The USGSA (7 U.S.C. 71 et seq. ) authorizes FGIS, a program area within AMS, to supervise grain inspection and weighing services provided by official agencies and to charge and collect reasonable fees to cover the cost of such supervision. These fees are charged by official agencies to their customers (grain industry) as part of the overall fee charged for inspection and weighing services. Supervision fees collected by FGIS cover, as nearly as practicable, the program and administrative costs of supervising official agencies.

FGIS regularly reviews its user-fee financed programs under USGSA to determine whether the fees are adequate and appropriate operating reserve fund levels are maintained. On July 1, 2016, following such a review (81 FR 41790; June 28, 2016), FGIS suspended the assessment of fees for supervision of official inspection and weighing services performed by delegated States and/or designated agencies to reduce the operating reserve. This suspension ended on December 31, 2020. FGIS's operating reserve at that time was adequate to cover 3 to 6 months' operating expenses as required, but the program will need to resume assessment of tonnage fees to cover the ongoing costs of supervision.

Based on the review, FGIS proposes to move to a standardized formula model for annual fee adjustments to recover the costs associated with administering the official agency supervision program. This action would maintain FGIS's financial stability to assure continued inspection and weighing services to the grain industry, which would further facilitate the sound and orderly marketing of grain in domestic and export markets. FGIS believes this approach would be acceptable to the grain industry.

The fees for supervising official agencies were last revised in 2005 (70 FR 50149; August 26, 2005). The fee schedule at 7 CFR 800.71(a)(2) (Schedule B) has not been changed since then. Currently, the FGIS fee for supervision of official agencies is set at $0.011 per metric ton of domestic U.S. grain shipments inspected and/or weighed, including land carrier shipments to Canada or Mexico.

Financial data for the supervision of official agencies program for fiscal years (FY) 2016 through 2020 is reviewed in Table 1.

As illustrated by Table 1, while revenues have been suspended since July 2016, FGIS obligations have generally increased due to inflation and cost of living adjustments. The exception was in FY19, when the accounts of the former Grain Inspection, Packers and Stockyards Administration (GIPSA), which included FGIS, were merged with AMS, along with the close-out of obligations. As explained above, the current fee structure generated a recurring annual operating surplus for several years, resulting in a decision to suspend the collection of the fees in 2016 that would gradually reduce the operating reserves to meet AMS's target of maintaining funds to cover 3 to 6 months' expenses. Monthly costs to operate the supervision of official agencies in FY 2020 were $151,000. Thus, AMS would consider an operating reserve of between $0.45 million and $0.91 million (3 and 6 times the monthly operating cost, respectively) at the end of FY 2020 to be appropriate. At the end of FY 2020, the operating reserve balance was $1.73 million, enough to cover eleven and one half months of expenses.

To prevent accumulating a reserve balance beyond the targeted amount (3 to 6 times the monthly operating cost), AMS proposes to adopt a standardized formula for calculating user fees for each calendar year (CY). AMS expects that reducing fees in the proposed manner would gradually reduce the balance in the reserve fund, while also allowing FGIS to continue making strategic operational expenditures to meet industry expectations and achieve United States Department of Agriculture (USDA) goals.

This proposal calculates the supervision tonnage fee using the prior year's actual costs and average yearly tonnage of domestic U.S. grain shipments inspected and/or weighed, including land carrier shipments to Canada and Mexico during the previous 5 fiscal years.

As a result, we are proposing to add new § 800.71(b)(2)(i) and (ii) to include the following formulas for calculating fee rates for CY 2021 and succeeding years.

Operating Reserve Adjustment. FGIS would divide the total prior year supervision costs by 2 to determine the 6-months operating reserve goal. From that value, FGIS would subtract the FY operating reserve ending balance to obtain the operating reserve adjustment for determining the supervision tonnage fee.

Supervision tonnage fee. FGIS would add the total prior year supervision costs and the operating reserve adjustment, then divide the result by the previous 5-year average tonnage. If the calculated fee is zero or a negative value, FGIS would suspend collection of supervision tonnage fees for the next calendar year.

In addition to implementing a new formula for calculating supervision tonnage fees, this proposal would also revise:

• Section 801.71(a)(2)—Schedule B—to remove the currently specified fee and provide that annual supervision fees would be as published on the AMS website.

• The introductory text of § 801.71(b)—Annual review of fees—to convey that weighing and inspection fees, as well as supervision fees, would be recalculated annually.

• Section 801.71(b)(1) to clarify that the tonnage fees calculated in that section pertain only to FGIS inspection and weighing (Schedule A) fees.

• Section 801.71(b) by redesignating paragraph (b)(2) as paragraph (b)(3) and adding a new paragraph (b)(2) that outlines the supervision fee calculations, as described earlier.

In addition to the above changes related to supervision fees, AMS proposes to make the following changes to other fee requirements in § 801.71(d).

The proposed rule would remove the introductory text of § 801.71(d)(1)(i)—Registration certificates and renewals, and would consolidate paragraphs (d)(1)(i)(A) and (B) of that section, which currently provide flat fees for registering business operations that buy, handle, weigh, or transport grain for sale in foreign commerce or for such businesses that are also in a control relationship with respect to a business that buys, handles, weighs, or transports grain for sale in interstate commerce. Currently, the registration fee for the former is $135, and the registration fee for the latter is $270. The proposed rule would combine the two charges into one. AMS proposes to calculate the export registration fee using the following formula and adjust the fees annually, as necessary.

Registration certificates and renewals. FGIS would multiply § 800.71(a) Table 1 of Schedule A noncontract hourly rate by quantity of five. The fee covers FGIS personnel costs to review applications, monitor annually, publication costs, and administrative expenses.

AMS would publish the annual rate in the Federal Register and on the AMS website. The anticipated consolidated fee for calendar year 2021 is estimated to be $300 using current published fees.

The proposed rule would remove § 800.71(d)(1)(ii), which provides charges for providing extra copies of registration certificates, as the certificates are now provided electronically for printing by the applicant.

The proposed rule would revise § 800.71(d)(2) to remove the provision of a flat fee for applications to amend an official agency designation and would instead calculate the rate using the following formula. The rate will be adjusted annually and published on the AMS website.

Designation amendments. FGIS will calculate the rate using Federal Register publication rate for 3 columns, plus 1 hour of noncontract hourly rate from § 800.71(a) Table 1 of Schedule A. The fee covers FGIS personnel costs, administrative expenses, and Federal Register publication costs.

The current rate is $75 per application; AMS estimates the fee would be $510 for calendar year 2021 using current published fees. AMS typically receives only one or two requests each year, so the overall cost to official agencies is not expected to be significant. AMS proposes to review the costs to process and publish designation amendments and adjust the fees annually, as necessary.

Finally, the proposed rule would remove § 800.71(d)(3), which provides a flat application fee for operating a scale testing organization. FGIS hasn't approved such an organization in the past 5 years. Now States that operate as scale testing organizations, in addition to FGIS, provide service in areas that are not in reasonably close proximity to FGIS duty stations. Scale operators pay far less in travel costs by obtaining services provided by their local State scale testing organizations on behalf of FGIS. Additionally, this increases FGIS efficiency by reducing staff travel and allowing their deployment to other mission duties.

Executive Orders 12866—Regulatory Planning and Review, and 13563—Improving Regulation and Regulatory Review, direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, harmonizing rules, and promoting flexibility. This proposed rule does not meet the criteria of a significant regulatory action under Executive Order 12866 as supplemented by Executive Order 13563. Therefore, the Office of Management and Budget (OMB) has not reviewed this rule under those orders.

AMS considered several alternatives to the changes in this proposed rule, including reinstating the current fee or applying a standardized formula using 1 year of supervision tonnage versus the 5-year supervision tonnage average. Ultimately, AMS determined that the proposed approach of recalculating the fee each year using a standard formula based on a 5-year supervision tonnage average would provide savings to the industry when the operating reserve balance exceeds FGIS's goal and would limit large fee increases following years where supervision tonnage volumes are significantly less. AMS expects the proposed changes to benefit the grain industry by adjusting supervision fee as needed annually to reflect actual expenses related to grain inspections supervision and maintaining appropriate operating reserve balances. AMS does not expect the proposed rule to provide any environmental, public health, or safety benefits. AMS has not identified any costs related to this proposed action.

This proposed rule has been reviewed under Executive Order 12988—Civil Justice Reform. This proposed rule is not intended to have retroactive effect. The USGSA provides in Sec. 87g that no State or subdivision thereof may require or impose any requirements or restrictions concerning the inspection, weighing, or description of grain under the Act. This proposed rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this proposed rule. No administrative proceedings would be required before parties could file suit in court challenging the provisions of this proposed rule.

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-602), AMS has considered the economic impact of this proposed action on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened.

This proposed rule sets the fees for three different FGIS functions: (1) Fees for FGIS Supervision, (2) fees for registration certificates and renewals for exporters of grain, and (3) fees for amending the designation of official agencies.

AMS has determined that this proposed rule does not have a significant economic impact on a substantial number of small entities, because most applicants (grain industry) that apply for these official services and are subjected to AMS supervision fees, do not meet the requirements for small entities. This proposed rule will affect entities engaged in shipping grain to and from points within the United States and exporting grain from the United States to Canada and Mexico. There are approximately 9,500 off-farm storage facilities in the United States that could receive grain services from delegated States or designated agencies. AMS estimates 25 percent of these users would be considered small businesses based on criteria established by the Small Business Administration (13 CFR 121.201) (SBA) to differentiate between large and small business entities. SBA uses the North American Industry Classification System (NAICS) to categorize various industry businesses. SBA defines small grain farmers, NAICS codes 424510 and 493130, as those whose annual receipts do not exceed $750,000 and no more than 500 employees.

With respect to fees for supervision, those fees are a minor amount compared to the total value of the grain shipments. The carrier types shipped by small entities are submitted samples and trucks with a standardized weight of 23.95 metric tons and railcars with a standardized weight of 99.79 metric tons. Supervision fees assessed on these carriers at the current published rate are $0.26 per truck with a 2020 corn market year value of $2,700, and $1.10 per railcar with a 2020 corn market year value of $12,600.

The registration certificates and renewal fee applies to persons engaged in the business of buying grain for sale in foreign commerce, and in the business of handling, weighing, or transporting of grain for sale in foreign commerce. Under the provisions of the USGSA, grain exported from the United States must be officially inspected and weighed. Mandatory inspection and weighing services were provided by AMS and official agencies on a fee basis for 73 registered exporters in CY 2019. Seventy-seven of the currently registered entities are owned and managed by multi-national corporations, large cooperatives, or public entities that do not meet the criteria for small entities established by the SBA. In 2019, approximately 11 small exporters registered with FGIS, and in 2020 approximately 7 small exporters registered with FGIS. As explained, with the estimated calculation of the registration fees for 2021 at $300, FGIS believes the registration fees would have a minor effect on the small number of small business that register with FGIS.

Finally, the designation amendment applies to an official agency requesting a modification to its designation within the five-year designation period. AMS has 42 designated States and agencies, and thirteen of these designated agencies meet the criteria for small entities established by the SBA. As explained earlier, the estimated designation amendment fee for 2021 would be $510. FGIS believes the designation amendment fee would have a minor impact on small businesses, since it typically receives no more than two modification requests per year.

Proposed adoption of standardized AMS user-fee rate calculations for 2021 and beyond would benefit all inspection applicants, regardless of size, as fees would more closely reflect the current cost of inspections, and the fee calculation process would be more transparent. Through its annual review, AMS would be able to monitor the financial status of the grain supervision program to determine whether further adjustments are necessary.

AMS has determined this proposed rule would not have a significant economic impact on a substantial number of entities as defined under the RFA because fewer than half the applicants for grain inspection services meet the definition of small entities.

Finally, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and record keeping requirements of the supervision of official agencies program have previously been approved by OMB under control number 0580-0013. No additional reporting, record keeping, or other compliance requirements would be imposed as a result of this proposed rule.

AMS is committed to complying with the E-Government Act (44 U.S.C. 3601 et seq. ), to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

For the reasons set forth in the preamble, AMS proposes to amend 7 CFR part 800 as follows:

The revisions and addition read as follows:

Background

FSIS has been delegated the authority to exercise the functions of the Secretary (7 CFR 2.18, 2.53) as specified in the Federal Meat Inspection Act (FMIA) (21 U.S.C. 601, et seq. ), the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451, et seq. ) and the Egg Products Inspection Act (EPIA) (21 U.S.C. 1031, et seq. ). These statutes mandate that FSIS protect the public by verifying that meat, poultry, and egg products are safe, wholesome, unadulterated, and properly labeled and packaged. In addition to mandatory inspection, the Agricultural Marketing Act (AMA), 7 U.S.C. 1622, 1624, provides for inspection services to accommodate business needs, such as obtaining certifications necessary to meet requirements of importing countries or the inspection of nonamenable products (voluntary reimbursable services). This includes the voluntary service activities related to export certification (9 CFR part 350), voluntary inspection of exotic animals ( e.g., antelope, bison) (9 CFR part 352), voluntary inspection of rabbits (9 CFR part 354), voluntary poultry inspection (9 CFR part 362), and the voluntary inspection of egg products (9 CFR part 592).

FSIS inspection program personnel (IPP) need to have efficient internet access to receive their scheduled inspection tasks and to record the results of the inspection tasks in the FSIS Public Health Information System (PHIS). PHIS is a web-based software application that integrates and streamlines all scheduling, assigning, tracking, and documentation for mission required FSIS food safety functions such as import management, export management, domestic production inspections, and risk analysis. FSIS employees, representatives of countries with whom the United States maintains an import and export relationship, and meat, poultry, and egg products establishments, which are subject to inspection, may all use PHIS. PHIS replaced several legacy client-server applications, multiple automated paper, and email-based processes.

For example, PHIS:

• Contains the establishment profile data for both official and non-official establishments that is used not only by IPP to perform their verification activities but also by other FSIS program areas to schedule laboratory sampling, inform policy decisions, and allocate resources.

• Contains slaughter totals and animal disposition information for amenable and exotic species, as entered by IPP. This data is used by FSIS and other USDA agencies ( e.g., the Animal and Plant Health Inspection Service) to inform policy decisions, track emerging disease trends, and allocate resources.

• Contains inspection results and provides IPP the ability to issue non-compliance records to address regulatory violations at official and non-official establishments.

• Allows IPP to request sampling supplies and receive laboratory sample results.

• Provides for IPP review and approval of electronic import applications in the PHIS import management component, as well as electronic export applications for shipments destined to countries included in the PHIS export component.

The regulations at 9 CFR 307.1, 381.36(a), and 533.3 require official meat, poultry, and Siluriformes fish establishments to provide FSIS IPP with office space, including necessary furnishings, light, heat, and janitor services, rent free, for their exclusive use for official purposes. These regulations state that, at the discretion of the Administrator, small establishments requiring less than one full-time inspector need not furnish such facilities. The regulations at 590.136(a) similarly state that egg products plants will furnish office space, including furnishings, light, heat, and janitor service, without cost, for the use of IPP for official purposes. These regulations also provide that, at the discretion of the Administrator, small plants requiring the services of less than one full-time inspector need not furnish such accommodations.

The United States bears the cost of providing mandatory inspection services to official establishments (21 U.S.C. 468, 695, 1053(a)), while establishments and other facilities receiving voluntary inspection services must pay for such services. FSIS regulations governing the voluntary inspection of rabbits and egg products ( e.g., inspection of the processing in official plants of products containing eggs, sampling of products and quantity and condition inspection of products) require that facilities purchasing such inspection services provide office space and utilities for use by IPP. Specifically, the regulations at 9 CFR 354.221(g) require facilities receiving voluntary rabbit inspection to provide IPP with office space, including, but not limited to, light, heat, and janitor services, without cost to the Agency. And, the regulations at 9 CFR 592.95(b)require facilities receiving voluntary inspection of egg products to provide IPP with acceptable furnished office space and equipment, including, but not limited to, a desk, lockers, or cabinets.

Establishments and other facilities that purchase other types of voluntary services under 9 CFR 350.7(a), 352.5(a), 362.5(a), including identification services, certification services, and voluntary inspection services may be charged to cover the cost of “other expenses” incurred by the Agency in connection with the furnishing of inspection. FSIS considers internet access to be an expense necessary for the provision of these voluntary inspection services.

As such, because internet access is a utility or expense necessary for the provision of both mandatory and voluntary inspection services, FSIS is proposing to require that establishments receiving mandatory inspection or purchasing voluntary inspection services provide internet access to IPP, as a condition of receiving inspection, provided the establishment already has internet service adequate for FSIS needs. Again, FSIS would not require establishments or facilities without internet access to purchase it or to upgrade the internet services they have, if inadequate for FSIS use.

FSIS is proposing to amend sections 9 CFR 307.1, 350.7(d), 352.5(d), 354.221(g), 362.5(d), 381.36(a), 533.3, 590.136(a), and 592.95(b) to require official meat, poultry, Siluriformes fish establishments and egg products plants, as well as facilities receiving voluntary services, including identification services, export certification, and voluntary exotic animal and poultry inspection, that have internet services, to provide FSIS IPP with internet access for the purposes of conducting and recording inspection verification activities. Consistent with the regulations providing that small establishments requiring less than one full-time inspector need not furnish FSIS with office space, lighting, heat, janitor services, and lockers, under this proposal, FSIS would not require establishments or facilities without internet access to purchase it or to upgrade the internet services they have, if inadequate for FSIS use.

In addition, FSIS is proposing to update 9 CFR 307.1 and 381.36(a) to change the title of the FSIS approving officials to Frontline Supervisors because FSIS no longer uses the title Circuit Supervisors. FSIS also proposes to change the use of the word “shall” to “must” in 9 CFR 307.1 and 381.36(a).

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This proposed rule has been designated as a “non-significant” regulatory action under section 3(f) of E.O. 12866. Accordingly, the rule has not been reviewed by the Office of Management and Budget (OMB) under E.O. 12866.

If this rule is finalized, FSIS does not expect any additional industry or Agency costs, because FSIS would not require establishments without internet access to purchase the services or to upgrade services that are not adequate for FSIS's use. FSIS would have cost savings by reducing the costs of providing internet access to FSIS IPP at establishments.

Internet connectivity benefits establishments and FSIS by facilitating FSIS verification activities. Internet access lets FSIS IPP more efficiently transmit or receive critical information ( e.g., receiving information on test results, submitting data on establishment operations, updating establishment profile information, and facilitating global trade).

FSIS would benefit through reduced payments for internet connection. FSIS spends on average $6.6 million  1 annually providing IPP with various forms of internet connection, such as direct or wireless local area network (LAN), and wireless solutions at approximately 1,500 establishments as well as additional mobile wireless solutions for IPP on patrol assignments. Of the approximate 6,500 active establishments, FSIS estimates that approximately 6,000 to 6,300 establishments have email addresses, 2 which we assume means that these establishments have internet connection. The Agency is seeking comment on the level of internet connectivity at establishments that currently maintain internet services. If the Agency is able to use internet provided by these establishments, it would result in an upper bound savings of $6.6 million annualized at the 7 percent discount rate over ten years.

FSIS expects any cost associated with this proposed rule to be de minimis. Since most establishments have email addresses, FSIS expects most establishments to have internet connectivity adequate for FSIS needs. Such establishments would likely be able to provide internet service to FSIS without a significant burden or additional costs to do so. FSIS requests comments on the number and types of establishments or facilities receiving mandatory or purchasing voluntary inspection services that do not purchase internet services at all, do not purchase internet services adequate for FSIS needs, or could not provide IPP access to internet services without accruing significant costs, as well as any cost estimates for providing IPP with access to the establishment's existing internet services.

