The European Union Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0049, dated March 11, 2019 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A330-200, -200F, and -300 series airplanes. You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-0523.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus SAS Model A330-200, -200F, and -300 series airplanes. The NPRM published in the Federal Register on July 9, 2019 (84 FR 32661). The NPRM was prompted by a determination that new or more restrictive airworthiness limitations are necessary. The NPRM proposed to require revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations. The FAA is issuing this AD to address a safety-significant latent failure (that is not annunciated) that, in combination with one or more other specific failures or events, could result in a hazardous or catastrophic failure condition. See the MCAI for additional background information.

The FAA gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.

American Airlines (AAL) asked that the proposed AD be revised to include Airbus A330 Airworthiness Limitations Section (ALS) Part 3—Certification Maintenance Requirements (CMR), Variation 6.1, dated June 28, 2019, as an additional source of service information. AAL stated that the variation document provides relieving compliance times for certain tasks. AAL pointed out that an alternative method of compliance (AMOC) for AD 2016-26-05, Amendment 39-18763 (82 FR 1170, January 5, 2017) (“AD 2016-26-05”) (AMOC AIR-676-19-016, dated November 2, 2018), has been approved to allow incorporation of the variation document into AAL's maintenance program as acceptable for compliance with the requirements of paragraph (g) of the proposed AD.

The FAA agrees with the commenter's request for the reason provided. Paragraph (g) of this AD has been revised to include Airbus A330 ALS Part 3—Certification Maintenance Requirements (CMR), Variation 6.1, dated June 28, 2019, as an additional source of service information.

Delta Airlines (DAL) asked that the proposed AD be revised to allow the use of future revisions of the service information. DAL noted that since the FAA has started to instruct operators to refer to the EASA AD to comply with the FAA AD, it recommends that the FAA include a paragraph that resolves this issue by referring to the EASA AD. DAL added that the EASA AD allows the use of future revisions of service information.

The FAA acknowledges the commenter's observation regarding the FAA's new “IBR the MCAI” process, which uses EASA ADs as the primary source of information for compliance with corresponding FAA ADs. However, the FAA currently only uses the new “IBR the MCAI” process with certain MCAI ADs (primarily those with service bulletins as the primary source of information). When the Airbus A330 Airworthiness Limitations Section is revised, and EASA issues an AD, the FAA will consider drafting the corresponding FAA AD as an “IBR the MCAI” AD. Thus, all provisions specified in the EASA AD would apply to the corresponding FAA AD.

Based on the information above, the FAA does not agree with the commenter's request to allow the use of future revisions of the service information. The FAA may not refer to any document that does not yet exist in an AD. To allow operators to use later revisions of the referenced document (issued after AD publication), the most expeditious approach would be for operators to request approval to use later revisions as an alternative method of compliance with this AD, under the provisions of paragraph (j)(1) of this AD. The alternative would be for the FAA to revise the AD to reference specific later revisions, which would take longer and consume more resources. This AD has not been revised regarding this issue.

The FAA reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule with the change described previously and minor editorial changes. The FAA has determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for addressing the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

The FAA also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

Airbus SAS has issued the following service information.

• A330 Airworthiness Limitations Section (ALS) Part 3—Certification Maintenance Requirements (CMR), Revision 06, dated October 15, 2018. This service information describes maintenance instructions and airworthiness limitations, including updated inspections and intervals, to be incorporated into the existing maintenance or inspection program.

• A330 ALS Part 3—Certification Maintenance Requirements (CMR), Variation 6.1, dated June 28, 2019. This service information describes maintenance instructions and airworthiness limitations, and increases the flight cycle inspection intervals to 12,000 flight hours.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA estimates that this AD affects 107 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA has determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. In the past, the FAA has estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, the FAA estimates the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

A. Background 1. Statutory Authority

Section 104(b)(1)(B) of the Consumer Product Safety Improvement Act (CPSIA), also known as the Danny Keysar Child Product Safety Notification Act, requires the Commission to promulgate consumer product safety standards for durable infant or toddler products. The law requires these standards to be “substantially the same as” applicable voluntary standards or more stringent than the voluntary standards if the Commission concludes that more stringent requirements would further reduce the risk of injury associated with the product.

The CPSIA also sets forth a process for updating CPSC's durable infant or toddler standards when the voluntary standard, upon which the CPSC standard was based, is changed. Section 104(b)(4)(B) of the CPSIA provides that if an organization revises a standard that has been adopted, in whole or in part, as a consumer product safety standard under this subsection, it shall notify the Commission. In addition, the revised voluntary standard shall be considered to be a consumer product safety standard issued by the Commission under section 9 of the Consumer Product Safety Act (15 U.S.C. 2058), effective 180 days after the date on which the organization notifies the Commission (or such later date specified by the Commission in the Federal Register ) unless, within 90 days after receiving that notice, the Commission notifies the organization that it has determined that the proposed revision does not improve the safety of the consumer product covered by the standard and that the Commission is retaining the existing consumer product safety standard.

On April 20, 2011, the Commission published  1 a final rule issuing a mandatory standard for toddler beds that incorporated by reference the standard in effect at that time, ASTM F1821-09, Standard Consumer Specification for Toddler Beds, with certain modifications to make the standard more stringent. 76 FR 22019. The standard was codified in the Commission's regulations at 16 CFR part 1217.

ASTM has revised the toddler beds standards several times since issuance of the rule:

• On September 25, 2013, ASTM officially notified the CPSC that ASTM published a revised 2013 version of ASTM F1821. The Commission published a Federal Register notice revising the Commission's toddler bed standard to reference ASTM F1821-13, effective March 24, 2014 (78 FR 73692, December 9, 2013).

• On April 6, 2015, ASTM officially notified the CPSC that ASTM had revised ASTM's toddler bed standard again and had published a revised 2015 version of ASTM F1821. Due to an inadvertent omission in the revised ASTM standard, the Commission voted  2 unanimously to retain the existing consumer product safety standard.

• On December 8, 2016, ASTM officially notified the CPSC that it had published a revised 2016 version of ASTM F1821. The Commission published a Federal Register notice incorporating ASTM F1821-16, Standard Consumer Safety Specifications for Toddler Beds, effective June 6, 2017, in 16 CFR part 1217 as the safety standard for toddler beds. (82 FR 11317, February 22, 2017).

Since publication of ASTM F1821-16, the current mandatory standard, ASTM has published revised versions of ASTM F1821 in 2018 and 2019. These revised versions of the standard not only update the standard to reflect clarifications to testing for consistency, the revisions also harmonize the standard with other juvenile product standards. ASTM F1821-19 was approved and published in June 2019. ASTM officially notified the Commission of this revision on July 30, 2019. Recently, ASTM published an editorial version of the 2019 standard, ASTM F1821-19 ε 1 , which corrects two typographical errors, but does not change the technical content of the 2019 version. The rule is incorporating ASTM F1821-19 ε 1 as the mandatory standard.

The ASTM standard for toddler beds, ASTM F1821-19 ε 1 defines a “toddler bed” as any bed sized to accommodate a full-size crib mattress having minimum dimensions of 51 5/8 inches (1310 mm) in length and 27 1/4 inches (690 mm) in width and is intended to provide free access and egress to a child not less than 15 months of age and who weighs no more than 50 pounds (27.7 kg). The standard has provisions that address the following hazards: Entrapment in bed end structures, entrapment between the guardrail and side rail, and entrapment in the mattress support system. In addition, the ASTM standard has provisions addressing corner post extensions, which may catch cords, ribbons, necklaces or clothing. Under section 104(b)(4)(B) of the CPSIA, unless the Commission determines that ASTM's revision to a voluntary standard that is a CPSC mandatory standard “does not improve the safety of the consumer product covered by the standard,” the revised voluntary standard becomes the new mandatory standard. As discussed below, the Commission determines that the changes made in ASTM F1821-19 ε 1 will either improve the safety of toddler beds or are neutral with respect to safety. Therefore, the Commission will allow the revised voluntary standard to become effective as a mandatory consumer product safety standard under the statute, effective January 27, 2020.

We summarize the differences and the CPSC's assessment of the revisions to ASTM F1821 below.

ASTM F1821-18, was approved and published in December 2018, and was the first revision of the standard following ASTM F1821-16, the current mandatory standard. ASTM did not notify CPSC of this update because ASTM was waiting to make an additional change to the standard. ASTM F1821-18 made the following changes:

• Section 1.7 states “This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.” ( Italicized language was added to the standard). We conclude that adding the word “environmental” does not change the safety of toddler beds because this does not relate specifically to the toddler bed requirements.

• The 2018 version of the ASTM standard added language (Section 1.8), which ASTM intends to add to all of its standards, stating that ASTM developed the standard in accordance with principles recognized by the World Trade Organization. We conclude that adding this text does not change the safety of toddler beds because the language pertains to voluntary standards development generally.

• The terminology section has a new definition for corner posts, “3.1.3 corner post, n—vertical post located at the corner of a product.” This definition does not change any other aspects of the standard. Therefore, we conclude this addition is neutral to the safety of the toddler beds.

• An editorial change was made in section 7.8.3 deleting the period in “15-lbf.” to “15-lbf” We conclude this editorial change is neutral to toddler bed safety.

ASTM F1821-19 contains changes to the performance requirements for section 6.2 Mattress Support System Attachment and Side Rails Integrity, as well as the testing requirements in section 7.3 Mattress Support System Attachment and Side Rails Integrity Tests. Some toddler beds have separate mattress support systems and side rail attachments to the end structure, so this change clarified that both the mattress support system and the side rail attachments must be tested. The testing requirement provide specific instructions for the mattress support system (section 7.3.2) and the side rails (section 7.3.3). We consider the clarification of performance and test requirements for mattress support system attachment and side rails to be an improvement to the safety of toddler beds because the change removes ambiguity and it assures more consistent testing.

Section 7.3.3 Side Rails of ASTM F1821-19 incorporates the previous section 7.3.4 requirements into section 7.3.3.2. However, publication of ASTM F1821-19 included the previous section 7.3.4 requirements, thus repeating the section 7.3.3.2 requirements. ASTM published ASTM F1821-19 ε 1 to make two editorial corrections: Deleting section 7.3.4 and correcting the word “load” in section 7.3.3.2 to “force.”

These editorial corrections do not change the voluntary standard requirements, but merely correct drafting errors, and therefore, the standard is simply noted with the epsilon.

The Office of the Federal Register (OFR) has regulations concerning incorporation by reference. 1 CFR part 51. Under these regulations, agencies must discuss, in the preamble to the final rule, ways that the materials the agency incorporates by reference are reasonably available to interested persons and how interested parties can obtain the materials. In addition, the preamble to the final rule must summarize the material. 1 CFR 51.5(b).

In accordance with the OFR's requirements, section B of this preamble summarizes the major provisions of the ASTM F1821-19 ε 1 standard that the Commission incorporates by reference into 16 CFR part 1217. The standard is reasonably available to interested parties, and interested parties may purchase a copy of the standard from ASTM International, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959 USA; phone: 610-832-9585; www.astm.org. A copy of the standard can also be inspected at CPSC's Division of the Secretariat, U.S. Consumer Product Safety Commission, Room 820, 4330 East West Highway, Bethesda, MD 20814, telephone 301-504-7923.

Section 14(a) of the CPSA requires that products subject to a consumer product safety rule under the CPSA, or to a similar rule, ban, standard, or regulation under any other act enforced by the Commission, be certified as complying with all applicable CPSC requirements. 15 U.S.C. 2063(a). Such certification must be based on a test of each product, or on a reasonable testing program, or, for children's products, on tests on a sufficient number of samples by a third party conformity assessment body accredited by the Commission to test according to the applicable requirements. As noted, standards issued under section 104(b)(1)(B) of the CPSIA are “consumer product safety standards.” Thus, they are subject to the testing and certification requirements of section 14 of the CPSA.

Because toddler beds are children's products, samples of these products must be tested by a third party conformity assessment body whose accreditation has been accepted by the Commission. These products also must comply with all other applicable CPSC requirements, such as the lead content requirements in section 101 of the CPSIA, the phthalates prohibitions in section 108 of the CPSIA and 16 CFR part 1307, the tracking label requirement in section 14(a)(5) of the CPSA, and the consumer registration form requirements in section 104(d) of the CPSIA.

In accordance with section 14(a)(3)(B)(iv) of the CPSIA, the Commission has previously published a notice of requirements (NOR) for accreditation of third party conformity assessment bodies for testing toddler beds (76 FR 22030, April 20, 2011). The NOR provided the criteria and process for our acceptance of accreditation of third party conformity assessment bodies for testing toddler beds to 16 CFR part 1217. The NORs for all mandatory standards for durable infant or toddler products are listed in the Commission's rule, “Requirements Pertaining to Third Party Conformity Assessment Bodies,” codified at 16 CFR part 1112.

Testing laboratories that have demonstrated competence for testing in accordance with ASTM F1821-16 have the competence to test in accordance with the revised standard ASTM F1821-19 ε 1 . Therefore, the Commission considers the existing CPSC-accepted laboratories for testing to ASTM F1821-16 to be capable of testing to ASTM F1821-19 ε 1 as well. Therefore, the Commission considers the existing accreditations that the Commission has accepted for testing to this standard also to cover testing to the revised standard. Accordingly, the existing NOR for this standard will remain in place, and CPSC-accepted third party conformity assessment bodies are expected to update the scope of the testing laboratories' accreditation to reflect the revised standard in the normal course of renewing their accreditation.

The Commission is issuing this rule as a direct final rule. Although the Administrative Procedure Act (APA) generally requires notice and comment rulemaking, section 553 of the APA provides an exception when the agency, for good cause, finds that notice and public procedure are “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B). The Commission concludes that when the Commission updates a reference to an ASTM standard that the Commission has incorporated by reference under section 104(b) of the CPSIA, notice and comment is not necessary.

Under the process set out in section 104(b)(4)(B) of the CPSIA, when ASTM revises a standard that the Commission has previously incorporated by reference as a Commission standard for a durable infant or toddler product under section 104(b)(1)(b) of the CPSIA, that revision will become the new CPSC standard, unless the Commission determines that ASTM's revision does not improve the safety of the product. Thus, unless the Commission makes such a determination, the ASTM revision becomes CPSC's standard by operation of law. The Commission is allowing ASTM F1821-19 ε 1 to become CPSC's new standard. The purpose of this direct final rule is merely to update the reference in the Code of Federal Regulations so that it reflects accurately the version of the standard that takes effect by statute. Public comment will not impact the substantive changes to the standard or the effect of the revised standard as a consumer product safety standard under section 104(b) of the CPSIA. Under these circumstances, notice and comment are not necessary. In Recommendation 95-4, the Administrative Conference of the United States (ACUS) endorsed direct final rulemaking as an appropriate procedure to expedite promulgating rules that are noncontroversial and that are not expected to generate significant adverse comment. See 60 FR 43108 (August 18, 1995). ACUS recommended that agencies use the direct final rule process when they act under the “unnecessary” prong of the good cause exemption in 5 U.S.C. 553(b)(B). Consistent with the ACUS recommendation, the Commission is publishing this rule as a direct final rule because we do not expect any significant adverse comments.

Unless we receive a significant adverse comment within 30 days, the rule will become effective on January 27, 2020. In accordance with ACUS's recommendation, the Commission considers a significant adverse comment to be one where the commenter explains why the rule would be inappropriate, including an assertion challenging the rule's underlying premise or approach, or a claim that the rule would be ineffective or unacceptable without change.

Should the Commission receive a significant adverse comment, the Commission would withdraw this direct final rule. Depending on the comments and other circumstances, the Commission may then incorporate the adverse comment into a subsequent direct final rule or publish a notice of proposed rulemaking, providing an opportunity for public comment.

The Regulatory Flexibility Act (RFA) generally requires that agencies review proposed and final rules for their potential economic impact on small entities, including small businesses, and prepare regulatory flexibility analyses. 5 U.S.C. 603 and 604. The RFA applies to any rule that is subject to notice and comment procedures under section 553 of the APA. Id. As explained, the Commission has determined that notice and comment are not necessary for this direct final rule. Thus, the RFA does not apply. We also note the limited nature of this document, which updates the incorporation by reference to reflect the mandatory CPSC standard that takes effect under section 104 of the CPSIA.

The standard for toddler beds contains information collection requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The revisions made no changes to that section of the standard. Thus, the revisions will not have any effect on the information collection requirements related to the standard.

The Commission's regulations provide a categorical exclusion for the Commission's rules from any requirement to prepare an environmental assessment or an environmental impact statement because they “have little or no potential for affecting the human environment.” 16 CFR 1021.5(c)(2). This rule falls within the categorical exclusion, so no environmental assessment or environmental impact statement is required.

Section 26(a) of the CPSA, 15 U.S.C. 2075(a), provides that where a consumer product safety standard is in effect and applies to a product, no state or political subdivision of a state may either establish or continue in effect a requirement dealing with the same risk of injury unless the state requirement is identical to the federal standard. Section 26(c) of the CPSA also provides that states or political subdivisions of states may apply to the CPSC for an exemption from this preemption under certain circumstances. Section 104(b) of the CPSIA refers to the rules to be issued under that section as “consumer product safety rules,” thus, implying that the preemptive effect of section 26(a) of the CPSA would apply. Therefore, a rule issued under section 104 of the CPSIA will invoke the preemptive effect of section 26(a) of the CPSA when it becomes effective.

Under the procedure set forth in section 104(b)(4)(B) of the CPSIA, when a voluntary standard organization revises a standard upon which a consumer product safety standard was based, the revision becomes the CPSC standard within 180 days of notification to the Commission, unless the Commission determines that the revision does not improve the safety of the product, or the Commission sets a later date in the Federal Register . The Commission has not set a different effective date. Thus, in accordance with this provision, this rule takes effect 180 days after we received notification from ASTM of revision to this standard. As discussed in the preceding section, this is a direct final rule. Unless we receive a significant adverse comment within 30 days, the rule will become effective on January 27, 2020.

The Congressional Review Act (CRA; 5 U.S.C. 801-808) states that, before a rule may take effect, the agency issuing the rule must submit the rule, and certain related information, to each House of Congress and the Comptroller General. 5 U.S.C. 801(a)(1). The submission must indicate whether the rule is a “major rule.” The CRA states that the Office of Information and Regulatory Affairs (OIRA) determines whether a rule qualifies as a “major rule.” Pursuant to the CRA, OIRA designated this rule as not a “major rule,” as defined in 5 U.S.C. 804(2). In addition, to comply with the CRA, the Office of the General Counsel will submit the required information to each House of Congress and the Comptroller General.

For the reasons stated above, the Commission amends title 16 CFR chapter II as follows:

We published final rules in the Federal Register on February 15, 2019 (83 FR 4323), that prohibit persons with certain criminal convictions from serving as representative payees. Those rules codified our responsibilities under the Strengthening Protections for Social Security Beneficiaries Act of 2018, 1 which prohibits the selection of certain representative payee applicants who have a specified felony conviction of committing, attempting, or conspiring to commit certain crimes. The law also requires us to review each individual currently serving as a representative payee (who does not meet one of the exceptions set out in the law) to determine whether the individual has been convicted of a specified crime, and continue to do so at least once every five years. The final rules inadvertently included the words “or organization” in §§ 404.2026, 408.626, and 416.626. They also inadvertently omitted the word “individual” from §§ 404.2024(a)(10) and 416.624(a)(10).

Although a representative payee may be an organization such as a social service agency, or an individual such as a parent, relative, or friend of the beneficiary, the final rules concerning a criminal background check and criminal history apply only to individuals applying to serve as representative payee and individuals currently serving as a representative payee. Accordingly, this correction removes the words “or organization” from the affected sections and clarifies our regulations. They also clarify in §§ 404.2024(a)(10) and 416.624(a)(10) that the criminal background check requirement applies to individual representative payee applicants.

Accordingly, 20 CFR parts 404, 408, and 416 are amended by making the following correcting amendments:

Upon request, FDA has classified the orthopedic surgical instrumentation designed for osteochondral implants with press-fit fixation as class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness for its intended use. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens by placing the device into the appropriate device class based on risk and the regulatory controls sufficient to provide reasonable assurance of safety and effectiveness.

FDA may classify a device through an accessory classification request under section 513(f)(6) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360c(f)(6)), established by section 707 of the FDA Reauthorization Act of 2017 (Pub. L. 115-52). The provision allows manufacturers or importers to request classification of an accessory distinct from another device upon written request. The classification is based upon the risks of the accessory when used as intended as well as the level of regulatory controls necessary to provide a reasonable assurance of safety and effectiveness, notwithstanding the classification of any other device with which such accessory is intended to be used. Until an accessory is reclassified by FDA, the classification of any accessory distinct from another device by regulation or written order issued prior to December 13, 2016, will continue to apply.

Under section 513(f)(6)(D)(ii) of the FD&C Act, a manufacturer or importer may request appropriate classification of an accessory that has been granted marketing authorization as part of a premarket approval application (PMA), premarket notification (510(k)), or De Novo classification request. FDA must grant or deny the request not later than 85 days after receipt and, if granting, publish a notice in the Federal Register within 30 days announcing the classification.

Alternatively, under section 513(f)(6)(C), a person filing a PMA or 510(k) may include a written request for the proper classification of an accessory that has not been classified distinctly from another device based on the risks of the accessory when used as intended and the level of regulatory controls necessary to provide a reasonable assurance of safety and effectiveness. When the written request is included in a submission for marketing authorization, FDA must grant or deny the request along with the response to the PMA or 510(k). Upon granting, FDA will publish a notice in the Federal Register within 30 days announcing the classification.

On January 31, 2018, Cartiva, Inc., submitted a request for accessory classification of the Reusable Implantation Instruments for the Cartiva Synthetic Cartilage Implant. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act.

