[Federal Register Volume 83, Number 92 (Friday, May 11, 2018)]
[Proposed Rules]
[Pages 21983-21995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09968]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 13-39; FCC 18-45]


Rural Call Completion

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, we seek comment on rules to implement the 
recently enacted Improving Rural Call Quality and Reliability Act 
(``RCC Act''), which directs us to establish registration requirements 
and service quality standards for ``intermediate providers''--entities 
that transmit calls without serving as the originating or terminating 
provider. By giving us clear authority to shine a light on intermediate 
providers and hold them accountable for their performance, the RCC Act 
provides an important additional tool we can use in our work to promote 
call completion to all Americans. We anticipate that the rules we will 
adopt to implement the RCC Act's direction to regulate intermediate 
providers will complement our covered provider monitoring rule by 
ensuring that the participants in the call path share in the 
responsibility to ensure that

[[Page 21984]]

calls to rural areas are completed. We also seek comment on sunsetting 
the recording and retention rules established in the 2013 RCC Order 
upon implementation of the RCC Act.

DATES: Comments are due on or before June 4, 2018, and reply comments 
are due on or before June 19, 2018. Written comments on the Paperwork 
Reduction Act proposed information collection requirements must be 
submitted by the public, Office of Management and Budget (OMB), and 
other interested parties on or before July 10, 2018.

ADDRESSES: You may submit comments, identified by WC Docket No. 13-39, 
by any of the following methods:
    [ssquf] Federal Communications Commission's Website: http://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.
    [ssquf] Mail: 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 
9050 Junction Drive, Annapolis Junction, MD 20701. U.S. Postal Service 
first-class, Express, and Priority mail must be addressed to 445 12th 
Street SW, Washington DC 20554.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format), send an email to [email protected] or 
call the Consumer & Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (TTY).
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document. In addition to filing comments 
with the Secretary, a copy of any comments on the Paperwork Reduction 
Act information collection requirements contained herein should be 
submitted to the Federal Communications Commission via email to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Wireline Competition Bureau, 
Competition Policy Division, Zach Ross, at (202) 418-1033, or 
[email protected]. For additional information concerning the 
Paperwork Reduction Act information collection requirements contained 
in this document, send an email to [email protected] or contact Nicole Ongele 
at (202) 418-2991.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third 
Further Notice of Proposed Rulemaking (FNPRM) in WC Docket No. 13-39, 
adopted and released on April 17, 2018. 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. It is available on the Commission's 
website at https://www.fcc.gov/document/fcc-takes-new-steps-improve-rural-call-completion-0.
    Pursuant to sections 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), http://www.fcc.gov/Bureaus/OGC/Orders/1998/fcc98056.pdf.
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. 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 
9050 Junction Drive, Annapolis Junction, MD 20701. U.S. Postal Service 
first-class, Express, and Priority mail must be addressed to 445 12th 
Street SW, Washington DC 20554.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format), send an email to [email protected] or 
call the Consumer & Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (TTY).

I. Synopsis

A. Certain Intermediate Providers Must Register With the Commission

    1. We propose and seek comment on rules to implement the registry 
provisions of the RCC Act. New section 262(c) of the Act mandates that, 
when promulgating registry rules, the Commission ``(A) ensure the 
integrity of the transmission of covered voice communications to all 
customers in the United States; and (B) prevent unjust or unreasonable 
discrimination among areas of the United States in the delivery of 
covered voice communications.'' The RCC Act also requires the 
Commission to make the intermediate provider registry publicly 
available on the Commission's website. The statute does not otherwise 
specify requirements for the registry or the registration rules to be 
imposed on intermediate providers.
    2. We propose to implement new section 262(a)(1) by requiring that 
any intermediate provider register with the Commission if that provider 
offers or holds itself out as offering the capability to transmit 
covered voice communications from one destination to another and 
charges any rate to any other entity (including an affiliated entity) 
for the transmission.
    3. We propose that this registration be filed via a portal on the 
Commission's website, be made publicly available on that website, and 
include the following information: (1) The intermediate provider's 
business name(s) and primary address; (2) the name(s), telephone 
number(s), email address(es), and business address(es) of the 
intermediate provider's regulatory contact and/or designated agent for 
service of process; (3) all business names that the intermediate 
provider has used in the past; (4) the state(s) in which the 
intermediate provider

[[Page 21985]]

provides service; and (5) the name, title, business address, telephone 
number, and email address of at least one person as well as the 
department within the company responsible for addressing rural call 
completion issues. We seek comment on this proposal and on any other 
types of information that intermediate providers should be required to 
include in their registrations.
    4. The first four categories of information listed above are 
similar to those required under the Commission's existing registration 
requirement for telecommunications carriers and interconnected VoIP 
providers, and we believe that they are appropriate for inclusion here. 
We also propose that intermediate provider registrations specifically 
include a point-of-contact for addressing rural call completion issues 
in light of record evidence that access to such information would help 
facilitate communication and cooperation among service providers to 
efficiently resolve rural call completion issues as expeditiously as 
possible. We believe collection and publication of the foregoing 
information will not constitute a significant burden for affected 
providers, and will facilitate compliance by creating a publicly-
available database of registered intermediate providers, along with the 
relevant contact information for each provider. We seek comment on this 
view. Consistent with our existing registration requirements, we also 
propose to require intermediate providers to update their registration 
information within one week of any change. We seek comment on this 
proposal and any alternatives thereto. We also seek comment on the 
benefits and burdens (including specific costs) of the proposed 
registration requirements, especially regarding small intermediate 
providers, and whether any accommodations for small providers are 
necessary.
    5. Finally, we propose to adopt a 30-day registration deadline for 
intermediate providers. The registration period would commence upon 
approval by the Office of Management and Budget of the final rules 
establishing the registry. We note that our filing instructions for 
Form 499-A indicate that new filers, including telecommunications 
carriers and interconnected VoIP providers, are to register with the 
Commission ``[u]pon beginning to provide service, but no later than 30 
days after beginning to provide service.'' Consistent with this 
requirement, we seek comment on whether a 30-day registration period 
would be appropriate for intermediate providers subject to our 
registration rules. We seek comment on this proposal, and on any 
alternative timeframes for requiring intermediate providers to register 
with the Commission.
    6. We believe that our proposals, including making the 
registrations publicly available on the Commission's website, are 
consistent with Congress' intent to ``increase the reliability of 
intermediate providers by bringing transparency'' to the intermediate 
provider market. We also believe that the proposals, including the 
requirement to provide point-of-contact information for rural call 
completion complaints and to make such information publicly available, 
are consistent with Congress' mandate that our implementing rules 
ensure the integrity of the transmission of covered voice 
communications to all customers in the country and prevent unjust or 
unreasonable discrimination among areas of the United States in the 
delivery of covered voice communications. In making this proposal, we 
clarify that our proposed registration requirements are not intended to 
alter our current processes for handling rural call completion 
complaints submitted by rural carriers or consumers. At the same time, 
we believe that requiring the submission of this information would be 
minimally burdensome on intermediate providers. We seek comment on this 
preliminary analysis.
    7. We also seek comment on any alternative proposals for 
structuring and managing the intermediate provider registry. In 
addition, we specifically seek comment on the benefits and burdens to 
smaller providers of our proposals and any potential alternatives.
    8. Intermediate Providers That Must Register. New section 262(a) of 
the Act imposes registration and service quality requirements only on 
any intermediate provider ``that offers or holds itself out as offering 
the capability to transmit covered voice communications from one 
destination to another and that charges any rate to any other entity 
(including an affiliated entity) for the transmission.'' We therefore 
propose to apply the registration and service quality requirements we 
adopt to any intermediate provider so long as it fits within the 
criteria established by section 262(a). We seek comment on this 
proposal, on any potential alternatives, and on any other guidance we 
should provide in implementing section 262(a).
    9. We seek comment on the difference between the universe of 
intermediate providers as defined in section 262(i)(3) and the universe 
of intermediate providers encompassed by section 262(a). Section 
262(i)(3) offers a general definition of intermediate providers. 
Section 262(a) appears to limit its application to intermediate 
providers, as defined in 262(i)(3), that meet additional limiting 
factors. One of these factors is that section 262(a) applies only to 
intermediate providers that charge a rate to other entities, including 
their affiliates, for transmitting covered voice communications. Are 
there any other differences between the intermediate providers 
encompassed by sections 262(i)(3) and 262(a)? Does the phrase ``that 
offers or holds itself out as offering the capability to transmit 
covered voice communications from one destination to another'' narrow 
the scope of intermediate providers captured by section 262(a) compared 
to section 262(i)(3)? We seek comment on this issue and any others that 
commenters believe are relevant in interpreting and implementing 
section 262(a).
    10. With respect to the scope of intermediate providers subject to 
the registration requirements in particular, we note that section 
262(b) states that ``[a] covered provider may not use an intermediate 
provider to transmit covered voice communications unless such 
intermediate provider is registered under subsection (a)(1).'' We 
believe that this provision is best understood to mean that 
intermediate providers ``that offer[] or hold[] [themselves] out as 
offering the capability to transmit covered voice communications from 
one destination to another and that charge[] any rate to any other 
entity (including an affiliate) for the transmission'' must register 
with the Commission under section 262(a)(1), and that any intermediate 
provider that seeks to be used by a covered provider must also register 
with the Commission. We seek comment on this view and on any 
alternative readings that give meaning to the text of both sections 
262(b) and 262(a)(1).

