[Federal Register Volume 84, Number 152 (Wednesday, August 7, 2019)]
[Rules and Regulations]
[Pages 38566-38579]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16897]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 61 and 69
[WC Docket Nos. 16-143, 05-25; GN Docket No. 13-5; RM 10593; FCC 19-66]
Business Data Services in an Internet Protocol Environment
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Commission eliminates ex ante pricing regulation for lower
speed time division multiplexing (TDM) transport services offered by
price cap regulated carriers nationwide, finding there is widespread
competition in the marketplace, and abundant support in the record for
removing the Commission's pricing regulations.
DATES: This final rule is effective September 6, 2019.
ADDRESSES: Federal Communications Commission, 445 12th Street SW,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: David Zesiger, Wireline Competition
Bureau, Pricing Policy Division at (202) 418-1540 or via email at
[email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order on Remand, released on July 12, 2019. A full-text copy of
this document may be obtained at the following internet address:
https://www.fcc.gov/document/removing-unnecessary-regulation-transport-services-and-facilities-0.
I. Background
A. BDS TDM Transport Services
1. The term business data services refers to the ``dedicated point-
to-point transmission of data at guaranteed speeds and service
levels.'' BDS offerings are fundamentally important to modern
communities and economies. Over the last several decades, the
Commission has repeatedly recognized the increasing competition for BDS
services in areas of the country served by price cap LECs. Competition
has grown even more markedly in recent years as cable operators
increasingly compete for all aspects of BDS, including TDM transport.
In response, the Commission has worked consistently to streamline
regulation of such services to reflect this evolution.
2. In so doing, the Commission has characterized TDM transport
services, which ``involve carrying traffic from one point of traffic
concentration to another,'' as ``low hanging fruit'' for competitors
because they can more easily justify competitive investment and
deployment. In 1999, recognizing that burdensome pricing regulation is
unnecessary and counter-productive where competitive pressure exists,
the Commission granted pricing flexibility to price cap carriers for
their BDS offerings, including their TDM transport services. The
Commission provided two levels of pricing flexibility to price cap LECs
offering BDS, including TDM-based transport services, keyed to the
presence of competitive providers collocated at a price cap LEC's wire
centers. The Commission suspended further grants of pricing flexibility
in 2012, pending the resolution of the BDS proceedings.
3. In 2017, after more than ten years of study and a massive data
collection (the 2015 Collection), the Commission adopted an order
comprehensively addressing the pricing regulation of BDS in price cap
LEC areas. In the BDS Order, the Commission found, among other things,
that competition for BDS TDM transport services was sufficiently
pervasive to justify elimination of ``all ex ante pricing regulation of
price cap incumbent LEC provision of TDM transport and other transport
(i.e., non-end user channel termination)'' services. In support of this
conclusion, the Commission looked to the record evidence showing that
``competitive providers have deployed competing transport networks in
more than 95% of census blocks with [BDS] demand,'' which included
``about 99% of business establishments.'' It also found that ``in all
price cap territories, 92.1 percent of buildings served were within a
half mile of competitive fiber transport facilities'' and that, ``for
all census blocks with business data services demand, 89.6 percent have
at least one served building within a half mile of competitive LEC
fiber.'' This half mile is significant because, as the Commission
concluded, most BDS providers are willing and able to profitably invest
in and deploy facilities within a half mile of existing competitive
facilities. In addition, the Commission found that buildings with BDS
demand that were served only by an incumbent LEC were on average only
364 feet from the closest competitive LEC fiber facility.
4. After the Eighth Circuit Court's partial remand of the BDS
Order, finding that the Commission had not provided sufficient notice
on the issue of eliminating ex ante pricing regulation for TDM
transport, the Commission released the Second Further Notice, proposing
to eliminate ex ante pricing regulation of price cap LECs' BDS TDM
transport and other transport (i.e., non-end user channel termination)
services. The Commission received eight comments, six reply comments,
and several filings memorializing various ex parte communications.
Also, in the interest of ensuring a more complete analysis of
competitive conditions affecting TDM transport services, the Commission
conducted additional analysis of TDM transport services using data from
the 2015 Collection. That analysis is focused on measuring the
proximity of incumbent LEC wire centers to competitive fiber and shows
that the vast majority of locations with BDS demand in price cap areas
are served by wire centers that are no more than a half mile from
competitive fiber. The Wireline Competition Bureau (Bureau) made that
additional analysis available for public review and sought and received
an additional seven comments and six reply comments about those data
tables (the April Data Tables). As a result of these two additional
rounds of comments, we now have an even more robust record.
B. Forbearance Under Section 10 of the Act
5. Section 10 of the Communications Act of 1934 as amended by the
Telecommunications Act of 1996 (the Act) requires the Commission to
forbear from applying any requirement of the Act or of our regulations
to a telecommunications carrier or telecommunications service if and
only if the Commission determines that: (1) Enforcement of the
requirement ``is not necessary to ensure that the charges, practices,
classifications, or regulations by, for, or in connection with that
telecommunications carrier or telecommunications service are just and
reasonable and are not unjustly or unreasonably discriminatory;'' (2)
enforcement of that requirement ``is not necessary for the protection
of consumers;'' and (3) ``forbearance from applying that requirement is
consistent with the public interest.'' Forbearance is warranted only if
all three criteria are satisfied.
[[Page 38567]]
II. Eliminating Ex Ante Pricing Regulation of BDS TDM Transport
Services Offered by Price Cap LECs (Report and Order on Remand)
6. After careful review of the record, we reaffirm the Commission's
previous decision to eliminate ex ante pricing regulation of TDM
transport services in areas served by price cap LECs. The current
record, even more so than the record that was before the Commission in
2017, demonstrates that widespread and ever-increasing competition in
the supply of BDS transport makes ex ante pricing regulation of TDM
transport in price cap areas both unnecessary and unduly burdensome. We
therefore grant nationwide relief from ex ante pricing regulation of
BDS TDM transport services in price cap areas, forbear from applying
Section 203 tariffing requirements to these services, and adopt
permissive detariffing for price cap LECs' BDS TDM transport services
for a transition period, followed by mandatory detariffing of these
services.