We classify devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls that, in combination with the general controls, provide reasonable assurance of the safety and effectiveness of the device for its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the information submitted in the request, we determined that the device can be classified into class II with the establishment of special controls. FDA has determined that these special controls, in addition to the general controls, will provide reasonable assurance of the safety and effectiveness of the device.

Therefore, on April 26, 2018, FDA issued an order to the requester classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 888.4505. We have named the generic type of device orthopedic surgical instrumentation designed for osteochondral implants with press-fit fixation, and it is identified as hand-held devices intended to manipulate bone and cartilage tissue or the implant for the positioning, alignment, defect creation, and placement of press-fit osteochondral implants that utilize no additional means of fixation ( e.g., suture fixation, adhesives). This type of device includes instruments specific to the geometry of the implant.

Upon request, FDA has classified the internal therapeutic massager as class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens by placing the device into a lower device class than the automatic class III assignment.

The automatic assignment of class III occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the new device. Any device that was not in commercial distribution before May 28, 1976, is automatically classified as, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device (see 21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976, which amended the Federal Food, Drug, and Cosmetic Act (FD&C Act).

FDA may take a variety of actions in appropriate circumstances to classify or reclassify a device into class I or II. We may issue an order finding a new device to be substantially equivalent under section 513(i) of the FD&C Act to a predicate device that does not require premarket approval (see 21 U.S.C. 360c(i)). We determine whether a new device is substantially equivalent to a predicate by means of the procedures for premarket notification under section 510(k) of the FD&C Act (21 U.S.C. 360(k) and Part 807 (21 CFR part 807), respectively.

FDA may also classify a device through “De Novo” classification, a common name for the process authorized under section 513(f)(2) of the FD&C Act (21 U.S.C. 360c(f)(2)). Section 207 of the Food and Drug Administration Modernization Act of 1997 established the first procedure for De Novo classification (Pub. L. 105-115). Section 607 of the Food and Drug Administration Safety and Innovation Act modified the De Novo application process by adding a second procedure (Pub. L. 112-144). A device sponsor may utilize either procedure for De Novo classification.

Under the first procedure, the person submits a 510(k) for a device that has not previously been classified. After receiving an order from FDA classifying the device into class III under section 513(f)(1) of the FD&C Act, the person then requests a classification under section 513(f)(2).

Under the second procedure, rather than first submitting a 510(k) and then a request for classification, if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence, that person requests a classification under section 513(f)(2) of the FD&C Act.

Under either procedure for De Novo classification, FDA is required to classify the device by written order within 120 days. The classification will be according to the criteria under section 513(a)(1) of the FD&C Act (21 U.S.C. 360c(a)(1)). Although the device was automatically within class III, the De Novo classification is considered to be the initial classification of the device.

We believe this De Novo classification will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA classifies a device into class I or II via the De Novo process, the device can serve as a predicate for future devices of that type, including for 510(k)s (see 21 U.S.C. 360c(f)(2)(B)(i)). As a result, other device sponsors do not have to submit a De Novo request or premarket approval application in order to market a substantially equivalent device (see 21 U.S.C. 360c(i), defining “substantial equivalence”). Instead, sponsors can use the 510(k) process, when necessary, to market their device.

For this device, FDA issued an order on July 27, 2010, finding the American Health Insurance Plans (AHIP) Internal Trigger Point Wand not substantially equivalent to a predicate not subject to premarket approval. Thus, the device remained in class III in accordance with section 513(f)(1) of the FD&C Act when we issued the order.

On August 20, 2010, National Center for Pelvic Pain Research Devices, Inc. submitted a request for De Novo classification of the AHIP Internal Trigger Point Wand. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act.

We classify devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls that, in combination with the general controls, provide reasonable assurance of the safety and effectiveness of the device for its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the information submitted in the request, we determined that the device can be classified into class II with the establishment of special controls. FDA has determined that these special controls, in addition to the general controls, will provide reasonable assurance of the safety and effectiveness of the device.

Therefore, on November 20, 2012, FDA issued an order to the requester classifying the device into class II. FDA is codifying the classification of the device by adding 21 CFR 890.5670. We have named the generic type of device internal therapeutic massager, and it is identified as a hand-held prescription device intended for medical purposes to manually provide direct pressure applied to localized areas of pain or tenderness in the myofascial tissue associated with chronic pelvic pain syndromes. The device is inserted rectally or vaginally and provides quantitative feedback to the user of the applied force to the target tissue.

FDA has identified the following risks to health associated specifically with this type of device and the measures required to mitigate these risks in table 1.

FDA has determined that special controls, in combination with the general controls, address these risks to health and provide reasonable assurance of safety and effectiveness. In order for a device to fall within this classification, and thus avoid automatic classification in class III, it would have to comply with the special controls named in this final order. The necessary special controls appear in the regulation codified by this order. This device is subject to premarket notification requirements under section 510(k) of the FD&C Act.

At the time of classification, internal therapeutic massagers are for prescription use only. Prescription devices are exempt from the requirement for adequate directions for use for the layperson under section 502(f)(1) of the FD&C Act and 21 CFR 801.5, as long as the conditions of 21 CFR 801.109 are met (referring to 21 U.S.C. 352(f)(1)).

Section 510(m)(2) of the FD&C Act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k) if, after notice of our intent to exempt and consideration of comments, we determine by order that premarket notification is not necessary to provide reasonable assurance of safety and effectiveness of the device. We believe this may be such a device. The notice of intent to exempt the device from premarket notification requirements is published elsewhere in this issue of the Federal Register .

The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations and guidance. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The collections of information in the guidance document “De Novo Classification Process (Evaluation of Automatic Class III Designation)” have been approved under OMB control number 0910-0844; the collections of information in part 820, regarding quality system regulation, have been approved under OMB control number 0910-0073; the collections of information in part 814, subparts A through E, regarding premarket approval, have been approved under OMB control number 0910-0231; the collections of information in part 807, subpart E, regarding premarket notification submissions, have been approved under OMB control number 0910-0120; and the collections of information in part 801, regarding labeling, have been approved under OMB control number 0910-0485.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 890 is amended as follows:

Section 201(d)(1) of the Controlled Substances Act (CSA) (21 U.S.C. 811(d)(1)) states that, if control of a substance is required “by United States obligations under international treaties, conventions, or protocols in effect on October 27, 1970, the Attorney General shall issue an order controlling such drug under the schedule he deems most appropriate to carry out such obligations, without regard to the findings required by [section 201(a) (21 U.S.C. 811(a)] or section [202(b) (21 U.S.C. 812(b)) of the Act] and without regard to the procedures prescribed by [section 201 (a) and (b) (21 U.S.C. 811(a) and (b)].” If a substance is added to one of the schedules of the Single Convention on Narcotic Drugs (1961), then, in accordance with article 3, paragraph 7 of the Convention, as a signatory Member State, the United States is obligated to control the substance under its national drug control legislation, the CSA. The Attorney General has delegated scheduling authority under 21 U.S.C. 811 to the Administrator of the Drug Enforcement Administration (DEA). 28 CFR 0.100.

On May 23, 2019, the Secretary-General of the United Nations send a letter to the Secretary of State of the United States advising him that during the 62nd session of the Commission on Narcotic Drugs, cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl were added to Schedule I of the Single Convention on Narcotic Drugs (1961). This letter was prompted by a decision at the 62nd session of the Commission on Narcotic Drugs in March 2019 to schedule cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl under Schedule I of the Single Convention on Narcotic Drugs. As a signatory Member State to the Single Convention on Narcotic Drugs, the United States is obligated to control cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl under its national drug control legislation, the CSA, in the schedule deemed most appropriate to carry out its international obligations. 21 U.S.C. 811(d)(1).

Cyclopropyl fentanyl (83 FR 469, January 4, 2018), methoxyacetyl fentanyl and ortho -fluorofentanyl (82 FR 49504, October 26, 2017), and para -fluorobutyryl fentanyl (83 FR 4580, February 1, 2018) were temporarily controlled in schedule I of the CSA upon finding that they pose an imminent hazard to the public safety. These substances share pharmacological profiles similar to morphine, fentanyl, and other synthetic opioids which act as µ-opioid receptor agonists. For this reason, cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl are abused for their opioid-like effects. Law enforcement and public health reports demonstrate the illicit use and distribution of these substances, which are similar to that of heroin and prescription opioid analgesics.

Cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl were identified in law enforcement encounters in the United States. The National Forensic Laboratory Information System (NFLIS) is a national drug forensic laboratory reporting system that systematically collects results from drug chemistry analyses conducted by other federal, state and local forensic laboratories across the country. According to NFLIS, 1 cyclopropyl fentanyl (first reported in 2016) was identified in 2,461 exhibits submitted to forensic laboratories, methoxyacetyl fentanyl (first reported in 2017) was identified in 1,718 exhibits, ortho -fluorofentanyl (first reported in 2016) was identified in 13 exhibits, and para -fluorobutyryl fentanyl (first reported in 2015) was identified in 309 exhibits.

The DEA is not aware of any claims or any medical or scientific literature suggesting that cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, or para -fluorobutyryl fentanyl have a currently accepted medical use in treatment in the United States. In addition, the Department of Health and Human Services (HHS) advised the DEA, by letters dated September 6, 2017 (cyclopropyl fentanyl), July 14, 2017 (methoxyacetyl fentanyl), June 9, 2017 ( ortho -fluorofentanyl), and November 8, 2017 ( para -fluorobutyryl fentanyl) that there were no investigational new drug applications or approved new drug applications for these substances.

The DEA requested that HHS conduct a scientific and medical evaluation and a scheduling recommendation for methoxyacetyl fentanyl and ortho -fluorofentanyl (by letter dated April 18, 2018) and cyclopropyl fentanyl and para -fluorobutyryl fentanyl (by letter dated November 5, 2018). Regardless of these requests and any potential responses from HHS, the DEA is not required under 21 U.S.C. 811(d)(1) to make any findings otherwise required by 21 U.S.C. 811(a) or 812(b), and is not required to follow the procedures prescribed by 21 U.S.C. 811(a) and (b). The Acting Administrator advised HHS, by letter dated September 6, 2019, that the DEA no longer requires scientific and medical evaluations and scheduling recommendations for cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl. These evaluations are no longer required due to the placement of these substances in Schedule I of the Single Convention on Narcotic Drugs (1961) in March 2019. Therefore, consistent with the framework of 21 U.S.C. 811(d), the DEA concludes that cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl have no currently accepted medical use in treatment in the United States and are most appropriately placed in schedule I of the CSA, the same schedule in which they currently reside. Further, while the DEA temporarily scheduled these substances under 21 CFR 1308.11(h), a paragraph reserved for the temporary listing of substances subject to emergency scheduling, this order moves these substances to 21 CFR 1308.11(b). As explained above, because control is required under the Single Convention on Narcotic Drugs (1961), the DEA will not be initiating regular rulemaking proceedings to schedule these substances pursuant to 21 U.S.C. 811(a).

In order to meet the United States' obligations under the Single Convention on Narcotic Drugs (1961) and because cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl have no currently accepted medical use in treatment in the United States, the Acting Administrator of the DEA has determined that these substances should remain in schedule I of the CSA.

Cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl have been controlled as schedule I controlled substances since January 4, 2018, October 26, 2017, October 26, 2017, and February 1, 2018, respectively. With publication of the final order contained in this document, cyclopropyl fentanyl, methoxyacetyl fentanyl, ortho -fluorofentanyl, and para -fluorobutyryl fentanyl remain subject to the CSA's schedule I regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, importation, exportation, engagement in research, conduct of instructional activities, and possession of schedule I controlled substances, including the following:

This action is not a significant regulatory action as defined by Executive Order 12866 (Regulatory Planning and Review), section 3(f), and the principles reaffirmed in Executive Order 13563 (Improving Regulation and Regulatory Review), and, accordingly, this action has not been reviewed by the Office of Management and Budget (OMB).

This order is not an Executive Order 13771 regulatory action.

This action meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

This action does not have federalism implications warranting the application of Executive Order 13132. This action does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications warranting the application of Executive Order 13175. The action does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.

The CSA provides for an expedited scheduling action where control is required by the United States obligations under international treaties, conventions, or protocols. 21 U.S.C. 811(d)(1). If control is required pursuant to such international treaty, convention, or protocol, the Attorney General must issue an order controlling such drug under the schedule he deems most appropriate to carry out such obligations, without regard to the findings or procedures otherwise required for scheduling actions. Id.

To the extent that 21 U.S.C. 811(d)(1) directs that if control is required by the United States' obligations under international treaties, conventions, or protocols in effect on October 27, 1970, scheduling actions shall be issued by order (as compared to scheduling pursuant to 21 U.S.C. 811(a) by rule), the DEA believes that the notice and comment requirements of section 553 of the Administrative Procedure Act (APA), 5 U.S.C. 553, do not apply to this scheduling action. In the alternative, even if this action does constitute “rule making” under 5 U.S.C. 551(5), this action is exempt from the notice and comment requirements of 5 U.S.C. 553 pursuant to 21 U.S.C. 553(a)(1) as an action involving a foreign affairs function of the United States given that this action is being done in accordance with 21 U.S.C. 811(d)(1)'s requirement that the United States comply with its obligations under the specified international agreements.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) applies to rules that are subject to notice and comment under section 553(b) of the APA or any other law. As explained above, the CSA exempts this final order from notice and comment. Consequently, the RFA does not apply to this action.

This action does not impose a new collection of information requirement under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-3521. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

This action is not a major rule as defined by the Congressional Review Act (CRA), 5 U.S.C. 804. This order will not result in: “an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign based enterprises in domestic and export markets.” However, pursuant to the CRA, the DEA has submitted a copy of this final order to both Houses of Congress and to the Comptroller General.

For the reasons set out above, the DEA amends 21 CFR part 1308 as follows:

DoD now has a single DoD-level Privacy Program rule at 32 CFR part 310 (84 FR 14728) that contains all the codified information required for the Department. The DARPA Privacy Act Program regulation at 32 CFR part 314, last updated on November 14, 1991 (56 FR 57802), is no longer required and can be removed.

It has been determined that publication of this CFR part removal for public comment is impracticable, unnecessary, and contrary to public interest because it is based on the removal of policies and procedures that are either now reflected in another CFR part, 32 CFR part 310, or are publically available on the Department's website. To the extent that DARPA internal guidance concerning the implementation of the Privacy Act within DARPA is necessary, it will continue to be published in DARPA Instruction 78, “Privacy and Civil Liberties,” and referenced under DARPA's respective Privacy and Civil Liberties Programs at https://www.darpa.mil.

This rule is one of 20 separate component Privacy rules. With the finalization of the DoD-level Privacy rule at 32 CFR part 310, the Department eliminated the need for this component Privacy rule, thereby reducing costs to the public as explained in the preamble of the DoD-level Privacy rule published on April 11, 2019, at 84 FR 14728-14811.

This rule is not significant under Executive Order (E.O.) 12866, “Regulatory Planning and Review.” Therefore, E.O. 13771, “Reducing Regulation and Controlling Regulatory Costs,” does not apply.

On June 6, 2018, section 152 of Public Law 115-182, the John S. McCain III, Daniel K. Akaka, and Samuel R. Johnson VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018, or the VA MISSION Act of 2018, amended title 38 of the United States Code (U.S.C.) by adding a new section 1703E, Center for Innovation for Care and Payment. This final rule implements this new authority and establishes the parameters and authority for the new Center for Innovation for Care and Payment (the Center) in its conduct of pilot programs designed to develop innovative approaches to testing payment and service delivery models to reduce expenditures while preserving or enhancing the quality of care furnished by VA.

VA published a proposed rule on the Center on July 29, 2019. 84 FR 36507. The public comment period closed on August 28, 2019. In response to this proposed rule, VA received multiple comments. Several of the comments expressed support for the rule in whole or in part. One comment supported the proposed ability to expand pilot program duration for up to an additional 5 years. The comment suggested that an extended pilot program duration would afford clinicians greater opportunity to improve care and obtain actionable data beyond the initial pilot program duration. One comment supported many elements of the proposed rule: VA's definition of the term reduction in expenditures; the ability to waive applicable regulations along with provisions of law; and VA's ability to extend and expand successful pilot programs. We appreciate the comments' support and make no changes to these provisions.

Many of the comments addressed issues related to implementation or ideas for specific pilot programs; because these are generally outside the scope of the rulemaking, we make no changes based on these comments. However, we summarize these comments below and address them as appropriate.

Several comments made recommendations on whom VA should consult in developing pilot programs. One comment supported VA's intent to consult with Federal agencies and medical and health experts. The comment encouraged VA to solicit input from professional associations and clinicians to ensure VA obtains a broad swath of input, guidance, and suggestions on innovations and programmatic priorities. The comment further encouraged VA to prioritize health promotion and disease prevention models that focus on keeping people healthy. One comment suggested that the inclusion of nurse practitioners (NP) in VA's consultation with relevant Federal agencies and clinical and analytical experts would be important in developing effective care models. One comment urged VA to collaborate with veterans organizations in local communities to ensure that veterans receive proper notice and information regarding pilot programs. We appreciate these recommendations and will take them into consideration when developing specific pilot proposals. We make no changes based on these comments.

Other comments made recommendations as to what types of pilot programs VA should pursue. One comment encouraged VA to consider models that enhance community design to promote safe physical activity and active forms of transportation for individuals and populations of all ages and abilities. The comment also recommended VA consider the development of a model that directs patients with musculoskeletal disorders to physical therapists for primary assessment in primary care. The comment also recommended that VA consider how it may integrate public information and performance metrics to assess the quality, timeliness, and patient satisfaction of care and services furnished. We appreciate these recommendations and will take them into consideration when developing specific pilot proposals. We make no changes based on this comment.

One comment supported the use of evidence-based health care models as necessary to make improvements to VA's health care system. The comment stated that finding the right health care model is essential in streamlining veterans' care. The comment encouraged VA to be strategic in creating pilot studies to provide efficient, cost-effective care without sacrificing quality of care. The comment recommended VA health care delivery models adhere to proper guideline requirements for recommended screenings and health promotion initiatives. The comment also encouraged the prioritization of care models addressing common health conditions unique to veterans, such as mental health or substance abuse disorders. The comment also recommended addressing barriers to care including better payment systems with timely reimbursement to non-VA health care providers and competency training for providers to ensure culturally competent care. We appreciate these recommendations and will take them into consideration when developing specific pilot proposals; however, because these comments make no recommendations regarding the specific provisions of this rule, which lays out the parameters of the Center, we make no changes based on these comments.

One comment supported the creation of the Center and noted that it looked forward to having NPs working with VA on the development of new pilot programs. The comment stated than an overarching goal should be to support and create models providing equal opportunity for participation of clinicians and their patients. The comment suggested including NPs as full participants in pilot programs as one way to increase participation. The comment noted that patient outcomes are improved and cost savings are realized when NPs are utilized to the fullest extent of their educational and clinical training. The comment noted this has been demonstrated in a number of models within the Center for Medicare and Medicaid Innovation. The comment suggested that including NPs as full participants would help VA enhance the quality of care provided to veterans while also reducing expenditures. We appreciate these recommendations and will take them into consideration when developing specific pilot proposals. We make no changes based on this comment.

One comment was broadly supportive of the proposed rule. The comment recommended a specific focus on modernizing drug pricing to allow for greater adoption of more flexible pricing arrangements, greater value for patients, and an improved standard of care. The comment encouraged a shift from rebated and volume discount pricing arrangements to an outcomes/value-based flexible pricing arrangement. The comment also encouraged VA to continue to ensure that existing arrangements for value-based health care are not impacted by this rulemaking. The comment recommended VA assess the ability to increase the amount of value-based health care contracting opportunities within VA systems and encouraged further rulemaking in this area. We appreciate these recommendations and will take them into consideration when developing specific pilot proposals. We make no changes based on this comment.

One comment recommended leveraging existing partnerships to design and test innovations in telehealth, data exchange, care transitions, and other areas. The comment noted that comparative effectiveness studies could identify cost and quality outliers, leading to a mutually beneficial exchange of best practices between VA and community-based providers. We appreciate this input but make no changes based on this comment, which makes no recommendations regarding provisions of the proposed rule.

One comment stated that it believed this new Center has the potential to facilitate additional opportunities to more fully engage massage therapy within veterans' health care, such as providing test cohorts of community-based massage therapists, determining how well massage therapists are receiving provider referrals for massage therapy, assessing outcomes following a treatment cycle, and providing important measurements to add to the research base on massage efficacy and cost-effectiveness for various conditions. The comment also noted the efficacy of massage therapy as a non-pharmacologic approach to pain management, and its recognition in guidelines for non-pharmacologic opioid alternatives by the Attorney General of West Virginia. We appreciate the comment's perspective regarding potential pilot programs but make no changes based on this comment.

One comment recommended VA consider, in developing pilot programs, recommendations made by the Commission on Care established by section 202 of the Veterans Access, Choice, and Accountability Act of 2014 (Pub. L. 113-146) that have not yet been acted upon by Congress or VA. Other possible pilot programs recommended by the comment included VA prioritizing treatment for service-connected conditions that are common among veterans, including posttraumatic stress disorder and mental health concerns; modifying VA's personnel system to allow for improved flexibility to respond to market conditions related to compensation, benefits, and recruitment; making VA the secondary payer for all non-service-connected health care in the community; and fully utilizing nurse practitioners and physician assistants to improve access to primary care, enhance quality, and reduce expenditures. We appreciate these recommendations regarding specific pilot programs and will take them under advisement. However, because these deal with specific pilot programs, and not with VA's general authority to operate the Center addressed in this rulemaking, we make no changes based on this comment.

