[Federal Register Volume 78, Number 78 (Tuesday, April 23, 2013)]
[Proposed Rules]
[Pages 23877-23882]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-09421]
[[Page 23877]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[CC Docket No. 02-6, GN Docket No. 09-51; DA 13-592]
Schools and Libraries Universal Service Support Mechanism and A
National Broadband Plan for Our Future
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) seeks comment on a proposal to clarify the schools and
libraries universal service support program (E-rate program)
requirements for bundling devices, equipment and services that are
ineligible for E-rate support. Under this proposal, beginning in
funding year 2014, service providers may no longer offer bundled
ineligible components as E-rate eligible even if they determine the
bundled offering falls within the scope of the Gift Rule Clarification
Order.
DATES: Comments are due on or before May 23, 2013 and reply comments
are due on June 7, 2013.
ADDRESSES: You may submit comments, identified by CC Docket No. 02-6,
GN Docket No. 09-51; DA 13-592, 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://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: Bryan Boyle or Cara Voth, Wireline
Competition Bureau, (202) 418-7400 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Public Notice in CC Docket No. 02-6, GN Docket No. 09-51, and DA 13-
592, released April 9, 2013. 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,
47 CFR 1.415, 1.419, interested parties may file comments and reply
comments on or before the dates indicated on the first page of this
document. Comments may be filed using the Commission's Electronic
Comment Filing System (ECFS). See Electronic Filing of Documents in
Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
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.
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.
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.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street SW., Washington DC 20554.
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).
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 Bryan P. Boyle,
Telecommunications Access Policy Division, Wireline Competition Bureau,
445 12th Street SW., Room 6-A100, Washington, DC 20554; email:
[email protected].
I. Introduction
1. In the Public Notice, the Wireline Competition Bureau (Bureau)
seeks comment on a proposal to clarify the schools and libraries
universal service support program (informally known as the E-rate
program) requirements for bundling devices, equipment and services that
are ineligible for E-rate support (``ineligible components'') with E-
rate eligible services and products. In 2012, the Bureau sought comment
on a petition filed by the State E-rate Coordinators Alliance (SECA)
seeking clarification of how the Commission's rules requiring cost
allocation of ineligible components aligns with language in the
Bureau's 2010 Gift Rule Clarification Order (Order) (DA 10-2355) that
allowed, under limited circumstances, the bundling of ineligible end-
user devices and equipment without cost allocation. Having considered
the comments filed in response to the SECA Petition Public Notice, the
Bureau now proposes and seeks comment on additional clarifications to
remove any potential uncertainty regarding the Commission's requirement
for applicants to cost allocate ineligible components when those
ineligible components are bundled with eligible services.
II. Discussion
2. Based on several unexpected issues that have arisen since the
Order was released, we have determined that it may be in the best
interest of E-rate applicants, service providers, and the public, for
the Bureau to interpret the Commission's rules regarding bundled
ineligible components differently than was reflected in the Order.
Specifically, we propose to clarify that beginning with applications
seeking discounts for E-rate funding year 2014, any ineligible
components must be cost allocated, even if bundled with E-rate eligible
services and offered to the public or some class of users. As further
described
[[Page 23878]]
herein, we seek comment on this proposal.
A. Requirements for Bundled Ineligible Components
3. We propose that, beginning in funding year 2014, service
providers may no longer offer bundled ineligible components as E-rate
eligible even if they determine the bundled offering falls within the
scope of the Order. E-rate applicants may seek E-rate funding for the
eligible services portion of any bundled offering but must provide a
cost allocation for any ineligible components including, but not
limited to, telephone handsets, computers, cell phones, and other
components. We make this proposal out of our concern that the Order
language that allowed, under limited circumstances, an exemption of our
cost allocation requirements, may lead to unintended consequences. We
are persuaded by those interested parties who have expressed concern
that an open-ended interpretation and widespread use and expansion of
this exception could lead to further strain on the E-rate fund, which
is capped and already over-subscribed. Moreover, the out-of-pocket
expenses at issue are for ineligible components that recipients have
always understood to be ineligible for E-rate support. Additionally, to
the extent that the real cost to the provider of the ``free'' or
reduced price ineligible component results in a more expensive bundle,
the money saved by not paying for the entire bundle will result in more
funds being available to other E-rate recipients for E-rate eligible
services. We seek further comment on these concerns and related
matters.
