[Federal Register Volume 79, Number 237 (Wednesday, December 10, 2014)]
[Rules and Regulations]
[Pages 73227-73237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28898]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 13-39; FCC 14-175]


Rural Call Completion

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document affirms the Commission's commitment to ensuring 
that high quality telephone service must be available to all Americans. 
In the underlying Order, the Commission established rules to combat 
extensive problems with successfully completing calls to rural areas, 
and created a framework to improve the ability to monitor call problems 
and take appropriate enforcement action. In the Order on 
Reconsideration, the Commission denies several petitions for 
reconsideration that, if granted, would impair the Commission's ability 
to monitor, and take enforcement action against, call completion 
problems. The Commission does, however, grant one petition for 
reconsideration because the Commission finds that modifying its 
original determination will significantly lower providers' compliance 
costs and burdens without impairing the Commission's ability to obtain 
reliable and extensive information about rural call completion 
problems.

DATES: Effective January 9, 2015, except for amendments to Sec. Sec.  
64.2101, 64.2103, and 64.2105, which contain new or modified 
information collection requirements that will not be effective until 
approved by the Office of Management and Budget. The Federal 
Communications Commission will publish a document in the Federal 
Register announcing the effective date.

ADDRESSES: Federal Communications Commission, 445 12th Street SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Claude Aiken, Wireline Competition 
Bureau, Competition Policy Division, (202) 418-1580, or send an email 
to [email protected]

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
on Reconsideration in WC Docket No. 13-39, adopted and released 
November 13, 2014. The full text of this document is available for 
public inspection during regular 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

[[Page 73228]]

Commission's duplicating contractor, Best Copy and Printing, Inc., 445 
12th Street SW., Room CY-B402, Washington, DC 20554, telephone (800) 
378-3160 or (202) 863-2893, facsimile (202) 863-2898, or via the 
Internet at http://www.bcpiweb.com. It is available on the Commission's 
Web site at http://www.fcc.gov.

Summary

    1. In the Order on Reconsideration, October 28, 2013, the 
Commission adopted the Rural Call Completion Order, WC Docket No. 13-
39, Report and Order and Further Notice of Proposed Rulemaking, 28 FCC 
Rcd 16154 (2013), Rural Call Completion Order or (Order). That Order 
established rules to combat extensive problems with successfully 
completing calls to rural areas, and created a framework to improve the 
ability to monitor call problems and take appropriate enforcement 
action. The Rural Call Completion Order reflected the Commission's 
commitment to ensuring that high quality telephone service must be 
available to all Americans. In this Order on Reconsideration, we affirm 
that commitment. We deny several petitions for reconsideration that, if 
granted, would impair the Commission's ability to monitor, and take 
enforcement action against, call completion problems. We do, however, 
grant one petition for reconsideration because we find that modifying 
our original determination will significantly lower providers' 
compliance costs and burdens without impairing the Commission's ability 
to obtain reliable and extensive information about rural call 
completion problems.
    2. Specifically, we grant the petition filed by USTelecom and ITTA. 
In doing so, we modify rules adopted in the Order so that the 
recordkeeping, retention, and reporting requirements adopted in the 
Order do not apply to a limited subset of calls: intraLATA toll calls 
that are carried entirely over the covered provider's network, and 
intraLATA toll calls that are handed off by the covered provider 
directly to the terminating local exchange carrier (LEC) or to the 
tandem that the terminating LEC's end office subtends. The decision to 
grant reconsideration reflects a focused analysis of the costs of 
applying the rules to this limited set of traffic, the fact that this 
traffic represents a small portion of total toll traffic, and the 
modest incremental benefit that such data would likely yield.
    3. We deny the petitions for reconsideration filed by Carolina West 
and COMPTEL, deny and dismiss the petition for reconsideration filed by 
Sprint Corporation, as described below, and dismiss the petition for 
reconsideration filed by Transcom Enhanced Services, Inc.

I. Background

    4. In a February 2013 Notice of Proposed Rulemaking (NPRM), the 
Commission sought comment on how to address rural call completion 
issues and sought comment on proposed rules. In October 2013, the 
Commission adopted recordkeeping, retention, reporting, and ring 
signaling rules designed to help the Commission and communications 
providers ensure that long-distance calls to rural Americans are 
completed.
    5. The recording, retention, and reporting rules we adopted in the 
Rural Call Completion Order apply to providers of long-distance voice 
service that make the initial long-distance call path choice for more 
than 100,000 domestic retail subscriber lines, counting the total of 
all business and residential fixed subscriber lines and mobile phones 
and aggregated over all of the providers' affiliates. These ``covered 
providers'' must record and retain specific information about each call 
attempt to a rural operating company number (OCN) from subscriber lines 
for which the providers make the initial long-distance call path 
choice. This information must be stored in a readily retrievable form 
and must include the six most recent complete calendar months. Covered 
providers must submit to the Commission, on a quarterly schedule, a 
certified report containing information on long-distance call attempts 
from subscriber lines for which the covered providers make the initial 
call path choice. The reports must separate out call attempts by month. 
The Commission adopted a safe harbor to reduce certain qualifying 
providers' reporting obligations and reduce their data retention 
obligations from six months to three months. Further, the Commission 
adopted a process enabling covered providers that have taken additional 
steps, beyond the safe harbor requirements, to ensure that calls to 
rural areas are being completed to receive a waiver of the data 
reporting and retention obligations. The Commission also adopted a rule 
prohibiting false audible ringing that applies to all originating long-
distance voice service providers and intermediate providers. This ring 
signaling rule prohibits providers from causing audible ringing to be 
sent to the caller before the terminating provider has signaled that 
the called party is being alerted to the existence of an inbound call.
    6. The Commission received five petitions for reconsideration of 
portions of the Rural Call Completion Order. Various parties filed 
comments in support of or in opposition to the petitions.

II. Discussion

A. USTelecom/ITTA Petition: IntraLATA Toll Calls

    7. The requirements described above apply to ``intraLATA toll 
traffic and interLATA traffic carried on [the covered provider's] own 
network and handed off directly by the originating provider to the 
terminating LEC.'' The Commission initially declined to exclude this 
traffic, ``[e]ven if [such traffic] would incur fewer call completion 
issues,'' because data on this traffic would ``provide[] an important 
benchmark for issue-free performance,'' especially ``where a provider 
may be using both on-net and off-net routes to deliver calls to the 
same terminating provider.
    8. In their petition for reconsideration, USTelecom and ITTA 
(USTelecom/ITTA or Petitioners) request that the Commission reconsider 
the decision to require recordkeeping, retention, and reporting of 
``on-network'' intraLATA interexchange/toll calls. Specifically, 
Petitioners seek reconsideration of application of the recordkeeping, 
retention, and reporting rules adopted in the Order for ``intraLATA 
interexchange/toll calls that are either carried entirely over the 
originating LEC's network (that is, originated and terminated by the 
same carrier) or handed off by the originating LEC directly to the 
terminating LEC.''
    9. We remain committed to both the goals of the Rural Call 
Completion Order, and the rules the Commission adopted therein to 
identify and address rural call completion and call quality problems. 
Excluding on-net intraLATA toll traffic from the recordkeeping, 
retention, and reporting requirements will reduce the burden of 
compliance without undermining these goals. Based on new information 
that was not available to the Commission when the Rural Call Completion 
Order was adopted, we conclude that the burdens associated with 
applying our rules to on-net intraLATA toll calls exceed the marginal 
benefit of obtaining this limited incremental information. Accordingly, 
we grant USTelecom/ITTA's petition for reconsideration.
    10. Excluding on-net intraLATA toll traffic from the scope of these 
rules will not undermine the goals of the Rural Call Completion Order 
and will not impair the Commission's ability to