The FSIS Administrator has made a preliminary determination that this proposed rule, if finalized, would not have a significant economic impact on a substantial number of small entities in the United States, as defined by the Regulatory Flexibility Act (5 U.S.C. 601), because any costs associated with the rule would be de minimis. FSIS would only require small businesses to provide internet access to FSIS IPP if the business has internet service and it's adequate for FSIS's use by IPP.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under this rule: (1) All State and local laws and regulations that are inconsistent with this rule will be preempted; (2) no retroactive effect will be given to this rule; and (3) no administrative proceedings will be required before parties may file suit in court challenging this rule.

There are no new paperwork or recordkeeping requirements associated with this proposed rule under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Each USDA agency is required to comply with 7 CFR part 1b of the Departmental regulations, which supplements the National Environmental Policy Act regulations published by the Council on Environmental Quality. Under these regulations, actions of certain USDA agencies and agency units are categorically excluded from the preparation of an Environmental Assessment (EA) or an Environmental Impact Statement (EIS) unless the agency head determines that a particular action may have a significant environmental effect (7 CFR 1b.4(a)). FSIS is among the agencies categorically excluded from the preparation of an EA or EIS (7 CFR 1b.4(b)(6)).

FSIS has determined that this proposed rule would not create any extraordinary circumstances that would result in this normally excluded action having a significant effect on the human environment. Therefore, this action is appropriately subject to the categorical exclusion for FSIS programs and activities under 7 CFR 1b.4.

FSIS and the U.S. Department of Agriculture (USDA) are committed to achieving the purposes of the E-Government Act (44 U.S.C. 3601, et seq. ) by, among other things, promoting the use of the internet and other information technologies and providing increased opportunities for citizen access to Government information and services, and for other purposes.

Pursuant to the Congressional Review Act at 5 U.S.C. 801 et seq., the Office of Information and Regulatory Affairs has determined that this proposed rule is not a “major rule,” as defined by 5 U.S.C. 804(2).

Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this Federal Register publication on-line through the FSIS web page located at: http://www.fsis.usda.gov/federal-register.

FSIS also will make copies of this publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, and other types of information that could affect or would be of interest to our constituents and stakeholders. The Constituent Update is available on the FSIS web page. Through the web page, FSIS is able to provide information to a much broader, more diverse audience. In addition, FSIS offers an email subscription service which provides automatic and customized access to selected food safety news and information. This service is available at: http://www.fsis.usda.gov/subscribe. Options range from recalls to export information, regulations, directives, and notices. Customers can add or delete subscriptions themselves and have the option to password protect their accounts.

No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.

To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at http://www.ocio.usda.gov/sites/default/files/docs/2012/Complain_combined_6_8_12.pdf, or write a letter signed by you or your authorized representative.

Send your completed complaint form or letter to USDA by mail, fax, or email:

Mail: U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue SW, Washington, DC 20250-9410.

Fax: (202) 690-7442.

Email: program.intake@usda.gov.

Persons with disabilities who require alternative means for communication (braille, large print, audiotape, etc.), should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

For the reasons set out in the preamble, FSIS is proposing to amend 9 CFR Chapter III as follows:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2021-0105; Project Identifier MCAI-2020-01422-R” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this proposal because of those comments.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to https://www.regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this proposal.

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Mahmood G. Shah, Aviation Safety Engineer, Fort Worth ACO Branch, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; phone: 817-222-5538; email: mahmood.g.shah@faa.gov. Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0272, dated December 13, 2018 (EASA AD 2018-0272) (also referred to as the Mandatory Continuing Airworthiness Information, or the MCAI), to correct an unsafe condition for all Airbus Helicopters Model SA330J helicopters.

This proposed AD was prompted by the failure of a second stage planet gear installed in the MGB of an Airbus Helicopters Model EC225LP helicopter. Airbus Helicopters Model SA330J helicopters have a similar design, therefore, these models may be subject to the unsafe condition revealed on the Model EC225LP helicopter. The FAA is proposing this AD to address failure of a second stage planet gear installed in the MGB, which could result in failure of the MGB and subsequent loss of control of the helicopter. See the MCAI for additional background information.

EASA AD 2018-0272 describes procedures for repetitively inspecting the MGB particle detector and the MGB bottom housing (oil sump) for metal particles, analyzing any metal particles that are found, and replacement of the MGB if necessary. This material 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.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to the bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI referenced above. The FAA is proposing this AD because the FAA evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in EASA AD 2018-0272, described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this proposed AD.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA initially worked with Airbus and EASA to develop a process to use certain EASA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has since coordinated with other manufacturers and civil aviation authorities (CAAs) to use this process. As a result, EASA AD 2018-0272 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2018-0272 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in the EASA AD does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in the EASA AD. Service information specified in EASA AD 2018-0272 that is required for compliance with EASA AD 2018-0272 will be available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-0105 after the FAA final rule is published.

The FAA considers this proposed AD interim action. If final action is later identified, the FAA might consider further rulemaking then.

The FAA estimates that this proposed AD affects 15 helicopters of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA estimates the following costs to do any necessary on-condition replacements that would be required based on the results of any required actions. The FAA has no way of determining the number of helicopters that might need these on-condition replacements:

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.

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:

(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 proposes to amend 14 CFR part 39 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would expand the availability of RNAV in the central United States and improve the efficient flow of air traffic within the NAS by lessening the dependency on ground-based navigation.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA Docket No. FAA-2021-0054; Airspace Docket No. 20-AGL-34) and be submitted in triplicate to the Docket Management Facility (see ADDRESSES section for address and phone number). You may also submit comments through the internet at https://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2021-0054; Airspace Docket No. 20-AGL-34.” The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified comment closing date will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at https://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at https://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the office of the Operations Support Group, Central Service Center, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177.

This document proposes to amend FAA Order 7400.11E, Airspace Designations and Reporting Points, dated July 21, 2020 and effective September 15, 2020. FAA Order 7400.11E is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11E lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

In 2003, Congress enacted the Vision 100—Century of Aviation Reauthorization Act (Pub. L. 108-176), which established a joint planning and development office in the FAA to manage the work related to the Next Generation Air Transportation System (NextGen). Today, NextGen is an ongoing FAA-led modernization of the nation's air transportation system to make flying safer, more efficient, and more predictable.

In support of NextGen efforts to improve the safety and efficiency of the NAS, as well as transition the NAS from a ground-based to a satellite-based Performance Based Navigation (PBN) system, the FAA is proposing to establish RNAV routes T-322, T-392, T-403, and T-405 to provide additional PBN enroute structure. This action would reduce air traffic control (ATC) sector workload and complexity, reduce pilot-to-controller communication, assist ATC when non-radar procedures are required, and increase NAS capacity in the areas of the new RNAV T-routes.

Additionally, the proposed T-routes would compensate for the previously removed airway segments of VOR Federal airways due to the Sioux City, IA; Park Rapids, MN; and Huron, SD, VORs being decommissioned effective February 25, 2021. The new T-routes would also provide Instrument Flight Rules (IFR) pilots that are equipped for RNAV PBN additional ATS route options for navigating around areas of heavy aviation activity and in areas of limited or no radar coverage. Visual Flight Rules (VFR) pilots, equipped with RNAV PBN, who elect to navigate via ATS routes, could also take advantage of the proposed RNAV T-routes.

The new routes will also assist in reducing workload and sector complexity for air traffic controllers, facilitate reduction of air to ground communications, and assist in increasing the efficiency and capacity of the NAS.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 to establish RNAV routes T-322, T-392, T-403, and T-405. The proposed new T-routes are described below.

T-322: T-322 is a new RNAV route that extends between the Rapid City, SD, VOR/Tactical Air Navigation (VORTAC) and the Redwood Falls, MN, VOR/Distance Measuring Equipment (VOR/DME). This T-route provides enroute routing over VOR Federal airway V-26.

T-392: T-392 is a new RNAV route that would extend between the MZEEE, IA, waypoint (WP) located near the Sioux City, IA, VORTAC and the GRSIS, MN, WP located near the Fairmont, MN, DME.

T-403: T-403 is a new RNAV route that would extend between the GENEO, MN, WP located near the Darwin, MN, VORTAC and the BLUOX, MN, fix located 40 NM North of the Park Rapids, MN, DME. This T-route would provide enroute routing adjacent to VOR Federal airway V-171 between the Darwin, MN, VORTAC and the Alexandria, MN, VOR/DME; and overlapping VOR Federal airway V-175 between the Alexandria, MN, VOR/DME and the BLUOX, MN, fix.

T-405: T-405 is a new RNAV route that would extend between the FIITS, SD, WP located near the Yankton, SD, VOR/DME and the GICHI, ND, WP located near the Devils Lake, ND, VOR/DME. This T-route would provide enroute routing adjacent to VOR Federal airway V-159 between the Yankton, SD, VOR/DME and the Huron, SD, DME; enroute routing adjacent to VOR Federal airway V-15 between the Huron, SD, DME and the Aberdeen, SD, VOR/DME; and enroute routing adjacent to VOR Federal airway V-170 between the Aberdeen, SD, VOR/DME and the Devils Lake, ND, VOR/DME.

United States RNAV T-routes are published in paragraph 6011 of FAA Order 7400.11E, dated July 21, 2020, and effective September 15, 2020, which is incorporated by reference in 14 CFR 71.1. The RNAV routes listed in this document would be subsequently published in the Order.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

1. Under the Commission's regulations, a data provider (a market participant that reports transaction data to price index developers) must submit accurate and factual information to price index developers, and not knowingly submit false or misleading information or omit material information. 1 Pursuant to the Commission's Safe Harbor Policy, which is currently set forth in the Commission's Policy Statement on Natural Gas and Electric Price Indices, 2 if the data provider can demonstrate that it has adopted and followed the standards for reporting set forth in the Commission's Policy Statement, it will benefit from a rebuttable presumption that it has submitted its transactions accurately, timely, and in good faith. The Commission proposes to codify its Safe Harbor Policy in its regulations. The proposed change does not modify the existing policy and, together with the proposed Revised Policy Statement that the Commission is issuing concurrently, is intended to promote voluntary reporting of wholesale natural gas and electricity transactions to price index developers. 3

2. To codify the Safe Harbor Policy, we specifically propose to amend 18 CFR 35.41(c), 284.288(a), and 284.403(a) of the Commission's regulations by adding language to indicate: (1) That there will be a rebuttable presumption of accuracy, timeliness, and good faith for data providers who submit transactions to price index developers in a manner consistent with the Policy Statement; and (2) that inadvertent reporting errors by such data providers will not constitute violations of those regulations.

3. Natural gas indices play a vital role in the energy industry, as they are used to price billions of dollars of natural gas and electricity transactions annually in both the physical and financial markets. A natural gas index is a weighted average price derived from a set of fixed-price  4 natural gas transactions within distinct geographical boundaries that market participants voluntarily report to a price index developer. 5

4. Natural gas indices serve as a proxy for the locational cost of natural gas in the daily and monthly markets, as many market participants reference index prices in their physical and financial transactions. Interstate natural gas pipelines, Independent System Operators (ISOs), and Regional Transmission Organizations (RTOs) reference natural gas indices in their FERC-jurisdictional tariffs for various terms and conditions of service. State commissions also use natural gas indices as benchmarks when reviewing the prudence of natural gas or electricity purchases. Finally, many natural gas financial derivative contracts used in hedging and speculation settle against the natural gas price indices.

5. Given that natural gas price index developers use physical fixed-price natural gas transactions to calculate the price of published natural gas indices, it is important that the market for these transactions be robust, liquid, and transparent. The Commission's investigation into the 2000-2001 Western Energy Crisis revealed problems in how published natural gas price indices were generated that “facilitate[ed], rather than discourage[d], manipulation and collusion.”  6 Recognizing the need to restore confidence in natural gas price indices, the Commission began an exhaustive analysis of these and related issues in the form of multiple staff white papers, two technical conferences, and a follow up staff workshop.

6. At the conclusion of these efforts, the Commission issued its Policy Statement to explain what the Commission expects of natural gas and electric price indices and under what conditions the Commission will give industry participants safe harbor protection for good faith reporting of transaction data to entities that develop price indices. 7 In particular, the Commission [created] a rebuttable presumption that companies and individuals that report trade data to price index developers in accordance with the standards adopted here are doing so in good faith, and will not be investigated or subjected to administrative penalties for inadvertent mistakes made in the course of reporting energy transaction information. 8 Thus, the Commission adopted the Safe Harbor Policy for the explicit purpose of encourag[ing] more industry participants to contribute to the formation of price indices. 9 Consistent with the Policy Statement, the Commission has not investigated or imposed penalties on any companies for inadvertent reporting errors.

7. After the Policy Statement was issued, the natural gas volumes market participants reported to price index developers increased, which resulted in greater confidence in those indices. However, after 2010, the estimated traded volume of fixed-price natural gas transactions reported to price index developers began to decline significantly. 10 FERC Form No. 552 data show that the estimated volume of fixed-price transactions voluntarily reported to price index developers declined by approximately 54% from 2010 until 2019. 11 At the same time that fixed-price reporting to price index developers decreased, the traded volume of natural gas transactions that referenced natural gas indices, known as index gas, increased. For example, FERC Form No. 552 data showed that index gas increased from 69% of the traded volumes in the U.S. physical natural gas market in 2010 to 82% in 2019. Figure 1 shows the estimated physical natural gas volumes reported to index developers based on FERC Form No. 552 data.

8. Commission staff held a technical conference on June 29, 2017, which addressed index liquidity and transparency issues and potential actions the Commission could consider taking in order to increase both the volume of transactions reported to natural gas price index developers and the transparency of the physical natural gas price formation process. 12 In post technical conference comments, a number of commenters suggested that placing the Safe Harbor Policy into the Commission's regulations would help to provide regulatory certainty which in turn would lead to an increase in the number of data providers that would report their transactions to price index developers. 13

9. The Commission proposes to revise three sections of its regulations, 18 CFR 35.41(c), 284.288(a), and 284.403(a). Although each of the three sections applies to different jurisdictional entities, they set forth almost identical requirements. Section 35.41(c) applies to persons with or seeking authorization to engage in sales for resale of electric energy, capacity or ancillary services at market-based rates under section 205 of the Federal Power Act. Section 284.288(a) applies to interstate pipelines that offer transportation service under subparts B or G of part 284. Section 284.403(a) applies to sales for resale by persons that are not interstate pipelines. Each section currently requires that data providers reporting transactions to price index developers provide accurate, factual information, and not knowingly submit false or misleading information or omit material information.

Reporting must be performed consistent with the procedures set forth in the Policy Statement. 14 The regulations do not incorporate the Safe Harbor Policy.

10. Currently, the Safe Harbor Policy is set forth in the Policy Statement, which advises the public about how the Commission intends to exercise its discretionary authority. The Policy Statement, however, is non-binding. 15 Although the Commission has never pursued enforcement action against a market participant for inadvertent errors in reporting transactions to price index developers, concerns nonetheless remain among market participants that this potential exists. 16

11. To alleviate these concerns and encourage voluntary reporting in order to promote more robust, liquid, and transparent indices, we propose to add identical language to 18 CFR 35.41(c), 284.288(a), and 284.403(a) to incorporate the Safe Harbor Policy into the regulatory text. This proposed language states that “[f]or a Seller who reports in a manner consistent with procedures set forth in the Policy Statement, there will be a rebuttable presumption that information submitted to publishers of electricity or natural gas indices is accurate, timely, and submitted in good faith.” The proposed revisions also state that “[i]nadvertent reporting errors by a Seller who reports in a manner consistent with the procedures set forth in the Policy Statement shall not constitute violations of this provision.” This action will eliminate any concerns that the Commission might choose to depart from the Safe Harbor Policy as set forth in the Policy Statement.

12. By incorporating the Safe Harbor Policy into the Commission's regulations, the Commission will provide certainty to the regulated industry that, provided that the data provider reports in a manner consistent with the Policy Statement, inadvertent errors in reporting will not constitute violations of the Commission's regulations requiring accurate reporting and will not give rise to civil penalties. Under the proposed language, for data providers that report consistent with the Policy Statement, only intentional or reckless behavior may give rise to liability. Based on industry comments during and after the technical conference, 17 we believe that incorporation of the Safe Harbor Policy into the Commission's regulations will provide greater certainty to market participants and will lead to increased voluntary reporting to price index developers.

13. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment. 18 The Commission has categorically excluded certain actions from these requirements as not having a significant effect on the human environment. 19 The actions proposed here fall within the categorical exclusions in the Commission's regulations for rules that are clarifying, corrective, or procedural, and for information gathering, analysis, and dissemination. 20 Therefore, an environmental assessment is unnecessary and has not been prepared in this Notice of Proposed Rulemaking.

14. The Regulatory Flexibility Act of 1980 (RFA)  21 generally requires a description and analysis of proposed rules that will have significant economic impact on a substantial number of small entities. The RFA does not mandate any particular outcome in a rulemaking. It only requires consideration of alternatives that are less burdensome to small entities and an agency explanation of why alternatives were rejected.

15. The Small Business Administration (SBA) size standards for natural gas and electric utilities are based on the number of employees, including affiliates. Under the SBA's standards, some data providers will fall under the following categories and associated size thresholds: Natural Gas Distribution and Electric Power Distribution, both at 1000 employees. 22

16. Because data providers who choose to report their transactions are already required to submit data consistent with the Policy Statement in order to receive the protections of the Safe Harbor Policy, the Commission estimates that there will be no additional compliance burden as a result of this proposed rule.

17. Based on the above, the Commission certifies that implementation of the proposed rule will not have a significant impact on a substantial number of small entities. Accordingly, no initial regulatory flexibility analysis is required.

18. The Commission invites interested persons to submit comments on the matters and issues proposed in this notice to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due June 1, 2021. Comments must refer to Docket No. RM20-7-000, and must include the commenter's name, the organization they represent, if applicable, and their address.

19. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing formats. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. Commenters filing electronically do not need to make a paper filing.

20. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426.

21. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters.

22. The Commission provides all interested persons an opportunity to view and/or print the contents of this document via the internet through the Commission's Home Page ( http://www.ferc.gov ). At this time, the Commission has suspended access to the Commission's Public Reference Room, due to the proclamation declaring a National Emergency concerning the Novel Coronavirus Disease (COVID-19), issued by the President on March 13, 2020.

23. From the Commission's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.

24. User assistance is available for eLibrary and the Commission's website during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at public.referenceroom@ferc.gov.

In consideration of the foregoing, the Commission is proposing to amend parts 35 and 284, chapter I, title 18, Code of Federal Regulations, as follows.

Invitation to Comment: We invite you to submit comments regarding the proposed priority and requirements. To ensure that your comments have maximum effect in developing the notice of final priority and requirements, we urge you to identify clearly the specific section of the proposed priority and requirements that each comment addresses.

In addition to your general comments and recommended clarifications, we seek input on the proposed design of the training. We are particularly interested in your feedback on the following questions:

1. Do the four specialty areas identified in the proposed priority meet the current needs in the field of interpreting for individuals who are deaf, hard of hearing, or DeafBlind? Are there other specialty areas that should be considered? If so, please provide information to demonstrate need and explain why.

2. Are there challenges to providing an induction experience for all participants as a requirement for successfully completing the program? For example, is there a limited number of potential induction opportunities that might be available for participants? If so, please provide information to describe any challenges and options for how induction opportunities may be reasonably incorporated into the training program.

