data from the 2002 Census, show that there were 3,188 firms in this category that operated for the entire year. Of this total, 3,144 had employment of 999 or fewer, and 44 firms had had employment of 1,000 employees or more. Thus under this category and the associated small business size standard, the majority of these PSPs can be considered small entities. According to Commission data, 657 carriers have reported that they are engaged in the provision of payphone services. Of these, an estimated 653 have 1,500 or fewer employees and four have more than 1,500 employees. Consequently, the Commission estimates that the majority of payphone service providers are small entities that may be affected by our action.

143. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for prepaid calling card providers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000. Thus under this category and the associated small business size standard, the majority of these prepaid calling card providers can be considered small entities. According to Commission data, 193 carriers have reported that they are engaged in the provision of prepaid calling cards. Of these, an estimated all 193 have 1,500 or fewer employees and none have more than 1,500 employees. Consequently, the Commission estimates that the majority of prepaid calling card providers are small entities that may be affected by rules adopted pursuant to the Notice.

144. 800 and 800-Like Service Subscribers. Neither the Commission nor the SBA has developed a small business size standard specifically for 800 and 800-like service (“toll free”) subscribers. The appropriate size standard under SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2007 show that 1,523 firms provided resale services during that year. Of that number, 1,522 operated with fewer than 1,000 employees and one operated with more than 1,000. Thus under this category and the associated small business size standard, the majority of resellers in this classification can be considered small entities. To focus specifically on the number of subscribers than on those firms which make subscription service available, the most reliable source of information regarding the number of these service subscribers appears to be data the Commission collects on the 800, 888, 877, and 866 numbers in use. According to our data, at of September 2009, the number of 800 numbers assigned was 7,860,000; the number of 888 numbers assigned was 5,888,687; the number of 877 numbers assigned was 4,721,866; and the number of 866 numbers assigned was 7,867,736. The Commission does not have data specifying the number of these subscribers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of toll free subscribers that would qualify as small businesses under the SBA size standard. Consequently, the Commission estimates that there are 7,860.000 or fewer small entity 800 subscribers; 5,888,687 or fewer small entity 888 subscribers; 4,721,866 or fewer small entity 877 subscribers; and 7,867,736 or fewer small entity 866 subscribers.

145. Below, for those services subject to auctions, the Commission notes that, as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Also, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated.

146. Wireless Telecommunications Carriers (except Satellite). Since 2007, the Census Bureau has placed wireless firms within this new, broad, economic census category. Prior to that time, such firms were within the now-superseded categories of “Paging” and “Cellular and Other Wireless Telecommunications.” Under the present and prior categories, the SBA has deemed a wireless business to be small if it has 1,500 or fewer employees. For the category of Wireless Telecommunications Carriers (except Satellite), Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small. Similarly, according to Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) Telephony services. Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees. Consequently, the Commission estimates that approximately half or more of these firms can be considered small. Thus, using available data, we estimate that the majority of wireless firms can be considered small.

147. Wireless Communications Services. This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (WCS) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these definitions. 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, seven bidders won 31 licenses that qualified as very small business entities, and one bidder won one license that qualified as a small business entity.

148. Common Carrier Paging. The SBA considers paging to be a wireless telecommunications service and classifies it under the industry classification Wireless Telecommunications Carriers (except satellite). Under that classification, the applicable size standard is that a business is small if it has 1,500 or fewer employees. For the general category of Wireless Telecommunications Carriers (except Satellite), Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small. The 2007 census also contains data for the specific category of “Paging” “that is classified under the seven-number NAICs code 5172101. According to Commission data, 291 carriers have reported that they are engaged in Paging or Messaging Service. Of these, an estimated 289 have 1,500 or fewer employees, and 2 have more than 1,500 employees. Consequently, the Commission estimates that the majority of paging providers are small entities that may be affected by our action. In addition, in the Paging Third Report and Order, the Commission developed a small business size standard for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. The SBA has approved these small business size standards. An auction of Metropolitan Economic Area licenses commenced on February 24, 2000, and closed on March 2, 2000. Of the 985 licenses auctioned, 440 were sold. Fifty-seven companies claiming small business status won.

149. Wireless Telephony. Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. As noted, the SBA has developed a small business size standard for Wireless Telecommunications Carriers (except Satellite). Under the SBA small business size standard, a business is small if it has 1,500 or fewer employees. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small According to Trends in Telephone Service data, 434 carriers reported that they were engaged in wireless telephony. Of these, an estimated 222 have 1,500 or fewer employees and 212 have more than 1,500 employees. Therefore, approximately half of these entities can be considered small. Similarly, according to Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) Telephony services. Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees. Consequently, the Commission estimates that approximately half or more of these firms can be considered small. Thus, using available data, we estimate that the majority of wireless firms can be considered small.

150. Broadband Personal Communications Service. The broadband personal communications services (PCS) spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission initially defined a “small business” for C- and F-Block licenses as an entity that has average gross revenues of $40 million or less in the three previous calendar years. For F-Block licenses, 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. These small business size standards, in the context of broadband PCS auctions, have been approved by the SBA. No small businesses within the SBA-approved small business size standards bid successfully for licenses in Blocks A and B. There were 90 winning bidders that claimed small business status in the first two C-Block auctions. A total of 93 bidders that claimed small business status won approximately 40 percent of the 1,479 licenses in the first auction for the D, E, and F Blocks. On April 15, 1999, the Commission completed the reauction of 347 C-, D-, E-, and F-Block licenses in Auction No. 22. Of the 57 winning bidders in that auction, 48 claimed small business status and won 277 licenses.

151. On January 26, 2001, the Commission completed the auction of 422 C and F Block Broadband PCS licenses in Auction No. 35. Of the 35 winning bidders in that auction, 29 claimed small business status. 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. On February 15, 2005, the Commission completed an auction of 242 C-, D-, E-, and F-Block licenses in Auction No. 58. Of the 24 winning bidders in that auction, 16 claimed small business status and won 156 licenses. On May 21, 2007, the Commission completed an auction of 33 licenses in the A, C, and F Blocks in Auction No. 71. Of the 12 winning bidders in that auction, five claimed small business status and won 18 licenses. On August 20, 2008, the Commission completed the auction of 20 C-, D-, E-, and F-Block Broadband PCS licenses in Auction No. 78. Of the eight winning bidders for Broadband PCS licenses in that auction, six claimed small business status and won 14 licenses.

152. Narrowband Personal Communications Services. To date, two auctions of narrowband personal communications services (PCS) licenses have been conducted. For purposes of the two auctions that have already been held, “small businesses” were entities with average gross revenues for the prior three calendar years of $40 million or less. Through these auctions, the Commission has awarded a total of 41 licenses, out of which 11 were obtained by small businesses. To ensure meaningful participation of small business entities in future auctions, the Commission has adopted a two-tiered small business size standard in the Narrowband PCS Second Report and Order. A “small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $40 million. A “very small business” is an entity that, together with affiliates and controlling interests, has average gross revenues for the three preceding years of not more than $15 million. The SBA has approved these small business size standards.

153. 220 MHz Radio Service—Phase I Licensees. The 220 MHz service has both Phase I and Phase II licenses. Phase I licensing was conducted by lotteries in 1992 and 1993. There are approximately 1,515 such non-nationwide licensees and four nationwide licensees currently authorized to operate in the 220 MHz band. The Commission has not developed a small business size standard for small entities specifically applicable to such incumbent 220 MHz Phase I licensees. To estimate the number of such licensees that are small businesses, the Commission applies the small business size standard under the SBA rules applicable. The SBA has deemed a wireless business to be small if it has 1,500 or fewer employees. For this service, the SBA uses the category of Wireless Telecommunications Carriers (except Satellite). Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small.

154. 220 MHz Radio Service—Phase II Licensees. The 220 MHz service has both Phase I and Phase II licenses. The Phase II 220 MHz service is a new service, and is subject to spectrum auctions. In the 220 MHz Third Report and Order, the Commission adopted a small business size standard for “small” and “very small” businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. This small business size standard indicates that a “small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. A “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that do not exceed $3 million for the preceding three years. The SBA has approved these small business size standards. Auctions of Phase II licenses commenced on September 15, 1998, and closed on October 22, 1998. In the first auction, 908 licenses were auctioned in three different-sized geographic areas: Three nationwide licenses, 30 Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693 were sold. Thirty-nine small businesses won licenses in the first 220 MHz auction. The second auction included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies claiming small business status won 158 licenses.

155. 800 MHz and 900 MHz Specialized Mobile Radio Licenses. The Commission awards small business bidding credits in auctions for Specialized Mobile Radio (“SMR”) geographic area licenses in the 800 MHz and 900 MHz bands to entities that had revenues of no more than $15 million in each of the three previous calendar years. The Commission awards very small business bidding credits to entities that had revenues of no more than $3 million in each of the three previous calendar years. The SBA has approved these small business size standards for the 800 MHz and 900 MHz SMR Services. The Commission has held auctions for geographic area licenses in the 800 MHz and 900 MHz bands. The 900 MHz SMR auction was completed in 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 was conducted in 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. A second auction for the 800 MHz band was conducted in 2002 and included 23 BEA licenses. One bidder claiming small business status won five licenses.

156. The auction of the 1,053 800 MHz SMR geographic area licenses for the General Category channels was conducted in 2000. Eleven bidders 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 in 2000, a total of 2,800 Economic Area licenses in the lower 80 channels of the 800 MHz SMR service were awarded. 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.

157. In addition, there are numerous incumbent site-by-site SMR licensees and licensees with extended implementation authorizations in the 800 and 900 MHz bands. We do not know how many firms provide 800 MHz or 900 MHz geographic area SMR 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, we do not know how many of these firms have 1,500 or fewer employees. We assume, for purposes of this analysis, that all of the remaining existing extended implementation authorizations are held by small entities, as that small business size standard is approved by the SBA.

158. 700 MHz Guard Band Licensees. In 2000, in the 700 MHz Guard Band 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. 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. 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. SBA approval of these definitions is not required. An auction of 52 Major Economic Area licenses commenced on September 6, 2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 96 licenses were sold to nine bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of 700 MHz Guard Band licenses commenced on February 13, 2001, and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses.

159. Air-Ground Radiotelephone Service. The Commission has previously used the SBA's small business size standard applicable to Wireless Telecommunications Carriers (except Satellite), i.e., an entity employing no more than 1,500 persons. There are approximately 100 licensees in the Air-Ground Radiotelephone Service, and under that definition, the Commission estimates that almost all of them qualify as small entities under the SBA definition. For purposes of assigning Air-Ground Radiotelephone Service licenses through competitive bidding, the Commission has defined “small business” as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $40 million. A “very small business” is defined as an entity that, together with controlling interests and affiliates, has average annual gross revenues for the preceding three years not exceeding $15 million. These definitions were approved by the SBA. In May 2006, the Commission completed an auction of nationwide commercial Air-Ground Radiotelephone Service licenses in the 800 MHz band (Auction No. 65). On June 2, 2006, the auction closed with two winning bidders winning two Air-Ground Radiotelephone Services licenses. Neither of the winning bidders claimed small business status.

160. Rural Radiotelephone Service. The Commission has not adopted a size standard for small businesses specific to the Rural Radiotelephone Service. A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio System (BETRS). The Commission uses the SBA's small business size standard applicable to “Cellular and Other Wireless Telecommunications,” i.e., an entity employing no more than 1,500 persons. There are approximately 1,000 licensees in the Rural Radiotelephone Service, and the Commission estimates that there are 1,000 or fewer small entity licensees in the Rural Radiotelephone Service that may be affected by the rules and policies adopted herein.

161. Aviation and Marine Radio Services. Small businesses in the aviation and marine radio services use a very high frequency (VHF) marine or aircraft radio and, as appropriate, an emergency position-indicating radio beacon (and/or radar) or an emergency locator transmitter. The Commission has not developed a small business size standard specifically applicable to these small businesses. For purposes of this analysis, the Commission uses the SBA small business size standard for the category Wireless Telecommunications Carriers (except satellite),” which is 1,500 or fewer employees. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small. Additionally, the Commission notes that most applicants for recreational licenses in this category of wireless service are individuals. Approximately 581,000 ship station licensees and 131,000 aircraft station licensees operate domestically and are not subject to the radio carriage requirements of any statute or treaty. For purposes of our evaluations in this analysis, the Commission estimates that there are up to approximately 712,000 licensees that are small businesses (or individuals) under the SBA standard. In addition, between December 3, 1998 and December 14, 1998, the Commission held an auction of 42 VHF Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz (coast transmit) bands. For purposes of the auction, the Commission defined a “small” business as an entity that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not to exceed $15 million dollars. In addition, a “very small” business is one that, together with controlling interests and affiliates, has average gross revenues for the preceding three years not to exceed $3 million dollars. There are approximately 10,672 licensees in the Marine Coast Service, and the Commission estimates that almost all of them qualify as “small” businesses under the above special small business size standards.

162. Fixed Microwave Services. Microwave services include common carrier, private-operational fixed, and broadcast auxiliary radio services. They also include the Local Multipoint Distribution Service (LMDS), the Digital Electronic Message Service (DEMS), and the 24 GHz Service, where licensees can choose between common carrier and non-common carrier status. The Commission has not yet defined a small business with respect to microwave services. For purposes of the IRFA, the Commission will use the SBA's definition applicable to Wireless Telecommunications Carriers (except satellite)— i.e., an entity with no more than 1,500 persons is considered small. For the category of Wireless Telecommunications Carriers (except Satellite), Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small. The Commission notes that the number of firms does not necessarily track the number of licensees. The Commission estimates that virtually all of the Fixed Microwave licensees (excluding broadcast auxiliary licensees) would qualify as small entities under the SBA definition.