Some comments discussed issues generally raised by other parts of the rule. One comment generally supported the use of patient health care experience tools in determining patient satisfaction but expressed concern that some of these tools are outdated and do not recognize NPs. The comment stated that survey tools omitting NPs would fail to provide accurate health care delivery information. The comment encouraged VA to accurately capture patient satisfaction data by developing updated patient satisfaction tools that include NPs. We appreciate these recommendations and will take them into consideration when developing specific pilot proposals. We make no changes based on this comment.

One comment urged VA to actively seek and fill as many of the new leadership positions within the Center as possible with outside candidates who have experience with designing and creating proven innovative health care delivery solutions and can bring that experience to the Center and to VA. The comment also urged VA to select internal candidates for the Center's leadership team who can best foster a collaborative environment that inspires effective innovation to enhance how VA delivers health care services to veterans. We make no changes based on this comment.

One comment recommended VA use the same terminology and definitions used by non-VA providers. The comment did not identify any specific terms it believed were inconsistent with industry standards; indeed, it recognized that many of the terms VA proposed are well established and consensus-based definitions. The comment recognized that it may be necessary to use a different definition but urged VA to start with the presumption of aligning terms and definitions. As we explained in our proposed rule, we believe the definitions we proposed are consistent with how these terms are used in the industry, and to the extent there is any variation, we believe our definitions are broader to allow for maximal flexibility in designing and operating pilot programs. We make no changes based on this comment.

One comment proposed VA allow non-VA providers and other stakeholders who are not affiliated with VA to propose pilot ideas. The comment recommended using the Center for Medicare and Medicaid Innovation's process for soliciting ideas as a starting point. The comment recognized that a more open process may take more time but could provide a greater breadth and depth of innovative pilot program concepts. We appreciate this recommendation and anticipate development of a system that would permit this type of voluntary input. We make no changes based on this comment.

Two comments expressed differing interpretations of provisions in the proposed rule concerning the operational independence of the Center. One comment supported the Center's operational independence from VA's three administrations because this would grant it the appropriate access and decision-making authority to work across the entire VA system to re-imagine care delivery, break and eliminate internal systemic barriers, create efficiencies, and improve care for veterans. Another comment, however, supported the Center being operationally independent from VA while also collaborating with VA. These comments indicate this language was unclear, so VA is revising paragraph (a) to remove the reference to and definition of operational independence. VA will retain the language in the proposed rule from paragraph (a)(3), now redesignated as paragraph (a)(2), that the Center will not operate within any specific administration. This should emphasize the Center's role within VA, but as an organization that can break and eliminate internal barriers, create efficiencies, and improve care for veterans. We further clarify that the Center is part of VA and acts at the direction of the Secretary, so it is not “independent” from VA; in the proposed rule, we stated that the Center will report through the Office of the Secretary of Veterans Affairs and ultimately the President of the United States and does not have the unilateral authority to execute pilot programs. (84 FR 36507, 36508.)

The Code of Federal Regulations, as revised by this rulemaking, represents the exclusive legal authority on this subject. No contrary rules or procedures will be authorized. All VA guidance will be read to conform with this rulemaking if possible or, if not possible, such guidance will be superseded by this rulemaking.

This final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This final rule adopts regulations that are largely procedural, and will not, without Congressional approval of a pilot program proposal from VA, result in any change in benefits or services by themselves. Thus, this final rule will not have a significant economic impact on qualifying non-VA entities or providers. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.

The Office of Information and Regulatory Affairs has determined that this rulemaking is a significant regulatory action under Executive Order 12866. VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA's website at http://www.va.gov/orpm by following the link for VA Regulations Published from FY 2004 through FYTD. This final rule is not subject to the requirements of Executive Order 13771 because this final rule is expected to result in no more than de minimis costs.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are as follows: 64.007, Blind Rehabilitation Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.012, Veterans Prescription Service; 64.013, Veterans Prosthetic Appliances; 64.014, Veterans State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 64.016, Veterans State Hospital Care; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; and 64.022, Veterans Home Based Primary Care.

The Secretary of Veterans Affairs approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Pamela Powers, Chief of Staff, Department of Veterans Affairs, approved this document on October 4, 2019, for publication.

For the reasons set forth in the preamble, we amend 38 CFR part 17 as follows:

I. General Information A. Does this action apply to me?

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2018-0300 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before December 24, 2019. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2018-0300, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html. Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of July 24, 2018 (83 FR 34968) (FRL-9980-31), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 8E8678) by Dow Agrosciences, LLC, 9330 Zionsville Road, Indianapolis, IN 46268. The petition requested that 40 CFR 180.480 be amended by establishing tolerances for residues of the fungicide fenbuconazole, in or on the raw agricultural commodities tea, dried at 10 parts per million (ppm); and tea, instant at 10 ppm. That document referenced a summary of the petition prepared by Dow Agrosciences, LLC, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

After the publication of the notice of filing in the Federal Register , Dow Agrosciences, LLC requested that its requested tolerance for residues on tea be established at 30 ppm in/on tea, dried and tea, instant based on additional magnitude of the residue studies conducted in 2016 and 2017.

Based upon the data reviewed by the Food Safety Commission of Japan, EPA is establishing tolerances for tea, dried and tea, instant at 30 ppm. The reason for these changes are explained in Unit IV.D.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for fenbuconazole including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with fenbuconazole follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

Subchronic and chronic feeding studies were conducted in the rat, mouse, and dog. The liver was the main target of toxicity in all three species. At lower dose levels in the subchronic studies, there were changes in liver histopathology, predominantly hepatocellular hypertrophy, along with increased liver weight. In the absence of other findings, these effects appeared to be adaptive liver changes, but at higher dose levels, increased levels of enzymes indicative of liver damage were observed (alkaline phosphatase or ALK; serum glutamic-pyruvic transaminase or SGPT; and serum glutamic-oxaloacetic transaminase or SGOT). Increased hepatocellular vacuolization was observed at the higher dose levels as well, and in mice after subchronic exposure, hepatocellular necrosis was observed with a low incidence at the highest dose. In the rat after subchronic exposure, the thyroid was a secondary target organ with increased follicular cell size. In the chronic studies, liver effects were observed (including hepatocellular hypertrophy and vacuolization, changes in liver enzymes, and increased liver weights), as well as decreased body weight gains in all three species. Again, in the chronic rat study, the thyroid was a secondary target with increased thyroid and parathyroid weights and thyroid follicular cell hypertrophy. In addition, thyroid hormones were affected, with increased mean T4 (thyroxine) and decreased TSH (thyroid stimulating hormone) being observed in the high-dose rats near the end of the study. In the chronic dog study, kidney and adrenal weights were also increased.

In the rat and rabbit developmental toxicity studies and the rat two-generation study, all effects in the pups occurred in the presence of maternal toxicity, including changes in body weight in rats and decreased food consumption and clinical signs in rabbits. Developmental effects included increased post-implantation loss and decreased fetuses per dam in the rat developmental study; increased early resorptions in the rabbit developmental study; and decreased mean pup body weight, increased number of stillborn pups, decreased number of total offspring delivered, and decreased viability index of pups in the two-generation study in rats. No increased qualitative or quantitative susceptibility was observed in any of the studies. There was no evidence of neurotoxicity in any of the studies available in the toxicology database.

Fenbuconazole is classified as a “Group C,” or possible human carcinogen, based on an increased incidence of liver tumors in male and female mice and thyroid tumors in male rats. A cancer potency factor has been used to estimate potential cancer risk associated with fenbuconazole uses.

Specific information on the studies received and referenced in this section and the nature of the adverse effects caused by fenbuconazole, as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled “Fenbuconazole: Human Health Risk Assessment for Proposed Use on Imported Tea,” on pages 23-30 in docket ID number EPA-HQ-OPP-2018-0300.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which the NOAEL are observed, and the LOAEL are identified. Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.

A summary of the toxicological endpoints for fenbuconazole used for human risk assessment is shown in Table 1 of this unit.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to fenbuconazole, EPA considered exposure under the petitioned-for tolerances as well as all existing fenbuconazole tolerances in 40 CFR 180.480. EPA assessed dietary exposures from fenbuconazole in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

Although no endpoints of concern were identified for the general population including infants and children, such effects were identified for fenbuconazole for females 13-49 years old. In estimating acute dietary exposure, EPA used 2003-2008 food consumption information from the United States Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). The acute dietary exposure analysis used tolerance-level residue estimates and assumed 100 percent crop treated (PCT).

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used 2003-2008 food consumption data from the USDA's NHANES/WWEIA. As to residue estimates in food, EPA conducted a partially refined chronic dietary (food and drinking water) exposure assessment for all established food uses of fenbuconazole. Average residues from field trials and 100 PCT were used. Empirical and default processing factors were used, as available.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that fenbuconazole should be classified as “a possible human carcinogen” and a linear approach has been used to quantify cancer risk. The cancer dietary exposure analysis used average field trial residue estimates and average PCT values. Empirical and default processing factors were used, as available.

iv. Anticipated residue and PCT information. Average residue values were used in the Agency's chronic and cancer assessment of fenbuconazole. Average percent crop treated estimates were used in the Agency's cancer assessment of fenbuconazole.

Section 408(b)(2)(E) of FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide residues that have been measured in food. If EPA relies on such information, EPA must require pursuant to FFDCA section 408(f)(1) that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. For the present action, EPA will issue such data call-ins as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Data will be required to be submitted no later than 5 years from the date of issuance of these tolerances.

Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:

• Condition a: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.

• Condition b: The exposure estimate does not underestimate exposure for any significant subpopulation group.

• Condition c: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area.

In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by FFDCA section 408(b)(2)(F), EPA may require registrants to submit data on PCT.

The Agency used the following average PCT estimates for fenbuconazole for assessing cancer risk: Almonds: 5%; apples: 5%; apricots: 5%; blueberries: 55%; cherries: 15%; grapefruit: 40%; nectarines: 5%; oranges: 5%; peaches: 15%; pecans: 10%; plums/prunes: 1%; sugar beets: 1%; tangelos: 10%; tangerines: 1%.

The Agency believes that the three conditions discussed in Unit III.C.1.iv. have been met. With respect to Condition a, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions b and c, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which fenbuconazole may be applied in a particular area.

In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the California Department of Pesticide Regulation (CalDPR) Pesticide Use Reporting (PUR) for the chemical/crop combination for the most recent 10 years. EPA uses an average PCT for chronic and cancer dietary risk analyses and a maximum PCT for acute dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than 1% or less than 2.5%. In those cases, the Agency would use less than 1% or less than 2.5% as the average PCT value, respectively. The maximum PCT figure is the highest observed maximum value reported within the recent 10 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%, except where the maximum PCT is less than 2.5%, in which case, the Agency uses less than 2.5% as the maximum PCT.

2. Dietary exposure from drinking water. The Agency used screening-level water exposure models in the dietary exposure analysis and risk assessment for fenbuconazole in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of fenbuconazole. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.

Based on the (PRZM/EXAMS), the estimated drinking water concentrations (EDWCs) of fenbuconazole for acute exposures are estimated to be 24.1 parts per billion (ppb) for surface water and 0.031 ppb for ground water. For chronic exposures for non-cancer assessments are estimated to be 16.5 ppb for surface water and 0.031 ppb for ground water. For chronic exposures for cancer assessments are estimated to be 11.7 ppb for surface water and 0.031 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. The PRZM/EXAMS 1-in-10-year annual peak surface water value of 24.1 ppb for peppers is greater than the SCI-GROW groundwater value of 0.031 ppb. As a result, the surface water value was used in the acute dietary analysis. The 1-in-10-year annual mean surface water value of 16.5 ppb for cherries is greater than the groundwater value of 0.031 ppb. As a result, the surface water value was used in the chronic dietary analysis. Finally, the 30-year annual mean surface water value of 11.7 ppb for cherries is greater than the groundwater value of 0.031 ppb. As a result, the surface water value was used in the cancer dietary analysis.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure ( e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Fenbuconazole is not registered for any specific use patterns that would result in residential exposure.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to fenbuconazole and any other substances. Although the conazole fungicides (triazoles) produce 1,2,4 triazole and its acid-conjugated metabolites (triazolylalanine and triazolylacetic acid), 1,2,4 triazole and its acid-conjugated metabolites do not contribute to the toxicity of the parent conazole fungicides (triazoles). The Agency has assessed the aggregate risks from the 1,2,4 triazole and its acid-conjugated metabolites (triazolylalanine and triazolylacetic acid) separately. The use of fenbuconazole on tea is not expected to quantitatively alter the dietary exposure estimates used in the most recent aggregate risk assessment for the common triazole metabolites because tea is not a significant consumption item and other conazoles are already registered for tea. The most recent triazole aggregate risk assessment ( Common Triazole Metabolites: Updated Aggregate Human Health Risk Assessment to Address New Section 3 Registrations For Use of Difenoconazole and Mefentrifluconazole; DP451447, dated May 15, 2019) can be found at https://www.regulations.gov at docket ID number EPA-HQ-OPP-2018-0002. Fenbuconazole does not appear to produce any other toxic metabolite produced by other substances. For the purposes of this action, therefore, EPA has not assumed that fenbuconazole has a common mechanism of toxicity with other substances.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10x) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10x, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. There is no indication of quantitative or qualitative susceptibility of rats or rabbits to in utero and/or postnatal exposure.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x. That decision is based on the following findings:

i. The toxicity database for fenbuconazole is complete.

ii. There is no indication that fenbuconazole is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. There is no evidence that fenbuconazole results in increased susceptibility in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

iv. There are no residual uncertainties identified in the exposure databases. The exposure assessment was based on field-trial residues and modeled drinking water estimates that will not underestimate dietary exposure and risk. The acute dietary exposure analysis used tolerance-level residues and assumed 100 PCT. The chronic and cancer dietary exposure analyses used average field-trial residue estimates. The chronic (non-cancer) assessment assumed 100 PCT, and the cancer analysis made use of average PCT estimates. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to fenbuconazole in drinking water. These assessments will not underestimate the exposure and risks posed by fenbuconazole.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to fenbuconazole will occupy 3.0% of the aPAD at the 95th percentile of exposure for females 13-49 years old, the only population subgroup with a relevant endpoint.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to fenbuconazole from food and water uses 6.8% of the cPAD for children 1-2 years old, the population group receiving the greatest exposure. The chronic risk estimate for the general U.S. population uses 2.5% of the cPAD. There are no residential uses for fenbuconazole.

3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). There are no registered residential uses for fenbuconazole, and therefore aggregate exposure and risk are equivalent to dietary exposure and risk, and these risk estimates are not of concern.

4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). There are no registered residential uses for fenbuconazole, and therefore aggregate exposure and risk are equivalent to dietary exposure and risk, and these risk estimates are not of concern.

5. Aggregate cancer risk for U.S. population. Cancer risk was estimated at 1.8 x 10 − 6 . The Agency generally considers risks up to 3 x 10 − 6 to be within the negligible risk range and below the Agency's LOC. In addition, actual cancer risk is likely to be much lower, since the residue inputs were based on field trial data (as opposed to monitoring data) and used upper-bound PCT estimates.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to fenbuconazole residues.

Tolerance enforcement method 34-90-47R is available for determining residues of fenbuconazole, RH-9129, and RH-9130 in plant commodities through gas chromatography with a nitrogen phosphorous detector (GC-NPD). The method has undergone successful independent laboratory validation. The GC-NPD method TR 34-94-142 is adequate for collecting data on residues of fenbuconazole, RH-9129, and RH-9130 in livestock commodities.

These methods may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level. The Codex has not established an MRL for fenbuconazole in tea.

The petitioner initially proposed a tolerance level of 10 ppm for residues in/on tea, dried and tea, instant, based on 1995 magnitude of the residue data reviewed by the Food Safety Commission of Japan. However, based on additional magnitude of the residue studies conducted in 2016 and 2017, the petitioner updated the proposed tolerance to 30 ppm in/on tea, dried and tea, instant. The proposed 30 ppm tolerance is in accordance with the Organization for Economic Cooperation and Development (OECD) tolerance calculation procedure. Based on the residue data reviewed by the Food Safety Commission of Japan, the Agency concluded that the proposed tolerances of 30 ppm in/on tea, dried and tea, instant are appropriate.

Therefore, tolerances are established for residues of fenbuconazole and its lactone metabolites ( trans - or cis -5-(4-chlorophenyl)dihydro-3-phenyl-3-(1 H -1,2,4-triazol-1-ylmethyl)-2(3 H )-furanone), in or on tea, dried and tea, instant at 30 ppm.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

I. General Information A. Does this action apply to me?

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Publishing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2018-0619 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before December 24, 2019. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2018-0619, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of December 21, 2018 (83 FR 65660) (FRL-9985-67), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 8E8694) by IR-4, IR-4 Project Headquarters, Rutgers, The State University of New Jersey, 500 College Road East, Suite 201 W, Princeton, NJ 08540. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of the herbicide pendimethalin, including its metabolites and degradates, in or on the following raw agricultural commodities: Leaf petiole vegetables, subgroup 22B at 0.15 ppm; monarda, oil at 1.0 ppm; monarda, fresh leaves at 0.20 ppm; rosemary, oil at 1.0 ppm; and rosemary, fresh leaves at 0.20 ppm. That document referenced a summary of the petition prepared by BASF, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has modified the levels at which some of the tolerances are being set. The reason for these changes is explained in Unit IV.C.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for pendimethalin including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with pendimethalin follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

The target organ for pendimethalin is the thyroid. Thyroid toxicity in chronic and subchronic rat and mouse studies was manifested as alterations in thyroid hormones (decreased total T4 and T3, increased percent of free T4 and T3), increased thyroid weight, and microscopic thyroid lesions (including increased thyroid follicular cell height, follicular cell hyperplasia, as well as follicular cell adenomas). Due to these effects, the Agency required that a developmental thyroid assay be conducted to evaluate the impact of pendimethalin on thyroid hormones, structure, and/or thyroid hormone homeostasis during development. A developmental thyroid study was submitted and demonstrated that there is no potential thyroid toxicity following pre- and/or post-natal exposure to pendimethalin.

There is no evidence that pendimethalin is a developmental, reproductive, neurotoxic, or immunotoxic chemical. There is no evidence of increased qualitative or quantitative susceptibility in the young. EPA classified pendimethalin as a “Group C” possible human carcinogen based on a statistically significant increased trend and pair-wise comparison between the high-dose group and controls for thyroid follicular cell adenomas in male and female rats. A non-quantitative approach ( i.e., non-linear, reference dose (RfD) approach) was used to assess cancer risk since mode-of-action studies are available to demonstrate that the thyroid tumors are due to a thyroid-pituitary imbalance, and also since pendimethalin was shown to be non-mutagenic in mammalian somatic cells and germ cells.

Specific information on the studies received and the nature of the adverse effects caused by pendimethalin as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled “ Pendimethalin—Human Health Risk Assessment to Support the Proposed New Uses on Leaf Petiole Vegetable Subgroup 22B, Monarda and Rosemary ” on pages 37-41 in docket ID number EPA-HQ-OPP-2018-0619.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticides.

A summary of the toxicological endpoints for pendimethalin used for human risk assessment is discussed in Unit III.B of the final rule published in the Federal Register of February 16, 2018 (83 FR 6975) (FRL-9973-03).

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to pendimethalin, EPA considered exposure under the petitioned-for tolerances as well as all existing pendimethalin tolerances in 40 CFR 180.361. EPA assessed dietary exposures from pendimethalin in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

Such effects were identified for pendimethalin. In estimating acute dietary exposure, EPA used Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID) Version 3.16. This software uses 2003-2008 food consumption data from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA used tolerance-level residues and 100 percent crop treated (PCT) for all commodities.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the DEEM-FCID, Version 3.16 software with 2003-2008 food consumption data from the USDA's NHANES/WWEIA. As to residue levels in food, EPA used tolerance-level residues and 100 PCT for all commodities.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that a nonlinear RfD approach is appropriate for assessing cancer risk to pendimethalin. Cancer risk was assessed using the same exposure estimates as discussed in Unit III.C.1.ii., chronic exposure.

iv. Anticipated residue and PCT information. EPA did not use anticipated residue or PCT information in the dietary assessment for pendimethalin. Tolerance level residues and 100 PCT were assumed for all food commodities.

2. Dietary exposure from drinking water. In drinking water, the residue of concern is pendimethalin, parent only. The Agency used screening-level water exposure models in the dietary exposure analysis and risk assessment for pendimethalin in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of pendimethalin. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

Based on the Pesticide Root Zone Model Ground Water (PRZM GW) and Surface Water Concentration Calculator (SWCC) models, the estimated drinking water concentrations (EDWCs) of pendimethalin for acute exposures are estimated to be 96.4 parts per billion (ppb) for surface water and 4.38 × 10 -9 ppb for ground water. For chronic exposures they are estimated to be 9.73 ppb for surface water. For chronic exposures, pendimethalin did not reach groundwater even after running the model with an extended 100-year weather file.

For the acute dietary risk assessment, the water concentration value of 96.4 ppb was used to assess the contribution to drinking water. For the chronic dietary risk assessment, the water concentration of value 9.73 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure ( e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Pendimethalin is currently registered for the following uses that could result in residential exposures: Turf, home gardens, and ornamentals. EPA assessed residential exposure using the following assumptions. First, for handlers, it is assumed that residential use will result in short-term (1 to 30 days) duration dermal and inhalation exposures. Second, residential post-application exposure is also assumed to be short-term (1 to 30 days) in duration, resulting from the following exposure scenarios: (1) Gardening: Adults (dermal) and children 6 < 11 years old (dermal); (2) physical activities on turf: Adults (dermal) and children 1-2 years old (dermal and incidental oral); (3) mowing turf: Adults (dermal) and children 11 < 16 years old (dermal); and (4) exposure to golf courses during golfing: Adults (dermal), children 11 < 16 years old (dermal), and children 6 < 11 years old (dermal).