We invite you to assist us in complying with the specific requirements of Executive Orders 12866 and 13563 and their overall requirement of reducing regulatory burden that might result from the proposed priority and requirements. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program.

During and after the comment period, you may inspect all public comments about the proposed priority and requirements by accessing Regulations.gov . Due to the COVID-19 pandemic, the Department buildings are currently not open. However, upon reopening, you may also inspect the comments in person in Room 5059, 550 12th Street SW, Washington, DC, between the hours of 9:30 a.m. and 4:00 p.m., Eastern Time, Monday through Friday of each week except Federal holidays. Please contact the person listed under FOR FURTHER INFORMATION CONTACT .

Assistance to Individuals With Disabilities in Reviewing the Rulemaking Record: On request, we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for the proposed priority and requirements. If you want to schedule an appointment for this type of accommodation or auxiliary aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT .

Purpose of Program: Under the Rehabilitation Act of 1973, as amended (Rehabilitation Act), the Rehabilitation Services Administration (RSA) makes grants to public and private nonprofit agencies and organizations, including institutions of higher education, to establish interpreter training programs or to provide financial assistance for ongoing interpreter programs to train a sufficient number of qualified professionals (as defined in 34 CFR 396.4) throughout the country.

The purpose of the program is to train interpreters to effectively interpret and transliterate using spoken, visual, and tactile modes of communication; ensure the maintenance of the interpreting skills of qualified interpreters; and provide opportunities for interpreters to raise their skill level in order to meet the highest standards approved by certifying associations and to effectively meet the communication needs of individuals who are deaf or hard of hearing and individuals who are DeafBlind.

Program Authority: 29 U.S.C. 709(c) and 772(a) and (f).

Proposed Priority: This notice contains one proposed priority.

The Department has long been committed to improving the delivery of vocational rehabilitation (VR) services to, and the employment outcomes of, individuals with disabilities who are deaf, hard of hearing, or DeafBlind  1 and has funded interpreter training projects since 1974. In 2016, the Department funded four national projects to provide specialized training in the areas of dysfluent language competencies, behavioral health interpreting, pro-tactile American Sign Language (ASL), and preparing interpreters, especially those from communities of color and heritage signing backgrounds, to work in legal settings. The Department also funded a national project to provide experiential learning to novice interpreters and reduce the length of time between graduation and certification. Information about the 2016 interpreter training projects may be accessed through the Rehabilitation Services Administration's National Clearinghouse of Rehabilitation Training Materials (NCRTM) at ncrtm.ed.gov.

Further, the Rehabilitation Act continues to support the communication needs of individuals who are deaf, hard of hearing, or DeafBlind. The Rehabilitation Act requires that the State Plan establish and maintain minimum standards to ensure the availability of personnel within the designated State unit, to the maximum extent feasible, trained to communicate in the native language or mode of communication of an applicant or eligible individual (section 101(7)(C)). When this is not possible, such as for individuals who are deaf, hard of hearing, or DeafBlind, the services of interpreters trained to communicate using the native language or mode of communication of an applicant or eligible individual are used. Section 302(f) of the Rehabilitation Act addresses the need for providing interpreting services for individuals who are deaf, hard of hearing, or DeafBlind by authorizing grants for the training of interpreters.

To continue to effectively meet the communication needs of individuals who are deaf, hard of hearing, or DeafBlind, the Department proposes a priority to provide training to working interpreters ( i.e., interpreters with a baccalaureate degree in ASL-English who possess a minimum of three years of relevant experience as an interpreter) in one of four specialty areas. This priority focuses on preparing interpreters to work in VR settings. According to the RSA-911, 2 in program year (PY) 2019, 7.43 percent (64,860) of all VR participants (872,643) were deaf, hard of hearing, or DeafBlind. Specifically, 2.6 percent were deaf, 4.68 percent were hard of hearing, and 0.15 percent were DeafBlind. The RSA-911 data show that interpreter services were used by 1,404 VR participants who achieved competitive integrated employment (CIE) outcomes in PY 2019, including 1,144 participants who are deaf, 231 participants who are hard of hearing, and 29 participants who are DeafBlind.

Interpreter training in specific specialty areas is necessary to meet the ongoing and diverse needs of individuals who are deaf, hard of hearing, and DeafBlind. A 2015 Trends Survey documented 47 percent of service providers reporting an increase in the number of deaf individuals pursuing education or employment in specialized fields (Schafer and Cokely, 2016). Interpreters must be able to understand and communicate proficiently using technical vocabulary and highly specialized discourse in a variety of complex specialty areas in both ASL and English.

In order to effectively train working interpreters in specific specialty areas, we propose a priority that incorporates high-quality remote learning, 3 field induction, mentorship, and coaching. Unlike spoken language majors, which often include a semester or year-long study abroad experience, many interpreting majors do not offer immersion opportunities. Classroom instruction alone is inadequate, and meaningful program interaction with diverse communities of deaf people is missing from most programs (Cokely and Cogen, 2015).

Experiential learning theory, a learning style first introduced by David Kolb in 1984, describes the value of learning through experience and meaningful program interaction, such as induction, mentorship, and coaching (Bentley-Sassaman, 2014). Working interpreters can apply Kolb's experiential learning theory to enhance their professional growth and skills. Under Kolb's approach, there are four key abilities that create an effective learning cycle. These abilities include concrete experience (CE), reflective observation (RO), abstract conceptualization (AC), and active experimentation (AE). To achieve CE, working interpreters must involve themselves fully, openly, and without bias in new experiences. To achieve RO, working interpreters must reflect on and observe their experiences from many perspectives. To achieve AC, working interpreters must create concepts that integrate their observations into logically sound theories. Lastly, to achieve AE, working interpreters must use these theories to make decisions and solve problems (Bentley-Sassaman, 2014).

According to Bentley-Sassaman (2014), the majority of learning for ASL-English interpreters takes place in the field, where they have hands-on experiences and the guidance of a mentor. Mentoring refines skills development through observation and reflection and builds on the experiential learning component. Under a mentor's supervision, students have the opportunity to apply foundational knowledge and then gather feedback from their mentor and apply it to their next activity or interpretation assignment.

Through the proposed priority, the Secretary intends to award one national project in each of the following specialty areas: (1) Increasing skills of novice interpreters, (2) trilingual interpreting (including Spanish) ( i.e., language fluency in first, second, and third languages with one of the three languages being ASL), and (3) advanced skills for working interpreters. In addition, the Secretary intends to award four national projects in a fourth specialty area, a field-initiated project.

With respect to Specialty Area (1) (increasing skills for novice interpreters), according to the National Interpreter Education Center (NIEC), challenges facing interpreter training and education programs are prevalent. In 2015, NIEC conducted a study to examine the disconnect between interpreter education and work-readiness (Cogen and Cokely, 2015). Its findings suggest that interpreter training and education programs have, in many instances, failed to produce ASL-fluent graduates. Graduates are generally unable to understand the English message and interpret it accurately from spoken English to ASL and from ASL to spoken English in a manner that is fluent and matches the source message in content, tone, and register.

Data gathered from the 2015 NIEC trends survey and two needs assessments revealed that newly graduated interpreters have a limited working ability to communicate in ASL and that the gap between interpreter graduation and readiness to work continues to grow. Furthermore, trends survey data suggests that recent graduates from interpreter education programs do not have access to structured post-graduation pathways, which threatens work-readiness and puts interpreters and their future consumers at an increased risk (Cogen and Cokely, 2015).

With respect to Specialty Area (2) (trilingual interpreting (including Spanish)), in 2015, the Census Bureau estimated that over 60 million U.S. residents speak a language other than English at home. In a 2018 study, the University of Texas at Austin examined 60 interpreter training programs (ITPs) across nine States and one territory, with 31 programs responding, to examine the incorporation of curricula focused on Spanish language within interpreter settings in the U.S. (Quinto-Pozos et al., 2018). The study revealed that 90 percent of interpreter training program students were from non-English speaking homes, 88 percent of whom were from Spanish speaking homes. Only 32 percent of respondents indicated that their ITP contained content and training on interpreting in settings where languages other than ASL and English are used. None of the ITPs surveyed offered certificates or degree programs specifically focused on languages other than ASL or English.

The National Consortium for Interpreter Education Centers (NCIEC), funded by the Department, developed curricula for professional development in Spanish-influenced settings, and the National Multicultural Interpreter Program (NMIP) created curriculum for interpreters in multicultural and multilingual settings (Quinto-Pozos et al., 2018). The NCIEC and NMIP curricula are publicly available and free of cost. Survey results from the University of Texas at Austin indicated that only 45 percent of ITPs reported using NCIEC curricula, and only 33 percent of ITPs reported using NMIP curriculum, respectively. Despite the accessibility of the curricula, only a minority of ITPs currently incorporate the content into their programs. We also believe there may be parts of the country where multiple languages are spoken by deaf individuals and individuals who are hard of hearing. Therefore, applicants may address multiple language combinations in their proposals.

With respect to Specialty Area (3) (advanced skills for working interpreters), it is crucial for interpreters to continue to improve their working knowledge and skills and stay up to date on ethical considerations in interpreting. According to the RSA-911 data, in program year (PY) 2019 employment outcomes for individuals who are deaf, hard of hearing, and DeafBlind were 60 percent, 82 percent, and 47 percent, respectively. Employment outcomes for the overall population of individuals receiving VR services was 43 percent in PY 2019. As employment possibilities and opportunities for individuals who are deaf, hard of hearing, and DeafBlind grow, more individuals are pursuing advanced degrees and working in specialized professions. Cogen and Cokely (2015) documented a notable increase in individuals who are deaf or hard of hearing and are pursuing careers in specialized areas such as law, medicine, engineering, and high-tech industry. For this reason, interpreters with advanced skills and knowledge of highly specialized terminology, discourse, and emerging areas of ASL are needed. Currently, it is difficult to find interpreters who have the knowledge and linguistic range in both English and ASL to interpret in highly specialized areas. The 2015 NIEC trends survey indicated that 87 percent of respondents found it difficult to find qualified interpreters (Schafer and Cokely, 2016). Furthermore, interpreters working in advanced and specialized professions must be trained and competent in ethical considerations of advanced study and specialized professions.

With respect to Specialty Area (4) (field initiated), projects must be designed to develop training for interpreters in areas where no training currently exists, where the existing training is no longer current or relevant, or to enhance training in an area that has received increased emphasis under the Rehabilitation Act. Field-initiated topics that would not be eligible under this proposed priority and requirements include, for example, topics focusing on educational interpreting for pre-kindergarten (pre-k) to grade 12 students and other topics that are not related to interpreting for individuals receiving VR services. While there is emphasis in the Workforce Innovation and Opportunity Act (WIOA) on providing services and support to transition-age youth, the purpose of this program is to train interpreters to serve consumers in the rehabilitation process. The Department has other resources to support programs preparing pre-K to grade 12 personnel, including, for example, grant awards under the Individuals with Disabilities Education Act Personnel Preparation in Special Education, Early Intervention, and Related Services program, which includes funding to train personnel who serve school-age children with low incidence disabilities, such as visual impairments, hearing impairments, and simultaneous visual and hearing impairments.

Under Specialty Area (4), the Department's interest is in, but is not limited to, the following topic areas:

Topic area (a) (interpreting in healthcare including interpreting for hard-to-serve populations) would address the increased need for interpreters within medical, behavioral, and mental health settings as well as settings where domestic violence or substance abuse issues are present. Individuals who are deaf, hard of hearing, and DeafBlind need access to both interpreting services and qualified interpreters trained in specialized medical settings. In the 2015 NCIEC Trends Report, 89 percent of respondents indicated that it is “somewhat” to “very difficult” to find interpreters who have the skills, knowledge, and training to effectively serve individuals with mental health concerns (Cogen and Cokely, 2015).

In 2009, a comparison report was developed reflecting a deaf consumer needs assessment from two composite groups (Cokely and Winston, 2009). Data was collected through 1,250 electronic surveys from deaf consumers through the National Association for the Deaf (NAD). Data was also collected through focus group and interview sessions with 61 individual consumers not typically associated with NAD membership. In both composite groups, the highest number of respondents identified “health” settings as the most difficult, as well as the most important, for securing interpreting services. Cokely and Winston (2009) explain the need to better understand health-related sub-settings and the various factors that make it difficult to attain interpreter services in those settings so access to both interpreting services and qualified interpreters may be increased.

Topic area (b) (interpreting for individuals who are DeafBlind) would build upon the 2016 grant to train interpreters to meet the growing needs of individuals who are DeafBlind and increase their autonomy and self-determination. Techniques for interpreting for individuals who are DeafBlind include, print on palm (POP), tactile sign language, tracking, tactile fingerspelling, Tadoma, pro-tactile American sign language (PTASL), and others. Interpreting for individuals who are DeafBlind is a skilled practice that requires the expansion of the typical interpreter role. Qualified DeafBlind interpreters provide visual environmental information, modify the signing space, manage the distance between consumer and interpreter, regulate pacing, and understand the importance of appropriate clothing in accommodating individuals who are DeafBlind (Interpreter Resources, 2020). As of 2018, there were approximately 150 Interpreter Training Programs in the United States, only six of which offered coursework dedicated to DeafBlind interpreting (DeafBlind Interpreting, 2018). The lack of learning opportunities has yielded a very limited pool of interpreters with expertise in this specialization. Most ITP students exit educational programs with limited or no skills in the specialization (DeafBlind Interpreting, 2018). A grant under this topic area could focus on any one of the stated techniques for interpreting for individuals who are DeafBlind.

Topic area (c) (atypical language interpreting) would build on the 2016 grant to improve services for individuals who are not skilled users of ASL. At the time of this notice, 31 working interpreters have completed the program of study and induction, another 19 have completed training, and 18 are engaged in induction. To date, 3,304 working interpreters enrolled in self-directed training with 1,121 having successfully completed at least one of the four modules. There is also a need to expand such services to the senior deaf population who may use older signs or suffer from dementia, and to individuals from foreign countries who do not yet use ASL fluently.

For topic area (d) (other topics), applicants must demonstrate the need for the training in a proposed new topic area or, in areas for which there is existing training, demonstrate that the existing training is not adequately meeting the needs of interpreters working in the field of VR.

Nothing in the proposed priority and requirements would alter an applicant's or grantee's obligations to comply with nondiscrimination requirements in the U.S. Constitution and Federal civil rights laws, including nondiscrimination on the basis of race or ethnicity, among other bases.

The purpose of this proposed priority is to fund projects that provide training to working interpreters in one of four specialty areas to effectively meet the communication needs of individuals who are deaf or hard of hearing and individuals who are DeafBlind receiving VR services. The projects must achieve, at a minimum, the following outcomes: An increase in the number of interpreters who are trained to work with deaf VR consumers who require specialized interpreting; and an increase in the number of interpreters trained in specialty areas who obtain or advance in employment in the areas for which they were prepared.

The Department proposes the following requirements for this activity. We may apply one or more of these requirements in any year in which this activity is in effect. RSA encourages innovative approaches to meet these requirements:

(a) Demonstrate, in the narrative section of the application under “Significance of the Project,” how the proposed project will address the need for sign language interpreters in a specialty area. To address this requirement, applicants must:

(1) Present applicable data demonstrating the need for interpreters in the specialty area for which training will be developed by the project and delivered in at least three distinct, noncontiguous geographic areas, which may include the U.S. Territories;

(2) Present baseline data for the number or estimated number of working interpreters currently trained in the specialty area. In the event that an applicant proposes training in a new specialty area that does not currently exist or for which there are no baseline data, the applicant should provide an adequate explanation of the lack of reliable data and may report zero as a baseline;

(3) Explain how the project will increase the number and quality of working interpreters in a specialty area who demonstrate the necessary competencies to meet the communication needs of individuals who are deaf, hard of hearing, or DeafBlind. To meet this requirement, the applicant must—

(i) Identify competencies that working interpreters must demonstrate in order to provide high-quality services in the identified specialty area using practices that demonstrate a rationale or are based on instruction supported by evidence, when available; and

(ii) Demonstrate that the identified competencies are based on practices that demonstrate a rationale or are supported by evidence that will result in effectively meeting the communication needs of individuals who are deaf, hard of hearing, or DeafBlind.

(b) Demonstrate, in the narrative section of the application under “Quality of Project Design,” how the proposed project will—

(1) Develop a new training program or stand-alone modules and conduct a pilot by the end of the first year of the project. Applicants must provide justification in their application if they determine additional time may be necessary to fully develop and pilot the curricula before the end of the first year. The training program or stand-alone modules must contain remote learning (as defined in this priority) experiences that advance engagement and learning ( e.g., synchronous and asynchronous professional learning, professional learning networks or communities, and coaching) that could also be incorporated into an existing baccalaureate or graduate degree ASL-English (or ASL-other spoken language) program, as appropriate. Applicants may choose to award continuing education credits (CEUs) or college or master's level credits to participants in the training program. Applicants should note that while pre-service training is not the focus of this program, a variety of resources may be considered (such as available pre-service training material) that may inform, support, or strengthen the development of training for ASL- English interpreter training in specialized areas.

(2) Deliver the training or stand-alone modules remotely to at least three distinct, noncontiguous geographic areas identified in paragraph (a)(1) of these application requirements in years two, three, four and five of the project. Applicants may also deliver in-person training, as appropriate, to support participants' application of knowledge, skills, and competencies gained through online training.

(3) Provide mentoring and coaching to participants, as needed. This may include, but is not limited to, one-on-one instruction to address specific areas identified by an advisor as needing further practice, and providing written feedback from observed interpreting situations, from deaf consumers, from trained mentors, including written feedback from mentoring sessions, and from others, as appropriate;

(4) Develop a self-directed track and make it available to the public for independent remote learning by the end of the second year of the project. Applicants must develop a curriculum guide for each module and make available relevant materials from the training program. Applicants may offer CEUs to participants who successfully complete the self-directed track;

(5) Be based on current research and make use of practices that demonstrate a rationale or are supported by promising evidence (as defined in 34 CFR 77.1). To meet this requirement, the applicant must describe—

(i) How the proposed project will incorporate current research and practices that demonstrate a rationale or are supported by promising evidence in the development and delivery of training and in the development of products and materials;

(ii) How the proposed project will ensure that working interpreters interact with individuals with disabilities who are deaf, hard of hearing, or DeafBlind and have a range of communication skills, from those with limited language skills to those with high-level, professional language skills, as appropriate.