163. Offshore Radiotelephone Service. This service operates on several UHF television broadcast channels that are not used for television broadcasting in the coastal areas of States bordering the Gulf of Mexico. There are presently approximately 55 licensees in this service. The Commission is unable to estimate at this time the number of licensees that would qualify as small under the SBA's small business size standard for the category of Wireless Telecommunications Carriers (except Satellite). Under that standard. Under that SBA small business size standard, a business is small if it has 1,500 or fewer employees. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small.

164. 32.39 GHz Service. The Commission created a special small business size standard for 39 GHz licenses—an entity that has average gross revenues of $40 million or less in the three previous calendar years. An additional size standard for “very small business” is: an entity that, together with affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. The SBA has approved these small business size standards. The auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The 18 bidders who claimed small business status won 849 licenses. Consequently, the Commission estimates that 18 or fewer 39 GHz licensees are small entities that may be affected by our action.

165. Wireless Cable Systems. Broadband Radio Service and Educational Broadband Service. Broadband Radio Service systems, previously referred to as Multipoint Distribution Service (MDS) and Multichannel Multipoint Distribution Service (MMDS) systems, and “wireless cable,” transmit video programming to subscribers and provide two-way high speed data operations using the microwave frequencies of the Broadband Radio Service (BRS) and Educational Broadband Service (EBS) (previously referred to as the Instructional Television Fixed Service (ITFS)). In connection with the 1996 BRS auction, the Commission established a small business size standard as an entity that had annual average gross revenues of no more than $40 million in the previous three calendar years. The BRS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 auction winners, 61 met the definition of a small business. BRS also includes licensees of stations authorized prior to the auction. At this time, we estimate that of the 61 small business BRS auction winners, 48 remain small business licensees. In addition to the 48 small businesses that hold BTA authorizations, there are approximately 392 incumbent BRS licensees that are considered small entities. After adding the number of small business auction licensees to the number of incumbent licensees not already counted, we find that there are currently approximately 440 BRS licensees that are defined as small businesses under either the SBA or the Commission's rules. In 2009, the Commission conducted Auction 86, the sale of 78 licenses in the BRS areas. The Commission offered three levels of bidding credits: (i) A bidder with attributed average annual gross revenues that exceed $15 million and do not exceed $40 million for the preceding three years (small business) will receive a 15 percent discount on its winning bid; (ii) a bidder with attributed average annual gross revenues that exceed $3 million and do not exceed $15 million for the preceding three years (very small business) will receive a 25 percent discount on its winning bid; and (iii) a bidder with attributed average annual gross revenues that do not exceed $3 million for the preceding three years (entrepreneur) will receive a 35 percent discount on its winning bid. Auction 86 concluded in 2009 with the sale of 61 licenses. Of the ten winning bidders, two bidders that claimed small business status won 4 licenses; one bidder that claimed very small business status won three licenses; and two bidders that claimed entrepreneur status won six licenses.

166. In addition, the SBA's Cable Television Distribution Services small business size standard is applicable to EBS. There are presently 2,032 EBS licensees. All but 100 of these licenses are held by educational institutions. Educational institutions are included in this analysis as small entities. Thus, we estimate that at least 1,932 licensees are small businesses. Since 2007, Cable Television Distribution Services have been defined within the broad economic census category of Wired Telecommunications Carriers; that category is defined as follows: “This industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies.” For these services, the Commission uses the SBA small business size standard for the category “Wireless Telecommunications Carriers (except satellite),” which is 1,500 or fewer employees. To gauge small business prevalence for these cable services we must, however, use the most current census data. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small. The Commission notes that the Census' use the classifications “firms” does not track the number of “licenses.”

167. In the 1998 and 1999 LMDS auctions, the Commission defined a small business as an entity that has annual average gross revenues of less than $40 million in the previous three calendar years. Moreover, the Commission added an additional classification for a “very small business,” which was defined as an entity that had annual average gross revenues of less than $15 million in the previous three calendar years. These definitions of “small business” and “very small business” in the context of the LMDS auctions have been approved by the SBA. In the first LMDS auction, 104 bidders won 864 licenses. Of the 104 auction winners, 93 claimed status as small or very small businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based on this information, the Commission believes that the number of small LMDS licenses will include the 93 winning bidders in the first auction and the 40 winning bidders in the re-auction, for a total of 133 small entity LMDS providers as defined by the SBA and the Commission's auction rules.

168. 218-219 MHz Service. The first auction of 218-219 MHz spectrum resulted in 170 entities winning licenses for 594 Metropolitan Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by entities qualifying as a small business. For that auction, the small business size standard was an entity that, together with its affiliates, has no more than a $6 million net worth and, after Federal income taxes (excluding any carry over losses), has no more than $2 million in annual profits each year for the previous two years. In the 218-219 MHz Report and Order and Memorandum Opinion and Order, the Commission established a small business size standard for a “small business” as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and their affiliates, has average annual gross revenues not to exceed $15 million for the preceding three years. A “very small business” is defined as an entity that, together with its affiliates and persons or entities that hold interests in such an entity and its affiliates, has average annual gross revenues not to exceed $3 million for the preceding three years. These size standards will be used in future auctions of 218-219 MHz spectrum.

169. 24 GHz—Incumbent Licensees. This analysis may affect incumbent licensees who were relocated to the 24 GHz band from the 18 GHz band, and applicants who wish to provide services in the 24 GHz band. For this service, the Commission uses the SBA small business size standard for the category “Wireless Telecommunications Carriers (except satellite),” which is 1,500 or fewer employees. To gauge small business prevalence for these cable services we must, however, use the most current census data. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of firms can be considered small. The Commission notes that the Census' use of the classifications” firms” does not track the number of “licenses”. The Commission believes that there are only two licensees in the 24 GHz band that were relocated from the 18 GHz band, Teligent and TRW, Inc. It is our understanding that Teligent and its related companies have less than 1,500 employees, though this may change in the future. TRW is not a small entity. Thus, only one incumbent licensee in the 24 GHz band is a small business entity.

170. 24 GHz—Future Licensees. With respect to new applicants in the 24 GHz band, the small business size standard for “small business” is an entity that, together with controlling interests and affiliates, has average annual gross revenues for the three preceding years not in excess of $15 million. “Very small business” in the 24 GHz band is an entity that, together with controlling interests and affiliates, has average gross revenues not exceeding $3 million for the preceding three years. The SBA has approved these small business size standards. These size standards will apply to the future auction, if held.

171. Satellite Telecommunications Providers. Two economic census categories address the satellite industry. The first category has a small business size standard of $15 million or less in average annual receipts, under SBA rules. The second has a size standard of $25 million or less in annual receipts.

172. 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.” Census Bureau data for 2007 show that 512 Satellite Telecommunications firms that operated for that entire year. Of this total, 464 firms had annual receipts of under $10 million, and 18 firms had receipts of $10 million to $24,999,999. Consequently, the Commission estimates that the majority of Satellite Telecommunications firms are small entities that might be affected by our action.

173. The second category, i.e. “All Other Telecommunications” comprises “establishments primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing Internet services or voice over Internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry.” For this category, Census Bureau data for 2007 show that there were a total of 2,383 firms that operated for the entire year. Of this total, 2,347 firms had annual receipts of under $25 million and 12 firms had annual receipts of $25 million to $49,999,999. Consequently, the Commission estimates that the majority of All Other Telecommunications firms are small entities that might be affected by our action.

174. Because Section 706 requires us to monitor the deployment of broadband regardless of technology or transmission media employed, the Commission anticipates that some broadband service providers may not provide telephone service. Accordingly, the Commission describes below other types of firms that may provide broadband services, including cable companies, MDS providers, and utilities, among others.

175. Cable and Other Program Distributors. Since 2007, these services have been defined within the broad economic census category of Wired Telecommunications Carriers; that category is defined as follows: “This industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies.” The SBA has developed a small business size standard for this category, which is: All such firms having 1,500 or fewer employees. Census data for 2007, which supersede data contained in the 2002 Census, show that there were 1,383 firms that operated that year. Of those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 100 employees. Thus under this category and the associated small business size standard, the majority of such firms can be considered small.

176. Cable Companies and Systems. The Commission has also developed its own small business size standards, for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers, nationwide. Industry data indicate that, of 1,076 cable operators nationwide, all but eleven are small under this size standard. In addition, under the Commission's rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Industry data indicate that, of 7,208 systems nationwide, 6,139 systems have under 10,000 subscribers, and an additional 379 systems have 10,000-19,999 subscribers. Thus, under this second size standard, most cable systems are small.

177. Cable System Operators. The Communications Act of 1934, as amended, also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” The Commission has determined that an operator serving fewer than 677,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. Industry data indicate that, of 1,076 cable operators nationwide, all but ten are small under this size standard. We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million, and therefore we are unable to estimate more accurately the number of cable system operators that would qualify as small under this size standard.

178. Open Video Services. Open Video Service (OVS) systems provide subscription services. The open video system (“OVS”) framework was established in 1996, and is one of four statutorily recognized options for the provision of video programming services by local exchange carriers. The OVS framework provides opportunities for the distribution of video programming other than through cable systems. Because OVS operators provide subscription services, OVS falls within the SBA small business size standard covering cable services, which is “Wired Telecommunications Carriers.” The SBA has developed a small business size standard for this category, which is: all such firms having 1,500 or fewer employees. To gauge small business prevalence for the OVS service, the Commission relies on data currently available from the U.S. Census for the year 2007. According to that source, there were 3,188 firms that in 2007 were Wired Telecommunications Carriers. Of these, 3,144 operated with less than 1,000 employees, and 44 operated with more than 1,000 employees. However, as to the latter 44 there is no data available that shows how many operated with more than 1,500 employees. Based on this data, the majority of these firms can be considered small. In addition, we note that the Commission has certified some OVS operators, with some now providing service. Broadband service providers (“BSPs”) are currently the only significant holders of OVS certifications or local OVS franchises. The Commission does not have financial or employment information regarding the entities authorized to provide OVS, some of which may not yet be operational. Thus, at least some of the OVS operators may qualify as small entities. The Commission further notes that it has certified approximately 45 OVS operators to serve 75 areas, and some of these are currently providing service. Affiliates of Residential Communications Network, Inc. (RCN) received approval to operate OVS systems in New York City, Boston, Washington, DC, and other areas. RCN has sufficient revenues to assure that they do not qualify as a small business entity. Little financial information is available for the other entities that are authorized to provide OVS and are not yet operational. Given that some entities authorized to provide OVS service have not yet begun to generate revenues, the Commission concludes that up to 44 OVS operators (those remaining) might qualify as small businesses that may be affected by the rules and policies adopted herein.

179. Electric Power Generators, Transmitters, and Distributors. The Census Bureau defines an industry group comprised of “establishments, primarily engaged in generating, transmitting, and/or distributing electric power. Establishments in this industry group may perform one or more of the following activities: (1) Operate generation facilities that produce electric energy; (2) operate transmission systems that convey the electricity from the generation facility to the distribution system; and (3) operate distribution systems that convey electric power received from the generation facility or the transmission system to the final consumer.” The SBA has developed a small business size standard for firms in this category: “A firm is small if, including its affiliates, it is primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.” According to Census Bureau data for 2007, there were 1,525 firms in this category that operated for the entire year. Census data do not track electric output and we have not determined how many of these firms fit the SBA size standard for small, with no more than 4 million megawatt hours of electric output. Consequently, we estimate that 1,525 or fewer firms may be considered small under the SBA small business size standard.

180. In 2007, the SBA recognized two new small business, economic census categories. They are (1) Internet Publishing and Broadcasting and Web Search Portals, and (2) All Other Information Services.

181. Internet Service Providers. The 2007 Economic Census places these firms, whose services might include voice over Internet protocol (VoIP), in either of two categories, depending on whether the service is provided over the provider's own telecommunications facilities ( e.g., cable and DSL ISPs), or over client-supplied telecommunications connections ( e.g., dial-up ISPs). The former are within the category of Wired Telecommunications Carriers, which has an SBA small business size standard of 1,500 or fewer employees. These are also labeled “broadband.” The latter are within the category of All Other Telecommunications, which has a size standard of annual receipts of $25 million or less. These are labeled non-broadband.

182. The most current Economic Census data for all such firms are 2007 data, which are detailed specifically for ISPs within the categories above. For the first category, the data show that 396 firms operated for the entire year, of which 159 had nine or fewer employees. For the second category, the data show that 1,682 firms operated for the entire year. Of those, 1,675 had annual receipts below $25 million per year, and an additional two had receipts of between $25 million and $49,999,999. Consequently, we estimate that the majority of ISP firms are small entities.

183. Internet Publishing and Broadcasting and Web Search Portals. This industry comprises establishments primarily engaged in (1) publishing and/or broadcasting content on the Internet exclusively or (2) operating Web sites that use a search engine to generate and maintain extensive databases of Internet addresses and content in an easily searchable format (and known as Web search portals). The publishing and broadcasting establishments in this industry do not provide traditional (non-Internet) versions of the content that they publish or broadcast. They provide textual, audio, and/or video content of general or specific interest on the Internet exclusively. Establishments known as Web search portals often provide additional Internet services, such as e-mail, connections to other Web sites, auctions, news, and other limited content, and serve as a home base for Internet users. The SBA has developed a small business size standard for this category; that size standard is 500 employees. Less than 500 employees is considered small. According to Census Bureau data for 2007, there were 2,705 firms that provided one or more of these services for that entire year. Of these, 2,682 operated with less than 500 employees and 13 operated with 500 to 999 employees. Consequently, we estimate that the majority of these firms are small entities that may be affected by our action.

