[Federal Register Volume 83, Number 126 (Friday, June 29, 2018)]
[Rules and Regulations]
[Pages 30573-30584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14073]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 17-310; FCC 18-82]


Promoting Telehealth in Rural America

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission (the 
Commission or FCC) addresses the current funding shortfall in the Rural 
Health Care (RHC) Program, including by raising the annual Program 
funding cap and applying it to the current

[[Page 30574]]

funding year to fully fund eligible funding requests for funding year 
(FY) 2017, adjusting the funding cap to reflect inflation, and 
establishing a process to carry-forward unused funds from past funding 
years for use in future funding years.

DATES: Effective June 29, 2018.

FOR FURTHER INFORMATION CONTACT: Elizabeth Drogula, 
[email protected], Telecommunications Access Policy Division, 
Wireline Competition Bureau, (202) 418-1591 or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order (R&O) in WC Docket No. 17-310; FCC 18-82, adopted on June 19, 
2018, and released on June 25, 2018. The full text of this document is 
available for public inspection during regular business hours in the 
FCC Reference Center, Room CY-A257, 445 12th Street SW, Washington, DC 
20554, or at the following internet address: https://docs.fcc.gov/public/attachments/FCC-18-82A1.pdf.

I. Introduction

    1. Technology and telemedicine have assumed an increasingly 
important role in health care delivery, particularly in rural and 
remote areas of the country. For Americans living in rural and isolated 
areas, doctor shortages and hospital closures are endemic, and 
obtaining access to high-quality health care is a constant challenge. 
Broadband greatly changes that equation, however, by enabling a wide 
range of telemedicine services--from specialists providing 
consultations via video conferencing to radiologists remotely reading 
X-rays via high-speed connectivity. Today, the Commission takes steps 
to help ensure that health care providers participating in the 
Commission's RHC Program can continue providing these and other 
essential telemedicine services to their communities.
    2. In 1996, Congress recognized the value of providing rural health 
care providers with ``an affordable rate for the services necessary for 
the provision of telemedicine,'' and the Commission established the RHC 
Program the following year. At that time, the Commission capped RHC 
Program funding at $400 million annually, and for many years, the $400 
million funding cap was sufficient to fulfill Program demand. More 
recently, however, funding requests for high-speed broadband from 
health care providers have outpaced the RHC Program funding cap, 
placing a strain on the Program's ability to increase access to 
broadband for health care providers, particularly in rural areas, and 
foster the deployment of broadband health care networks. Further, rural 
health care providers face imminent financial hardship in FY 2017 due 
to the significant, automatic proration of their funding requests 
pursuant to RHC Program rules. These funding reductions have forced 
providers to assume additional costs of providing critical health care 
services to their communities.
    3. Given rural health care providers' urgent need for funding, the 
Commission takes immediate action in the R&O to address the current 
funding shortfall in the RHC Program, including by raising the annual 
Program funding cap to $571 million and applying it to the current 
funding year to fully fund eligible funding requests for FY 2017. The 
Commission takes this action consistent with the goals of ensuring that 
rural health care providers are able to get the funding they need from 
the RHC Program. At the same time, the Commission is mindful of the 
need to guard against Program waste, fraud, and abuse to ensure that 
this funding is being spent appropriately. The Commission remains 
committed to this goal and for that reason, have proposed and sought 
comment in this proceeding on measures to ensure compliance and to 
reduce waste, fraud, and abuse in the RHC Program.

II. Discussion

    4. In the R&O, the Commission adopts measures to address the 
increased demand for funding from the RHC Program and thereby promote 
health care delivery and telemedicine in rural America. Specifically, 
the Commission (1) increases the annual RHC Program funding cap to $571 
million and apply it to FY 2017; (2) decides to annually adjust the RHC 
Program funding cap to reflect inflation, beginning with FY 2018; and 
(3) establishes a process to carry-forward unused funds from past 
funding years for use in future funding years. These actions will 
provide rural health care providers with a sufficient and more 
predictable source of universal service funding to deliver vital 
telemedicine services to their communities.

A. Raising the RHC Program Funding Cap

    5. Background. In the 2017 NPRM and Order (FCC 17-164), the 
Commission sought comment on whether to increase the RHC Program's $400 
million annual funding cap and how to determine the appropriate funding 
cap level. The Commission explained that one metric would be to 
consider what the cap would have been if adjusted by inflation since 
its adoption. It therefore sought comment on whether to establish a new 
RHC Program funding cap based on the expected level had the Commission 
initiated an annual inflation adjustment in 1997 using the gross 
domestic product chain-type price index (GDP-CPI). The Commission also 
sought comment on whether to apply any increased funding cap to FY 
2017.
    6. The majority of commenters agree that the Commission should 
raise the RHC Program funding cap. Of those commenters, most argue that 
setting the cap at $571 million, the level it would be had the Program 
been indexed for inflation since its inception, is a sufficient and 
appropriate metric for establishing a new funding cap today. Some 
commenters instead argue that the cap should be raised beyond $571 
million to account for the expansion of eligible services and entities 
since the Program's inception, as well as advances in telehealth 
capabilities and technologies, and increased broadband requirements. 
Other commenters contend that the GDP-CPI index does not sufficiently 
represent Program demand because the costs of providing health care 
services have historically outpaced inflation, or they assert that the 
funding cap should simply be doubled to $800 million to account for 
inflation, the increased number of eligible entities, and advances in 
technology.
    7. Additionally, some parties assert that the Commission's analysis 
in setting the original cap of $400 million was arbitrary or based on 
incorrect estimates of the number of qualifying rural health care 
providers. Despite this, these commenters advocate raising the annual 
funding cap based on the broadband communications requirements for 
health care providers, the increased demand for the services that such 
broadband can support, other potential sources of funding of rural 
health care broadband needs, or indexing the $400 million cap to GDP-
CPI.
    8. Discussion. The Commission concludes that raising the RHC 
Program funding cap is necessary to address current and future demand 
for supported services by health care providers. Raising the funding 
cap to $571 million responds to the significant increase in RHC Program 
demand resulting from the expansion of eligible services and entities 
since the Program's creation, as well as the advances in technology 
that often require higher bandwidth (e.g., higher-speed bandwidth, less 
latency, and diverse