4. We make this proposal primarily because the record developed on
this issue thus far demonstrates a lack of clarity about the rules
regarding cost allocation for bundled ineligible components. We are
also not persuaded that the clarifications suggested by stakeholders
would be effective because those suggestions could result in
excessively burdensome procedures for applicants, service providers and
the administrator of the E-rate program, USAC. For example, SECA's
proposals and other potential outcomes that include procedures to
determine which bundled offerings qualify for an exemption from cost
allocation are likely to be administratively unworkable and ultimately
costly for the E-rate program. Also, assigning a specific measurement
as a maximum threshold for a bundled ineligible component, such as a
percentage of a contract price or a specific dollar amount, as at least
one commenter recommends, could in turn encourage recipients to set
that dollar amount as a goal for spending or might prompt service
providers to price equipment just under that maximum. This could
further deplete funds, and could have other unintended negative
consequences on participant purchasing decisions. Finally, determining
whether a bundled service offering is a commercially common practice
within the industry, and not a unique offering of an individual service
provider, and that the bundled arrangement is currently available to
the public and not just to a designated class of subscribers, would
require both USAC and ultimately the Commission to perform analysis of
individual service provider offerings on a case-by-case basis. We agree
that it would be difficult to administer this exemption on a consistent
basis without posing a drain on E-rate resources, because it could
require additional personnel and market trend analysis that USAC is not
prepared for or structured to perform. We seek comment on whether
putting measurements and procedures in place to implement the bundling
exemption in the Order will cost more to the program than any savings
that might be gained by some applicants if we continue to allow the
exemption.
5. We also seek comment on any alternatives to our proposal. We ask
commenters that support our proposal to provide a specific rationale
for their position. To the extent commenters believe that other
interpretations would better serve the Commission's goals, including
other proposals that might improve program efficiency while protecting
E-rate funds, commenters should provide detailed descriptions of their
proposals in their comments. We also welcome suggested alternatives
that minimize the impact of these proposals on small businesses as well
as comments regarding the cost and benefits of implementing our
proposal.
B. Cost Allocation Procedures
6. We considered as part of this proposal the likely impact on
applicants and we do not anticipate it will cause an unreasonable
burden. E-rate program participants have always been required to detail
the costs of ineligible components and our proposal would merely
require them to apply this requirement to any bundled ineligible
components they may have believed to fall within the purview of the
Order. Although this may increase the amount of time applicants spend
on their applications, we do not believe that this increase will be
significant. We recognize, however, that applicants may desire
additional guidance on how to best derive the costs of ineligible end-
user devices. For example, for situations where component costs are not
easily obtained and applicants must rely on their service providers for
cost allocation percentages, how can applicants confirm such
percentages? We seek comment on whether we should further clarify our
current standard for cost allocations to provide additional guidance
concerning end-user equipment. We also seek comment whether there are
additional ways the Commission could reduce the burden on E-rate
recipients that are required to cost allocate bundled components that
they may have believed to be exempt from cost allocation in more recent
funding years.