184. Data Processing, Hosting, and Related Services. This industry comprises establishments primarily engaged in providing infrastructure for hosting or data processing services. These establishments may provide specialized hosting activities, such as Web hosting, streaming services or application hosting; provide application service provisioning; or may provide general time-share mainframe facilities to clients. Data processing establishments provide complete processing and specialized reports from data supplied by clients or provide automated data processing and data entry services. The SBA has developed a small business size standard for this category; that size standard is $25 million or less in average annual receipts. According to Census Bureau data for 2007, there were 8,060 firms in this category that operated for the entire year. Of these, 6,726 had annual receipts of under $25 million, and 155 had receipts between $25 million and $49,999,999 million. Consequently, we estimate that the majority of these firms are small entities that may be affected by our action.

185. All Other Information Services. “This industry comprises establishments primarily engaged in providing other information services (except new syndicates and libraries and archives).” Our action pertains to interconnected VoIP services, which could be provided by entities that provide other services such as e-mail, online gaming, Web browsing, video conferencing, instant messaging, and other, similar IP-enabled services. The SBA has developed a small business size standard for this category; that size standard is $7.0 million or less in average annual receipts. According to Census Bureau data for 2007, there were 367 firms in this category that operated for the entire year. Of these, 334 had annual receipts of under $5 million, and an additional 11 firms had receipts of between $5 million and $9,999,999. Consequently, we estimate that the majority of these firms are small entities that may be affected by our action.

186. In the Notice, the Commission proposes additional or modified information collections that would impose further reporting and recordkeeping requirements on current Form 477 filers, including small entities. Specifically, the NPRM invites comment on whether and how the Commission could collect data on the following additional or modified categories of data: (1) Deployment, (2) subscription, (3) price, (4) service quality, and (5) ownership and contact information. The Commission also seeks comment on whether to collect “other data” such as socioeconomic and social metrics data to assess socially and economically disadvantaged parties. The Commission seeks further comment on the extent to which technological tools and use of commercial and publicly available data can reduce the burden of producing information. The Commission also seeks comment on how to streamline the process in collecting the data the Commission needs to inform its policymaking processes while minimizing the production burden on providers and the processing burden on the Commission. The Commission invites comments on the merits and methodologies of such data collections to include suggestions and discussions of other alternatives not specifically discussed in the NPRM that would meet the objectives of the NPRM but would impose lesser burdens on smaller entities.

187. Based on these questions, the Commission anticipates that a record will be developed concerning actual burden and alternative ways in which the Commission could lessen the burden on small entities of obtaining improved data about broadband deployment and availability throughout the nation.

188. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include (among others) the following four alternatives: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

189. In particular, the Commission seeks comment on whether it would be less burdensome for providers to submit address-level data with respect to the deployment and availability of services. The Commission also seeks comment on other ways that the Commission can ease the burden on small- and medium-sized providers.

190. Based on these questions, and the alternatives the Commission has discussed, the Commission anticipates that the record will be developed concerning alternative ways in which the Commission could lessen the burden on small entities of obtaining improved data about broadband. The Commission welcomes proposals of alternatives from any of the approaches as described in Section A, supra.

191. None.

NMFS announces that the Administrator, NE Region, NMFS (Regional Administrator), has made a preliminary determination that 19 sector operations plans and contracts, which were initially submitted to NMFS on or before September 1, 2010, and sector rosters, submitted on or before September 10, 2010, are: (1) Consistent with the goals of the FMP, as described in Amendment 16 Final Environmental Impact Statement (FEIS) and other applicable laws, (2) in compliance with the measures that govern the development and operation of a sector as specified in Section 4.2.3 of the Amendment 16 FEIS, and (3) have met administrative deadlines, including roster deadlines, for being proposed as a sector operations plan for FY 2011. This proposed rule summarizes many of the sector requirements as implemented by Amendment 16 and the requirements proposed for modification in Framework Adjustment 45 (FW 45), and solicits comments on the regulatory exemptions requested by sectors as well as the applicable environmental analyses.

As stated in Amendment 16, the deadline to submit operations plans and signed contracts was September 1, 2010. However, because NE multispecies permit holders were notified of their preliminary FY 2011 Potential Sector Contribution (PSC) in mid-August, 2010, NMFS extended the deadline to submit signed contracts from September 1, 2010, to September 10, 2010, to allow vessel owners adequate time to make a decision to join a sector for FY 2011 or to fish in the common pool. Based upon industry request, this deadline was further extended to December 1, 2010, to provide additional flexibility.

The final rule implementing Amendment 13 to the NE Multispecies FMP (69 FR 22906; April 27, 2004) specified a process for forming sectors within the NE multispecies fishery, implemented restrictions applicable to all sectors, and authorized allocation of a total allowable catch (TAC) for specific groundfish species to a sector. As approved in Amendment 13, sector operations plans and contracts must contain certain elements, including a contract signed by all sector participants and an operations plan containing rules that sector members agree to abide by to avoid exceeding their sector TAC. An EA, or other appropriate analysis, must be prepared for the sectors that analyzes the individual and cumulative impacts of all proposed sector operations. Additionally, the public must be provided an opportunity to comment on the proposed sector operations plans, sector contracts, and EA. The regulations require that, upon completion of the public comment period, the Regional Administrator must make a determination regarding approval of the sectors operations plans and contracts. Amendment 13 implemented the GB Cod Hook Sector in FY 2004, and Framework 42 (71 FR 62156; October 23, 2006) implemented the GB Cod Fixed Gear Sector in FY 2006.

Amendment 16 (74 FR 18262; April 9, 2010) expanded the sector management measures, revised the 2 existing sectors, and implemented an additional 17 new sectors for a total of 19 sectors, including the Northeast Fishery Sectors I through XIII, the Sustainable Harvest Sector, the Tri-State Sector, the Northeast Coastal Communities Sector, and the Port Clyde Community Groundfish Sector. Amendment 16 defined a sector as “[a] group of persons (three or more persons, none of whom have an ownership interest in the other two persons in the sector) holding limited access vessel permits who have voluntarily entered into a contract and agree to certain fishing restrictions for a specified period of time, and which has been granted a TAC(s) [sic] in order to achieve objectives consistent with applicable FMP goals and objectives.” A sector's TAC is referred to as an annual catch entitlement (ACE). Regional Administrator approval is required for a sector to be authorized to fish and to be allocated an ACE for stocks of regulated NE multispecies during each FY. Each individual sector's ACE for a particular stock represents a share of that stock's annual catch limit (ACL) available to commercial NE multispecies vessels, based upon the PSC of permits participating in that sector. Sectors are self-selecting, meaning each sector maintains the ability to choose its members. Sectors may pool harvesting resources and consolidate operations to fewer vessels, if they desire.

FW 45, as proposed by the New England Fishery Management Council (Council) and available for public review through the Federal Register , would revise the rules for the 19 previously approved sectors and include 5 new sectors (for a total of 24 sectors), including the Maine Permit Bank Sector, the Massachusetts Permit Bank Sector, the New Hampshire Permit Bank Sector, the Rhode Island Permit Bank Sector, and Sustainable Harvest Sector 3. Approval of the operation of these new sectors is conditional on approval of measures proposed in FW 45. Similarly, approval of some of the exemptions requested by the sectors that submitted operations plans for FY 2011 is also contingent on FW 45. Therefore, final action regarding the approval of the operation of these sectors and the exemptions requested will not be made unless and until a final decision on FW 45 has been made. FW 45 is expected to be implemented on May 1, 2011. Concurrent with the implementation of FW 45, NMFS and the States of Maine, Massachusetts, New Hampshire, and Rhode Island have entered into separate Memoranda of Agreement (MOA) for the administration of State-managed permit banks. Terms and conditions for permit banks include: The permit bank may only transfer out ACE, it may not transfer in ACE; the permit bank may only transfer ACE to sectors for use by vessels that are 45 ft (13.72 m) in length or smaller, based out of ports with a population of 30,000 residents or less. The States of Massachusetts, New Hampshire, and Rhode Island were unable to fulfill roster requirements in time to be considered in this rulemaking process for FY 2011. The Maine Permit Bank Sector is proposed to consist of two privately held permits, as well as any additional permits purchased by the permit bank. The State issued a request for proposal, soliciting permit holders who are interested in selling permits to the State permit bank, and submitted this information to NMFS as additional prospective permits. The Maine Permit Bank Sector must finalize the purchase of permits from this list and notify NMFS by February 1, 2011.

Representatives from 22 of the 24 current and proposed sectors submitted operations plans and sector contracts, and requested an allocation of stocks regulated under the FMP for FY 2011. Neither the GB Cod Hook Sector, nor Northeast Fishery Sector I chose to submit an operations plan and sector contract for FY 2011. The Massachusetts Permit Bank Sector, the New Hampshire Permit Bank Sector, and the Rhode Island Permit Bank Sector submitted operations plans for FY 2011, but were unable to demonstrate membership requirements, and thus will not be considered for approval in this rule, reducing the number of potential FY 2011 sectors to 19. Two of the proposed FY 2011 sectors, Northeast Fishery Sector IV and Sustainable Harvest Sector 3, would operate as private lease-only sectors. The Sustainable Harvest Sector 3 has not explicitly prohibited fishing activity, and may transfer permits onto active vessels.

As of December 1, 2010, 834 of the 1,475 eligible NE multispecies permits, which would account for approximately 98.8 percent of the historical commercial NE multispecies landings during the qualifying period selected by the Council in Amendment 16, have preliminarily enrolled in a sector for FY 2011. Table 1 includes a summary of permits enrolled in a sector as of December 1, 2010. Permits enrolled in a sector, and the vessels associated with those permits, have until April 30, 2011, to withdraw from a sector and fish in the common pool for FY 2011. NMFS will publish final sector sub-ACL and common pool sub-ACL totals, based upon final rosters as soon as possible after the start of FY 2011.

Table 2 details the cumulative PSC (a percentage) each sector would receive based on their rosters as of December 1, 2010. Tables 3a and 3b detail the ACEs (in thousands of pounds and metric tons) each sector would be allocated based on their December 1, 2010, sector rosters for FY 2011. While the common pool does not receive a specific allocation of ACE, it has been included in each of these tables for comparison.

Note that individual sector members are not assigned a PSC for Eastern GB cod or Eastern GB haddock; rather each sector is allocated a portion of the GB cod and GB haddock ACE to harvest exclusively in the Eastern U.S./Canada Area. The amount of cod and haddock that a sector may harvest in the Eastern U.S./Canada Area is calculated by multiplying the percentage of the GB cod and GB haddock ACLs by the overall Eastern U.S./Canada Area GB cod and GB haddock TACs, respectively.

In accordance with Amendment 16, at the start of FY 2011, NMFS will withhold 20 percent of a sector's FY 2011 ACE for each stock for a period of up to 61 days, to allow time to process any FY 2010 ACE transfers submitted by May 14, 2011, and to determine whether the FY 2011 ACE allocated to any sector needs to be reduced, or any overage penalties need to be applied to accommodate an FY 2010 ACE overage by that sector. At the request of the Council, NMFS is considering relaxing the May 14 requirement to submit ACE transfers. The Council and sector managers will be notified of any change in this deadline in writing and the decision will be announced on the NERO Web site ( http://www.nero.noaa.gov/ ).

All sectors must, on an annual basis, submit an operations plan and sector contract to NMFS by a specified deadline to be authorized to fish and receive an allocation of groundfish for the following FY. Of the 24 current and FW 45 proposed sectors, 19 sectors met the September 1, 2010, operations plan deadline and the final December 1, 2010, NMFS roster deadline for FY 2011, including the Maine Permit Bank Sector. Each sector operations plan contains the rules under which each sector would fish. The sector contract provides the legal contract that binds members to a sector and its operations plan. Most sectors submitted one document to NMFS that encompasses both the operations plan and contract.

While each sector conducts fishing activities according to its approved operations plan, Section 4.2.3 of the Amendment 16 FEIS contains numerous provisions that apply to all sector operations plans and sector members. Under this amendment, all permit holders with a limited access NE multispecies permit that was valid as of May 1, 2008, are eligible to participate in a sector, including holders of permits currently held in confirmation of permit history (CPH). While membership in each sector is voluntary, each member (and his/her permits enrolled in the sector) must remain with the sector for the entire FY, and cannot fish in the NE multispecies days-at-sea (DAS) program outside of the sector ( i.e., in the common pool) during the FY. Participating vessels would be required to comply with all pertinent Federal fishing regulations, unless specifically exempted by a letter of authorization (LOA) issued by the Regional Administrator, as part of the approval of a sector's operations plan, as described further below. Sector operations plans may be amended in-season if a change is necessary and agreed to by NMFS, provided the change is consistent with the sector administration provisions. These changes would be included in updated LOAs issued to sector members and through amendments to the approved operations plan.

Sectors would be allocated all large-mesh groundfish stocks for which members have landings history, with the exception of Atlantic halibut, windowpane flounder, Atlantic wolffish, and SNE/MA winter flounder. Sector vessels would be required to retain all legal-sized allocated groundfish, unless an exemption is granted allowing sector vessels to discard legal-sized unmarketable fish at sea. Catch (including discards) of all allocated groundfish stocks by a sector's vessels would count against the sector's ACE, unless the catch is an element of a separate ACL sub-component, such as groundfish caught when fishing in an exempted fishery, or yellowtail flounder caught when fishing in the Atlantic sea scallop fishery. Sector vessels fishing for monkfish, skate, lobster (with non-trap gear), and spiny dogfish when on a sector trip ( e.g., not fishing under provisions of a NE multispecies exempted fishery) would have their groundfish catch (including discards) on those trips debited against the sector's ACE. Discard ratios applied to sectors would be determined by NMFS based on observed trips.