EPA did not combine exposure resulting from adult handler and post-application exposure resulting from treated gardens, lawns, and/or golfing because the conservative assumptions and inputs within each estimated exposure scenario would result in an overestimate of adult exposure. EPA selected the most conservative adult residential scenario (adult dermal post-application exposure from gardening) as the contributing source of residential exposure to be combined with the dietary exposure for the aggregate assessment. The children's oral exposure is based on post-application hand-to-mouth exposures. To include exposure from object-to-mouth and soil ingestion in addition to hand-to-mouth would overestimate the potential for oral exposure. However, there is the potential for co-occurrence of dermal and oral exposure, since the toxicological effects from the dermal and oral routes of exposure are the same. As a result, the children's aggregate assessment combines post-application dermal and oral exposure along with dietary exposure from food and water. Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/standard-operating-procedures-residential-pesticide.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found pendimethalin to share a common mechanism of toxicity with any other substances, and pendimethalin does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that pendimethalin does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/cumulative-assessment-risk-pesticides.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. There was no indication of pre- or post-natal qualitative or quantitative increased susceptibility in the developmental studies in rats and rabbits or the 2-generation reproduction studies in rats. A developmental thyroid toxicity study demonstrated that there is no potential thyroid toxicity following pre- and/or post-natal exposure to pendimethalin.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1X. That decision is based on the following findings:

i. The toxicity database for pendimethalin is complete. Although a subchronic inhalation study was not available in the database, EPA determined that one is not needed at this time based on a weight-of-evidence analysis, considering the following: (1) All relevant hazard and exposure information, which indicates its low acute inhalation toxicity; (2) its physical/chemical properties, which indicate its low volatility; and (3) the use of an oral POD that results in a residential inhalation margin of exposure (MOE) more than 10X the level of concern (in the case of pendimethalin MOE = 30 based on thyroid POD).

ii. There is no indication that pendimethalin is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

iii. There is no evidence that pendimethalin results in increased susceptibility in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study. In addition, a developmental thyroid toxicity study demonstrated that there is no potential thyroid toxicity following pre- or post-natal exposure to pendimethalin.

iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to pendimethalin in drinking water. EPA used similarly conservative assumptions to assess post-application exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by pendimethalin.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to pendimethalin will occupy 2.1% of the aPAD for all infants less than 1 year old, the population group receiving the greatest exposure.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to pendimethalin from food and water will utilize 2.4% of the cPAD for children one to two years old, the population group receiving the greatest exposure. Based on the explanation in Unit III.C.3., regarding residential use patterns, chronic residential exposure to residues of pendimethalin is not expected.

3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Pendimethalin is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to pendimethalin.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 130 for adults and 92 for children 1 to 2 years old, the two population subgroups receiving the greatest combined dietary and non-dietary exposure. Because EPA's level of concern for pendimethalin is a MOE of 30 or below, these MOEs are not of concern.

4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

An intermediate-term adverse effect was identified; however, pendimethalin is not registered for any use patterns that would result in intermediate-term residential exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess intermediate-term risk), no further assessment of intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating intermediate-term risk for pendimethalin.

5. Aggregate cancer risk for U.S. population. As discussed in Unit III.A., EPA has determined that an RfD approach based on the chronic point of departure is appropriate for evaluating cancer risk. As there are not chronic aggregate risks of concern, there are no cancer aggregate risk concerns.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to pendimethalin residues.

Adequate enforcement methodology, gas chromatography with electron capture detection (GC/ECD), is available to enforce the tolerance expression.

The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established any MRLs for pendimethalin for the crops covered by this action.

The Agency is establishing tolerances for monarda, fresh leaves; rosemary, fresh leaves; monarda, oil; and rosemary, oil to be consistent with the Organization for Economic Co-operation and Development (OECD) rounding class practice (at 0.2 ppm and 1 ppm instead of at 0.20 ppm and 1.0 ppm). For the joint review of the pendimethalin on celery data, the U.S. EPA and Canada PMRA have used the OECD calculation procedures to determine the recommended maximum residue level (MRL). Although the Agency-calculated level using the OECD procedure is the same as the petitioned-for level of 0.15 ppm, PMRA is proposing to recommend a MRL of 0.2 ppm for pendimethalin in celery. The different levels are a result of different proposed use rates in the U.S. and Canada. EPA is therefore establishing a U.S. tolerance of 0.2 ppm for the leaf petiole vegetable subgroup 22B for harmonization purposes with Canada.

Therefore, tolerances are established for residues of pendimethalin, including its metabolites and degradates, in or on the leaf petiole vegetable subgroup 22B at 0.2 ppm; monarda, fresh leaves at 0.2 ppm; monarda, oil at 1 ppm; rosemary, fresh leaves at 0.2 ppm; and rosemary, oil at 1 ppm.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Publishing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2018-0599 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before December 24, 2019. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2018-0599, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of June 7, 2019 (84 FR 26630) (FRL-9993-93), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 4F8338) by Dow AgroSciences LLC, 9330 Zionsville Road, Indianapolis, IN 46268. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of sulfoxaflor (1-(6-trifluoromethylpyridin-3-yl)ethyl)(methyl)-oxido-l4-sulfanylidenecyyanamide), in or on the following raw agricultural commodities: Rice, grain at 5 parts per million (ppm); rice, straw at 5 ppm; rice, hulls at 14 ppm; and avocado, whole fruit at 0.15 ppm.

One comment was received on the notice of filing. EPA's response to this comment is discussed in Unit IV.C.

Based upon review of the data supporting the petition, EPA is establishing tolerances that vary from what the petitioner requested, as authorized under FFDCA section 408(d)(4)(A)(i). EPA's explanation for those variations are contained in Unit IV.D.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for sulfoxaflor in or on rice and avocado.

On July 24, 2019, EPA published a final rule establishing a tolerance for residues of sulfoxaflor in or on multiple commodities based on the Agency's conclusion that those tolerances are safe for the general population, including infants and children (84 FR 35546) (FRL-9995-63). EPA's exposure assessment supporting the July 24, 2019 final rule included exposure from use of sulfoxaflor on both avocado and rice commodities, but these tolerances were not established at the time because a Notice of Filing for the petition for these commodities was still pending and the statutory public comment period was still open. Because the toxicity profile of sulfoxaflor has not changed since that rule was published, and because residues of sulfoxaflor on both avocado and rice were included in the dietary exposure and risk assessment supporting that rule, EPA is incorporating the findings in the preamble to that July 24, 2019 final rule into this rulemaking.

Further information about EPA's risk assessment and determination of safety supporting the tolerances established in the July 24, 2019 Federal Register action, as well as the new sulfoxaflor tolerances on rice and avocado can be found at http://www.regulations.gov in the documents entitled: “ Sulfoxaflor. Human Health Risk Assessment for New Food Uses on Numerous Crops, Ornamentals Growing in Greenhouses and Nurseries and Tree Farms and Plantations ” and “ Sulfoxaflor. Human Health Risk Assessment for New Food Uses on Artichoke, Asparagus, Bushberry, Caneberry and Sunflower, and Multiple Crop Group Conversions. ” The documents may be found in docket ID numbers EPA-HQ-OPP-2018-0599 and EPA-HQ-OPP-2018-0179.

Therefore, based on the risk assessments and information described above, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to sulfoxaflor residues.

High performance liquid chromatographic methods with positive-ion electro spray interface (ESI) and tandem mass spectrometric detection (LC/MS/MS) were previously reviewed and found to be acceptable for tolerance enforcement of sulfoxaflor residues (the two metabolites, X11719474 and X11721061, are also quantitated). The limit of quantitation (LOQ), determined as the lowest level of method validation (LLMV), is 0.010 ppm in all matrices.

The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established a MRL for sulfoxaflor in or on avocados or rice.

One comment was received that stated in part that tolerance levels should be zero because people do not need to be exposed to more poison. Although the Agency recognizes that some individuals believe that pesticides should be banned on agricultural crops, the existing legal framework provided by section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) authorizes EPA to establish tolerances when it determines that the tolerance is safe. Upon consideration of the validity, completeness, and reliability of the available data as well as other factors the FFDCA requires EPA to consider, EPA has determined that these sulfoxaflor tolerances are safe. The commenter has provided no information supporting a contrary conclusion.

Although proposed by the petitioner, a tolerance is not being established on rice straw because the Agency no longer considers this commodity a significant livestock feed item, per the Chemistry Science Advisory Council (ChemSAC) memorandum on livestock feed (Revisions of Feedstuffs in Table 1 of OPPTS Test Guideline 860.1000 and Guidance on Constructing Maximum Reasonably Balanced Diets (MRBD); ChemSAC; 30 June 2008). Also, based on results of the rice processing study, the Agency is establishing a tolerance of 15 ppm on rice hulls, rather than at 14 ppm as requested. This is in accordance with the pertinent rounding class of the Organization for Economic Development and Cooperation (OECD) tolerance calculation procedure.

Therefore, tolerances are established for residues of sulfoxaflor in or on avocado at 0.15 ppm; rice, grain at 5 ppm; and rice, hulls at 15 ppm.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

This is a summary of the Commission's Report and Order, WT Docket No. 18-120, FCC 19-62, adopted on July 10, 2019 and released on July 11, 2019. The complete text of this document is available for public inspection and copying from 8 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 12th Street SW, Room CY-A257, Washington, DC 20554. The complete text is available on the Commission's website at https://docs.fcc.gov/public/attachments/FCC-19-62A1.pdf, or by using the search function on the ECFS web page at http://www.fcc.gov/cgb/ecfs/. Alternative formats are available to persons with disabilities by sending an email to fcc504@fcc.gov or by calling the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (tty).

The Regulatory Flexibility Act (RFA) requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) concerning the possible impact of the rule changes contained in this Report and Order on small entities. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking (NPRM) released in May 2018 in this proceeding (83 FR 26396, June 7, 2018). The Commission sought written public comment on the proposals in the NPRM, including comments on the IRFA. No comments were filed addressing the IRFA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

The requirements in §§ 27.14(u) and 27.1204 constitute new or modified collections subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. They will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Commission notes that, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission previously sought, but did not receive, specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Commission describes impacts that might affect small businesses, which includes more businesses with fewer than 25 employees, in the Final Regulatory Flexibility Analysis.

The Commission will send a copy of this Report & Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act. See 5 U.S.C. 801(a)(1)(A). 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 Report and Order, and FRFA (or summaries thereof) will also be published in the Federal Register .

1. In this Report and Order, the Commission takes another step towards implementing its comprehensive strategy to make additional high-band, mid-band, and low-band spectrum available for next generation wireless services. Specifically, the Commission transforms the regulatory framework governing the 2.5 GHz band (2496-2690 MHz), which is the single largest band of contiguous spectrum below 3 gigahertz. Too much of this spectrum, which is prime spectrum for next generation mobile operations, including 5G, has lain fallow for more than twenty years. In order to move this spectrum into the hands of those who will provide service, including 5G, to Americans across the country, and particularly in rural and Tribal areas, the Commission is replacing an outdated regulatory regime, developed in the days when educational TV was the only use envisioned for this spectrum, with one that not only gives incumbent users more flexibility in how they use the spectrum, but also provides opportunities for additional entities to obtain access to unused 2.5 GHz spectrum. Importantly, the reforms the Commission adopts in this Report and Order will make valuable mid-band spectrum available for the mobile services on which consumers increasingly rely and which is critical to maintaining American leadership in the next generation of wireless connectivity.

2. The 2.5 GHz band, which extends from 2496 to 2690 MHz, is comprised of 20 channels designated for Educational Broadband Service (EBS), 13 channels designated for commercial Broadband Radio Service (BRS), and a number of small guard band channels. EBS licensees are authorized to operate on the A, B, C, D, and G channel groups, with each group comprised of three 5.5 megahertz-wide channels in the lower or upper band segment and one 6 megahertz-wide channel in the middle band segment. Currently, there are 1,300 EBS licensees holding 2,193 licenses.

3. Only specified entities are eligible to hold an EBS license, specifically (1) accredited public and private educational institutions, (2) governmental organizations engaged in the formal education of enrolled students, and (3) nonprofit organizations whose purpose is educational and include providing educational and instructional television materials to accredited institutions and governmental organizations.

4. The Commission rules permit EBS licensees to lease their excess capacity to non-educational entities to use for non-educational purposes. And most EBS licensees do so. There are 2,087 active leases of EBS spectrum, compared with 2,193 licenses.

5. There are special requirements applicable to EBS excess capacity leases that do not apply in other services. Because the Commission's rules require EBS licensees to use their spectrum to further their educational missions, any excess capacity lease entered into by an EBS licensee must reserve a minimum of 5% of its spectrum capacity for the licensee/lessor and the licensee must use that capacity to provide 20 hours of educational usage per channel per week. Under existing rules, the Commission generally prohibits EBS licensees from leasing their facilities for a term longer than 30 years. Also, lessees are required to provide EBS lessors with the opportunity to revisit their lease terms at years 15, 20, and 25 to review their “educational use requirements in light of changes in educational needs, technology, and other relevant factors and to obtain access to such additional services, capacity, support, and/or equipment as the parties shall agree upon in the spectrum leasing arrangement to advance the EBS licensee's educational mission.” Those rules do not apply to leases that were entered into before January 10, 2005; such leases were grandfathered under the previous ITFS rules, which allowed a term of no more than fifteen years.

6. EBS presents two special challenges which are largely not present in other bands: a long-standing failure to make spectrum available, particularly in rural areas, and an unusual licensing scheme. Incumbent EBS licenses cover only about one half of the geographic area of the United States in any given channel. The 2.5 GHz spectrum remains largely unassigned in much of the rest of the country, especially in rural areas west of the Mississippi River.

7. The Commission suspended the processing of applications for new EBS licenses (and for major changes to existing EBS licenses) in 1993. Since then, the Commission has only opened two filing windows for EBS applications—in 1995, for new construction permits and major changes to existing EBS facilities, and in 1996, to allow for the filing of EBS modification applications and amendments to pending EBS applications proposing to co-locate with an authorized wireless cable facility. Thus, the last regular opportunity to apply for a new EBS license was in 1995.

8. In general, each EBS license is based on a circular Geographic Service Area (GSA) with a 35-mile radius (with an area of approximately 3,850 square miles). Due to a historical license modification process the Commission adopted in 2005, however, many EBS licenses have much smaller, irregular GSAs. Specifically, many EBS licenses had their 35-mile radius circles reduced when the Commission converted their Protected Service Areas (PSAs) to GSAs through the “splitting-the-football” process. 1

9. On May 10, 2018, the Commission released the Notice of Proposed Rulemaking ( NPRM ), 83 FR 26396, in this proceeding that explored ways to make this unused spectrum available for more flexible use to facilitate the deployment of next generation wireless services, including 5G, to all Americans. The NPRM proposed to rationalize the geographic service areas of EBS licenses and to provide additional flexibility to current EBS licensees in the use of the spectrum. It also sought comment on opening up priority windows for access to the spectrum by certain groups, such as Tribal Nations; and it proposed to assign the remaining white space through geographic area licenses for commercial use subject to competitive bidding; and sought comment on regulatory requirements for new EBS licensees.

10. The Commission received 304 comments (including express comments) and 29 reply comments on the NPRM.

11. To further the Commission's goal of ensuring that this fallow spectrum is used to provide high-speed broadband service, particularly in rural areas, the Commission moves quickly to assign the remaining spectrum in this band to those who will use it to provide service. 2 Specifically, the Commission will hold a Tribal priority window to enable Tribal nations an opportunity to obtain 2.5 GHz licenses to provide service on rural Tribal lands. This window will be followed immediately by a system of competitive bidding for the remaining white spaces. In conjunction with the Commission's effort to quickly license the remaining spectrum in this band to entities that will use it, the Commission also will replace the outdated regulatory regime for EBS with one of flexible use, thus making this valuable mid-band spectrum more available for advanced wireless services, including 5G.

12. The Commission takes a series of steps to provide existing EBS licensees with additional flexibility. First, in order to provide EBS licensees with additional flexibility and to facilitate the most efficient use of the EBS spectrum through a market-based mechanism, the Commission adopts the NPRM' s proposal to eliminate the EBS eligibility requirements, including for licenses granted via waiver of the filing freeze. Second, as part of the Commission's efforts to remove unnecessary regulatory barriers and align the EBS licenses with the flexible use policies used in similar spectrum bands, the Commission adopts its proposal in the NPRM to eliminate the educational use requirements for EBS licenses. Third, the Commission adopts the NPRM's proposal to eliminate restrictions on EBS leases entered into under its Secondary Markets policies on a going forward basis. The Commission clarifies that nothing in its decisions is intended to affect or change the terms of any private contractual arrangement or any provisions in existing leases. Finally, the Commission declines to adopt the NPRM' s proposal to rationalize incumbent licenses to align with pre-existing geographic areas.

13. As noted by commenters that support elimination of the eligibility restrictions, eliminating eligibility restrictions will promote more efficient use of the spectrum, improve the industry's ability to attract capital, and make this spectrum more appealing for commercial operators to include in their long-term service plans. Therefore, once the rules become effective, both incumbent EBS licenses and new EBS licenses once issued will be free of the eligibility restrictions, and EBS licensees may assign or transfer their licenses freely. In taking this step, the Commission better aligns these licenses with the flexible use licensing policies used in similar spectrum bands, which generally feature open eligibility. Moreover, taking this step is also consistent with the Commission's historical progression of granting increasing flexibility to EBS licensees, which has been an effective means of promoting more efficient use of the 2.5 GHz band.

14. The circumstances that led to the creation of a dedicated educational service no longer exist. Substantial technological changes over the last 30 years enable any educator with a broadband connection to access a myriad of educational resources—a content distribution model that does not require dedicated educational spectrum licensed to educational institutions. Only a handful of EBS licensees have deployed their own networks or use their EBS licenses in a way that requires dedicated spectrum. Instead, most licensees rely on lessees to deploy and operate broadband networks and use the leases as a source for revenues or devices. Moreover, as noted below, there are a multiplicity of other sources of educational programming available to institutions with broadband connections. All of these factors support eliminating the eligibility restrictions at this time.

15. The Commission does not believe that eliminating EBS eligibility restrictions will result in negative consequences for the educational community. Despite some claims to the contrary, eliminating eligibility requirements will not disrupt existing arrangements. Granting incumbent licensees additional flexibility to transfer or assign their licenses will not affect existing leases because: (1) The decision about whether to lease or transfer or assign a license remains with the EBS licensee, and (2) the Commission's actions in this Report and Order do not affect the validity of existing leases and other contractual arrangements. The services currently provided by EBS licensees will continue uninterrupted, including those provided by Mobile Beacon and Mobile Citizen pursuant to their leases with Sprint, unless the parties themselves decide otherwise. The Commission is not persuaded that eliminating the eligibility restrictions will jeopardize the public-private partnerships promoted by the Commission's leasing rules that have facilitated the construction of networks, which have benefitted both the educational institutions and their network partners. Providing additional flexibility to incumbent EBS licensees by eliminating the eligibility restrictions will help ensure that the licensee retains control of decisions about how the license is to be used, including decisions about whether, under what terms, and to whom to transfer or assign the license. Incumbent EBS licensees that wish to retain their licenses  3 and continue participating in public-private partnerships may do so; incumbent EBS licensees that wish to transfer or assign their licenses will now have greater ability to do so.

16. The Commission therefore rejects as speculative and unpersuasive the assertions of some commenters that eliminating eligibility restrictions will lead to existing EBS licensees' losing negotiating leverage and will give commercial entities the incentive and ability to offer licensees unfavorable sale terms rather than new or renewed leases. For the same reasons, the Commission rejects allegations that permitting transfer or assignment of incumbent EBS licensees will hurt education generally, even if it benefits individual licensees. Providing licensees with additional flexibility to transfer or assign their licenses gives them greater power to put the licenses to use in the manner that suits their educational objectives. The Commission expects that incumbent licensees will make decisions about assigning or transferring their licenses based on the best interests of their educational institution.

17. Contrary to the concerns of some commenters, the Commission does not believe that continuing to apply EBS eligibility restrictions is necessary to ensure that commercial entities meet the needs of underserved communities. Appropriate performance requirements, such as those adopted herein, can ensure that licensees actually use their spectrum to offer service. Moreover, nothing in this proceeding affects the ability of commercial entities to provide broadband to entities eligible for E-Rate funding, which is another way to ensure that schools and libraries in underserved communities are provided with broadband access. In addition, those incumbent EBS licensees that retain their licenses can continue to meet the educational and other needs of their communities. Finally, the priority window and competitive bidding mechanisms adopted herein will provide additional opportunities for the deployment of broadband service to rural unserved market areas using 2.5 GHz spectrum.

18. The Commission rejects claims that the Commission's prior decisions to establish ITFS in 1963 and to maintain the eligibility restrictions in 2004 support continuation of the EBS eligibility restriction. When the 2.5 GHz band originally was designated for educational use in 1963, there was a demonstrated need for dedicated spectrum for educational television services. When, in 2004—three years before the introduction of the smartphone—the Commission decided against revising the eligibility restrictions, the 2.5 GHz band was just beginning a major transition, as it moved from an analog television service to a broadband service accompanied by substantial technical changes. In that context, the Commission concluded that it was premature to eliminate the restrictions at that time. In contrast, this band now is used primarily for broadband, and it resembles flexible use bands such as the PCS or AWS bands more than it resembles the ITFS band of old. Indeed, even the current educational use requirements—to retain 5% of capacity for educational use and to use each channel at least 20 hours per week for educational purposes—have little relevance to the way this band is being used. In the exercise of the Commission's spectrum management responsibilities, the Commission believes that it is more appropriate in these circumstances to address the critical shortage of flexible use mid-band spectrum necessary to promote the deployment of wireless broadband devoted to the wide range of 5G uses.