B. Covered Providers May Not Use Unregistered Intermediate Providers

    11. We seek comment on how to interpret and implement the 
prohibition on covered providers' use of unregistered intermediate 
providers in section 262(b). In particular, we seek comment on the 
definition of ``use'' in section 262(b). We propose that the word 
``use'' in this context be understood to mean that a covered provider 
may not rely on any unregistered intermediate providers in the path of 
a given call. In making this proposal, we note that the definition of 
``intermediate provider'' contained in

[[Page 21986]]

section 262(i) broadly refers to providers at all points in the call 
chain, excluding covered providers who originate or terminate a given 
call, and that section 262(a) requires any of these entities that offer 
to transmit covered voice communications for a rate to register with 
the Commission and meet our quality of service standards. We seek 
comment on this proposal. Alternatively, should ``use'' be interpreted 
to mean that the covered provider must ensure only that the first 
intermediate provider in the call path is registered? Are there other 
possible interpretations of section 262(b)? For each potential 
interpretation, we seek comment on the costs and benefits (including to 
smaller providers), implementation issues, and the extent to which the 
interpretation reflects Congress' intent.
    12. We note that the relevant Senate Commerce Committee Report 
states that it is ``not the intent of the Committee that this 
definition be interpreted to cover entities that only incidentally 
transmit voice traffic, like internet Service Providers alongside other 
packet data, without a specific business arrangement to carry, route, 
or transmit that voice traffic.'' Should we supplement our proposed 
definition of ``intermediate provider'' to reflect this intent, and if 
so, how? For example, should certain types of entities be exempt from 
the definition of ``intermediate provider''?
    13. We further propose that covered providers must be responsible 
for knowing the identity of all intermediate providers in a call path, 
and we seek comment on this proposal. We believe this proposed 
requirement appropriately builds on and flows from our proposed 
interpretation of ``use'' in the RCC Act. The ATIS RCC Handbook states 
that if ``[service providers] are aware of which downstream [service 
providers] are involved in handling their traffic, they can perform due 
diligence and possibly better manage call completion issues.'' 
Moreover, given the section 217 liability we described above (and 
related monitoring rule obligation we impose on covered providers to be 
responsible for the entire intermediate provider chain), we believe 
that allowing covered providers to not know the identities of their 
intermediates amounts to allowing willful ignorance: i.e., it would 
allow covered providers to circumvent their duties by employing unknown 
or anonymous intermediate providers in a call path. We seek comment on 
this proposal and analysis. If we adopt our proposed definition of 
``use,'' how could covered providers comply with the RCC Act and not 
possess this information? We also seek comment on HD Tandem's assertion 
that ``[t]he possibility of unlimited and unknown intermediate carriers 
in the call path makes it nearly impossible, as a practical matter, to 
enforce the Commission's RCC rules.''
    14. We further propose to require covered providers to maintain, 
and furnish upon request to the Commission or state authorities as 
appropriate, the identities of any or all intermediate providers in 
their respective call paths. We seek comment on this proposal and on 
any alternative approaches, particularly as they relate to the RCC Act. 
We believe that making this information available upon request to the 
Commission and state authorities would facilitate our and state 
authorities' understanding of rural call completion issues and how to 
combat them. We further believe that this approach will help maximize 
the value of the registry for promoting rural call completion, and 
ensure compliance with section 262(b). We seek comment on this 
analysis.
    15. We also seek comment generally on how best to enforce the 
requirements of section 262(b). For example, should we require covered 
providers to use the intermediate provider registry that we establish 
to confirm the registration of a potential intermediate provider before 
purchasing service from that provider? Further, we seek comment on 
whether we should adopt any exceptions to the prohibition on using 
unregistered intermediate providers and whether any such exceptions 
would be consistent with the RCC Act. What should the consequences be 
if a covered provider uses an unregistered intermediate provider? If an 
intermediate provider loses its registration, how long should a covered 
provider have to remove that intermediate provider from its route 
table? What if that newly deregistered intermediate provider is the 
only provider to the target rural carrier? As part of this inquiry, we 
seek comment on the best approach to adopting any exceptions, including 
as to whether we should adopt express exceptions to our rules, or 
delineate circumstances under which affected entities could seek a 
waiver from the Commission.
    16. Once we have adopted rules to implement the RCC Act 
registration requirement, how long should covered providers have to 
ensure that they comply with the requirement to use only registered 
intermediate providers? As discussed above, we propose to adopt a 30-
day registration deadline for intermediate providers. Should covered 
providers have an additional 30 days--after the 30-day registration 
deadline for intermediate providers--in which to ensure that they 
comply with the requirement to use only registered intermediate 
providers? Is that an adequate period of time for covered providers to 
make any contractual and/or traffic routing adjustments needed to 
comply with the RCC Act and the Commission's implementing regulations? 
If not, what would be an appropriate period of time?