The final rule issued for Amendment 16 implemented a program whereby ACE may be transferred between sectors, although ACE transfers to or from common pool vessels is prohibited. Each sector would be required to ensure that its ACE is not exceeded during the FY. Additionally, Amendment 16 required sectors to develop independent third-party dockside monitoring programs (DSM) to verify landings at the time they are weighed by the dealer, and to certify that the landing weights are accurate as reported by the dealer. During FY 2010, 50 percent of trips from each sector are required to be randomly selected for DSM. Dockside monitoring coverage was specified to be reduced to 20 percent in FY 2011; however, FW 45, as proposed, would change the required coverage level for DSM to the level NMFS is able to fund, up to 100 percent coverage through FY 2012, prioritizing coverage for trips that have not received at-sea or electronic monitoring. In addition, the Council voted to remove DSM requirements (a reporting requirement) from the list of prohibited exemptions for sectors. Sectors would be required to monitor their landings and available ACE and submit weekly catch reports to NMFS. In addition, the sector manager would be required to provide NMFS with aggregate sector reports on a daily basis when a threshold (specified in the operations plan) is reached. Once a sector's ACE for a particular stock is caught, a sector would be required to cease all fishing operations in that stock area until it could acquire additional ACE for that stock. Each sector would be required to submit an annual report to NMFS and the Council within 60 days of the end of the FY detailing the sector's catch (landings and discards by the sector), enforcement actions, and pertinent information necessary to evaluate the biological, economic, and social impacts from the sector, as directed by NMFS.

Each sector contract provides procedures to enforce the sector operations plan, explains sector monitoring and reporting requirements, presents a schedule of penalties, and provides authority to sector managers to issue stop fishing orders to sector members that violate provisions of the contract. Sector members could be held jointly and severally liable for ACE overages, discarding of legal-sized fish, and/or misreporting of catch (landings or discards). As required by Amendment 16, each sector contract submitted for FY 2011 states that the sector will withhold an initial reserve from the sector's sub-allocation to each individual member to prevent the sector from exceeding its ACE. Each sector contract also details the method for initial ACE allocation to sector members; for FY 2011, each sector has proposed that each sector member could harvest an amount of fish equal to the amount each individual member's permit contributed to the sector's ACE.

Amendment 16 contains several “universal” exemptions that are applicable to all sectors. These universal exemptions include exemptions from: Trip limits on allocated stocks; the GB Seasonal Closure Area; NE multispecies DAS restrictions; the requirement to use a 6.5-inch (16.51-cm) mesh codend when fishing with selective gear on GB; and portions of the GOM Rolling Closure Areas. Sectors may request additional exemptions from NE multispecies regulations through their sector operations plan. Amendment 16 prohibits sectors from requesting exemptions from year-round closed areas, permitting restrictions, gear restrictions designed to minimize habitat impacts, and reporting requirements (not including DAS reporting requirements). FW 45 proposes to exclude DSM from the reporting requirements from which sectors may not be exempted.

A total of 31 exemptions from the NE multispecies regulations have been requested by sectors through their FY 2011 operations plans. These requests fall into several categories: Exemptions previously approved for FY 2010 (numbers 1-7); additional exemptions that were under consideration for FY 2010 at the time of the request for FY 2011 (numbers 8-9); exemptions disapproved in FY 2010 (number 10); novel exemptions for FY 2011 (numbers 11-19), dockside monitoring exemptions (numbers 20-30) and State permit bank exemptions (number 31). A full discussion of the 31 exemptions is below. The requirements that were exempted in FY 2010 and have again been requested for FY 2011 are: (1) 120-day block out of the fishery required for Day gillnet vessels; (2) prohibition on a vessel hauling another vessel's gillnet gear; (3) limitation on the number of gillnets that may be hauled on GB when fishing under a groundfish/monkfish DAS; (4) limitation on the number of gillnets imposed on Day gillnet vessels; (5) 20-day spawning block out of the fishery required for all vessels; (6) limits on the number of hooks that may be fished; and (7) DAS Leasing Program length and horsepower restrictions. Additional regulations that were under consideration for exemption for FY 2010 at the time of the request, and have again been requested for FY 2011 are: (8) the GOM Sink Gillnet Mesh Exemption; and (9) prohibition on the possession or use of squid or mackerel in the Closed Area I (CAI) Hook Gear Haddock (HGH) Special Access Program (SAP). For FY 2011, sectors requested an exemption from the follow regulation that was previously disapproved for FY 2010 is again being proposed for FY 2011: (10) access to GOM Rolling Closure Areas in May and June. For FY 2011, sectors have proposed novel exemptions from the following regulations: (11) prohibition on discarding; (12) extension of the GOM Sink Gillnet Mesh Exemption through the month of May; (13) daily catch reporting by Sector Managers for vessels participating in the CAI HGH SAP; (14) prohibition on pair trawling; (15) minimum hook size requirements for demersal longline gear; (16) minimum mesh size requirement; (17) Rhule and Haddock Separator requirements to utilize the 98.4 in × 15.7 in (250 cm × 40 cm) Eliminator Trawl TM in areas where these gear types are approved; (18) trawl gear restrictions in the U.S./Canada Area; and (19) the requirement to power a VMS while at the dock. Due to the Council's vote to exclude DSM from the list of prohibited exemptions in FW 45, sectors have requested exemptions from DSM requirements ranging from a complete exemption to area-, fishery-, and volume-based exemptions. Specifically, sectors requested novel exemptions from the following DSM requirements for FY 2011: (20) All DSM and roving monitoring requirements; (21) DSM requirements for directed monkfish, skate, and dogfish trips; (22) DSM requirements for jig vessels; (23) DSM requirements for hook vessels when the sector has caught less than 10,000 lb (4535.9 kg) of groundfish per year; (24) DSM requirements in May when fishing in several mid-Atlantic NMFS Statistical Areas; (25) DSM requirements for vessels fishing west of 72°30′ W. long.; (26) DSM, roving monitoring, and hail requirements for hook-only or handgear vessels; (27) DSM, roving monitoring, and hail requirements for vessels using demersal longline, jig and handgear while targeting spiny dogfish in Massachusetts State waters of NMFS Statistical Area 521; (28) DSM requirements when at-sea monitoring has previously observed the trip; (29) the requirement to delay offloading due to the late arrival of the assigned monitor; and (30) the prohibition on offloading of non-allocated stocks prior to the arrival of the monitor. These exemptions were considered too late to be included in the EA for this action; they will be fully analyzed and included in the final EA. Finally, the State permit bank sector has requested an exemption from: (31) the requirement to provide a sector roster to NMFS by the specified deadline.

NMFS is soliciting public comment on the proposed sector operations plans and all 31 of the exemptions specified above. NMFS is particularly interested in receiving comments on the exemptions from the GOM Rolling Closure Areas, prohibition on pair trawling, minimum trawl mesh size requirements on targeted redfish trips, and dockside monitoring exemptions, because of particular concerns regarding the potential impacts of these exemptions.

The 120-day block out of the fishery requirement for day gillnet vessels was implemented in 1997 under Framework 20 (62 FR 15381; April 1, 1997) to help ensure that management measures for Day gillnet vessels were comparable to effort controls placed on other fishing gear types, given that gillnets continue to fish as long as they are in the water. Regulations at § 648.82(j)(1)(ii) require that each NE multispecies gillnet vessel declared into the Day gillnet category declare and take 120 days out of the non-exempt gillnet fishery. Each period of time taken must be a minimum of 7 consecutive days, and at least 21 of the 120 days must be taken between June 1 and September 30. An exemption from this requirement was previously approved for FY 2010 based upon the rationale that this measure was designed to control fishing effort and, therefore, is no longer necessary for sectors because sectors are restricted to an ACE for each groundfish stock, which limits overall fishing mortality. For additional information pertaining to this exemption and other exemptions previously approved in FY 2010, please refer to the proposed and final sector rules for FY 2010 (74 FR 68015, December 22, 2010 and 75 FR 18113, April 9, 2010, respectively). This exemption would increase the operational flexibility of sector vessels and would be expected to increase profit margins of sector fishermen. The exemption from the Day gillnet 120-day block requirement is requested by the GB Cod Fixed Gear Sector; the Northeast Coastal Communities Sector; Northeast Fishery Sectors III, V-VIII, and X-XIII; the Port Clyde Community Groundfish Sector; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

Regulations at §§ 648.14(k)(6)(ii)(A) and 648.84(a) specify the manner in which gillnet gear must be tagged, requiring that information pertinent to the vessel owner or vessel be permanently affixed to the gear. No provisions exist in the regulations allowing for multiple vessels to haul the same gear. An exemption from this regulation, which was previously approved in FY 2010 because it was determined that the regulations pertaining to hauling and setting responsibilities are no longer necessary when sectors are confined to an ACE for each stock, would allow a sector to share fixed gear among sector vessels, thereby reducing costs. Consistent with the exemption as originally approved, the sectors requesting this exemption have proposed that all vessels utilizing community fixed gear be jointly liable for any violations associated with that gear. Additionally, each member intending to haul the same gear will be required to tag the gear with the appropriate gillnet tags, consistent with § 648.84(a). The exemption from the prohibition on hauling another vessel's gear is being requested by the GB Cod Fixed Gear Sector; the Northeast Coastal Communities Sector; Northeast Fishery Sectors III, VI-VIII, and X-XII; the Port Clyde Community Groundfish Sector; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

Regulations at § 648.80(a)(4)(iv) prohibit Day gillnet vessels fishing on a groundfish DAS from possessing, deploying, fishing, or hauling more than 50 nets on GB were implemented as a groundfish mortality control under Amendment 13. An exemption from the limit on the number of gillnets that may be hauled on GB when fishing under a groundfish/monkfish DAS was previously granted in FY 2010 because it would allow nets deployed under existing net limits of the Monkfish FMP to be hauled more efficiently by vessels dually permitted under both FMPs. The exemption from the limitation on the number of gillnets that may be hauled on GB when fishing under a groundfish/monkfish DAS is being requested by the GB Cod Fixed Gear Sector; Northeast Fishery Sectors III, VI-VIII, and X-XIII; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

Current gear restrictions in the groundfish regulated mesh areas (RMA) restrict Day gillnet vessels from fishing more than: 100 gillnets (of which no more than 50 can be roundfish gillnets) in the GOM RMA (§ 648.80(a)(3)(iv)); 50 gillnets in the GB RMA (§ 648.80(a)(4)(iv)); and 75 gillnets in the Mid-Atlantic (MA) RMA (§ 648.80(b)(2)(iv)). This exemption was previously requested and approved in FY 2010, and would allow sector vessels to fish up to 150 nets (any combination of flatfish or roundfish nets) in any RMA, and provides greater operational flexibility to sector vessels in deploying gillnet gear. This exemption was previously approved for FY 2010 because it is designed to control fishing effort and is no longer necessary for sector vessels, since each sector is restricted by an ACE for each stock, which caps overall fishing mortality. The exemption from the limit on the number of gillnets for Day gillnet vessels is being requested by the GB Cod Fixed Gear Sector; Northeast Fishery Sectors III, V-VIII, and X-XIII; the Port Clyde Community Groundfish Sector; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

Regulations at § 648.82(g) require vessels to declare out and be out of the NE multispecies DAS program for a 20-day period each calendar year between March 1 and May 31, when spawning is most prevalent in the GOM. This regulation was developed to reduce fishing effort on spawning groundfish stocks and an exemption was approved for FY 2010 sectors based upon the rationale that the sector's ACE will restrict fishing mortality, making this measure no longer necessary as an effort control. An exemption from this requirement would provide vessel owners with greater flexibility to plan operations according to fishing and market conditions. The exemption from the Day gillnet 20-day block requirement is being requested by the GB Cod Fixed Gear Sector; the Northeast Coastal Communities Sector; Northeast Fishery Sectors II-III and V-XIII; the Port Clyde Community Groundfish Sector; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

Current regulations for the GOM RMA, GB RMA, and SNE and MAA RMAs at §§ 648.80(a)(3)(iv)(B)( 2 ), 648.80(a)(4)(iv)(B)( 2 ), 648.80(b)(2)(iv)(B)( 1 ), and 648.80(c)(2)(v)(B)( 1 ), respectively, prohibit vessels from fishing or possessing more than 2,000 rigged hooks in the GOM RMA, more than 3,600 rigged hooks in the GB RMA, more than 2,000 rigged hooks in the SNE RMA, or 4,500 rigged hooks in the MA RMA. This measure, which was initially implemented in 2002 through an interim action (67 FR 50292; August 1, 2002) and made permanent through Amendment 13, was designed to control fishing effort. An exemption from the number of hooks that a vessel may fish was approved for FY 2010 because it would allow sector vessels to more efficiently harvest ACE and is no longer a necessary control on effort by sector vessels. This exemption was granted to the GB Cod Hook Sector from 2004-2009, and was granted to the GB Cod Fixed Gear Sector; the Northeast Coastal Communities Sector; Northeast Fishery Sectors III, V-VIII, and X-XII; the Sustainable Harvest Sector; and the Tri-State Sector for either all or a portion of FY 2010. The exemption from the limitation on the number of hooks that may be fished is being requested by the GB Cod Fixed Gear Sector; the Northeast Coastal Communities Sector; Northeast Fishery Sectors III, VI-VIII, and X-XII; the Port Clyde Community Groundfish Sector; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

While sector vessels are exempt from the requirement to use NE multispecies DAS to harvest groundfish, sector vessels have been allocated, and still need to use, NE multispecies DAS for specific circumstances. For example, the Monkfish FMP includes a requirement that limited access monkfish Category C and D vessels harvesting more than the incidental monkfish possession limit must fish under both a monkfish and a groundfish DAS. Therefore, sector vessels may still use, and lease, NE multispecies DAS.

