[Federal Register Volume 78, Number 13 (Friday, January 18, 2013)]
[Proposed Rules]
[Pages 4100-4107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-01048]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket No. 10-90; DA 12-2075]
Connect America Fund
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission seeks
comment on procedures to determine what areas are eligible for Connect
America Phase II funding and how carriers may elect to accept or
decline a statewide commitment in Connect America Phase II.
DATES: Comments are due on or before February 19, 2013 and reply
comments are due on or before March 4, 2013. If you anticipate that you
will be submitting comments, but find it difficult to do so within the
period of time allowed by this notice, you should advise the contact
listed below as soon as possible.
ADDRESSES: You may submit comments, identified by WC Docket No. 10-90,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web Site: http://
[[Page 4101]]
fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: [email protected] or phone: (202) 418-
0530 or TTY: (202) 418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Ryan Yates, Wireline Competition
Bureau, (202) 418-0886 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Federal
Communications Commission's (Commission) Public Notice in WC Docket No.
10-90, and DA 12-2075, released December 27, 2012. 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. (BCPI), 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 Sec. Sec. 1.415 and 1.419 of the Commission's rules,
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.
[cir] 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 email. To get filing instructions,
filers should send an email to [email protected], and include the following
words in the body of the message, ``get form.'' A sample form and
directions will be sent in response.
[cir] 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.
[cir] 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 8:00 a.m. to 7:00 p.m. All hand deliveries
must be held together with rubber bands or fasteners. Any envelopes
must be disposed of before entering the building.
[cir] 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.
[cir] U.S. Postal Service first-class, Express, and Priority mail
should be addressed to 445 12th Street SW., Washington, DC 20554.
In addition, one copy of each pleading must be sent to the
Commission's duplicating contractor, Best Copy and Printing, Inc, 445
12th Street SW., Room CY-B402, Washington, DC 20554; Web site:
www.bcpiweb.com; phone: 1-800-378-3160. Furthermore, two copies of each
pleading must be sent to Charles Tyler, Telecommunications Access
Policy Division, Wireline Competition Bureau, 445 12th Street SW., Room
5-A452, Washington, DC 20554; email: [email protected] and one copy
to Ryan Yates, Telecommunications Access Policy Division, Wireline
Competition Bureau, 445 12th Street SW., Room 5-B441A, Washington, DC
20554; email: [email protected].
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:
www.bcpiweb.com, by email at [email protected], by telephone at (202)
488-5300 or (800) 378-3160 (voice), (202) 488-5562 (tty), or by
facsimile at (202) 488-5563.
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) or (202) 418-0432 (TTY).
Contact the FCC to request reasonable accommodations for filing
comments (accessible format documents, sign language interpreters,
CART, etc.) by email: [email protected]; phone: (202) 418-0530 or TTY:
(202) 418-0432.
I. Introduction
1. The Commission has delegated to the Wireline Competition Bureau
(Bureau) the task of developing a forward-looking cost model to
determine support levels to be offered to price cap carriers in Phase
II of the Connect America Fund. The Bureau recently announced the
availability of version one of the Connect America Cost Model, which
provides the ability to calculate costs using a variety of different
inputs and assumptions.
2. The Bureau expects to solicit additional public comment on the
cost model through its ongoing Virtual Workshop, which focuses on
technical model design and input issues, and public notices, which will
focus on other issues relating to implementation of Phase II, before
finalizing the Connect America Cost Model.
3. In this Public Notice, the Bureau proposes procedures to provide
an opportunity for parties to challenge whether census blocks that are
identified as eligible to receive Phase II support are in fact unserved
by an unsubsidized competitor. We also seek comment on procedures
relating to the election of price cap carriers to accept Phase II
support in exchange for making a statewide commitment.
II. Discussion
A. Procedures for Challenging Whether an Area Is Served by an
Unsubsidized Competitor
4. The Commission directed the Bureau, after the cost model is
adopted,
[[Page 4102]]
to ``publish a list of all eligible census blocks'' (specifically,
those census blocks in price cap territories below the extremely high-
cost threshold but above the funding threshold) and provide an
opportunity for parties to ``challenge the determination of whether or
not areas are unserved by an unsubsidized competitor.'' We propose to
utilize the following procedures to allow interested parties to make
such challenges when we adopt a final model and seek comment on these
proposed procedures.