C. Service Quality Standards for Intermediate Providers

    17. The RCC Act also requires intermediate providers that offer, or 
hold themselves out as offering, the capability to transmit covered 
voice communications from one destination to another and that charge 
any rate to any other entity (including an affiliated entity) to comply 
with ``service quality standards'' to be established by the Commission. 
Under new section 262(d) of the Act, in promulgating such standards, 
the Commission must ``ensure the integrity of the transmission of 
covered voice communications to all customers in the United States'' 
and ``prevent unjust or unreasonable discrimination among areas of the 
United States in the delivery of covered voice communications.'' While 
the RCC Act does not define the term ``service quality standards,'' the 
Senate Commerce Committee Report states that such standards ``could 
include the adoption of specific call completion metrics or the more 
general adoption of duties to complete calls analogous to those that 
already apply to covered providers under prior Commission rules and 
orders.''
    18. We seek comment generally on possible frameworks to implement 
the service quality standards provisions of the RCC Act. We seek to 
establish service quality standards for intermediate providers that 
will ensure rural call completion but that are also minimally 
burdensome, and we seek comment on how best to do so. We believe that 
proposals that rely on or are consistent with industry best practices 
to develop service quality standards will be less burdensome on 
intermediate providers than other potential approaches, and we seek 
comment on this view. For each of the proposals below and each 
potential alternative proposed by commenters, we seek comment on its 
effectiveness in ensuring call completion to rural areas (including its 
effectiveness relative to other proposals), its costs and benefits, and 
its impact on smaller intermediate providers.

[[Page 21987]]

1. Proposed Service Quality Standards
    19. Industry Best Practices. First, we propose to require 
intermediate providers subject to section 262(a) to take reasonable 
steps to abide by certain industry best practices for rural call 
completion. Specifically, we propose to require intermediate providers 
to take reasonable steps to: (1) Prevent ``call looping,'' a practice 
in which the intermediate provider hands off a call for completion to a 
provider that has previously handed off the call; (2) ``crank back'' or 
release a call back to the originating carrier, rather than simply 
dropping the call, upon failure to find a route; and (3) not process 
calls so as to ``terminate and re-originate'' them (e.g., fraudulently 
using ``SIM boxes'' or unlimited VoIP plans to re-originate large 
amounts of traffic in an attempt to shift the cost of terminating these 
calls from the originating provider to the wireless or wireline 
provider). These best practices, developed by ATIS, are supported by 
both covered providers and rural carriers. We seek comment on our 
proposal, and how these rules should be drafted, including the specific 
language and terminology that should be used.
    20. We also recognize that another industry best practice for rural 
call completion is to prohibit intermediate providers from manipulating 
signaling information. Section 64.1601(a)(2) of the Commission's rules 
already requires intermediate providers within an interstate or 
intrastate call path that originate and/or terminate on the PSTN to 
pass unaltered to subsequent providers in the call path signaling 
information identifying the telephone number, or billing number, if 
different, of the calling party that is received with a call. In 
addition, section 64.2201(b) requires intermediate providers to return 
unaltered to providers in the call path any signaling information that 
indicates that the terminating provider is alerting the called party, 
such as by ringing. Are any additional rules necessary to prevent 
intermediate providers from manipulating signaling information for 
calls destined for rural areas? If we adopt an annual certification 
requirement, should we require intermediate providers to certify 
compliance with these rules in their annual certifications?
    21. Are these best practices sufficient? Should we require 
intermediate providers to take reasonable steps to follow any other 
industry best practices, either in addition to or in place of those 
discussed above? Should we require intermediate providers to 
temporarily or permanently remove an intermediate provider who fails to 
perform at an acceptable service level from the routing path, as we 
required for covered providers? Although we declined to mandate this 
approach for covered providers, should we require intermediate 
providers to take reasonable steps to limit the number of intermediate 
providers after them in the call chain? How can we ensure that our 
rules keep pace if ATIS rural call completion best practices or other 
industry-based standard is modified? What are the costs, benefits, and 
implications of these requirements on covered providers, intermediate 
providers, and consumers? Are there other implementation issues 
associated with these best practices that we should consider? We seek 
comment on the approach we propose generally, including on how we 
should define ``reasonable steps.'' We also seek comment on 
alternatives to this proposal, such as omitting the language ``take 
reasonable steps to'' from the draft rule.
    22. Self-Monitoring of Rural Call Completion Performance. Second, 
in addition to the proposed requirement to comply with industry best 
practices, we propose requiring intermediate providers to have 
processes in place to monitor their own rural call completion 
performance when transmitting covered voice communications. We seek 
comment on whether we should model this self-monitoring rule on the 
monitoring rule for covered providers. In what ways, if any, should the 
two requirements vary? Should the self-monitoring rule for intermediate 
providers be more prescriptive than the monitoring rule for covered 
providers we adopt, and if so why and how? How can we ensure that the 
combined monitoring requirements work harmoniously to best promote 
rural call completion while avoiding wasteful duplicative effort? For 
instance, should we allow a safe harbor for covered providers who work 
with an intermediate provider that meets our intermediate provider 
monitoring requirements and reports back or certifies its compliance to 
the covered provider?
    23. If commenters believe the intermediate provider self-monitoring 
requirement and covered provider monitoring rule should differ, we seek 
comment on how they should differ. Should we specify the form and 
frequency of the required monitoring, and if so, how? Should we clarify 
the scope of the required monitoring by intermediate providers, and if 
so how? For example, should we clarify whether the monitoring must be 
conducted on a rural OCN-by-OCN basis? Should we specify how 
intermediate providers must monitor and assess their own rural call 
completion performance or should we leave this to the discretion of 
intermediate providers? We also seek comment on any other potential 
implementation issues associated with the proposed self-monitoring 
requirement. Additionally, we seek comment on the benefits and burdens 
of this proposal with regard to small intermediate providers.
    24. Compliance. Further, we seek comment on how we can best ensure 
compliance with our proposed requirements. While we rejected requiring 
covered providers to file an annual certification of compliance with 
the monitoring rule, should we nonetheless require intermediate 
providers to file annual certifications that they are taking reasonable 
steps to follow the specified best practices? If so, how should such a 
requirement be implemented?
2. Alternative Proposals
    25. We seek comment on alternative proposals for service quality 
standards. If we were to pursue ``the more general adoption of duties 
to complete calls analogous to those that already apply to covered 
providers under prior Commission rules and orders,'' with which basic 
practices should we require intermediate providers to comply? For 
instance, should we explicitly prohibit intermediate providers from 
blocking or restricting calls to rural areas? We seek comment on such a 
requirement, including whether any exceptions would need to be 
permitted.
    26. Alternatively, should we require intermediate providers to meet 
or exceed one or more numeric rural call completion performance targets 
or thresholds while giving them flexibility in how to meet this 
requirement? If so, what metric(s) should we utilize and what target(s) 
or threshold(s) should we set? How would we address the data quality 
issues we have previously seen in our reports in creating and enforcing 
such a metric?
    27. Finally, we seek comment on whether we should require 
intermediate providers to certify that they do not transmit covered 
voice communications to other intermediate providers that are not 
registered with the Commission and on any implementation issues 
associated with such a requirement. Is such a requirement necessary 
given that new section 262(b) prohibits covered providers from using 
intermediate providers that are unregistered?

[[Page 21988]]

3. Impact of Covered Provider Requirements on Quality Standards
    28. For each of the proposals above and any potential alternative, 
we also seek comment on its relationship to the requirements for 
covered providers we adopt in today's Order. In particular, how should 
the quality standards we adopt for intermediate providers be influenced 
by the monitoring rule we establish for on covered providers, if at 
all? Does the fact that we adopted a flexible, standard-based approach 
for covered providers suggest that we should do the same for 
intermediate providers? Or does it encourage us to adopt specific 
measures for intermediate provider quality standards, so that covered 
providers can refer to intermediate provider compliance when working to 
fulfill the monitoring rule? We seek comment on these and any other 
issues regarding the interplay between our proposed service quality 
standards and the covered provider requirements adopted in today's 
Order.

