[Federal Register Volume 77, Number 168 (Wednesday, August 29, 2012)]
[Proposed Rules]
[Pages 52279-52292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21311]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 10-90; DA 12-1199]


Wireline Competition Bureau Seeks Comment on Proposed Urban Rates 
Survey and Issues Relating to Reasonable Comparability Benchmarks and 
the Local Rate Floor

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Wireline Competition Bureau seeks 
comment on a proposed survey of urban rates for fixed voice and fixed 
broadband residential services. The Bureau also seeks comment 
concerning how, using data from the urban rates survey, to determine 
the local voice rate floor and the reasonable comparability benchmarks 
for fixed voice and fixed broadband services.

DATES: Comments are due on or before September 28, 2012.

ADDRESSES: Interested parties may file comments. All pleadings are to 
reference WC Docket 10-90. Comments may be filed using the Commission's 
Electronic Filing System (ECFS) or by filing paper copies, by any of 
the following methods:
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy 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.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (Braille, large print, 
electronic files, audio format), send an email to [email protected] or 
call the Consumer & Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (tty).
    [ssquf] In addition, one copy of each pleading must be sent to each 
of the following:
    (1) Jay Schwarz, Industry Analysis and Technology Division, 
Wireline Competition Bureau, 445 12th Street, SW., 6-A134, Washington, 
DC 20554; email: [email protected].
    (2) Alexander Minard, Telecommunications Access Policy Division, 
Wireline Competition Bureau, 445 12th Street, SW., 5-A334, Washington, 
DC 20554; email: [email protected].

FOR FURTHER INFORMATION CONTACT: Jay Schwarz, Wireline Competition 
Bureau, (202) 418-0948; Alexander Minard, Wireline Competition Bureau, 
(202) 418-7400, or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice, WC 
Docket No. 10-90; DA 12-1199, released on July 26, 2012. The full text 
of this document is available for public inspection during regular 
business hours in the FCC Reference Center, Room CY-A257, 445 12th 
Street, SW., Washington, DC 20554. 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 number (800) 378-3160 or (202) 863-2898, or via the Internet 
at http://www.bcpiweb.com.

I. Synopsis of Public Notice

    1. In this public notice, the Wireline Competition Bureau seeks 
comment on a proposed survey of urban rates for fixed voice and fixed 
broadband residential services. The Bureau also seeks comment 
concerning how, using data from the urban rates survey, to determine 
the local voice rate floor and the reasonable comparability

[[Page 52280]]