[[Page 30575]]

routing) than was contemplated by the Commission when it established a 
$400 million cap for the Program in 1997. The Commission also finds 
that increasing the funding cap to what it would have been if indexed 
annually for inflation since the inception of the Program, using the 
GDP-CPI index, ensures that RHC Program funding is sufficient to meet 
current demand, while also minimizing the increased costs of funding, 
which are imposed on USF contributors and generally passed on to 
consumers. In addition, adjusting the funding cap to account for 
inflation over the past 20 years maintains the purchasing power in 
today's dollars that health care providers held when the RHC Program 
was first instituted. On these bases, the Commission raises the RHC 
Program annual funding cap from $400 million to $571 million.
    9. The Commission disagrees with those commenters who advocate 
doubling the RHC Program funding cap to $800 million at this time. The 
$171 million increase in the annual funding cap exceeds the current 
demand of $521 million, and commenters fail to provide reliable data 
justifying a $400 million increase. Moreover, the Commission believes 
that adopting such a substantial increase at this time is especially 
imprudent given the concerns in this proceeding about whether potential 
waste in the RHC Telecommunications Program has contributed to reaching 
the cap sooner than anticipated and what steps the Commission should 
take to reduce such waste.
    10. Accordingly, the Commission concludes that increasing the cap 
to $571 million strikes the appropriate balance between ensuring 
adequate funding for vital telehealth services while minimizing the 
burden placed on USF contributors and consumers. As necessary, the 
Commission will assess the need for any future increases in the cap to 
ensure that the RHC Program is sufficiently funded to achieve the 
Program's goals of increasing access to broadband for health care 
providers, particularly in rural areas, and fostering the deployment of 
broadband health care networks. For these reasons, the Commission is 
not persuaded by the arguments submitted by SHLB, ACS, and others that 
raising the cap to $571 million is insufficient to address RHC Program 
demand. By raising the cap by $171 million and taking the other steps 
discussed in this R&O (i.e., indexing the cap to reflect inflation and 
adopting a carry-forward process for unused funding), the Commission is 
addressing the substantial increase in RHC Program demand.
    11. The Commission is also unpersuaded by AT&T's arguments that 
until the Telecommunications Program is fundamentally reformed, it is 
premature to consider increasing the annual RHC Program funding cap. In 
light of the current funding shortfall in the RHC Program, the 
Commission believes that raising the funding cap to $571 million now is 
necessary to ensure that sufficient funding is available for eligible 
health care providers to maintain their current network connections and 
telehealth services, and to provide additional certainty as health care 
providers consider their future bandwidth needs. The Commission does, 
however, agree with AT&T and other commenters that managing waste, 
fraud, and abuse in the RHC Program is essential to ensuring efficient 
Program disbursements, and that the Commission should consider 
additional measures to ensure Program compliance. For that very reason, 
the 2017 NPRM and Order proposed and sought comment on measures to 
control outlier costs and reform support calculations in the 
Telecommunications Program, improve competitive bidding, and establish 
more effective oversight of the RHC Program.
    12. In addition to raising the annual RHC Program funding cap, the 
Commission addresses the immediate needs of participating health care 
providers by applying the increased cap to the current funding year (FY 
2017). Given the significant financial hardship faced by rural health 
care providers due to the scarcity of Program funding and the 
substantial proration of FY 2017 funding requests, it is incumbent on 
the Commission to make available the additional funding in this funding 
year. This decision will eliminate the need to prorate the amount of 
qualified FY 2017 funding requests and relieve rural health care 
providers of burdensome service cost increases resulting from the 
required proration.
    13. None of the commenters who support raising the annual funding 
cap oppose applying the funding cap to FY 2017. In the 2017 NPRM and 
Order, the Commission sought comment on whether to raise the funding 
cap, and whether the funding cap should be increased for FY 2017 to 
address the financial distress that can result from the proration of 
funding requests. The Commission anticipated that demand would exceed 
the funding cap in FY 2017, potentially at a level requiring a deeper 
proration than required in FY 2016, and recognized that the ``proration 
that comes with capped funding may be especially hard on small, rural 
healthcare providers with limited budgets. . . .'' USAC has since 
announced and applied a significant proration factor for FY 2017, and 
the hardship anticipated by the Commission has been reflected in 
petitions for relief and correspondence filed in the RHC Program 
dockets. The Commission concludes that the public health consequences 
that could result from rural health care providers receiving reduced 
funding as a result of the proration of their funding requests in FY 
2017 weighs in favor of increasing the FY 2017 RHC Program cap to the 
$571 million level as adopted by this R&O.
    14. By taking this action, the Commission makes significant funding 
available to issue commitments for the full amount approved for FY 2017 
funding requests prior to proration. The Commission directs USAC to 
collect the additional funds needed to fully fund FY 2017 demand over 
the next two quarters in accordance with the standard process for 
calculating and announcing the quarterly contribution factor to reduce 
the impact on ratepayers. The Commission further directs USAC to take 
any other steps necessary to reverse the proration of approved FY 2017 
funding requests, consistent with this R&O.

B. Instituting an Annual Inflation Adjustment

    15. Background. In addition to whether and how to raise the RHC 
Program annual funding cap, in the 2017 NPRM and Order, the Commission 
sought comment on whether the cap should be adjusted annually for 
inflation. The Commission noted that other universal service support 
mechanisms use the GDP-CPI inflation index to adjust funding caps, and 
inquired whether the RHC Program cap should also be adjusted annually 
on the same basis. Commenters that support raising the RHC Program 
funding cap to the level that it would be had it been indexed for 
inflation using GDP-CPI since the inception of the Program also support 
adjusting the cap for inflation in future funding years.
    16. Discussion. The Commission adopts a rule that, beginning in FY 
2018, the RHC Program funding cap will be adjusted annually for 
inflation using the GDP-CPI inflation index. By itself, raising the cap 
does not create the flexibility necessary to ensure that rural health 
care providers have affordable access to telecommunications and 
broadband services in the event of future price inflation. Accordingly, 
the Commission must also institute an annual inflation adjustment to 
ensure that the RHC Program maintains consistent purchasing power 
without

[[Page 30576]]

unreasonably increasing the size of the USF and increasing the USF 
contribution charges that are ultimately passed through to consumers.
    17. The Commission concludes that it is appropriate to rely upon 
the GDP-CPI index for the RHC Program's inflation adjustment. There is 
no index that specifically examines the cost of services funded under 
the RHC Program. Given that GDP-CPI is the same index the Commission 
uses to inflation-adjust the E-Rate Program cap, the high-cost loop 
support mechanism cap, and in other contexts to estimate inflation of 
carrier costs, the Commission concludes that it is reasonable to use 
the GDP-CPI to approximate the impact of inflation on RHC Program 
supported services. In the event of periods of deflation, the 
Commission will maintain the prior-year cap to maintain predictability.
    18. To compute the annual inflation adjustment, the percentage 
increase in the GDP-CPI from the previous year will be used. The 
increase shall be rounded to the nearest 0.1 percent. The increase in 
the inflation index will then be used to calculate the maximum amount 
of funding for the next RHC Program funding year which runs from July 1 
to June 30. When the calculation of the yearly average GDP-CPI is 
determined, the Wireline Competition Bureau (Bureau) will publish a 
Public Notice in the Federal Register within 60 days announcing any 
increase in the annual funding cap based on the rate of inflation. For 
FY 2018, based on GDP-CPI, the RHC Program funding cap will be $581 
million.