D. Enforcement of Intermediate Provider Requirements

    29. We seek comment on how to enforce the registration and service 
quality requirements that we adopt for intermediate providers. Should 
an intermediate provider's failure to comply with the quality standards 
we adopt or to fully and accurately register potentially result in 
removal from the registry, thereby preventing covered providers from 
using that intermediate provider? We seek comment on this issue and any 
related implementation issues. For example, how long should removal 
from the registry last? And what process should we establish for 
permitting an intermediate provider that has been removed from the 
registry for noncompliance to be reinstated?
    30. For the Commission to exercise its forfeiture authority for 
violations of the Act and the Commission's rules without first issuing 
a citation, the wrongdoer must hold (or be an applicant for) some form 
of authorization from the Commission, or be engaged in activity for 
which such an authorization is required. Intermediate providers are not 
currently required to obtain a Commission authorization (although some 
intermediate providers may hold Commission authorizations as a result 
of other services that they provide). We propose to interpret the act 
of registration itself as a grant of Commission authorization to 
intermediate providers and allow us to exercise our forfeiture 
authority against registered providers without first issuing a 
citation. We seek comment on this proposal. Does this proposal allow us 
to take appropriate enforcement action against providers that violate 
the intermediate provider requirements that we adopt? Are there 
drawbacks to this proposal, or practical implementation issues we 
should consider? Is there an alternate mechanism to gain enforcement 
authority over intermediate providers that we should adopt?
    31. In addition, to the extent that any intermediate providers are 
not common carriers, we seek comment on appropriate penalties and 
enforcement processes for violations of the RCC Act. Presently, common 
carriers may be assessed a forfeiture of up to $196,387 per violation 
or each day of a continuing violation and up to a statutory maximum of 
$1,963,870 for any single act or failure to act. These amounts reflect 
inflation adjustments to the forfeitures specified in section 
503(b)(2)(B) of the Act ($100,000 per violation or per day of a 
continuing violation and $1,000,000 per any single act or failure to 
act). The Federal Civil Penalties Inflation Adjustment Act Improvement 
Act of 2015 (2015 Inflation Adjustment Act) requires the Commission to 
amend its forfeiture penalty rules to reflect annual adjustments for 
inflation in order to improve their effectiveness and maintain their 
deterrent effect. Further, the 2015 Inflation Adjustment Act provides 
that the new penalty levels shall apply to penalties assessed after the 
effective date of the increase, including when the violations 
associated with the penalties predate the increase. In contrast, non-
common carrier entities that hold Commission authorizations, but are 
not specifically designated in section 503(b)(2)(A) through (C) of the 
Act, are subject to a forfeiture of up to $19,639 per violation or each 
day of a continuing violation and up to a statutory maximum of $147,290 
for any single act or failure to act. These penalties also apply to an 
entity that does not hold (and is not required to hold) a Commission 
license, permit, certificate, or other instrument of authorization, 
but, as explained above, is subject to forfeiture after a citation has 
first been issued. Under our proposal, we could impose forfeitures on 
intermediate providers registered with us without first issuing a 
citation. In such cases, which penalty is the more appropriate maximum 
forfeiture for intermediate providers that are not otherwise considered 
common carriers? If commenters believe that such entities should be 
subject to the same potential penalties as common carriers, what legal 
authority do we have for that approach? Commenters advocating for a 
given approach should discuss in detail the legal analysis and/or any 
relevant precedent that they believe could justify such action. Are 
there other bases for imposing on any intermediate providers that are 
not common carriers equivalent enforcement provisions as those imposed 
on traditional common carriers in the rural call completion context?
    32. Should intermediate providers be prohibited from registering 
with the Commission if they are ``red-lighted'' by the Commission for 
unpaid debts or other reasons? And how can we prevent individuals from 
circumventing registration prohibitions by forming and registering new 
intermediate provider entities? Are there other reasons for which 
intermediate providers should be deemed ineligible to register? We seek 
comment on these and any alternative approaches that commenters believe 
would put any intermediate providers that are not common carriers on an 
equal footing with intermediate providers that are common carriers.

E. Exception to Service Quality Standards for Safe Harbor Covered 
Providers

    33. The RCC Act creates an exception to the intermediate provider 
service quality standards to be established by the Commission for those 
intermediate providers that are also safe harbor covered providers. In 
order to qualify for the Safe Harbor, covered providers satisfy three 
qualification requirements: (1) The covered provider must restrict by 
contract any intermediate provider to which a call is directed from 
permitting more than one additional intermediate provider in the call 
path before the call reaches the terminating provider or terminating 
tandem; (2) any nondisclosure agreement with an intermediate provider 
must permit the covered provider to reveal the identity of the 
intermediate provider and any additional intermediate provider to the 
Commission and to the rural incumbent LEC(s) whose incoming long-
distance calls are affected by the intermediate provider's performance; 
and (3) the covered provider must have a process in place to monitor 
the performance of its intermediate providers. Specifically, new 
section 262(h) provides that the service quality standards ``shall not 
apply to a covered provider that--(1) on or before the date that is 1 
year after the date of enactment of this section, has certified as a 
safe harbor provider under section 64.2107(a) . . . or any successor 
regulation; and (2) continues to the meet the requirements under such 
section 64.2107(a).'' Therefore, to implement new section 262(h), we 
propose to retain

[[Page 21989]]

the three qualification requirements of our existing safe harbor rule. 
That is, a covered provider seeking to qualify for the safe harbor 
within the timeframe specified under the legislation would need to meet 
the existing qualification requirements in section 64.2107(a) of our 
rules. We seek comment on this proposal.
    34. We also seek comment on the interaction between the exemptions 
contained in the RCC Act and our removal of the RCC data reporting 
requirements. In this connection, we seek comment on how phasing out 
the remaining recording and retention requirements, if we were to adopt 
that approach, could affect the safe harbor provisions of section 
64.2107(a), and by extension, our implementation of section 262(h). If 
we were to eliminate the recording and retention requirements from 
which the safe harbor provides partial relief, will safe harbor covered 
providers have sufficient incentive to continue to use no more than two 
intermediate providers in the path of a given call? Stated differently, 
will relief from the intermediate provider service quality standards 
pursuant to section 262(h) provide adequate incentive for current safe 
harbor covered providers to continue utilizing no more than two 
intermediate providers in the call path in an effort to reduce rural 
call completion problems? Do commenters have alternative proposals for 
implementing section 262(h)? For our proposal and any alternative 
proposal, we seek comment on its costs and benefits (including for 
smaller providers), implementation issues, and its effect on reducing 
rural call completion problems.