C. Ancillary Components
7. Finally, our proposal addresses only the cost allocation
language in the Order pertaining to the treatment of ineligible
components and does not purport to alter the Commission's cost
allocation rule, 47 CFR 54.504(e). Other than the Order language, the
only existing exception to the cost allocation rules is the exception
for ancillary components. An insignificant and strictly ``ancillary''
component can be bundled into a much broader product or service without
cost allocation if the ineligible component is ancillary to the
principle use of the eligible component, and is the most cost-effective
means of receiving the eligible component functionality. In order for
an ineligible component to be ancillary, however, its price cannot be
determined separately and independently from the price of the eligible
components. SECA asserts that in addition to the Order language, the
rules concerning ancillary components may lack clarity and should be
addressed by the Bureau. Therefore, we seek comment on whether it is
necessary to make changes and, if so, what clarifications could be made
to ensure that ineligible components are not bundled under the guise of
being ancillary to a much broader product or service. For example,
under what circumstances would it be appropriate for an applicant or
service provider to assert that a separate piece of equipment, such as
a telephone handset, cell phone or tablet, is ancillary to the eligible
service it is paired with? Because their prices can almost always be
determined independent of any eligible components, we do not think end-
user devices could ever be considered ancillary to the services with
which they are paired. We seek comment on this position.
[[Page 23879]]
III. Procedural Matters
A. Initial Regulatory Flexibility Analysis
8. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared its Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on a substantial number of small entities by the 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).
B. Need for, and Objectives of, the Proposed Rules
9. The public notice seeks comment on requirements that apply when
service providers seek to bundle devices, equipment and services that
are ineligible for E-rate support with E-rate eligible services and
products. In the public notice, we propose to clarify that beginning
with applications seeking discounts for E-rate fund year 2014, any
ineligible components must be cost allocated, even if bundled with E-
rate eligible services and offered to the public or some class of
users. The Bureau's objective for the proposed rule is to provide
clarity to E-rate recipients and service providers and stabilize fund
expenditures. The current requirement as interpreted in the Order could
further strain the E-rate program because it permits E-rate funding to
pay for ineligible components and also lacks sufficient clarity to be
interpreted on a consistent and fair basis in the marketplace. This
Public Notice seeks comment on the Commission's definition of ancillary
services and its relation to E-rate offerings with bundled ineligible
components.
10. The prudent use of limited E-rate funding and clarity about E-
rate rules are important to the long-term efficacy of the fund. The
proposal contained in this public notice will help to achieve the
Commission's goal of maintaining fund solvency and providing clear
rules to E-rate recipients.
C. Legal Basis
11. The legal basis for any action that may be taken pursuant to
the public notice is contained in sections 1 through 4, 201-205, 254,
303(r), and 403 of the Communications Act of 1934, 47 U.S.C. 151
through 154, 201 through 205, 254, 303(r), and 403.
D. Description and Estimate of the Number of Small Entities To Which
the Proposed Rules May Apply
12. 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 that: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the Small Business
Administration (SBA). Nationwide, there are a total of approximately
27.5 million small businesses, according to the SBA. A ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
13. Nationwide, as of 2002, there were approximately 1.6 million
small organizations. The term ``small governmental jurisdiction'' is
defined generally as ``governments of cities, towns, townships,
villages, school districts, or special districts, with a population of
less than fifty thousand.'' Census Bureau data for 2002 indicate that
there were 87,525 local governmental jurisdictions in the United
States. We estimate that, of this total, 84,377 entities were ``small
governmental jurisdictions.'' Thus, we estimate that most governmental
jurisdictions are small.
14. Small entities potentially affected by the proposals herein
include eligible schools and libraries and the eligible service
providers offering them discounted services.
15. Schools and Libraries. As noted, ``small entity'' includes non-
profit and small government entities. Under the schools and libraries
universal service support mechanism, which provides support for
elementary and secondary schools and libraries, an elementary school is
generally ``a non-profit institutional day or residential school that
provides elementary education, as determined under state law.'' A
secondary school is generally defined as ``a non-profit institutional
day or residential school that provides secondary education, as
determined under state law,'' and not offering education beyond grade
12. For-profit schools and libraries, and schools and libraries with
endowments in excess of $50,000,000, are not eligible to receive
discounts under the program, nor are libraries whose budgets are not
completely separate from any schools. Certain other statutory
definitions apply as well. The SBA has defined for-profit, elementary
and secondary schools and libraries having $6 million or less in annual
receipts as small entities. In funding year 2007 approximately 105,500
schools and 10,950 libraries received funding under the schools and
libraries universal service mechanism. Although we are unable to
estimate with precision the number of these entities that would qualify
as small entities under SBA's size standard, we estimate that fewer
than 105,500 schools and 10,950 libraries might be affected annually by
our action, under current operation of the program.