5. The Commission concluded that ``it would be appropriate to
exclude any area served by an unsubsidized competitor,'' and it
delegated to the Bureau ``the task of implementing the specific
requirements of this rule.'' Consistent with the directive in the USF/
ICC Transformation Order, 76 FR 73830, November 29, 2011, we propose to
publish a list of eligible census blocks classified by the cost model
as unserved by an unsubsidized competitor offering service that meets
the broadband performance obligations for Phase II. For purposes of
this determination, the Commission has defined an unsubsidized
competitor as one that is offering terrestrial fixed broadband with an
advertised speed of 4 Mbps downstream and 1 Mbps upstream. Consistent
with the approach adopted by the Commission for Connect America Phase
I, we propose to use 3 Mbps downstream and 768 kbps upstream as a proxy
for 4 Mbps downstream and 1 Mbps upstream in developing this initial
list because that information is readily available from other data
sources. Likewise, for administrative simplicity, we propose that to
the extent a party is challenging the classification of a particular
census block, it may present evidence demonstrating the block in
question is served by service providing 3 Mbps downstream and 768 kbps
upstream.
6. We expect the final Connect America Cost Model we adopt will use
the National Broadband Map reflecting State Broadband Initiative (SBI)
data as of June 2012, potentially supplemented with other data sources.
Once we publish the relevant list of unserved census blocks with costs
between the extremely high-cost threshold and the funding threshold
shown in the model, we propose that interested parties would then have
an opportunity to challenge that list. Specifically, challengers would
submit revisions and other potential corrections to the list of
eligible census blocks where coverage by unsubsidized competitors is
either overstated (i.e., census blocks are listed as served where they
are in fact unserved) or understated (i.e., census blocks are listed as
unserved when they are in fact served). We propose that parties
contending the Bureau's original classification as served or unserved
is accurate would have an opportunity to submit evidence to rebut the
challenge.
7. Commenters seeking to challenge the eligibility of a particular
area for funding would be required to list specific census blocks that
are inaccurately classified as served or unserved by an unsubsidized
competitor, along with a brief statement and supporting evidence
demonstrating that those census blocks are inaccurately reported. We
propose not to process any challenge that lacks some evidentiary
showing regarding the census block in question; a challenge that merely
asserts the area is or is not served would not be sufficient.
Challenges to a census block's eligibility may be based on any or all
of the Commission's broadband performance metrics--speed, latency, and/
or capacity (i.e., minimum usage allowance). Challenges may also be
based on non-performance metrics that affect the availability of
broadband in a census block. For example, if the provider of broadband
in that census block only offers service to business customers and not
residential customers, the status of that block as served may be
challenged.
8. Consistent with our proposal above, we propose that to be deemed
served, a census block must have access to broadband with speeds of at
least 3 Mbps downstream and 768 kbps upstream. Proposed examples of
potential types of probative evidence regarding the availability of
broadband service meeting the speed requirements established by the
Commission include, but are not limited to, more recent SBI data than
that used in version of the model adopted by the Bureau; maps or
printouts of Web sites indicating coverage for a particular area
accompanied by an officer certification that such materials reflect
current conditions; printouts of billing information for customers
within the particular census block, with identifying customer
information appropriately masked; engineering analyses or drive tests;
explanations of methodologies for determining coverage; and
certifications by one or more individuals as to the veracity of the
material provided. What other information regarding the speed of
alleged service offerings would be readily available to potential
challengers or parties seeking to maintain the classification of an
area as shown on the National Broadband Map?
9. The Commission specified in the USF/ICC Transformation Order
that latency should be sufficiently low as to enable real-time
applications, such as Voice over Internet Protocol (VoIP). Proposed
examples of potential types of probative evidence regarding latency
include, but are not limited to, documentation that a provider is
actually offering voice service to customers in the relevant area, such
as a printout of a Web site showing voice service availability at a
particular address in the census block accompanied by an officer
certification, or a sworn declaration from one or more customers within
the census block that they subscribe to voice from that provider. What
other information regarding the latency of alleged service offerings
would be readily available to potential challengers or parties seeking
to maintain the classification of an area as shown on the National
Broadband Map?
10. The Commission delegated to the Wireline Competition Bureau and
Wireless Telecommunications Bureau the task of adopting capacity or
``minimum usage allowance'' requirements for recipients of Phase II
support. Proposed examples of potential types of probative evidence
regarding minimum usage include, but are not limited to, a printout of
a Web site showing market offerings meeting the minimum usage
requirement accompanied by an officer certification, or a sworn
declaration from one or more customers within the census block that
they subscribe to a service offering meeting the minimum usage
allowance requirement. What other information regarding the capacity of
alleged service offerings would be readily available to potential
challengers or parties seeking to maintain the classification of an
area as shown on the National Broadband Map? Should we require one or
more of these evidentiary showings for a challenge to be deemed
complete as filed?