[[Page 73229]]

monitor and address problems associated with completing calls to rural 
areas. First, the Commission will continue to have access to 
information about on-net interLATA toll traffic, as well as all off-net 
traffic, and this traffic comprises the significant majority of all 
calls. Petitioners assert that the volume of on-network intraLATA toll 
traffic is relatively small--less than three percent of the total 
traffic on the network of one of USTelecom's largest members. 
CenturyLink estimates that less than one percent of its traffic is on-
net intraLATA toll traffic. Although the data samples available to 
establish on-net delivery benchmarks will be slightly reduced by 
removing the intraLATA toll component, we are persuaded both by new 
evidence from Petitioners and supporting commenters and by the nature 
of these on-net intraLATA toll calls that on-net delivery benchmarks 
will not significantly change. Covered providers remain obligated to 
follow our recordkeeping, retention, and reporting rules for all 
interLATA and off-net intraLATA toll traffic. Second, the Commission 
will still be able to use on-net interLATA traffic as a benchmark for 
assessing off-net traffic performance, which was the stated reason for 
requiring providers to record, retain and report on-net traffic data. 
Because the vast majority of on-net long distance traffic is interLATA 
traffic, the Commission will continue to have an effective benchmark by 
which to compare off-net long distance call failure rates for a 
particular carrier.
    11. The cost of including on-net intraLATA toll traffic in the 
recording and reporting requirements exceeds the limited incremental 
benefit from collecting this data. After analyzing the requirements of 
the Rural Call Completion Order, USTelecom/ITTA and Verizon provided 
new information regarding the compliance costs of applying the 
recordkeeping, retention, and reporting obligations to on-net intraLATA 
toll traffic and the compliance cost reductions associated with 
excluding on-net intraLATA toll traffic from these requirements. 
Petitioners explain that their members currently lack the ability to 
capture call attempt information for this traffic because their members 
generally only collect data for billable calls and consequently had no 
reason to record this information. While this category of traffic 
reportedly represents a relatively small percentage of Petitioner's 
traffic, Petitioners estimate that, industry-wide, implementing such 
capability into legacy networks to comply with recordkeeping, 
retention, and reporting requirements for this traffic would take ``at 
least 18 to 24 months and cost in excess of $100 million.'' In comments 
supporting the USTelecom/ITTA Petition, Verizon states that it would 
cost in excess of $20 million and take two years to collect and report 
data for intraLATA interexchange/toll traffic. As explained above, the 
Commission can establish an on-net benchmark against which to compare 
off-net performance without on-net intraLATA toll traffic data. 
Therefore, we find that at this time the compliance costs for reporting 
information on this small category of calls are not justified. We are 
committed to balancing the costs and benefits of regulatory obligations 
in the public interest.
    12. The Commission considered and denied a broader request to 
exclude both intraLATA and interLATA on-net information in the Rural 
Call Completion Order; USTelecom/ITTA's reconsideration request is much 
narrower and does not seek exclusion of on-net interLATA call data. 
Moreover, when it made that decision, the Commission did not have the 
benefit of data regarding the costs and benefits specifically 
associated with retaining and reporting on on-net intraLATA toll 
traffic. As a result, the new evidence regarding both: (1) The 
compliance cost reductions associated with excluding on-net intraLATA 
toll traffic from our rules; and (2) the fact that on-net intraLATA 
toll traffic is only a small fraction of on-network traffic, are 
relevant to our decision to reconsider and we find that consideration 
of this data is in the public interest.
    13. Petitioners also assert that on-net intraLATA toll traffic is 
unlikely to be a source of call completion problems. Petitioners report 
that the on-network intraLATA toll traffic for which they seek relief 
in their petition does not involve the use of intermediate providers 
and that, rather than having multiple carriers in the call completion 
path, these calls are typically carried by a single provider on its own 
network or are handed off directly to the terminating LEC. We need not 
and do not decide whether on-net traffic might ever present concerns 
about call quality or completion. Our decision to exclude on-network 
intraLATA toll traffic from our recordkeeping, retention, and reporting 
requirements reflects an overall balancing of the costs and benefits, 
including consideration of the small portion of traffic that is on-net 
intraLATA toll traffic. Moreover, our rules remain in effect for the 
remainder of covered provider traffic, which includes on-net interLATA 
toll traffic, as well as off-net intraLATA toll traffic and off-net 
interLATA traffic.
    14. We implement the exclusion discussed above by amending the 
recordkeeping, retention, and reporting rules adopted in the Order to 
exclude their applicability to intraLATA toll calls carried entirely 
over the covered provider's network or handed off by the covered 
provider directly to the terminating LEC or directly to the tandem 
switch serving the terminating LEC's end office. We also amend the 
definition of ``long-distance voice service'' in section 64.2101 of our 
rules to include intraLATA toll voice services. We make this amendment 
to harmonize the rule language with the Commission's intent expressed 
in the Order, where it defined ``long-distance voice service provider'' 
for purposes of the Order as any person engaged in the provision of 
specific voice services, including intraLATA toll voice services.
    15. Some entities argue that the Commission should not make these 
changes to its new call completion rules until it collects and analyzes 
a year's worth of call data or opens an inquiry into the matter. As 
explained above, the industry-wide costs of compliance are substantial, 
and exceed the potential value of the incremental data we would 
collect. A large portion of the costs associated with complying with 
the recordkeeping, retention and reporting would occur at the outset, 
because providers would have to develop and implement systems to 
collect this information. Having concluded that the potential value of 
the data is outweighed by the significant burden of compliance, we 
cannot conclude that such costs are justified on a one-time or short-
term basis. While we decline to impose the burden of collecting and 
reporting data on such traffic on a temporary basis, we can revisit 
this decision if evidence later suggests that on-net intraLATA calls to 
rural areas are not being completed properly. For example, we will 
continue to monitor information and complaints submitted about call 
completion problems and will be attentive to the jurisdictional nature 
about such complaints.
    16. All parties generally agree that any relief granted should be 
limited to calls carried on-network or handed off directly from the 
originating carrier to the terminating carrier. USTelecom/ITTA and 
Verizon assert that the relief should encompass calls delivered 
directly to the terminating tandem, as well as to the terminating 
carrier. USTelecom/ITTA and Verizon state that many rural LECs can only 
be reached through these tandems, and that covered providers have no 
involvement in the

[[Page 73230]]

selection or performance of these tandems. USTelecom/ITTA note that 
these tandems exist largely due to the legacy structure of the networks 
and are the equivalent of a direct network connection. They note that 
the Commission declined to count the tandem as an additional 
intermediate provider for purposes of safe harbor eligibility. The 
Rural Associations did not specifically address whether any relief 
granted on reconsideration should include calls delivered directly to 
the terminating tandem. We find Petitioner's arguments compelling and 
grant the request for relief from the recordkeeping, retention, and 
reporting requirements for intraLATA toll calls that are delivered by 
the covered provider directly to the tandem that the terminating LEC's 
end office subtends.
    17. The Rural Associations also assert that any relief should be 
limited to ``only the intraLATA traffic that is originated by the LEC's 
retail customers.'' The Rural Associations did not, however, provide 
any reasons for limiting relief to retail traffic. Verizon opposes such 
limitation, arguing that it ``has wholesale arrangements through which 
it provides intraLATA interexchange/toll service in the same manner as 
it carries traffic for its [retail] customers'' and that the same 
implementation obstacles exist for this traffic. In the absence of 
specific or substantiated arguments to support limiting relief to calls 
originated by retail customers, we decline to do so.