benchmarks for fixed voice and fixed broadband services.
    2. Background. On November 18, 2011 the Commission released the 
USF/ICC Transformation Order and FNPRM, 76 FR 73830 (November 29, 
2011), 76 FR 78384 (December 16, 2011), which comprehensively reforms 
and modernizes the universal service and intercarrier compensation 
systems. In the Order, among other things, the Commission directed the 
Wireline Competition Bureau and Wireless Telecommunications Bureau to 
conduct a survey of residential urban rates for fixed voice, fixed 
broadband, mobile voice, and mobile broadband services. In the Further 
Notice, the Commission sought comment on various issues associated with 
determining reasonable comparability for voice and broadband rates.
    3. The rate survey, conducted once each year, will be used to 
establish a rate floor that carriers receiving high-cost loop support 
(HCLS) or high-cost model support must meet in order to receive their 
full support amounts, beginning in 2014. In addition, the rate survey 
will be used to develop reasonable comparability benchmarks for voice 
and broadband rates that carriers will annually certify their rates do 
not exceed, with the first certification due July 1, 2013.
    4. Content of Rate Survey. Section A to this Public Notice contains 
the survey instrument that the Bureau proposes to gather data regarding 
fixed voice and fixed broadband rates. We seek comment on the details 
of the proposed rate survey as described below.
    5. In the fixed voice section of the survey, the Bureau proposes 
that providers will separately report non-discounted rates and other 
charges (i.e. taxes, fees, etc.) for their unlimited or flat-rate local 
service, unlimited all-distance service, and measured or messaged local 
service. If the provider does not offer such service, it will indicate 
as such and not report data for that item. Providers will report rates 
for both public switched telephone network (PSTN) and Voice over 
Internet Protocol (VoIP) service, to the extent each is offered. 
Various non-recurring charges will also be surveyed. We seek comment on 
the proposed data to be collected in the fixed voice section of the 
survey.
    6. In the fixed broadband section of the survey, the Bureau 
proposes that providers will separately report non-discounted rates and 
other charges for four specific advertised speed tiers of broadband 
service. Are the four proposed speed tiers a reasonable set on which to 
collect rates? For each offering, the provider will also report on any 
capacity limits and what action is taken if the capacity limit is 
reached. Such actions may include overage charges, blocking traffic, 
and rate limiting. Are there any other service provider practices 
regarding capacity limits that should be included? Do the survey's 
questions about capacity limits adequately capture market offerings 
given the current market for residential, fixed broadband? Is the 
proposed format appropriate for collecting information on usage-based 
broadband pricing for fixed services, and, if not, how should the 
format be modified?
    7. The Bureau intends to implement this survey through an online 
reporting form accessible to those urban providers of fixed voice and 
broadband services who are selected to participate. Urban providers 
will be chosen to create a statistically valid sample for the purpose 
of setting a reasonable comparability benchmark for fixed voice and 
fixed broadband services and a rate floor for fixed voice service. 
Independent samples will be chosen for the fixed voice and fixed 
broadband sections of the survey. The proposed survey will use as a 
population from which to sample all terrestrial providers of 
residential voice or broadband services in urban areas. The Bureau 
proposes defining ``urban'' for the purposes of this survey as all 2010 
Census urban areas and urban clusters that sit within a Metropolitan 
Statistical Area (MSA). We seek comment on this approach.
    8. For each section (fixed voice and fixed broadband), urban 
providers will be chosen in order to generate a statistically valid 
sample for the purpose of calculating benchmarks and rate floors. 
Responding providers will be asked for rates in a specified geographic 
area. We propose specifying, for each surveyed provider, a 2010 Census 
tract (that is ``urban,'' as explained above) for which rates should be 
reported. For sampling purposes, the Bureau will use in-house data to 
determine which providers are serving a Census tract. To aid providers 
in locating the specified Census tract when completing the survey, the 
survey will include hyperlinks where the respondent can look up the 
Census tract on a map. Will this approach allow respondents to easily 
and accurately report rates?
    9. In the interest of simplicity, the proposed survey will not 
collect rates for bundles of applications (i.e., voice and broadband 
bundle; voice, broadband, and TV bundle, etc.). The survey will also 
only collect non-discounted rates that are available to potential 
customers rather than actual rates paid by existing customers. For the 
survey's intended purposes, obtaining information about bundles, 
discounts and promotional pricing of limited duration would 
unnecessarily increase the complexity and burden of the data collection 
on service providers that are selected to respond to the survey. We 
seek comment on this approach.
    10. To the extent commenters contend that we should modify the 
content of the proposed survey, they should specify with particularity 
how the proposed survey should be altered and explain why their 
preferred approach better serves to accomplish the Commission's 
objectives. Should any of the survey's questions or terminology be 
altered for clarity or accuracy? Should we modify proposed sampling and 
collection process in any way? Are there any other changes that should 
be made?
    11. Use of Data for Urban Rate Floor. The Bureau also seeks comment 
on how the information collected in the proposed urban rates survey 
should be used to establish the local rate floor. Historically, the 
Bureau surveyed local rates (both flat-rate and measured local service) 
and developed a single urban local rate average. For purposes of the 
rate floor, we propose to use the urban flat local rate data to derive 
a population-weighted national urban average that will be used as the 
local rate floor in 2014 and updated annually thereafter. We seek 
comment on this proposal.
    12. Use of Data for Reasonable Comparability of Voice Service. In 
the USF/ICC Transformation Order, the Commission required that carriers 
certify that their voice rates are within two standard deviations of 
``the national average'' for voice service. We request comment on how 
rate survey data should be used to determine this national average.
    13. For fixed voice service, the Bureau seeks comment on deriving 
the national average for rate comparability purposes solely from data 
collected regarding local, flat rate voice service in urban areas. 
Alternatively, should we instead develop the national average based 
solely on urban data for unlimited, all-Distance service, as determined 
from the survey? A reason to adopt a national average based on the 
urban unlimited, all-distance rates rather than the local, flat rate is 
that the unlimited, all-distance service best reflects the varied 
ways--in terms of call frequency, duration, and distance--that 
households typically communicate using voice services. We seek comment 
on these two alternatives and the implications of each in terms of the 
ability of carriers to meet the certification requirement. Under