19. Further, the Commission is not persuaded by the economic study submitted on behalf of SHLB in support of maintaining the eligibility requirements, which it finds to be premised on an unrealistic deployment model. The SHLB Economic Study discusses the services offered by Mobile Citizen and Mobile Beacon pursuant to their agreement with Sprint, as well as those offered by self-deployed EBS networks, and it constructs a framework to measure the economic benefit of retaining eligibility restrictions assuming that educational licensees offer broadband service at $15/month. However, as noted previously, most educational licensees have chosen not to deploy their own networks. Indeed, none of the self-deployed educational networks identified by SHLB offer service on a regular basis to the general public at $15/month. 4 While economic and social benefits would flow from increased broadband adoption, SHLB has not shown that educators could sustain a broadband system at the $15/month price point they studied. Finally, the study in the Commission's view does not adequately address the problem of the digital divide. Specifically, while Mobile Citizen and Mobile Beacon offer access at $10/month pursuant to their agreement with Sprint, their associated companies hold EBS spectrum licenses in major and more densely populated markets. The Commission cannot infer from this that new EBS licenses in rural areas would be able to negotiate similar agreements with Sprint or another provider, particularly given the higher cost of deploying mid-band spectrum in rural areas.

20. Further, the SHLB Economic Study claims that the economic and social benefits from assigning the 2.5 GHz spectrum via an overlay auction are less than if the licenses were assigned to educational institutions and/or Tribal nations. The Commission disagrees. The Commission finds that auctioning overlay licenses for remaining white spaces will be a more efficient and effective means of addressing the digital divide, as new EBS licensees will have both the market incentives and flexibility to pursue the most efficient deployment of this spectrum. The Commission notes that the Commission for over a quarter-century has successfully assigned spectrum via auction. It has recognized that spectrum auctions allow market forces to determine the highest and best use of scarce spectrum and the highest value user. The SHLB Economic Study not only fails to recognize the efficiency of spectrum auctions, but it also understates the potential benefits of an overlay auction because its commercial deployment model only considers deployment to entire counties, and it precludes deployment to parts of counties, which would greatly expand the potential scope of commercial deployment after an auction. The SHLB Economic Study also fails to consider complementarities that EBS spectrum may have with other spectrum bands. As noted above, the Commission has a comprehensive strategy to make additional high-band, mid-band, and low-band spectrum available, and wireless providers can combine these different bands to better achieve the best 5G coverage and capacity possible. Finally, the SHLB Economic Study is mistaken in concluding that there is no “economic surplus” from an overlay auction because it “would not allow commercial carriers to launch more affordable offerings.” Additional spectrum may lower network costs for service providers ( e.g., by eliminating the need for cell-splitting), thus leading to more affordable plans for American consumers.

21. In addition, to the extent that SHLB suggests that the Commission impose some sort of rate regulation on new EBS licensees, it fails to consider the disincentive that such a requirement would create to using these licenses to provide broadband service, especially in conjunction with similar bands used for broadband. That disincentive would be particularly significant given the fact that today's networks use a mixture of spectrum bands, and the 2.5 GHz band represents key mid-band spectrum for the deployment of 5G. Indeed, while CTN and NEBSA support the existing eligibility requirements, they do not see the proposal around which the SHLB Economic Study is based as workable. To be clear, nothing the Commission adopts prevents existing EBS licensees from pursuing opportunities with commercial service providers to provide broadband to the public; in fact, the Commission's action allows current EBS licensees flexible use of the full amount of spectrum they hold. Finally, the desire of entities such as Mobile Citizen and Mobile Beacon to expand their broadband service offerings to the general public using 2.5 GHz spectrum underscores the importance of making this spectrum available as quickly as possible.

22. There is no reason why those who hold licenses granted pursuant to waiver of the filing freeze should not have the same rights to transfer or assign or lease their licenses as other incumbent EBS licensees, and thus the Commission will permit those who hold licenses granted pursuant to waiver to freely assign or transfer their licenses. The existence of the filing freeze justified treating these licenses differently at the time they were granted, including subjecting the licenses to significant conditions such as prompt build-out and a prohibition on leasing. Now that these licensees have been operating and providing service in compliance with these conditions, and the filing freeze is being lifted with the upcoming Tribal priority window and competitive bidding opportunity, the Commission sees no reason to continue to apply different rules to them. 5

23. To effectuate the Commission's decision to eliminate the EBS eligibility restriction, the Commission will eliminate existing § 27.1201 of the Commission's rules. In addition, the Commission will amend its secondary market leasing rules to eliminate the EBS-specific exception to the rule that a lessee must be eligible to hold a license in the service in which it is leasing spectrum. Since EBS will now be a service with open eligibility, the exception will no longer be necessary.

24. The Commission finds it is in the public interest to give licensees flexibility to put 2.5 GHz spectrum to its most efficient use, rather than maintaining or updating outmoded educational use requirements that have not been changed since 1998. Licensees holding licenses in the 2.5 GHz band, whether obtained before or after the adoption of this Report and Order, will not be required to use these licenses to fulfill an educational mission, although they are still permitted to do so.

25. This decision is consistent with the Commission's other decisions in this item to increase flexibility and eliminate outdated EBS requirements. The primary purpose of the educational use requirements was to ensure that educational licensees were using the spectrum for educational purposes, in order to “safeguard[ ] the primary educational purpose of the ITFS spectrum allocation.” If the Commission allows non-educators to hold licenses directly, it makes little sense to retain these restrictions on spectrum use. Furthermore, the Commission believes that eliminating these requirements is the best means of promoting flexibility, which ultimately will promote the deployment of broadband and allow markets to direct spectrum to its most productive use, for the benefit of educational institutions and all Americans.

26. As the Commission stated in the NPRM, the educational use requirements have not been updated since 1998 and were based on the use of analog video. Circumstances have changed radically since the Commission established ITFS. In 1963, there were very limited means of distributing educational programming to students, and a dedicated means of distributing such programming made sense. Now, as WCAI notes, “broadband gives all educators—not just those lucky enough to be EBS licensees—the ability to provide access to educational materials to whomever they choose.” The internet is a far more prevalent and efficient mechanism for distributing content.T-Mobile compares the efficiency of internet video streaming (for live events) or the downloading of compressed video files (for recorded material) over generic broadband digital connections versus using dedicated video transmissions. Furthermore, educators also use broadband to communicate with peers, collaborate across platforms, and research. Moreover, most current EBS licensees have abandoned use of EBS as a closed, dedicated means of distributing educational content. The educational use of the 2.5 GHz band has become indistinguishable from the commercial broadband service offered by the commercial lessee, with most EBS licensees or their commercial lessees providing digital broadband service, offered 24/7, at the school itself, at home, or anywhere within the licensee's GSA. Even if there were a rationale for maintaining the educational use requirements in the absence of eligibility restrictions, the Commission sees no workable set of requirements in this record. Commenters recommend that the Commission adopt a large and diverse set of potential requirements, ranging from new metrics differentiated by institution size to certification requirements to price mandates.

27. But the alternative educational use requirements proposed by commenters would neither facilitate broadband deployment nor be workable for licensees or commercial operators. Requiring a commercial operator to designate a fixed percentage of capacity for educational use is not an appropriate requirement when it is not clear how much capacity future networks will have or how much capacity most educational institutions will need or be able to use. Similarly, imposing rate regulation on new EBS licensees offering broadband service to consumers likely would create a disincentive to providing broadband service and would establish a regulatory requirement that would make it more difficult to use the band in conjunction with similar bands used for broadband. There is a large difference between the voluntary partnership entities such as Mobile Citizen and Mobile Beacon have negotiated to facilitate discounted broadband access and a regulatory mandate that would be a form of price control. The Commission also agrees with NEBSA/CTN that it is difficult to see how such a requirement would be defined and enforced.

28. The Commission is sensitive to the concerns raised by Sprint and NEBSA/CTN that any changes it makes not disrupt any existing leases. The Commission clarifies that nothing in its decision to remove the educational use requirement is intended to affect or change the terms of any private contractual arrangement or any provisions in existing leases that may provide a licensee with airtime, equipment, or capacity. In other words, if a lease negotiated under the old rules provides that a licensee shall receive services or equipment from a lessee, the Commission's decision does not change or nullify the provisions of that lease.

29. Finally, the Commission disagrees with NACEPF that the educational use requirements are one of the few tools the Commission has that can address the homework gap. There are many other spectrum bands that educators may use if they do not have access to 2.5 GHz spectrum, such as 5 GHz Wi-Fi or General Authorized Access in the 3.5 GHz CBRS band, and as mentioned above, commercial services developed using licensed spectrum are broadly deployed (certainly more so than services relying on current EBS spectrum). In addition, the Commission has for years focused on providing connectivity to millions of students and library patrons through its E-Rate program.

30. Given the Commission's decision to eliminate eligibility requirements, and the fact that broadband is the predominant use of the EBS band, the Commission sees no value in maintaining special lease restrictions that only apply to EBS. Eliminating the leasing restrictions that only apply to EBS licenses will make the rules for the 2.5 GHz band consistent with other Wireless Radio Services, incentivize build-out in rural areas and provide additional flexibility to both EBS licensees and lessees to enter into mutually beneficial arrangements.

31. The Commission agrees with commenters that argue that these lease restrictions are unique to EBS and that they constrain commercial operations and deter investment, particularly in rural areas. The Commission concurs with VIYA that, if eligibility restrictions are eliminated, the restrictions on lease terms serve no purpose.

32. The Commission acknowledges that many educational institutions oppose eliminating restrictions on lease terms, with a split between educational institutions that support the current leasing rules and those that want to impose additional restrictions on leasing. Supporters of the current leasing rules argue that the lease term limitations allow educational institutions to review their leases periodically in light of changing needs and technology. In contrast, Educational Broadband Corp. (EBC) urges the Commission to eliminate lease terms that transfer too much control to the lessee, while Havasupai and Utah would prohibit leasing to commercial providers so that use of the spectrum can be focused on education. The Commission agrees with those commenters arguing that its actions should not harm or invalidate existing leases, and the Commission emphasizes that nothing in this Report and Order is intended to invalidate existing lease provisions. Leases are a form of contract, and the parties retain the ability to exercise their rights under state contract law. Indeed, there is broad agreement among both educational institutions and commercial providers that the Commission should not take any action to invalidate or harm existing leases. As HITN writes, “[b]oth commercial lessees and educational lessors, have invested in services and equipment, in substantial reliance on the negotiated terms of their existing leases, and the Commission should make no rule changes that would interfere with or substantially alter such contractual rights and obligations.” WCAI and Sprint take a similar view. To the extent some argue for additional restrictions on leasing, the Commission finds that such additional restrictions would be inconsistent with its goals of promoting broadband deployment using EBS spectrum and maximizing flexibility for EBS licensees.

33. The Commission therefore eliminates § 27.1214 of the Commission's rules, except for paragraph (d). In addition, the Commission will eliminate § 1.9047, which is a cross-reference in the secondary market rules to § 27.1214.

34. To ensure that the fallow spectrum in this band is made available for use quickly, the Commission has decided to leave existing license boundaries for incumbent 2.5 GHz licenses intact, rather than imposing a complex and protracted rationalization process on incumbents. In the NPRM, the Commission proposed to rationalize the current point-and-radius license areas held by incumbents to a defined geographic area and sought comment on a number of issues related to this proposal. Upon review of the record, however, and in light of the unique circumstances posed by licensing of this 2.5 GHz band as discussed below, the Commission finds that engaging in the complex, and potentially confusing process of rationalizing current licenses to a geographic area (such as counties or census tracts) would delay making the white spaces available in this band and would not likely result in the potential benefits explored in the NPRM.

35. With regard to the NPRM' s proposal to modify each existing license to include all of the census tracts covered by each current geographic service area the Commission is persuaded by opponents' argument that census tract-based rationalization would not necessarily result in more easily-determined license boundaries and therefore would not facilitate service by either existing licensees or new entrants. As the EBC and other commenters point out, any method of assigning census tracts to incumbents is likely to leave license areas with edges like “saw teeth”—irregular zig-zagging lines with frequent, small protrusions. Given the propagation characteristics of the 2.5 GHz band, it would be difficult to provide services to these areas as a technical matter, and this difficulty may result in significant degradation of service near market boundaries, as each licensee decreased power in order to remain within power limits, resulting in lower signal strength and lower service quality in the area. This issue does not arise to the same degree with the current license areas, as their smooth, circular contours are more consistent with signal propagation patterns. In addition, any problems caused by these irregular boundaries necessarily also would affect the white space available for licensing subject to competitive bidding, at the borders between incumbents and new entrants. Because the potential for operational problems far outweighs the small potential for improvement in the regularity of the resulting white space, the Commission therefore declines to adopt a census tract-based rationalization scheme.

36. The Commission also rejects the proposal by commenters to expand existing GSAs to include the counties covered by or that intersect the geographic service area, based on a coverage threshold determined by the percentage of the geographic area of the county covered by the licensee. While the Commission has recognized the benefits of adopting county-based licensing in other bands, the Commission declines to adopt a county boundary-based rationalization scheme for incumbents in the 2.5 GHz band for several reasons. First, the Commission is concerned about the potential for some licensees to receive a much larger GSA, with no corresponding requirement to provide service in the expanded area. For example, San Bernardino County, the largest county in the United States, covers over 20,000 square miles, compared to the maximum incumbent license area of approximately 3,850 square miles. Since the Commission is not applying updated performance requirements to existing EBS licenses, there is no guarantee that existing licensees would use the expanded area. Alternatively, was the Commission to adopt NACEPF's suggestion to expand incumbents' licenses to county boundaries subject to additional build-out requirements, incumbents with no interest in serving additional geographic areas, especially in very large counties, could ultimately lose their entire license based on a failure to expand service.

37. Second, implementing county-based expansion in situations with multiple incumbent licenses in the same county raises complex issues that likely reduce significantly the benefits of county expansion. To handle such situations, several commenters suggest “splitting the football,” the methodology that the Commission previously employed in this band to address the issue of overlapping circular GSAs or alternative methods to deal with multiple incumbents expanding into the same county. While “splitting the football,” or using a similar method to establish a border between multiple incumbents expanding into the same county, might be equitable for current licensees, it would not result in regular, mappable license areas based on geographic boundaries. The resulting borders would not correspond to any official boundaries or natural features; instead, they could only be calculated by referencing the previous license areas—either the “point” of the point-and-radius GSA, or the edge of the previously-calculated circle—neither of which would be immediately visible after rationalization. All of the problems cited by commenters, including the difficulty of administering these arbitrary license areas in ULS, would persist. CA K-12 HSN's suggestion of splitting counties by spectrum is also problematic. Wider channel width is important for many advanced wireless applications, including 5G, and dividing spectrum among multiple incumbents may reduce its usefulness significantly.

38. Third, using a percentage threshold based on existing geographic area coverage of a county relative to the total area of the county limits the amount of rationalization that actually takes place. Commenters originally proposed a wide array of threshold levels of geographic coverage within a county that an incumbent licensee would be required to meet to qualify for expansion to the county's boundaries, including 10%, 20%, 30%, 35%, or 80% of the geographic area of the license. Sprint, WISPA, MidCo, WCAI, CTN, NEBSA, Voqal, and NACEPF subsequently agreed on using a 25% threshold. To the extent the Commission adopted any threshold for county-based expansion, however, many incumbent licenses would remain at least partially “un-rationalized,” because if the GSA is in more than one county (as many are), some sections of the license would expand to county borders and some sections of the license would not expand to county borders, but rather would remain bounded by the circle arc. Counties with un-rationalized license sections still would be subject to all the problems and continuing coverage gaps cited in the record. In addition, as WCAI notes, expanding licenses to county boundaries in some cases, while leaving vestigial circle arcs in other counties, with respect to the same GSA license, would result in “significant confusion as to what areas are white space,” as well as “exacerbat[ing] the [current] problem by adding a second, geographic area-based approach.”

39. Although some commenters point to certain alleged advantages of county-based rationalization, including eliminating coverage gaps between current license areas better aligning licenses with typical school districts, and other claimed advantages, the Commission concludes that the problems associated with county-based rationalization outlined above outweigh any of these potential benefits. NACEPF also mentions faster 5G deployment in the 2.5 GHz band as a benefit of county expansion, primarily due to the resulting increase in the license areas available to Sprint. While Sprint supports county-based rationalization, it does not make any commitments to deploy in expanded license areas.

40. The Commission also rejects other alternative rationalization schemes suggested by commenters, such as self-defined GSAs, GSAs based on granular population data, or GSAs that vary from state to state based on local school district size. Those methods of rationalizing licenses would be both unpredictable and difficult to implement. The Commission also rejects rationalization of existing EBS licenses to “correspond with the geographic areas where existing licensees currently provide service,” because such an approach: (1) Would take years to implement, as it would require an extensive analysis of where service was being provided, (2) would be prone to litigation, and (3) would be inconsistent with the goal of quickly getting unused spectrum into the hands of those who will provide service, including 5G, to Americans across the country.

41. Similarly, any of the rationalization schemes described in the NPRM or suggested by commenters would require considerable time to implement and would have to be completed before any auction of remaining spectrum could take place. In addition to the necessary changes to the licensing system, the process of resolving whether the required threshold had been met and dealing with situations where multiple incumbents met the threshold would be complex. Adding a complicated and lengthy rationalization process before the auction could delay the deployment of 2.5 GHz services in currently unlicensed areas. In the interest of expeditiously moving this important mid-band spectrum into the hands of those best able to develop it, the Commission concludes that the likelihood of considerable delay for such a limited result is not in the public interest.

42. Given the complications and drawbacks inherent in all the rationalization schemes proposed in the record with respect to licensing of this band, the Commission declines to adopt any of the proposals. Instead, the Commission concludes that the best mechanism of putting unassigned spectrum to use as quickly and efficiently as possible is to offer overlay licenses subject to competitive bidding. Such an overlay license approach also addresses any concerns regarding irregular gaps between license areas, allowing overlay licensees to take existing EBS license contours into account when bidding for such license.

43. In the NPRM, the Commission proposed to use geographic area licensing to assign the remaining unassigned portions of the 2.5 GHz band. Envisioning that these geographic licenses would be assigned by auction, the Commission also sought comment on whether it first should open up to three priority filing windows to give Tribal Nations, other non-licensee educational institutions, and existing licensees an opportunity to file applications for 2.5 GHz licenses to serve their local communities, in advance of any auction for these frequencies. The Commission explained that, in each filing window, qualifying applicants would have the opportunity to apply for one or more vacant channels of EBS spectrum in areas where the applicant can demonstrate that it has a local presence.

44. In this Report and Order, the Commission adopts a priority window for Tribal Nations to obtain access to the 2.5 GHz band on rural Tribal lands. The priority window will operate as an overlay license, with Tribal priority window applicants obtaining geographic area licenses subject to protecting incumbent operations within the relevant geographic area. The Commission declines to adopt priority windows for non-incumbent educational institutions or incumbent licensees.

45. The Commission finds that adoption of a Tribal priority window for Tribal entities to obtain EBS licenses on Tribal lands that are located in rural areas is in the public interest. Consistent with the Commission's suggestion in the NPRM, the Commission concludes that opening a priority filing window for rural Tribal Nations will provide Tribal Nations with an opportunity to obtain unassigned EBS spectrum to address the communications needs of their communities and of residents on rural Tribal lands, including the deployment of advanced wireless services to unserved or underserved areas. The Commission has recognized that “members of federally-recognized American Indian Tribes and Alaska Native Villages and other residents of Tribal lands have lacked meaningful access to wired and wireless communications services.” The EBS spectrum offers sufficient bandwidth to give rural Tribal entities an opportunity to provide broadband wireless service. As proposed in the NPRM, applicants in the Tribal priority window will be able to acquire all available EBS spectrum on their rural Tribal lands.

46. The Commission's decision to adopt a Tribal priority window finds broad support in the record, including from many Tribal and Tribal-related commenters, who argue that opening a priority filing window for Tribal Nations would provide rural Tribal Nations with a way to obtain spectrum that could be used to provide needed advanced wireless and broadband services. In addition, those commenters who support local priority filing windows in general also support a Tribal priority window. Even among commenters who oppose local priority windows in general WCAI acknowledges a need for a Tribal priority window. The Commission disagrees with MidCo's assertion that priority windows would “not further any national policy objectives” because, as explained above, a Tribal priority window would facilitate access to high-speed broadband, including 5G, on rural Tribal lands.

47. Eligibility. As proposed in the NPRM, eligibility for the Tribal priority window will be limited to federally-recognized American Indian Tribes and Alaska Native Villages on rural Tribal lands. As of September 24, 2018, there were 573 federally-recognized Indian tribes. Federally-recognized Tribes have a government-to-government relationship with the United States and are eligible to receive certain protections, services, and benefits by virtue of their federally-recognized status. While the Commission's rules with respect to Tribal eligibility in various contexts vary somewhat, they universally limit eligibility to those Tribes that are “federally-recognized,” so the Commission will do so with respect to the Tribal priority window.

48. The Commission will extend eligibility in the Tribal priority window to communications providers and other entities that provide communications and other services, provided that that they are owned and controlled by federally-recognized Tribes or a consortium of such Tribes. To permit these entities to be eligible to hold EBS licenses and use those licenses to provide broadband service on rural Tribal lands, the Commission will permit those entities and others that are owned and controlled by a federally-recognized Tribe or a consortium of federally-recognized Tribes to participate in the Tribal filing window and to hold EBS licensees. 6 AIHEC requests that the 38 Tribal Colleges and Universities (TCUs) be classified as eligible to apply for available EBS spectrum. To the extent TCUs or other educational entities are owned and controlled by a federally-recognized Tribe or a consortium of federally-recognized Tribes as well as the other requirements the Commission establishes for participation, they would also qualify as applicants in the Tribal priority window.