C. Adopting a Carry-Forward Process for the RHC Program

    19. Background. In the 2017 NPRM and Order, the Commission sought 
comment on whether to allow unused funds committed in one funding year 
to be carried forward to a subsequent funding year. In fact, in the 
accompanying Order (FCC 17-164), the Commission directed that unused 
funds from prior years be carried forward to reduce the effect of 
proration for certain health care providers in FY 2017. All those who 
commented on this issue supported the proposal that unused funds be 
carried forward for use in subsequent years.
    20. Discussion. The Commission finds that, beginning in FY 2018, 
unused funds may be carried forward from previous years for use in 
subsequent funding years. Unused funds are the difference between the 
amount of funds collected, or made available for that particular 
funding year, and the amount of funds disbursed or to be disbursed for 
that funding year. Funds carried forward from one funding year may be 
rolled over to multiple funding years until ultimately committed and 
disbursed. Considering the high demand for RHC Program funding, the 
Commission concludes that this action is consistent with the goals of 
the RHC Program, aligns the RHC Program with the E-Rate Program's 
carry-forward process, and is in the public interest.
    21. Additionally, as in the E-Rate Program, the Commission will 
require USAC to provide quarterly estimates to the Commission regarding 
the amount of unused funds that will be available for carryover in 
subsequent years. This requirement codifies USAC's existing reporting 
practice and reporting cycle. The quarterly estimate will also provide 
stakeholders of the RHC Program with general notice regarding the 
estimated amount of unused funds that may be made available in the 
subsequent year.
    22. Further, the Commission will make unused funds available 
annually in the second quarter of each calendar year for use in the 
next full funding year of the RHC Program. Based on the estimates 
provided by USAC, the Commission will announce a specific amount of 
unused funds from prior funding years to be carried forward to increase 
available funding for future funding years. This unused funding may be 
used to commit to eligible services in excess of the annual funding cap 
in the event demand in a given year exceeds the cap, or it may be used 
to reduce collections for the RHC Program in a year when demand is less 
than the cap. The Bureau will announce the availability and amount of 
carryover funds during the second quarter of the calendar year.
    23. Finally, the Commission finds it is in the public interest to 
carry forward unused funds for disbursement on an annual basis. 
Distribution of unused funds on an annual basis allows USAC to refine 
its calculation of available funds over four reporting quarters as the 
funding year progresses. The Commission also believes that the timing 
of this process provides certainty regarding when unused funds will be 
carried forward for use in the RHC Program with minimal disruption to 
the administration of the Program.

III. Procedural Matters

A. Paperwork Reduction Act Analysis

    24. This document contains no new information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, the Commission notes that pursuant to 
the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), it previously sought specific comments on how 
the Commission might further reduce the information collection burden 
for small business concerns with fewer than 25 employees. The 
Commission describes impacts that might affect small businesses, which 
includes most business with fewer than 25 employees, in the Final 
Regulatory Flexibility Analysis (FRFA).

B. Congressional Review Act

    25. The Commission will send a copy of the R&O to Congress and the 
Government Accountability Office, pursuant to the Congressional Review 
Act, see 5 U.S.C. 801(a)(1)(A).

C. Regulatory Flexibility Act

    26. The Regulatory Flexibility Act of 1980 (RFA) requires that an 
agency prepare a regulatory flexibility analysis for notice and comment 
rulemakings, unless the agency certifies that ``the rule will not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities.'' Accordingly, we have prepared a Final Regulatory 
Flexibility Analysis (FRFA) concerning the possible impact of the rule 
changes contained in the R&O on small entities. The Commission will 
send a copy of the R&O, including the FRFA below, in a report to be 
sent to Congress and the Government Accountability Office pursuant to 
the Small Business Regulatory Enforcement Fairness Act of 1996. In 
addition, the Commission will send a copy of the R&O, including the 
FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the R&O and FRFA (or summaries thereof) will 
also be published in the Federal Register.

D. Final Regulatory Flexibility Analysis

    27. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) of the 
possible significant economic impact on a substantial number of small 
entities by the policies and rules was incorporated into the 2017 
Notice of Proposed Rulemaking. Written comments were requested on this 
IRFA. This present FRFA conforms to the RFA.
1. Need for, and Objectives of, the Report and Order
    28. Through the R&O, the Commission seeks to improve the Rural 
Health Care (RHC) Program's capacity to distribute telecommunications 
and broadband support to health care providers--especially small, rural

[[Page 30577]]

health care providers--in the most equitable, effective, efficient, 
clear, and predictable manner as possible. Telemedicine has become an 
increasingly vital component of health care delivery to rural Americans 
and, in Funding Year (FY) 2016, for the first time in the RHC Program's 
twenty-year history, and then again in FY 2017, demand for support 
exceeded the $400 million annual cap which necessitated reduced, pro 
rata distribution of support. In light of the significance and scarcity 
of RHC Program support, the Commission adopts several measures to most 
effectively meet health care providers' needs while responsibly 
stewarding the RHC Program's limited funds. Specifically, the 
Commission adopts rules that: (1) Raise the annual RHC Program funding 
cap to $571 million to apply to FY 2017; (2) adjust the annual RHC 
Program funding cap for inflation; and (3) establish a mechanism to 
carry-forward unused funds from past funding years for use in future 
funding years.
2. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA
    29. There were no comments filed that specifically addressed the 
rules and policies proposed in the IRFA.
3. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration
    30. The Chief Counsel did not file any comments in response to the 
proposed rules in this proceeding.
4. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply
    31. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one that: (1) Is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA).
    32. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes here, at the outset, three broad groups of small 
entities that could be directly affected herein. First, while there are 
industry specific size standards for small businesses that are used in 
the RFA, 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 percent 
of all businesses in the United States, which translates to 28.8 
million businesses.
    33. 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 August 2016, there were approximately 356,494 small 
organizations based on registration and tax data filed by nonprofits 
with the Internal Revenue Service (IRS).
    34. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2012 Census of Governments indicate that there 
were 90,056 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number, there were 37,132 General purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,184 Special purpose governments (independent school 
districts and special districts) with populations of less than 50,000. 
The 2012 U.S. Census Bureau data for most types of governments in the 
local government category show that the majority of these governments 
have populations of less than 50,000. Based on this data the Commission 
estimates that at least 49,316 local government jurisdictions fall in 
the category of ``small governmental jurisdictions.''
    35. Small entities potentially affected by the reforms adopted 
herein include eligible non-profit and public health care providers and 
the eligible service providers offering them services, including 
telecommunications service providers, Internet Service Providers 
(ISPs), and vendors of the services and equipment used for dedicated 
broadband networks.
a. Health Care Providers
    36. Offices of Physicians (except Mental Health Specialists). This 
U.S. industry comprises establishments of health practitioners having 
the degree of M.D. (Doctor of Medicine) or D.O. (Doctor of Osteopathy) 
primarily engaged in the independent practice of general or specialized 
medicine (except psychiatry or psychoanalysis) or surgery. These 
practitioners operate private or group practices in their own offices 
(e.g., centers, clinics) or in the facilities of others, such as 
hospitals or health maintenance organization (HMO) medical centers. The 
SBA has created a size standard for this industry, which is annual 
receipts of $11 million or less. According to 2012 U.S. Economic 
Census, 152,468 firms operated throughout the entire year in this 
industry. Of that number, 147,718 had annual receipts of less than $10 
million, while 3,108 firms had annual receipts between $10 million and 
$24,999,999. Based on this data, the Commission concludes that a 
majority of firms operating in this industry are small under the 
applicable size standard.
    37. Offices of Physicians, Mental Health Specialists. The U.S. 
industry comprises establishments of health practitioners having the 
degree of M.D. (Doctor of Medicine) or D.O. (Doctor of Osteopathy) 
primarily engaged in the independent practice of psychiatry or 
psychoanalysis. These practitioners operate private or group practices 
in their own offices (e.g., centers, clinics) or in the facilities of 
others, such as hospitals or HMO medical centers. The SBA has 
established a size standard for businesses in this industry, which is 
annual receipts of $11 million dollars or less. The U.S. Economic 
Census indicates that 8,809 firms operated throughout the entire year 
in this industry. Of that number 8,791 had annual receipts of less than 
$10 million, while 13 firms had annual receipts between $10 million and 
$24,999,999. Based on this data, the Commission concludes that a 
majority of firms in this industry are small under the applicable 
standard.
    38. Offices of Dentists. This U.S. industry comprises 
establishments of health practitioners having the degree of D.M.D. 
(Doctor of Dental Medicine), D.D.S. (Doctor of Dental Surgery), or 
D.D.S. (Doctor of Dental Science) primarily engaged in the independent 
practice of general or specialized dentistry or dental surgery. These 
practitioners operate private or group practices in their own offices 
(e.g., centers, clinics) or in the facilities of others, such as 
hospitals or HMO medical centers. They can provide either comprehensive 
preventive, cosmetic, or emergency care, or specialize in a single 
field of dentistry. The SBA has established a size standard