F. RCC Act Definitions

    35. We seek comment on any other issues we should take into account 
with respect to the RCC Act's definitions of the terms ``intermediate 
provider,'' ``covered voice communication,'' and ``covered provider.'' 
In addition, we seek comment on whether there are any other terms that 
we should define explicitly for purposes of implementing the RCC Act 
and, if so, how we should define those terms.
    36. Intermediate Provider. New section 262(i) of the Act defines an 
``intermediate provider'' as any entity that ``(A) enters into a 
business arrangement with a covered provider or other intermediate 
provider for the specific purpose of carrying, routing, or transmitting 
voice traffic that is generated from the placement of a call placed--
(i) from an end user connection using a North American Numbering Plan 
resource; or (ii) to an end user connection using such a numbering 
resource; and (B) does not itself, either directly or in conjunction 
with an affiliate, serve as a covered provider in the context of 
originating or terminating a given call.'' We propose to adopt the same 
definition of ``intermediate provider'' in our rules implementing the 
RCC Act. We seek comment on this proposal and on what, if any, 
additional guidance we should provide concerning this definition. We 
also seek comment on possible alternatives.
    37. Our existing rural call completion rules define ``intermediate 
provider'' differently from the RCC Act. Specifically, under section 
64.2101 of the Commission's rules, ``intermediate provider'' is given 
the same meaning as in section 64.1600(f), which defines it as ``any 
entity that carries or processes traffic that traverses or will 
traverse the PSTN at any point insofar as that entity neither 
originates nor terminates that traffic.'' For our rural call completion 
rules governing covered providers, we propose to modify the existing 
definition of intermediate provider in section 64.2101 to make it 
consistent with the definition of intermediate provider in the RCC Act. 
We seek comment on the effects of this proposed modification. Do 
commenters believe that there is a substantive difference between the 
definition of ``intermediate provider'' in our existing rules and in 
the RCC Act? Should we supplement our proposed definition of 
``intermediate provider'' to reflect this difference, and if so, how? 
For example, should certain types of entities be exempt from the 
definition of ``intermediate provider''?
    38. Covered Voice Communication. The RCC Act defines ``covered 
voice communication'' as ``a voice communication (including any related 
signaling information) that is generated--(A) from the placement of a 
call from a connection using a North American Numbering Plan resource 
or a call placed to a connection using such a numbering resource; and 
(B) through any service provided by a covered provider.'' We propose to 
adopt the same definition in our rules implementing the RCC Act. We 
seek comment on this proposal and on any additional guidance we should 
provide on this definition. We also seek comment on the meaning of the 
phrase ``through any service provided by a covered provider.'' Is a 
voice communication ``covered'' if it does not originate with a covered 
provider but the call traverses or terminates on the network of covered 
provider? Would such voice communication include those carried by non-
interconnected VoIP providers or private networks in the call path? 
More generally, how should non-interconnected VoIP providers and 
private networks be regulated to ensure the completion of calls to 
rural areas, and what rules should apply in that regard?
    39. Covered Provider. New section 262(i)(1) of the Act gives the 
term ``covered provider'' the same meaning as in the Commission's 
existing rural call completion rules ``or any successor thereto.'' For 
purposes of implementing the RCC Act, we propose to retain the 
definition of ``covered provider'' as in our existing rules. We seek 
comment on this proposal.

G. Legal Authority

    40. We believe that the RCC Act gives us ample legal authority to 
adopt the proposed registration requirements and service quality 
standards for intermediate providers and any potential alternative 
proposals. We seek comment on this view, and on additional or 
alternative sources of authority for the rules we propose and on which 
we seek comment above. To the extent that additional authority 
necessary, we seek comment on sections 201(b), 251(a), and 403 as 
additional sources of authority for our proposals.

H. Sunset of Recording and Retention Rules

    41. We seek comment on elimination of the recordkeeping and 
retention rules adopted in the RCC Order in conjunction with our 
implementation of the RCC Act. As we have observed, the rural call 
completion data collection has been characterized by challenges that 
limit its utility for some of its intended purposes. Going forward, we 
anticipate that progress on intercarrier compensation reform, our newly 
adopted requirement that covered providers monitor their intermediate 
providers, and the implementation of the RCC Act should allow the 
Commission to more efficiently address rural call completion issues. We 
therefore seek comment on whether to sunset the remaining recordkeeping 
and retention rules upon effectiveness of rules we adopt to implement 
the RCC Act.
    42. Alternatively, should we sunset the rules at a different point 
in time, such as three years from today's Order, on the view that this 
will allow sufficient time for the Commission to undertake further 
intercarrier compensation reform, and for compliance with the rules we 
adopt today and those to implement the RCC Act to promote rural call 
completion? We seek comment on further

[[Page 21990]]

alternatives, including whether we should instead retain the recording 
and retention rules without any sunset.

I. Modification of Rules Adopted in the Second Report and Order

    43. In the RCC Second Report and Order, we conclude that covered 
provider monitoring requirements we adopt are necessary complements to 
the intermediate provider requirements created by the RCC Act. We seek 
comment on whether we should revisit our conclusions as we implement 
the RCC Act. Should we change the monitoring requirements that we adopt 
today in light of the service quality standards for intermediate 
providers under consideration in this Third Further Notice of Proposed 
Rulemaking? If so, how? Should we create a safe harbor for covered 
providers who work with intermediate providers that meet our quality 
standards? What would be the contours of such a safe harbor so that it 
would be meaningful, considering that the RCC Act directs all 
intermediate providers to meet the quality standards we adopt? 
Alternatively, should we remove covered provider requirements entirely 
once the RCC Act is fully implemented? Would such changes jeopardize 
our ability to identify and penalize providers, including intermediate 
providers, that violate the Communications Act or our call blocking 
rules? We seek comment on these and any alternative approaches.

II. Initial Regulatory Flexibility Analysis

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

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

    45. The Third Further Notice of Proposed Rulemaking proposes and 
seeks comment on rules to implement the recently-enacted Improving 
Rural Call Quality and Reliability Act of 2017 (RCC Act). The RCC Act 
directs us to (1) promulgate registration requirements for intermediate 
providers within 180 days of enactment, and create a registry for such 
providers on our website; and (2) establish service quality standards 
for intermediate providers within one year of enactment. We propose and 
seek comment on rules to implement the registry provisions of the RCC 
Act. We further seek comment generally on possible frameworks to 
implement the service quality standards provisions of the RCC Act. We 
also seek comment on sunsetting the recording and retention rules 
established in the RCC Order upon implementation of the RCC Act. As we 
move forward, we will work quickly to implement the RCC Act and 
continue take other measures as necessary ``to ensure the integrity of 
voice communications and to prevent unjust or unreasonable 
discrimination among areas of the United States in the delivery of such 
communications.''

B. Legal Basis

    46. The legal basis for any action that may be taken pursuant to 
the Third Further Notice of Proposed Rulemaking is contained in 
sections 1, 4(i), 201(b), 202(a), 218, 220(a), 251(a), 262, and 403 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 
201(b), 202(a), 218, 220(a), 251(a), 262, and 403.

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

    47. 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 and by the rule revisions on which the 
NPRM seeks comment, 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.
    48. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three comprehensive small entity size standards that could 
be directly affected herein. First, while there are industry specific 
size standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the SBA's Office of 
Advocacy, in general a small business is an independent business having 
fewer than 500 employees. These types of small businesses represent 
99.9% of all businesses in the United States which translates to 28.8 
million businesses. Next, the type of small entity described as a 
``small organization'' is generally ``any not-for-profit enterprise 
which is independently owned and operated and is not dominant in its 
field.'' Nationwide, as of 2007, there were approximately 1,621,215 
small organizations. Finally, the small entity described as a ``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.'' U.S. Census 
Bureau data published in 2012 indicate that there were 89,476 local 
governmental jurisdictions in the United States. We estimate that, of 
this total, as many as 88,761 entities may qualify as ``small 
governmental jurisdictions.'' Thus, we estimate that most governmental 
jurisdictions are small.
    49. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``establishments primarily engaged in 
operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having

[[Page 21991]]