(c) In the narrative section of the application under “Quality of Project Services,” the applicant must—

(1) Demonstrate how the project will ensure equal access and treatment for eligible project participants who are members of groups who have traditionally been underrepresented based on race, color, national origin, gender, age, or disability;

(2) Describe the criteria that will be used to identify applicants for participation in the program, including any pre-assessments that may be used to determine the skill, knowledge base, and competence of the working interpreter;

(3) Describe how the project will outreach  4 to working interpreters, especially working interpreters from rural areas, Indian Tribes, and traditionally underrepresented groups;

(4) Describe how the project will provide feedback, resources, and next steps to applicants who may not be accepted into the program due to insufficient skills, knowledge base, and competence;

(5) Describe the approach that will be used to enable more working interpreters to participate in and successfully complete the training program, specifically participants who need to work while in the program, have child care or elder care considerations, or live in geographically isolated areas;

(6) Describe how the project will incorporate adult learning principles and practices that demonstrate a rationale or are supported by promising evidence for adult learners;

(7) Demonstrate how the project is of sufficient scope, intensity, and duration to adequately prepare working interpreters in the identified specialty area of training. To address this requirement, the applicant must describe how—

(i) The components of the proposed project will support working interpreters' acquisition and enhancement of the competencies identified in paragraph (a)(2)(i) of these application requirements;

(ii) The components of the project will provide working interpreters opportunities to apply their content knowledge in a variety of practical settings;

(iii) The proposed project will establish induction experiences in the specialty area for participants as a requirement for completion in the training program. Applicants may determine the appropriate scope and length of time for the induction;

(8) Demonstrate how the proposed project will actively engage representation from consumers, consumer organizations, and service providers, especially State VR agencies and their partners, interpreters, interpreter educators, and individuals who are deaf, hard of hearing, or DeafBlind in all aspects of the project;

(9) Describe how the project will conduct dissemination, coordination, and communication activities. To meet this requirement, the applicant must—

(i) Disseminate information to working interpreters about training available in specialized areas and to State VR agencies and their partners, American Job Centers, and other workforce partners about how to locate specialized interpreters in their State and local areas;

(ii) Establish a state-of-the-art website or modify an existing website for communicating with participants and stakeholders and ensure that all material developed by the grant and posted on the website are accessible to individuals with disabilities in accordance with section 504 of the Rehabilitation Act of 1973 and title II of the Americans with Disabilities Act, as applicable. The website must provide a central location for all material related to the project, such as reports, training curricula, audiovisual materials, webinars, communities of practice, and other relevant material developed by the grant;

(iii) Disseminate information about the project, including, but not limited to, products such as training curricula, presentations, reports, effective practices for training working interpreters in specialized areas, and other relevant information through the NCRTM;

(iv) In the final year of the budget period, ensure that all training materials have been provided to the NCRTM and the website and IT platform can be sustained, or coordinate with RSA to transition the website to the NCRTM;

(v) Establish one or more communities of practice in the specialty area of training that focuses on project activities in this priority and acts as a vehicle for communication and exchange of information among participants in the program and other relevant stakeholders;

(vi) Communicate, collaborate, and coordinate with other relevant Department-funded projects, as applicable;

(vii) Maintain ongoing communication with the RSA project officer and other RSA staff as required; and

(viii) Communicate, collaborate, and coordinate, as appropriate, with key staff in State VR agencies, such as the State Coordinators for the Deaf; State and local partner programs; consumer organizations and associations, including those that represent individuals who are deaf, hard of hearing, or DeafBlind; and relevant RSA partner organizations and associations; and

(ix) Disseminate to baccalaureate or graduate degree ASL-English programs, as well as to relevant Department-funded programs and Federal partners, as applicable, the training material and products for incorporation into existing curricula, as well as products, effective practices for training working interpreters in specialized areas, challenges and solutions, results achieved, and lessons learned. To satisfy this requirement, the grantee must develop participant guides, implementation materials, toolkits, manuals, and other relevant material for interpreter educators and others, as appropriate, to incorporate or build into existing programs.

(d) In the narrative section of the application under “Quality of the Evaluation Plan,” include an evaluation plan. To meet this requirement, the evaluation plan must describe—

(1) Standards and targets for measuring the effectiveness of the program;

(2) An approach for measuring knowledge, skills, and competencies before and after successful completion of training;

(3) An approach for gathering information from participants about their knowledge of VR, estimated percentage of workload interpreting for VR consumers before specialty training, and estimated percentage of workload interpreting for VR consumers who are deaf, hard of hearing, and DeafBlind after specialty training;

(4) An approach for incorporating oral and written feedback from trainers and deaf consumers, and any feedback from coaching or mentoring sessions conducted with the participants;

(5) Methodologies, including instruments, data collection methods, and analyses that will be used to evaluate the project and how the methods of evaluation will produce quantitative and qualitative data to demonstrate whether the project activities achieved their intended outcomes;

(6) Measures of progress in implementation, including the extent to which the project activities and products have reached their intended recipients, measures of intended outcomes or results in order to evaluate those activities, and how well the goals and objectives of the proposed project, as described in the logic model (as defined in 34 CFR 77.1), have been met; and how well the goals and objectives of the proposed project, as described in its logic model have been met;

(7) How the evaluation will be coordinated, implemented, and revised, as needed, during the project. The applicant must designate at least one individual with sufficient dedicated time, demonstrated experience in evaluation, and knowledge of the project to coordinate and conduct the evaluation. This may include, but is not limited to, making revisions post award in order to reflect any changes or clarifications, as needed, to the model and to the evaluation design and instrumentation with the logic model ( e.g., designing instruments and developing quantitative or qualitative data collections that permit collecting of progress data and assessing project outcomes);

(8) How evaluation results will be used to examine the effectiveness of the training. To address this requirement, applicants must provide an approach for determining—

(i) What practice(s) was most effective in training working interpreters in the respective specialty area; and

(ii) What practice(s) was most effective in narrowing working interpreters' skill gaps and what data demonstrates the practice(s) was effective.

(e) Demonstrate, in the narrative section of the application under “Adequacy of Project Resources,” how—

(1) The proposed project will encourage applications for employment with the project from persons who are members of groups that have historically been underrepresented based on race, color, national origin, gender, age, or disability;

(2) Describe any proposed consultants or contractors named in the application, their areas of expertise, and provide a rationale to demonstrate the need;

(3) Describe costs associated with technology, including, but not limited to, maintaining an online learning platform, state-of-the-art archiving and dissemination platform, and communication tools ( i.e., Microsoft Teams, Zoom, Google, Amazon Chime, Skype, etc.) ensuring all products and services are accessible to individuals with disabilities in accordance with section 504 of the Rehabilitation Act of 1973 and title II of the Americans with Disabilities Act, as applicable, including costs associated with captioning and transcription services, and cybersecurity; and

(4) The applicant and any identified partners have adequate resources to carry out the proposed activities.

(f) Demonstrate, in the narrative section of the application under “Quality of the Management Plan,” how the applicant will ensure that—

(1) The project's intended outcomes, including the evaluation, will be achieved on time and within budget, through—

(i) Clearly defined responsibilities of key project personnel, consultants, and contractors, as applicable;

(ii) Procedures to track and ensure completion of the action steps, timelines, and milestones established for key project activities, requirements, and deliverables;

(iii) Internal monitoring processes to ensure that the project is being implemented in accordance with the established application and project plan; and

(iv) Internal financial management controls to ensure accurate and timely obligations, drawdowns, and reporting of grant funds, as well as monitoring contracts, in accordance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR part 200 and the terms and conditions of the Federal award.

(2) The allocation of key project personnel, consultants, and contractors, as applicable, including levels of effort of key personnel that are appropriate and adequate to achieve the project's intended outcomes, including an assurance that key personnel will have enough availability to ensure timely communications with stakeholders and RSA;

(3) The products and services are of high quality, relevance, and usefulness, in both content and delivery;

(4) The proposed project will benefit from a diversity of perspectives; and

(5) Projects will be operated in a manner consistent with nondiscrimination requirements contained in the U.S. Constitution and the Federal civil rights laws;

(g) Address the following application requirements. The applicant must—

(1) Include, in Appendix A, a logic model that depicts, at a minimum, the goals, activities, outputs, and short and long-term outcomes of the proposed project, and

(2) Include, in Appendix A, person-loading charts and timelines, as applicable, to illustrate the management plan described in the narrative.

When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the Federal Register . The effect of each type of priority follows:

Absolute priority: Under an absolute priority, we consider only applications that meet the priority (34 CFR 75.105(c)(3)).

Competitive preference priority: Under a competitive preference priority, we give competitive preference to an application by (1) awarding additional points, depending on the extent to which the application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)).

Invitational priority: Under an invitational priority, we are particularly interested in applications that meet the priority. However, we do not give an application that meets the priority a preference over other applications (34 CFR 75.105(c)(1)).

We will announce the final priority and requirements in a document in the Federal Register . We will determine the final priority and requirements after considering responses to the proposed priority and requirements, and other information available to the Department. This document does not preclude us from proposing additional priorities, requirements, definitions, or selection criteria, subject to meeting applicable rulemaking requirements.

Note: This document does not solicit applications. In any year in which we choose to use the proposed priority and requirements, we invite applications through a notice in the Federal Register .

Under Executive Order 12866, the Office of Management and Budget (OMB) determines whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by OMB. Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—

(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities in a material way (also referred to as an “economically significant” rule);

(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.

This proposed regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.

We have also reviewed this proposed regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—

(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;

(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.

Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

We are proposing the priority and requirements only on a reasoned determination that their benefits would justify their costs. In choosing among alternative regulatory approaches, we selected those approaches that would maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.

We also have determined that this regulatory action would not unduly interfere with State, local, and Tribal governments in the exercise of their governmental functions.

In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities. The costs would include the time and effort in responding to the priority and requirements for entities that choose to respond. In addition, we have considered the potential benefits of this regulatory action and have noted these benefits in the background section of this document.

Executive Order 12866 and the Presidential memorandum “Plain Language in Government Writing” require each agency to write regulations that are easy to understand.

The Secretary invites comments on how to make the proposed priority and requirements easier to understand, including answers to questions such as the following:

• Are the requirements in the proposed regulations clearly stated?

• Do the proposed regulations contain technical terms or other wording that interferes with their clarity?

• Does the format of the proposed regulations (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce their clarity?

• Would the proposed regulations be easier to understand if we divided them into more (but shorter) sections?

• Could the description of the proposed regulations in the SUPPLEMENTARY INFORMATION section of this preamble be more helpful in making the proposed regulations easier to understand? If so, how?

• What else could we do to make the proposed regulations easier to understand?

To send any comments that concern how the Department could make these proposed regulations easier to understand, see the instructions in the ADDRESSES section.

Regulatory Flexibility Act Certification: The Secretary certifies that this proposed regulatory action would not have a significant economic impact on a substantial number of small entities. The U.S. Small Business Administration Size Standards define “small entities” as for-profit or nonprofit institutions with total annual revenue below $7,000,000 or, if they are institutions controlled by small governmental jurisdictions (that are comprised of cities, counties, towns, townships, villages, school districts, or special districts), with a population of less than 50,000.

The small entities that this proposed regulatory action would affect are public or private nonprofit agencies and organizations, including Indian Tribes and IHEs that may apply. We believe that the costs imposed on an applicant by the proposed priority and requirements would be limited to paperwork burden related to preparing an application and that the benefits of the proposed priority and requirements would outweigh any costs incurred by the applicant. There are very few entities that could provide the type of technical assistance required under the proposed priority and requirements. For these reasons, the proposed priority and requirements would not have a significant impact on a substantial number of small entities.

Paperwork Reduction Act of 1995: The proposed priority and requirements contain information collection requirements that are approved by OMB under OMB control number 1820-0018. The proposed priority and requirements do not affect the currently approved data collection.

Intergovernmental Review: This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.

This document provides early notification of our specific plans and actions for this program.

Accessible Format: On request to the contact person listed under FOR FURTHER INFORMATION CONTACT , individuals with disabilities can obtain this document in an accessible format. The Department will provide the requestor with an accessible format that may include Rich Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, braille, large print, audiotape, or compact disc, or other accessible format.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register . You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov . At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Portable Document Format (PDF). To use PDF, you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov . Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

Pursuant to section 110(a)(1) of the CAA, states are required to submit SIP revisions meeting the applicable requirements of section 110(a)(2) within three years after promulgation of a new or revised NAAQS or within such shorter period as EPA may prescribe. Section 110(a)(2) requires states to address basic SIP elements such as requirements for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the NAAQS. States were previously required to submit such SIPs for the 2008 and 1997 8-hour ozone and the 1997 annual and 2006 24-hour PM 2.5 NAAQS to EPA within three years of promulgation of the respective NAAQS. This action only pertains to sections 110(a)(2)(C), (D)(i)(II), and (J) as they relate to GHG under a SIP-approved PSD permitting program. 1

On July 30, 2012 (77 FR 44485), EPA disapproved portions of Florida's 1997 8-hour ozone infrastructure SIP submission related to GHG PSD permitting requirements under section 110(a)(2)(C) and section 110(a)(2)(J). The disapproval action was a result of Florida not submitting a SIP revision to adopt the appropriate emission thresholds for determining which new stationary sources and modification projects become subject to PSD permitting requirements for their GHG emissions as promulgated in the GHG Tailoring Rule. See 75 FR 31514 (June 3, 2010).

On April 3, 2013 (78 FR 19998), EPA disapproved the portion of Florida's infrastructure SIP submission for both the 1997 annual and 2006 24-hour PM 2.5 NAAQS related to GHG PSD permitting requirements under the section 110(a)(2)(D)(i)(II) provision that prohibits emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state. The Florida SIP for these two standards did not provide adequate legal authority to address the GHG PSD permitting requirements at or above the levels of emissions set forth in the June 3, 2010, GHG Tailoring Rule.

On November 1, 2013 (78 FR 65559), EPA disapproved portions of Florida's 2008 8-hour ozone infrastructure SIP submission related to GHG PSD permitting requirements under section 110(a)(2)(C), the section 110(a)(2)(D)(i)(II) provision that prohibits emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state, and section 110(a)(2)(J). The disapproval was a result of Florida not submitting a SIP revision to adopt the appropriate emission thresholds for determining which new stationary sources and modification projects become subject to PSD permitting requirements for their GHG emissions as promulgated in the June 3, 2010, GHG Tailoring Rule.

In summary, for the 2008 and 1997 8-hour ozone and the 1997 annual and 2006 24-hour PM 2.5 NAAQS, Florida's SIP did not address or provide adequate legal authority for the implementation of a GHG PSD program in Florida.

On May 19, 2014 (79 FR 28607), EPA approved Florida's December 19, 2013, SIP revision that amended the State's definition of “PSD pollutant” to provide Florida with the authority to regulate GHG under its PSD program to establish PSD applicability thresholds for GHG emissions at the same emissions thresholds and in the same timeframes as those specified by EPA in the June 3, 2010, GHG Tailoring Rule. Based on this May 19, 2014 approval, the Florida SIP addressed the GHG requirements for PSD as specified in the June 3, 2010, GHG Tailoring Rule.

This element consists of three sub-elements: Enforcement, state-wide regulation of new and modified minor sources and minor modifications of major sources, and preconstruction permitting of new major sources and major modifications in areas designated attainment or unclassifiable for the subject NAAQS as required by CAA title I part C ( i.e., the major source PSD program).

This proposed action pertains to the PSD permitting for new major sources and major modifications for the 2008 and 1997 8-hour ozone NAAQS. EPA interprets the PSD sub-element to require that a state's infrastructure SIP submission for a particular NAAQS demonstrate that the state has a complete PSD permitting program in place covering the current PSD requirements for all regulated NSR pollutants. A state's PSD permitting program is complete for this sub-element (and (D)(i)(II) and (J) related to PSD) if EPA has already approved or is simultaneously approving the state's implementation plan with respect to all PSD requirements that are due under the EPA regulations or the CAA.

FDEP's August 26, 2020, submission cited a number of SIP provisions to address the major source PSD program. Florida's authority to regulate new and modified sources to assist in the protection of air quality in attainment or unclassifiable areas is established in Chapter 62-210 and Chapter 62-212 of the Florida SIP. Under Florida's SIP, new major sources and major modifications in areas of the State designated attainment or unclassifiable for a NAAQS are subject to a federally-approved PSD permitting program meeting all the current structural requirements of part C of title I of the CAA to satisfy the infrastructure SIP PSD elements. With EPA's May 19, 2014 approval of Florida's SIP revision to address GHG under its PSD program in accordance with the GHG Tailoring Rule, Florida's SIP satisfied current CAA requirements for PSD. Therefore, EPA has made the preliminary determination that Florida's SIP and practices are adequate for PSD permitting related to GHGs for major sources and major modifications as required by section 110(a)(2)(C) for the 2008 and 1997 8-hour ozone NAAQS.

Section 110(a)(2)(D)(i) has two components: 110(a)(2)(D)(i)(I) and 110(a)(2)(D)(i)(II). Each of these components has two subparts resulting in four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS in another state (“prong 1”) and interfering with maintenance of the NAAQS in another state (“prong 2”). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state (“prong 3”), or to protect visibility in another state (“prong 4”).

This proposed action pertains to 110(a)(2)(D)(i)(II)—prong 3 for the 2008 8-hour ozone and the 1997 annual and 2006 24-hour PM 2.5 NAAQS. This requirement may be met by a state's confirmation in an infrastructure SIP submission that new major sources and major modifications in the state are subject to a PSD program meeting current structural requirements of part C of title I of the CAA, or if the state contains nonattainment areas that have the potential to impact PSD in another state, a nonattainment new source review (NNSR) program. 2 A state's PSD permitting program satisfies prong 3 if EPA has already approved or is simultaneously approving the state's implementation plan with respect to all PSD requirements that are due under EPA regulations or the CAA on or before the date of EPA's proposed action on the infrastructure SIP submission.

As explained in the discussion of section 110(a)(2)(C), Florida's SIP contains provisions for the State's PSD program that reflect the required structural PSD requirements to satisfy prong 3 of section 110(a)(2)(D)(i)(II). Florida addresses prong 3 for PSD through Chapters 62-204, 62-210, and 62-212. EPA has made the preliminary determination that Florida's SIP and practices are adequate for interstate transport for PSD permitting of major sources and major modifications related to GHGs for the 2008 8-hour ozone and the 1997 annual and 2006 24- hour PM 2.5 NAAQS for section 110(a)(2)(D)(i)(II) (prong 3).

This element consists of four sub-elements: Consultation requirements of section 121, the public notification requirements of section 127, PSD, and visibility protection. This action pertains to the PSD element of section 110(a)(2)(J) for GHGs for the 2008 and 1997 8-hour ozone NAAQS.

With regard to the PSD element of section 110(a)(2)(J), this requirement is met when a state demonstrates in an infrastructure SIP submission that its PSD program meets all the current requirements of part C of title I of the CAA. As explained in the discussion of section 110(a)(2)(C), Florida's SIP contains provisions in Chapters 62-210 and 62-212 for the State's PSD program that reflect the relevant SIP revisions to satisfy the requirement of the PSD element of section 110(a)(2)(J). EPA has made the preliminary determination that Florida's SIP is adequate for PSD permitting of major sources and major modifications related to GHGs for the 2008 and 1997 8-hour ozone NAAQS for section 110(a)(2)(J).

EPA is proposing to approve revisions to the Florida SIP, submitted on August 26, 2020, related to sections 110(a)(2)(C), (D)(i) (prong 3), and (J) as they relate to new major sources and major modifications in areas of the State designated attainment or unclassifiable. EPA has made the preliminary determination that Florida's SIP and practices are adequate for GHG PSD permitting of major sources and major modifications related to the 2008 8-hour ozone NAAQS for sections 110(a)(2)(C), (D)(i) (prong 3), and (J); the 1997 8-hour ozone NAAQS for sections 110(a)(2)(C) and (J); and the 1997 annual and 2006 24-hour PM 2.5 NAAQS for section 110(a)(2)(D)(i)(ii) prong 3. Consequently, EPA is proposing to convert the previous disapprovals of Florida's infrastructure SIPs related to the CAA GHG PSD permitting requirements for the 2008 and 1997 8-hour ozone and the 1997 annual and 2006 24-hour PM 2.5 NAAQS to full approvals.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. This action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

EPA has explained the reasons for this action in the preamble to the direct final rule. For additional information, see the direct final rule published in the “Rules and Regulations” section of this issue of the Federal Register .