B. COMPTEL Petition: Smaller Covered Provider Exception

    18. COMPTEL seeks reconsideration of the smaller covered provider 
exception. As noted above, in the Order, the Commission concluded that 
it should require only providers of long-distance voice service that 
make the initial long-distance call path choice for more than 100,000 
domestic retail subscriber lines to comply with the recording, 
retention, and reporting rules. COMPTEL argues, on various grounds, 
that the Commission should reconsider this conclusion, so that more 
providers qualify for the smaller provider exception. For the reasons 
set forth below, we deny COMPTEL's Petition.
1. Administrative Procedure Act
    19. COMPTEL asserts that the Commission violated the Administrative 
Procedure Act (APA) because the Commission (1) did not provide an 
explanation for the change in the smaller covered provider exception 
from the proposal in the NPRM that referred to ``subscribers'' to the 
rule ultimately adopted that instead refers to ``subscriber lines,'' 
and (2) did not give adequate notice and opportunity to comment on the 
definition of smaller provider adopted in the Rural Call Completion 
Order. We find these arguments to be without merit.
    20. Reasoned Explanation. The rule that the Commission adopted to 
except smaller providers from recordkeeping and reporting requirements 
was reasonable, and the Commission's decision to base the exception on 
the number of a provider's subscriber lines for which the provider 
makes the initial long-distance call path choice, rather than the 
number of its subscribers, was also reasonable. The purpose of the 
exception, as COMPTEL recognized in its petition for reconsideration, 
was to exempt smaller providers from the record-keeping and reporting 
requirements. In the notice, the Commission asked commenters about ways 
to minimize burdens on smaller providers, ``without compromising the 
goals of [the] rules.'' The rule that the Commission selected was a 
reasonable means of achieving this balance. Although COMPTEL objects to 
the decision to adopt an exception based on the number of subscriber 
lines, it does not assert that the adoption of such an exception will 
compromise the Commission's goals when implementing these rules.
    21. Excepting providers on the basis of subscriber lines, rather 
than subscribers, is reasonably designed to minimize burdens on smaller 
providers without compromising the effectiveness of the rules. The 
number of lines better reflects a provider's size and share of traffic 
than does the number of subscribers. For example, a provider that 
serves a modest number of very large business customers (each with 
hundreds of subscriber lines) may handle a substantial portion of 
traffic to rural areas. Thus, excepting providers on the basis of 
subscribership would not have been as well suited, relative to an 
exclusion based on subscriber lines, to ensure that only smaller 
covered providers are subject to the exception. In addition, the 
Commission noted that the 100,000 subscriber-line threshold should 
capture as much as 95 percent of all callers. Thus, the exception will 
not compromise the effectiveness of the rules.
    22. Additionally, the use of ``subscriber lines'' is easier to 
administer than a subscriber-based exception would be. The Commission 
collects data, via FCC Form 477, on subscriber lines. The Commission 
does not routinely collect data that provides an equally reliable count 
of ``subscribers.'' By defining the smaller covered provider exception 
in terms consistent with the Commission's Form 477 collection of voice 
telephony data, the Commission will be able to verify that entities 
claiming the exception are in fact eligible for it.
    23. COMPTEL argues that far more smaller providers will be required 
to comply with the adopted recordkeeping, retention, and reporting 
requirements, and that compliance will be expensive and burdensome for 
providers to implement, especially smaller providers. We recognize 
that, as a result of the change from subscribers to subscriber lines, 
some additional providers will need to expend the resources necessary 
to comply with these rules. However, we find that the importance of 
obtaining the data necessary to address rural call completion problems 
and the benefits described above of the adopted exception outweigh the 
burden these providers will encounter. We note that only providers that 
actually make the initial call path choice for more than 100,000 
subscriber lines are required to comply with the rules. Additionally, 
in the Order, the Commission reduced the compliance burden, relative to 
the proposed rules, in a number of ways. We further reduce compliance 
burdens today by excluding intraLATA on-net toll traffic from the 
recordkeeping, retention, and reporting requirements. Finally, although 
COMPTEL argues that far more providers will be required to comply with 
the recordkeeping, retention, and reporting requirements as a result of 
the change from ``subscribers'' to ``subscriber lines'' we believe that 
the number of affected providers will be more modest. COMPTEL's 
assertion is premised on an erroneous interpretation of Paperwork 
Reduction Act of 1995 (PRA) filings. While suggesting that there could 
be more, COMPTEL has identified only four entities affected by this 
change.
    24. NPRM. COMPTEL alleges that the Commission's decision to exclude 
from the requirements providers that make the initial long-distance 
call path choice for 100,000 or fewer subscriber lines, rather than 
adopting the specific proposal set forth in the NPRM, failed to provide 
adequate notice and opportunity to comment. COMPTEL asserts that no 
commenter advocated adoption of a rule that defined smaller provider 
based on ``subscriber lines,'' and that far fewer providers are 
eligible for the exception as a result of the change.
    25. We disagree that the Commission failed to provide adequate 
notice and an opportunity to comment. We find that

[[Page 73231]]