A. Competition for BDS TDM Transport
7. In finding that there is widespread and increasing competition
for BDS TDM transport services in price cap areas, we rely in part on
the evidence and analysis that was before the Commission in 2017 and
also on evidence and analysis added to the record through two
additional rounds of public comment following the Eighth Circuit
Court's remand. Indeed, the additional submissions to the record have
substantiated the reasonableness of the Commission's previous findings,
and nothing in those submissions would cause us to modify the
conclusions the Commission previously made concerning the state of
competition for TDM transport services. As the Commission did in 2017,
we find particularly persuasive the data that shows that as of 2013:
(1) ``competitive providers ha[d] deployed competing transport networks
in more than 95% of census blocks with [BDS] demand'' which included
``about 99% of business establishments;'' (2) ``in all price cap
territories, 92.1 percent of buildings served were within a half mile
of competitive fiber transport facilities'' and that, ``for all census
blocks with business data services demand, 89.6 percent have at least
one served building within a half mile of competitive LEC fiber;'' and
(3) buildings with BDS demand that were served only by an incumbent LEC
were on average only 364 feet from the closest competitive LEC fiber
facility.
8. We continue to find that competitive suppliers with nearby fiber
put competitive pressure on transport prices. As the Commission
previously found, the record demonstrates that providers actively
compete for customers located within about a half mile from their
networks. That is because wireline providers of BDS are commonly
willing to extend their existing networks a half mile or further to
meet demand. Thus, the fact that 92.1% of buildings served with
business data services in price cap areas were within a half mile of
competitive fiber transport facilities and that, 89.6% of census blocks
with BDS demand in price cap areas had at least one served building
within a half mile of competitive LEC fiber, demonstrates the
widespread competitive pressure on TDM transport in price cap areas.
9. INCOMPAS disagrees and argues that the relevant measure of
competition in the supply of TDM transport is the proximity of
competitive fiber to incumbent LEC wire centers rather than the
proximity of fiber to buildings with BDS demand. We find this argument
to be misplaced. As the record demonstrates, while competitive LECs
sometimes use transport links that are collocated at incumbent LEC wire
centers, they often connect customers directly to their fiber
facilities, effectively bypassing the incumbent LEC network. For
example, cable operators compete with price cap incumbent LECs for
transport services, but do not rely on interconnection with incumbent
LEC wire centers to provide service. Commenters also observe
competitors' increasing reliance on third party carrier hotels and data
centers, which provide competitive LECs alternatives to incumbent LEC
wire centers. Therefore, using the proximity of price cap LEC wire
centers to competitive LEC fiber to measure the competitiveness of TDM
transport would, by itself, understate the level of competition for TDM
transport by failing to account for competition that bypasses incumbent
LEC networks.
10. Moreover, we agree with commenters that argue that our decision
to measure the proximity of buildings with BDS demand to competitive
fiber is ``both more granular and more comprehensive'' than the
competitive LECs' alternative proposal to measure the proximity of
incumbent LEC wire centers to competitive fiber. Our metric assesses
competition at approximately 1.2 million locations with BDS demand
whereas there are fewer than 16,000 price cap incumbent LEC wire
centers.
11. In the interest in having as complete a record as possible,
however, earlier this year, using data from the 2015 Collection,
Commission staff included in the record the April Data Tables that show
that the vast majority of locations with BDS demand are served by wire
centers that were within a half mile of competitive fiber. More
specifically, staff analysis demonstrates that, in 2013, 75.7% of price
cap LEC wire center locations were within a half mile of competitive
fiber. INCOMPAS's own analysis confirms this finding. Commission staff
determined that only 5.6% of locations with BDS demand are likely
served by incumbent LEC wire centers without competitive LEC fiber
within a half mile. Staff further calculated that only 2.7% of all
locations with BDS demand were either likely served by wire centers
without nearby competitive fiber or were themselves not within a half
mile of such fiber.
12. As CenturyLink explains, the ``tables confirm that competitors
can connect to the vast majority of ILEC central offices, and
particularly those with meaningful demand for business services, to
supplement their own competitive networks.'' At the same time, the
April Data Tables ``dramatically understate competition for these
services, as cable companies and other competitors frequently bypass
ILEC networks entirely, eliminating the need for them to connect to
ILEC wire centers to reach end-user customers.'' Moreover, the April
Data Tables reflect only the competitive fiber that existed in 2013; as
the record demonstrates, however, competitive fiber providers have
continued to build new fiber routes in part to compete with incumbent
LECs' BDS offerings.
13. Commenters challenge the validity of the Commission's April
Data Tables on various grounds. For example, INCOMPAS argues that
without information about the distance between wire centers and the
nearest splice point or interconnection point on the competitive
provider's network, the April Data Tables understate the barriers to
competitive entry. INCOMPAS cites Commission precedent regarding using
the distance to splice points to measure competition, and notes the
lack of splice point data in the record.
14. However, given the fact that fiber operators commonly install
interconnection points at regular intervals on the fiber they deploy,
measuring the distance to fiber is a reasonable proxy for measuring the
distance to a splice point. As CenturyLink explains, installing an
interconnection point on fiber is neither ``particularly burdensome
[nor] otherwise unachievable . . . . If there is sufficient demand,
carriers will
[[Page 38568]]
naturally install interconnection points nearby when they deploy fiber,
and even if they do not, it is still possible to add new splice
points.'' It further observes that ``[e]stablishing a splice point
generally does not significantly increase the cost of adding a new
customer location to CenturyLink's network . . . . As a result, the
need for a new splice point typically does not negatively affect the
business case for deploying a fiber lateral to serve a new customer . .
. .'' These statements are unrebutted in the record. We believe the
data on fiber locations represents the best data available to the
Commission and find they provide a reasonable means by which to
estimate competitive pressure generated by the proximity of competitive
fiber.