[[Page 52281]]

either approach, we propose to develop a population-weighted average. 
We seek comment on this approach. How, if at all, should we take into 
account non-recurring charges when computing the fixed voice benchmark?
    14. The Bureau proposes to establish a single benchmark for fixed 
voice service by which supported carriers would certify their rates, 
for purposes of reasonable comparability, regardless of the voice 
service offered (i.e. flat, local; unlimited, all-distance; measured 
local). One reason for doing so is that the urban availability of some 
services may diminish over time and reduce the available sample 
population for a given service. This in turn could increase the year-
to-year variability in the benchmarks, while also creating, as a 
statistical artifact, wide deviations in the benchmarks for different 
types of voice services.
    15. Another alternative would be to develop a separate national 
average for each voice service surveyed (i.e. flat, local; unlimited, 
all distance; measured, local). To the extent commenters believe the 
Bureau should establish multiple, service-specific reasonable 
comparability benchmarks for voice rather than simply developing a 
single average for urban voice service, they should explain why such an 
approach is preferable and consistent with the framework established by 
the Commission in the USF/ICC Transformation Order. The Bureau also 
proposes not combining multiple service rates collected in the survey 
into a single benchmark because this would require weighting each 
service's rate by its number of subscribers. Collecting such subscriber 
information would unnecessarily impose more burden on the carriers 
surveyed. To the extent commenters contend that the Bureau should 
combine multiple services' rates into a single benchmark, how should 
the rates be combined and what measures could be taken to minimize 
burden on those providers that are surveyed?
    16. The Further Notice sought comment on whether to adopt a 
presumption that if a given provider is offering the same rates, terms 
and conditions (including capacity limits) to both urban and rural 
customers, that is sufficient to meet the statutory requirement that 
services be reasonably comparable. Under such a presumption, providers 
that serve both rural and urban markets would not be required to 
certify their voice rates against a national urban benchmark derived 
from the proposed rate survey. We seek further focused comment on this 
potential approach. In particular, commenters are encouraged to 
identify the universe of providers that would be able to utilize the 
presumption, under the proposed survey approach that would define urban 
areas as MSAs.
    17. Calculation of Voice Rates for Certifying Carriers Offering 
Measured Service. We also seek comment on how a fixed voice provider 
offering only measured service will determine its rate that should be 
compared to the national urban average for voice service, for purposes 
of rate comparability. The Bureau proposes allowing such carriers to 
calculate a ``blended'' rate which will be compared to the national 
urban rate voice average, consistent with the approach adopted by the 
Commission for purposes of the local rate floor. In particular, we 
propose that a supported carrier with measured service should use its 
average minutes of use data during each rate period (e.g. peak, off-
peak) to calculate its rate for reasonable comparability purposes. We 
seek comment on this approach.
    18. Use of Data for Reasonable Comparability of Fixed Broadband 
Service. To the extent there were a presumption that offering the same 
service in both rural and urban areas meets the reasonable 
comparability requirements of the statute, there would be no need for 
some providers to compare their broadband rates to a national average 
urban rate benchmark derived from the results of the proposed rate 
survey. For fixed broadband, the Bureau proposes using the surveyed 
rate data for each speed tier to set reasonable comparability 
benchmarks for those providers that are required to certify against a 
national urban benchmark. Each speed tier would have its own benchmark, 
and providers would certify their rates against the speed tier 
corresponding to the slowest broadband service they offer. We are 
proposing to establish different benchmarks for different speed tiers 
so that supported providers offering substantially faster broadband 
service than the minimum required under the Commission's public 
interest obligations can certify their rates against a more comparable 
urban service, rather than an urban benchmark for a much slower service 
or an average of rates for both slower and faster services. We seek 
comment on this approach. Would such an approach be a workable way to 
determine reasonable comparability for providers that do not offer 
broadband services in urban areas?
    19. Alternatively, should the several speed tiers be combined to 
form a single benchmark? How, if at all, should we take into account 
non-recurring charges when computing the fixed broadband benchmark? 
How, if at all, should the capacity limit data be used for determining 
reasonable comparability? Given the emergence of usage-based broadband 
pricing, how should such rates be incorporated into the benchmark? 
Should the Bureau collect usage data on such plans so a ``blended'' 
rate can be calculated? How might a supported broadband provider with a 
usage-based service certify its rates?