1,500 or fewer employees. Census data for 2012 show that there were 
3,117 firms that operated that year. Of this total, 3,083 operated with 
fewer than 1,000 employees. Thus, under this size standard, the 
majority of firms in this industry can be considered small.
    50. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable NAICS 
Code category is Wired Telecommunications Carriers as defined above. 
Under the applicable SBA size standard, such a business is small if it 
has 1,500 or fewer employees. According to Commission data, census data 
for 2012 shows that there were 3,117 firms that operated that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. The 
Commission therefore estimates that most providers of local exchange 
carrier service are small entities that may be affected by the rules 
adopted.
    51. Incumbent LECs. Neither the Commission nor the SBA has 
developed a small business size standard specifically for incumbent 
local exchange services. The closest applicable NAICS Code category is 
Wired Telecommunications Carriers as defined above. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 3,117 firms operated in that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. 
Consequently, the Commission estimates that most providers of incumbent 
local exchange service are small businesses that may be affected by the 
rules and policies adopted. Three hundred and seven (307) Incumbent 
Local Exchange Carriers reported that they were incumbent local 
exchange service providers. Of this total, an estimated 1,006 have 
1,500 or fewer employees.
    52. Competitive Local Exchange Carriers (Competitive LECs), 
Competitive Access Providers (CAPs), Shared-Tenant Service Providers, 
and Other Local Service Providers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate NAICS Code category is Wired 
Telecommunications Carriers, as defined above. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
U.S. Census data for 2012 indicate that 3,117 firms operated during 
that year. Of that number, 3,083 operated with fewer than 1,000 
employees. Based on this data, the Commission concludes that the 
majority of Competitive LECS, CAPs, Shared-Tenant Service Providers, 
and Other Local Service Providers, are small entities. According to 
Commission data, 1,442 carriers reported that they were engaged in the 
provision of either competitive local exchange services or competitive 
access provider services. Of these 1,442 carriers, an estimated 1,256 
have 1,500 or fewer employees. In addition, 17 carriers have reported 
that they are Shared-Tenant Service Providers, and all 17 are estimated 
to have 1,500 or fewer employees. Also, 72 carriers have reported that 
they are Other Local Service Providers. Of this total, 70 have 1,500 or 
fewer employees. Consequently, based on internally researched FCC data, 
the Commission estimates that most providers of competitive local 
exchange service, competitive access providers, Shared-Tenant Service 
Providers, and Other Local Service Providers are small entities.
    53. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on Commission analyses and determinations 
in other, non-RFA contexts.
    54. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a definition for Interexchange Carriers. The closest 
NAICS Code category is Wired Telecommunications Carriers as defined 
above. The applicable size standard under SBA rules is that such a 
business is small if it has 1,500 or fewer employees. U.S. Census data 
for 2012 indicates that 3,117 firms operated during that year. Of that 
number, 3,083 operated with fewer than 1,000 employees. According to 
internally developed Commission data, 359 companies reported that their 
primary telecommunications service activity was the provision of 
interexchange services. Of this total, an estimated 317 have 1,500 or 
fewer employees. Consequently, the Commission estimates that the 
majority of IXCs are small entities that may be affected by our 
proposed rules.
    55. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. The 
Telecommunications Resellers industry comprises establishments engaged 
in purchasing access and network capacity from owners and operators of 
telecommunications networks and reselling wired and wireless 
telecommunications services (except satellite) to businesses and 
households. Establishments in this industry resell telecommunications; 
they do not operate transmission facilities and infrastructure. Mobile 
virtual network operators (MVNOs) are included in this industry. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees. Census data for 2012 show that 1,341 firms provided resale 
services during that year. Of that number, all operated with fewer than 
1,000 employees. Thus, under this category and the associated small 
business size standard, the majority of these prepaid calling card 
providers can be considered small entities.
    56. Toll Resellers. The Commission has not developed a definition 
for Toll Resellers. The closest NAICS Code Category is 
Telecommunications Resellers. The Telecommunications Resellers industry 
comprises establishments engaged in purchasing access and network 
capacity from owners and operators of telecommunications networks and 
reselling wired and wireless telecommunications services (except 
satellite) to businesses and households. Establishments in this 
industry resell telecommunications; they do not operate transmission 
facilities and infrastructure. Mobile virtual network operators (MVNOs) 
are included in this industry. The SBA has developed a small business 
size standard for the category of Telecommunications Resellers. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees. Census data for 2012 show that 1,341 firms provided resale 
services during that year. Of that number, 1,341 operated with fewer 
than 1,000 employees. Thus, under this category and the associated 
small business size standard, the majority of these resellers can be 
considered small entities. According to Commission data, 881 carriers 
have reported that they are engaged in the provision of toll resale 
services. Of this total, an estimated 857 have 1,500 or fewer 
employees. Consequently, the Commission estimates that the majority of 
toll resellers are small entities.
    57. Other Toll Carriers. Neither the Commission nor the SBA has 
developed

[[Page 21992]]

a definition for small businesses specifically applicable to Other Toll 
Carriers. This category includes toll carriers that do not fall within 
the categories of interexchange carriers, operator service providers, 
prepaid calling card providers, satellite service carriers, or toll 
resellers. The closest applicable NAICS Code category is for Wired 
Telecommunications Carriers as defined above. Under the applicable SBA 
size standard, such a business is small if it has 1,500 or fewer 
employees. Census data for 2012 shows that there were 3,117 firms that 
operated that year. Of this total, 3,083 operated with fewer than 1,000 
employees. Thus, under this category and the associated small business 
size standard, the majority of Other Toll Carriers can be considered 
small. According to internally developed Commission data, 284 companies 
reported that their primary telecommunications service activity was the 
provision of other toll carriage. Of these, an estimated 279 have 1,500 
or fewer employees. Consequently, the Commission estimates that most 
Other Toll Carriers are small entities that may be affected by rules 
adopted pursuant to the Second Further Notice.
    58. Prepaid Calling Card Providers. The SBA has developed a 
definition for small businesses within the category of 
Telecommunications Resellers. Under that SBA definition, such a 
business is small if it has 1,500 or fewer employees. According to the 
Commission's Form 499 Filer Database, 500 companies reported that they 
were engaged in the provision of prepaid calling cards. The Commission 
does not have data regarding how many of these 500 companies have 1,500 
or fewer employees. Consequently, the Commission estimates that there 
are 500 or fewer prepaid calling card providers that may be affected by 
the rules.
    59. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census data for 2012 show that there were 967 firms that operated for 
the entire year. Of this total, 955 firms had employment of 999 or 
fewer employees and 12 had employment of 1000 employees or more. Thus 
under this category and the associated size standard, the Commission 
estimates that the majority of wireless telecommunications carriers 
(except satellite) are small entities.
    60. The Commission's own data--available in its Universal Licensing 
System--indicate that, as of October 25, 2016, there are 280 Cellular 
licensees that will be affected by our actions today. The Commission 
does not know how many of these licensees are small, as the Commission 
does not collect that information for these types of entities. 
Similarly, according to internally developed Commission data, 413 
carriers reported that they were engaged in the provision of wireless 
telephony, including cellular service, Personal Communications Service, 
and Specialized Mobile Radio Telephony services. Of this total, an 
estimated 261 have 1,500 or fewer employees, and 152 have more than 
1,500 employees. Thus, using available data, we estimate that the 
majority of wireless firms can be considered small.
    61. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these definitions.
    62. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite). Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Commission data, 
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. Therefore, a little less than one third of these 
entities can be considered small.
    63. Cable and Other Subscription Programming. This industry 
comprises establishments primarily engaged in operating studios and 
facilities for the broadcasting of programs on a subscription or fee 
basis. The broadcast programming is typically narrowcast in nature 
(e.g. limited format, such as news, sports, education, or youth-
oriented). These establishments produce programming in their own 
facilities or acquire programming from external sources. The 
programming material is usually delivered to a third party, such as 
cable systems or direct-to-home satellite systems, for transmission to 
viewers. The SBA has established a size standard for this industry 
stating that a business in this industry is small if it has 1,500 or 
fewer employees. The 2012 Economic Census indicates that 367 firms were 
operational for that entire year. Of this total, 357 operated with less 
than 1,000 employees. Accordingly we conclude that a substantial 
majority of firms in this industry are small under the applicable SBA 
size standard.
    64. Cable Companies and Systems (Rate Regulation). The Commission 
has developed its own small business size standards for the purpose of 
cable rate regulation. Under the Commission's rules, a ``small cable 
company'' is one serving 400,000 or fewer subscribers nationwide. 
Industry data indicate that there are currently 4,600 active cable 
systems in the United States. Of this total, all but eleven cable 
operators nationwide are small under the 400,000-subscriber size 
standard. In addition, under the Commission's rate regulation rules, a 
``small system'' is a cable system serving 15,000 or fewer subscribers. 
Current Commission records show 4,600 cable systems nationwide. Of this 
total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 
systems have 15,000 or more subscribers, based on the same records. 
Thus, under this standard as well, we estimate that most cable systems 
are small entities.
    65. Cable System Operators (Telecom Act Standard). The 
Communications Act also contains a size standard for small cable system 
operators, which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' There are approximately 52,403,705 cable video 
subscribers in the United States today. Accordingly, an operator 
serving fewer than 524,037 subscribers shall be deemed a small operator 
if its annual revenues, when combined with the total annual revenues of 
all its affiliates, do not exceed $250 million in the aggregate. Based 
on available data, we find that all but nine incumbent cable operators 
are small entities under this size standard. We note that the 
Commission neither requests nor collects information on whether cable 
system operators are affiliated with entities whose gross annual 
revenues