15. We also find the suggestion that it is improper to include
cable fiber in the April Data Tables, since cable providers do not
collocate in incumbent LEC wire centers to sell transport, to be
premised on an unnecessarily narrow and outdated view of competition
that requires interconnection with the incumbent LEC. It misses the
competitive pressure that nearby cable fiber exerts on the incumbent
LEC regardless of whether it interconnects with the incumbent LEC.
Competitive LEC fiber, including cable fiber, remains relevant to a
competitive analysis regardless of whether competitors connect with
incumbent facilities or bypass them.
16. We reaffirm the Commission's finding that the presence or
reasonable proximity of a single competitor's facilities represents
competition given the high sunk cost nature of BDS. At the same time,
as some commenters have pointed out, there are major urban areas with
as many as 28 competitive transport providers, and second tier
metropolitan areas with more than a dozen separate competitive
transport providers. While these data are discrete in nature, they are
unquestionably relevant to our assessment of TDM transport competition.
That some of these competitive providers may not currently ``offer a
substitute for interoffice DS1 and DS3 facilities in the MSA'' is of
limited relevance given our view that TDM transport services are
competitive due in part to the potential for providers to deploy
transport when competitive LEC fiber exists within a half mile of BDS
demand. Moreover, the willingness of so many competitors to supply
service in these markets is a general indicator of competitiveness and
the increasing use of non-incumbent LEC networks for transport.
17. The 2015 Collection and other data submitted into the record
before the adoption of the 2017 BDS Order necessarily do not account
for competitive facilities deployed over the last several years. More
recent record submissions show that competition for BDS transport
services has continued to grow. The current record shows, for example,
that cable operators have ``evolved from new entrants to established
providers of BDS . . . .'' In the BDS Order, the Commission identified
cable service as a substitute for BDS in areas with Metro Ethernet-
enabled offerings and for lower speed TDM services but did not find
``broad substitution'' of cable best efforts services for BDS or
``substantial performance similarities'' between the two types of
services. Cable now competes for the full range of BDS, and, since it
almost always bypasses the incumbent LEC network when it provides
service, displaces incumbent LEC transport offerings when it takes a
customer. In recent years, cable operators have invested billions of
dollars in their hybrid fiber coax (HFC) networks which are now
available in most areas where there is BDS demand and which can be
repurposed to provide various levels of BDS with only incremental
investment. Comcast, for example, reports having invested billions of
dollars ``to increase network capacity,'' resulting in ``the largest
facilities-based last mile alternative to the phone company.'' Charter
Spectrum reportedly spent over $1 billion in 2018 in new fiber
infrastructure to increase the density of its national fiber network.
Cox is reported to be planning to invest an additional $10 billion into
its network over the next five years.
18. According to a recent industry analyst report, ``[c]able
companies are leveraging [their] ubiquitous HFC and rapidly expanding
fiber networks to gain share in the [BDS] market.'' It states that
``[a]ll major [cable operators] are focused on expanding their network
footprints and speed offerings, and Comcast, Cox and other cable
companies are working to increase the capacities of their Ethernet over
HFC offerings.'' The report also projects that cable providers are
``expected to see share gains across markets, with continued expansion
and upgrades of fiber and HFC footprint and focus on growing business
and wholesale traction.''
19. As a result of this aggressive investment, cable's BDS revenues
and share of BDS revenues have steadily increased. Cable operators' BDS
revenues more than doubled from approximately $8 billion in 2013 to
more than $18 billion in 2018 and could reach $20 billion by the end of
2019. Atlantic-ACM projects that from 2017 to 2023, cable operators'
share of all BDS revenues will grow from 19.7% to an estimated 30.7%.
In 2017 alone, cable BDS revenue growth was 10.6%.
20. Traditional competitive LEC's BDS offerings have also increased
over the past two years. As one analyst report declares, ``CLECs are
aggressively expanding their footprints via network builds or M&A while
ILECs are attempting to remain competitive by making major investments
to prepare their networks for 5G.'' Fiber-based competitive LECs such
as Zayo and Uniti Fiber have deployed significant additional facilities
and continue to grow their share of BDS revenues. Zayo reported a 38%
increase in fiber route miles from December 2015 (95,000 miles) to
November 2018 (131,100 miles). Moreover, as commenters have also
observed the increased use of carrier-neutral facilities such as third-
party carrier hotels and data centers that bypass incumbent LEC
facilities, further suggesting competitive pressure from competitive
LECs.
21. As the Commission did in the BDS Order, we consider packet-
based transport services to be broadly substitutable for TDM-based
transport services. Substitution between these two types of services is
generally in one direction, and we find that ``circuit- and packet-
switched business data services that offer similar speed,
functionality, and quality of service characteristics fall within the
same product markets'' for the purposes of the market analysis relevant
here. Indeed, TDM transport services can be carried over fiber, so
fiber providers can offer customers TDM services.
22. There is an ongoing steady decline in demand for TDM transport
and increase in demand for packet-based alternatives. One analyst
forecasts that legacy TDM transport will decline from $3.2 billion to
$1.2 billion from 2017 to 2023. This forecast is supported by data
submitted to the record by BDS providers. For example, according to
CenturyLink, between 2015 and 2018, its incumbent LEC revenues for TDM
transport dropped 9% annually and demand for DS1 and DS3 services ``has
been declining for years as customers migrate to Ethernet and other
packet-based services that are easily scalable to meet their growing
bandwidth needs.'' Similarly, AT&T reports that its ``revenues for DS1
and D[S]3 transport have continued to decline substantially since 2015
due to the availability of competitive alternatives and the fact that
many competitors (e.g., cable companies) do not purchase much transport
from ILECs at all.''
[[Page 38569]]
23. In light of the record of continued aggressive deployment by
competitors of BDS-capable network facilities since the BDS Order, we
find unpersuasive arguments that our analysis fails to sufficiently
consider the barriers to supplying TDM transport and whether those
barriers identified are significant enough to prevent robust
competition. As the Commission previously explained, while entry
barriers to BDS supply may seem high, competitors nonetheless
frequently choose to make significant investment to enter these
markets. And, given that transport services typically connect points of
traffic aggregation and therefore offer relatively greater revenue
opportunity than end user channel terminations, barriers to entry to
supply transport are lower than for other types of BDS. Additionally,
because fiber connections are a sunk cost, and it is efficient to
deploy many more strands than are initially used, once competitors
deploy facilities, they have every incentive to price competitively (as
do the incumbents against whom they compete).