the smaller covered provider exception adopted in the Order is a 
logical outgrowth of the smaller provider exception proposed in the 
NPRM and is well within the scope of the inquiry initiated by the NPRM. 
As discussed below, the Commission determined that a smaller covered 
provider exception, albeit a revised version of the originally proposed 
exception, is warranted.
    26. Section 553(b) and (c) of the APA requires agencies to give 
public notice of a proposed rulemaking that includes ``either the terms 
or substance of the proposed rule or a description of the subjects and 
issues involved'' and to give interested parties an opportunity to 
submit comments on the proposal. The notice ``need not specify every 
precise proposal which [the agency] may ultimately adopt as a rule''; 
it need only ``be sufficient to fairly apprise interested parties of 
the issues involved.'' In particular, the APA's notice requirements are 
satisfied where the final rule is a ``logical outgrowth'' of the 
actions proposed. As long as parties could have anticipated that the 
rule ultimately adopted was possible, it is considered a ``logical 
outgrowth'' of the original proposal, and there is no violation of the 
APA's notice requirements.
    27. The Commission provided the required notice by seeking comment 
on the proposed smaller covered provider exception. The Commission 
provided notice that it might exclude smaller providers, and proposed a 
threshold of 100,000 subscribers, but it also sought comment on whether 
the proposed exception would compromise the Commission's ability to 
monitor rural call completion problems. Among other things, the 
Commission explained that it was proposing rules to ``help [it] monitor 
originating providers' call-completion performance and ensure that 
telephone service to rural consumers is as reliable as service to the 
rest of the country.''
    28. We find that it is a logical outgrowth of such notice that the 
Commission would, and did, adopt a rule that represents a compromise 
position. Interested parties could reasonably anticipate that the 
Commission might consider the pros and cons of excluding smaller 
carriers and adopt a narrower exception than the one specifically 
proposed. Indeed, numerous parties responded to this opportunity to 
comment, some supporting the exception as proposed, some opposing any 
exception, and some arguing for a narrower exception. In fact, two 
commenters specifically noted that the Commission could define the 
smaller covered provider exception using lines. These comments support 
our conclusion that relying on subscriber lines rather than subscribers 
represents an adjustment that parties reasonably could have 
anticipated.
    29. As discussed above, beyond seeking comment on a proposed 
100,000 subscriber cut-off, the Commission gave notice that it might 
not exclude any providers, or might only exclude some different 
universe of providers. Commenters were on notice that any exclusion 
would be designed to ensure that it did not ``compromise the 
Commission's ability to monitor rural call completion problems 
effectively.'' In the Order, the Commission made clear that it wanted 
``a complete picture of the rural call completion problem'' in order to 
``address it effectively.'' The 100,000 subscriber line threshold 
ultimately adopted better ensures ``the Commission's ability to monitor 
rural call completion problems effectively'' than the exclusion 
proposed in the Notice because a subscriber line-based threshold is 
more verifiable and administrable than a subscriber-based threshold. 
Moreover, the exclusion reflects and reasonably balances the range of 
views in the record regarding the scope of any exclusion--including 
some advocating no exclusion at all.
    30. In short, the Notice contained sufficient notice to generate a 
full record on the smaller covered provider exception. The final rule, 
which reflects input from commenters, deviated from the proposal in the 
Notice only in ways specifically designed to ensure that the exemption 
did not ``compromise the Commission's ability to monitor rural call 
completion problems effectively.'' The exception adopted in the Order 
was thus a logical outgrowth of the original proposal in the Notice. 
There is no violation of the APA's notice requirements and thus, 
contrary to COMPTEL's assertion, no need for an additional round of 
comments on the smaller covered provider exception.
2. Regulatory Flexibility Act
    31. For many of the same reasons it challenged the Commission's 
decision to adopt a smaller covered provider exception based on 100,000 
subscriber lines instead of 100,000 subscribers, COMPTEL argues that 
the Commission failed to comply with section 604 of the Regulatory 
Flexibility Act. COMPTEL asserts that the FRFA attached to the Rural 
Call Completion Order did not include a statement of the factual, 
policy or legal reasons for selecting the 100,000 subscriber line 
threshold or explain why the 100,000 subscriber threshold proposed in 
the Notice was rejected. As discussed below, the FRFA complies with the 
Regulatory Flexibility Act.
    32. The Commission has complied with the Regulatory Flexibility 
Act, and COMPTEL's argument on this issue is without merit. We 
therefore deny COMPTEL's Petition. In the FRFA, the Commission 
specifically noted that ``[t]o the extent we received comments raising 
general small business concerns during this proceeding, those comments 
are discussed throughout the Order.'' Subsection E of the FRFA 
specifically addresses steps taken to minimize the significant economic 
impact on small entities, and references the smaller covered provider 
exception as one factor that reduces the economic impact of the rules 
on small entities.
    33. As addressed above, the Commission provided an explanation for 
the smaller covered provider exception adopted in the Order, and we 
respond to further relevant comments regarding that exception. The 
Commission noted that some commenters argued that the threshold should 
be lowered, that the 100,000 subscriber-line threshold should capture 
as much as 95 percent of all callers, and that many providers that have 
fewer than 100,000 subscriber lines would not be covered providers even 
without the smaller provider exception because they are reselling long-
distance service from other providers that make the initial long-
distance call path choice. The Commission also noted that exclusion of 
smaller providers should not compromise our ability to monitor rural 
call completion problems effectively.
    34. Accordingly, the Commission did provide factual, policy, and 
legal reasons for selecting the 100,000 subscriber line threshold over 
the proposal in the Notice for the smaller covered provider exception. 
COMPTEL's Regulatory Flexibility Act argument amounts essentially to a 
restatement of its earlier argument that the Commission failed to 
provide an adequate explanation for the threshold it adopted.

C. Sprint Petition

    35. Sprint raises several issues in its Petition. First, Sprint 
asks us to reconsider the Commission's decision ``to use the required 
call completion reports as the basis for subsequent enforcement action. 
Second, Sprint asserts that the Commission largely relied on summaries 
of surveys performed by the RLECs and urges the Commission to make the 
RLEC surveys available in their entirety for independent review. 
Finally, Sprint argues that the Commission's compliance burden estimate 
is too low.

[[Page 73232]]

For the reasons discussed below, we deny Sprint's Petition.
1. Use of Call Completion Reports for Enforcement Action
    36. Sprint argues that the Commission should reconsider its 
decision ``to use the required call completion reports as the basis for 
subsequent enforcement action,'' asserting that the Commission ``has 
provided no guidance as to what behaviors by covered carriers it 
considers unreasonable, or what performance results are actionable and 
therefore could trigger enforcement action.'' Sprint suggests that the 
Commission should ``make public a list of call completion practices it 
deems acceptable.'' For the reasons discussed below, we deny Sprint's 
Petition on this issue.
    37. First we note that, although the Commission adopted the 
recordkeeping, retention, and reporting rules to ``substantially 
increase [its] ability to monitor and redress problems associated with 
completing calls to rural areas,'' the Order did not suggest that the 
reports covered providers file with the Commission would constitute the 
sole basis for an enforcement action. Rather, the Order stated that the 
recording, retention, and reporting requirements may ``aid[ ],'' 
``enhance,'' and ``inform'' enforcement actions. This language makes 
clear that the reports are intended as a means for identifying possible 
areas for further inquiry, not for forming the sole basis for 
enforcement actions. Any action initiated by the Enforcement Bureau 
would offer providers the evidentiary opportunities afforded in any 
enforcement proceeding. Furthermore, the Order emphasizes that 
enforcement actions are not the only reason for adopting the rules; the 
rules will also help the providers themselves identify and correct call 
completion problems. The Order explains that, once providers begin 
collecting call completion data under the rural call completion rules, 
``many will have greater insight into their performance and that of 
their intermediate providers than they have had in the past.''
    38. Second, the Commission has provided ample guidance regarding 
what it considers unacceptable call completion practices. The Wireline 
Competition Bureau has issued two declaratory rulings clarifying that 
carriers are prohibited from blocking, choking, reducing, or 
restricting traffic in any way, including to avoid termination charges, 
and clarifying the scope of the Commission's longstanding prohibition 
on blocking, choking, reducing, or restricting telephone traffic, which 
may violate section 201 or 202 of the Act. The failure of a carrier to 
investigate evidence of a rural call delivery problem or to correct a 
problem of degraded service about which it knows or should know also 
may lead to enforcement action. In the 2011 USF/ICC Transformation 
Order, the Commission addressed the prohibition on call blocking and, 
inter alia, made clear that the prohibition applies to VoIP-to-PSTN 
traffic and providers of interconnected VoIP and ``one-way'' VoIP 
services. We thus reject Sprint's assertion that the Commission has not 
adequately identified prohibited practices.
    39. Finally, Sprint asserts that the required reports will not, in 
many cases, identify the reason a call failed to complete, and there 
are multiple factors that cause rural call completion failures, many of 
which are beyond the control of the long-distance provider. As we have 
explained, any enforcement action would give a covered provider an 
opportunity to provide exculpatory evidence. Furthermore, Sprint's 
assertion that the rules impose ``the burden of an investigation, and 
the threat of enforcement action, entirely on long distance carriers'' 
is incorrect. On the contrary, the Order emphasized that while the 
recording, retention, and reporting requirements do not apply to 
intermediate providers, ``the Enforcement Bureau continues to have the 
authority to investigate and collect additional information from 
intermediate providers when pursuing specific complaints and 
enforcement actions.'' The Commission also encouraged rural ILECs to 
report specific information and sought comment on whether the 
Commission should adopt or encourage additional rural ILEC reporting. 
For all of these reasons, we decline to reconsider our recognition of 
the potential use of call completion reports in enforcement actions, 
and we deny Sprint's Petition on this issue.
2. Availability of RLEC Surveys for Independent Review
    40. Sprint argues that, to justify adopting the recording, 
retention, and reporting rules, the Commission relied largely on 
summaries of surveys of RLECs' call completion experiences filed with 
the Commission by NTCA. It asserts that the Commission should make 
these surveys available in their entirety for independent review. 
Sprint also asserts that the Commission should reconsider whether a 
more limited data collection, such as one-time sample studies, would be 
a more appropriate first step to address rural call completion 
problems.
    41. Sprint's Petition overstates the Commission's reliance on the 
RLEC surveys. The Commission based its decision to promulgate rural 
call completion rules on a broad array of information filed in this 
proceeding and in predecessor dockets. This base of information 
included, among other things, numerous comments and filings in the 
docket and preceding dockets, the Commission's experience with and 
investigations of rural call completion complaints, and the information 
gained from a workshop held at the Commission which addressed rural 
call completion problems. The Commission found comments and ex parte 
letters filed with the Commission by the Rural Associations and the 
Commission's state partners to be especially persuasive, ``given their 
direct experience with complaints about call completion performance.'' 
The Commission did rely, in part, on the results of a test conducted by 
NECA in two of the Rural Association filings, but these results were 
only one piece of information that the Commission relied upon as a 
basis for adopting the Order. Other entities also filed comments noting 
the existence of call completion problems in rural areas. The 
Commission also relied on its own significant experience receiving and 
investigating informal call completion complaints. Rather than being 
critical factual information on which our decision hinged, the 
information submitted about the RLEC surveys was supplementary data 
that confirmed the various other pieces of evidence in the record. Even 
absent these surveys, we would find a strong basis in the record to 
adopt the recording, retention, and reporting rules. For these reasons, 
we are not persuaded that we should revisit the Commission's use of 
NECA's summaries of its RLEC surveys, the availability of the NECA RLEC 
survey results for independent review, or the implementation of a new 
data sample before the rules take effect. We also separately affirm our 
conclusion that ongoing data collection, rather than a one-time 
collection, is more likely to address call completion problems, which 
have been ongoing and extensive. We therefore deny Sprint's petition on 
this issue.
3. Industry Compliance Costs
    42. Sprint reiterates arguments about the burden of compliance that 
it made during the pendency of the rulemaking. These arguments do not 
warrant consideration by the Commission because Sprint relies on 
arguments that the Commission considered and rejected