11. We propose that all certifications regarding evidence
supporting or opposing a challenge be signed by an individual with
relevant knowledge (such as officer of the company making or opposing
the challenge, or a representative of the state mapping agency)
certifying that the information presented is accurate to the best of
his or her knowledge.
12. To assist in the development of a more complete record, we also
seek comment on how to ensure that potentially interested parties are
aware of the opportunity for public input. For instance, should a
purported unsubsidized competitor challenging the classification of a
block as unserved (and therefore eligible for funding) be required to
serve a copy of its challenge
[[Page 4103]]
on the price cap carrier? If a price cap carrier believes a particular
census block should be on the list of blocks eligible for funding
(because it is not served), should it be required to serve a copy of
its challenge by overnight delivery on any entity shown as serving the
block on the National Broadband Map?
13. We intend to conduct this challenge process in an expeditious
fashion. We propose that after the release of the list of census
blocks, parties would have 45 days to file challenges to the list.
Parties wishing to rebut such challenges would have an additional 20
days to submit evidence supporting their contentions. We seek comment
on whether this proposed time frame adequately serves our goal of
providing a meaningful opportunity for challenge, while concluding this
challenge process in a reasonable timeframe. We propose that all
evidence regarding the status of a particular census block must be
filed within this timeframe; any evidence filed after these dates will
be deemed untimely. Strict adherence to these deadlines is necessary to
provide an adequate opportunity for the party that contends the
classification as served or unserved is accurate to respond to all
evidence submitted by the challenger within the reply comment
timeframe, and in order for this administrative process to be completed
expeditiously.
14. At the close of the challenge timeframe, we propose that where
the Bureau finds that it is more likely than not that a census block is
inaccurately classified as served or unserved, we would modify the
classification of that census block for purposes of finalizing the
census blocks that will be eligible for a price cap carrier statewide
commitment under the Connect America Phase II program. In the event
that both the challenger and the opponent provide credible evidence
regarding the status of a particular block, we propose that the default
determination will be however the block is classified on the National
Broadband Map at the time the challenge is resolved. We recognize the
practical difficulties that may ensue in situations where one party
says service exists and the other party says service does not exist.
Because it may be difficult and expensive for the party contending that
service does not exist to prove a negative, we propose that the most
expedient solution in such situations is to rely upon the most current
available map data.
15. We propose that, in making its determinations, the Bureau would
consider whether the challenger took steps to bring the alleged errors
in the National Broadband Map to the attention of the relevant state
mapping authority and the outcome of any such efforts. It is possible
that the December 2012 SBI data may become available shortly before or
after the forward looking cost model is adopted, and therefore
challengers may wish to present evidence of the more recent
classification on the National Broadband Map in their challenges. If
December 2012 SBI data is available at the time the Bureau resolves
these challenges, we propose to rely upon the December 2012
classification.
16. While the Bureau will rely on updates to the available SBI
data, we propose to focus on evidence regarding current broadband
availability at the time we resolve the challenge, and not on announced
market expansion plans that may occur at some future date. We note that
announced deployment plans may change for business and other reasons,
and if we were to exclude a census block area based on announced plans
to extend service to that block, that could provide an opportunity for
potential competitors to engage in strategic behavior to eliminate
support for a particular census block, without an assurance that the
competitor will actually serve the block at a future date.
17. We also propose that the Bureau only include on the preliminary
list of blocks eligible for funding those census blocks that are
completely unserved. We further propose to treat partially served
census blocks as served and therefore not eligible for funding in Phase
II. We anticipate that entertaining challenges with respect to
potentially many thousands of individual census blocks could be a
significant undertaking by itself, and we are concerned that the
administrative burden of permitting challenges at the sub-census block
level would outweigh the potential benefits. We therefore propose to
conduct the challenge process at the census block level. To the extent
commenters believe that we should entertain sub-census block
challenges, they should describe with specificity how their proposed
process would work, and in particular how we would ensure compliance
with build out requirements in partially served census blocks.