16. Telecommunications Service Providers. First, neither the
Commission nor the SBA has developed a size standard for small
incumbent local exchange services. The closest 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 incumbent carriers reported that
they were engaged in the provision of local exchange services. Of these
1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and
301 have more than 1,500 employees. Thus, under this category and
associated small business size standard, we estimate that the majority
of entities are small. We have included small incumbent local exchange
carriers in this RFA analysis. 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 local exchange carriers are not dominant in their field of
operation because any such dominance is not ``national'' in scope. We
have therefore included small incumbent carriers in this RFA analysis,
although we emphasize that this RFA action has no effect on the
Commission's analyses and determinations in other, non-RFA contexts.
17. Second, neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to providers of
interexchange services (IXCs). The closest applicable definition under
the SBA rules is for wired telecommunications carriers. This
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provides that a wired telecommunications carrier is a small entity if
it employs no more than 1,500 employees. According to the Commission's
2010 Trends Report, rel. Sept. 2012, 359 companies reported that they
were engaged in the provision of interexchange services. Of these 300
IXCs, an estimated 317 have 1,500 or few employees and 42 have more
than 1,500 employees. Consequently, the Commission estimates that most
providers of interexchange services are small businesses.
18. Third, neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to competitive
access services providers (CAPs). The closest applicable definition
under the SBA rules is for wired telecommunications carriers. This
provides that a wired telecommunications carrier is a small entity if
it employs no more than 1,500 employees. According to the 2010 Trends
Report, 1,442 CAPs and competitive local exchange carriers (competitive
LECs) reported that they were engaged in the provision of competitive
local exchange services. Of these 1,442 CAPs and competitive LECs, an
estimated 1,256 have 1,500 or fewer employees and 186 have more than
1,500 employees. Consequently, the Commission estimates that most
providers of competitive exchange services are small businesses.
19. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Prior to that time, such firms were
within the now-superseded categories of ``Paging'' and ``Cellular and
Other Wireless Telecommunications.'' Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. Because Census Bureau data are not yet
available for the new category, we will estimate small business
prevalence using the prior categories and associated data. For the
category of Paging, data for 2002 show that there were 807 firms that
operated for the entire year. Of this total, 804 firms had employment
of 999 or fewer employees, and three firms had employment of 1,000
employees or more. For the category of Cellular and Other Wireless
Telecommunications, data for 2002 show that there were 1,397 firms that
operated for the entire year. Of this total, 1,378 firms had employment
of 999 or fewer employees, and 19 firms had employment of 1,000
employees or more. Thus, we estimate that the majority of wireless
firms are small.
20. Wireless telephony includes cellular, personal communications
services, and specialized mobile radio telephony carriers. As noted,
the SBA has developed a small business size standard for Wireless
Telecommunications Carriers (except Satellite). Under the SBA small
business size standard, a business is small if it has 1,500 or fewer
employees. According to the 2010 Trends Report, 413 carriers reported
that they were engaged in wireless telephony. Of these, an estimated
261 have 1,500 or fewer employees and 152 have more than 1,500
employees. We have estimated that 261 of these are small under the SBA
small business size standard.
21. Common Carrier Paging. As noted, since 2007 the Census Bureau
has placed paging providers within the broad economic census category
of Wireless Telecommunications Carriers (except Satellite). Prior to
that time, such firms were within the now-superseded category of
``Paging.'' Under the present and prior categories, the SBA has deemed
a wireless business to be small if it has 1,500 or fewer employees.