An exemption from the DAS Leasing Program length and horsepower baseline restrictions on DAS leases between vessels within their individual sectors, as well as with vessels in other sectors with this exemption was approved in FY 2010. Restricting sectors to their ACEs eliminates the need to use vessel characteristics to control groundfish fishing effort. Further, exemption from this restriction allows sector vessels greater flexibility in the utilization of ACE and DAS. Providing greater flexibility in the distribution of DAS could result in increased effort on non-allocated target stocks, such as monkfish and skates. However, sectors predicted little consolidation and redirection of effort in their FY 2010 operations plans. In addition, any potential redirection in effort would be restricted by the sector's ACE for each stock, as well as by effort controls in other fisheries ( e.g., monkfish trip limits and DAS). The exemption from the length and horsepower restrictions on DAS leasing is being requested by the GB Cod Fixed Gear Sector; the Maine Permit Bank Sector; all 12 Northeast Fishery Sectors; the Port Clyde Community Groundfish Sector; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

The regulations require a minimum mesh size of 6.5-in (16.51-cm) for gillnets in the GOM RMA (§ 648.80(a)(3)(iv)). Minimum mesh size requirements have been used to reduce overall mortality on groundfish stocks, as well as to reduce discarding of, and improve survival of, sub-legal groundfish. An exemption from this regulation, which would allow vessels to potentially catch more haddock seasonally in the GOM, was considered in a supplemental proposed and final rule to FY 2010 sector operations (75 FR 53939; September 2, 2010; and 75 FR 80720; December 23, 2010) and is functionally equivalent to a pilot program that was proposed by the Council in Amendment 16. This exemption would allow sector vessels to use 6-inch (15.24-cm) mesh stand-up gillnets in the GOM RMA from January 1, 2012, to April 30, 2012, when fishing for haddock. The designation of this season is consistent with the original pilot program proposal and is the time period when haddock are most available in the GOM. Sector vessels utilizing this exemption would be prohibited from using tie-down gillnets during this period. Sector vessels may transit the GOM RMA with tie-down gillnets, provided they are properly stowed and not available for immediate use in accordance with one of the methods specified at § 648.23(b).

The GOM Sink Gillnet Mesh Program, as proposed by the Council, stipulated that Day gillnet vessels would not be able to fish with, possess, haul, or deploy more than 30 nets per trip. Consistent with the original scope of the pilot program, for FY 2010 NMFS proposed in supplemental rulemaking that Day gillnet vessels utilizing this exemption also be limited to 30 nets per trip during this period, but requested public comment on a net limit of between 30 and 150 stand-up nets, analyzing up to 150 nets. Because Day gillnet vessels granted the sector exemption from Day gillnet net limits, as explained under exemption request 4, would not be subject to the general net limit in the GOM RMA, and thus able to fish up to 150 nets in the GOM RMA, they would be limited to 30 nets when fishing under this exemption program. Therefore, NMFS again requests public comment on the feasibility of allowing up to 150 nets when fishing under this exemption. The LOA issued to sector vessels that qualify for this exemption would specify the net restrictions to help ensure the provision is enforceable. There would be no limit on the number of nets that participating Trip gillnet vessels would be able to fish with, possess, haul, or deploy, during this period, because Trip gillnet vessels are required to remove all gillnet gear from the water before returning to port at the end of a fishing trip.

Recent selectivity studies have indicated that 6.5-inch (16.51-cm) sink gillnets may not be effective at retaining haddock at the current legal minimum fish size. An exemption from this requirement would provide sector vessels the opportunity to utilize a smaller mesh size gillnet to potentially catch more haddock in the GOM, and, thereby, increase efficiency and revenue in the fishery. NMFS believes that impacts to allocated target stocks resulting from this exemption would be negligible, given that fishing mortality by sector vessels is restricted by an ACE for allocated stocks, capping overall mortality. It is possible that a higher net limit for Day gillnet vessels participating in this program could result in an increase in the number of gillnets in the water at any one time and, therefore, potentially increase interactions with protected species. However, potential negative impacts to protected species from this exemption are expected to be low because additional nets may result in greater efficiency that could decrease the overall number of soak hours throughout the year as a sector's ACE is caught faster, thus potentially reducing interactions with protected species. In addition, sector vessels utilizing this exemption would still be required to comply with all requirements of the Harbor Porpoise Take Reduction Plan and Atlantic Large Whale Take Reduction Plan. The GOM Sink Gillnet Mesh Exemption is being requested by the GB Cod Fixed Gear Sector; Northeast Fishery Sectors III, VI-VIII, and X-XII; the Port Clyde Community Groundfish Sector; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

The restriction on the possession or use of squid or mackerel as bait in the CAI Hook Gear Haddock SAP was originally approved by the Council in Framework 41, and analyzed in the FEIS for Framework 41, but inadvertently not included in the regulations implementing Framework 41. To correct this oversight, this provision was implemented as part of the Amendment 16 final rule. This restriction was intended to control the catch rates of cod, as squid and mackerel have been demonstrated to result in higher catch rates of cod. NMFS received comments on Amendment 16 that the bait restrictions should not apply to sector vessels. In the final rule implementing Amendment 16, NMFS stated that * * * because the Council did not provide for a specific exemption from such bait restriction in Amendment 16, NMFS cannot provide a sector an exemption from the bait requirements for this SAP in the final rule.” However, because the bait restriction in Framework 41 was included under Section 4.2.2.2 “Requirements for Vessels not in the Hook Sector,” NMFS, after further discussion with Council staff, understands that Framework 41 intended that this bait restriction apply only to vessels fishing outside of a sector ( i.e., the common pool). Based on this, NMFS intends to revise the current regulations for this requirement in an upcoming correction rule and, until the correction is effective, exempt any interested sector from this provision for the remainder of FY 2010 through an amendment to that sector's approved operations plan.

The GB Cod Fixed Gear Sector requested an exemption from this bait restriction, asserting the provision is an input control used to control fishing effort within the SAP under the DAS system and is unnecessary because catch by the sector will be limited by the ACE for each stock that caps overall fishing effort.

The GOM Rolling Closure Areas were initially implemented in 1998 under Framework 25 to the FMP to reduce fishing effort in “areas with high GOM cod landings.” However, Framework 26 referred to the rolling closure areas as “inshore `cod spawning' closures.” The stated purpose and need under Framework 26 (Section 3.0) states that the Council wanted to “take additional action to protect cod during the 1999 spawning season * * * and immediate action is necessary to reduce catches and protect the spawning stock.” As a result, Framework 26 expanded the time period of these “cod spawning” closures, which included several 30-minute blocks. The final rule implementing Framework 26 (64 FR 2601; January 15, 1999) specified that the Council undertook action to expand these closures because of the “opportunity to delay fishing mortality on mature cod during the spring spawning period, a time when stocks aggregate and are particularly vulnerable to fishing pressure.” Amendment 16 implemented universal sector exemptions from specific portions of the current GOM Rolling Closure Areas, and specifically did not exempt these portions of these areas due to the understanding that they protect spawning aggregations of cod. The Council tasked the Groundfish Plan Development Team (PDT) with reviewing and analyzing the existing GOM Rolling Closure Areas to determine which areas should remain closed, but stipulated that sectors may request specific exemptions from the GOM Rolling Closure Areas in their sector operations plans. On November 18, 2009, the Council voted to endorse a previous FY 2010 exemption request from block 138 in May.

Several sectors requested exemptions from GOM Rolling Closure Areas for FY 2010; however, these exemptions were ultimately rejected in the final rule implementing FY 2010 sector operations plans because the requesting sectors failed to consider that, despite ACE limits, direct targeting of spawning aggregations can adversely impact the reproductive potential of a stock, as opposed to post-spawning mortality. Additionally, justification that demonstrates that spawning fish could be avoided was not provided by the individual sectors. The final rule also cited that the existing GOM Rolling Closure Areas provide some protection to harbor porpoise and other marine mammals. Six of the Northeast Fishery Sectors and the Sustainable Harvest Sector requested additional exemptions from these rolling closures in FY 2010.

The sectors requesting this exemption for FY 2011 assert that the GOM Rolling Closure Areas were originally intended as mortality closures, and are now unnecessary because fishing mortality for sectors is capped by the ACE allocated for each groundfish stock. Sustainable Harvest Sectors 1 and 3 are requesting access to 30-minute blocks 138 and 139 in May, and 30-minute block 139 in June. They argue that they should not be subject to additional mortality controls because sector vessels are limited to a hard TAC. Additionally, these sectors note that Table 177 in the Environmental Impact Statement for Amendment 16 indicates that May is not a particularly important time for groundfish spawning, with the exception of plaice and haddock. The Port Clyde Community Groundfish Sector is requesting access to 30-minute blocks 138 and 139 in May, and 30-minute blocks 139, 145, and 146 in June. The Port Clyde Community Groundfish Sector stipulated a strategy to minimize the impacts to spawning fish while promoting benefits to sector members. Under this strategy, the sector would restrict the harvesting of any species in these areas and times by capping the percentage of the sector's available ACE that could be harvested from these areas, and would institute a closure of these areas if, based on NMFS Northeast Fisheries Observer Program (NEFOP) data, a significant amount of spawning fish are harvested. Additionally, the sector proposes to implement a program to notify the sector manager and other vessels if spawning aggregations and/or marine mammals are detected in these areas. Finally, the Port Clyde Community Groundfish Sector contends that vessels fishing in the requested exemption areas would provide additional data, which could serve as a pilot study for future use of these areas and times by all sectors.

Current regulations prohibit sector vessels from discarding legal-sized fish of any of the 14 stocks allocated to sectors while at sea (§ 648.87(b)(1)(v)(A)). Amendment 16 contained this provision to ensure that the sector's ACE is accurately monitored. Sectors requested a partial exemption from this prohibition, because of concerns that retaining and landing large amounts of unmarketable fish, including fish carcasses, creates operational difficulties and potentially unsafe working conditions for sector vessels at sea. The Regional Administrator considered a partial exemption from the requirement to retain all legal-sized fish in a supplemental proposed rule to FY 2010 sector operations. However, due to problematic mid-season implementation issues, further consideration of this exemption was delayed until FY 2011 in the supplemental final rule to FY 2010 sector operations. Under this proposed exemption, all legal-sized unmarketable allocated fish would be accounted for in the overall sector-specific discard rates in the same way discards of undersized fish at sea are currently accounted for, through observer and at-sea monitoring coverage. If approved, unmarketable fish discarded by a sector's vessels on observed trips would be deducted from that sector's ACE and incorporated into that sector's discard rates to account for discarding under this exemption on unobserved trips. Vessels in a sector opting for this exemption would be required to discard all legal-sized unmarketable fish at sea ( i.e., not just on select trips). Legal-sized unmarketable fish would be prohibited from being landed to prevent the potential to skew observed discards. NMFS is specifically seeking comment on the implementation of this requirement.

NMFS received several comments regarding this exemption in response to the proposed supplemental rule for FY 2010 sector operations, which initially proposed this exemption. This included comment from Oceana, who raised concern that this exemption would expand loopholes in the self-reporting component of the sector monitoring program, and encourage high-grading, thereby weakening the sector monitoring program and undermining the FMP goals, as well as National Standards 2 and 9 of the Magnuson-Stevens Fishery Conservation and Management Act. However, the accounting of discards does not rely on self-reported data. Rather, actual discards by sector vessels observed by NMFS observers and at-sea monitors on sector trips are applied to the sector's ACEs in live weights, and incorporated into sector-specific discard rates that are used to account for discards by sector vessels on unobserved trips. In addition, this exemption is not expected to lead to high-grading of catch, given that there is a financial incentive for sector vessels to minimize discards of allocated stocks. Since discards of allocated stocks are applied to the sector's ACE through observer data and sector-specific discard rates, there is an incentive for sector vessels that opt for this exemption to land catch rather than discard it, to maximize the value of the sector's ACEs. Thus, this discarding exemption is intended to provide NMFS with additional data for the monitoring of sector ACEs. Currently, a sector vessel could illegally discard legal-sized unmarketable fish at sea for operational or safety reasons. If such discarding is occurring only on unobserved sector trips, these discards may be unaccounted for in the sector-specific discard rates. This exemption would allow sectors to legally discard these fish at sea and, therefore, would provide NMFS with a means of capturing some of this information. Therefore, allowing the discarding of unmarketable fish and incorporating observed unmarketable discards into the sector-specific discard rates under this exemption would account for any illegal discarding that may currently be occurring on unobserved trips and, thereby, improve the information being used to extrapolate discards across all sector trips.