18. We seek comment on all these proposals and on any alternatives.
If commenters believe different procedures would better serve the
Commission's goal of targeting support to areas without unsubsidized
competitors, they should provide a detailed description of their
preferred alternative. We welcome suggested alternatives that minimize
the impact of these proposals on small businesses, as well as comments
regarding the cost and benefits of implementing these proposals.
B. Procedures for Implementing the Price Cap Carrier Election To Make a
Statewide Commitment
19. We propose that after reviewing any public comment, the Bureau
will publish a revised list of census blocks and a revised list of
support amounts associated with each eligible area that will be offered
to price cap carriers. We seek comment on whether the election period
should be 90 days from the date of release of the finalized list, which
would be the same as the time period provided to price cap carriers for
electing to accept incremental support for Connect America Phase I. In
the alternative, should the time period for price cap carriers to elect
to make a statewide commitment in Phase II be longer, such as 120 days,
due to the complexity of the decisions individual carriers will need to
make? We also seek comment on requiring the submissions either electing
or declining support to be submitted on a confidential basis prior to
the deadline for election. Should carriers be allowed or required to
make confidential submissions? In the event that such submissions were
afforded confidentiality, we propose that the Bureau would announce all
statewide elections on a single date shortly after the close of the
election period.
20. We propose that a carrier electing to accept the statewide
commitment would submit a letter, signed by an officer of the company,
by the deadline specifying that it agrees to meet the Commission's
requirements in exchange for receiving support in amounts set forth in
the final Bureau public notice. To the extent a letter of credit or
other form of security is required to ensure compliance with these
obligations, we propose to require its submission within ten days of
exercising the statewide commitment.
21. We seek comment on what information carriers should be required
to submit along with their acceptance notices. Should such carriers be
required to specify the technology or combination of technologies they
intend to deploy in a particular state, at the wire center or census
block level? Should carriers also be required to provide information
such as geocoded latitude and longitude location information, along
with census block and wire center information, for the specific
locations where they intend to provide service meeting the 6 Mbps
downstream/1.5 Mbps upstream
[[Page 4104]]
requirement, as determined by the Bureau? Should carriers be required
at the time of acceptance to submit a preliminary plan showing the
census blocks and/or wire centers, and associated number of locations,
where they anticipate meeting the third year 85 percent build-out
milestone? What other information should be required in the initial
acceptance notices in order to ensure the Commission has the tools it
needs to monitor compliance with performance obligations? Should the
Commission afford confidential treatment to any of the information
required to be submitted after the Bureau announces the acceptance by
carriers of funding on a statewide level?
22. We propose that a carrier declining to accept a statewide
commitment in a particular state would file a letter by the deadline
specifying that it is declining funding. Alternatively, a carrier
failing to file a letter by the deadline could be deemed as having
declined funding.
23. We seek comment on all these proposals and on any alternatives.
To the extent commenters believe that other procedures would better
serve the Commission's goals, they should provide a detailed
description of their proposal for the statewide commitment process. We
welcome suggested alternatives that minimize the impact of these
proposals on small businesses, as well as comments regarding the cost
and benefits of implementing these proposals.
III. Procedural Matters
A. Initial Regulatory Flexibility Act Analysis
24. 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 by the policies and rules
proposed in this Public Notice. Written comments are requested on this
IRFA. Comments must be identified as responses to the IRFA and must be
filed by the deadlines for comments on the 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.
B. Need for, and Objectives of, the Proposed Rules
25. The Public Notice seeks comment on issues related to the
implementation of Phase II of Connect America. As discussed in the USF/
ICC Transformation Order, the rapid and efficient deployment of
broadband is crucial for our nation's growth. The proposals contained
in this public notice will help to achieve the Commission's goal of
making broadband accessible to all Americans.
26. The Bureau is currently in the process of developing a cost
model for Phase II of Connect America. The Commission directed the
Bureau to publish a list of census blocks that would be eligible for
support under the cost model, and to provide an opportunity for parties
to make challenges to that list. This Public Notice seeks comment on
how to conduct such a challenge process and what data should be used in
that process. The Bureau plans to publish a list of census blocks that
are within the cost model's funding threshold but are unserved by
broadband with speeds of 3 Mbps downstream and 768 kbps upstream.
Parties could then submit comments challenging the accuracy of that
list.