[[Page 21993]]

exceed $250 million. Although it seems certain that some of these cable 
system operators are affiliated with entities whose gross annual 
revenues exceed $250 million, we are unable at this time to estimate 
with greater precision the number of cable system operators that would 
qualify as small cable operators under the definition in the 
Communications Act.
    66. All Other Telecommunications. ``All Other Telecommunications'' 
is defined as follows: This U.S. industry is comprised of 
establishments that are primarily engaged in providing specialized 
telecommunications services, such as satellite tracking, communications 
telemetry, and radar station operation. This industry also includes 
establishments primarily engaged in providing satellite terminal 
stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. 
Establishments providing internet services or voice over internet 
protocol (VoIP) services via client-supplied telecommunications 
connections are also included in this industry. The SBA has developed a 
small business size standard for ``All Other Telecommunications,'' 
which consists of all such firms with gross annual receipts of $32.5 
million or less. For this category, census data for 2012 show that 
there were 1,442 firms that operated for the entire year. Of these 
firms, a total of 1,400 had gross annual receipts of less than $25 
million. Consequently, we estimate that the majority of All Other 
Telecommunications firms are small entities that might be affected by 
our action.

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

    67. The Third Further Notice of Proposed Rulemaking proposes and 
seeks comment on rule changes that will affect reporting, 
recordkeeping, and other compliance requirements. In particular, the 
Third Further Notice of Proposed Rulemaking proposes to adopt the 
definitions of the terms ``intermediate provider'', ``covered voice 
communication'', and ``covered provider'' provided in the RCC Act in 
our rules. With respect to the RCC Act's registry requirements, we 
propose and seek comment on rules to implement those provisions, and 
seek comment on: (a) How to interpret and implement the RCC Act's 
prohibition on covered providers' use of unregistered intermediate 
providers; (b) how best to ensure compliance with that prohibition; (c) 
whether we should adopt any exceptions to the prohibition on using 
unregistered intermediate providers, and (d) whether any such 
exceptions would be consistent with the RCC Act. The Third Further 
Notice of Proposed Rulemaking also proposes to require intermediate 
providers to take reasonable steps to abide by certain industry best 
practices for rural call completion, and to have processes in place to 
monitor their own rural call completion performance when transmitting 
covered voice communications. We seek comment on how to enforce the 
registration and service quality requirements that we adopt for 
intermediate providers. Should the Commission adopt these proposals, 
such action could result in increased, reduced, or otherwise altered 
reporting, recordkeeping, or other compliance requirements for covered 
providers.
    68. In the Third Further Notice of Proposed Rulemaking, we also 
propose to retain the three qualification requirements of our existing 
safe harbor rule, and seek comment on sunsetting the recording and 
retention rules established in the RCC Order upon implementation of the 
RCC Act. Should the Commission adopt these measures, we expect such 
action to reduce reporting, recordkeeping, and other compliance 
requirements. Specifically, these measures should have a beneficial 
reporting, recordkeeping, or compliance impact on small entities 
because many providers will be subject to fewer such burdens.

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

    69. 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.
    70. The Third Further Notice of Proposed Rulemaking seeks comment 
on a variety of proposals to implement the registry provisions of the 
RCC Act and possible frameworks to implement the service quality 
standards provisions of the RCC Act. It also specifically seeks comment 
on the benefits and burdens to smaller providers of our proposals (and 
any potential alternative proposals) for structuring and managing the 
intermediate provider registry. With respect to possible frameworks to 
implement the service quality standards, the Third Further Notice of 
Proposed Rulemaking seeks comment on the costs, benefits, and impact on 
smaller intermediate providers of each of the proposals outlined and 
each potential alternative proposed by commenters. We also seek comment 
on how to interpret and implement the RCC Act's prohibition on covered 
providers' use of unregistered intermediate providers, and we seek 
comment on the costs and benefits (including to smaller providers) and 
implementation issues for each potential interpretation.
    71. The Third Further Notice of Proposed Rulemaking seeks comment 
on all of our proposals, as well as alternatives that could also 
address rural call completion problems while reducing burdens on small 
providers. In the Third Further Notice of Proposed Rulemaking, we 
explicitly seek comment on the impact of our proposals on small 
providers. The Commission expects to consider the economic impact on 
small entities, as identified in comments filed in response to the 
Third Further Notice of Proposed Rulemaking, in reaching its final 
conclusions and taking action in this proceeding.

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

    72. None.

III. Procedural Matters

A. Comment Filing Procedures

    73. Pursuant to sections 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 in Dockets WC 17-192, and CC 95-155. 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).
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. If more than one

[[Page 21994]]

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.
     [ssquf] All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours 
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes must be 
disposed of before entering the building.
     [ssquf] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701.
     [ssquf] U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street SW, Washington DC 20554.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format), send an email to [email protected] or 
call the Consumer & Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (TTY).
    74. This proceeding shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making ex parte presentations must file a copy of any written 
presentation or a memorandum summarizing any oral presentation within 
two business days after the presentation (unless a different deadline 
applicable to the Sunshine period applies). Persons making oral ex 
parte presentations are reminded that memoranda summarizing the 
presentation must (1) list all persons attending or otherwise 
participating in the meeting at which the ex parte presentation was 
made, and (2) summarize all data presented and arguments made during 
the presentation. If the presentation consisted in whole or in part of 
the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with rule 1.1206(b). In proceedings governed by 
Rule 1.49(f) or for which the Commission has made available a method of 
electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

B. Initial Regulatory Flexibility Analysis

    75. Pursuant to the Regulatory Flexibility Act (RFA), the 
Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities of 
the policies and actions considered in this Third Further Notice of 
Proposed Rulemaking. The text of the IRFA is set forth above. Written 
public comments are requested on this IRFA. Comments must be identified 
as responses to the IRFA and must be filed by the deadlines for comment 
on the Third Further Notice of Proposed Rulemaking. The Commission's 
Consumer and Governmental Affairs Bureau, Reference Information Center, 
will send a copy of this Third Further Notice of Proposed Rulemaking, 
including the IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration (SBA).