Finally, NMFS received a comment that the proposed rule did not contain sufficient analysis of the exemption and that further analysis should be completed prior to implementation. This exemption was analyzed in the FY 2010 proposed supplemental rule and EA, and is further discussed here. The analysis of this exemption was based upon information available at the time of the analysis, which consisted of observer data from sector trips through November 3, 2010. Dealer reports and vessel trip reports (VTRs) were not designed to specifically monitor the landing and handling of unmarketable fish, so there is little information available from these sources about the amount of unmarketable fish that sector vessels have landed to date. During the development of this exemption, NMFS identified the need for, and implemented, a specific code that could be used by vessels to report the landing of unmarketable fish on their VTRs. A permit holder letter sent on October 20, 2010, introduced this VTR code to vessel operators and included instructions for both vessel operators and dealers for the reporting of unmarketable fish. If approved, legal-sized unmarketable fish could be discarded at sea, and recorded as such on the VTR. Sectors that do not receive this exemption would continue to use the new VTR code. NMFS observers and at-sea monitors record the amount of each species kept by sector vessels because they are prohibited from discarding such fish by the regulations. Fish recorded under this category likely consist of unmarketable legal-sized fish of allocated stocks that could not otherwise be discarded by the vessel operator and, therefore, represent the best estimate of the amount of unmarketable fish that sector vessels encounter on a given trip and may be expected to discard under this exemption. Observer data from sector trips during the first half of FY 2010 show that retained legal-sized unmarketable groundfish have been observed on 7.3 percent of observed sector trips. Observers reported a total of 14,423 lb (6,542 kg) of unmarketable groundfish that have been retained by sector vessels on 161 trips. Gillnet vessels encountered the most unmarketable groundfish per trip, with an average of 92 lb (42 kg), and a maximum of 402 lb (182 kg). Hook vessels retained an average of 64 lb (29 kg) of unmarketable groundfish per trip (maximum of 150 lb (68 kg)), and trawl vessels retained an average of only 23 lb (10 kg) of unmarketable groundfish per trip (maximum of 14 lb (6 kg)). In addition, unmarketable fish have a much greater occurrence on gillnet trips than trips using hook or trawl gear, during the time from May 1 through November 3, 2010, with observers reporting legal-sized unmarketable fish on 151 gillnet trips, but only 7 hook trips and 3 trawl trips. The occurrence of legal-sized unmarketable fish that had to be retained is limited, and does not appear to be a significant portion of sector catch. To date, these observed fish, and other unmarketable fish landed, are deducted from the sector's ACE. For sectors opting for the discarding exemption, any unmarketable fish that would have been required to be landed without the exemption and now are discarded by sector vessels will be recorded by observers as discards and applied to sector ACEs through discard data and sector-specific discard rates on unobserved trips.

The discarding exemption, in combination with the enhanced reporting of legal-sized unmarketable fish, would improve the monitoring of this unmarketable portion of sector catch, particularly on unobserved sector trips. The discard exemption is being requested by the GB Cod Fixed Gear Sector; Northeast Fishery Sectors II-III, V-VI and X-XII; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector.

For a full description of the GOM Sink Gillnet Mesh Exemption, please see exemption 8 of this section. Northeast Fishery Sectors III, VI-VIII, and X have requested that the GOM Sink Gillnet Mesh Exemption, proposed above, be extended an additional month, from the end of April until the end of May.

This exemption would provide sector vessels the opportunity to potentially catch more GOM haddock, a fully rebuilt stock, during the months that haddock are most prevalent, and would also provide sector participants the opportunity to more fully harvest their allocation of GOM haddock, therefore increasing efficiency and revenues for vessel participating in this program. The sectors assert that impacts to non-target species would be minimal, because fishing effort by sectors vessels is restricted by ACE for allocated stocks, which caps overall mortality.

The regulations at § 648.85(b)(7)(v)(C) require that sector vessels that declared into the CA I Hook Gear Haddock SAP submit daily catch reports to the sector manager, and that the sector manager report catch information to NMFS, on a daily basis. This reporting requirement was originally implemented through Framework 40A, to facilitate real-time monitoring of quotas by both the sector manager and NMFS. Amendment 16 granted authority to the Regional Administrator to determine if weekly sector reports were sufficient for the monitoring of most SAPs. Through the final rule implementing Amendment 16, the Regional Administrator alleviated reporting requirements for sector vessels participating in other Special Management Programs (SMPs), though these reporting requirements were retained for the CA I Hook Gear Haddock SAP, given that NMFS must continue to monitor an overall haddock TAC that applies to sector and common pool vessels fishing in this SAP.

The GB Cod Fixed Gear Sector requests that NMFS exempt the sector manager from submitting these reports to NMFS, opting instead to mandate that participating vessels submit a VMS catch report directly to NMFS containing all required information, analogous to the requirements for common pool vessels. The sector contends that this scenario would provide NMFS with data in a more timely fashion.

NMFS is currently evaluating the possibility of using the sector manager's weekly report, rather than daily reports, to monitor the TAC. Sector weekly reports have provided information in a timely enough manner to adequately monitor other SAPs. However, the weekly reports, in their current form would not provide sufficient information. Furthermore, NMFS is concerned that this provision may reduce the sector manager's capability to accurately monitor the sector's ACE in a timely manner. NMFS is soliciting comment on both the utility of the current reporting method, and the alternate reporting options highlighted above.

The regulations at § 648.14(k)(5)(vi) prohibit pair trawling in the NE multispecies fishery. This prohibition was originally implemented through an emergency interim rule (58 FR 32062; June 8, 1993), extended through a second emergency interim rule (59 FR 26; January 3, 1994), and made permanent in Amendment 5 (59 FR 9872; March 1, 1994). The first emergency interim rule prohibited pair trawling, based on record low abundance of spawning stock biomass and high fishing mortality of cod, conditions of the haddock stock and benefits to reducing discards of haddock, the high efficiency of this gear type, and an increase in the number of vessels electing to use this gear. The second emergency interim rule extending the prohibition noted that pair trawls are “highly efficient gear, and its unlimited use during a period of severely declining haddock and cod stocks is counterproductive to the goal of reducing effort in an overfished fishery.” Amendment 5 also noted that pair trawling vessels “had significantly higher revenue-per-day-absent and landings-per-day-absent than otter trawl vessels fishing singly,” further demonstrating the efficiency of this gear type. While initially intended to protect cod and haddock stocks, which at the time were at all-time low levels of abundance, the rule noted that “the stock condition and landings will continue to decline until such time that meaningful measures are implemented that will eliminate the overfished condition of the stocks and reduce the exploitation rate to levels that will allow significant rebuilding to take place.”

Northeast Fishery Sectors VI-X and XIII are requesting an exemption from the pair trawling restriction for FY 2011, while restricting vessels to using either the Ruhle Trawl or the Eliminator Trawl. The sectors comment that a prohibition of this highly efficient gear type was intended to reduce fishing mortality. Given this, the sectors assert that, since sectors are managed under an ACE, they should be exempt from effort controls. These sectors anticipate that the exemption will enable participating vessels to harvest the sector's ACE more efficiently and economically.

However, NMFS has concerns with granting this exemption because, due to the efficiency of pair trawling, sectors may not have sufficient ACE for all stocks caught by this gear, and may be unable to selectively target desired stocks. Additionally, this gear configuration has not been studied, and it could be that an increase in herding could diminish the established selectivity of the Ruhle Trawl. NMFS is especially interested in receiving public comment on this exemption request.

The regulations at §§ 648.80(a)(3)(v), 648.80(a)(4)(v), 648.80(b)(2)(v), and 648.80(c)(2)(iv) specify that “all longline gear hooks must be circle hooks, of a minimum size of 12/0.” This restriction was implemented through Amendment 13 to reduce the catch of small fish and improve their survivability in the hook fishery. In addition, the Amendment 13 FEIS further reasoned that “limits on the number of hooks are intended to reduce overall effort in the hook fishery.”

The Northeast Coastal Communities Sector requested an exemption from this regulation, which would allow sector members the ability to target flatfish, species of fish which generally have smaller mouths than other groundfish. The sector asserts that bycatch could be avoided by selectively placing this gear, and that this exemption would allow its members to more effectively harvest the sector's ACE and increase profit margins of sector fishermen. However, NMFS has concerns with allowing a smaller hook size, given that this could increase the catch of sublegal fish.

The regulations at § 648.80 specify the minimum mesh size that may be used in fishing nets on vessels fishing in the GOM, GB, SNE, and MA RMAs. The regulations implementing the minimum mesh size were initially adopted through interim rules in 2001 and 2002 (67 FR 21140, 29 April 2002; 67 FR 50292, August 1, 2002) and made permanent through Amendment 13. This provision was intended to provide protection to spawning fish and increase the size of targeted fish. Framework 42 further modified the mesh regulations in the SNE/MA RMAs to reduce discards of yellowtail flounder.

Northeast Fishery Sectors II, V-X and XIII are requesting an exemption from the current minimum mesh size codend on targeted redfish trips for FY 2011; replacing this requirement with a 5-inch (12.7-cm) minimum mesh size codend on directed redfish trips. The sectors also propose that members be required to notify the manager at least 48 hrs in advance of such a trip, and be required to have 100 percent observer or at-sea monitor coverage while utilizing this gear. Also, to accurately monitor the ACE, Sector members would be required to submit catch reports to the sector manager on a daily basis while at sea. The requesting sectors argue that this exemption could increase the operational flexibility of sector vessels and could increase profit margins of sector fishermen.

The sectors referenced several studies in support of this exemption. A study entitled “The Status of the Fishery Resources of the Northeast U.S.,” by Mayo, R., L. Col and M. Traver 2006 describes the gear historically used in the redfish fishery. It notes that the minimum mesh size restrictions, along with “low biomass and truncated size and age structure of the redfish stock have effectively eliminated the prosecution of a fishery since the mid 1980s.”

Anecdotal information for FY 2010 provided by some industry members, as well as information in a study entitled “ME Boats go for Redfish the New-Fashioned Way,” by Peter K. Prybot, in the September 2010 issue of Commercial Fisheries News, suggests that some sector members have been successful at targeting redfish utilizing gear with 6.5-inch (16.51-cm) mesh. NMFS is currently funding a study through the Northeast Cooperative Research Partners Program to investigate strategies and methods to sustainably harvest the redfish resource in the GOM through a network approach, including fishing enterprises, gear manufacturers, researchers, and social and economic experts and managers, which will include the investigation of success of various mesh sizes within the fishery. Given that the use of this smaller mesh could negatively impact spawning fish and populations of flounders, which the current minimum mesh sizes were intended to protect, NMFS has reservations about approving this exemption, until such time that results from this study can first be considered.

Through several separate rulemakings (73 FR 29098, May 20, 2008; 73 FR 40186, July 14, 2008; 73 FR 52214, August 9, 2008; and 73 FR 53158, August 15, 2008), NMFS has authorized the use of the Ruhle Trawl (f.k.a., Eliminator Trawl and Haddock Rope Trawl) for use in the B DAS Program, Eastern U.S./Canada Haddock SAP, and the Eastern U.S./Canada Area Program. NMFS approval of this gear was based upon a recommendation from the Council, following a review of a study that demonstrated that this experimental net was successful at targeting haddock and significantly reducing the catch of other groundfish species. NMFS, however, noted in the final rule approving this gear for use in the B DAS Program and the Eastern U.S./Canada Haddock SAP that the “results of the experiment cannot be used to extrapolate to smaller scale haddock rope trawl gear that could be readily used by smaller horsepower vessels” but that “research is currently underway testing a smaller, modified version of the haddock rope trawl, and at-sea observations indicate that this smaller net may also be effective at reducing bycatch.”

Although the results of the smaller-scale trawl study have yet to be reviewed by the Council, several of the Northeast Fishery Sectors (II, V-X, and XIII) have requested an exemption to utilize the 8.4 in × 15.7 in (250 cm × 40 cm) Eliminator Trawl TM in areas and programs where the Ruhle trawl has been approved. In addition, these sectors wish to have this gear type included in the Ruhle trawl discard strata. Therefore observed discards from this smaller net would apply to the current Ruhle trawl strata, and the discard rate for the Ruhle trawl strata would apply to all unobserved trips utilizing this gear. The sectors assert that approving this gear type will provide sector members greater flexibility, as many vessels are too small to utilize the larger version of the net. In addition, the sectors argue that, based upon the final results of “Exploring Bycatch Reduction in the Haddock Fishery through the use of the Eliminator Trawl with Fishing Vessels in the 250 to 550 HP Range,” by Laura Scrobe, David Beutel and Jonathan Knight, this smaller net may reduce the catch of major stocks of concern, while allowing vessels to selectively target haddock. As with the previous mesh size exemption request discussed under exemption 16, NMFS has concerns with granting this exemption prior to reviewing the results of the report studying this smaller net.

Current regulations require that a NE multispecies vessel fishing with trawl gear in the Eastern U.S./Canada Area must fish with a Ruhle trawl, a haddock separator trawl, or a flounder trawl net. The final rule implementing Amendment 13 clarified that the restriction to use a haddock separator trawl or a flounder trawl net was designed to “ensure that the U.S./Canada TACs are not exceeded. Because both the flounder net and haddock separator trawl are designed to affect cod selectivity, and because the cod TAC is specific to the Eastern U.S./Canada Area only, application of this gear requirement to the Western U.S./Canada Area is not necessary to achieve the stated goal.”

The requirement to utilize a Ruhle trawl in the Eastern U.S./Canada Area was implemented through several inseason actions, and made permanent in Amendment 16. This gear configuration was originally authorized for its demonstrated ability to allow the targeting of haddock, an under-harvested stock, while reducing bycatch of cod and yellowtail flounder stocks, which were identified as overfished. The addition of the Ruhle Trawl to gear previously approved (haddock separator trawl and flounder trawl net) provided added flexibility to trawl vessels.