27. The Public Notice proposes that parties could make challenges
based on the fact that a purported unsubsidized competitor is or is not
meeting the broadband performance requirements for speed, latency, or
capacity. The Public Notice also suggests various forms of evidence
that could be submitted to support these contentions. Assertions that
are offered without supporting evidence would not be considered. Where
the Bureau finds its more likely than not that a census block is
inaccurately classified as served or unserved, that census block's
status would be altered accordingly for the purposes of Phase II
eligibility.
28. Under the system proposed in the Public Notice, parties
challenging the eligibility of a particular census block would be
required to serve a copy of their challenge on the entity purportedly
serving that block. That entity would then have an opportunity to
respond and provide evidence rebutting that challenge. In the event
that both the challenger and the respondent provide credible
information supporting their claims, the census block's status would be
determined based on its current status on the most recent version of
National Broadband Map available at the time the list of eligible areas
is finalized.
29. The Public Notice also sets limits on the types of challenges
considered. First, only wholly unserved census blocks would be eligible
for Phase II support. Therefore, under the proposed system, sub-census
block challenges would not be considered. Second, challenges and
rebuttals must be based on current broadband availability, not
announced deployment plans.
30. In addition to seeking comment on issues related to the Phase
II challenge process, the Public Notice also seeks comment on
procedures for implementing the process of price cap carriers' election
to receive support in exchange for a commitment to serve all eligible
areas within a state. Comment is sought on what time period should be
used in this process. The Public Notice also seeks comment on what
information a carrier should be required to submit when accepting a
statewide commitment.
C. Legal Basis
31. The legal basis for any action that may be taken pursuant to
the Public Notice is contained in sections 1, 4(i), 4(j), 214, and 218,
of the Communications Act of 1934, as amended, and section 706 of the
Telecommunications Act of 1996.
D. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
32. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by 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.
33. Small Businesses. Nationwide, there are a total of
approximately 27.5 million small businesses, according to the SBA.
34. 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 1,000 employees or more. Thus, under this size standard,
the majority of firms can be considered small.
[[Page 4105]]
35. 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.
36. 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.
37. 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.
38. 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.
39. 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
1,000 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.
40. Broadband Personal Communications Service. The broadband
personal communications service (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission defined ``small entity'' for
Blocks C and F as an entity that has average gross revenues of $40
million or less in the three previous calendar years. For Block F, an
additional classification for ``very small business'' was added and is
defined as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years. These standards defining ``small entity'' in the
context of broadband PCS auctions have been approved by the SBA. No
small businesses, within the SBA-approved small business size standards
bid successfully for licenses in Blocks A and B. There were 90 winning
bidders that qualified as small entities in the Block C auctions. A
total of 93 small and very small business bidders won approximately 40
percent of the 1,479 licenses for Blocks D, E, and F. In 1999, the
Commission re-auctioned 347 C, E, and F Block licenses. There were 48
small business winning bidders. In 2001, the Commission completed the
auction of 422 C and F Broadband PCS licenses in Auction 35. Of the 35
winning bidders in this auction, 29 qualified as ``small'' or ``very
small'' businesses. Subsequent events, concerning Auction 35, including
judicial and agency determinations, resulted in a total of 163 C and F
Block licenses being available for grant. In 2005, the Commission
completed an auction of 188 C block licenses and 21 F block licenses in
Auction 58. There were 24 winning bidders for 217 licenses. Of the 24
winning bidders, 16 claimed small business status and won 156 licenses.
In 2007, the Commission completed an auction of 33 licenses in the A,
C, and F Blocks in Auction 71. Of the 14 winning bidders, six were
designated entities. In 2008, the Commission completed an auction of 20
Broadband PCS licenses in the C, D, E and F block licenses in Auction
78.
41. Fixed Microwave Services. Fixed microwave services include
common carrier, private operational-fixed, and broadcast auxiliary
radio services. At present, there are approximately 22,015 common
carrier fixed licensees and 61,670 private operational-fixed licensees
and broadcast auxiliary radio licensees in the microwave services. The
Commission has not created a size standard for a small business
specifically with respect to fixed microwave services. For purposes of
this analysis, the Commission uses the
[[Page 4106]]
SBA small business size standard for Wireless Telecommunications
Carriers (except Satellite), which is 1,500 or fewer employees. The
Commission does not have data specifying the number of these licensees
that have more than 1,500 employees, and thus is unable at this time to
estimate with greater precision the number of fixed microwave service
licensees that would qualify as small business concerns under the SBA's
small business size standard. Consequently, the Commission estimates
that there are up to 22,015 common carrier fixed licensees and up to
61,670 private operational-fixed licensees and broadcast auxiliary
radio licensees in the microwave services that may be small and may be
affected by the rules and policies adopted herein. We note, however,
that the common carrier microwave fixed licensee category includes some
large entities.