II. Procedural Matters

    20. Filing Requirements. Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules, interested parties may file comments on or 
before the dates indicated on the first page of this document. Comments 
may be filed using the Commission's Electronic Comment Filing System 
(ECFS).
    21. 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.
    [ssquf] 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. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    [ssquf] 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.
    [ssquf] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington, DC 20554.
    22. The proceeding this Notice initiates shall be treated as a 
``permit-but-disclose'' proceeding in accordance with the Commission's 
ex parte rules. Persons making ex parte presentations must file a copy 
of any written presentation or a memorandum summarizing any oral 
presentation within two business days after the presentation (unless a 
different deadline applicable to the Sunshine period applies). Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentation must (1) list all persons attending or 
otherwise participating in the meeting at which the ex parte 
presentation was made, and (2) summarize all data presented and 
arguments made during the presentation. If the presentation

[[Page 52282]]

consisted in whole or in part of the presentation of data or arguments 
already reflected in the presenter's written comments, memoranda or 
other filings in the proceeding, the presenter may provide citations to 
such data or arguments in his or her prior comments, memoranda, or 
other filings (specifying the relevant page and/or paragraph numbers 
where such data or arguments can be found) in lieu of summarizing them 
in the memorandum. Documents shown or given to Commission staff during 
ex parte meetings are deemed to be written ex parte presentations and 
must be filed consistent with rule Sec.  1.1206(b). In proceedings 
governed by rule Sec.  1.49(f) or for which the Commission has made 
available a method of electronic filing, written ex parte presentations 
and memoranda summarizing oral ex parte presentations, and all 
attachments thereto, must be filed through the electronic comment 
filing system available for that proceeding, and must be filed in their 
native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants 
in this proceeding should familiarize themselves with the Commission's 
ex parte rules.
    23. Paperwork Reduction Act. This document contains proposed new 
information collection requirements. The new requirements will be 
submitted to the Office of Management and Budget (OMB) for review under 
section 3507(d) of the Paperwork Reduction Act (PRA). The Bureau, as 
part of its continuing effort to reduce paperwork burdens, invites the 
general public and OMB to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), the Bureau seeks specific comment on how it might 
further reduce the information collection burden for small business 
concerns with fewer than 25 employees.
    24. Initial Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act of 1980 (RFA), the Bureau has prepared this 
Initial Regulatory Flexibility Analysis (IRFA) of the possible 
significant economic impact on a substantial number of small entities 
by the policies and rules proposed in this Notice. Written comments are 
requested on this IRFA. Comments must be filed as responses to the IRFA 
and must be filed by the deadlines for comments on the Public Notice. 
The Commission will send a copy of the Public Notice, including this 
IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA). In addition, the Public Notice and IRFA (or 
summaries thereof) will be published in the Federal Register.

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

    25. The Public Notice seeks comment on a proposed survey of urban 
rates for fixed voice and fixed broadband residential services. The 
Bureau also seeks comment concerning how, using data from the urban 
rates survey, to determine the local voice rate floor and the 
reasonable comparability benchmarks for fixed voice and fixed broadband 
services. The rate survey, and benchmarks and rate floors based on the 
survey, is part of implementing the USF/ICC Transformation Order to 
insure supported provider's rates are not unreasonably high or 
unnecessarily low.