24. Some commenters' arguments about barriers to entry are based on
an unjustifiably narrow view of BDS transport competition which is
premised on competition that is interconnected with, and therefore
dependent on, incumbent LEC infrastructure. This argument ignores
substantial and growing evidence that competitors often bypass the
incumbent LEC network entirely. Indeed, as the Commission has
previously recognized, ``cable operators self-provision all aspects of
their BDS, including transport functionality,'' and therefore do not
rely on incumbent LEC central offices to offer competitive TDM
transport services and competitive LECs are increasingly bypassing
incumbent LEC infrastructure. As AT&T explains, ``CLECs do not need to
collocate in ILEC central offices, or to replicate ILEC transport
paths, in order to provide a competitive alternative that disciplines
ILEC rates.''
25. Finally, we find unpersuasive the assertion by some commenters
that incumbent LECs retain market power over DS1 and DS3 channel
terminations, which they contend extends to TDM transport, thus
rendering some TDM transport markets noncompetitive. As an initial
matter, the Commission's competitive market test in the BDS Order,
which was upheld on appeal by the Eighth Circuit, determined that 91.1%
of locations with DS1 and DS3 end user channel termination demand were
competitive. In support of their position, these commenters argue that
the market analysis conducted by Dr. Marc Rysman on behalf of the
Commission showed that incumbent LECs exercised some market power over
DS1 and DS3 services. The conclusions they cite from the Rysman study,
however, were specific to DS1 and DS3 channel terminations. Moreover,
as the Commission explained in the BDS Order, the data used in Dr.
Rysman's analysis were examined by peer reviewers and were found to be
``too noisy to draw any firm conclusions,'' and therefore the
Commission chose not to rely on these to draw conclusions about markets
for DS1 and DS3 services. Additionally, Dr. Rysman's analysis was based
on pricing data for full circuit service which combined data for
channel termination, transport, and other services. Dr. Rysman did not
attempt to draw conclusions specific to TDM transport. In fact, Dr.
Rysman removed from his study all data specific to standalone transport
services ``because the cost structure behind providing transport is
likely to be substantially different from providing service to end-user
premises and therefore would make comparisons of prices less
meaningful.''
B. Removing Ex Ante Pricing Regulation
26. Given our finding that the supply of TDM transport services is
sufficiently competitive across the country that the continued
application of ex ante pricing regulation would do more harm than good,
and consistent with the recommendation made by numerous commenters, we
reaffirm the Commission's decision in the BDS Order to remove ex ante
pricing regulation of BDS TDM transport and other transport (i.e., non-
end user channel termination) services in price cap areas nationwide.
The record does not support allegations made by some commenters that
``stark differences'' in competitive conditions in different areas
preclude the nationwide removal of ex ante pricing regulation. It does
demonstrate, as the Commission recognized in the BDS Order, that an
extremely small percentage of buildings with BDS demand in price cap
areas may face the prospect of no regulatory constraint on incumbent
LEC prices for TDM transport and no immediate prospect of a competitive
alternative. We believe, however, that the costs of imposing ex ante
pricing regulation far exceed the benefits of continued regulation of
price cap LECs' TDM transport services. Imposing inflexible and
burdensome ex ante pricing regulation on TDM transport services would
harm the dynamic competitive nature of these markets, could lead to a
decrease in new entrants, and would likely delay the transition from
TDM- to IP-based offerings. To the limited extent there remain
locations where there is not an immediate competitive threat, the
Commission has previously explained that we anticipate reasonably
competitive outcomes in the short- to medium-term (i.e., over several
years) will discipline prices. As a result, we find that such locations
do not preclude our adoption of a nationwide solution. Moreover, as the
Commission previously recognized, ``our goal is not absolute
mathematical precision but an administratively feasible approach that
avoids imposing undue regulatory burdens on this highly competitive
segment of the market.'' Refraining from pricing regulation for TDM
transport services in price cap areas nationally achieves the proper
balance between precision and administrability, particularly given the
fact that parties continue to be able to file complaints with the
Commission pursuant to section 208 of the Act.
27. As a result, we do not support proposals that we adopt a
competitive market test for TDM transport services. The fact that the
Commission adopted a competitive market test for TDM channel
terminations in price cap areas does not compel the adoption of a
competitive market test for TDM transport services. The Commission has
always distinguished its analysis and regulation of these markets and
presuming that a test for one set of services means that a competitive
market test for the other is necessary or even possible, wrongly
conflates the two. Indeed, commenters that support a competitive market
test for TDM transport concede that a ``competitive market test for
transport should be distinct from that used for channel termination
given the differences between the two types of services.'' Moreover,
they claim that the record ``does not[ ] contain data on the extent of
competition by different transport service providers'' and urge the
Commission to ``further develop the record.''
28. We see no benefit to prolonging this long-running proceeding to
conduct a further data collection for TDM transport services. Given the
very significant burdens and delays involved in the Commission's 2015
Collection, the benefits of collecting additional data on TDM transport
competition to develop a separate TDM transport competitive market test
would need to be substantial to justify the burdens of such a
collection. Commission staff analysis of the 2015 Collection shows that
only 2.7% of locations with BDS
[[Page 38570]]
demand in price cap areas in 2013 were neither served by a wire center
that was within a half mile of competitive fiber nor were themselves
within a half mile of competitive fiber. With competition this
extensive, the burdens of a major data collection and of developing and
administering a competitive market test for TDM transport services
clearly outweigh the benefits.