[[Page 30578]]

for that industry of annual receipts of $7.5 million or less. The 2012 
U.S. Economic Census indicates that 115,268 firms operated in the 
dental industry throughout the entire year. Of that number 114,417 had 
annual receipts of less than $5 million, while 651 firms had annual 
receipts between $5 million and $9,999,999. Based on this data, the 
Commission concludes that a majority of business in the dental industry 
are small under the applicable standard.
    39. Offices of Chiropractors. This U.S. industry comprises 
establishments of health practitioners having the degree of D.C. 
(Doctor of Chiropractic) primarily engaged in the independent practice 
of chiropractic. These practitioners provide diagnostic and therapeutic 
treatment of neuromusculoskeletal and related disorders through the 
manipulation and adjustment of the spinal column and extremities, and 
operate private or group practices in their own offices (e.g., centers, 
clinics) or in the facilities of others, such as hospitals or HMO 
medical centers. The SBA has established a size standard for this 
industry, which is annual receipts of $7.5 million or less. The 2012 
U.S. Economic Census statistics show that in 2012, there were 33,940 
firms operated throughout the entire year. Of that number 33,910 
operated with annual receipts of less than $5 million per year, while 
26 firms had annual receipts between $5 million and $9,999,999. Based 
on that data, the Commission concludes that a majority of chiropractors 
are small.
    40. Offices of Optometrists. This U.S. industry comprises 
establishments of health practitioners having the degree of O.D. 
(Doctor of Optometry) primarily engaged in the independent practice of 
optometry. These practitioners examine, diagnose, treat, and manage 
diseases and disorders of the visual system, the eye and associated 
structures as well as diagnose related systemic conditions. Offices of 
optometrists prescribe and/or provide eyeglasses, contact lenses, low 
vision aids, and vision therapy. They operate private or group 
practices in their own offices (e.g., centers, clinics) or in the 
facilities of others, such as hospitals or HMO medical centers, and may 
also provide the same services as opticians, such as selling and 
fitting prescription eyeglasses and contact lenses. The SBA has 
established a size standard for businesses operating in this industry, 
which is annual receipts of $7.5 million or less. The 2012 Economic 
Census indicates that 18,050 firms operated the entire year. Of that 
number, 17,951 had annual receipts of less than $5 million, while 70 
firms had annual receipts between $5 million and $9,999,999. Based on 
this data, the Commission concludes that a majority of optometrists in 
this industry are small.
    41. Offices of Mental Health Practitioners (except Physicians). 
This U.S. industry comprises establishments of independent mental 
health practitioners (except physicians) primarily engaged in (1) the 
diagnosis and treatment of mental, emotional, and behavioral disorders 
and/or (2) the diagnosis and treatment of individual or group social 
dysfunction brought about by such causes as mental illness, alcohol and 
substance abuse, physical and emotional trauma, or stress. These 
practitioners operate private or group practices in their own offices 
(e.g., centers, clinics) or in the facilities of others, such as 
hospitals or HMO medical centers. The SBA has created a size standard 
for this industry, which is annual receipts of $7.5 million or less. 
The 2012 U.S. Economic Census indicates that 16,058 firms operated 
throughout the entire year. Of that number, 15,894 firms received 
annual receipts of less than $5 million, while 111 firms had annual 
receipts between $5 million and $9,999,999. Based on this data, the 
Commission concludes that a majority of mental health practitioners who 
do not employ physicians are small.
    42. Offices of Physical, Occupational and Speech Therapists and 
Audiologists. This U.S. industry comprises establishments of 
independent health practitioners primarily engaged in one of the 
following: (1) Providing physical therapy services to patients who have 
impairments, functional limitations, disabilities, or changes in 
physical functions and health status resulting from injury, disease or 
other causes, or who require prevention, wellness or fitness services; 
(2) planning and administering educational, recreational, and social 
activities designed to help patients or individuals with disabilities, 
regain physical or mental functioning or to adapt to their 
disabilities; and (3) diagnosing and treating speech, language, or 
hearing problems. These practitioners operate private or group 
practices in their own offices (e.g., centers, clinics) or in the 
facilities of others, such as hospitals or HMO medical centers. The SBA 
has established a size standard for this industry, which is annual 
receipts of $7.5 million or less. The 2012 U.S. Economic Census 
indicates that 20,567 firms in this industry operated throughout the 
entire year. Of this number, 20,047 had annual receipts of less than $5 
million, while 270 firms had annual receipts between $5 million and 
$9,999,999. Based on this data, the Commission concludes that a 
majority of businesses in this industry are small.
    43. Offices of Podiatrists. This U.S. industry comprises 
establishments of health practitioners having the degree of D.P.M. 
(Doctor of Podiatric Medicine) primarily engaged in the independent 
practice of podiatry. These practitioners diagnose and treat diseases 
and deformities of the foot and operate private or group practices in 
their own offices (e.g., centers, clinics) or in the facilities of 
others, such as hospitals or HMO medical centers. The SBA has 
established a size standard for businesses in this industry, which is 
annual receipts of $7.5 million or less. The 2012 U.S. Economic Census 
indicates that 7,569 podiatry firms operated throughout the entire 
year. Of that number, 7,545 firms had annual receipts of less than $5 
million, while 22 firms had annual receipts between $5 million and 
$9,999,999. Based on this data, the Commission concludes that a 
majority of firms in this industry are small.
    44. Offices of All Other Miscellaneous Health Practitioners. This 
U.S. industry comprises establishments of independent health 
practitioners (except physicians; dentists; chiropractors; 
optometrists; mental health specialists; physical, occupational, and 
speech therapists; audiologists; and podiatrists). These practitioners 
operate private or group practices in their own offices (e.g., centers, 
clinics) or in the facilities of others, such as hospitals or HMO 
medical centers. The SBA has established a size standard for this 
industry, which is annual receipts of $7.5 million or less. The 2012 
U.S. Economic Census indicates that 11,460 firms operated throughout 
the entire year. Of that number, 11,374 firms had annual receipts of 
less than $5 million, while 48 firms had annual receipts between $5 
million and $9,999,999. Based on this data, the Commission concludes 
that the majority of firms in this industry are small.
    45. Family Planning Centers. This U.S. industry comprises 
establishments with medical staff primarily engaged in providing a 
range of family planning services on an outpatient basis, such as 
contraceptive services, genetic and prenatal counseling, voluntary 
sterilization, and therapeutic and medically induced termination of 
pregnancy. The SBA has established a size standard for this industry, 
which is annual receipts of $11 million or less. The 2012 Economic 
Census indicates that 1,286 firms in this industry