B. Legal Basis

    26. The legal basis for any action that may be taken pursuant to 
the Notice is contained in sections 1, 2, 4(i), 214, 254, 303(r), 403, 
and 706 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
152, 154(i), 214, 254, 303(r), 403, and 706, and Sec. Sec.  1.1 and 
1.1421 of the Commission's rules, 47 CFR 1.1, 1.421.

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

    27. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small-business concern'' under the Small Business 
Act. A small-business concern'' is one which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the SBA.
    28. Small Businesses. Nationwide, there are a total of 
approximately 27.5 million small businesses, according to the SBA.
    29. Wired Telecommunications Carriers. The SBA has developed a 
small business size standard for Wired Telecommunications Carriers, 
which consists of all such companies having 1,500 or fewer employees. 
According to Census Bureau data for 2007, there were 3,188 firms in 
this category, total, that operated for the entire year. Of this total, 
3,144 firms had employment of 999 or fewer employees, and 44 firms had 
employment of 1000 employees or more. Thus, under this size standard, 
the majority of firms can be considered small.
    30. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable size 
standard under SBA rules is for Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 1,307 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 Public Notice.
    31. Incumbent Local Exchange Carriers (incumbent LECs). Neither the 
Commission nor the SBA has developed a size standard for small 
businesses specifically applicable to incumbent local exchange 
services. The closest applicable size standard under SBA rules is for 
Wired Telecommunications Carriers. Under that size standard, such a 
business is small if it has 1,500 or fewer employees. According to 
Commission data, 1,307 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 incumbent 
local exchange service are small businesses that may be affected by 
rules adopted pursuant to the Public Notice.
    32. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on Commission analyses and determinations 
in other, non-RFA contexts.

[[Page 52283]]

    33. 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. 
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 Public Notice.
    34. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the SBA has recognized 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 this category, census data for 2007 show that there were 
1,383 firms that operated for the entire year. Of this total, 1,368 
firms had employment of 999 or fewer employees and 15 had employment of 
1000 employees or more. 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.
    35. Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (``LMDS'') is a fixed broadband point-to-
multipoint microwave service that provides for two-way video 
telecommunications. The auction of the 986 LMDS licenses began and 
closed in 1998. The Commission established a small business size 
standard for LMDS licenses as an entity that has average gross revenues 
of less than $40 million in the three previous calendar years. An 
additional small business size standard for ``very small business'' was 
added as an entity that, together with its affiliates, has average 
gross revenues of not more than $15 million for the preceding three 
calendar years. The SBA has approved these small business size 
standards in the context of LMDS auctions. There were 93 winning 
bidders that qualified as small entities in the LMDS auctions. A total 
of 93 small and very small business bidders won approximately 277 A 
Block licenses and 387 B Block licenses. In 1999, the Commission re-
auctioned 161 licenses; there were 32 small and very small businesses 
winning that won 119 licenses.
    36. Cable and Other Program Distribution. 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. According to Census Bureau data for 2007, there were a total 
of 955 firms in this previous category that operated for the entire 
year. Of this total, 939 firms had employment of 999 or fewer 
employees, and 16 firms had employment of 1000 employees or more. Thus, 
under this size standard, the majority of firms can be considered small 
and may be affected by rules adopted pursuant to the Public Notice.
    37. Cable Companies and Systems. The Commission has 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 and may be affected by rules 
adopted pursuant to the Public Notice.
    38. Cable System Operators. The Act 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.
    39. Open Video 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. According to Census Bureau data for 
2007, there were a total of 955 firms in this previous category that 
operated for the entire year. Of this total, 939 firms had employment 
of 999 or fewer employees, and 16 firms had employment of 1000 
employees or more. Thus, under this second size standard, most OVS 
operators are small

[[Page 52284]]

and may be affected by rules adopted pursuant to the Public Notice. 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, again, at least 
some of the OVS operators may qualify as small entities.
    40. Internet Service Providers. 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. According to Census Bureau data for 2007, there were 3,188 
firms in this category, total, that operated for the entire year. Of 
this total, 3144 firms had employment of 999 or fewer employees, and 44 
firms had employment of 1000 employees or more. Thus, under this size 
standard, the majority of firms can be considered small. In addition, 
according to Census Bureau data for 2007, there were a total of 396 
firms in the category Internet Service Providers (broadband) that 
operated for the entire year. Of this total, 394 firms had employment 
of 999 or fewer employees, and two firms had employment of 1000 
employees or more. Consequently, we estimate that the majority of these 
firms are small entities that may be affected by rules adopted pursuant 
to the Public Notice.