49. Tribal Lands. For purposes of the Tribal filing window, the Commission adopts the broad definition of Tribal lands contained in the Commission's part 54 rules. The Commission does so because, in both the Universal Service and EBS contexts, the Commission is assisting Tribes in obtaining necessary communications services. The Commission declines to adopt the part 73 definitions proposed by some commenters because broadcast definitions were adopted to permit comparison between non-commercial educators applying for broadcast stations, while the part 54 definition has a similar purpose to the Tribal priority window, to encourage provision of broadband service on rural lands.

50. The Commission will include in the Tribal priority window Tribal lands on-reservation in all situations and off-reservation lands in certain situations. Consistent with the Commission's ongoing effort to close the digital divide on rural Tribal lands, the purpose of this filing window is to provide broadband access to Tribal lands that historically have been unserved or underserved. It is important to ensure that entities acquiring spectrum in this window will use it to meet the needs of Tribal members.

51. In the NPRM, the Commission requested comment on the appropriate geographic area for such licenses and whether county-based or census tract-based license areas might be appropriate. While some commenters support county-based or census tract-based licensing for Tribal entities, most Tribal entities favor a geographic license area that tracks reservation boundaries. In addition, some Tribal entities have members who don't reside on a reservation but live beyond the boundaries of Tribal lands on off-reservation lands. In addition, some federally-recognized tribes do not have reservations at all. These commenters ask that the Commission includes in this priority window licenses that cover “counties bordering the licensees' reservations” or counties in which Tribal lands cover some minimum percentage of a county (such as 10%).

52. The Commission agrees with commenters that including off-reservation lands in the Tribal priority window can help promote its goal of facilitating access to wireless service to underserved Tribal populations, and that the Commission must define eligible off-reservation lands in a way that promotes this goal. With respect to including off-reservation land in the Tribal priority window, the Havasupai propose that Tribal entities be licensed on an “ad hoc” basis using a variety of criteria such as: The services to be provided, the location of the target recipients, the amount of EBS spectrum that will be used to provide the service, the broadcast or distribution capabilities of the applicant, and the percentage of the target population that will be served by the proposed size of the service area. The Chickasaw Nation suggest that the service area should be based on whether a “portion of the Tribe's population will be served by licensing that proposed” service area. Instead of relying on the “ad-hoc” processes proposed by Tribes, the Commission will rely on an existing Commission process and designate off-reservation Tribal lands as eligible for the Tribal priority window if they have already been designated (as of the adoption date of this Report and Order ) as Tribal lands pursuant to the designation process contained in § 54.412 of the universal service rules. The Commission finds that using the existing process would be efficient and facilitate prompt processing of Tribal priority applications. The Commission finds that limiting eligible off-reservation lands as of the adoption date of this Report and Order will provide certainty to Tribal applicants and facilitate administration of the Tribal priority window.

53. While Midco may be correct that, in some cases, “irregularly shaped” reservation-based Tribal lands will complicate the geographic landscape for EBS licenses awarded through competitive bidding, the Commission does not see this potential complication as a reason not to make all reservation lands available for the Tribal priority window. EBS licensees that acquire their licenses through competitive bidding will have to protect existing EBS licensees, many of which already have irregularly shaped geographic service areas. More importantly, the Commission finds that the need to provide Tribal lands with broadband service outweighs this additional complexity.

54. Rural. To be included in the Tribal priority window, the Commission adopts the proposal from the NPRM that, in addition to being designated as Tribal Lands, an area must also be rural. The Commission understands that not all Tribes are located in areas that are considered rural and that by limiting eligibility to rural Tribal lands, some tribes may be excluded from the window. However, as the Commission has previously made clear, bringing broadband access to rural Americans is critical to providing them with the same economic, employment, education and civic opportunities that people in urban areas enjoy. Because the problem of access to wireless communications services is most acute in rural areas, and because the purpose of the Tribal priority window should be to promote service to areas that are currently unserved or underserved, the Commission believes that limiting this priority window to rural Tribal lands will provide the most effective and targeted way to achieve the Commission's goal of closing the digital divide in Tribal lands.

55. First, the Commission is not persuaded by the objections raised to limiting the Tribal priority window to rural areas. For example, the Commission disagrees with the assertion that such a limitation is inconsistent with the “federal government's trust relationship with Indian tribes,” as that relationship is not limited to rural areas. The Commission is committed to honoring its trust relationship with Tribal Nations through, among other things, policies facilitating broadband deployment on Tribal lands. Individual policies tailored to specific deployment issues, such as increasing access to spectrum over unserved rural areas, positively contribute to this overall effort. Nor is the Commission persuaded that limiting access to rural areas will reduce flexibility for Tribal Nations to use this spectrum, create definitional uncertainty for Tribal Nations, or create separate classes of Tribal governments, which is inconsistent with the intent of Congress. Priority window applicants seeking access to 2.5 GHz spectrum on rural Tribal lands will not be limited in how they use the spectrum; rather they will have the same flexibility as other licensees. Since the Commission is adopting an objective definition of what land will be considered rural, Tribes will be able to determine whether the lands for which they seek licenses are eligible for this window and make the appropriate demonstration.

56. The Commission is, however, persuaded that, in establishing what constitutes rural Tribal lands for purposes of a Tribal priority window, the Commission should set a population limit that is higher than the one the Commission proposed in the NPRM. Although in the NPRM, the Commission proposed using the definition of rural Tribal lands from the E-rate and Lifeline programs: i.e., Tribal Lands that are not part of “an urbanized area or urban cluster area with a population equal to or greater than 25,000,” the Commission notes that, as the Chickasaw Nation asserts, some clusters within historically rural Tribal lands have populations very close to or perhaps just over 25,000. The Commission therefore adopts the proposed definition but modify the population threshold for an urbanized area or urban cluster from 25,000 to 50,000. Therefore, Tribal lands will be considered rural if they are not part of an urbanized area or urban cluster area with a population equal to or greater than 50,000. In this specific instance, the Commission finds that using the population threshold of 50,000 will provide certainty to Tribes in bona fide rural areas that they can take advantage of the Tribal priority window while ensuring that the Tribal priority window is appropriately targeted and limited. Some commenters suggest other definitions of rural for the Tribal priority window. The Commission finds that by focusing on areas that are not part of urbanized clusters, as the Commission does in the E-rate and Lifeline programs, the Commission will best target those areas that are most difficult to serve and are therefore likely in greatest need of high-speed broadband service. The Commission finds that using this population limit is consistent with its goal of targeting underserved and unserved Tribal areas.

57. Local Presence. The Commission adopts the NPRM's proposal to require that all applicants for the Tribal priority window have a local presence in any area for which they apply. The Commission believes Tribal entities with a local presence better understand the needs of their communities and are better able to serve those needs. Further, there is no opposition to this proposal with respect to Tribal entities, and thus, the Commission will require applicants for the Tribal priority window to demonstrate that they have a local presence in the Tribal land area for which they seek licenses.

58. Timing. To ensure that federally-recognized Tribes have access to the maximum amount of unassigned EBS spectrum available on rural Tribal lands, the Commission will open the Tribal priority window before the Commission makes unassigned EBS spectrum generally available to all entities through competitive bidding.

59. Procedures. While few commenters address the application process for the Tribal window, several Tribal entities propose a 90-day notice period prior to the opening of the priority filing window with a 60-day window for the filing of applications. In accordance with the process the Commission uses for competitive bidding and with its notice and comment requirements, the Commission directs the Wireless Telecommunications Bureau to announce procedures for the Tribal priority window through one or more Public Notices and other appropriate outreach to potentially eligible Tribal applicants.

60. The Commission rejects Colville's suggestion that the Commission rank applicants eligible for the Tribal window based on a “tribe's reservation size and location, with the largest, most sparsely populated, and currently least `wired' reservations receiving top priority.” The Commission does not believe it necessary to rank Tribal eligibility. The Commission finds it unlikely that applications filed in the Tribal priority window will be mutually exclusive in light of its criteria requiring that: (1) Tribal applicants be federally-recognized; (2) the area to be licensed be based on a Tribe's reservation or qualified off-reservation lands; (3) the area be rural; and (4) the Tribe have a local presence. To the extent that the Commission does receive mutually exclusive applications, the Commission required by statute to subject such applications to competitive bidding.

61. Other Issues. Because the Commission is eliminating the educational use requirements for EBS spectrum generally, the Commission finds that it would make little sense to apply those requirements to new Tribal licensees. To that end, the Commission will not impose educational use requirements on the EBS spectrum available in the Tribal filing window.

62. Consistent with the Commission's general decision to eliminate leasing restrictions generally for EBS licenses, the Commission will not impose such restrictions on Tribal licensees' ability to lease spectrum to third parties. According to certain Tribal commenters, doing otherwise might “impede the Commission's goal of timely and efficient build out in rural areas.” Tribal entities may not have the “know-how or resources to build out a broadband network” and leasing will increase the likelihood that the spectrum is “used for its highest and best use.” In addition, the Tribes should be able to lease unused spectrum to “bring in much needed revenue.” Although the Commission is generally eliminating restrictions on assignment and transfer of existing EBS licenses, the Commission believes it necessary to impose some restrictions on assignment and transfers of licenses acquired in the Tribal priority window. Because proponents of the Tribal priority window have indicated an urgent need for the spectrum to provide service to underserved tribal communities, the Commission believes it is appropriate to limit, and will accordingly restrict, Tribal licensees' ability to assign or transfer their licenses until after they have met the build-out requirements applicable to these licenses.

63. The Tribal window will include only unassigned EBS spectrum. The Commission rejects suggestions from several Tribal commenters that the Commission permits Tribal entities to apply for already-licensed spectrum. 7 Not only would such an action be beyond the scope of the NPRM, but it also would have a substantial effect on existing licenses that are in compliance with the Commission's rules. However, since licenses granted to Tribal entities will be overlay licenses, if an incumbent license that covers rural Tribal lands is cancelled or terminated, any spectrum that becomes available over time will revert to the Tribal licensee. Similarly, Tribal licensees are authorized to lease, partition, or disaggregate their spectrum, including in areas in or near rural Tribal lands. The Commission does not require that incumbent licensees do so, but the Commission encourages those who have holdings covering, or adjacent to, rural Tribal lands to work cooperatively with new Tribal licensees to facilitate deployment of needed service to these areas.

64. The Commission declines to establish a priority filing window for educational institutions, either for educational institutions that do not currently hold EBS licenses or for existing licensees. Adopting a priority window restricted to educational institutions would be at odds with the Commission's other decisions to provide greater flexibility for more providers to make use of the 2.5 GHz band to offer high-speed broadband service to the public. Given the Commission's experience with service deployment to date in EBS, with the vast majority of licensees leasing their spectrum to commercial providers, the Commission believes that making the unassigned EBS spectrum available for flexible use is the best way of getting broadband service deployed to the public more quickly and extensively. While the Commission understands the desire of certain educational institutions to gain additional access to spectrum, the Commission's decision is guided by the goal of facilitating broadband deployment and spectrum use and perpetuating an outdated regulatory regime in this band will not further this goal.

65. If the Commission adopted a priority window open to all educational institutions, it is highly likely that the Commission will receive mutually exclusive applications. Commenters have identified circumstances that raise substantial doubts about the legal authority of certain EBS licensees, particularly public-school districts and local governments, to participate in a spectrum auction. Specifically, commenters claim that a number of states (approximately 36) have adopted Dillon's Rule, which provides that a municipality may exercise only those powers expressly conferred by statute, necessarily or fairly implied by the expressed power in the statute, or essential and not merely convenient. Applied to the auction situation, Dillon's Rule may limit the ability of many municipal educational entities, including counties and school districts that hold EBS licenses, from participating in an auction. The Commission notes that no commenter has attempted to show that Dillon's Rule is not an impediment to auction participation.

66. Those problems become important because, under section 309(j) of the Communications Act of 1934, as amended, if mutually exclusive EBS applications are accepted for filing, the Commission must use competitive bidding to resolve the mutual exclusivity. Educational institutions propose various workarounds to address that issue, including using a first-come, first-served filing system, placing strict limits on the number of channels an applicant can apply for, forcing applicants to form consortia, or basing license grants on the number of enrolled students in a service area. These proposals are inconsistent either with the Communications Act's requirement that the Commission use competitive bidding to resolve mutually exclusive applications or with the public interest test applicable to alternatives that avoid mutual exclusivity. Placing strict limits on the number of channels for which an educational institution could apply could constrain severely the capacity any individual educational institution could provide. Finally, choosing between mutually exclusive applicants on a basis other than competitive bidding or requiring applicants that have applied individually to form a joint venture or consortium is plainly inconsistent with the requirement to use competitive bidding. 8

67. Although EBPARC argues that the use of priority filing windows would quickly put EBS spectrum in the hands of schools and local operator partners that are eager and ready to build out, the Commission does not see a way to avoid the receipt of mutually exclusive applications. And even though SETDA touts the ability of certain educational institutions to provide broadband to unserved and underserved areas, these limited identified examples, among the thousands of EBS licensees, do not persuade us to establish a priority window for all educational institutions. Given the time and effort and delay that would be involved in establishing and running the priority window, and the likelihood that such a window for all educational institutions would result in having to auction the spectrum anyway, the Commission finds that moving directly to flexible use and open eligibility would be the most expeditious method of making spectrum available to provide broadband service in rural and underserved areas, consistent with the Commission's statutory objective to ensure “the development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas, without administrative or judicial delays. . . .” The Commission finds that the advantages to the public of making critical mid-band spectrum available for flexible commercial use on a prompt basis far outweigh the detriment to those educational institutions.

68. The Commission recognizes that some institutions have a desire to provide broadband service to rural, underserved areas. In establishing a priority window for Tribal entities—sovereign nations seeking to bring broadband service to the members of their Tribal Nations, but which historically have not had access to such spectrum—but declining to establish a new priority window for educational institutions, the Commission exercising its considered judgment about which proposals will most effectively and expeditiously achieve its statutory obligations and objectives. The Commission believes the Tribal priority window will be a more focused solution than an educational window, since Tribal entities will have a clear incentive to target areas lacking broadband, and Tribes must already work with providers that want to deploy broadband on rural Tribal lands.

69. The Commission has noted that Tribal lands, in comparison to comparable non-Tribal lands (including in rural areas), frequently have characteristics that increase the cost of entry and reduce the profitability of providing service, including cultural and language barriers, a lack of existing infrastructure, and a predominance of low-income residential customers rather than business subscribers. A recent report to Congress on broadband coverage on Tribal lands recognized that there is a considerable gap between Tribal lands and non-Tribal areas in terms of population covered by mobile LTE service. Further, the report noted that people residing on Tribal lands currently have access to fewer providers that offer 4G LTE coverage. In contrast, the fact that a small fraction of educational institutions might be positioned to provide broadband service in rural areas is not a sufficient basis for establishing a general priority window for all eligible educational institutions.

70. Thus, in the context of the federally-recognized Tribes' unique status, their relationship of trust with the Commission, and their right to set their own communications policies, as well as the unique and significant obstacles to offering service in Tribal areas and the fact that they have not previously had access to this spectrum, the Commission concludes that they have an interest in obtaining additional 2.5 GHz spectrum that is greater than and distinguishable from the interests of educational entities. Beyond Tribal areas, the Commission believes that auctioning overlay licenses for remaining white spaces will be a more effective means of addressing the digital divide. Specifically, new EBS licensees will have market incentives to provide service and will also be required to meet new performance requirements.

71. The Commission also notes most rural Tribal lands areas will likely be associated with a single Tribal entity, whereas many localities have a wide variety of educational institutions that could have a local presence. Accordingly, a Tribal priority window is less likely to trigger mutual exclusivity in a significant number of license areas than a priority window for educational institutions (or a priority window that includes Tribal entities and educational institutions).

72. The Commission also does not adopt a priority window for existing licensees. The Commission declines to open a priority window for existing licensees to expand to county boundaries for many of the same reasons that the Commission declines to expand those licensees' footprints to census tract or county boundaries; the Commission expects that such a window would be needlessly complicated and delay the deployment of critical mid-band spectrum. Existing licensees have already had the opportunity to avail themselves of the benefits of EBS spectrum. For this reason, the Commission rejects the recommendations of Bridge the Divide and EBC to open a window for incumbent EBS licensees.

73. As proposed in the NPRM, any remaining unassigned EBS spectrum will be made available for commercial use via competitive bidding immediately following the completion of the Tribal priority filing window. Section 309(j) generally requires the Commission to employ competitive bidding to award licenses when mutually exclusive applications have been accepted for filing. With the elimination of the eligibility and educational use requirements, the potential for mutually exclusive applications for unassigned EBS spectrum should increase dramatically. While commenters have suggested various ways to avoid mutual exclusivity, in this case, the Commission finds that accepting mutually exclusive applications and using competitive bidding to resolve the mutual exclusivity is the best way to assign spectrum quickly and efficiently for its highest-valued use. Commercial operators strongly support competitive bidding for unassigned EBS spectrum.

74. The Commission is not persuaded by the educational community's concerns about the use of competitive bidding for unassigned EBS spectrum. First, the Commission rejects claims that assigning licenses by auction will lead to the abandonment of educational services and a worsening of the digital divide. To the contrary, the Commission believes this approach is far more likely to deliver value to educational institutions and to help close the digital divide than the status quo, in which EBS spectrum either has lain fallow or has generally not been used for the purpose of providing educational services. The Commission finds that assigning licenses by auction will not displace or impair existing incumbent licenses or leases, nor will the assignment of overlay licenses impair existing services, since new 2.5 GHz licensees will be required to protect existing incumbent operators from harmful interference. Nothing in this Report and Order requires incumbent licensees to abandon their current educational use or to change how they use their spectrum. Finally, the Commission finds that entities that acquire their licenses by auction will have an incentive to provide services to address the digital divide because all new EBS licensees will have to meet the performance requirements that the Commission establishes in this Report and Order in markets that they acquire. Licensees, whether incumbent or new, can provide any services the market requires, without limitation.

75. Auction of Overlay Licenses. To make the unlicensed EBS spectrum as attractive as possible to potential entrants, while protecting the rights of incumbent EBS licensees and their lessees, the Commission concludes that offering geographic overlay licenses that are subject to competitive bidding in those markets where white spaces ( i.e., spectrum that is not associated with an active license) exist is the best mechanism for assigning this spectrum. With overlay licenses, the licensees obtain the rights to geographic area licenses “overlaid” on top of the existing incumbent licenses. As with an ordinary flexible use license, the overlay licensee may operate anywhere within its geographic area, subject to protecting the licensed areas ( i.e., GSAs) of incumbent licensees. If an incumbent licensee in a county cancels or terminates its license, the overlay licensee obtains the rights to operate in the geographic area and on the channel of the cancelled license. An overlay licensee may clear its geographic area by purchasing the incumbent licenses, but it does not have the exclusive right to negotiate with the incumbent licensee for its spectrum rights or to purchase an incumbent license in the geographic area in which it has the overlay rights. An auction of overlay licenses would make the unassigned EBS spectrum available expeditiously to potential bidders and would provide a mechanism for those bidders to acquire additional spectrum usage rights within their geographic area when and if an incumbent licensee desires to make its spectrum available. For these reasons, the Commission believes that assigning overlay licenses for vacant and available EBS spectrum by competitive bidding is the best method for assigning such spectrum, because it will maximize the potential for expansion, without disrupting existing licensees and lessees.

76. It does not make sense to limit the auction to licenses covering only unlicensed EBS spectrum. Given the large number of existing incumbent EBS geographic service areas, that is 35-mile radius circles, there may not be enough vacant and available EBS spectrum in many markets to encourage competition for those markets in an auction limited to these white space areas. As noted in the NPRM, in many markets all that is available are “small, irregularly shaped areas between GSAs.” Another factor that may affect interest in licenses that are not overlay licenses, but rather cover vacant and available spectrum only is that, although the total available geographic area of the EBS vacant and available spectrum might be substantial (50%), the percentage of population covered by the vacant and available (slightly over 15%) may not be.

77. Another distinguishing characteristic of the EBS band is the preponderance of leasing by existing EBS incumbent licensees. While there are 2,193 active, regular EBS licenses, there are 2,046 long-term de facto control leases involving EBS licenses. The majority of those leases are with Sprint, but there are other lessees in the 2.5 GHz band. These leases are authorized to have terms of up to 30 years and often contain rights of first refusal or purchase options. While one commenter appears to suggest that the Commission considers terminating EBS leases to facilitate transition of the band, the Commission continues to believe that such an action would serve as an undue deterrent to the negotiation of spectrum leasing, in this as well as other bands, “thus creating uncertainty among all parties that have entered into or are contemplating agreements under the Commission's Secondary Markets rules and policies.” Thus, the Commission must consider the impact of those leases on a potential auction.

78. The Commission is not persuaded by the objections raised in the record to offering overlay licenses at auction. For example, there is no evidence in the record supporting the allegation that the winning bidders would be motivated “to undermine existing EBS licenses serving the area, in order to obtain access to that EBS spectrum under the overlay license without having to lease it.” Moreover, incumbent EBS licensees will retain control over their licenses and the right to protection from interference from the operations of overlay licensees, their lessees, and other successors in interest.