This is a summary of the Commission's document, Public Notice ( Auction 108 Comment Public Notice ), AU Docket No. 20-429, FCC 21-14, adopted on January 13, 2021 and released on January 13, 2021. The complete text of this document, including its attachments, is available on the Commission's website at www.fcc.gov/auction/108 or by using the search function for AU Docket No. 20-429 on the Commission's ECFS web page at www.fcc.gov/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).

1. By the Auction 108 Comment Public Notice, the Commission seeks comment on the procedures to be used for Auction 108, the auction of approximately 8,300 geographic overlay licenses in the 2.5 GHz band. The Commission seeks comment on whether to use a single-round auction format with user-defined package bidding, or a simultaneous multiple-round (SMR) auction format.

2. Auction 108 will offer geographic overlay licenses for unassigned spectrum in the 2.5 GHz (2496-2690 MHz) band. With overlay licenses, licensees obtain the rights to geographic area licenses “overlaid” on top of the existing incumbent licenses, 2.5 GHz Report and Order, 84 FR 57343, October 25, 2019. 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., circular Geographic Service Areas with a 35-mile radius) of incumbent licensees. If an incumbent licensee in a county cancels or terminates its license, then 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. The Commission will offer up to three blocks of spectrum—49.5 megahertz, 50.5 megahertz, and 16.5 megahertz blocks, respectively—licensed on a county basis. Specifically, the first license block will include channels A1-A3, B1-B3, C1-C3 (49.5 megahertz); the second license block will include channels D1-D3, the J channels, and channels A4-G4 (50.5 megahertz); and the third license block will include channels G1-G3 and the relevant K channels (16.5 megahertz of contiguous spectrum and 1 megahertz of the K channels associated with the G channel group). New overlay licenses in the Educational Broadband Service (EBS) portion of the 2.5 GHz band will be issued for 10-year, renewable license terms. A licensee in this band may provide any services permitted under terrestrial fixed or mobile allocations, as set forth in the non-Federal Government column of the Table of Frequency Allocations in 47 CFR 2.106.

3. The specific inventory of overlay licenses available in Auction 108 will be determined by the results of the Rural Tribal Priority Window. During the Rural Tribal Priority Window, federally recognized Tribes were given the opportunity to submit applications to acquire new 2.5 GHz licenses for currently unassigned white space spectrum to provide broadband service on rural Tribal lands before the remaining unassigned spectrum is made generally available through competitive bidding. The Rural Tribal Priority Window opened on February 2, 2020, and the original deadline was extended by 30 days to close on September 2, 2020. The Commission received over 400 applications through the Rural Tribal Priority Window and the Wireless Telecommunications Bureau (WTB) has already granted over 150 of these applications. Based on review of applications received in the Rural Tribal Priority Window, the Office of Economics and Analytics (OEA), in conjunction with WTB, will release a public notice announcing the final inventory of 2.5 GHz band overlay licenses to be offered in Auction 108. This public notice will be released in advance of the deadline for the submission of short-form applications to bid in Auction 108 so that potential applicants can make informed decisions about whether to apply in light of information as to existing incumbents and potential Tribal licensees. Commission staff aims to process all pending Rural Tribal Priority Window applications prior to announcing the final auction inventory; however, there may be Tribal applications that remain pending at the time the auction inventory is announced. Potential bidders in Auction 108 should continue to investigate all factors that may affect each license on which they seek to bid throughout the auction process, including potential encumbrances that may result from pending Tribal applications.

4. Concurrent with the release of the Auction 108 Comment Public Notice, OEA and WTB have made available a file listing all county and frequency block combinations potentially available for Auction 108, subject to the results of the ongoing review of applications submitted during the Rural Tribal Priority Window. This file is listed as an “Attachment A” file on the Auction 108 website at www.fcc.gov/auction/108. The file listing available county and frequency block combinations does not include blocks or counties that are fully encumbered by existing licenses.

5. OEA and WTB will also make available resources to assist applicants in conducting due diligence research regarding potential encumbrances in the band prior to the release of the public notice announcing the final auction inventory. In addition to existing incumbents in the band, the pending Rural Tribal Priority Window applications represent the maximum potential additional encumbrances that may affect the licenses available in the auction. These resources will include a mapping tool to help identify and view existing licenses and Rural Tribal Priority Window applications in the Commission's Universal Licensing System (ULS) database. The mapping tool will be updated to reflect changes due to the grant or dismissal of any pending Tribal applications prior to the auction. Potential applicants are reminded, however, that this tool will not represent complete licensing information; all information should be confirmed in ULS for any specific license or area. More information about Rural Tribal Priority Window applications, including a current mapping tool to help identify the location of pending, accepted for filing, and granted applications, is available at www.fcc.gov/rural-tribal-window-updates. The licensing information provided on this web page does not represent complete licensing information. All information should be confirmed in ULS for any specific license or area.

6. Notwithstanding Commission resources described in the Auction 108 Comment Public Notice, each potential bidder is solely responsible for investigating and evaluating all technical and marketplace factors that may have a bearing on the potential uses of a license that it may seek in Auction 108, including the availability of unassigned white space in any particular market. In addition to the typical due diligence considerations that the Commission encourages of bidders in all auctions, the Commission calls particular attention in Auction 108 to potential encumbrances due to existing licenses and the Rural Tribal Priority Window issues described above, which may impact the licenses available in Auction 108. Each applicant should closely follow releases from the Commission concerning these issues and consider carefully the technical and economic implications for commercial use of the 2.5 GHz band. The Commission makes no representations or warranties about the use of this spectrum for particular services, or about the information in Commission databases that is furnished by outside parties. Each applicant should be aware that a Commission auction represents an opportunity to become a Commission licensee, subject to certain conditions and regulations. This includes the established authority of the Commission to alter the terms of existing licenses by rulemaking, which is equally applicable to licenses awarded by auction. A Commission auction does not constitute an endorsement by the Commission of any particular service, technology, or product, nor does a Commission license constitute a guarantee of business success.

7. In the 2.5 GHz Report and Order, the Commission decided to conduct any auction of new 2.5 GHz band licenses in conformity with the amended part 1 rules. The Commission's part 1 rules require each applicant seeking to bid to acquire licenses in a spectrum auction to provide certain information in a short-form application (FCC Form 175), including ownership details and numerous certifications. Part 1, subpart Q's, competitive bidding rules also contain a framework for the implementation of a competitive bidding design, application and certification procedures, reporting requirements, and the prohibition of certain communications. The rules and requirements proposed in this section would apply in either a single bidding round auction or an SMR auction, unless clearly indicated otherwise.

8. In addition to the certifications already required under 47 CFR 1.2105, the Commission proposes to require any applicant seeking to participate in Auction 108 to certify in its short-form application, under penalty of perjury, that it has read the public notice adopting procedures for Auction 108 that will be released in advance of the short-form deadline, and that it has familiarized itself with those procedures and the requirements for obtaining a license and operating facilities in the 2.5 GHz band. The Commission believes that this requirement would help ensure that the applicant has reviewed the procedures for participation in the auction process and has investigated and evaluated those technical and marketplace factors that may have a bearing on its potential use of any licenses won at auction. Consequently, this requirement will promote an applicant's successful participation and will minimize its risk of defaulting on its auction obligations. As with other required certifications, an auction applicant's failure to make the required certification in its short-form application by the applicable filing deadline would render its application unacceptable for filing, and its application would be dismissed with prejudice. The Commission seeks comment on this proposal. The Commission also seeks comment on whether there are additional steps it should take with respect to the filing of short-form applications to further ensure and promote auction integrity.

9. Consistent with the Commission's decisions in the Updating Part 1 Report and Order, 80 FR 56764, September 18, 2015, the Commission seeks comment on establishing reasonable caps on the total bidding credit amount that an eligible small business, very small business, or rural service provider may be awarded for Auction 108. The Commission administers its bidding credit programs to promote small business and rural service provider participation in auctions and in the provision of spectrum-based services.

10. Eligibility for the small business bidding credit is determined according to a tiered schedule of small business size definitions that are based on an applicant's average annual gross revenues for the relevant preceding period, and which determine the size of the bidding credit discount. In the 2.5 GHz Report and Order, the Commission determined that eligibility for the small business bidding credit in auctions of new licenses in the 2.5 GHz band would be defined using two of the thresholds of the standardized schedule of small business sizes. Specifically, the Commission determined that an entity with average annual gross revenues for the preceding five years not exceeding $55 million would be designated as a “small business” eligible for a 15% bidding credit, and that an entity with average annual gross revenues for the preceding five years not exceeding $20 million would be designated as a “very small business” eligible for a 25% bidding credit. The Commission further determined that entities providing commercial communication services to a customer base of fewer than 250,000 combined wireless, wireline, broadband, and cable subscribers in primarily rural areas would be eligible for the 15% rural service provider bidding credit. The Commission defined “rural area” as a county with a population density of 100 persons or fewer per square mile.

11. To protect the integrity of the bidding credit program and to mitigate the incentives for abuse, the Commission, in the Updating Part 1 Report and Order, established a process to implement a reasonable cap on the total bidding credit amount that an eligible small business or rural service provider may be awarded in any auction, based on an evaluation of the expected capital requirements presented by the particular service and inventory of licenses being auctioned. The Commission determined that bidding credit caps would be implemented on an auction-by-auction basis, but resolved that, for any particular auction, the total amount of the bidding credit cap for small businesses would not be less than $25 million, and the bidding credit cap for rural service providers would not be less than $10 million. For Auctions 101-103, 105, and 107, the Commission adopted a $25 million cap on the total bidding credit amount that may be awarded to an eligible small business in each auction and a $10 million cap on rural service provider bidding credits in each auction.

12. The Commission proposes to adopt the same bidding credit caps for Auction 108. As the Commission did for its recent auctions of spectrum for next-generation wireless services, it believes that the range of potential use cases suitable for spectrum in the 2.5 GHz band, combined with the relatively small geographic areas for new flexible-use overlay licenses of white space, may permit deployment of smaller-scale networks with lower total costs. Moreover, past auction data suggest that the proposed caps will allow the substantial majority of eligible businesses in the auction to take advantage of the bidding credit program. The Commission therefore believes that its proposed caps will promote the statutory goals of providing meaningful opportunities for bona fide small businesses to participate in the auction and in the provision of spectrum-based services, without compromising its responsibility to prevent unjust enrichment and ensure efficient and intensive use of spectrum.

13. Similarly, the Commission proposes to adopt a $10 million cap on the total bidding credit amount that may be awarded to an eligible rural service provider in Auction 108. An entity is not eligible for a rural service provider bidding credit if it has already claimed a small business bidding credit. Based on its experience with other spectrum auctions, the Commission anticipates that a $10 million cap on rural service provider bidding credits will not constrain the ability of any rural service provider to participate fully and fairly in Auction 108. In addition, to create parity in Auction 108 among eligible small businesses and rural service providers competing against each other in smaller markets, the Commission proposes a $10 million cap on the overall bidding credit amount that any winning small business bidder may apply to licenses won in counties located within any partial economic area (PEA) with a population of 500,000 or less.

14. The Commission seeks comment on these proposed caps. Specifically, do the expected capital requirements associated with operating in the 2.5 GHz band, the potential number and value of new overlay licenses, past auction data, or any other considerations justify a higher cap for either type of bidding credit? Moreover, are there convincing reasons for not maintaining parity with the bidding credit caps adopted in previous auctions of spectrum suitable for 5G? Commenters are encouraged to identify unique circumstances and characteristics of this mid-band auction that should guide us in establishing bidding credit caps, and to provide specific, data-driven arguments in support of their proposals.

15. The Commission reminds applicants applying for designated entity bidding credits that they should take due account of the requirements of the Commission's rules and implementing orders regarding de jure and de facto control of such applicants. These rules include a prohibition, which applies to all applicants (whether or not they are seeking bidding credits) starting at the short-form application filing deadline, against changes in ownership of the applicant that would constitute an assignment or transfer of control. Under 47 CFR 1.2107(c), the winning bidder must be the entity that files the post-auction long-form application. Pursuant to 47 CFR 1.929(a)(2), any substantial change in ownership or control of an applicant is classified as a major amendment. Applicants should not expect to receive any opportunities to revise their ownership structure after the filing of their short- and long-form applications, including making revisions to their agreements or other arrangements with interest holders, lenders, or others in order to address potential concerns relating to compliance with the designated entity bidding credit requirements. This policy will help to ensure compliance with the Commission's rules applicable to the award of bidding credits prior to the start of bidding in this auction, which will involve competing bids from those who do and do not seek bidding credits, and thus preserves the integrity of the auction process. In furtherance of this policy, applicants will not be permitted to change their bidding credit type selection ( i.e., from small business to rural service provider, or vice versa) after the short-form deadline. The Commission also believes that this will meet its objectives in awarding licenses through the competitive bidding process.

16. Section 1.2105(c)(1) of the Commission's rules, 47 CFR 1.2105(c)(1), provides that, subject to specified exceptions, after the short-form application filing deadline, all applicants are prohibited from cooperating or collaborating with respect to, communicating with or disclosing, to each other or any nationwide provider of communications services that is not an applicant, or, if the applicant is a nationwide provider, any non-nationwide provider that is not an applicant, in any manner the substance of their own, or each other's, or any other applicants' bids or bidding strategies (including post-auction market structure), or discussing or negotiating settlement agreements, until after the down payment deadline. Section 1.2105(c)(5)(i), 47 CFR 1.2105(c)(5)(i), defines “applicant” as including all officers and directors of the entity submitting a short-form application to participate in the auction, all controlling interests of that entity, as well as all holders of partnership and other ownership interests and any stock interest amounting to 10% or more of the entity, or outstanding stock, or outstanding voting stock of the entity submitting a short-form application.

17. Nationwide Providers Subject to the Prohibition of Certain Communications. The operation of the rule prohibiting certain communications requires that the Commission identify each “nationwide provider” for purposes of § 1.2105(c)(1) in connection with each auction. Accordingly, consistent with the procedures adopted for prior auctions of flexible-use licenses for advanced wireless services, the Commission proposes to identify AT&T, T-Mobile, and Verizon as “nationwide providers” for the purpose of implementing its competitive bidding rules in Auction 108, including § 1.2105(c), the rule prohibiting certain communications. This is consistent with the Commission's identification of nationwide providers in the 2020 Communications Marketplace Report. The Commission seeks comment on this proposal.

18. As an additional safeguard to further prevent the sharing of information about applicants' bids and bidding strategies and to discourage unproductive and anti-competitive strategic behavior, the Commission proposes to limit information available in Auction 108 in order to prevent the identification of bidders placing particular bids until after the bidding has closed. The Commission has instituted limited information procedures in most recent spectrum auctions. While the Commission generally makes available to the public information provided in each applicant's FCC Form 175 following an initial review by Commission staff, it proposes to not make public until after bidding has closed: (1) The licenses that an applicant selects for bidding in its FCC Form 175, (2) the amount of any upfront payment made by or on behalf of an applicant for Auction 108, (3) any applicant's bidding eligibility, and (4) any other bidding-related information that might reveal the identity of the bidder placing a bid.

19. As in past Commission auctions, the Commission will not make public during a bidding round any real-time information on bidding activity. Bidders would have access both during and after a round to information related to their own bidding activity and eligibility. For example, bidders would be able to view their own levels of eligibility and submitted activity through the FCC auction bidding system.

20. After the close of bidding, bidders' license selections, upfront payment amounts, bidding eligibility, bids, and other bidding-related information would be made publicly available.

21. The Commission seeks comment on the above details of its proposal for implementing limited information procedures, or anonymous bidding, in Auction 108. Commenters opposing the use of limited information procedures in Auction 108 should explain their reasoning and propose alternative information rules.

22. In keeping with the Commission's usual practice in spectrum license auctions, the Commission proposes that applicants be required to submit upfront payments as a prerequisite to becoming qualified to bid. As described below, the upfront payment is a refundable deposit made by an applicant to establish its eligibility to bid on licenses. Upfront payments protect against frivolous or insincere bidding and provide the Commission with a source of funds from which to collect payments owed at the close of bidding. The Commission notes that its rules require that any auction applicant that, pursuant to 47 CFR 1.2106(a)(2)(xii), certifies that it is a former defaulter must submit an upfront payment equal to 50% more than the amount that otherwise would be required. With these considerations in mind, the Commission proposes upfront payments based on $0.003 per MHz-pop, with a minimum of $500 per license. Given the uncertain total amount of available white space spectrum in each 2.5 GHz band license pending resolution of Rural Tribal Priority Window applications and other factors, the Commission proposes to base upfront payments on the total potential MHz-pops of each license offered in the auction, rather than on available white space in each block. For the 49.5 megahertz and 50.5 megahertz blocks, the Commission proposes to base the calculation on 50 megahertz. Additionally, when calculating upfront payment amounts, the Commission proposes to round the results of calculations as follows: Results below $1,000 will be rounded down to the nearest $100; results between $1,000 and $10,000 will be rounded down to the nearest $1,000; results between $10,000 and $100,000 will be rounded down to the nearest $10,000; and results above $100,000 will be rounded down to the nearest $100,000. The proposed rounding procedures would lessen the differences between upfront payment amounts for licenses in counties with similar population instead of reflecting relatively small differences in total potential MHz-pops that are not necessarily representative of the available white space.

23. The Commission seeks comment on these upfront payment amounts, which are specified in the Attachment A file on the Auction 108 website at www.fcc.gov/auction/108. If commenters believe that these upfront payment amounts are not reasonable amounts, they should explain their reasoning and suggest an alternative approach.

24. The Commission further proposes that the amount of the upfront payment submitted by a bidder would determine its bidding eligibility in bidding units, which are a measure of bidder eligibility and bidding activity. The upfront payment does not limit the dollar amounts of the bids that a bidder may submit. The Commission proposes to assign each license that is available to be assigned a specific number of bidding units, equal to one bidding unit per $100 of the upfront payment listed in the Attachment A file. The number of bidding units for a given license is fixed and does not change during the auction.

25. Calculating Upfront Payments in the Single-Round Format. To the extent that a bidder wishes to bid on multiple licenses simultaneously, it would need to ensure that its upfront payment provides enough eligibility to cover the total bidding units associated with the licenses that the bidder can win given the bids it intends to submit. Under the single-round approach, a bidder's upfront payment would not be attributed to specific licenses. A bidder may place bids on multiple licenses consistent with its selections in its FCC Form 175, provided that the maximum number of bidding units associated with the licenses that the bidder can win does not exceed its bidding eligibility. Thus, in calculating its upfront payment amount, and hence its bidding eligibility, an applicant must determine the maximum number of bidding units needed to cover licenses that it may wish to win in the auction and submit an upfront payment amount covering that total number of bidding units. The Commission seeks comment on these procedures.

26. Calculating Upfront Payments in the SMR Format. If the Commission adopts the SMR auction format discussed below, a bidder that wishes to bid on multiple licenses simultaneously similarly would need to ensure that its upfront payment provides enough eligibility. A bidder would be able to place bids on multiple licenses, provided that the total number of bidding units associated with those licenses does not exceed its current eligibility. Thus, in calculating its upfront payment amount and hence its initial bidding eligibility under this approach, an applicant must determine the maximum number of bidding units on which it may wish to bid (or hold provisionally winning bids) in any single round, and submit an upfront payment amount covering that total number of bidding units. The Commission seeks comment on this approach to upfront payments under an SMR auction format.