42. Satellite Telecommunications. Since 2007, the SBA has
recognized satellite firms within this revised category, with a small
business size standard of $15 million. The most current Census Bureau
data are from the economic census of 2007, and we will use those
figures to gauge the prevalence of small businesses in this category.
Those size standards are for the two census categories of ``Satellite
Telecommunications'' and ``Other Telecommunications.'' Under the
``Satellite Telecommunications'' category, a business is considered
small if it had $15 million or less in average annual receipts. Under
the ``Other Telecommunications'' category, a business is considered
small if it had $25 million or less in average annual receipts.
43. The first 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.'' For this category, Census Bureau data for 2007
show that there were a total of 512 firms that operated for the 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, we estimate that the majority of Satellite
Telecommunications firms are small entities that might be affected by
rules adopted pursuant to the Public Notice.
44. The second category of Other Telecommunications ``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; or * * * providing Internet services or voice
over Internet protocol (VoIP) services via client-supplied
telecommunications connections.'' 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, 2,346 firms had annual receipts of
under $25 million. Consequently, we estimate that the majority of Other
Telecommunications firms are small entities that might be affected by
our action.
45. 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 1,000 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.
46. 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.
47. 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.
48. 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 1,000 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
[[Page 4107]]
employment of 1,000 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.
49. All Other Information Services. The Census Bureau defines this
industry as including ``establishments primarily engaged in providing
other information services (except news syndicates, libraries,
archives, Internet publishing and broadcasting, and Web search
portals).'' Our action pertains to interconnected VoIP services, which
could be provided by entities that provide other services such as
email, online gaming, web browsing, video conferencing, instant
messaging, and other, similar IP-enabled services. The SBA has
developed a small business size standard for this category; that size
standard is $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 $5.0 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.
E. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
50. In this Public Notice, the Bureau seeks public comment on
procedures for implementing Connect America Phase II. Certain proposals
could result in additional reporting requirements.
51. If the Bureau implements the Phase II challenge process
articulated above, commenters, including small entities, wishing to
participate would be required to comply with the listed reporting and
evidentiary standards. This includes filing a challenge along with
supporting evidence and serving a copy of the challenge on any
challenged party within a specified timeframe. Similarly, if the Bureau
implements the proposed statewide commitment process, any small entity
that is either accepting or declining a statewide commitment would be
subject to additional reporting requirements.
F. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
52. 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.''
53. The Public Notice seeks comment from all interested parties.
The Commission is aware that some of the proposals under consideration
may impact small entities. Small entities are encouraged to bring to
the Commission's attention any specific concerns they may have with the
proposals outlined in the Public Notice, and the Commission will
consider alternatives that reduce the burden on small entities.
54. The Commission expects to consider the economic impact on small
entities, as identified in comments filed in response to the Public
Notice, in reaching its final conclusions and taking action in this
proceeding. The reporting requirements in the Public Notice could have
an impact on both small and large entities. The Commission believes
that any impact of such requirements is outweighed by the accompanying
public benefits. Further, these requirements are necessary to ensure
that the statutory goals of Section 254 of the Act are met without
waste, fraud, or abuse.
55. In the Public Notice, the Commission seeks comment on several
issues and measures that may apply to small entities in a unique
fashion. Small entities may be more likely to face challenges to their
service areas, and thus be required to comply with the reporting
requirements above in order to have their rebuttals considered. The
Bureau will consider comments from small entities as to whether a
different standard should apply.
G. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
56. None.
H. Initial Paperwork Reduction Act of 1995 Analysis
57. This document does not contain proposed information collection
requirements subject to the Paperwork Reduction Act of 1995, Public Law
104-13. In addition, therefore, it does not contain any proposed
information collection burden for small business concerns with fewer
than 25 employees, pursuant to the Small Business Paperwork Relief Act
of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).
I. Ex Parte Presentations
58. Permit-But-Disclose. The proceeding this Public 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 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 section
1.1206(b). In proceedings governed by rule section 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.
Federal Communications Commission.
Trent B. Harkrader,
Division Chief, Telecommunications Access Policy Division, Wireline
Competition Bureau.
[FR Doc. 2013-01048 Filed 1-17-13; 8:45 am]
BILLING CODE 6712-01-P