29. This is particularly true because some commenters arguing for a
competitive market test urge us to adopt a route-based test for TDM
transport services based on transport routes connecting incumbent LEC
wire centers. They argue that the relevant geographic market for TDM
transport services is ``the route between two ILEC end offices and not
the area within a given distance from a customer's location.'' The
providers that suggest adoption of such a test do not explain--even in
broad terms--how it would be structured, on what evidence it could be
based, or how it could be feasibly administered. Neither do they
acknowledge that the incumbent LEC-centric nature of such a test would
not account for competitors that bypass incumbent LEC infrastructure.
Nor do they take into account the fact that price cap LECs ``generally
do not price their transport services on a route-by-route basis.''
Given the evidence of extensive and still growing competition for
transport services in the vast majority of the areas served by price
cap carriers where there is BDS demand, we cannot justify imposing
burdensome new ex ante pricing regulation on BDS offerings based on the
results of a test that will not actually be able to identify where
there are failures in the transport market, but could inhibit
investment in this dynamic marketplace.
30. We also reject arguments made by some commenters that
nationwide deregulation of TDM transport will have secondary
consequences for the pricing of channel terminations in those price cap
counties that the BDS Order deemed insufficiently competitive to
warrant removal of ex ante pricing regulation. These parties argue that
eliminating pricing regulations for TDM transport would allow price cap
LECs to evade the price caps that remain on channel terminations in
areas deemed non-competitive by allowing them to impose offsetting rate
increases on TDM transport services in those counties. We find this
reasoning flawed. The argument assumes that, if a provider tried to
charge supracompetitive rates on transport services to compensate for
price-capped channel terminations, competitors would not respond to
such increased transport prices with additional investment in transport
facilities. However, given the evidence of widespread competitive entry
for BDS transport, there is reason to believe that the likely result of
a price cap LEC charging supracompetitive rates on transport services
would be the entry of a competitor with the capacity to bypass
facilities being added in response. The competitive LECs' view of the
BDS marketplace ignores the evidence of competitive pressure in the
record. Moreover, in the more than two years since the adoption of the
BDS Order, ex ante pricing regulation of TDM transport has been largely
removed in price cap areas, even in counties where the Commission
retained price cap regulation over price cap LECs' DS1 and DS3 channel
terminations. Yet, competitive LECs cite no instance where deregulating
transport rates has undercut price cap regulation of channel
terminations. In light of this experience, the competitive LECs'
concern seems speculative.
31. Refraining from pricing regulation for TDM transport services
nationwide achieves the proper balance between precision and
administrability. It also avoids unnecessary disruption of existing BDS
transport sales arrangements. And, as one commenter explains, the
``risks of overregulation of these services would outweigh any marginal
benefit from'' reinstating ex ante pricing regulation ``in this highly
competitive sector, by artificially tamping down TDM transport rates,
thereby deterring competitive entry and slowing the IP migration.''
Instead, we believe that providing regulatory relief in this market
segment will foster conditions that will continue to encourage
competitive entry and provide incentive for further investment in fiber
transport facilities.
32. Finally, as we previously observed in the BDS Order, price cap
LECs' TDM transport services continue to be subject to sections 201,
202 and 208 of the Communications Act. These statutory provisions
prohibit carriers from imposing rates, terms, and conditions that are
unjust, unreasonable, or unreasonably discriminatory.
C. Forbearance From Tariffing
33. To effectuate the approach we take to TDM transport, and
consistent with the approach the Commission took in the BDS Order,
pursuant to section 10 of the Communications Act, we forbear from
applying section 203 of the Act and our tariffing requirements to price
cap incumbent LECs in their provision of BDS TDM transport services.
This forbearance relieves price cap LECs of the requirement to file
interstate tariffs for these services nationwide.
34. The Commission has a long history of granting price cap LECs
forbearance from tariffing requirements for various of their BDS
offerings. More than a decade ago, the Commission provided grants of
forbearance to price cap LECs for their packet-switched and optical
transmission BDS. Two years ago, in the BDS Order, the Commission
granted price cap LECs forbearance from the Act's tariffing obligations
with respect to the provision of packet-based and higher speed TDM BDS,
lower speed TDM transport, and DS1 and DS3 end user channel termination
services in counties deemed competitive by the Commission's competitive
market test. Based on the record before us, we find that the statutory
test for granting forbearance from tariffing obligations for price cap
LECs' TDM transport services has been met.
35. First, we find that the widespread existence of competitive
alternatives to incumbent LECs' BDS TDM transport offerings means that
the application of section 203 of the Act is not necessary to ensure
that the charges and practices for price cap LECs' transport services
are just and reasonable and not unreasonably discriminatory. Congress
enacted section 203 of the Act in an era when tariffs ``were required
to protect consumers from unjust, unreasonable, and discriminatory
rates in a virtually monopolistic market.'' Over time, the Commission
progressively modified its regulation of price cap LECs' BDS to reflect
increasing levels of competition in the supply of BDS, and therefore,
the reduced need for the protections tariffs that provide. The record
demonstrates that current market forces will better ensure that prices
for TDM transport offered by price cap LECs are just and reasonable and
not unreasonably discriminatory than (necessarily) blunt regulatory
measures.
36. Second, for many of the same reasons, we find that enforcement
of our tariffing requirements for price cap LECs' BDS TDM transport
services is ``not necessary for the protection of consumers,'' and
forbearance will benefit consumers. Widespread and increasing
competition to BDS services will drive down prices and provide
competitive alternatives to those services, which in turn benefits
consumers. Moreover, forbearance from tariffing will allow price cap
carriers to respond more quickly to competition and be more innovative
in the services they offer, also benefitting consumers. Additionally,
price cap LEC BDS TDM transport offerings will remain subject to
sections 201, 202, and 208 of the Act
[[Page 38571]]
and to our enforcement of those provisions through the section 208
complaint process.