27. For Auction 108, the Commission proposes that, at any time before or during the bidding process, OEA, in conjunction with WTB, may delay, suspend, or cancel bidding in Auction 108 in the event of a natural disaster, technical obstacle, network interruption, administrative or weather necessity, evidence of an auction security breach or unlawful bidding activity, or for any other reason that affects the fair and efficient conduct of competitive bidding. In such a case, OEA would notify participants of any such delay, suspension, or cancellation by public notice and/or through the FCC auction bidding system's announcement function. If the bidding is delayed or suspended, OEA, in its sole discretion, may elect to resume the auction starting from the beginning of the round, or it may cancel the auction in its entirety (subject to the scheduling in due course of another auction for this spectrum). The Commission emphasizes that OEA and WTB would exercise the authority to delay, suspend, or cancel bidding in Auction 108 solely at their discretion. The Commission seeks comment on this proposal.

28. Any winning bidder that defaults or is disqualified after the close of an auction ( i.e., fails to remit the required down payment by the specified deadline, fails to submit a timely long-form application, fails to make full and timely final payment, or is otherwise disqualified) is liable for a default payment under 47 CFR 1.2104(g)(2). This payment consists of a deficiency payment, equal to the difference between the amount of the bidder's winning bid and the amount of the winning bid the next time a license covering the same spectrum is won in an auction, plus an additional payment equal to a percentage of the defaulter's bid or of the subsequent winning bid, whichever is less.

29. The Commission's rules provide that, in advance of each auction, it will establish a percentage between 3% and 20% of the applicable winning bid to be assessed as an additional default payment. The level of this additional payment in each auction will be based on the nature of the service and the licenses being offered.

30. For Auction 108, the Commission proposes to establish an additional default payment of 15%, which is consistent with that adopted for prior auctions of spectrum suitable for 5G and other advanced wireless services. As noted in the Commercial Spectrum Enhancement Act (CSEA)/Part 1 Report and Order, 71 FR 6214, February 7, 2006, defaults weaken the integrity of the auction process and may impede the deployment of service to the public, and an additional default payment of up to 20% will be more effective in deterring defaults than the 3% used in some earlier auctions. At the same time, the Commission does not believe the detrimental effects of any defaults in Auction 108 are likely to be unusually great. In light of these considerations, the Commission proposes for Auction 108 an additional default payment of 15% of the relevant bid. The Commission seeks comment on this proposal.

31. The Commission proposes to conduct Auction 108 using either a single bidding round, after which the auction system will process the bids to determine winning bidders, or a simultaneous multiple-round ascending (SMR) auction format. Under the single-round format, winning bidders would pay the amounts of their winning bids for the licenses they are awarded (less any applicable bidding credit discount). The SMR auction format would offer every license for bid at the same time and consist of successive bidding rounds in which bidders may place bids on individual licenses. Under this format, bidding would remain open on all licenses until bidding stops on every license.

32. The procedures the Commission proposes for the single-round format on which it seeks comment differ from FCC spectrum auctions it has held in the past because the circumstances for Auction 108 differ in many respects from more typical spectrum auction scenarios. However, the Commission also outlines and seeks comment on SMR procedures that may be more familiar to potential auction participants.

33. The Commission notes the delegated authority of OEA to develop auctions jointly with WTB and expects that OEA and WTB will release a technical guide supplementing the information in the Auction 108 Comment Public Notice and including the mathematical details and algorithms of the single-round auction design. The corresponding technical information for an SMR auction is contained in the Auction 108 Comment Public Notice.

34. The Commission seeks comment on use of a single bidding round that would remain open long enough to give bidders ample time to submit, review and potentially resubmit, and confirm their bids. Bids submitted during the round would need to meet the activity rule. After the round closes, the submitted bids would be processed by the bidding system to determine the winning bids.

35. While this format departs from the multiple-round procedures that the Commission typically has used in auctioning spectrum licenses, the inventory of licenses available in Auction 108 will be very large (approximately 8,300 licenses) and, as a result, a multiple-round auction could require a number of months to complete. Although a clock auction of generic blocks with an assignment phase to assign frequency-specific licenses can shorten the duration of a multiple-round auction relative to the Commission's SMR auction format, a clock auction format would not be appropriate here because each overlay license being offered is unique. Within a county, each block has a different amount of bandwidth—though not all frequency blocks are available in all counties—and even where a given frequency block is available in a county, white space may not be available throughout the county due to existing incumbent licensee operations. An SMR auction could last for months, which would require participating bidders to monitor the auction consistently, a resource commitment that is demanding for all bidders, but particularly for smaller entities, many of which the Commission expects will compete in Auction 108. In addition, a longer auction entails a longer prohibited communications quiet period, in which all applicants—including but not limited to all officers and directors of the entity submitting an application and all controlling interests of that entity—are subject to the rule prohibiting certain discussions of bids or bidding strategies. Moreover, smaller entities that are seeking only a limited number of relatively low value licenses may consider such a resource commitment to be too onerous and may choose not to participate in this auction. In contrast, the Commission anticipates that, based on estimated processing time, a single bidding round giving bidders ample time to submit their bids and bid processing could be completed within a week.

36. In addition, a single-round auction format may help overcome some of the inherent advantages of incumbent rights holders in the band and increase overall competition in the auction. Specifically, the Commission seeks comment on using a single-round auction format in the context of the existing licensing and leasing landscape of the 2.5 GHz band where a single entity holds a large share of the spectrum rights. A multiple-round auction will always give a bidder an opportunity to outbid its competitors, and given that the majority license-holder in this band is a nationwide service provider and is likely to be better funded than many other entities that are potentially interested in Auction 108, these other, smaller entities may feel as though they have little chance of winning when competing against the larger license-holder. Moreover, given that the larger entity's interests are geographically broad while the smaller entities tend to have more localized interests, the larger entity would be able to “cost-average” by paying more for some licenses than its stand-alone valuation would otherwise indicate because it would be able to leverage savings from other licenses that it wins at less than its valuation. Other bidders, recognizing these advantages, consequently are likely to be deterred from participating in an auction where they expect that they would have little opportunity to win. Absent the participation of the smaller entities, the advantages to the majority license-holding entity would be even stronger. As a result of the diminished competition in the auction, prices may likely be lower than they would have been had the smaller entities participated. Conversely, in a single-round, pay-as-bid auction, the weak bidder has a better opportunity to win, it is more likely to participate in the auction, and prices can therefore be expected to be closer to the winning bidder's valuation. The Commission asks commenters to consider whether a single-round format would encourage greater participation in this auction than would an SMR auction. Would a smaller entity be more likely to participate if other, possibly larger entities did not always have an opportunity to place a higher bid, as is the case in a multiple-round ascending auction format?

37. The Commission recognizes that a single-round auction precludes the price discovery across licenses that is possible in a multiple-round auction. Price discovery is intended to help inform a bidder's decision to shift its resources across areas as relative prices change over the course of the auction, which is particularly helpful for a bidder with multiple alternative business plans but without sufficient resources to pursue all of them. The single-round auction on which the Commission seeks comment considers the potential losses in efficiency from the price discovery process and, on balance, finds that any losses are likely to be less consequential in this auction than is generally true for spectrum auctions. Based on input in the proceeding and the characteristics of the licenses offered in Auction 108—county-based, with non-uniform and occasionally significant encumbrances across areas, making them less suitable for larger-scale operations—it is the Commission's understanding that the majority of potential bidders in Auction 108 likely will be entities with specific local or regional interests, and therefore, they will not be hampered significantly by a lack of price discovery over multiple rounds for alternative areas. To determine their bid amounts, bidders can incorporate information from significant secondary market activity in the 2.5 GHz band, including through auction or auction-like processes that have been used by incumbents to find interested parties and set prices, as well as data in ULS, and spectrum values from recent mid-band spectrum auctions, such as the recently-concluded Commission auction of Priority Access Licenses in the 3550-3650 MHz Band. Moreover, it has been suggested that smaller operators may have better knowledge of the local landscape and may be able to price their bids more accurately than larger entities without ties to such local rural areas.

38. The bidding procedures the Commission proposes for the single-round format include several mechanisms for ensuring that many important benefits of a multiple-round auction can be accommodated under the single-round format. Importantly, the Commission seeks comment on procedures to ensure that certain potentially critical aggregations of licenses can be bid on with an either/or indicator so that a bidder can indicate that it wishes to be assigned only one of a group of substitutable licenses. This procedure offers a useful advantage that is not feasible in a multiple-round auction where a large number of items precludes flexible package bidding. With these mechanisms, the Commission is confident that bidders can simply and effectively represent their bidding interests in a single-round format.

39. The Commission seeks comment on any specific aspects of this single-round auction with which commenters agree or disagree. In particular, do potential bidders see the time savings of a single-round auction as valuable relative to the SMR auction that could last for several months? Do commenters believe that the single-round format would disproportionately favor one group of bidders or another? Is there any reason to conclude that its understanding of the type of entities likely to participate in Auction 108 is inaccurate or unsupported by the record in the Transforming the 2.5 GHz Band proceeding, WT Docket No. 18-120?

40. Prior to the start of Auction 108, the Commission would make available to bidders various educational materials.

41. Under the single-round auction format, each winning bidder would pay the sum of its winning bid amounts for the licenses it is awarded, less any applicable bidding credit discount. Accordingly, a bidder with bidding credits should bid an undiscounted (full-price) amount for the licenses it wishes to win.

42. The Commission would use a pay-as-bid payment rule to give bidders more certainty about the cost of their winning bids than would a “second price” payment rule, in which the winning bidder would pay a price corresponding to the next best bid or set of bids. In the simple case of an individual item and no package bids, the “second price” would be the second-highest bid. In the context of a combinatorial winner determination process such as the Commission proposes here, the bidding system would compare the revenue of the winning combination of bids with the highest revenue possible absent the winning bidder's bid, and subtract the difference from the winning bidder's bid to determine the second, or Vickrey, price. A pay-as-bid rule may also be useful in discouraging undesirable strategic behavior. In a second-price auction where the highest bidder would win but pay only the amount of the second-highest bid, a dominant entity may overbid on a large group of licenses if it anticipates that competing bids for most of those licenses would be considerably lower, so that expected gains would outweigh any losses. In contrast, with a pay-as-bid rule, each bidder would have to pay the amount of its high bid for each license it wins, discouraging such aggressive strategies by entities with interests in a large number of areas. Moreover, given the very large inventory of licenses offered in Auction 108, the computation of “second prices” (or Vickrey prices) would be exceedingly complex and potentially intractable within a reasonable amount of processing time. The determination of a single Vickrey price involves solving an additional combinatorial optimization problem, which could take a significant amount of time to solve. The Commission has computed Vickrey prices during the assignment phase of several recent spectrum clock auctions where, in each assignment phase market, the number of licenses being assigned was less by orders of magnitude and only a relatively small number of bidders were being assigned licenses.

43. Might a resource-constrained smaller bidder be more inclined to compete at auction because it has more certainty over the amount it might pay? Or might a small entity be more likely to participate because a dominant entity will have less incentive to strategically overbid than in a second-price auction? The Commission seeks comment on the use of a pay-as-bid payment rule.

44. Consistent with its proposal to determine bidding eligibility in bidding units based on the amount of a bidder's upfront payment, the Commission proposes to determine bidding activity in terms of bidding units, as well. Each license will be assigned a certain number of bidding units. For a single round of bidding, the Commission would limit a bidder's total bidding activity such that the maximum number of bidding units associated with the licenses that the bidder can win does not exceed its total eligibility in bidding units.

45. To implement this procedure, when a bidder uploads a set of bids via the internet to the FCC auction bidding system, the system would calculate the maximum bid amount and the maximum number of bidding units associated with the bids. If the bids do not exceed the bidder's eligibility and otherwise are valid bids, the bidding system would accept the bid submission. If the submitted bids exceed the bidder's eligibility, the bids would be rejected and new bids could be submitted before the close of the round. In addition, during the bidding round, the bidding system would inform the bidder of a running total of its activity in terms of bidding units and the total value of all of its submitted bids. The Commission asks for comment on these procedures.

46. As part of the pre-bidding process for each auction, section 309(j) of the Communications Act of 1934, as amended, mandates that the Commission prescribes methods for establishing reasonable minimum bid amounts for licenses subject to auction unless such bid amounts are not in the public interest. Accordingly, the Commission proposes to establish minimum bid amounts for Auction 108.

47. Given the potential lack of accurate information on available white space in the 2.5 GHz band, the Commission proposes to establish the minimum bid amounts in Auction 108 using the total potential MHz-pops of each license offered in the auction, rather than on available white space in each block. The Commission proposes to base these calculations on $0.006 per MHz-pop, with a minimum of $500 per license. For the 49.5-megahertz and 50.5-megahertz blocks, the Commission proposes to base the calculation on 50 megahertz. Additionally, when calculating minimum bid amounts, the Commission proposes to round the results of calculations as follows: Results below $1,000 will be rounded down to the nearest $100; results between $1,000 and $10,000 will be rounded down to the nearest $1,000; results between $10,000 and $100,000 will be rounded down to the nearest $10,000; and results above $100,000 will be rounded down to the nearest $100,000. The proposed rounding procedures would lessen the differences between minimum bid amounts for licenses in counties with similar population instead of reflecting relatively small differences in total potential MHz-pops that are not necessarily representative of the available white space. The Commission seeks comment on these minimum bid amounts, which are specified in the Attachment A file on the Auction 108 website at www.fcc.gov/auction/108. If commenters believe that these minimum bid amounts would result in unsold licenses or are not reasonable amounts, they should explain their reasoning and propose an alternative approach. Commenters should support their claims with valuation analyses and suggested amounts or formulas for minimum bids. The Commission does not propose a separate aggregate reserve price, below which the auction would not conclude, and it seeks comment on that proposal. The Commission is not aware at this time of circumstances that require establishment of an aggregate reserve price in the public interest for this auction of overlay licenses in the 2.5 GHz band and propose only the minimum bids that it discusses here.

48. For the single-round format, the Commission proposes a flexible form of package bidding, which would allow bidders to submit bids for packages of multiple licenses within the same county or for multiple geographic area licenses, i.e., licenses covering multiple metropolitan counties within a specified geographic region.

49. Packages of Multiple Blocks within a County. For the single-round format, the Commission proposes to allow a bidder to submit package bids for two or three licenses in a single county, in order to give the bidder more control in this single-round auction over the number and combination of licenses that it may win. By contrast, in a multiple-round auction, a bidder has greater ability to shape the combination of licenses that it is assigned. The Commission proposes these limited package bidding procedures for the single-round format to address a bidder's need to win at least two or three blocks in a county if it wins any blocks. This would enable a bidder to ensure that if it won any licenses in a county, it would win sufficient licenses to facilitate high-bandwidth services and applications. A package bid would consist of a group of licenses and a single price that would apply to the entire group. The bidding system would determine the winning combination of licenses taking into account that all or none of the licenses in a package bid are to be assigned to the bidder.

50. For example, if a bidder is interested in winning any two license blocks in a county, but not a single license or all three licenses, it could submit three package bids for each of the two-license block combinations in the county. The bidder would be ensured of winning two licenses if it wins any of them.

51. Packages of Multiple Metropolitan Counties. The Commission proposes procedures to permit certain package bids that include licenses in multiple metropolitan counties, as long as the counties in a bid are within a given geographic region or area. The Commission proposes to define “metropolitan” for this purpose as those counties that are not subject to the small-market bidding credit cap. Counties located within any PEA with a population of 500,000 or less are subject to the small-market bidding credit cap. Thus, metropolitan counties are those located within any PEA with a population greater than 500,000.

52. For the single round format, the Commission proposes to limit an individual package bid further to include licenses only in metropolitan counties that lie within the same Major Economic Area (MEA). This limitation would enable packaging across the interdependent counties in a metropolitan market, would prevent the submission of overly broad packages, and recognizes the need to maintain bidding and computational manageability. There are 51 MEAs nationwide; MEAs are intermediate in size between Economic Areas (EAs) and Regional Economic Area Groupings (REAGs). In addition, the Commission will license Guam and the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands, and American Samoa, which have been assigned Commission-created MEA numbers 49-51, respectively. Therefore, a single package bid could include licenses in two or more metropolitan counties in a given MEA; the non-metropolitan counties in the MEA could be bid for only as single counties (but potentially as packages of two or three licenses in a single county). Finally, for computational reasons, the Commission proposes that the total number of package and/or individual bids that a bidder may submit involving metropolitan counties in an MEA is limited to 250. If the number of individual licenses available in the metropolitan counties in a single MEA exceeds 250, an exception to the limit would permit a bidder to submit a bid for each individual license. The Commission does not propose a limit on individual county-level bids, package or otherwise, that do not involve metropolitan counties.

53. A package bid would consist of a set of licenses in a set of counties and a single price applicable to the entire set of licenses in those counties. Within the proposed limits the Commission sets forth here, a bidder could include any combination of counties in a package— i.e., packages would not be pre-defined.

54. In proposing these procedures for package bidding for the single-round format, the Commission aims to balance the needs of smaller entities with very localized interests with the requirements of entities that wish to create larger networks. Permitting packages of the licenses within a county provides a simple mechanism for a bidder to guard against winning an undesirable combination or number of licenses in a single county, which is likely to be useful to all bidders. Allowing multiple-county packages of licenses only for metropolitan areas addresses the needs of entities with larger networks to ensure that they do not win an undesired patchwork of more heavily populated areas. In such areas, counties of smaller and greater competitiveness may make winning such patchworks potentially more likely. At the same time, limiting the scope of multiple-county packages to metropolitan counties within a single MEA reduces the potential for a bidder to leverage a highly-valued aggregation in one area in order to win licenses in other areas where bidders for individual counties may be the more efficient users of those licenses. Moreover, limits on package bids help reduce complexity for the bidder and enhance computational feasibility.

55. The Commission seeks comment on these procedures to allow bidding for packages of multiple licenses within a single county and for packages of bids for multiple metropolitan counties within an MEA. The Commission asks commenters to consider how changes they suggest to these procedures might impact the different needs of the wide variety of potential bidders that may be interested in Auction 108. In particular, the Commission seeks comment on the use of MEAs as the relevant “region” for limiting the metropolitan counties that can be included in a single package bid. Would a smaller aggregation, such as EAs, be more appropriate? Alternatively, would larger areas, such as REAGs be preferable? The Commission also asks commenters to address the proposed definition of “metropolitan.” Would an alternative definition of more heavily populated counties be simple to implement and consistent with other definitions used in this and other recent Commission spectrum auctions?

56. Because a single-round auction does not give a bidder an opportunity to move its bids from one area to another as prices change, or from one block to another within an area, as does a multiple-round auction, the Commission proposes to allow a bidder to indicate that two or more of its bids are to be treated as mutually exclusive by the bidding system when assigning winning bids. In other words, a bidder can indicate that it wants to win only one of the bids in a group of bids it specifies. For example, if a bidder is interested in winning one of the three licenses available in a county, it could submit separate bids for each of the three licenses and indicate that it wishes to win only one of them. A bidder's upfront payment amount and its activity and eligibility calculations would be based on the largest set of bids that the bidder can win taking into account that some bids may be mutually exclusive.

57. The Commission proposes that a bidder may indicate that it wants the bidding system to consider the bids in a specified group as mutually exclusive as long as either all the bids in the group involve the same non-metropolitan county or all the bids in the group involve only metropolitan counties in the same MEA. The Commission further seeks comment on allowing each bid to be included in at most one mutually exclusive group of bids. The Commission proposes these limits on either/or bids to ensure that the combinatorial optimization winner determination problem is feasible, given the extremely large number of potential combinations of bids that must be considered. A group of mutually exclusive bids can include individual and/or package bids.