The Sustainable Harvest Sectors 1 and 3, and the Tri-State Sector have requested an exemption from the trawl gear requirements in the Eastern U.S./Canada Area, to allow either a standard otter trawl or modified versions of currently approved trawl gear (Ruhle trawl, a haddock separator trawl, or a flounder trawl net) to access the area. The sectors both assert that this measure was initially designed as a method to control fishing effort and therefore is no longer necessary because a sector is now constrained by the allocated ACE for each stock, which caps overall fishing mortality.

The regulations at § 648.10(b)(4) require that a vessel issued certain categories of NE multispecies permits, or eligible and participating in a sector, to have an operational VMS unit onboard. Additionally, § 648.10(c)(1)(i) requires that the VMS units onboard a NE multispecies vessel transmit accurate positional information ( i.e., polling) at least every hour, 24 hr per day, throughout the year. Amendment 5 first included the requirement for vessels to use VMS. While the requirement to use VMS was delayed until a later action (Framework 42 ultimately implemented a VMS requirement for NE multispecies DAS vessels), NMFS supported polling due to its ability to insure adequacy of monitoring requirements and address enforcement concerns, and because it could be beneficial in the event of an at-sea emergency.

Under certain circumstances, the regulations at § 648.10(c)(2) allow NMFS to issue a LOA allowing vessels to sign out of the VMS program for a minimum of 30 consecutive days. The ability to power-down a VMS unit was justified in Amendment 13 to reduce vessel costs when reduced DAS allocation limited fishing opportunities to a small portion of the year.

The Tri-State Sector requested an exemption from the requirement to power a VMS while at the dock, noting that the VMS was used to track DAS and proximity to closed areas, and would require that the VMS unit be operational when the vessel is away from the dock. The Tri-State Sector further noted that other reporting requirements (trip start and trip end hails, VMS declarations, etc. ) received by the sector manager and NMFS could be used to monitor vessels granted this exemption.

Amendment 13 adopted the concept that sectors are responsible for monitoring sector catch, but provided few details for that requirement. Amendment 16 formalized this requirement, by specifying that sector operations plans must include how a sector will monitor its catch to assure that sector catch does not exceed the sector allocation; including developing and implementing an independent third-party DSM program for monitoring landings from sector trips and utilization of ACE. The DSM program was implemented to ensure that catch is accurately documented and that all sectors are being held to the same standards, for the purpose of bolstering compliance monitoring efforts.

The GB Cod Fixed Gear Sector and Northeast Fishery Sectors II-III and V-XIII have requested an exemption from all DSM requirements. The GB Fixed Gear sector contends that this program has added little value to the sectors' infrastructure or sector members' businesses. Additionally, the sector argues that ambiguities with the DSM program, such as the failure to require confirmation that all landings have been offloaded, the fact that NMFS does not utilize or cross-reference this data, and the ability of fishermen to alter behavior when notified of a monitoring event, prevent the program from meeting its stated objectives. The GB Cod Fixed Gear Sector also asserts that NMFS has yet to request any dockside or roving monitoring reports to validate or verify a landing event, and therefore the requirement is not being utilized as an enforcement tool. The Northeast Fishery Sectors contend that the implementation of the DSM program has not met the stated objectives of the DSM program in an economically efficient manner. They contend that DSM was meant as a means for sector managers to verify catch, and that the Northeast Fishery Sector managers do not utilize DSM reports, but rather opt to utilize dealer weigh-out slips for this purpose. NMFS acknowledges that the DSM program could be strengthened, and intends to modify DSM standards for the start of FY 2011, to help ensure better compliance monitoring, the primary objective of the program.

At its November 18, 2010, meeting, the Council voted to include in FW 45 a provision that would remove DSM from the list of reporting requirements, thereby removing this requirement from the list of prohibited sector exemptions. Many of the DSM requirements that were requested for exemption in the operations plans submitted as of September 1, 2010, were, at the time, prohibited under Amendment 16 and, therefore, not analyzed in the sector EA, given that there was insufficient time to do so. This request, and other DSM exemption requests, will be analyzed in the final EA.

As explained above in exemption 20, Amendment 13 adopted the concept that sectors are responsible for monitoring sector catch, and Amendment 16 formalized these requirements. Unless a vessel is fishing in an exempted fishery, directed monkfish, skate and dogfish trips are considered a sector trip because a groundfish trip declaration is required (NE multispecies DAS or sector trip), since gear utilized on such trips is capable of catching groundfish and groundfish retention is permitted.

The Northeast Coastal Communities Sector; and Northeast Fishery Sectors II-III, V-X, and XIII have requested an exemption from DSM while on directed fishing trips on monkfish, skate, and/or dogfish. Specifically, the Northeast Coastal Communities Sector has requested an exemption from DSM on dogfish trips when vessels are utilizing hook gear. The sector contends that data collected from observed FY 2010 dogfish trips demonstrate that little groundfish incidental catch occurs, making the cost of DSM per pound of groundfish too low to support it. The Northeast Fishery Sectors have requested an exemption on all directed monkfish, skate, and dogfish trips, contending that the implementation of DSM in FY 2010 has not met the objectives stated in Amendment 16 in an economically efficient manner. These sectors state that providing an exemption on these trips could provide economic relief from the costs of monitoring trips that land little groundfish.

NMFS believes that this request poses operational concerns. Vessels fishing on directed monkfish, skate, and dogfish trips, unless in an exempted fishery, are declared as a sector trip, and/or require the declaration of a DAS. Such trips are not prohibited from targeting or landing groundfish and, therefore, may land substantial amounts of groundfish. Since these trips are made through groundfish declarations, it is currently impossible to distinguish these trips from directed groundfish trips. Sector discard rates, a crucial component of ACE monitoring, are calculated based on total catch, not solely groundfish catch. A reduction in monitoring would decrease oversight of, and confidence in, this crucial calculation. Additionally, the sectors requesting this exemption did not address the benefit that this program provides to compliance monitoring.

Jigging, with respect to the NE multispecies fishery, is defined at § 648.2 as fishing with handgear, handline, or rod and reel gear using a jig, which is a weighted object attached to the bottom of the line used to sink the line and/or imitate a baitfish, which is moved with an up and down motion. Jigging gear is not exempted gear and, therefore, sector trips utilizing this gear are required to participate in the DSM program.

The Northeast Coastal Communities Sector requested an exemption from DSM requirements for vessels using jig gear, noting that vessels utilizing this gear type are able to target cod with little incidental catch of other allocated groundfish species. The sector points out that the cost of monitoring these trips is disproportionately high, due to the comparatively small amount of catch that this gear type yields.

The Council, through FW 45, proposes to remove DSM requirements in FY 2011 for common pool vessels with Handgear A and B permitted vessels, as well as for Small Vessel permitted vessels, because small quantities of groundfish landed by these permit categories would make monitoring such trips uneconomical. Vessels that have a valid Handgear or Small Vessel permit and that fish with jig gear would be exempt from DSM, if the provision in FW 45 is approved by NMFS.

The regulations at § 648.87(b)(1)(v)(B)( 3 ) specify that any DSM service provider must provide coverage that is distributed in a random manner among all trips, such that the coverage is representative of fishing activities by all vessels within each sector and by all sector vessels operations throughout the fishing year.

The Northeast Coastal Communities Sector has requested an exemption from DSM requirements for hook vessels when the sector has caught less than 10,000 lb (4535.9 kg) of groundfish per year, noting that, in FY 2010, trips by sector vessels have, thus far, yielded little groundfish, and due to the remote location of its ports, DSM has been cost prohibitive. The sector proposes a 10,000-lb (4,535.9 kg) threshold for the year, above which DSM would be required, and stated that catch could be verified through a comparison of dealer data, vessel trip reports, and VMS catch reports. The manager proposes to notify NMFS when 8,000 lb (3,628.7 kg) of groundfish have been caught, and would submit to DSM program requirements at that time.

NMFS is concerned that this threshold is somewhat arbitrary and is interested in public comment on this. Additionally, a 10,000-lb (4,535.9-kg) cap is a significant amount of landings, and exempting a sector from DSM requirements could raise compliance monitoring concerns (as noted above).

Upon receiving exemption requests to the DSM requirement for vessels fishing in SNE and MA waters, the Regional Administrator, in a September 1, 2010, letter to the Council, requested that the Council consider establishing a geographic boundary outside of which DSM would not be required. At its November 18, 2010, meeting, the Council considered this request and supported removal of DSM from the list of prohibited exemptions to allow sectors to request geographic- and gear-based exemptions from DSM.

Northeast Fishery Sectors VI-VIII and X-XIII have requested an exemption from DSM in May and June on non-groundfish directed trips that occur in the following NMFS statistical areas: 615, 616, 621, 622, 623, 625, 626, 627, 631, 632, 633, 635, 637, and 638. The sectors point out that historical data indicate that little groundfish incidental catch has been observed in these areas, and monitoring of such trips is therefore not a beneficial use of financial resources.

Please see exemption 24 for background on this request. Sustainable Harvest Sectors 1 and 3, and the Tri-State Sector have requested an exemption from the DSM requirements for vessels fishing west of 72°30′ W. long., noting that historical data indicate that little groundfish incidental catch has been observed in this area, and monitoring of such trips is therefore not a beneficial use of financial resources.

Neither hook gear nor handgear, as defined in § 648.2, are exempted gear, and therefore sector trips utilizing these gear types are required to have DSM.

The GB Cod Fixed Gear Sector requested an exemption from DSM, roving monitoring, and hail requirements for hook-only or handgear vessels, noting that vessels utilizing this gear type are among the smallest operators and have historically landed small amounts of groundfish. The sector contends that the proceeds from these trips may be less than the cost of deploying a dockside or roving monitor, making the cost of monitoring of these vessels disproportionately high relative to the rest of the groundfish fleet. The sector also requests that, if this exemption is granted, these vessels should also be exempt from hail requirements. Although FW 45 proposes to remove DSM requirements from the list of regulations that sectors may not be exempt from, hail requirements would remain reporting requirements, and therefore may not be exempted. While hails are widely viewed as necessary for the deployment of dockside monitors, NMFS receives this information and also uses it to coordinate the deployment of enforcement resources in monitoring offloads.

As explained above in exemption 22, the Council, through FW 45, proposes to remove DSM requirements in FY 2011 for common pool vessels with Handgear A and B permitted vessels, as well as for Small Vessel permitted vessels.

Unless a vessel is fishing in an exempted fishery, directed monkfish, skate, and dogfish trips are considered sector trips, because a groundfish trip declaration is required (NE multispecies DAS or sector trip), since gear utilized on such trips is capable of catching groundfish and groundfish retention is permitted.

The GB Cod Fixed Gear Sector has requested an exemption from DSM, roving monitoring, and hail requirements for vessels using demersal longline gear, jig gear, and handlines while targeting spiny dogfish in Massachusetts State waters of NMFS Statistical Area 521, asserting that its FY 2010 sector data indicate little groundfish incidental catch in this area. The sector contends that deploying monitors on such trips provides little value to a program designed to monitor landings of regulated groundfish.

NMFS believes that this request may pose operational concerns. Vessels fishing on a directed dogfish trip, outside of an exempted fishery, must declare a sector trip through VMS or IVR prior to starting their trip. It is currently impossible to distinguish such a trip from a directed groundfish trip. Sector discard rates, a crucial component of ACE monitoring, are calculated based on total catch, not solely groundfish catch. A reduction in monitoring would decrease oversight of and confidence in this crucial calculation. The sector did not address the benefit that this program provides to compliance monitoring.

The regulations at § 648.87(b)(1)(v)(B)(3) specify that any DSM service provider must provide coverage that is distributed in a random manner among all trips, thereby accurately observing sector fishing activity.

The Northeast Coastal Communities Sector has requested an exemption from DSM requirements when a trip has been monitored by either an at-sea monitor or fishery observer, noting that requiring both at-sea monitoring and DSM is redundant, as the goal of both programs is catch verification. The sector claims that requiring DSM on trips that also receive monitoring at-sea is overly burdensome for sector members. At its November 18, 2010, meeting, the Council asked NMFS to prioritize DSM for trips that did not receive an at-sea monitor.

The regulations at § 648.87(b)(5)(i)(C) specify that a vessel may not offload any fish from a trip that was selected to be observed by a dockside/roving monitor until the dockside/roving monitor assigned to that trip is present. The regulations implementing Amendment 16 require each sector to develop, implement, and fund a DSM program, including the selection and hiring of approved monitoring provider(s). Because each sector contracts directly with monitoring provider(s), the sector has the ability, and responsibility, to resolve the late arrival of an assigned monitor directly with its contracted provider(s).

The GB Cod Fixed Gear Sector has requested a partial exemption from the above regulation, allowing vessels to begin offloading catch if a dockside or roving monitor is late. The sector argues that it is the responsibility of the monitor to ensure timely arrival at monitoring events, and that delays have negative social and economic impacts for the sector member being observed, for the dealer, and for other members that must also wait to offload.

This request, however, poses several operational concerns. First, confirming the late arrival of a monitor may be difficult, as it would require verification of the information in the vessel's trip end hail to the dockside monitor. Second, granting this exemption may promote misreporting of the offloading locations in an attempt to delay the arrival of a monitor and avoid monitoring coverage. Additionally, the sector did not address the benefit that this program provides to compliance monitoring.

The regulations at § 648.87(b)(5)(i)(C) specify that a vessel may not offload any fish from a trip that was selected to be observed by a dockside/roving monitor until the dockside/roving monitor assigned to that trip is present.