79. Nor is the Commission persuaded by alleged disadvantages of overlay licensees. For example, Voqal asserts that in many, particularly urban and suburban, markets, only slivers of areas are available for new licensing, and that, as a result, there will be “significant technical complexity engineering a network to operate without impacting adjacent licensees.” The technical complexities that may result from an auction of overlay licenses are a by-product of its most important advantage, namely the protection of the rights and interests of incumbent licensees. As such, potential bidders will need to consider carefully these technical issues as they decide whether to participate in the auction. Voqal further argues that “allowing a new buyer to purchase this spectrum would foreclose opportunities for existing providers to cover these areas just outside the current GSAs, and that this could lead to very different levels of service in the two adjacent GSAs, which could include residents of the same county.” The Commission notes that overlay licensees will have an incentive to put to use licenses they acquired at auction and also will be required to provide service in order to meet their performance requirements. Proceeding to auction of the vacant and available EBS spectrum will permit market forces to determine the highest and best use of this spectrum.

80. Incentive Auction. The Commission finds that conducting an incentive auction could be particularly challenging for purposes of assigning flexible use licenses for EBS white spaces because: (1) The majority of the licensed EBS spectrum is already leased, (2) incumbent EBS licensees and potential bidders have demonstrated little interest in participating in an incentive auction, and (3) many EBS licensees do not have authorization under state law to participate in any kind of auction. Commenters note that such “[t]wo-sided auctions are complicated, costly to the government as well as to participants, and take a long time to complete;” moreover, any repacking process would be disruptive for incumbent EBS licensees that wish to continue to provide educational services. The Commission therefore concludes that its policy objectives are better served by assigning overlay licenses subject to auction as described above.

81. Most commenters oppose an incentive auction because the vast majority of EBS spectrum is subject to long-term leases that would preclude most EBS licensees from participating in the reverse auction. They note that an incentive auction would not work from a legal or practical perspective because it would require participation from both existing licensees and their lessees. Further, commenters note that even if the terms of leases permitted licensees to participate in an incentive auction to relinquish their spectrum usage rights, and forward auction participants bid on licenses subject to the existing leases, the prevalence of long-term leases could severely limit bidders' interest in the new licenses offered. Commenters contend that the existence of the leases lessens the likelihood that entities other than the current lessee would bid, and that it would “badly distort a potential forward auction.”

82. AT&T claims that EBS licensees would be able to participate in an incentive auction, despite existing leases, because they could negotiate a price at which lessees would give up their rights. The Commission expects that it likely would be difficult or impossible for many EBS licensees to pay commercial lessees to break their leases, as most EBS licensees are educational, non-profit entities. Although TechKnowledge suggests that the Commission could invalidate lease provisions that would prevent EBS licensees from participating in an incentive auction, unilaterally modifying contractual provisions agreed to as part of an agreement between a licensee and lessee raises serious questions of fairness and legality. Moreover, even if such lease provisions were invalidated, many EBS licensees may still be unable to participate in an incentive auction because they lack the legal authority under state law to do so.

83. AT&T contends that the majority of entities opposing incentive auctions “have a powerful self-interest” in doing so because keeping EBS licensees confined to the secondary market prevents interested parties from knowing the value of the licenses, especially after eligibility and use restrictions are eliminated. While AT&T likely is correct that lessors and lessees have an interest in protecting existing leases, the Commission finds that such an interest is legitimate where they have relied on those leases to build their networks and where such leases have long been permitted under its rules.

84. While there is limited support in the record for an incentive auction as a way to “encourage incumbents to relinquish voluntarily some or all of their spectrum usage rights,” the Commission concludes that it can achieve much the same result with less disruption to existing licensees and lessees through an auction of overlay licenses. For example, commenters allege that, if the Commission acts on its proposals to eliminate eligibility restrictions and make EBS licenses readily transferable, an incentive auction will not be necessary to promote the transition of the band to commercial use, since the use of the spectrum is not changing. As WCAI notes, EBS licensees that wish to sell their licenses and have the ability to do so will be able to sell quickly and efficiently, and without administrative costs, via secondary markets, due to the lifting of the eligibility restrictions. In addition, as WCAI explains, not all EBS spectrum is fungible. In these circumstances, given the Commission's decision to eliminate eligibility restrictions, an auction of overlay licenses will quickly assign licenses for EBS white spaces and promote the transition of the band with little disruption to existing users of the spectrum.

85. Applicability of Part 1 Competitive Bidding Rules. Substantially consistent with the NPRM, the Commission adopts its proposal to conduct any auction of EBS licenses in conformity with the general competitive bidding rules in part 1, subpart Q, including any modifications that the Commission may adopt for its part 1 general competitive bidding rules in the future. The Commission believes that its general competitive bidding rules are suitable to conduct an auction of EBS licenses. The limited comment the Commission received on these issues generally supports use of the general part 1 competitive bidding rules. The Commission believes its part 1 rules will allow market forces to determine its highest and best use, and thus will enable the Commission to meet its goal of spurring more efficient and effective use of the 2.5 GHz band. These rules have proven successful in numerous spectrum auctions and establish an auction process that promotes “efficient and intensive use” of this spectrum and the “development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas,” and that “recover[s] for the public . . . a portion of the value of the public spectrum resource made available for commercial use.

86. The Commission will adopt bidding credits for EBS, although the NPRM proposed not to apply any designated entity preferences. Based on the Commission's experience with the use of bidding credits in recent spectrum auctions, the Commission now concludes that using bidding credits in competitive bidding for the 2.5 GHz band is an effective tool to achieve its statutory objective of promoting the participation of designated entities in the provision of spectrum-based service. In designing auction rules and procedures, the Commission takes into account both the nature of the service and the nature of the parties most likely to be interested in using the spectrum. Bidding credits have been successful in other auctions, including prior auctions of the 2.5 GHz band. The removal of the eligibility restriction and educational use requirements will attract more commercial operators to the 2.5 GHz band and bidding credits should help to facilitate greater participation in any auction of EBS licenses. The Commission now concludes that offering bidding credits to designated entities, along with the updates to the 2.5 GHz band that the Commission adopts, strike the appropriate balance and should improve the ability of small businesses to attract the capital necessary to meaningfully participate in an auction of 2.5 GHz spectrum, best satisfying its congressional objectives. The Commission therefore agrees with the comments it received supporting the use of bidding credits in an EBS auction.

87. Consistent with the Commission's other recent auctions, it will adopt the high two of three thresholds in the Commission's standardized schedule of bidding credits for auction of spectrum well suited for 5G deployment. Accordingly, an entity with average annual gross revenues for the preceding five years not exceeding $55 million will qualify as a “small business,” while an entity with average annual gross revenues for the preceding five years not exceeding $20 million will qualify as a “very small business.”  9 In the Competitive Bidding Second Memorandum Opinion and Order (59 FR 44272 (Aug. 26, 1994)), the Commission stated that it would define eligibility requirements for small businesses on a service-specific basis, taking into account the capital requirements and other characteristics of each particular service in establishing the appropriate threshold. While the capital requirements of the services to be deployed in these bands is not yet known, the Commission believes that using these gross revenue thresholds will enhance the ability of small businesses to acquire and retain capital and thereby complete meaningfully at auction. The Commission also believes that these thresholds are not overly inclusive, and prevent designated entity benefits from flowing to entities for which such credits are not necessary. The Commission will provide qualifying “small businesses” with a bidding credit of 15% and qualifying “very small businesses” with a bidding credit of 25%, consistent with the standardized schedule in part 1 of its rules. The Commission rejects the proposal for the use of three tiers of small business bidding credits because the Commission believes that this two-tiered approach has been successful in the past, and will once again use it. 10 The Commission believes the use of the small business definitions and associated bidding credits set forth in the part 1 bidding credit schedule will provide consistency and predictability for small businesses. 11

88. The rural service provider bidding credit awards a 15% bidding credit to those servicing predominantly rural areas and that have fewer than 250,000 combined wireless, wireline, broadband and cable subscribers. The Commission will apply the rural service provider bidding credit to auction of EBS licenses in the 2.5 GHz band. The Commission believes that a targeted bidding credit will better enable rural service providers to compete for spectrum licenses at auction and in doing so, will increase the availability of 5G service in rural areas. The comments the Commission received supports the use of the rural service provider bidding credit.

89. The Commission previously adopted a process for establishing a reasonable monetary limit or cap on the amount of bidding credits that an eligible small business or rural service provider may be awarded in any particular auction. It established the parameters to implement a bidding credit cap for future auctions on an auction-by-auction basis. Consistent with the Commission's longstanding approach, the Commission will initiate a public notice process to solicit public input on certain details of auction design and the auction procedures for the auction of EBS licenses. As part of that process, the Commission will solicit public input on the appropriate amount of the bidding credit cap and subsequently establish the cap that will apply for that auction, based on an evaluation of the expected capital requirements presented by the particular spectrum being auctioned and the inventory of licenses to be auctioned.

90. The tribal lands bidding credit program awards a discount to a winning bidder for serving qualifying tribal land that have a wireline telephone subscription rate equal to or less than 85% of the population. The Commission believes that tribal entities involved in the telecommunications industry face unique challenges in participating in spectrum auctions and that the tribal lands bidding credit will promote further deployment and use of spectrum over tribal lands. While the Commission is also adopting a Tribal priority window, the Commission believes the priority window and bidding credit can complement each other and help facilitate service on Tribal lands. No commenters oppose the tribal land bidding credit nor suggest that the tribal lands bidding credit is unnecessary. Accordingly, a winning bidder for a market will be eligible to receive a credit for serving qualifying Tribal lands within that market, provided it complies with the applicable competitive bidding rules.

91. Geographic Area. The Commission adopts counties as the appropriate geographic size for new licenses. The Commission finds that a county-based license will afford overlay licensees the flexibility to develop localized services, allow for targeted deployments based on market forces and customer demand, and facilitate access by both smaller and larger providers. As noted by several commenters, counties also “nest” into Basic Trading Areas (BTA)s, and thus they are congruent with the current footprint of BRS licensees, creating consistency with the existing BRS licensing framework. As noted by supporters, licensing by county accommodates a wide variety of business models: it enables rural providers to obtain spectrum just in the area that they intend to serve, while allowing larger providers to aggregate spectrum in multiple counties as part of a larger business plan.

92. The Commission rejects the alternative of census tracts as the geographic area licensing unit. The Commission agrees with commenters opposing the use of census tracts that census tracts are extremely numerous and are dynamic in size and location, which makes them difficult to manage and organize. These commenters contend that “the numerous boundaries make RF containment problematic, a problem that would be exacerbated by the relatively higher field strength limits involved with 2.5 GHz equipment that can operate at hundreds of watts of power.” Because many census tracts would be smaller than the average coverage area of a single 2.5 GHz base station, the Commission concludes that census tracts would be unworkable.

93. The Commission also finds Sprint's proposal to offer large-area licenses, based on either Partial Economic Areas or BTAs, inferior to basing licenses on counties. While Sprint notes that “BTA licensing in particular has the benefit of consistency with the existing BRS licensing framework,” the Commission is not persuaded that consistency with the BRS framework alone warrants adopting a larger license size for EBS spectrum.

94. Band Plan. The Commission adopts a band plan that will include three overlay licenses: the first license will include channels A1-A-3, B1-B3, C1-C3 (49.5 megahertz); the second license will include channels D1-D3, the J channels, and channels A4-G4 (50.5 megahertz); and the third license will include channels G1-G3 and the relevant EBS K channels (16.5 megahertz of contiguous spectrum and 1 megahertz of the K channels associated with the G channel group). A group of small rural carriers supports this band plan. By providing applicants the flexibility to bid on three different licenses, the Commission also will provide opportunity for entities of various sizes and spectrum needs to participate in an auction. As commenters note, it is important that wide channel blocks of contiguous spectrum be available because wider blocks are necessary to provide high-speed broadband access. By creating two new wider channel blocks of 49.5 megahertz and 50.5 megahertz of contiguous spectrum, respectively, the Commission has done just that. Moreover, by creating two new licenses of almost equal size while keeping channel groups together, the Commission has made it easier for the new overlay licensees to coordinate with the incumbent EBS licensees.

95. In the NPRM, the Commission asked commenters to address the appropriate channel block size for future licensing and to discuss why such a channel block size would serve the public interest, and the Commission received a variety of proposals in response. While some commenters argue that the Commission should license the current middle band segment as a separate license, the Commission concludes that such an approach would be spectrally inefficient. The middle band segment was originally designed for legacy video services, which have virtually disappeared from the band. Licensing the middle band channels separately creates discontinuity, which is ill-suited for wireless broadband use in general and Time Division Duplexing (TDD)—the predominant use of the band currently—in particular. For this reason, while the Commission agrees with WCAI and Sprint that having three different licenses is appropriate, the Commission does not adopt their specific proposed band plans. WCAI suggests licenses for the lower band (A1-3, B1-3, C1-3, D1-3 and the J channels), the middle band (A-G4) and the upper band. (G1-G3 and the K channels), while Sprint proposes three licenses at (1) A1-4 and B1-4, (2) C1-4 and (3) D1-4 and G1-4. The Commission also rejects WISPA's proposal, supported by US Cellular, for four channel blocks, (1) A1-3 and B1-3, (2) C1-3 and (3) D1-3, A4, B4, C,4, D4 and G4 and (4) G1-G3. By creating separate licenses for the lower and middle parts of the band, these proposals would not maximize the 2.5 GHz band's potential to be used for high-speed wireless broadband services. The band plan the Commission adopts will also create two wide channel blocks of almost equal size. The Commission notes that WISPA would find the band plan the Commission adopts acceptable as an alternative, and the Commission also believes the band plan the Commission adopts is responsive to U.S. Cellular's argument that fixed wireless providers generally need 45 megahertz of spectrum to deploy in the 2.5 GHz band.

96. The Commission further finds that the EBS white space discounts from the spectrum screen also should be eliminated. In the NPRM, the Commission sought comment on whether any rule changes adopted here would warrant modification of its treatment of EBS spectrum in the spectrum screen. Although one commenter, opposing revision of the screen, argues that changes are unnecessary, several others support revising the spectrum screen. WCAI, for example, argues that retaining a spectrum screen discount “based on outdated educational use requirements and eligibility would not reflect the new reality that all EBS spectrum can be used for commercial purposes.” AT&T similarly argues that changing the EBS spectrum rules and repurposing EBS spectrum would require the Commission to revise the spectrum screen to include all EBS spectrum because the changes would make all EBS spectrum “`used and useful' for the provision of mobile broadband services.”

97. Although the Commission previously excluded 16.5% of EBS spectrum from the spectrum screen to account for the fact that commercial providers did not have an opportunity to gain access to EBS white space spectrum, this discount is no longer necessary. Accordingly, the Commission finds that EBS white space spectrum should be considered “available,” for purposes of the spectrum screen.

98. Finally, the Commission concludes that it is no longer necessary to exclude 5% of EBS spectrum from the spectrum screen in light of its decision to eliminate the educational use requirement. While the Commission recognizes that some existing EBS spectrum leases may include terms with educational use restrictions, the Commission believes that if there are such aspects of EBS spectrum leases that warrant further consideration, its case-by-case review of secondary market transactions is the best way to assess the impact of such spectrum lease contractual provisions in particular local markets.

99. Performance Requirements. The Commission adopts the performance requirements that the Commission proposed in the NPRM, replacing the existing substantial service regime  12 with a menu of specific performance requirements for EBS licensees that depend on the specific service they are offering. Going forward, EBS licensees that are required to make a build-out showing under these new standards may fulfill their final performance requirements by showing any of the following: (1) 80% population coverage for mobile or point-to-multipoint service (50% interim); (2) 40 links per million persons (one link per 25,000) for fixed point-to-point service (20 links per million interim (one link per 50,000)); or (3) 80% population coverage for broadcast service (50% interim). No other types of showing or levels of coverage will be accepted. These benchmarks will apply to both licenses won at auction and licenses granted through the Tribal priority window.

100. These benchmarks are similar to those for the AWS-3 and WCS bands (which have similar propagation characteristics) but are slightly higher (an additional 5%) to account for the maturity of technologies already developed and deployed in the 2.5 GHz band. Specifically, while the AWS-3 and WCS performance requirements were established before there were extensive operations in those bands, there are currently extensive operations and ample equipment in the 2.5 GHz band. These increased requirements will help to address the concerns of some commenters that current licensees of this spectrum are not deploying to all communities within their license areas. This approach to performance requirements is supported by several commenters who advocate for robust performance requirements, including the NPRM proposal specifically, as well as other commenters who generally support build-out requirements without providing specifics.

101. Some commenters suggest a more relaxed approach to performance requirements, including retaining the current substantial service regime. Other commenters support adoption of the same performance requirements as those currently applicable to BRS licensees, which are similar to the current EBS substantial service standard. The Commission rejects retaining the existing substantial service requirement for new EBS licenses, as the existing requirements are inconsistent with the build-out requirements the Commission has adopted for similar bands such as AWS. The Commission agrees with WISPA that those substantial service standards are too vague, particularly in the context of a band that has a developed equipment ecosystem. The existing substantial service requirements were adopted prior to the transition to the new band plan and at a time when there was substantial uncertainty about how the band would be used in the future. Now, the ability to use EBS for broadband is well established. Given the maturity of the ecosystem in this band, and the low thresholds and vague requirements of the previous standards, the Commission declines to continue with the substantial service regime or to adopt any minor modification thereof. In other bands, the Commission has determined that a substantial service regime, which lacks firm minimum requirements, does not adequately safeguard effective use of the relevant spectrum, and the Commission extends that conclusion to EBS. The increased requirements the Commission adopts in this Report and Order will address that concern more effectively than the current requirements.

102. A few commenters suggest alternatives to the NPRM proposal beyond retention of substantial service. The Nez Perce Tribe suggests that the “coverage target” should be 100% area coverage, but that the actual benchmark should be determined by each licensee according to the specific terrain and circumstances of each license. Other commenters propose imposing various standards of service, such as speed or affordability, as part of the performance requirement. The Commission declines to incorporate these concepts into the new performance requirements the Commission adopts. The Nez Perce Tribe's case-by-case suggestion would result in requirements that would vary across licenses, and that, if based on a licensee's own analysis, could not be determined prior to auction. The resulting uncertainty would be unfair to auction participants, who could not reasonably anticipate the construction obligation that would accompany their new licenses. This system also would place a significant burden on licensees to justify their particular level of construction as adequate in their circumstances, rather than giving licensees a set benchmark on which to rely. The Commission also declines to incorporate any quality of service measure into the performance requirements. The Commission does not include such a requirement in any other wireless service as a condition of license renewal, and the commenters suggesting it have not provided evidence that EBS as a service is uniquely situated so as to require it.

103. The Commission declines to adopt any educational use metric for performance requirements. The potential for wireless services to support education is clear; nevertheless, this goal will be supported best by adopting stringent build-out requirements that encourage wider deployment of all broadband services, rather than by attempting to define what constitutes acceptable levels or types of educational use specifically. The few comments received on this issue illustrate the difficulty of finding a specific educational metric that encourages deployment without placing an undue regulatory burden on licensees. The robust mobile, fixed, and broadcast metrics the Commission adopts in this Report and Order will promote deployment of wireless services that can be used for all purposes, including education. The Commission recognizes that incumbent licensees may have relied on the educational use standard to fulfill their performance requirements in the past. Those licensees may continue to use the substantial service standard in order to make their renewal showing, but the substantial service standard, including the educational safe harbor, will not be available to new licensees in the band.

104. The Commission also sought comment in the NPRM on the appropriate timeline for the interim benchmark, and the appropriate penalty for failure to meet a benchmark. In this regard, the Commission will apply the interim benchmark after four years, and the final benchmark after eight years. The penalty for failure to meet the interim benchmark will be the acceleration of the final benchmark deadline by two years, to six years rather than eight. This timeline is slightly more aggressive than WISPA's suggestion of a five-year interim and a ten-year final deadline, but the critical role of mid-band spectrum in today's spectrum environment warrants such an approach. The existing ecosystem of equipment already available in the band, and the success of recipients of waivers and STAs with expeditious deployment, also suggest that a more compressed timeline is appropriate here. This timeline and the two-year acceleration penalty are also largely consistent with the Commission's rules in other bands and will help harmonize the regulatory regime of the 2.5 GHz band with other commercial wireless services. Apart from WISPA, no other commenters offer suggestions for the timing of benchmarks or the acceleration penalty.

105. As with other wireless services, a license will automatically terminate if the licensee fails to meet the final construction benchmark. The Commission rejects as unnecessary Midco's suggestion to allow one or two 90-day cure periods in order to accommodate “difficult conditions” or “other unknown impediments.” The Commission expects applicants to conduct their due diligence and plan to meet these buildout deadlines. In extraordinary circumstances, the Commission may consider waiver requests to accommodate unanticipated difficulties requiring short-term accommodations.

106. For licenses acquired via the Tribal priority window described above, the Commission adopts a different timeline. These licenses must demonstrate compliance with interim build-out levels after two years, and final build-out levels after five years. The penalty for missing the interim deadline will be an acceleration of the final deadline by one year. This timeline will encourage deployment in underserved areas, while discouraging speculation or application mills. The equipment ecosystem in this band has matured considerably since potential licensees last had a routine opportunity to apply for this spectrum, and the cost and difficulty of deployment have eased significantly. Recent recipients of waivers and STAs in this band have been able to deploy and begin service well within a five-year timeframe. This timeline is also consistent with the recommendation from MuralNet, which developed and deployed the network for the Havasupai Tribe.

107. There are also considerations specific to the Tribal window that support this timeline for those licensees. Because Tribal applicants will be able to specify their own service area, this timeline will encourage those applicants to estimate accurately the level of deployment they will be able to achieve, rather than over-claiming and thereby precluding any other potential licensee. The Commission therefore rejects Colville's suggestion that requirements should not be “more robust” than for other licensees, and Havasupai's suggestion that Tribes should not be subject to any build-out requirement whatsoever. In addition, a five-year Tribal deployment timeline will enable an auction-based overlay licensee to reclaim unbuilt spectrum before the end of its ten-year overlay license term if a Tribe is unable to build, helping to ensure that the spectrum is put to use.