[[Page 30579]]

operated throughout the entire year. Of that number 1,237 had annual 
receipts of less than $10 million, while 36 firms had annual receipts 
between $10 million and $24,999,999. Based on this data, the Commission 
concludes that the majority of firms in this industry are small.
    46. Outpatient Mental Health and Substance Abuse Centers. This U.S. 
industry comprises establishments with medical staff primarily engaged 
in providing outpatient services related to the diagnosis and treatment 
of mental health disorders and alcohol and other substance abuse. These 
establishments generally treat patients who do not require inpatient 
treatment. They may provide a counseling staff and information 
regarding a wide range of mental health and substance abuse issues and/
or refer patients to more extensive treatment programs, if necessary. 
The SBA has established a size standard for this industry, which is $15 
million or less in annual receipts. The 2012 U.S. Economic Census 
indicates that 4,446 firms operated throughout the entire year. Of that 
number, 4,069 had annual receipts of less than $10 million while 286 
firms had annual receipts between $10 million and $24,999,999. Based on 
this data, the Commission concludes that a majority of firms in this 
industry are small.
    47. HMO Medical Centers. This U.S. industry comprises 
establishments with physicians and other medical staff primarily 
engaged in providing a range of outpatient medical services to the HMO 
subscribers with a focus generally on primary health care. These 
establishments are owned by the HMO. Included in this industry are HMO 
establishments that both provide health care services and underwrite 
health and medical insurance policies. The SBA has established a size 
standard for this industry, which is $32.5 million or less in annual 
receipts. The 2012 U.S. Economic Census indicates that 14 firms in this 
industry operated throughout the entire year. Of that number, 5 firms 
had annual receipts of less than $25 million, while 1 firm had annual 
receipts between $25 million and $99,999,999. Based on this data, the 
Commission concludes that approximately one-third of the firms in this 
industry are small.
    48. Freestanding Ambulatory Surgical and Emergency Centers. This 
U.S. industry comprises establishments with physicians and other 
medical staff primarily engaged in (1) providing surgical services 
(e.g., orthoscopic and cataract surgery) on an outpatient basis or (2) 
providing emergency care services (e.g., setting broken bones, treating 
lacerations, or tending to patients suffering injuries as a result of 
accidents, trauma, or medical conditions necessitating immediate 
medical care) on an outpatient basis. Outpatient surgical 
establishments have specialized facilities, such as operating and 
recovery rooms, and specialized equipment, such as anesthetic or X-ray 
equipment. The SBA has established a size standard for this industry, 
which is annual receipts of $15 million or less. The 2012 U.S. Economic 
Census indicates that 3,595 firms in this industry operated throughout 
the entire year. Of that number, 3,222 firms had annual receipts of 
less than $10 million, while 289 firms had annual receipts between $10 
million and $24,999,999. Based on this data, the Commission concludes 
that a majority of firms in this industry are small.
    49. All Other Outpatient Care Centers. This U.S. industry comprises 
establishments with medical staff primarily engaged in providing 
general or specialized outpatient care (except family planning centers, 
outpatient mental health and substance abuse centers, HMO medical 
centers, kidney dialysis centers, and freestanding ambulatory surgical 
and emergency centers). Centers or clinics of health practitioners with 
different degrees from more than one industry practicing within the 
same establishment (i.e., Doctor of Medicine and Doctor of Dental 
Medicine) are included in this industry. The SBA has established a size 
standard for this industry, which is annual receipts of $20.5 million 
or less. The 2012 U.S. Economic Census indicates that 4,903 firms 
operated in this industry throughout the entire year. Of this number, 
4,269 firms had annual receipts of less than $10 million, while 389 
firms had annual receipts between $10 million and $24,999,999. Based on 
this data, the Commission concludes that a majority of firms in this 
industry are small.
    50. Blood and Organ Banks. This U.S. industry comprises 
establishments primarily engaged in collecting, storing, and 
distributing blood and blood products and storing and distributing body 
organs. The SBA has established a size standard for this industry, 
which is annual receipts of $32.5 million or less. The 2012 U.S. 
Economic Census indicates that 314 firms operated in this industry 
throughout the entire year. Of that number, 235 operated with annual 
receipts of less than $25 million, while 41 firms had annual receipts 
between $25 million and $49,999,999. Based on this data, the Commission 
concludes that approximately three-quarters of firms that operate in 
this industry are small.
    51. All Other Miscellaneous Ambulatory Health Care Services. This 
U.S. industry comprises establishments primarily engaged in providing 
ambulatory health care services (except offices of physicians, 
dentists, and other health practitioners; outpatient care centers; 
medical and diagnostic laboratories; home health care providers; 
ambulances; and blood and organ banks). The SBA has established a size 
standard for this industry, which is annual receipts of $15 million or 
less. The 2012 U.S. Economic Census indicates that 2,429 firms operated 
in this industry throughout the entire year. Of that number, 2,318 had 
annual receipts of less than $10 million, while 56 firms had annual 
receipts between $10 million and $24,999,999. Based on this data, the 
Commission concludes that a majority of the firms in this industry are 
small.
    52. Medical Laboratories. This U.S. industry comprises 
establishments known as medical laboratories primarily engaged in 
providing analytic or diagnostic services, including body fluid 
analysis, generally to the medical profession or to the patient on 
referral from a health practitioner. The SBA has established a size 
standard for this industry, which is annual receipts of $32.5 million 
or less. The 2012 U.S. Economic Census indicates that 2,599 firms 
operated in this industry throughout the entire year. Of this number, 
2,465 had annual receipts of less than $25 million, while 60 firms had 
annual receipts between $25 million and $49,999,999. Based on this 
data, the Commission concludes that a majority of firms that operate in 
this industry are small.
    53. Diagnostic Imaging Centers. This U.S. industry comprises 
establishments known as diagnostic imaging centers primarily engaged in 
producing images of the patient generally on referral from a health 
practitioner. The SBA has established size standard for this industry, 
which is annual receipts of $15 million or less. The 2012 U.S. Economic 
Census indicates that 4,209 firms operated in this industry throughout 
the entire year. Of that number, 3,876 firms had annual receipts of 
less than $10 million, while 228 firms had annual receipts between $10 
million and $24,999,999. Based on this data, the Commission concludes 
that a majority of firms that operate in this industry are small.
    54. Home Health Care Services. This U.S. industry comprises 
establishments primarily engaged in providing skilled nursing services 
in the home, along with