37. Third, we find that granting forbearance for price cap LECs'
BDS TDM transport services from section 203 of the Act is consistent
with the public interest and will promote competitive market
conditions. As the Commission found in the BDS Order, forbearance from
tariffing obligations for TDM transport will promote further BDS
competition and deployment in price cap LEC areas. Moreover, tariffing
can adversely impact competitive markets by reducing a carrier's
incentives to offer price discounts, delaying and increasing the costs
of innovation, and inhibiting a carrier from tailoring services to best
meet customers' needs. Further, tariffing itself is not without its
costs. Forbearing from section 203 and our tariffing rules will reduce
unnecessary administrative costs, which can be significant, and allow
carriers to redirect their resources to deploying service capabilities
and providing service. We continue to adhere to our view that disparate
forbearance treatment of carriers providing the same or similar
services is not in the public interest, as it creates distortions in
the marketplace that may harm consumers. Accordingly, the continued
application of section 203 is unnecessary under sections 10(a)(3) and
10(b). Because we find that each of the elements of the section 10
forbearance analysis is satisfied, we must grant forbearance from
section 203 tariffing requirements.
D. Transition to Mandatory Detariffing
38. To ensure an orderly transition to a fully detariffed
regulatory regime for price cap LECs' TDM transport offerings, we adopt
mechanisms that align with those the Commission adopted in the BDS
Order. As in the BDS Order, we also require competitive LECs, which are
subject to permissive detariffing, to detariff their remaining
transport BDS offerings by the end of this transition. In so doing, we
recognize that many price cap LECs have already detariffed their TDM
transport in response to the BDS Order and these services have remained
detariffed given the Eighth Circuit's temporary stay of its partial
remand. For those price cap LECs that have not already detariffed their
TDM transport, we adopt a new transition period that will begin on the
effective date of this Order (which will be 30 days after publication
of this Order in the Federal Register) and will end on August 1, 2020,
the date of the transition period mandated by the BDS Order for
mandatory detariffing.
39. During this transition, tariffing for TDM transport services by
carriers will be permissive--we will accept new tariffs and revisions
to existing tariffs for the affected services. Price cap LECs will no
longer be required to comply with price cap regulation for their TDM
transport services, and once these rules are effective, carriers that
wish to continue filing tariffs under the permissive detariffing regime
are free to modify such tariffs consistent with this Order. Carriers,
including non-incumbent LECs, may remove the relevant portions of their
tariffs for the affected services at any time during the transition.
Once the transition ends, no price cap carrier may file or maintain any
interstate tariffs for affected business data services.
40. Price cap incumbent LECs and competitive LECs may not file or
maintain any interstate tariffs for affected business data services
once the transition ends. This will prevent carriers from obtaining
``deemed lawful'' status for tariff filings that are not accompanied by
cost support and invoking the filed-rate doctrine in contractual
disputes with customers. Business data service providers will also be
prevented from picking and choosing when they are able to invoke the
protections of tariffs.
41. We do not intend our actions to disturb existing contractual or
other long-term arrangements--a contract tariff remains a contract even
if it is no longer tariffed. As we stated in the BDS Order, contract
tariffs, term and volume discount plans, and individual circuit plans
do not become void upon detariffing. All carriers are to act in good
faith to develop solutions to ensure rates remain just and reasonable.
42. The rule amendments we adopt today relating to TDM transport
are substantively the same as those the Commission adopted in the BDS
Order, and as such, impose the same obligations on carriers as the
existing rules. We make only minor clarifying changes to the rules. For
example, we amend the rules to specify that competitive LECs must
detariff their business data services by August 1, 2020.
III. Procedural Matters
43. Paperwork Reduction Act Analysis--This document does not
contain proposed information collection(s) subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore,
it does not contain any new or modified information collection burden
for small business concerns with fewer than 25 employees, pursuant to
the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
see 44 U.S.C. 3506(c)(4).
44. Congressional Review Act--The Commission will send a copy of
this Report and Order to Congress and the Government Accountability
Office pursuant to the Congressional Review Act, see 5 U.S.C.
801(a)(1)(A).
45. Final Regulatory Flexibility Analysis--As required by the
Regulatory by the Regulatory Flexibility Act of 1980, as amended (RFA)
an Initial Regulatory Flexibility Analysis (IRFA) was incorporated into
the Second Further Notice of Proposed Rulemaking and Further Notice of
Proposed Rulemaking (Second Further Notice) for the Time Division
Multiplexing (TDM) transport business data services (BDS). The
Commission sought written public comment on the proposals in the Second
Further Notice, including comment on the IRFA. The Commission received
no comments on the IRFA. Because the Commission amends its rules in
this Report and Order, the Commission has included this Final
Regulatory Flexibility Analysis (FRFA). This present FRFA conforms to
the RFA.
A. Need for, and Objectives of, the Proposed Rules
46. In the Second Further Notice, the Commission proposed changes
to, and sought comment on, the appropriate regulatory treatment of TDM
transport BDS offerings offered by price cap local exchange carriers
(LECs). The Commission proposed to remove ex ante pricing regulation
from TDM transport business data services offered by price cap LECs. In
this Order, we promote competition in the market for BDS TDM transport
services by adopting a regulatory framework for those services that
better reflects the dynamic competitive nature of price cap LECs' TDM
transport markets.
B. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
47. We analyze the market for TDM transport in areas served by
price cap incumbent local exchange carriers and conclude that the
record in this proceeding demonstrates widespread, significant and
growing competition in this segment of the BDS market. We therefore
grant nationwide relief from ex ante pricing regulation of these
carriers' TDM transport services, forbear from applying Section 203
tariffing requirements to these services, and adopt permissive
detariffing for price cap LECs' TDM transport services for a
[[Page 38572]]
transition period, followed by mandatory detariffing of these services.
48. The Commission did not receive comments specifically addressing
the rules and policies proposed in the IRFA.
C. Response to Comments by the Chief Counsel for Advocacy of the Small
Business Administration
49. The Chief Counsel did not file any comments in response to this
proceeding.
D. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
50. 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
FNPRMs seek 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.
1. Total Small Entities
51. 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 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 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.
52. 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).
53. 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 from
the 2012 Census of Governments indicates 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 shows that the majority of these governments have populations
of less than 50,000. Based on these data we estimate that at least
49,316 local government jurisdictions fall in the category of ``small
governmental jurisdictions.''