Sustainable Harvest Sectors 1 and 3 have requested an exemption from the prohibition on offloading of non-allocated species prior to the arrival of the monitor, to allow for the offload of non-allocated species prior to the arrival of a monitor. The sectors contend that, on occasion, dealers request vessels to offload non-allocated stocks, such as lobster, prior to the offload of groundfish; this exemption would give additional flexibility to sector members and dealers for the processing of catch. The sectors propose to require their vessels to file VMS catch reports and/or a trip end hail reports prior to crossing the demarcation line to account for total catch. Additionally, the sector proposes to require captains to sign an affidavit stating that no allocated stock was offloaded during these instances. The DSM standards require catch of all stocks to be monitored because sector discard ratios are calculated based on total catch, not groundfish catch only. NMFS is concerned, therefore, that granting this exemption could decrease oversight of, and confidence in, this crucial calculation.

The regulations implementing Amendment 16, at § 648.87(b)(2), expanded the requirements for sector operations plan submissions and specified a due date of September 1 to ensure that the operations plans and associated analysis are reviewed in time to implement such operations by the start of the next FY. The deadline for submitting sector documents is an administrative one, set to ensure sufficient time to comply with all applicable laws. For FY 2011, NMFS extended the deadline for sector rosters to December 1, 2010, in response to industry requests.

The Maine Permit Bank Sector has requested an exemption from the December 1 deadline to allow for additional time to acquire permits. Because membership is a prerequisite to sector formation, the Maine Permit Bank Sector has been notified that it must demonstrate its compliance with minimum membership requirements (“Rule of 3”), but that a list of permits that the State expects to purchase by February 1, 2011 (“bid sheets”) would be accepted in the interim. The bid sheet, thus represents a list of permits offered for sale to the Maine Permit Bank Sector by their owners. Similar to vessels on a traditional sector roster, these permits are not bound to the sector for FY 2011 at this time. Since NMFS is accepting bid sheets, it is possible that any permits associated with the permit bank sector could also be on the roster for another sector. Sectors currently account for approximately 99 percent of available ACE, and sectors are free to transfer ACE among each other during the FY. Consequently, the EA has analyzed the impacts of each sector's operations as if 100 percent of ACE would be harvested by that sector. For permits moving from another sector to the permit bank, the current analysis already accounts for the harvest of this ACE within active sectors. Since current sector rosters account for the vast majority of historic landings, little additional ACE is anticipated to move from the common pool to sectors, based on this exemption. Since the development of permit bank requirements has been a collaborative process, the need for this exemption was not developed until it was clear that Maine would not have finalized the purchase of permits by the December 1 roster deadline. Due to this delay, this exemption is not considered in the draft EA. The final purchase of permits acquired by the Maine Permit Bank Sector must be officially documented to NMFS prior to the publication of the final rule. Setting the deadline for submitting sector documents is an administrative matter. Therefore, this exemption request is being highlighted, but not proposed because NMFS has accommodated the permit bank's needs.

Exemptions requested by several sectors, ranging from at-sea monitoring provisions, discard rate calculation methods, Eastern U.S./Canada Area requirements, VTR requirements, and NMFS's Office of Law Enforcement (OLE) confidentiality requirements, are either specifically prohibited, or fall outside the NE multispecies regulations. In a letter dated September 1, 2010, NMFS notified the Council that NMFS interprets the reporting requirement exemption prohibition broadly to apply to all monitoring requirements, including at-sea monitoring, DSM, ACE monitoring, and the counting of discards against sector ACE. In this letter, NMFS also requested that the Council define which regulations sectors may not be exempted from. On November 18, 2010, the Council addressed this letter by voting to remove DSM from the list of regulations that sectors may not be exempted from, but did not take such action for at-sea monitoring, ACE monitoring, VTR regulations, or counting of discards against ACE. Northeast Fishery Sectors II, V-X, and XIII; Sustainable Harvest Sectors 1 and 3; and the Tri-State Sector requested an exemption from a delayed opening of the Eastern U.S./Canada Area for trawl gear. However, this is a temporary rule that the Regional Administrator has the authority to implement, as specified at § 648.85(a)(3)(iv)(D), to prevent either over-harvesting or to facilitate achieving the Eastern U.S./Canada Area TACs. Additionally, the GB Cod Fixed Gear Sector requested an exemption from OLE confidentiality requirements to receive information about enforcement actions or concerns from OLE within 24 hr; however, this is not controlled by regulations implementing the NE Multispecies FMP. Accordingly, these exemption requests are not proposed in this rule.

As previously stated, Amendment 16 prohibits sectors from requesting exemptions from year-round closed areas, permitting restrictions, gear restrictions designed to minimize habitat impacts, and reporting requirements (excluding DAS reporting requirements).

In addition, sectors requested several exemptions for FY 2011 that were previously disapproved for FY 2010, but failed to provide new information or justification for these exemptions. These include VMS requirements and minimum fish size requirements. The Northeast Fishery Sectors requested a VMS exemption that would allow a central sector server to relay member vessel catch reports and logbook data to NMFS. NMFS previously disapproved this exemption request because of serious concern that interrupting chain of custody of catch information would leave the catch information open to tampering. The Northeast Fishery Sectors provided no new information, justification, rationale, or mitigation to address this concern. Accordingly, this exemption is not proposed in this rule. In addition, the GB Cod Fixed Gear Sector and several of the Northeast Fishery Sectors requested an exemption from the minimum fish size requirements for allocated stocks. This exemption was previously disapproved because it would present significant enforcement issues by allowing two different legal minimum fish sizes in the marketplace and could potentially increase the targeting of juvenile fish. The requesting sectors have provided no new information, justification, rationale, or mitigation to address these concerns.

In order to comply with NEPA, one EA was prepared encompassing all 22 operations plans. The sector EA is tiered from the Environmental Impact Statement (EIS) prepared for Amendment 16. The EA examines the biological, economic, and social impacts unique to each sector's proposed operations, including requested exemptions, and provides a cumulative effects analysis (CEA) that addresses the combined impact of the direct and indirect effects of approving all proposed sector operations plans. The summary findings of the EA conclude that each sector would produce similar effects that have non-significant impacts. Visit http://www.regulations.gov to view the EA prepared for the 19 sectors that this rule proposes to approve.

Amendment 16 provided the Regional Administrator with the authority to remove SMP-specific reporting requirements if it is determined that the reporting requirements are unnecessary. Consistent with the provisions adopted under Amendment 16, NMFS retained the authority to reinstate such reporting requirements if it is later determined that the weekly sector catch reports are insufficient to adequately monitor catch by sector vessels in SMPs. For FY 2010, the Regional Administrator determined that daily SMP-specific VMS catch reports for vessels participating in sectors are unnecessary, because sectors were allocated ACE for most NE multispecies regulated species and ocean pout stocks and, therefore, would not be subject to any SMP-specific TACs or other restrictions on catch; would be responsible for ensuring that sector allocations are not exceeded; and would provide sufficient information to monitor all sector catch through the submission of weekly sector catch reports. For these same reasons, the Regional Administrator has determined, unless otherwise noted above, that SMP-specific reporting requirements are not necessary to monitor sector catch for FY 2011. This exemption from the SMP reporting requirements for sector vessels would not apply to vessels participating in the Closed Area (CA) I Hook Gear Haddock SAP, as this SAP includes an overall haddock TAC that is applicable to both sector and common pool vessels fishing in this SAP. Therefore, the existing requirement for sector managers to provide daily catch reports by participating sector vessels would be maintained for the CAI Hook Gear Haddock SAP only.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the NMFS Assistant Administrator has determined that this proposed rule is consistent with the NE Multispecies FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.

This action is exempt from review under Executive Order (E.O.) 12866.

An IRFA has been prepared, as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact that this proposed rule, if adopted, would have on small entities. The IRFA consists of this section and the SUMMARY section of the preamble of this proposed rule, and the EA prepared for this action. A description of the action, why it is being considered, and the legal basis for this action are contained in the preamble to this proposed rule and in Sections 1.0, 2.0, and 3.0 of the EA prepared for this action. A summary of the analysis follows. A copy of this analysis is available from NMFS ( see ADDRESSES ).

This proposed action would affect regulated entities engaged in commercial fishing for groundfish that have elected to join any one of the 19 proposed sectors that have submitted operations plans for FY 2010. Any limited access Federal permit issued under the NE Multispecies FMP is eligible to join a sector (Table 4). The Small Business Administration (SBA) size standard for commercial fishing (NAICS code 114111) is $4 million in sales. Available data indicate that, based on 2005-2007 average conditions, median gross annual sales by commercial fishing vessels were just over $200,000, and no single fishing entity earned more than $2 million annually. Although we acknowledge there are likely to be entities that, based on rules of affiliation, would qualify as large business entities, due to lack of reliable ownership affiliation data, we cannot apply the business size standard at this time. Data are currently being compiled on vessel ownership that should permit a more refined assessment and determination of the number of large and small entities in the groundfish fishery for future actions. For this action, since available data are not adequate to identify affiliated vessels, each operating unit is considered a small entity for purposes of the RFA, and, therefore, there is no differential impact between small and large entities. As of December 1, 2010, a total of 834 of 1,475 eligible permits elected to join a sector. Table 4 summarizes the number and percent of individual permits currently enrolled in a sector for FY 2011, as well as those predicted to be active. Since individuals may withdraw from a sector at any time prior to the beginning of FY 2011, the number of permits participating in sectors on May 1, 2011, and the resulting sector ACE allocations, are likely to change.

Over the past decade, there has been a significant amount of consolidation in this fishery in response to management measures to end overfishing of, and to rebuild, groundfish stocks. The recent implementation of ACLs and AMs, and the expanded use of sectors under Amendment 16 have affected fishing patterns in ways that cannot yet be quantified and analyzed. Sector measures were intended to provide a mechanism for vessels to pool harvesting resources and consolidate operations in fewer vessels, if desired, and to provide a mechanism for capacity reduction through consolidation. Reasons why fewer vessels have fished thus far this year, in comparison to FY 2009, may be related to owners with multiple vessels fishing fewer vessels, or vessel owners or sectors using quota differently and waiting to fish later in the fishing year to maximize revenue in response to some of the efficiencies gained through the implementation of sector measures in 2010. It is also likely that some vessels that have not landed groundfish have received revenue from leasing their groundfish allocation or have been fishing in other fisheries. Thus, fewer vessels are actively fishing for and landing regulated species and ocean pout stocks, with 10 percent of the fishing vessels earning more than half of the revenues from such stocks since 2005, leading to a seemingly continuing trend of consolidation in the fishery. However, as alluded to above, this trend began before the implementation and expansion of the sector program, and based on limited data available to date, the trend is not significantly out of proportion to fishing years prior to the implementation of Amendment 16. Further, most proposed FY 2011 sectors are anticipating no further consolidation than previously occurred through FY 2010. Five sectors have reported that they anticipate a smaller percentage of permits to harvest groundfish for FY 2011 as compared to FY 2010. Based upon concerns over consolidation raised by the public during the development of Amendment 16, the Council is currently working on a white paper regarding fleet diversity and accumulation limits, and has agreed to develop an amendment to the FMP to address concerns identified.

Joining a sector is voluntary. This means that the decision whether or not to join a sector may be based upon which option—joining a sector or fishing under effort controls in the common pool—offers the greater economic advantage. Since sectors would be granted certain universal exemptions, and may request and be granted additional exemptions from regulatory measures that will apply to common pool vessels, sector vessels would be afforded greater flexibility. Sector members would no longer have groundfish catch limited by DAS allocations and would, instead, be limited by their available ACE. In this manner, the economic incentive changes from maximizing the value of throughput of all species on a DAS to maximizing the value of the sector ACE. This change places a premium on timing of landings to market conditions, as well as changes in the selectivity and composition of species landed on fishing trips.

Unlike common pool vessels, sectors bear the administrative costs associated with preparing an EA, as well as the costs associated with sector management, DSM, and at-sea monitoring. However, FW 45 proposes to change the required coverage level for DSM to the level NMFS is able to fund, up to 100 percent coverage through FY 2012, prioritizing coverage for trips that have not received at-sea or electronic monitoring. The magnitude of the administrative costs for sector formation and operation is estimated to range from $60,000 to $150,000 per sector, and the potential cost for dockside and at-sea monitoring ranges from $13,500 to $17,800 per vessel. These estimates serve to illustrate the fact that the potential administrative costs associated with joining a sector may be expected to influence a vessel owner's decision. The majority of these administrative costs was subsidized by NMFS in FY 2010 and will continue to be subsidized in FY 2011. Whether these subsidies, which include providing financial support for preparation of sector EAs, DSM, and at-sea monitoring, will continue beyond FY 2011 is not known. Nevertheless, these subsidies may make joining a sector a more attractive economic alternative for FY 2011.

The capability to form a sector in the groundfish fishery was first implemented in 2004 through Amendment 13. Prior to FY 2010, there were only two sectors operating and only one sector had been operating continuously from 2004 to 2010. Available data (Table 5) suggest that the economic performance of the two sectors that had been operating prior to FY 2010 was positive. Whether improved profitability experienced by these two sectors will translate into improved performance for all 17 sectors that were implemented during FY2010 is not known since the fishing year is incomplete. Nevertheless, the analysis conducted for Amendment 16 posited that the combination of relief from specific regulations and the incentives to change fishing practices would result in improved ACL utilization compared to TAC use rates while the majority of the groundfish fleet was still operating under DAS controls. Using a straight-line projection approach suggests that for most stocks the use rates for aggregate sector ACLs will be higher than the average observed TAC use rates compared to FY 2007 and FY 2008. This assumes that the average weekly catch rates by sector vessels will remain constant for the remainder of the fishing year. Further, given substantial differences in ACE across sectors and among members within sectors, economic performance may be expected to vary considerably.