Because Census Bureau data are not yet available for the new category,
we will estimate small business prevalence using the prior category and
associated data. The data for 2002 show that there were 807 firms that
operated for the entire year. Of this total, 804 firms had employment
of 999 or fewer employees, and three firms had employment of 1,000
employees or more. Thus, we estimate that the majority of paging firms
are small.
22. In addition, in the Paging Second Report and Order, 12 FCC Rcd
2732, rel. Feb. 24, 1997, the Commission adopted a size standard for
``small businesses'' for purposes of determining their eligibility for
special provisions such as bidding credits and installment payments. A
small business is an entity that, together with its affiliates and
controlling principals, has average gross revenues not exceeding $15
million for the preceding three years. The SBA has approved this
definition. An initial auction of Metropolitan Economic Area (``MEA'')
licenses was conducted in the year 2000. Of the 2,499 licenses
auctioned, 985 were sold. Fifty-seven companies claiming small business
status won 440 licenses. A subsequent auction of MEA and Economic Area
(``EA'') licenses was held in the year 2001. Of the 15,514 licenses
auctioned, 5,323 were sold. One hundred thirty-two companies claiming
small business status purchased 3,724 licenses. A third auction,
consisting of 8,874 licenses in each of 175 EAs and 1,328 licenses in
all but three of the 51 MEAs, was held in 2003. Seventy-seven bidders
claiming small or very small business status won 2,093 licenses.
23. Currently, there are approximately 74,000 Common Carrier Paging
licenses. According to the most recent Trends in Telephone Service,
rel. Sept. 2012, 291 carriers reported that they were engaged in the
provision of ``paging and messaging'' services. Of these, an estimated
289 have 1,500 or fewer employees and two have more than 1,500
employees. We estimate that the majority of common carrier paging
providers would qualify as small entities under the SBA definition.
24. Internet Service Providers. The 2007 Economic Census places
these firms, whose services might include voice over Internet protocol
(VoIP), in either of two categories, depending on whether the service
is provided over the provider's own telecommunications facilities
(e.g., cable and DSL ISPs), or over client-supplied telecommunications
connections (e.g., dial-up ISPs). The former are within the category of
Wired Telecommunications Carriers, which has an SBA small business size
standard of 1,500 or fewer employees. The latter are within the
category of All Other Telecommunications, which has a size standard of
annual receipts of $25 million or less. The most current Census Bureau
data for all such firms, however, are the 2002 data for the previous
census category called Internet Service Providers. That category had a
small business size standard of $21 million or less in annual receipts,
which was revised in late 2005 to $23 million. The 2002 data show that
there were 2,529 such firms that operated for the entire year. Of
those, 2,437 firms had annual receipts of under $10 million, and an
additional 47 firms had receipts of between $10 million and
$24,999,999. Consequently, we estimate that the majority of ISP firms
are small entities.
25. Vendors of Internal Connections: Telephone Apparatus
Manufacturing. The Census Bureau defines this category as follows:
``This industry comprises establishments primarily engaged in
manufacturing wire telephone and data communications equipment. These
products may be standalone or board-level components of a larger
system. Examples of products made by these establishments are central
office switching equipment, cordless telephones (except cellular), PBX
equipment, telephones, telephone answering machines, LAN modems, multi-
user modems, and other data communications equipment, such as bridges,
routers, and gateways.'' The SBA has developed a small business
[[Page 23881]]
size standard for Telephone Apparatus Manufacturing, which is: all such
firms having 1,000 or fewer employees. According to Census Bureau data
for 2002, there were a total of 518 establishments in this category
that operated for the entire year. Of this total, 511 had employment of
under 1,000, and an additional seven had employment of 1,000 to 2,499.
Thus, under this size standard, the majority of firms can be considered
small.