[[Page 73233]]

in the Order. Accordingly, we dismiss this part of Sprint's Petition.
    43. Evaluating Sprint's arguments on the merits, however, we find 
that reconsideration of the Commission's burden analysis is not 
warranted and deny this part of Sprint's Petition. In the Order, the 
Commission determined that the benefits of these rules outweigh the 
burdens. Sprint asserts that the Commission should re-evaluate the 
estimated industry-wide compliance costs these rules impose on covered 
providers. Sprint asserts that insufficient data has been submitted to 
calculate the total on-going costs likely to be incurred by covered 
providers to comply with the new rules. It argues that numerous 
carriers currently do not collect at least some of the information 
required under the new rules and at least three carriers have estimated 
that it would cost each of them millions of dollars to comply with 
those rules.
    44. As explained further below, the Commission adopted the Order 
only after carefully weighing the costs and benefits of the new 
requirements, including record evidence alleging compliance costs on 
the part of covered providers. Sprint nonetheless contends that the 
Commission should ``assess factually the relative costs and benefits of 
its data collection retention and reporting rules.'' Pursuant to the 
Paperwork Reduction Act of 1995 (PRA), the Commission will conduct a 
careful analysis of any reporting and recordkeeping requirements 
imposed on the public. The Commission has begun that analysis, and five 
entities have submitted comments, including Sprint and HyperCube. The 
recordkeeping, retention, and reporting requirements adopted in the 
Order will not become effective until an announcement is published in 
the Federal Register of the Office of Management and Budget (OMB) 
approval and an effective date of the rules. While we deny Sprint's 
Petition, several of the concerns raised by Sprint, XO and HyperCube 
will be addressed in the context of the PRA analysis.
    45. Sprint contends that industry compliance costs will exceed $100 
million and that it has updated its burden analysis to reflect new 
compliance cost information and the impact of the rules adopted. Much 
of the information Sprint provides to support these assertions, 
including its own cost estimates, are not new and were submitted prior 
to the Commission's adoption of the rules in the Order. This 
information includes estimates of compliance costs that do not take 
into account ways the Commission reduced the burden of the proposed 
rules in the Order. For example, the Commission changed the rule 
requiring retention of call detail records to apply only to call 
attempts to rural ILECs, a relatively small percentage of total call 
attempts, and determined that call attempts to nonrural incumbent LECs 
need not be retained. Sprint also refers to a cost estimate in a 
request for waiver filed by Midcontinent Communications after the Order 
was released, but that estimate is consistent with or less than other 
estimates already considered by the Commission. Moreover, the changes 
we adopt in this Reconsideration Order will reduce providers' costs. 
The USTelecom/ITTA cost estimate that Sprint refers to includes the 
cost of collecting, retaining, and reporting data for on-net intraLATA 
interexchange toll traffic that we now exempt from the rules.
    46. Sprint states that the Commission's PRA analysis estimates that 
225 entities will be required to file the new call completion reports, 
all of those entities will incur some compliance costs, some will need 
to make system and/or staffing changes to comply with the new rules, 
and covered providers will continue to incur recurring compliance costs 
for years to come. Sprint over-estimates the number of entities 
required to comply with the new rules. It misunderstands the PRA 
analysis, which, as noted above, includes voluntary quarterly reporting 
by RLECs of a reduced set of data. The majority of the 225 entities are 
RLECs that may voluntarily file and that may have this information 
readily available.
    47. Finally, Sprint states that the information provided pursuant 
to the new rules will provide limited information on the root cause of 
any call termination problems and, if the likely costs exceed the 
anticipated benefits, the Commission should adopt more limited 
measures, such as allowing covered providers to perform a statistically 
significant sample study or to retain fewer months of data. These 
arguments were fully addressed and disposed of in the Order, and Sprint 
provides no new information warranting reconsideration. XO and 
HyperCube support Sprint's Petition and argue that not all providers 
collect the information required, but neither provides new information 
or arguments warranting reconsideration.
    48. HyperCube asserts that the Commission ``overlooked the 
substantial burden imposed on many providers to determine whether they 
are in fact `covered providers' and, as a result, has also greatly 
underestimated the number of burdened providers.'' We disagree. The 
Commission recognized the burden of determining if a provider is a 
covered provider. In the Order, the Commission attempted to minimalize 
any such burden, by providing examples of how to determine whether a 
provider is a covered provider and noting that some providers will need 
to segregate originated traffic from intermediary traffic. HyperCube's 
assertions that we underestimated the number of burdened providers 
because we did not include the substantial burden imposed on many 
providers just to determine whether they are in fact ``covered 
providers'' is more appropriately addressed in the PRA context. 
HyperCube filed comments regarding the Commission's specific burden 
estimate in the PRA context and these matters will be addressed in the 
context of that Paperwork Reduction Analysis.
    49. HyperCube also argues that the Commission did not consider the 
possibility that providers could be covered providers even if they 
operate primarily as intermediate providers. Although the Commission 
did not apply these rules to entities acting exclusively as 
intermediate providers, it did apply the rules to providers of long-
distance voice service that make the initial long-distance call path 
choice for more than 100,000 domestic retail subscriber lines. The 
Commission recognized that such providers might also serve as 
intermediate providers and in fact stated that ``a covered provider 
that also serves as an intermediate provider for other providers may--
but need not--segregate its originated traffic from its intermediary 
traffic in its recording and reporting, given the additional burdens 
such segregation may impose on such providers.'' Accordingly, the 
Commission did not overlook the fact that providers that may be 
intermediate providers in some instances and covered providers in other 
instances.
    50. For all of these reasons, we decline to reconsider the 
Commission's finding that the benefits of these rules outweigh the 
burdens of compliance. Burden arguments raised in the PRA context will 
be considered and addressed in compliance with the PRA.