108. Renewal Standards. In 2017, the Commission adopted a unified regulatory framework for the Wireless Radio Services (WRS) that replaced the existing patchwork of service-specific rules regarding renewal, comparative renewal, continuity of service, and partitioning and disaggregation, with clear and consistent rules of the road for WRS licensees. The Commission adopts the NPRM' s proposal to apply the WRS framework of renewal standards to new EBS licenses, including licenses granted via the Tribal priority window. With the actions the Commission takes to make EBS more flexible and similar to other bands where the WRS rules apply, the Commission finds it is now appropriate to apply the WRS rules to EBS. This change will harmonize the regulatory regime of the 2.5 GHz band with other bands that support commercial wireless services, and it will give licensees more clarity on their regulatory requirements and options, including the flexibility to partition or disaggregate their licenses. The record supports applying the WRS framework to new EBS licensees. The Commission believes that updating the renewal standards in this manner will encourage more rapid deployment of next generation wireless services, including 5G.

109. The Commission also applies the WRS framework to existing EBS licensees. 13 The Commission sought comment on this issue in the NPRM, and several commenters support this idea. Applying the renewal standard to existing licenses will ensure that the licensees who hold them will continue to provide some level of service and that the frequencies covered by those licenses do not lie fallow. Consistent with the Commission's treatment of other incumbent licenses that did not have a prior renewal standard, the Commission will require compliance with the renewal standard for renewal applications filed after January 1, 2023.

110. In evaluating existing licensees under these new renewal standards, however, the Commission will apply new WRS build-out standards if the Commission promulgates them. 14 Without prejudging the outcome of that open proceeding, the Commission seeks to harmonize the 2.5 GHz band with other bands that support commercial wireless services, recognizing that this Order transitions the band to more flexible use. For clarity, the Commission emphasizes that the old, substantial service build-out standard contained in § 27.14(o) of the Commission's rules will apply to existing EBS license renewals, unless the Commission alters the WRS build-out standards upon renewal. The Commission further clarifies that, for purposes of meeting the old renewal standard, the educational use safe harbor contained in § 27.14(o)(2) is available only to licensees that meet the old EBS eligibility standard, since that safe harbor was based on service to accredited educational institutions. If such a licensee transfers its license to an entity that does not meet that standard, the new licensee will be required to make future showings using one of the other safe harbor provisions contained in § 27.14(o).

111. Upon adoption of this Report and Order, the Commission will dismiss, without prejudice, any pending applications for new EBS licenses. A freeze on the filing of new EBS applications was instituted in 2003 in conjunction with the Commission's proposing new technical rules and band plan for the 2.5 GHz band. The Commission has granted some waiver requests to permit the filing of applications for new EBS licenses while the freeze remained in place. There are a handful of additional requests for waiver of the EBS freeze currently pending that seek new EBS licenses. Since this Report and Order is instituting a new process for the assignment of EBS spectrum, the Commission sees no need to grant requests for waiver of the freeze, and therefore the Commission dismisses these pending applications without prejudice. The applicants are free to participate in the license assignment processes adopted herein through the Tribal priority window or competitive bidding, as applicable.

112. Because the transition from the interleaved channel plan under the former ITFS to the new channel plan under BRS and EBS was completed in 2011, the Commission proposed to remove those rule sections that addressed the transition. In light of the fact that the transition has been completed, the Commission finds that the rules are obsolete and no longer necessary, and that elimination of the rules is therefore in the public interest. The Commission also received no comments objecting to the removal of these rules. The Commission therefore adopts its proposal to remove §§ 27.1230 through 27.1239 of its rules.

113. The Commission also received no comments objecting to the Commission's proposal to make non-substantive clarifying amendments to § 27.1206 of its rules. In light of the Commission's decisions to adopt a Tribal priority window with GSAs based on rural Tribal lands, as well as its decision not to rationalize existing licenses, the Commission will amend § 27.1206 to reflect the decisions it has made. The Commission also reorganizes §§ 27.1207, 27.1208, and 27.1209 to place similar subjects together, reduce duplication, and incorporate the rule changes it has adopted for EBS. These changes do not result in any substantive changes for existing BRS or EBS licenses.

114. Several commenters have made proposals that are outside of the scope of the subject proceeding or that have been made moot by the Commission's changes to the EBS band, and thus, the Commission has not addressing those proposals herein. 15

115. In order to provide applicants in the Tribal priority window with a stable licensing environment unaffected by changes to the band, the Commission will defer the effective date of the rule changes it adopts in this proceeding  16 (other than the rules adopting the Tribal priority window and the construction requirements rule, which will apply to the Tribal priority window) until six months from the date of Federal Register publication of this Report and Order.

116. In the Report and Order, the Commission takes steps to permit more flexible use of the 2496-2690 MHz (2.5 GHz) band by current Educational Broadband Service (EBS) licensees and to provide new opportunities for EBS eligible entities, Tribal Nations, and commercial entities to obtain unused 2.5 GHz spectrum to facilitate improved access to next generation wireless broadband, including 5G, for both educational and commercial uses. EBS spectrum currently is assigned in geographic areas of various sizes and shapes and is subject to unique use and transfer restrictions. Consistent with the Commission's goal of making additional spectrum available for flexible use, and to promote use of EBS frequencies that have been unassigned for far too long, the Commission takes steps to encourage and facilitate more efficient use of the 2.5 GHz band. These steps are not intended to curtail the spectrum usage rights of existing EBS licensees, nor to annul or disturb existing agreements between such licensees and commercial operators. Additionally, since the process for transitioning Broadband Radio Service (BRS) and EBS licensees to the new band plan was completed in 2011, the Commission eliminates the BRS/EBS transition rules. The Commission believes it is in the public interest to eliminate these regulations that are out of date and no longer necessary.

117. There were no comments filed that specifically addressed the proposed rules and policies presented in the IRFA.

118. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments.

119. The Chief Counsel did not file comments in response to the proposed rules in this proceeding.

120. 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 rules adopted herein. 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.

121. Small Businesses, Small Organizations, Small Governmental Jurisdictions. The Commission's actions, over time, may affect small entities that are not easily categorized at present. The Commission therefore describes here, at the outset, three broad groups of small entities that could be directly affected herein. First, while there are industry specific size standards for small businesses that are used in the 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.

122. 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).

123. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2012 Census of Governments indicate that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 37, 132 General purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,184 Special purpose governments (independent school districts and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category show that the majority of these governments have populations of less than 50,000. Based on this data, the Commission estimates that at least 49,316 local government jurisdictions fall in the category of “small governmental jurisdictions.”

124. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census Bureau data for 2012 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.

125. Broadband Radio Service and Educational Broadband Service. Broadband Radio Service (BRS) systems, previously referred to as Multipoint Distribution Service (MDS) and Multichannel Multipoint Distribution Service (MMDS) systems, and “wireless cable,” transmit video programming to subscribers and provide two-way high-speed data operations using the microwave frequencies of the BRS and Educational Broadband Service (EBS) (previously referred to as the Instructional Television Fixed Service (ITFS)).

126. BRS. In connection with the 1996 BRS auction, the Commission established a small business size standard as an entity that had annual average gross revenues of no more than $40 million in the previous three calendar years. The BRS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 auction winners, 61 met the definition of a small business. BRS also includes licensees of stations authorized prior to the auction. At this time, the Commission estimates that of the 61 small business BRS auction winners, 48 remain small business licensees. In addition to the 48 small businesses that hold BTA authorizations, there are approximately 86 incumbent BRS licensees that are considered small entities (18 incumbent BRS licensees do not meet the small business size standard). After adding the number of small business auction licensees to the number of incumbent licensees not already counted, there are currently approximately 133 BRS licensees that are defined as small businesses under either the SBA or the Commission's rules.

127. In 2009, the Commission conducted Auction 86, the sale of 78 licenses in the BRS areas. The Commission offered three levels of bidding credits: (i) A bidder with attributed average annual gross revenues that exceed $15 million and do not exceed $40 million for the preceding three years (small business) received a 15% discount on its winning bid; (ii) a bidder with attributed average annual gross revenues that exceed $3 million and do not exceed $15 million for the preceding three years (very small business) received a 25% discount on its winning bid; and (iii) a bidder with attributed average annual gross revenues that do not exceed $3 million for the preceding three years (entrepreneur) received a 35% discount on its winning bid. Auction 86 concluded in 2009 with the sale of 61 licenses. Of the ten winning bidders, two bidders that claimed small business status won 4 licenses; one bidder that claimed very small business status won three licenses; and two bidders that claimed entrepreneur status won six licenses.

128. EBS. Educational Broadband Service has been included within the broad economic census category and SBA size standard for Wired Telecommunications Carriers since 2007. 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's small business size standard for this category is all such firms having 1,500 or fewer employees. U.S. Census Bureau data for 2012 show that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. Thus, under this size standard, the majority of firms in this industry can be considered small.

129. In addition to U.S. Census Bureau data, the Commission's Universal Licensing System indicates that as of March 2019 there are 1,300 licensees holding over 2,190 active EBS licenses. The Commission estimates that of these 2,190 licenses, the majority are held by non-profit educational institutions and school districts, which are by statute defined as small businesses.

130. The Commission expects the rules adopted in the Report and Order will impose new or additional reporting or recordkeeping and/or other compliance obligations on small entities as well as other applicants and licensees. The Commission is not in a position to determine whether the adopted rule changes will require small entities to hire attorneys, engineers, consultants, or other professionals, and cannot quantify the cost of compliance with these rule changes. The Commission does not believe however, that the costs of compliance or the administrative requirements associated with any of the rule changes will unduly burden small entities. The Commission notes that several of the rule changes are consistent with and mirror existing policies and requirements used in similar spectrum bands. Therefore, small entities with existing licenses in may already be familiar with such policies and requirements and have the processes and procedures in place to facilitate compliance resulting in minimal incremental costs to comply with the Report and Order.

131. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its 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 or reporting requirements under the rule for 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 small entities.

132. The Commission does not believe that the rule changes adopted in the Report and Order will have a significant economic impact on small entities. The proposed changes expanding the use of the 2.5 GHz band will benefit small entities as well as entities of other sizes by reducing unnecessary regulatory burdens on licensees, promoting greater spectrum efficiency, and facilitating the full use of EBS spectrum to provide advanced mobile broadband services, particularly in rural areas where this spectrum currently sits idle. Moreover, the adopted reforms will permit more flexible use of this spectrum by small and other sized entities that currently hold EBS licenses and will provide new opportunities for EBS eligible entities, Tribal Nations, and commercial entities to obtain unused 2.5 GHz spectrum to facilitate improved access to next generation wireless broadband, including 5G, for both educational and commercial uses. The Commission discusses the alternatives considered to the rules adopted below.

133. Rationalizing the GSAs of incumbent EBS Licensees. In the NPRM, the Commission proposed to rationalize the current point-and-radius license areas held by incumbents to a defined geographic area. There was both support for this approach and alternatives proposed by commenters. The alternatives considered by the Commission included expansion to county borders, using self-defined GSAs, GSAs based on granular population data, and rationalization but not any expansion of geographic area coverage. Finding the benefits, the Commission believed would result from its NPRM proposals are unlikely to materialize to any significant degree, and the process of rationalizing licenses is likely to be complex, time-consuming, and potentially confusing to incumbent and future licensees, the Commission declined to adopt any rationalization scheme for incumbent EBS licenses and left the existing license boundaries intact.

134. Additional Flexibility for EBS Licensees. The Commission adopted the NPRM's proposal to eliminate the EBS eligibility requirements contained in § 27.1201 of the rules for incumbent EBS licenses, including licenses granted via waiver instead of maintaining the current requirements. This alternative allows the Commission to bring these licenses into better alignment with the flexible use licensing policies used in similar spectrum bands, which feature open eligibility absent a compelling showing that regulatory intervention to exclude potential participants is necessary and has been an effective means of promoting more efficient and better use of the 2.5 GHz band. Small entities should benefit from this increased flexibility to assign or transfer control of their licenses to entities that are not EBS-eligible. The Commission believes that, at this point in time, licensees are in the best position to determine how to use their licenses, or, alternatively, whether to transfer their licenses to a third party in the secondary market.

135. The Commission also eliminated the educational use requirement contained in § 27.1203 of the rules as proposed in the NPRM after considering alternative proposals to revise and/or update the requirements to reflect the current broadband use of the spectrum. In doing so the Commission did not find that any these alternatives would facilitate broadband deployment or be workable for licensees or commercial operators. Additionally, after considering alternative proposals to maintain and increase restriction on lease terms, the Commission adopted the NPRM's proposal to eliminate restrictions on EBS leases entered into under its secondary markets policies on a going forward basis which will make the rules for the 2.5 GHz band consistent with other part 27 services, incentivize build-out in rural areas, and provide additional flexibility to both EBS licensees and lessees.

136. Local Priority Filing Window. The Commission adopted a Tribal priority window for Tribal entities to obtain 2.5 GHz licenses on Tribal lands that are located in rural areas as proposed in the NPRM, enabling these entities to acquire all available EBS spectrum on their Tribal lands. This window will allow Tribal entities to address the educational and communication needs of their communities and provide much needed services such advanced wireless services, in areas that are devoid of such services. Conversely, after considering the priority filing window option for existing EBS licensees and for educational institutions that do not currently hold any EBS licenses, the Commission declined to adopt these windows based on a belief that windows for these entities are not the best way to achieve rapid expansion and deployment of broadband in the band.

137. Licensing of White Spaces. As proposed in the NPRM, the Commission will use competitive bidding to resolve mutually exclusive applications for the unassigned EBS spectrum after the completion of the rural Tribal priority window, finding the competitive bidding alternative is consistent with the other changes made in the Report and Order to align EBS licenses more closely with flexible use service rules. An overlay auction was determined to be the best mechanism for assigning EBS spectrum due to, among other things, the costly nature of an incentive auction to government and other participants. Thus, the overlay auction should help minimize participation costs for small entities.

138. The procedures the Commission has adopted contain provisions to assist small entities in competitive bidding. The Commission will employ the part 1 rules governing competitive bidding design, designated entity preferences, unjust enrichment, application and payment procedures, reporting requirements, and the prohibition on certain communications between auction applicants. Furthermore, qualifying “small businesses”—those with gross revenues for the preceding five years not exceeding $55 million—will be provided with a bidding credit of 15%, and “very small businesses”—those with average annual gross revenues for the preceding five years not exceeding $20 million—with a bidding credit of 25%. Providing small businesses and very small businesses with bidding credits will provide an economic benefit to small entities by making it easier for small entities to acquire spectrum or access to spectrum in these bands.

139. Geographic Area and the Band Plan for New Licenses. The band plan adopted in the Report and Order will include three overlay licenses—the first license will include channels A1-A-3, B1-B3, C1-C3 (49.5 MHz); the second license will include channels D1-D3, the J channels, and channels A4-G4 (50.5 MHz); and the third license channels G1-G3 and the relevant EBS K channels (16.5 megahertz of contiguous spectrum and 1 megahertz of the K channel associated with the G channel group). This arrangement will give applicants two wide blocks and one small block from which to choose, providing opportunity for small entities participate as well as medium and large entities with different needs.

140. Requirements for New 2.5 GHz Licenses. Regarding performance requirements, the alternatives considered by the Commission were broadly speaking, robust requirements (including the Commission's proposal), relaxed requirements (including the current substantial service standard), or the general concept of a build-out requirement without specifics. The Commission adopted the robust mobile, fixed and broadcast performance requirement metrics from the NPRM for new licensees in the band, which will promote the deployment of wireless services for multiple purposes including education. With respect to the timeline for evaluating build-out, the Commission required that the interim benchmark be applied after four years, and that the penalty for failure to make this showing be the acceleration of the final benchmark deadline to six years, rather than eight years. This approach is largely consistent with the Commission's rules for other bands and will help harmonize the regulatory regime of the 2.5 GHz band with other commercial wireless services. Additionally, the Commission will apply the Wireless Radio Services (WRS) framework of renewal standards to both new and existing EBS licensees. The Commission anticipates that updating the performance requirements in this manner will encourage rapid deployment of next generation wireless services, including 5G, which will benefit small entities and the industry as a whole.

141. Pending Waiver Requests and Cleaning Up the 2.5 GHz Rules. Small entities should benefit from the Commission's removal of the filing freeze for new EBS licenses, which will provide them greater opportunity to obtain EBS spectrum to meet the needs of their communities. In conjunction with removing the filing freeze, the Commission will dismiss three pending requests to waive the freeze for new EBS licenses. Small entities should also benefit from the Commission's clean-up of the 2.5 GHz rules by eliminating the BRS/EBS transition rules which were completed in 2011 and making non-substantive, clarifying amendments to § 27.1206, making it is easier to understand.

142. Accordingly, it is ordered, pursuant to sections 1, 2, 3, 4, 5, 7, 301, 302, 303, 304, 307, 309, and 310 of the Communications Act of 1934, 47 U.S.C. 151, 152, 153, 154, 155, 157, 301, 302a, 303, 304, 307, 309, and 310, and section 706 of the Telecommunications Act of 1996, as amended, 47 U.S.C. 1302, that this Report and Order is hereby adopted.

143. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

144. It is further ordered that the rules and requirements adopted herein will become effective six months from the date of publication in the Federal Register with the exception of §§ 27.14(u) and (v) and 27.1204 of the rules, which contain new or modified information collection requirements that require review by the OMB under the PRA. The Commission directs the Bureau to announce the compliance date for those information collections in a document published in the Federal Register after OMB approval and directs the Bureau to cause §§ 27.14 and 27.1204 to be revised accordingly.

145. It is further ordered, pursuant to sections 4(i) and 309 of the Communications Act of 1934, 47 U.S.C. 154(i), 309, and § 1.934(d)(2) of the Commission's Rules, 47 CFR 1.934(d)(2), that the requests for waiver of the freeze on the filing of new EBS applications filed by Monterey Peninsula Unified School District and the Duckwater Shoshone Tribe are denied, and the applications filed by Monterey Peninsula Unified School District (File No. 0007664266) and Duckwater Shoshone Tribe (File Nos. 0007768145 and 0007768146) are dismissed without prejudice.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 1 and 27 as follows:

The snapper-grouper fishery of the South Atlantic includes gray triggerfish and is managed under the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region (FMP). The FMP was prepared by the South Atlantic Fishery Management Council and is implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

The commercial ACL (commercial quota) for gray triggerfish in the South Atlantic is divided into two 6-month fishing seasons. The total commercial ACL of 312,324 lb (141,668 kg), round weight, is allocated 50 percent to each commercial fishing season, or 156,162 lb (70,834 kg), round weight, each, for January through June, and July through December, as specified in 50 CFR 622.190(a)(8)(i) and (ii).

Under 50 CFR 622.193(q)(1)(i), NMFS is required to close the commercial sector for gray triggerfish when the commercial quota specified in 50 CFR 622.190(a)(8)(ii) is reached, or is projected to be reached, by filing a notification to that effect with the Office of the Federal Register. NMFS has determined that the commercial quota for South Atlantic gray triggerfish for the July through December fishing season will be reached by October 27, 2019. Accordingly, the commercial sector for South Atlantic gray triggerfish is closed effective at 12:01 a.m., local time, October 27, 2019, until the start of the January through June fishing season on January 1, 2020.

The operator of a vessel with a valid Federal commercial vessel permit for South Atlantic snapper-grouper having gray triggerfish on board must have landed and bartered, traded, or sold such gray triggerfish prior to 12:01 a.m., local time, October 27, 2019. During the closure, the recreational bag limit specified in 50 CFR 622.187(b)(8), and the possession limits specified in 50 CFR 622.187(c), apply to all harvest or possession of gray triggerfish in or from the South Atlantic EEZ. Also, during the closure, the sale or purchase of gray triggerfish taken from the South Atlantic EEZ is prohibited. The prohibition on the sale or purchase does not apply to gray triggerfish that were harvested, landed ashore, and sold prior to 12:01 a.m., local time, October 27, 2019, and were held in cold storage by a dealer or processor.

For a person on board a vessel for which a valid Federal commercial or charter vessel/headboat permit for the South Atlantic snapper-grouper fishery has been issued, the bag and possession limits and sale and purchase prohibitions for gray triggerfish apply regardless of whether the fish are harvested in state or Federal waters, as specified in 50 CFR 622.190(c)(1)(ii).

The Regional Administrator, NMFS Southeast Region, has determined this temporary rule is necessary for the conservation and management of gray triggerfish and the South Atlantic snapper-grouper fishery and is consistent with the Magnuson-Stevens Act and other applicable laws.

This action is taken under 50 CFR 622.193(q)(1)(i) and is exempt from review under Executive Order 12866.

These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.

This action responds to the best scientific information available. The Assistant Administrator for NOAA Fisheries (AA), finds that the need to immediately implement this action to close the commercial sector for gray triggerfish constitutes good cause to waive the requirements to provide prior notice and opportunity for public comment pursuant to the authority set forth in 5 U.S.C. 553(b)(B), as such procedures are unnecessary and contrary to the public interest. Such procedures are unnecessary because the final rules implementing the split commercial season for gray triggerfish and the commercial closure provisions have already been subject to notice and comment, and all that remains is to notify the public of the closure. Such procedures are contrary to the public interest because of the need to immediately implement this action to protect gray triggerfish since the capacity of the fishing fleet allows for rapid harvest of the commercial quota. Prior notice and opportunity for public comment would require time and would potentially result in a harvest well in excess of the established commercial quota.

For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).