C. Paperwork Reduction Act

    76. This document contains proposed new information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, we 
seek specific comment on how we might further reduce the information 
collection burden for small business concerns with fewer than 25 
employees.

D. Contact Person

    77. For further information about this proceeding, please contact 
Zach Ross, FCC Wireline Competition Bureau, Competition Policy 
Division, Room 5-C211, 445 12th Street SW, Washington, DC 20554, at 
(202) 418-1033 or [email protected].

IV. Ordering Clauses

    78. Accordingly, it is ordered that, pursuant to sections 1, 4(i), 
201(b), 202(a), 217, 218, 220(a), 251(a), and 403 of the Communications 
Act of 1934, as amended, 47 U.S.C. 151, 154(i), 201(b), 202(a), 217, 
218, 220(a), 251(a), and 403, this Third Further Notice of Proposed 
Rulemaking is adopted.
    79. It is further ordered that the Commission shall send a copy of 
this Third Further Notice of Proposed Rulemaking to Congress and to the 
Government Accountability Office pursuant to the Congressional Review 
Act, see 5 U.S.C. 801(a)(1)(A).
    80. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Third Further Notice of Proposed Rulemaking, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 64

    Miscellaneous rules relating to common carriers, Communications 
common carriers, Reporting and recordkeeping requirements, 
Telecommunications, Telephone.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Proposed Rules

    For the reasons set forth above, The Federal Communications 
Commission proposes to amend Part 64 of Title 47 of the Code of Federal 
Regulations as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

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

    Authority: 47 U.S.C. 154, 202, 225, 251(e), 254(k), 262, 
403(b)(2)(B), (c), 616, 620, Pub. L. 104-104, 110 Stat. 56. 
Interpret or apply 47 U.S.C. 201, 202, 217, 218, 220, 222, 225, 226, 
227, 228, 251(a), 251(e), 254(k), 262 616, 620, and the Middle Class 
Tax Relief and Job Creation Act of 2012, Pub. L. 112-96, unless 
otherwise noted.
0
2. Amend Sec.  64.2101 by adding a definition of ``covered voice 
communication'' and revising the

[[Page 21995]]

definition of ``intermediate provider'' to read as follows:


Sec.  64.2101  Definitions.

* * * * *
    Covered voice communication. The term ``covered voice 
communication'' means a voice communication (including any related 
signaling information) that is generated--
    (1) from the placement of a call from a connection using a North 
American Numbering Plan resource or a call placed to a connection using 
such a numbering resource; and
    (2) through any service provided by a covered provider.
* * * * *
    Intermediate provider. The term ``intermediate provider'' means any 
entity that--
    (a) enters into a business arrangement with a covered provider or 
other intermediate provider for the specific purpose of carrying, 
routing, or transmitting voice traffic that is generated from the 
placement of a call placed--
    (1) from an end user connection using a North American Numbering 
Plan resource; or
    (2) to an end user connection using such a numbering resource; and
    (b) does not itself, either directly or in conjunction with an 
affiliate, serve as a covered provider in the context of originating or 
terminating a given call.
* * * * *
0
3. Amend Sec.  64.2107 by revising to read as follows:


Sec.  4.2107  Safe Harbor from Intermediate Provider Service Quality 
Standards.

    (a)(1) A covered provider may qualify as a safe harbor provider 
under this subpart if it files one of the following certifications, 
signed under penalty of perjury by an officer or director of the 
covered provider regarding the accuracy and completeness of the 
information provided, in WC Docket No. 13-39:
    I __(name), (title), an officer of __(entity), certify that 
__(entity) uses no intermediate providers;'' or
    I __(name),__(title), an officer of__(entity), certify that 
__(entity) restricts by contract any intermediate provider to which a 
call is directed by__(entity) from permitting more than one additional 
intermediate provider in the call path before the call reaches the 
terminating provider or terminating tandem. I certify that any 
nondisclosure agreement with an intermediate provider permits__(entity) 
to reveal the identity of the intermediate provider and any additional 
intermediate provider to the Commission and to the rural incumbent 
local exchange carrier(s) whose incoming long-distance calls are 
affected by the intermediate provider's performance. I certify 
that__(entity) has a process in place to monitor the performance of its 
intermediate providers.
    (2) The certification in paragraph (a)(1) must be submitted:
    (A) for the first time on or before February 26, 2019; and
    (B) annually thereafter.
    (b) The requirements of section 64.2117 shall not apply to covered 
providers who qualify as safe harbor providers in accordance with this 
section.
0
4. Add Sec.  64.2115 to subpart V to read as follows:


Sec.  64.2115  Registration of Intermediate Providers.

    (a) Requirement to use registered intermediate providers. A covered 
provider shall not use an intermediate provider to transmit covered 
voice communications unless such intermediate provider is registered 
pursuant to this section.
    (b) Registration. An intermediate provider that offers or holds 
itself out as offering the capability to transmit covered voice 
communications from one destination to another and that charges any 
rate to any other entity (including an affiliated entity) for the 
transmission shall register with the Commission in accordance with this 
section. The intermediate provider shall provide the following 
information in its registration:
    (1) The intermediate provider's business name(s) and primary 
address;
    (2) The name(s), telephone number(s), email address(es), and 
business address(es) of the intermediate provider's regulatory contact 
and/or designated agent for service of process;
    (3) All names that the intermediate provider has used in the past;
    (4) The state(s) in which the intermediate provider provides 
service; and
    (5) The name, title, business address, telephone number, and email 
address of at least one person as well as the department within the 
company responsible for addressing rural call completion issues.
    (c) Submission of registration. An intermediate provider that is 
subject to the registration requirement in paragraph (b) of this 
section shall submit the information described therein through the 
intermediate provider registry on the Commission's website. The 
registration shall be made under penalty of perjury.
    (d) Changes in information. An intermediate provider must update 
the information provided pursuant to paragraph (b) of this section 
within one week of any change.
    (e) Effect of registration. An intermediate provider that submits 
registration pursuant to subsections (b) and (c) of this section, and 
receives confirmation that its registration is complete, is thereby 
granted an authorization to operate as an intermediate provider that 
covered providers may use under subsection (a).
0
5. Add Sec.  64.2117 to subpart V to read as follows:


Sec.  64.2117   Intermediate Provider Service Quality Standards.

    An intermediate provider that offers or holds itself out as 
offering the capability to transmit covered voice communications from 
one destination to another and that charges any rate to any other 
entity (including an affiliated entity) for the transmission must 
comply with the following requirements when transmitting covered voice 
communications:
    (a) The intermediate provider must take reasonable steps to:
    (1) prevent handing off a call for completion to a provider that 
has previously handed off the same call;
    (2) release a call back to the originating interexchange carrier if 
the intermediate provider fails to find a route for completion of the 
call; and
    (3) prevent processing of calls in a manner that terminates and re-
originates the calls.
    (b) The intermediate provider must have processes in place to 
monitor its rural call completion performance.

[FR Doc. 2018-09968 Filed 5-10-18; 8:45 am]
 BILLING CODE 6712-01-P