D. Transcom Petition: Application of Ring Signaling Rule to 
Intermediate Providers That Are Not Common Carriers

    51. In the Order, the Commission adopted a rule that prohibits 
``originating and intermediate providers . . . from causing audible 
ringing to be sent to the caller before the terminating provider has 
signaled that the called party is being alerted.'' The Commission 
applied this rule to, among others,

[[Page 73234]]

``intermediate providers that are not common carriers.'' Transcom 
requests reconsideration of this rule ``insofar as [it] applies to 
`intermediate providers' that are not common carriers,'' arguing that 
the Commission exceeded its legal authority by extending the rule to 
such providers. For the reasons discussed below, we dismiss Transcom's 
Petition.
    52. As an initial matter, we must determine whether consideration 
of Transcom's petition is procedurally appropriate under section 
1.429(b) of the Commission's rules. As Transcom notes, it did not 
submit comments in response to the Notice or conduct any ex parte 
meetings in this docket. Thus Transcom did not previously present any 
of the facts or arguments in its Petition to the Commission, and our 
review of the record indicates that no party to the proceeding raised 
facts or arguments relating to the Commission's authority to require 
intermediate providers that are not common carriers to comply with the 
ring signaling rule. Transcom asserts that another entity presented the 
relevant legal issue in an ex parte letter and that the Commission thus 
considered and addressed the matter in the Order. However, the ex parte 
letter from the VON Coalition that Transcom cites did not present the 
same issues that Transcom now presents. Neither the VON Coalition's 
letter cited by Transcom nor its comments and reply comments in this 
proceeding, which the letter references, raised any facts or arguments 
relating to the Commission's authority to require intermediate 
providers that are not common carriers to comply with the ring 
signaling rule.
    53. Section 1.429(b) of the Commission's rules provides that a 
petition for reconsideration that relies on facts or arguments which 
have not previously been presented to the Commission will be granted 
only if: (1) The facts or arguments relied on relate to events which 
have occurred or circumstances which have changed since the last 
opportunity to present such matters to the Commission; (2) the facts or 
arguments relied on were unknown to petitioner until after his last 
opportunity to present them to the Commission, and he could not through 
the exercise of ordinary diligence have learned of the facts or 
arguments in question prior to such opportunity; or (3) the Commission 
determines that consideration of the facts or arguments relied on is 
required in the public interest. Because Transcom's Petition ``relies 
on facts or arguments which have not previously been presented to the 
Commission,'' we may grant the Petition only if one of the three 
criteria described above is met.
    54. Transcom makes no effort in its Petition to argue that its 
reconsideration request meets the requirements of section 1.429(b). In 
its reply to an opposition filed by the Rural Associations, however, 
Transcom argues that the United States Court of Appeals for the 
District of Columbia Circuit's recent decision in Verizon v. FCC 
constitutes an ``intervening event'' that justifies consideration of 
its Petition under section 1.429(b)(1). We disagree. Transcom reads 
Verizon to hold that ``the Commission cannot use Title I to justify 
imposing common carrier duties on non-common carriers.'' But the idea 
that the Commission cannot regulate services that have not been 
classified as common carrier services in a way that result in per se 
common carriage did not originate in the Verizon opinion; the courts 
and the Commission have long recognized that concept. The Verizon court 
merely applied this precedent to the Commission's Open Internet rules 
and found that parts of those rules impermissibly required per se 
common carriage in that context. For this reason, the fact that the 
Verizon court discussed limitations on the Commission's ability to 
regulate non-common carriers does not make the Verizon opinion an 
``event[ ] which [has] occurred or circumstance[ ] which [has] changed 
since the last opportunity to present such matters to the Commission'' 
for purposes of section 1.429(b)(1).
    55. In this same set of reply comments, Transcom also argues that 
reconsideration is appropriate under section 1.429(b)(2) because the 
legal question was presented by the VON Coalition and disposed in the 
Order. As we have explained, Transcom's assertion that the relevant 
legal issue was raised in the record prior to adoption of the Order is 
incorrect. Even if it were correct, however, whether or not ``the legal 
question was presented and disposed'' is irrelevant to whether a 
petition satisfies section 1.429(b)(2), which applies only where ``the 
facts or arguments relied on were unknown to petitioner until after his 
last opportunity to present them to the Commission.'' Transcom makes no 
argument based on the requirements of section 1.429(b)(2); accordingly, 
this argument also fails.
    56. Transcom further argues that consideration of its petition is 
required by the public interest and thus warrants consideration under 
section 1.429(b)(3). But Transcom does not support this assertion 
except to say that the Verizon decision ``directly undercuts the 
primary rationale'' for the ring signaling rule. As we have explained, 
the Verizon opinion did not change the law in any way bearing on the 
Commission's decision to apply the ring signaling rule to intermediate 
providers that are not common carriers. Moreover, we independently 
discern no other fact or argument set forth in the Transcom Petition 
that would require its petition to be considered. Accordingly, 
consideration of Transcom's petition is not ``required in the public 
interest.'' Because Transcom's Petition fails to satisfy any of the 
criteria of section 1.429(b), we dismiss the Petition.
    57. Carolina West asks us to modify the definition of ``covered 
provider'' as it applies to the smaller covered provider exception to 
our recordkeeping, retention, and reporting rules. Specifically, 
Carolina West proposes that we replace ``aggregated over all of the 
provider's affiliates'' in the definition of covered provider with 
``aggregated over all entities under common control with such 
provider'' Carolina West argues that, when determining whether a 
provider makes the initial call path choice for more than 100,000 
subscriber lines, a provider should not have to include ``lines served 
by non-controlling minority owners.'' In support of its petition, 
Carolina West states that it is ``common for rural wireless carriers to 
have passive investors who are themselves carriers that provide long-
distance service'' and that these investors ``do not and cannot make 
the ultimate determination regarding the call routing practices of the 
providers in which they hold such passive investments.'' Carolina West 
reports that, although it serves fewer than 100,000 subscriber lines, 
it ``believes that it would be subject to the full scope of the new 
retention and reporting requirements because one or more of its 
minority investors provide long-distance service and make the initial 
call path decision for enough customer lines such that, in the 
aggregate, [Carolina West] and its `affiliates' would exceed the 
100,000 line de minimis threshold.''
    58. In the Order, the Commission concluded that the recordkeeping, 
retention, and reporting rules should apply to ``covered providers,'' 
i.e., providers of long-distance voice service that make the initial 
long-distance call path choice for more than 100,000 domestic retail 
subscriber lines, including lines served by the providers' affiliates. 
The 100,000 line threshold forms a basis for the ``exception for 
smaller covered providers'' adopted in the Order. In adopting this 
exception, the Commission noted that the recordkeeping, retention, and 
reporting requirements would still ``capture as