2. Broadband Internet Access Service Providers
54. 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 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.
3. Wireline Providers
55. 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. 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.
56. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent LEC services. The closest applicable size
standard under SBA rules is for the category 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. A total of
1,307 firms reported that they were incumbent local exchange service
providers. Of this total, an estimated 1,006 have 1,500 or fewer
employees.
57. 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
[[Page 38573]]
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.
58. We have included small incumbent LECs in this present RFA
analysis. As mentioned 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.
59. 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.
60. 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.
61. 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.
62. Other Toll Carriers. Neither the Commission nor the SBA has
developed 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 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 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.
63. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 33 carriers have reported that
they are engaged in the provision of operator services. Of these, an
estimated 31 have 1,500 or fewer employees and two have more than 1,500
employees. Consequently, the Commission estimates that the majority of
OSPs are small entities.
4. Wireless Providers--Fixed and Mobile
64. 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
[[Page 38574]]
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.
65. 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.
66. 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.
67. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As explained, 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.
5. Cable Service Providers
68. Because section 706 requires us to monitor the deployment of
broadband using any technology, we anticipate that some broadband
service providers may not provide telephone service. Accordingly, we
describe below other types of firms that may provide broadband
services, including cable companies, MDS providers, and utilities,
among others.
69. 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.
70. 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.
71. 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% 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. The Commission neither
requests nor collects information on whether cable system operators are
affiliated with entities whose gross annual revenues 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.
72. 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.
E. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
73. The rule changes in the Order include reducing the unnecessary
regulatory burdens and inflexibility of ex ante pricing regulation and
tariffing requirements for price cap LECs' TDM
[[Page 38575]]
transport services since the Commission has found there is sufficient
competition to justify reduced regulation. These rule changes provide
additional incentives for competitive entry, network investment and the
migration to IP-based network technologies and services.
74. The transition period for detariffing price cap LECs' TDM
transport services will begin on the effective date of this Order
(thirty (30) days after Federal Register publication). Given our desire
to align the transition periods we adopt here with those the Commission
already adopted in the BDS Order, the transition periods for
detariffing TDM transport services will end on the same date that the
transition period mandated by the BDS Order for price cap LECs' other
BDS services is scheduled to end--August 1, 2020.
75. Specifically, the Order eliminates ex ante pricing regulation
and tariffing requirements for price cap LECs' TDM transport BDS. This
will eliminate reporting, recordkeeping, and other compliance
requirements for any price cap LEC.
F. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
76. The RFA requires an agency to describe any significant
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.
77. The rule changes in this Order reduce the economic impact of
the Commission's rules on price cap LECs by freeing price cap LECs from
ex ante pricing regulation for their TDM transport offerings, including
the requirement to tariff their TDM transport services. These rule
changes will significantly minimize the economic impact of our rules on
price cap LECs.
G. Report to Congress
78. The Commission will send a copy of the Report and Order,
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 Report and Order, including this FRFA, to the Chief Counsel for
Advocacy of the SBA. A copy of the Order and FRFA (or summaries
thereof) will also be published in the Federal Register. Final
Regulatory Flexibility Analysis.
79. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA) an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated into the Second Further Notice of Proposed Rulemaking and
Further Notice of Proposed Rulemaking (Second Further Notice) for the
Time Division Multiplexing (TDM) transport business data services
(BDS). The Commission sought written public comment on the proposals in
the Second Further Notice, including comment on the IRFA. The
Commission received no comments on the IRFA. Because the Commission
amends its rules in this Report and Order, the Commission has included
this Final Regulatory Flexibility Analysis (FRFA). This present FRFA
conforms to the RFA.
A. Need for, and Objectives of, the Proposed Rules
80. In the Second Further Notice, the Commission proposed changes
to, and sought comment on, the appropriate regulatory treatment of TDM
transport BDS offerings offered by price cap local exchange carriers
(LECs). The Commission proposed to remove ex ante pricing regulation
from TDM transport business data services offered by price cap LECs. In
this Order, we promote competition in the market for BDS TDM transport
services by adopting a regulatory framework for those services that
better reflects the dynamic competitive nature of price cap LECs' TDM
transport markets.
B. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
81. We analyze the market for TDM transport in areas served by
price cap incumbent local exchange carriers and conclude that the
record in this proceeding demonstrates widespread, significant and
growing competition in this segment of the BDS market. We therefore
grant nationwide relief from ex ante pricing regulation of these
carriers' TDM transport services, forbear from applying Section 203
tariffing requirements to these services, and adopt permissive
detariffing for price cap LECs' TDM transport services for a transition
period, followed by mandatory detariffing of these services.
82. The Commission did not receive comments specifically addressing
the rules and policies proposed in the IRFA.
C. Response to Comments by the Chief Counsel for Advocacy of the Small
Business Administration
83. The Chief Counsel did not file any comments in response to this
proceeding.
D. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
84. 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
FNPRMs seek 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.
1. Total Small Entities
85. 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 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 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.
86. 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).
87. 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
[[Page 38576]]
from the 2012 Census of Governments indicates 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 shows that the majority of these governments have
populations of less than 50,000. Based on these data we estimate that
at least 49,316 local government jurisdictions fall in the category of
``small governmental jurisdictions.''
2. Broadband Internet Access Service Providers
88. 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 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.
3. Wireline Providers
89. 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. 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.
90. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent LEC services. The closest applicable size
standard under SBA rules is for the category 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. A total of
1,307 firms reported that they were incumbent local exchange service
providers. Of this total, an estimated 1,006 have 1,500 or fewer
employees.
91. 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.
92. We have included small incumbent LECs in this present RFA
analysis. As mentioned 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.
93. 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.
94. 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
[[Page 38577]]
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.
95. 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.
96. Other Toll Carriers. Neither the Commission nor the SBA has
developed 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 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 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.
97. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 33 carriers have reported that
they are engaged in the provision of operator services. Of these, an
estimated 31 have 1,500 or fewer employees and two have more than 1,500
employees. Consequently, the Commission estimates that the majority of
OSPs are small entities.