26. Vendors of Internal Connections: Radio and Television
Broadcasting and Wireless Communications Equipment Manufacturing. The
Census Bureau defines this category as follows: ``This industry
comprises establishments primarily engaged in manufacturing radio and
television broadcast and wireless communications equipment. Examples of
products made by these establishments are: transmitting and receiving
antennas, cable television equipment, GPS equipment, pagers, cellular
phones, mobile communications equipment, and radio and television
studio and broadcasting equipment.'' The SBA has developed a small
business size standard for firms in this category, which is: all such
firms having 750 or fewer employees. According to Census Bureau data
for 2002, there were a total of 1,041 establishments in this category
that operated for the entire year. Of this total, 1,010 had employment
of under 500, and an additional 13 had employment of 500 to 999. Thus,
under this size standard, the majority of firms can be considered
small.
27. Vendors of Internal Connections: Other Communications Equipment
Manufacturing. The Census Bureau defines this category as follows:
``This industry comprises establishments primarily engaged in
manufacturing communications equipment (except telephone apparatus, and
radio and television broadcast, and wireless communications
equipment).'' The SBA has developed a small business size standard for
Other Communications Equipment Manufacturing, which is having 750 or
fewer employees. According to Census Bureau data for 2002, there were a
total of 503 establishments in this category that operated for the
entire year. Of this total, 493 had employment of under 500, and an
additional 7 had employment of 500 to 999. Thus, under this size
standard, the majority of firms can be considered small.
E. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
28. In the Public Notice, the Bureau seeks public comment on
proposals for cost allocating bundled ineligible components. The
proposed rule could result in minimal additional reporting
requirements.
29. These requirements are already part of 47 CFR 54.504(e) which
require a clear delineation of eligible and ineligible services that
are included on an application requesting E-rate discounts. The result
of the Public Notice could be that small entities that had not been
cost allocating certain bundled ineligible components per the Order
would again be required to comply with 47 CFR 54.504(e) requirements
for cost allocating these components. Small entities that are service
providers and vendors in the E-rate program would also be required to
reexamine offerings in accordance to any changed requirements.
F. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
30. 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 rule 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.''
31. The proposed rulemaking could impose minimal additional burden
on small entities. The only additional administrative burden the
proposed rulemaking could impose on small entities, however, would be
requiring them to cost allocate ineligible components that they may
have presumed were exempted from the cost allocation requirements per
the Order. Cost allocation requires determining the costs of eligible
and ineligible components and reporting the delineation of those costs
in a request for E-rate discounts on the FCC Form 471. E-rate
recipients had been required to cost allocate ineligible components
bundled with eligible services prior to the Order, and are already
generally required to cost allocate all ineligible components. Thus,
this rulemaking merely removes a short-term exemption that may have
been applicable to certain equipment that met the limited
qualifications outlined in the Order.
G. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
32. None.
H. Initial Paperwork Reduction Act of 1995 Analysis
33. This document seeks comment on a potential new or revised
information collection requirement. If the Commission adopts any new or
revised information collection requirement, the Commission will publish
a separate notice in the Federal Register inviting the public to
comment on the requirement, as required by the Paperwork Reduction Act
of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). 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 Commission seeks specific comment on how
it might ``further reduce the information collection burden for small
business concerns with fewer than 25 employees.''
I. Ex Parte Presentations
34. 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, 47 CFR 1.1200 through
1.1216. 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
[[Page 23882]]
shown or given to Commission staff during ex parte meetings are deemed
to be written ex parte presentations and must be filed consistent with
Sec. 1.1206(b) of the Commission's rules. In proceedings governed by
Sec. 1.49(f) of the Commission's rules 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.
Kimberly Scardino,
Division Chief, Telecommunications Access Policy Division, Wireline
Competition Bureau.
[FR Doc. 2013-09421 Filed 4-22-13; 8:45 am]
BILLING CODE 6712-01-P