[[Page 73235]]

much as 95 percent of all callers'' and that ``a covered provider 
qualifies for this exception only if it and all its affiliates, as 
defined in section 3(2) of the Act . . . together made the initial 
long-distance call path choice for 100,000 or fewer total business or 
residential subscriber lines.''
    59. We acknowledge Carolina West's concerns about the burdens on 
small providers associated with complying with the rule. On the record 
before us, however, we are unable to conclude that the Commission's 
goals would continue to be met if we changed our rules to exempt 
additional providers from compliance. For example, the Commission noted 
that it was not ``compromis[ing] our ability to monitor rural call 
completion problems effectively'' in creating the exemption because we 
could continue to capture ``as much as 95% of all callers.'' But the 
record here does not reveal how many providers or how much call 
completion data would be lost if we modified the rule as Carolina West 
proposes. In addition, while Carolina West argues that minority 
investors cannot dictate call routing for the carriers in which they 
invest, this argument fails to take into account, for example, the 
variety of stock classes and attendant voting rights that may allow a 
minority investor to in fact to dictate call routing for an affiliate 
because the affiliate may be relying on the minority investor to handle 
its long distance traffic. Thus, a categorical decision to consider the 
lines of only affiliates under common control could create a loophole 
exempting carriers under common influence in their routing decisions, 
making it more difficult for the Commission to identify the sources of 
problems in rural call completion. Therefore, the record does not 
persuade us to modify our rules as Carolina West requests, and we deny 
their petition.
    60. We do, however, recognize that there are burdens associated 
with compliance with these rules, and there may be particular 
circumstances that make application of the rules to Carolina West 
inequitable or contrary to the public interest. We invite Carolina West 
and other carriers to file waiver requests if they believe that the 
public interest would be better served by not counting the lines of 
some or all of their affiliates towards the 100,000 line threshold.

III. Procedural Matters

A. Paperwork Reduction Act

    61. This document contains modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. It has been submitted to the Office of Management 
and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the 
general public, and other Federal agencies are invited to comment on 
the modified information collection requirements contained in this 
proceeding. In addition, we note that pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4), we previously sought specific comment on how the Commission 
might further reduce the information collection burden for small 
business concerns with fewer than 25 employees.
    62. In this present document, we have assessed the effects of 
various requirements adopted in the Rural Call Completion Order and 
determined that certain recordkeeping, retention, and reporting 
requirements should not apply to intraLATA toll calls that are carried 
entirely over the covered provider's network or that are handed off by 
the covered provider directly to the terminating LEC or its terminating 
tandem switch. We find that these actions are in the public interest 
because they reduce the burdens of these recordkeeping, retention, and 
reporting requirements without undermining the goals and objectives 
behind the requirements. The amendments we adopt today will reduce the 
burden on businesses with fewer than 25 employees.

B. Supplemental Final Regulatory Flexibility Analysis

    63. As required by the Regulatory Flexibility Act of 1980 (RFA), 
the Commission has prepared a Supplemental Final Regulatory Flexibility 
Analysis (FRFA) relating to the Order on Reconsideration.
    64. As required by the Regulatory Flexibility Act (RFA), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice 
of Proposed Rulemaking (Notice) in WC Docket No. 13-39. The Commission 
sought written public comment on the proposals in the Notice, including 
comment on the IRFA. The Commission subsequently incorporated a Final 
Regulatory Flexibility Analysis (FRFA), as well as a supplemental IRFA, 
in the Report and Order and Further Notice of Proposed Rulemaking in WC 
Docket No. 13-39. This Supplemental FRFA conforms to the RFA and 
incorporates by reference the FRFA in the Order. It reflects changes to 
the Commission's rules arising from the Order on Reconsideration.

C. Need for, and Objectives of, the Order on Reconsideration

    65. The Order on Reconsideration affirms the Commission's 
commitment to ensuring that high quality telephone service must be 
available to all Americans. In the underlying Order, the Commission 
established rules to combat extensive problems with successfully 
completing calls to rural areas, and created a framework to improve the 
ability to monitor call problems and take appropriate enforcement 
action. In this Order on Reconsideration, the Commission denies several 
petitions for reconsideration that, if granted, would impair the 
Commission's ability to monitor, and take enforcement action against, 
call completion problems. The Commission does, however, grant one 
petition for reconsideration because the Commission finds that 
modifying its original determination will significantly lower 
providers' compliance costs and burdens without impairing the 
Commission's ability to obtain reliable and extensive information about 
rural call completion problems.
    66. Specifically, in the Order on Reconsideration, the Commission 
grants the petition for reconsideration of the Rural Call Completion 
Order filed by USTelecom and ITTA. In doing so, the Commission modifies 
rules adopted in the Rural Call Completion Order so that the 
recordkeeping, retention, and reporting requirements adopted in the 
Rural Call Completion Order do not apply to a limited subset of calls: 
intraLATA toll calls that are carried entirely over the covered 
provider's network, and intraLATA toll calls that are handed off by the 
covered provider directly to the terminating local exchange carrier 
(LEC) or to the tandem that the terminating LEC's end office subtends. 
The decision to grant reconsideration reflects a focused analysis of 
the costs of applying the rules to this limited set of traffic, the 
fact that this traffic represents a small portion of total toll 
traffic, and the modest incremental benefit that such data would likely 
yield. Most notably, these limited rule modifications will reduce the 
burdens on small business entities resulting from compliance with the 
rules adopted in WC Docket No. 13-39.

D. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA and the Rural Call Completion Order

    67. There were no comments filed that specifically addressed the 
rules and policies proposed in the IRFA that was incorporated in the 
Notice.

[[Page 73236]]

    68. In a petition for reconsideration of the Rural Call Completion 
Order, COMPTEL argued that the Commission's decision to adopt in the 
Rural Call Completion Order a smaller covered provider exception to the 
reporting rules, based on 100,000 subscriber lines rather than 100,000 
subscribers, failed to comply with section 604 of the RFA. In the Order 
on Reconsideration, the Commission denies COMPTEL's petition. The 
Commission finds that the FRFA incorporated in the Rural Call 
Completion Order complies with the RFA. Specifically, the Commission 
recounts how section E of the FRFA specifically addresses steps taken 
to minimize the significant economic impact on small entities, and 
references the smaller covered provider exception as one factor that 
reduces the economic impact of the rules on small entities, and that in 
the Rural Call Completion Order, the Commission provided an explanation 
for the smaller covered provider exception adopted therein.

E. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    69. Pursuant to the Small Business Jobs Act of 2010, the Commission 
is required to respond to any comments filed by the Chief Counsel for 
Advocacy of the Small Business Administration (SBA), and to provide a 
detailed statement of any change made to the proposed rules as a result 
of those comments. The Chief Counsel did not file any comments in 
response to the proposed rules in this proceeding.