[[Page 30580]]

a range of the following: Personal care services; homemaker and 
companion services; physical therapy; medical social services; 
medications; medical equipment and supplies; counseling; 24-hour home 
care; occupation and vocational therapy; dietary and nutritional 
services; speech therapy; audiology; and high-tech care, such as 
intravenous therapy. The SBA has established a size standard for this 
industry, which is annual receipts of $15 million or less. The 2012 
U.S. Economic Census indicates that 17,770 firms operated in this 
industry throughout the entire year. Of that number, 16,822 had annual 
receipts of less than $10 million, while 590 firms had annual receipts 
between $10 million and $24,999,999. Based on this data, the Commission 
concludes that a majority of firms that operate in this industry are 
small.
    55. Ambulance Services. This U.S. industry comprises establishments 
primarily engaged in providing transportation of patients by ground or 
air, along with medical care. These services are often provided during 
a medical emergency but are not restricted to emergencies. The vehicles 
are equipped with lifesaving equipment operated by medically trained 
personnel. The SBA has established a size standard for this industry, 
which is annual receipts of $15 million or less. The 2012 U.S. Economic 
Census indicates that 2,984 firms operated in this industry throughout 
the entire year. Of that number, 2,926 had annual receipts of less than 
$15 million, while 133 firms had annual receipts between $10 million 
and $24,999,999. Based on this data, the Commission concludes that a 
majority of firms in this industry are small.
    56. Kidney Dialysis Centers. This U.S. industry comprises 
establishments with medical staff primarily engaged in providing 
outpatient kidney or renal dialysis services. The SBA has established 
assize standard for this industry, which is annual receipts of $38.5 
million or less. The 2012 U.S. Economic Census indicates that 396 firms 
operated in this industry throughout the entire year. Of that number, 
379 had annual receipts of less than $25 million, while 7 firms had 
annual receipts between $25 million and $49,999,999. Based on this 
data, the Commission concludes that a majority of firms in this 
industry are small.
    57. General Medical and Surgical Hospitals. This U.S. industry 
comprises establishments known and licensed as general medical and 
surgical hospitals primarily engaged in providing diagnostic and 
medical treatment (both surgical and nonsurgical) to inpatients with 
any of a wide variety of medical conditions. These establishments 
maintain inpatient beds and provide patients with food services that 
meet their nutritional requirements. These hospitals have an organized 
staff of physicians and other medical staff to provide patient care 
services. These establishments usually provide other services, such as 
outpatient services, anatomical pathology services, diagnostic X-ray 
services, clinical laboratory services, operating room services for a 
variety of procedures, and pharmacy services. The SBA has established a 
size standard for this industry, which is annual receipts of $38.5 
million or less. The 2012 U.S. Economic Census indicates that 2,800 
firms operated in this industry throughout the entire year. Of that 
number, 877 has annual receipts of less than $25 million, while 400 
firms had annual receipts between $25 million and $49,999,999. Based on 
this data, the Commission concludes that approximately one-quarter of 
firms in this industry are small.
    58. Psychiatric and Substance Abuse Hospitals. This U.S. industry 
comprises establishments known and licensed as psychiatric and 
substance abuse hospitals primarily engaged in providing diagnostic, 
medical treatment, and monitoring services for inpatients who suffer 
from mental illness or substance abuse disorders. The treatment often 
requires an extended stay in the hospital. These establishments 
maintain inpatient beds and provide patients with food services that 
meet their nutritional requirements. They have an organized staff of 
physicians and other medical staff to provide patient care services. 
Psychiatric, psychological, and social work services are available at 
the facility. These hospitals usually provide other services, such as 
outpatient services, clinical laboratory services, diagnostic X-ray 
services, and electroencephalograph services. The SBA has established a 
size standard for this industry, which is annual receipts of $38.5 
million or less. The 2012 U.S. Economic Census indicates that 404 firms 
operated in this industry throughout the entire year. Of that number, 
185 had annual receipts of less than $25 million, while 107 firms had 
annual receipts between $25 million and $49,999,999. Based on this 
data, the Commission concludes that more than one-half of the firms in 
this industry are small.
    59. Specialty (Except Psychiatric and Substance Abuse) Hospitals. 
This U.S. industry consists of establishments known and licensed as 
specialty hospitals primarily engaged in providing diagnostic, and 
medical treatment to inpatients with a specific type of disease or 
medical condition (except psychiatric or substance abuse). Hospitals 
providing long-term care for the chronically ill and hospitals 
providing rehabilitation, restorative, and adjustive services to 
physically challenged or disabled people are included in this industry. 
These establishments maintain inpatient beds and provide patients with 
food services that meet their nutritional requirements. They have an 
organized staff of physicians and other medical staff to provide 
patient care services. These hospitals may provide other services, such 
as outpatient services, diagnostic X-ray services, clinical laboratory 
services, operating room services, physical therapy services, 
educational and vocational services, and psychological and social work 
services. The SBA has established a size standard for this industry, 
which is annual receipts of $38.5 million or less. The 2012 U.S. 
Economic Census indicates that 346 firms operated in this industry 
throughout the entire year. Of that number, 146 firms had annual 
receipts of less than $25 million, while 79 firms had annual receipts 
between $25 million and $49,999,999. Based on this data, the Commission 
conclude that more than one-half of the firms in this industry are 
small.
    60. Emergency and Other Relief Services. This industry comprises 
establishments primarily engaged in providing food, shelter, clothing, 
medical relief, resettlement, and counseling to victims of domestic or 
international disasters or conflicts (e.g., wars). The SBA has 
established a size standard for this industry, which is annual receipts 
of $32.5 million or less. The 2012 U.S. Economic Census indicates that 
541 firms operated in this industry throughout the entire year. Of that 
number, 509 had annual receipts of less than $25 million, while 7 firms 
had annual receipts between $25 million and $49,999,999. Based on this 
data, the Commission concludes that a majority of firms in this 
industry are small.
b. Providers of Telecommunications and Other Services
i. Telecommunications Service Providers
    61. Incumbent Local Exchange Carriers (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

[[Page 30581]]

is Wired Telecommunications Carriers and under the SBA size standard, 
such a business is small if it has 1,500 or fewer employees. U.S. 
Census Bureau data for 2012 indicate that 3,117 firms operated during 
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 our actions. According to Commission data, one thousand 
three hundred and seven (1,307) 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. Thus, 
using the SBA's size standard the majority of Incumbent LECs can be 
considered small entities.
    62. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a definition of small entities specifically 
applicable to providers of IXCs. The closest NAICS Code category is 
Wired Telecommunications Carriers and the applicable size standard 
under SBA rules consists of all such companies having 1,500 or fewer 
employees. U.S. Census Bureau data for 2012 indicate 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 interexchange service 
providers that may be affected are small entities.
    63. Competitive Access Providers. Neither the Commission nor the 
SBA has developed a definition of small entities specifically 
applicable to competitive access services providers (CAPs). The closest 
applicable definition under the SBA rules is Wired Telecommunications 
Carriers and under the size standard, such a business is small if it 
has 1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate 
that 3,117 firms operated during that year. Of that number, 3,083 
operated with fewer than 1,000 employees. Consequently, the Commission 
estimates that most competitive access providers are small businesses 
that may be affected by these actions. According to Commission data the 
2010 Trends in Telephone Report, dated September 2010, 1,442 CAPs and 
competitive local exchange carriers (competitive LECs) reported that 
they were engaged in the provision of competitive local exchange 
services. Of these 1,442 CAPs and competitive LECs, an estimated 1,256 
have 1,500 or few employees and 186 have more than 1,500 employees. 
Consequently, the Commission estimates that most providers of 
competitive exchange services are small businesses.
    64. 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 1,500 or fewer employees. U.S. 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.
    65. 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 Bureau data for 2012 shows 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 1,000 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.
    66. 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 these actions. 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 (PCS), and 
Specialized Mobile Radio (SMR) 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, the Commission estimates 
that the majority of wireless firms can be considered small.
    67. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. The closest applicable SBA category is Wireless 
Telecommunications Carriers (except Satellite) and the appropriate size 
standard for this category under the SBA rules is that such a business 
is small if it has 1,500 or fewer employees. For this industry, U.S. 
Census Bureau data for 2012 show that there were 967 firms that 
operated for the entire year. Of this total, 955 firms had fewer than 
1,000 employees and 12 firms has 1,000 employees or more. Thus, under 
this category and the associated size standard, the Commission 
estimates that a majority of these entities can be considered small. 
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, more 
than half of these entities can be considered small.
    68. Satellite Telecommunications. This category comprises firms 
``primarily engaged in providing telecommunications services to other 
establishments in the telecommunications and broadcasting industries by 
forwarding and receiving communications signals via a system of 
satellites or reselling satellite telecommunications.'' Satellite 
telecommunications service providers include satellite and earth 
station operators. The category has a small business size standard of 
$32.5 million or less in average annual receipts, under SBA rules. For 
this category, U.S.