58. The Commission asks commenters to consider whether these procedures to allow a bidder to use an either/or indicator to instruct the bidding system to assign only one of a specified group of bids would be helpful in managing the bidder's potential winnings if this single-round auction format is adopted.

59. To determine winning bids in the single-round format, the Commission proposes that after the single bidding round, the bidding system would use optimization software to determine the value-maximizing combination of (package and individual) bids, taking into account each bidder's mutually exclusive either/or bids. A bid of a bidder with a bidding credit would be considered in the optimization at its undiscounted bid price. In contrast, for payment purposes, the bidding credit discount for a bidder with a bidding credit will be subtracted from the bidder's total winning bids, applying any bidding credit caps, to determine its net winning bids.

60. The Commission also seeks comment on assigning each individual or package bid a pseudo-random number upon submission, such that, if there are ties among the value-maximizing combinations of bids, the bidding system would determine the winning bids by finding the set that maximizes the sum of pseudo-random numbers.

61. Because there is a very small but positive probability that the optimization software would be unable to provide an exact solution to the problem of determining the value-maximizing combination of bids within a reasonable amount of time, the Commission seeks comment on use of an “escape clause.” Under the proposed escape clause, if the optimization software does not yield an exact solution within 48 hours, then the winning set of bids would be determined by the best solution identified to that point. Winning bidders would pay the amounts of their winning bids, consistent with the pay-as-bid pricing rule.

62. The Commission seeks comment on these proposed bid processing procedures for this novel single-round auction with package bidding, including the tie-breaking mechanism, the escape clause generally, and the proposed 48-hour computational period.

63. The Commission also seeks comment on using its SMR auction format for this auction. This type of auction offers every license for bid at the same time and consists of successive bidding rounds in which bidders may place bids on individual licenses. The SMR procedures on which the Commission seeks comment below are consistent with those adopted in prior Commission SMR auctions. Typically, bidding remains open on all licenses until bidding stops on every license. This format would not provide for package bidding because of the significant complexity that this would present, for both bidders and the bidding system, given that the 2.5 GHz band plan has a potential inventory of approximately 8,300 licenses.

64. The Commission has predominantly used an SMR format for spectrum auctions, and therefore this format is familiar to potential bidders that have participated in past Commission spectrum auctions. An SMR format allows price discovery, so that a bidder may observe how prices differ across areas or frequency blocks, and to modify its bidding strategies accordingly. In addition, multiple rounds of bidding may give a bidder more confidence in its bid amounts in cases where there is a significant “common” value element to the licenses being auctioned beyond the particular value to the bidder in its business plan.

65. The Commission seeks comment on whether using an auction design that is familiar to bidders is important in helping potential participants feel more comfortable with participating in Auction 108. The Commission also asks whether allowing price discovery through a multiple round auction format is particularly important in this auction, and whether such benefits would warrant the additional time required to conduct an SMR auction relative to a single-round. Would such benefits outweigh the potential advantages of a single-round format to smaller entities discussed above?

66. Under the SMR format, Auction 108 would consist of sequential bidding rounds, each of which would be followed by the release of round results. The initial bidding schedule would be announced in a public notice to be released at least one week before the start of bidding. Details on viewing round results, including the location and format of downloadable results files for each round would be included in the same public notice.

67. Under this auction format, the Commission would conduct Auction 108 over the internet using the FCC auction bidding system. Bidders would have the option of placing bids online or by telephone through a dedicated auction bidder line.

68. OEA would retain the discretion to change the bidding schedule in order to foster an auction pace that reasonably balances speed with the bidders' need to study round results and adjust their bidding strategies. This would allow OEA to change the amount of time for bidding rounds, the amount of time between rounds, or the number of rounds per day, depending upon bidding activity and other factors. The large number of licenses available in the 2.5 GHz band implies that the SMR format could involve a large number of bidding rounds, potentially lasting several months. The Commission seeks comment on this approach. Commenters on this issue should address the role of the bidding schedule in managing the pace of the auction, specifically discussing the tradeoffs in managing auction pace by bidding schedule changes, by changing the activity requirements or bid amount parameters, or by using other means.

69. The Commission has discretion to establish stopping rules before or during multiple-round auctions in order to complete the auction within a reasonable time. Under this SMR auction format, the Commission would employ a simultaneous stopping rule approach, which means all licenses remain available for bidding until bidding stops on every license. Specifically, bidding would close on all licenses after the first round in which no bidder submits any new bids, applies a proactive waiver, or withdraws any provisionally winning bids (if bid withdrawals are permitted). Provisionally winning bids are bids that would become final winning bids if the auction were to close in that given round. Under this simultaneous stopping rule, bidding would remain open on all licenses until bidding stops on every license. Consequently, under this approach, it is not possible to determine in advance precisely how long the bidding in Auction 108 would last.

70. Further, OEA would retain the discretion to exercise any of the following stopping options during Auction 108:

Option 1. The auction would close for all licenses after the first round in which no bidder applies a waiver, no bidder withdraws a provisionally winning bid (if withdrawals are permitted in Auction 108), or no bidder places any new bid on a license for which it is not the provisionally winning bidder. Thus, absent any other bidding activity, a bidder placing a new bid on a license for which it is the provisionally winning bidder would not keep the auction open under this modified stopping rule.

Option 2. The auction would close for all licenses after the first round in which no bidder applies a waiver, no bidder withdraws a provisionally winning bid (if withdrawals are permitted in Auction 108), or no bidder places any new bid on a license that already has a provisionally winning bid. Thus, absent any other bidding activity, a bidder placing a new bid on an FCC-held license (a license that does not have a provisionally winning bid) would not keep the auction open under this modified stopping rule.

Option 3. The auction would close using a modified version of the simultaneous stopping rule that combines Option 1 and Option 2 above.

Option 4. The auction would close after a specified number of additional rounds (special stopping rule) to be announced by OEA. If OEA invokes this special stopping rule, it would accept bids in the specified final round(s), after which the auction would close.

Option 5. The auction would remain open even if no bidder places any new bid, applies a waiver, or withdraws any provisionally winning bids (if withdrawals are permitted in Auction 108). In this event, the effect would be the same as if a bidder had applied a waiver. The activity rule would apply as usual, and a bidder with insufficient activity would lose bidding eligibility or use a waiver.

71. Under the SMR format, OEA would exercise these options only in certain circumstances, for example, where the auction is proceeding unusually slowly or quickly, there is minimal overall bidding activity, or it appears likely that the auction will not close within a reasonable period of time or will close prematurely. Before exercising these options, OEA would likely attempt to change the pace of Auction 108. For example, OEA could adjust the pace of bidding by changing the number of bidding rounds per day and/or the minimum acceptable bids. Under this approach, OEA would retain continuing discretion to exercise any of these options with or without prior announcement by OEA during the auction. The Commission seeks comment on these procedures.

72. In order to avoid unduly prolonging the length of the auction, an activity rule requires bidders to bid actively throughout the auction, rather than wait until late in the auction before participating. The bidding system calculates a bidder's activity in a round as the sum of the bidding units associated with any licenses upon which it places bids during the current round and the bidding units associated with any licenses for which it holds provisionally winning bids. Bidders are required to be active on a specific percentage of their current bidding eligibility during each round of the auction. Failure to maintain the requisite activity level will result in the use of an activity rule waiver, if any remain, or a reduction in the bidder's eligibility, possibly curtailing or eliminating the bidder's ability to place additional bids in the auction.

73. Under an SMR auction format, the Commission would consider dividing the auction into at least two stages, each characterized by a different activity requirement. For example, in a first stage, bidders could be required to be active on 80% of their bidding units, while in a later stage, they could be required to be active on 95% of their bidding units. The Commission would also consider conducting the auction in a single stage, potentially with a 100% activity requirement. If the Commission does not conduct a single stage, the auction would start in Stage One. OEA would then have the discretion to advance the auction to another stage by announcement during the auction. In exercising this discretion, the Commission anticipates that OEA would consider a variety of measures of auction activity, including but not limited to, the length of the auction, the percentage of bidding units associated with licenses on which there are new bids, the number of new bids, and the increase in revenue. For example, when monitoring activity for determining when to change stages, OEA could consider the percentage of bidding units of the licenses receiving new provisionally winning bids, excluding any FCC-held licenses. In past auctions, OEA has generally—but not always—changed stages when this measure was approximately 20% or below for three consecutive rounds of bidding. The Commission seeks comment on these procedures for activity requirements.

74. For the SMR auction format, when a bidder's activity in the current round is below the required minimum level, it could preserve its current level of eligibility through an activity rule waiver, if available. An activity rule waiver applies to an entire round of bidding, not to a particular license. Activity rule waivers can be either proactive or automatic. Activity rule waivers are primarily a mechanism for a bidder to avoid the loss of bidding eligibility in the event that exigent circumstances prevent it from bidding in a particular round.

75. Under an SMR auction format, each bidder in Auction 108 would be provided with three activity rule waivers that could be used as set forth at the bidder's discretion during the course of the auction. The FCC auction bidding system would assume that a bidder that does not meet the activity requirement would prefer to use an activity rule waiver (if available) rather than lose bidding eligibility. Therefore, the system would automatically apply a waiver at the end of any bidding round in which a bidder's activity level is below the minimum required unless: (1) The bidder has no activity rule waivers remaining; or (2) the bidder overrides the automatic application of a waiver by reducing eligibility, thereby meeting the activity requirement. If a bidder has no waivers remaining and does not satisfy the required activity level, the bidder's current eligibility would be permanently reduced, possibly curtailing or eliminating the ability to place additional bids in the auction.

76. A bidder with insufficient activity might wish to reduce its bidding eligibility rather than use an activity rule waiver. If so, then the bidder affirmatively would have to override the automatic waiver mechanism during the bidding round by using the reduce eligibility function in the FCC auction bidding system. In this case, the bidder's eligibility would be permanently reduced to bring it into compliance with the activity rule described above. Reducing eligibility is an irreversible action; once eligibility has been reduced, a bidder could not regain its lost bidding eligibility.

77. Under the simultaneous stopping rule for this auction format, a bidder would be permitted to apply an activity rule waiver proactively as a means to keep the auction open without placing a bid. If a bidder proactively were to apply an activity rule waiver (using the proactive waiver function in the FCC auction bidding system) during a bidding round in which no bids are placed or withdrawn (if bid withdrawals are permitted in Auction 108), the auction would remain open and the bidder's eligibility would be preserved. An automatic waiver applied by the FCC auction bidding system in a round in which there is no new bid, no bid withdrawal (if bid withdrawals are permitted in Auction 108), or no proactive waiver would not keep the auction open. The Commission seeks comment on this approach.

78. If the Commission adopts an SMR auction format, then it would also establish minimum opening bid amounts. The bidding system would not accept bids lower than these amounts.

79. The Commission would calculate minimum opening bid amounts on a license-by-license basis using the same calculations outlined for the single bidding round auction design based on $0.006 per MHz-pop. The Commission seeks comment on these minimum opening bid amounts, which are specified in Attachment A to the Auction 108 Comment Public Notice. If commenters believe that these minimum opening bid amounts would result in unsold licenses or are not reasonable amounts under an SMR format, they should explain why this is so. Commenters should support their claims with valuation analyses and suggested amounts or formulas for minimum opening bids for this auction design.

80. In establishing minimum opening bid amounts under the SMR format, the Commission particularly seeks comment on factors that reasonably could have an impact on bidders' valuation of the spectrum, including the type of service offered, market size, population covered by the proposed facility, and any other relevant factors.

81. Commenters may also wish to address the general role of minimum opening bids in managing the pace of the auction. For example, commenters could compare using minimum opening bids— e.g., by setting higher minimum opening bids to reduce the number of rounds it takes licenses to reach their final prices—to other means of controlling auction pace, such as changes to bidding schedules or activity requirements.

82. The Commission would not establish any aggregate reserve price for licenses offered through an SMR auction format. The Commission is not aware at this time of circumstances that require establishment of an aggregate reserve price in the public interest for this auction of overlay licenses in the 2.5 GHz band and seek comment only on the per license minimum opening bids that it discusses here. The Commission seeks comment on this issue. If commenters believe the Commission should establish an aggregate reserve price, they should explain why and support their claims with valuation analyses and suggested amounts or formulas for reserve prices.

83. Under an SMR auction format, an eligible bidder with sufficient eligibility, in each round, would be able to place a bid on a given license in any of up to nine different amounts—the minimum acceptable bid amounts and additional bid amounts discussed below. Under this approach, the FCC auction bidding system would list the acceptable bid amounts for each license.

84. Minimum Acceptable Bid Amounts. The first of the acceptable bid amounts is called the minimum acceptable bid amount. The minimum acceptable bid amount for a license would be equal to its minimum opening bid amount until there is a provisionally winning bid on the license. Once there is a provisionally winning bid for a license, the minimum acceptable bid amount for that license would be equal to the amount of the provisionally winning bid plus a percentage of that bid amount calculated using the activity-based formula described below. In general, the percentage would be higher for a license receiving many bids than for a license receiving few bids. In the case of a license for which the provisionally winning bid has been withdrawn (if withdrawals are allowed in Auction 108), the minimum acceptable bid amount would equal the second highest bid received for the license.

85. The percentage of the provisionally winning bid used to establish the minimum acceptable bid amount (the additional percentage) would be calculated based on an activity index at the end of each round. The activity index is a weighted average of (a) the number of distinct bidders placing a bid on the license in that round, and (b) the activity index from the prior round. Specifically, the activity index is equal to a weighting factor times the number of bidders placing a bid covering the license in the most recent bidding round plus one minus the weighting factor times the activity index from the prior round. For Round 1 calculations, because there is no prior round ( i.e., no round 0), the activity index from the prior round would be set at 0. The additional percentage is determined as one plus the activity index times a minimum percentage amount, with the result not to exceed a given maximum. The additional percentage is then multiplied by the provisionally winning bid amount to obtain the minimum acceptable bid for the next round. The result will be rounded using the Commission's standard rounding procedures for auctions: Results above $10,000 are rounded to the nearest $1,000; results below $10,000 but above $1,000 are rounded to the nearest $100; and results below $1,000 are rounded to the nearest $10. Under the SMR auction format, the weighting factor would be set initially at 0.5, the minimum percentage at 0.1 (10%), and the maximum percentage at 0.2 (20%). Hence, at these initial settings, the minimum acceptable bid for a license would be between 10% and 20% higher than the provisionally winning bid, depending upon the bidding activity for the license. Equations and examples are shown in Attachment B to the Auction 108 Comment Public Notice. The Commission seeks comment on whether to use this activity-based formula or a different approach for the SMR auction format. In particular, the Commission asks whether it should set the maximum percentage at a higher amount, for example 30% or more, in light of concerns over the large number of rounds that may be required for this auction.

86. Additional Bid Amounts. The FCC auction bidding system would calculate any additional bid amounts using the minimum acceptable bid amount and an additional bid increment percentage. The minimum acceptable bid amount would be multiplied by the additional bid increment percentage, and that result (rounded) would be the additional increment amount. The first additional acceptable bid amount would equal the minimum acceptable bid amount plus the additional increment amount. The second additional acceptable bid amount would equal the minimum acceptable bid amount plus two times the additional increment amount; the third additional acceptable bid amount would be the minimum acceptable bid amount plus three times the additional increment amount; etc. The Commission would set the additional bid increment percentage at 5% initially. Hence, the calculation of the additional increment amount would be (minimum acceptable bid amount) * (0.05), rounded. The Commission seeks comment on this approach.

87. Bid Amount Changes. Under this auction format, OEA would retain the discretion to change the minimum acceptable bid amounts, the additional bid amounts, the number of acceptable bid amounts, and the parameters of the formulas used to calculate minimum acceptable bid amounts and additional bid amounts if OEA determines that circumstances so dictate. Further, OEA would retain the discretion to do so on a license-by-license basis. Commenters should address the size of changes in the bid amounts, in particular, the additional percentage. Should the Commission increase the size of the minimum acceptable bid amounts in order to manage expeditiously the pace of an SMR auction with approximately 8,300 licenses? At what size do changes in bid amounts make it too difficult for bidders to align their bid amounts with their budgets and willingness to pay? OEA would also retain the discretion to limit (a) the amount by which a minimum acceptable bid for a license may increase compared with the corresponding provisionally winning bid, and (b) the amount by which an additional bid amount may increase compared with the immediately preceding acceptable bid amount. For example, OEA could set a limit on increases in minimum acceptable bid amounts over provisionally winning bids. Thus, if calculating a minimum acceptable bid using the activity-based formula results in a minimum acceptable bid amount that exceeds the provisionally winning bid on a license by more than the limit, the minimum acceptable bid amount would instead be capped at the provisionally winning bid plus the amount of the limit. The Commission seeks comment on the circumstances under which OEA should employ such a limit, factors OEA should consider when determining the dollar amount of the limit, and the tradeoffs in setting such a limit or changing other parameters—such as the minimum and maximum percentages of the activity-based formula. If OEA were to exercise this discretion, it would alert bidders by announcement in the FCC auction bidding system. The Commission seeks comment on these procedures.

88. The Commission seeks comment on the above procedures for the SMR auction format, including whether to use the activity-based formula to establish the additional percentage or a different approach. If commenters disagree with beginning the auction with nine acceptable bid amounts per license as described above, they should suggest an alternative number of acceptable bid amounts to use at the beginning of the auction and an alternative number to use later in the auction. Commenters may wish to address the role of the minimum acceptable bids and the number of acceptable bid amounts in managing the pace of the auction and the tradeoffs in managing auction pace by changing the bidding schedule, activity requirements, or bid amounts, or by using other means.

89. Under an SMR auction format, the FCC auction bidding system would determine provisionally winning bids consistent with practices in past auctions. At the end of each bidding round, the bidding system would determine a provisionally winning bid for each license based on the highest bid amount received for the license. A provisionally winning bid would remain the provisionally winning bid until there is a higher bid on the same license at the close of a subsequent round. Provisionally winning bids at the end of the auction would become the winning bids.

90. If identical high bid amounts were submitted on a license in any given round ( i.e., tied bids), the FCC auction bidding system would use a pseudo-random number generator to select a single provisionally winning bid from among the tied bids. The auction bidding system would assign a pseudo-random number to each bid when the bid is entered. The tied bid with the highest pseudo-random number would become the provisionally winning bid. The remaining bidders, as well as the provisionally winning bidder, would be permitted to submit higher bids in subsequent rounds. However, if the auction were to end with no other bids being placed, the winning bidder would be the one that placed the provisionally winning bid. If the license received any bids in a subsequent round, the provisionally winning bid again would be determined by the highest bid amount received for the license

91. A provisionally winning bid would be retained until there is a higher bid on the license at the close of a subsequent round, unless the provisionally winning bid is withdrawn (if bid withdrawals are permitted in Auction 108). Under the SMR auction design, provisionally winning bids would count toward activity for purposes of the activity rule.

92. The FCC auction bidding system would allow each bidder to remove any of the bids it placed in a round before the close of that round. By removing a bid placed within a round, a bidder would effectively “unsubmit” the bid. In contrast to the bid withdrawal provisions described below, a bidder removing a bid placed in the same round would not be subject to a withdrawal payment. Once a round closes, a bidder would no longer be permitted to remove a bid.

93. The Commission seeks comment on whether bid withdrawals should be permitted should it adopt an SMR auction format for Auction 108. When permitted in an auction, bid withdrawals provide a bidder with the option of withdrawing bids placed in prior rounds that have become provisionally winning bids. A bidder would be able to withdraw its provisionally winning bids using the withdraw function in the FCC auction bidding system.