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

    70. 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.
    71. As noted, a FRFA was incorporated into the Rural Call 
Completion Order. In that analysis, the Commission described in detail 
the various small business entities that may be affected by the final 
rules. Those entities consist of: Wired telecommunications carriers; 
LECs; incumbent LECs; competitive LECs, competitive access providers, 
shared-tenant service providers, and other local service providers; 
interexchange carriers; prepaid calling card providers; local 
resellers; toll resellers; other toll carriers; wireless 
telecommunications carriers (except satellite); cable and other program 
distribution; cable companies and systems; and all other 
telecommunications. In this present Order on Reconsideration, the 
Commission is amending the final rules adopted in the Rural Call 
Completion Order and the small business entities described in the 
underlying FRFA are the same that may be affected by this present Order 
on Reconsideration. This Supplemental FRFA incorporates by reference 
the description and estimate of the number of small entities from the 
FRFA in this proceeding.

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

    72. In Section D of the FRFA incorporated into the Rural Call 
Completion Order, the Commission described in detail the projected 
recording, recordkeeping, reporting and other compliance requirements 
for small entities arising from the rules adopted in the Rural Call 
Completion Order. This Supplemental FRFA incorporates by reference the 
requirements described in Section D of the FRFA. In the Order on 
Reconsideration, however, the Commission modifies rules adopted in the 
Rural Call Completion Order so that the recordkeeping, retention, and 
reporting requirements adopted in the Rural Call Completion Order do 
not apply to a limited subset of calls: intraLATA toll calls that are 
carried entirely over the covered provider's network, and intraLATA 
toll calls that are handed off by the covered provider directly to the 
terminating LEC or to the tandem that the terminating LEC's end office 
subtends. The effect of such modifications is to reduce the compliance 
requirements for this subset of small entities that carry intraLATA 
toll traffic.

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

    73. 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.'' In Section E of the FRFA incorporated into the Rural Call 
Completion Order, the Commission described in detail the steps taken to 
minimize the significant economic impact on small entities, and the 
significant alternatives considered in the Rural Call Completion Order. 
This Supplemental FRFA incorporates by reference the steps taken and 
alternatives described in Section E of the FRFA.
    74. The Commission considered the economic impact on small entities 
in reaching its final conclusions and taking action in the Rural Call 
Completion Order, and it likewise does so here. While declining to 
disturb the majority of the findings and conclusions in the underlying 
Rural Call Completion Order, this Order mitigates burdens for smaller 
entities that carry intraLATA toll traffic. By excluding intraLATA toll 
calls that are carried entirely over the covered provider's network, 
and intraLATA toll calls that are handed off by the covered provider 
directly to the terminating LEC or to the tandem that the terminating 
LEC's end office subtends, the Commission reduces burden of the 
recordkeeping, retention, and reporting requirements it adopted in the 
Rural Call Completion Order.

I. Report to Congress

    75. The Commission will send a copy of the Order on 
Reconsideration, including this Supplemental FRFA, in a report to be 
sent to Congress pursuant to the Congressional Review Act. In addition, 
the Commission will send a copy of the Order on Reconsideration, 
including this Supplemental FRFA, to the Chief Counsel for Advocacy of 
the SBA. A copy of the Order on Reconsideration and Supplemental FRFA 
(or summaries thereof) will also be published in the Federal Register.

J. Congressional Review Act

    76. The Commission will send a copy of the Order on Reconsideration 
in a report to be sent to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A).

[[Page 73237]]

IV. Ordering Clauses

    77. Accordingly, IT IS ORDERED, pursuant to sections 1, 4(i), and 
405 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 405, and sections 1.1 and 1.429 of the Commission's rules, 47 
CFR 1.1, 1.429, that the Order on Reconsideration IS ADOPTED, effective 
January 9, 2015.
    78. IT IS FURTHER ORDERED that part 64 of the Commission's rules, 
47 CFR part 64, IS AMENDED as set forth in Appendix A, and that such 
rule amendments SHALL BE EFFECTIVE after announcement in the Federal 
Register of Office of Management and Budget (OMB) approval of the 
rules, and on the effective date announced therein.
    79. IT IS FURTHER ORDERED that the Petition of USTelecom and ITTA 
for Reconsideration or, in the Alternative, for Waiver or Extension of 
Time to Comply IS GRANTED to the extent described herein and otherwise 
DISMISSED AS MOOT.
    80. IT IS FURTHER ORDERED that the Petitions for Reconsideration 
filed by Carolina West and COMPTEL ARE DENIED.
    81. IT IS FURTHER ORDERED that the Petition for Reconsideration 
filed by Sprint Corporation IS DENIED, as to Sections I and II.A of the 
Petition. The Petition for Reconsideration filed by Sprint Corporation 
is DISMISSED and DENIED on an independent and alternative basis, as to 
Section II.B of the Petition.
    82. IT IS FURTHER ORDERED that the Petition for Reconsideration 
filed by Transcom Enhanced Services, Inc. is DISMISSED.
    83. IT IS FURTHER ORDERED that the Petition for Waiver filed by 
AT&T Services, Inc., IS DISMISSED AS MOOT, as to the portion of the 
Petition requesting relief for on-net intraLATA toll traffic.
    84. IT IS FURTHER ORDERED that the Petition for Waiver filed by 
CenturyLink, Inc. IS DISMISSED AS MOOT, as to Section III.C.ii of the 
Petition.
    85. IT IS FURTHER ORDERED that the Commission SHALL SEND a copy of 
the Order on Reconsideration to Congress and to the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A). Part 64 of the Commission's rules ARE GRANTED to 
the extent set forth herein, and this Order on Reconsideration SHALL BE 
EFFECTIVE upon release.

    Federal Communications Commission.
Marlene H. Dortch,
Secretary.
    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 64 to read as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. The authority citation for part 64 continues to read as follows:

    Authority:  47 U.S.C. 154, 254(k); 403(b)(2)(B), (c), Pub. L. 
104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 218, 222, 
225, 226, 227, 228, 254(k), 616, and 620 unless otherwise noted.


0
2. Amend Sec.  64.2101 by revising paragraph (f) to read as follows:


Sec.  64.2101  Definitions.

* * * * *
    (f) Long-distance voice service. For purposes of subparts V and W, 
the term ``long-distance voice service'' includes interstate interLATA, 
intrastate interLATA, interstate interexchange, intrastate 
interexchange, intraLATA toll, inter-MTA interstate and inter-MTA 
intrastate voice services.

0
3. Amend Sec.  64.2103 by redesignating paragraph (e) as paragraph (f) 
and adding new paragraph (e) as follows.


Sec.  64.2103  Retention of Call Attempt Records.

* * * * *
    (e) IntraLATA toll calls carried entirely over the covered 
provider's network or handed off by the covered provider directly to 
the terminating local exchange carrier or directly to the tandem switch 
serving the terminating local exchange carrier's end office 
(terminating tandem), are excluded from these requirements.
* * * * *

0
4. Amend Sec.  64.2105 by adding paragraph (e) to read as follows:


Sec.  64.2105  Reporting requirements.

* * * * *
    (e) IntraLATA toll calls carried entirely over the covered 
provider's network or handed off by the covered provider directly to 
the terminating local exchange carrier or directly to the tandem switch 
that the terminating local exchange carrier's end office subtends 
(terminating tandem), are excluded from these requirements.

[FR Doc. 2014-28898 Filed 12-9-14; 8:45 am]
BILLING CODE 6712-01-P