[[Page 30582]]

Census Bureau data for 2012 shows that there were a total of 333 firms 
that operated for the entire year. Of this total, 299 firms had annual 
receipts of less than $25 million. Consequently, the Commission 
estimates that the majority of satellite telecommunications providers 
are small entities.
    69. All Other Telecommunications. The ``All Other 
Telecommunications'' category 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, U.S. 
Census Bureau 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 and 42 firms had gross 
annual receipts of $25 million to $49, 999,999. Thus, the Commission 
estimates that a majority of ``All Other Telecommunications'' firms 
potentially affected by our action can be considered small.
ii. Internet Service Providers
    70. Internet Service Providers (Broadband). Broadband internet 
service providers include wired (e.g., cable, DSL) and VoIP service 
providers using their own operated wired telecommunications 
infrastructure fall in the category of Wired Telecommunication 
Carriers. Wired Telecommunications Carriers are comprised of 
establishments primarily engaged in operating and/or providing access 
to transmission facilities and infrastructure that they own and/or 
lease for the transmission of voice, data, text, sound, and video using 
wired telecommunications networks. Transmission facilities may be based 
on a single technology or a combination of technologies. The SBA size 
standard for this category classifies a business as small if it has 
1,500 or fewer employees. U.S. Census Bureau 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. Consequently, under this size 
standard, the majority of firms in this industry can be considered 
small.
    71. Internet Service Providers (Non-Broadband). Internet access 
service providers such as Dial-up internet service providers, VoIP 
service providers using client-supplied telecommunications connections 
and internet service providers using client-supplied telecommunications 
connections (e.g., dial-up ISPs) fall in the category of All Other 
Telecommunications. 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, U.S. Census Bureau 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, 
under this size standard, a majority of firms in this industry can be 
considered small.
iii. Vendors and Equipment Manufacturers
    72. Vendors of Infrastructure Development or ``Network Buildout.'' 
The Commission has not developed a small business size standard 
specifically directed toward manufacturers of network facilities. There 
are two applicable SBA categories in which manufacturers of network 
facilities could fall and each have different size standards under the 
SBA rules. The SBA categories are ``Radio and Television Broadcasting 
and Wireless Communications Equipment'' with a size standard of 1,250 
employees or less and ``Other Communications Equipment Manufacturing'' 
with a size standard of 750 employees or less.'' U.S. Census Bureau 
data for 2012 show that for Radio and Television Broadcasting and 
Wireless Communications Equipment firms 841 establishments operated for 
the entire year. Of that number, 828 establishments operated with fewer 
than 1,000 employees, 7 establishments operated with between 1,000 and 
2,499 employees and 6 establishments operated with 2,500 or more 
employees. For Other Communications Equipment Manufacturing, U.S. 
Census Bureau data for 2012 show that 383 establishments operated for 
the year. Of that number, 379 firms operated with fewer than 500 
employees and 4 had 500 to 999 employees. Based on this data, the 
Commission concludes that the majority of Vendors of Infrastructure 
Development or ``Network Buildout'' are small.
    73. Telephone Apparatus Manufacturing. This industry comprises 
establishments primarily engaged in manufacturing wire telephone and 
data communications equipment. These products may be standalone or 
board-level components of a larger system. Examples of products made by 
these establishments are central office switching equipment, cordless 
telephones (except cellular), PBX equipment, telephones, telephone 
answering machines, LAN modems, multi-user modems, and other data 
communications equipment, such as bridges, routers, and gateways.'' The 
SBA size standard for Telephone Apparatus Manufacturing is all such 
firms having 1,250 or fewer employees. According to U.S. Census Bureau 
data for 2012, there were a total of 266 establishments in this 
category that operated for the entire year. Of this total, 262 had 
employment of under 1,000, and an additional 4 had employment of 1,000 
to 2,499. Thus, under this size standard, the majority of firms can be 
considered small.
    74. Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. This industry comprises establishments 
primarily engaged in manufacturing radio and television broadcast and 
wireless communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment. The SBA has established a small business size 
standard for this industry of 1,250 employees or less. U.S. Census 
Bureau data for 2012 show that 841 establishments operated in this 
industry in that year. Of that number, 828 establishments operated with 
fewer than 1,000 employees, 7 establishments operated with between 
1,000 and 2,499 employees and 6 establishments operated with 2,500 or 
more employees. Based on this data, the Commission concludes that a 
majority of manufacturers in this industry are small.
    75. Other Communications Equipment Manufacturing. This industry 
comprises establishments primarily engaged in manufacturing 
communications equipment (except telephone apparatus, and radio and 
television broadcast, and wireless communications equipment). Examples 
of such manufacturing include fire

[[Page 30583]]

detection and alarm systems manufacturing, Intercom systems and 
equipment manufacturing, and signals (e.g., highway, pedestrian, 
railway, traffic) manufacturing. The SBA has established a size for 
this industry as all such firms having 750 or fewer employees. U.S. 
Census Bureau data for 2012 show that 383 establishments operated in 
that year. Of that number, 379 operated with fewer than 500 employees 
and 4 had 500 to 999 employees. Based on this data, the Commission 
concludes that the majority of Other Communications Equipment 
Manufacturers are small.
5. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities
    76. There are no new or different reporting, recordkeeping, or 
other compliance requirements adopted in this R&O that would likely 
financially impact either large or small entities, including health 
care providers and service providers.
6. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    77. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): ``(1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for such small entities; (3) the 
use of performance rather than design standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for such small 
entities.''
    78. In the R&O, the Commission increases available funding for all 
eligible RHC Program entities including small entities. Specifically, 
the Commission increases RHC Program support, and thereby increases 
support available for rural, mostly small, health care providers, by: 
(1) Increasing the RHC Program support cap to $571 million to apply to 
FY 2017; (2) prospectively increasing the $571 million RHC Program 
support cap via inflation using the Gross Domestic Price Chain-type 
Price Index (GDP-CPI) in FY 2018 and beyond; and (3) ``carrying 
forward'' unused funds committed in one funding year into subsequent 
funding years.
    79. In the R&O, the Commission carefully balanced the significant 
financial hardship faced by rural health care providers due to the 
otherwise scarcity of funding and the public health consequences that 
could result from lack of broadband service with the increase in 
funding needed to meet the new cap. The Commission considered and 
rejected arguments to double the cap or to increase it beyond the $571 
million adopted in the R&O. The increased cap, indexed to inflation, 
and the carry forward of unused funds will make more funding available 
to eligible health care providers including small entities, while 
minimizing the amount of funds that are needed to be collected. No 
commenters proposed significant small business alternatives.
7. Report to Congress
    80. The Commission will send a copy of the R&O, including this 
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 R&O, 
including this FRFA, to the Chief Counsel for Advocacy of the SBA. A 
copy of the R&O and FRFA (or summaries thereof) will also be published 
in the Federal Register.