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

    41. In this Public Notice, the Commission seeks public comment on a 
proposed survey of urban rates for fixed voice and fixed broadband 
residential services. The Bureau also seeks comment concerning how, 
using data from the urban rates survey, to determine the local voice 
rate floor and the reasonable comparability benchmarks for fixed voice 
and fixed broadband services. The Public Notice seeks comment on data 
requirements that would require reporting by small entities. 
Specifically, the Public Notice seeks comment on the collection of 
advertised rates and product offerings from small entities in urban 
areas that are included in the sample.

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

    42. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): ``(1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rules for such 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 such small 
entities.''
    43. The Public Notice seeks comment on issues related to the rates 
survey and how the benchmarks and rate floors should be determined. The 
rate survey issues are not anticipated to have a significant economic 
impact on small entities because the survey will only sample a small 
number of providers. Furthermore, since the statistical sampling 
methodology will result in larger entities being more likely to be 
surveyed, we anticipate small entities will only compose a minor 
portion of the overall sample. Moreover, the survey only asks about 
advertised rates and product offerings which should be readily 
available to entities of any size. Furthermore, any significant 
economic impact cannot necessarily be minimized through alternatives 
since the survey sample will already be restricted to a small set of 
the total population of carriers necessary for generating a 
statistically valid sample, and the survey will only ask for readily 
available advertised rates and will be implemented in an easily 
accessible online format.

F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    44. None.

Federal Communications Commission.
Trent B. Harkrader,
Division Chief, Telecommunications Access Policy Division Wireline 
Competition Bureau.

Proposed Rate Survey Questions for Fixed Services Sections of Rate 
Survey

    Note:  The below survey instrument is intended to be implemented 
via an online interface accessible to survey participants. The 
particular format used in this appendix is for explanatory purposes 
only.

III. Survey Respondent Information

    This survey asks questions about PROVIDER NAME's (FIXED VOICE, 
FIXED BROADBAND, MOBILE) services and rates. Please answer all 
questions as they pertain to the specific geographic location indicated 
below on MONTH DAY, YEAR.
    Enter identifying information below as it pertain to the location 
identified in the bottom line of Section I.

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
I. SURVEY RESPONDENT INFORMATION
----------------------------------------------------------------------------------------------------------------
Provider Name:                                                               Pre-populated by FCC
Provider FRN (used on Dec 31, 2011 Form 477):
Provider Study Area Code (if current USF recipient):
Name of Person Completing Form:
Contact Phone Number:
Contact Email Address:
Name of Certifying Official:
Certifying Official's Phone Number:
Certifying Official's Email Address:
----------------------------------------------------------------------------------------------------------------
Location for Which Reported Rates Apply:                                     Pre-populated by FCC
----------------------------------------------------------------------------------------------------------------


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IV. Fixed Voice

    Report rates on fixed voice service provided in GEOGRAPHIC 
LOCATION. All reported rates should be non-discounted, residential 
rates available on MONTH DAY, YEAR to any existing or potential 
customer at the specified location. Report rates for fixed voice 
service that is not bundled with any other product (e.g. Internet, TV).

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V. Fixed Broadband

    Report rates on fixed broadband service provided in GEOGRAPHIC 
LOCATION. All reported rates should be standard, non-discounted, 
residential rates available on MONTH DAY, YEAR to any existing or 
potential customer. Report rates for fixed broadband service that is 
not bundled with any other product (e.g. telephone, TV). Exclude 
residential broadband service that is provided via satellite.

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[FR Doc. 2012-21311 Filed 8-28-12; 8:45 am]
BILLING CODE 6712-01-C