4. Wireless Providers--Fixed and Mobile
98. 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 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.
99. 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.
100. 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.
101. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As explained, 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.
5. Cable Service Providers
102. Because section 706 requires us to monitor the deployment of
broadband using any technology, we anticipate that some broadband
service providers may not provide telephone service. Accordingly, we
describe below other types of firms that may provide broadband
services, including cable companies, MDS providers, and utilities,
among others.
[[Page 38578]]
103. 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.
104. 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.
105. 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% 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. The Commission neither
requests nor collects information on whether cable system operators are
affiliated with entities whose gross annual revenues 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.
106. 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.
E. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
107. The rule changes in the Order include reducing the unnecessary
regulatory burdens and inflexibility of ex ante pricing regulation and
tariffing requirements for price cap LECs' TDM transport services since
the Commission has found there is sufficient competition to justify
reduced regulation. These rule changes provide additional incentives
for competitive entry, network investment and the migration to IP-based
network technologies and services.
108. The transition period for detariffing price cap LECs' TDM
transport services will begin on the effective date of this Order
(thirty (30) days after Federal Register publication). Given our desire
to align the transition periods we adopt here with those the Commission
already adopted in the BDS Order, the transition periods for
detariffing TDM transport services will end on the same date that the
transition period mandated by the BDS Order for price cap LECs' other
BDS services is scheduled to end--August 1, 2020.
109. Specifically, the Order eliminates ex ante pricing regulation
and tariffing requirements for price cap LECs' TDM transport BDS. This
will eliminate reporting, recordkeeping, and other compliance
requirements for any price cap LEC.
F. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
110. The RFA requires an agency to describe any significant
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.
111. The rule changes in this Order reduce the economic impact of
the Commission's rules on price cap LECs by freeing price cap LECs from
ex ante pricing regulation for their TDM transport offerings, including
the requirement to tariff their TDM transport services. These rule
changes will significantly minimize the economic impact of our rules on
price cap LECs.
G. Report to Congress
112. The Commission will send a copy of the Report and Order,
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 Report and Order, including this FRFA, to the Chief Counsel for
Advocacy of the SBA. A copy of the Order and FRFA (or
[[Page 38579]]
summaries thereof) will also be published in the Federal Register.
IV. Ordering Clauses
113. Accordingly, it is ordered that, pursuant to sections 1, 2,
4(i)-(j), 10, 201(b), 202(a), 403, of the Communications Act of 1934,
as amended, and section 706 of the Telecommunications Act of 1996, 47
U.S.C. 151, 152, 154(i)-(j), 160, 201(b), 202(a), 403, 1302, this
Report and Order on Remand in WC Docket No. 16-143, GN Docket No. 13-5,
WC Docket No. 05-25, and RM-10593 is adopted and shall be effective
thirty (30) days after publication in the Federal Register.
114. It is further ordered that Parts 61 and 69 of the Commission's
rules, 47 CFR parts 61 and 69, are amended as set forth in Appendix A,
and that such rule amendments shall be effective thirty (30) days after
publication of this Report and Order on Remand in the Federal Register.
115. It is further ordered that, pursuant to sections 402 and 405
of the Communications Act, 47 U.S.C. 402, 405, the date of ``public
notice'' with respect to this Report and Order on Remand of all actions
taken herein shall be the date that a summary of this Report and Order
on Remand is published in the Federal Register. The period for filing
petitions for reconsideration or petitions for judicial review of all
actions taken herein shall commence on that date. Section 1.4 of the
Commission's rules, 47 CFR 1.4, is hereby waived to the extent
inconsistent with this paragraph.
116. It is further ordered that the Commission's Consumer &
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order on Remand to Congress and the Government
Accountability Office pursuant to the Congressional Review Act, see 5
U.S.C. 801(a)(1)(A).
117. It is further ordered, that the Commission's Consumer &
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order on Remand, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
List of Subjects
47 CFR Part 61
Communications, Common carriers, Reporting and recordkeeping
requirements, Telephone.
47 CFR Part 69
Communications, Common carriers, Reporting and recordkeeping
requirements, Telephone.
Federal Communications Commission.
Marlene Dortch,
Secretary.
Final Rules
For the reasons set forth in the preamble, the Federal
Communications Commission amends parts 61 and 69 of title 47 of the
CFR, as follows:
PART 61--TARIFFS
0
1. The authority citation for part 61 continues to read as follows:
Authority: 47 U.S.C. 151, 154(i), 154(j), 201-205, 403, unless
otherwise noted.
0
2. Section 61.201 is amended by revising paragraph (a)(3) to read as
follows:
Sec. 61.201 Detariffing of price cap local exchange carriers.
(a) * * *
(3) Any transport services as defined in Sec. 69.801(j) of this
chapter;
* * * * *
0
3. Section 61.203 is amended by revising paragraph (b) to read as
follows:
Sec. 61.203 Detariffing of competitive local exchange carriers.
* * * * *
(b) The detariffing must be completed by August 1, 2020.
PART 69--ACCESS CHARGES
0
4. The authority citation for part 69 continues to read as follows:
Authority: 47 U.S.C. 154, 201, 202, 203, 205, 218, 220, 254,
403, unless otherwise noted.
0
5. Section 69.807 is amended by revising paragraph (a) to read as
follows:
Sec. 69.807 Regulatory relief.
(a) Price cap local exchange carrier TDM transport, end user
channel terminations in markets deemed competitive, and end user
channel terminations in grandfathered markets for a price cap local
exchange carrier that was granted Phase II pricing flexibility prior to
June 2017, are granted the following regulatory relief:
(1) Elimination of the rate structure requirements contained in
subpart B of this part;
(2) Elimination of price cap regulation; and
(3) Elimination of tariffing requirements as specified in Sec.
61.201 of this chapter.
* * * * *
[FR Doc. 2019-16897 Filed 8-6-19; 8:45 a.m.]
BILLING CODE 6712-01-P