E. Effective Date of Report and Order

    81. The Commission finds good cause to make the rule changes herein 
effective June 29, 2018, pursuant to section 553(d) of the 
Administrative Procedure Act. Agencies determining whether there is 
good cause to make a new rule or rule revision take effect less than 30 
days after Federal Register publication must balance the necessity for 
immediate implementation against principles of fundamental fairness 
that require that all affected persons be afforded a reasonable time to 
prepare for the effective date of the new rule. Making these rule 
changes effective June 29, 2018 enables eligible health care providers 
to benefit from the increased funding cap for FY 2017, thereby avoiding 
the financial hardship caused by the proration of their funding 
commitments and the potential public health crises that could result. 
As noted earlier, the current reduction in funding may impede the 
ability of rural health care providers to provide essential health care 
services in their rural communities, or require them to scale back 
service offerings or quality, and these consequences could be 
particularly severe for small, rural health care providers with limited 
budgets.
    82. Further, making these rule changes effective upon publication 
will not burden contributors or RHC Program participants. As a 
practical matter, contributors pass through their contribution 
obligations to their end users by a line item on the end user's 
invoice, which they update quarterly based on the contribution factor. 
The additional funding required by the R&O to be applied to FY 2017 
will be collected over the next two quarters in accordance with our 
regular course of business for calculating and announcing the quarterly 
contribution factor, thus requiring no additional or different 
administrative burden on contributors. No additional time is needed for 
affected parties to prepare for the rules' effectiveness because USAC 
and interested parties have already applied for and processed the 
requests for funding for the current RHC Program year (FY 2017). 
Additionally, the rule change to increase the funding cap enables 
eligible health care providers to benefit from increased funding in the 
current funding year and does not oblige them to take any particular 
action. The rule changes that index the funding cap to inflation and 
carry forward unused funds do not impose any additional requirement on 
RHC Program participants and will be implemented by Commission staff 
and USAC during FY 2018. Thus, the Commission finds good cause to make 
these rule changes effective June 29, 2018.

IV. Ordering Clauses

    83. Accordingly, it is ordered that, pursuant to sections 4(i) 
through (j), 201(b), and 254 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i) through (j), 201(b), 254, the Report and 
Order is adopted.
    84. It is furthered ordered that part 54 of the Commission's rules, 
47 CFR part 54, is amended, and such rules shall become effective June 
29, 2018.
    85. It is further ordered that, pursuant to the authority contained 
in sections 1 through 4 and 254 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151 through 154 and 254, and pursuant to Sec.  1.3 
and of the Commission's rules, 47 CFR 1.3, that Sec.  54.675 of the 
Commission's rules, 47 CFR 54.675, is waived to the extent provided 
herein.
    86. It is further ordered that, pursuant to the authority contained 
in sections 1 through 4 and 254 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151 through 154 and 254, the petitions for waiver 
filed by Schools, Health, and Libraries Broadband Coalition filed on 
April 3, 2018, Advanced Data Solutions (on behalf of Frontier Community 
Services, Central Peninsula Hospital, Cordova Community Medical Center, 
Camai

[[Page 30584]]

Community Health Center, IHS/ABQ Alamo Health Center and Kenaitze 
Indian Tribe) filed on May 15, 2018, Bristol Bay Area Health 
Corporation filed on April 2, 2018, and Council of Athabascan Tribal 
Government filed on April 9, 2018 are dismissed as moot.
    87. It is further ordered that, pursuant to 5 U.S.C. 801(a)(1)(A), 
the Commission shall send a copy of the Report and Order to Congress 
and to the Government Accountability Office pursuant to the 
Congressional Review Act.
    88. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer, Office of the Secretary.

List of Subjects in 47 CFR Part 54

    Communications common carriers, Health facilities, internet, 
Telecommunications.

Final Rule

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citation for part 54 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
254, 303(r), 403, and 1302 unless otherwise noted.

0
2. Amend Sec.  54.675 by revising paragraph (a) to read as follows:


Sec.  54.675  Cap.

    (a) Amount of the annual cap. The aggregate annual cap on federal 
universal service support for health care providers shall be $571 
million per funding year, of which up to $150 million per funding year 
will be available to support upfront payments and multi-year 
commitments under the Healthcare Connect Fund.
    (1) Inflation increase. In funding year 2018 and the subsequent 
funding years, the $571 million cap on federal universal support in the 
Rural Health Care Program shall be automatically increased annually to 
take into account increases in the rate of inflation as calculated in 
paragraph (a)(2) of this section.
    (2) Increase calculation. To measure increases in the rate of 
inflation for the purposes of this paragraph (a), the Commission shall 
use the Gross Domestic Product Chain-type Price Index (GDP-CPI). To 
compute the annual increase as required by this paragraph (a), the 
percentage increase in the GDP-CPI from the previous year will be used. 
For instance, the annual increase in the GDP-CPI from 2017 to 2018 
would be used for the 2018 funding year. The increase shall be rounded 
to the nearest 0.1 percent by rounding 0.05 percent and above to the 
next higher 0.1 percent and otherwise rounding to the next lower 0.1 
percent. This percentage increase shall be added to the amount of the 
annual funding cap from the previous funding year. If the yearly 
average GDP-CPI decreases or stays the same, the annual funding cap 
shall remain the same as the previous year.
    (3) Public notice. When the calculation of the yearly average GDP-
CPI is determined, the Wireline Competition Bureau shall publish a 
public notice in the Federal Register within 60 days announcing any 
increase of the annual funding cap based on the rate of inflation.
    (4) Amount of unused funds. All funds collected that are unused 
shall be carried forward into subsequent funding years for use in the 
Rural Health Care Program in accordance with the public interest and 
notwithstanding the annual cap. The Administrator shall report to the 
Commission, on a quarterly basis, funding that is unused from prior 
years of the Rural Health Care Program.
    (5) Application of unused funds. On an annual basis, in the second 
quarter of each calendar year, all funds that are collected and that 
are unused from prior years shall be available for use in the next full 
funding year of the Rural Health Care Program in accordance with the 
public interest and notwithstanding the annual cap as described in this 
paragraph (a).
* * * * *
[FR Doc. 2018-14073 Filed 6-28-18; 8:45 am]
 BILLING CODE 6712-01-P