94. The Commission has recognized that bid withdrawals may be a helpful tool for bidders seeking to efficiently aggregate licenses or implement backup strategies in certain auctions. The Commission has also acknowledged that allowing bid withdrawals may encourage insincere bidding or increase opportunities for undesirable strategic bidding in certain circumstances.

95. Applying this reasoning to Auction 108, each bidder would be allowed to withdraw provisionally winning bids in no more than two rounds during the course of the auction. To permit a bidder to withdraw bids in more than two rounds may encourage insincere bidding or the use of withdrawals for undesirable strategic bidding purposes. The two rounds in which a bidder may withdraw provisionally winning bids would be at the bidder's discretion, and there would be no limit on the number of provisionally winning bids that a bidder may withdraw in either of the rounds in which it withdraws bids. Withdrawals must be in accordance with the Commission's rules, including the bid withdrawal payment provisions specified in 47 CFR 1.2104(g).

96. A bidder that withdraws its provisionally winning bid(s), if permitted, is subject to the bid withdrawal payment provisions of the Commission's rules. The Commission proposes the interim bid withdrawal payment be set at 15% of the withdrawn bid for the purposes of an SMR auction. A bidder that withdraws a bid during an auction is subject to a withdrawal payment equal to the difference between the amount of the withdrawn bid and the amount of the winning bid in the same or a subsequent auction. The withdrawal payment amount is deducted from any upfront payments or down payments that the withdrawing bidder has deposited with the Commission. No withdrawal payment is assessed for a withdrawn bid if either the subsequent winning bid or any of the intervening subsequent withdrawn bids equals or exceeds that withdrawn bid. However, if a license for which a bid had been withdrawn does not receive a subsequent higher bid or winning bid in the same auction, the FCC cannot calculate the final withdrawal payment until that license receives a higher bid or winning bid in a subsequent auction. In such cases, when that final withdrawal payment cannot yet be calculated, the FCC imposes on the bidder responsible for the withdrawn bid an interim bid withdrawal payment, which will be applied toward any final bid withdrawal payment that is ultimately assessed.

97. The amount of the interim bid withdrawal payment is established in advance of bidding in each auction and may range from 3% to 20% of the withdrawn bid amount. The Commission has determined that the level of the interim withdrawal payment in a particular auction will be based on the nature of the service and the inventory of the licenses being offered. The Commission noted specifically that a higher interim withdrawal payment percentage is warranted to deter the anti-competitive use of withdrawals when, for example, bidders will not need to aggregate the licenses being offered in the auction or when there are few synergies to be captured by combining licenses. With respect to the flexible-use 2.5 GHz band licenses being offered in Auction 108, the service rules permit a variety of advanced spectrum-based services, some of which may best be offered by combining licenses on adjacent frequencies or in adjacent areas. Balancing the potential need for bidders to use withdrawals to avoid winning incomplete combinations of licenses with the Commission's interest in deterring undesirable strategic use of withdrawals, the Commission proposes to establish an interim bid withdrawal payment of 15% of the withdrawn bid for Auction 108, should it adopt an SMR auction format.

98. The Commission seeks comment on allowing bid withdrawals and an interim bid withdrawal payment of 15% of the withdrawn bid under a potential SMR auction design. If commenters disagree, then the Commission asks them to support their arguments by taking into account the licenses available, the impact on auction dynamics and the pricing mechanism, and the effects on the bidding strategies of other bidders.

99. The Commission intends to provide additional information on the bidding system and to offer demonstrations and other educational opportunities for applicants in Auction 108 to familiarize themselves with the FCC auction application system and the auction bidding system.

100. In addition, OEA and WTB will make available an interactive mapping tool to identify and assess potential encumbrances in the band, including as a result of pending Rural Tribal Priority Window applications. Potential applicants are again reminded, however, that this tool will not represent complete licensing information; all information should be confirmed in ULS for any specific license or area.

101. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the possible significant economic impact on small entities of the policies and rules addressed in the Auction 108 Comment Public Notice to supplement the Commission's Initial and Final Regulatory Flexibility Analyses completed in the 2.5 GHz Notice of Proposed Rulemaking (NPRM), 83 FR 26396, June 7, 2018, and 2.5 GHz Report and Order, and other Commission orders pursuant to which Auction 108 will be conducted. Written public comments are requested on this Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the same deadline for comments specified on the first page of the Auction 108 Comment Public Notice. The Commission will send a copy of the Auction 108 Comment Public Notice, including this Supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Auction 108 Comment Public Notice and Supplemental IRFA (or summaries thereof) will be published in the Federal Register .

102. Need for, and Objectives of, the Proposed Rules. The Auction 108 Comment Public Notice sets forth the proposed auction procedures for those entities that seek to bid to acquire licenses in Auction 108. The Auction 108 Comment Public Notice seeks comment on proposed procedural rules to govern Auction 108, which will auction geographic overlay licenses of unlicensed spectrum in the 2.5 GHz band (2496-2690 MHz). The specific overlay licenses available in Auction 108 will be determined by the results of the Rural Tribal Priority Window, which gave federally recognized Tribes the opportunity to submit applications to acquire new 2.5 GHz band overlay licenses to provide broadband service on rural Tribal lands before the remaining unassigned spectrum is made generally available to all entities through competitive bidding. The Rural Tribal Priority Window closed on September 2, 2020. Based on review of applications received in the Rural Tribal Priority Window, OEA, in conjunction with WTB, will release a public notice announcing the final inventory of 2.5 GHz band overlay licenses to be offered in Auction 108. This public notice will be released in advance of the deadline for the submission of short-form applications to bid in Auction 108 so that potential applicants can make informed decisions about whether to apply. OEA and WTB will also make available resources to assist applicants in conducting due diligence research regarding potential encumbrances in the band prior to the release of the public notice announcing the final auction inventory.

103. The Auction 108 Comment Public Notice and process is intended to provide notice of and adequate time for potential applicants to comment on proposed auction procedures. To promote the efficient and fair administration of the competitive bidding process for all Auction 108 participants, the Commission seeks comment on the following procedures that would apply to Auction 108 under either the single-round auction format or the SMR auction format:

• Requirement of an additional certification by each applicant in its short-form application, under penalty of perjury, that it has read the public notice adopting procedures for Auction 108 and that it has familiarized itself with those procedures and the requirements for obtaining a license and operating facilities in the 2.5 GHz band;

• use of limited information procedures under which the Commission will not make public until after the bidding has closed: (1) The licenses that an applicant selects for bidding in its auction application (FCC Form 175); (2) the amount of any upfront payment made by or on behalf of an applicant for Auction 108; (3) an applicant's bidding eligibility; and (4) any other bidding-related information that might reveal the identity of the bidder placing a bid;

• establishment of bidding credit caps for eligible small businesses and rural service providers in Auction 108;

• provision of discretionary authority to OEA, in conjunction with WTB, to delay, suspend, or cancel bidding in Auction 108 for any reason that affects the ability of the competitive bidding process to be conducted fairly and efficiently;

• a specific upfront payment amount for each license available in Auction 108;

• establishment of an additional default payment of 15% under § 1.2104(g)(2) of the rules in the event that a winning bidder defaults or is disqualified after the auction.

104. The Auction 108 Comment Public Notice also seeks comment on the following procedures under the single-round auction format:

• Use of a single-round auction format for Auction 108 with limited package bidding;

• use of a pay-as-bid pricing rule whereby each winning bidder will pay the sum of its winning bid amounts for the licenses it is awarded, less any applicable bidding credit discount;

• establishment of a bidder's bidding eligibility in bidding units based on that bidder's upfront payment through assignment of a specific number of bidding units for each license;

• establishment of a minimum bid amount for each license available in Auction 108 based on each license's potential MHz-pops;

• use of an either/or indicator to allow a bidder to indicate that two or more of its bids are to be treated as mutually exclusive by the bidding system when assigning winning bids; and

• a methodology for processing bids.

105. In addition, the Auction 108 Comment Public Notice seeks comment on the following procedures under the SMR auction format:

• Use of a simultaneous multiple-round auction format for Auction 108, consisting of sequential bidding rounds with a simultaneous stopping rule (with discretion by OEA to exercise alternative stopping rules under certain circumstances);

• use of an activity rule that would require bidders to bid actively during the auction rather than waiting until late in the auction before participating;

• an auction with one or more stages, in which, for example, a bidder is required to be active on 80% of its bidding eligibility in each round of the first stage, and on 95% of its bidding eligibility in each round of the second stage;

• provision of three activity rule waivers for each bidder to allow it to preserve eligibility during the course of the auction;

• use of minimum acceptable bid amounts and additional bid increments, along with a methodology for calculating such amounts, with OEA retaining discretion to change its methodology if circumstances dictate;

• a procedure for breaking ties if identical high bid amounts are submitted on a license in a given round;

• bid removal procedures;

• whether to permit bid withdrawals; and

• establishment of an interim bid withdrawal percentage of 15% of the withdrawn bid if the Commission were to allow bid withdrawals in Auction 108.

106. The proposed procedures for the conduct of Auction 108 constitute the more specific implementation of the competitive bidding rules contemplated by parts 1 and 27 of the Commission's rules, the 2.5 GHz Report and Order, and relevant competitive bidding orders, and are fully consistent therewith.

107. Legal Basis. The Commission's statutory obligations to small businesses under the Communications Act of 1934, as amended, are found in 47 U.S.C. 309(j)(3)(B) and 47 U.S.C. 309(j)(4)(D). The statutory basis for the Commission's competitive bidding rules is found in various provisions of the Communications Act of 1934, as amended, including 47 U.S.C. 154(i), 301, 302, 303(e), 303(f), 303(r), 304, 307, and 309(j). The Commission has established a framework of competitive bidding rules, updated most recently in 2015, pursuant to which it has conducted auctions since the inception of the auctions program in 1994 and would conduct Auction 108. In promulgating those rules, the Commission conducted numerous RFA analyses to consider the possible impact of those rules on small businesses that might seek to participate in Commission auctions. In addition, a Final Regulatory Flexibility Analysis (FRFA) was included in the 2.5 GHz Report and Order that adopted rule provisions relevant to this notification.

108. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

109. As noted above, Regulatory Flexibility Analyses were incorporated into the 2.5 GHz NPRM and the 2.5 GHz Report and Order. In those analyses, the Commission described in detail the small entities that might be significantly affected. In the Auction 108 Comment Public Notice, the Commission adopts by reference the descriptions and estimates of the number of small entities from the previous Regulatory Flexibility Analyses in the 2.5 GHz NPRM and the 2.5 GHz Report and Order.

110. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities. The Commission designed the auction application process itself to minimize reporting and compliance requirements for applicants, including small entity applicants. In the first part of the Commission's two-phased auction application process, parties desiring to participate in an auction file streamlined, short-form applications in which they certify under penalty of perjury as to their qualifications. Eligibility to participate in bidding is based on an applicant's short-form application and certifications, as well as its upfront payment. In the second phase of the process, winning bidders file a more comprehensive long-form application. Thus, an applicant which fails to become a winning bidder does not need to file a long-form application and provide the additional showings and more detailed demonstrations required of a winning bidder.

111. The Commission does not expect the processes and procedures proposed in the Auction 108 Comment Public Notice will require small entities to hire attorneys, engineers, consultants, or other professionals to participate in Auction 108 and comply with the procedures it ultimately adopts because of the information, resources, and guidance the Commission makes available to potential and actual participants. For example, the Commission intends to release an online tutorial that will help applicants understand the procedures for filing of the auction short-form application (FCC Form 175). The Commission also intends to make information on the bidding system available and offer demonstrations and other educational opportunities for applicants in Auction 108 to familiarize themselves with the FCC auction application system and the auction bidding system. By providing these resources as well as the resources discussed below, the Commission expects small entities that use the available resources to experience lower participation and compliance costs. Nevertheless, while the Commission cannot quantify the cost of compliance with the proposed procedures, it does not believe that the costs of compliance will unduly burden small entities that choose to participate in the auction because the proposals for Auction 108 are similar in many respects to the procedures in recent auctions conducted by the Commission.

112. Steps Taken to Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.

113. The Commission has taken steps to minimize any economic impact of its auction procedures on small entities through, among other things, the Commission's potential use of a single bidding round and a pay-as-bid pricing rule. The Commission expects that many small entities will bid in Auction 108 and the use of a single-round auction would significantly reduce the time and resource commitment required for participation, if adopted. Due to the large inventory of licenses that will be available in Auction 108, the multiple-round auction format that the Commission has typically used in auctioning spectrum licenses could require several months to complete and require participating bidders to expend resources to consistently monitor the auction during that time. In contrast, the Commission anticipates that with a single bidding round, bid processing for Auction 108 could be completed within a week. In addition, the use of a pay-as-bid pricing rule, which requires each winning bidder to pay the sum of its winning bid amounts for the licenses it is awarded, less any applicable bidding credit discount, should also benefit small entities by giving them more certainty about the costs of their winning bids.

114. In the event the Commission adopts the SMR auction format, it has also taken steps to minimize any economic impact of its auction procedures on small entities through, among other things, the many resources the Commission provides potential auction participants. OEA and WTB propose to make resources available to assist applicants in conducting due diligence research regarding potential encumbrances in the band prior to the release of the public notice announcing the final auction inventory. Small entities and other auction participants may seek clarification of or guidance on complying with competitive bidding rules and procedures, reporting requirements, and the FCC's auction bidding system. An FCC Auctions Hotline provides access to Commission staff for information about the auction process and procedures. The FCC Auctions Technical Support Hotline is another resource which provides technical assistance to applicants, including small entities, on issues such as access to or navigation within the electronic FCC Form 175 and use of the FCC's auction bidding system. Small entities may also use the web-based, interactive online tutorial produced by Commission staff to familiarize themselves with auction procedures, filing requirements, bidding procedures, and other matters related to an auction.

115. The Commission also makes various databases and other sources of information, including the Auctions program websites and copies of Commission decisions, available to the public without charge, providing a low-cost mechanism for small entities to conduct research prior to and throughout the auction. Prior to and at the close of Auction 108, the Commission will post public notices on the Auctions website, which articulate the procedures and deadlines for the auction. The Commission makes this information easily accessible and without charge to benefit all Auction 108 applicants, including small entities, thereby lowering their administrative costs to comply with the Commission's competitive bidding rules.

116. Prior to the start of bidding, the Commission also proposes to make available to bidders various educational materials. Eligible bidders will be given an opportunity to become familiar with auction procedures and the bidding system by participating in a mock auction. Further, the Commission intends to conduct Auction 108 electronically over the internet using a web-based auction system that eliminates the need for bidders to be physically present in a specific location. Qualified bidders also have the option to place bids by telephone. These mechanisms are made available to facilitate participation in Auction 108 by all eligible bidders and may result in significant cost savings for small entities that use these alternatives. Moreover, the adoption of bidding procedures in advance of the auction, consistent with statutory directive, is designed to ensure that the auction will be administered predictably and fairly for all participants, including small entities.

117. For Auction 108, the Commission proposes a $25 million cap on the total bidding credit amount that may be awarded to an eligible small business and a $10 million cap on the total bidding credit amount that may be awarded to a rural service provider. In addition, the Commission proposes a $10 million cap on the overall amount of bidding credits that any winning small business bidder may apply to licenses won in counties located within any PEA with a population of 500,000 or less. Based on the technical characteristics of the 2.5 GHz band and its analysis of past auction data, the Commission anticipates that its proposed caps will allow the majority of small businesses to take full advantage of the bidding credit program, thereby lowering the relative costs of participation for small businesses.

118. These proposed procedures for the conduct of Auction 108 constitute the more specific implementation of the competitive bidding rules contemplated by parts 1 and 30 of the Commission's rules, 47 CFR parts 1 and 30, the 2.5 GHz Report and Order, and relevant competitive bidding orders, and are fully consistent therewith.

119. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules. None.

120. The Auction 108 Comment Public Notice contains proposed new information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might further reduce the information collection burden for small business concerns with fewer than 25 employees.

121. Pursuant to 47 CFR 1.415, 1.419, interested parties may file comments or reply comments on or before the dates indicated on the first page of the Auction 108 Comment Public Notice in AU Docket No. 20-429. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies.

122. Ex Parte Requirements. This proceeding has been designated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making oral ex parte presentations must file a copy of any written presentations or memoranda summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine Period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to the Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with 47 CFR 1.1206(b). In proceedings governed by 47 CFR 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format ( e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

This is a synopsis of the Commission's Notice of Proposed Rulemaking, MB Docket No. 21-55; RM-11880; DA 21-164, adopted February 12, 2021, and released February 12, 2021. The full text of this document is available for download at https://www.fcc.gov/edocs. To request materials in accessible formats (braille, large print, computer diskettes, or audio recordings), please send an email to FCC504@fcc.gov or call the Consumer & Government Affairs Bureau at (202) 418-0530 (VOICE), (202) 418-0432 (TTY).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to this proceeding.

Members of the public should note that all ex parte contacts are prohibited from the time a Notice of Proposed Rulemaking is issued to the time the matter is no longer subject to Commission consideration or court review, see 47 CFR 1.1208. There are, however, exceptions to this prohibition, which can be found in Section 1.1204(a) of the Commission's rules, 47 CFR 1.1204(a).

See Sections 1.415 and 1.420 of the Commission's rules for information regarding the proper filing procedures for comments, 47 CFR 1.415 and 1.420.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rulemaking, MB Docket No. 21-59; RM-11883; DA 21-202, adopted February 22, 2021, and released February 22, 2021. The full text of this document is available for download at https://www.fcc.gov/edocs. To request materials in accessible formats (braille, large print, computer diskettes, or audio recordings), please send an email to FCC504@fcc.gov or call the Consumer & Government Affairs Bureau at (202) 418-0530 (VOICE), (202) 418-0432 (TTY).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to this proceeding.

Members of the public should note that all ex parte contacts are prohibited from the time a Notice of Proposed Rulemaking is issued to the time the matter is no longer subject to Commission consideration or court review, see 47 CFR 1.1208. There are, however, exceptions to this prohibition, which can be found in Section 1.1204(a) of the Commission's rules, 47 CFR 1.1204(a).

See Sections 1.415 and 1.420 of the Commission's rules for information regarding the proper filing procedures for comments, 47 CFR 1.415 and 1.420.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rulemaking, MB Docket No. 21-61; RM-11885; DA 21-204, adopted February 22, 2021, and released February 22, 2021. The full text of this document is available for download at https://www.fcc.gov/edocs. To request materials in accessible formats (braille, large print, computer diskettes, or audio recordings), please send an email to FCC504@fcc.gov or call the Consumer & Government Affairs Bureau at (202) 418-0530 (VOICE), (202) 418-0432 (TTY).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to this proceeding.

Members of the public should note that all ex parte contacts are prohibited from the time a Notice of Proposed Rulemaking is issued to the time the matter is no longer subject to Commission consideration or court review, see 47 CFR 1.1208. There are, however, exceptions to this prohibition, which can be found in Section 1.1204(a) of the Commission's rules, 47 CFR 1.1204(a).

See Sections 1.415 and 1.420 of the Commission's rules for information regarding the proper filing procedures for comments, 47 CFR 1.415 and 1.420.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

NMFS and the Council manage the reef fish fishery under the Reef Fish FMP. The Reef Fish FMP was prepared by the Council and is implemented by NMFS through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) (16 U.S.C. 1801 et seq. ).

The Madison-Swanson and Steamboat Lumps MPAs were established on June 19, 2000 (65 FR 31827, May 19, 2000). The two MPAs combined cover 219 square nautical miles (nmi 2 ) (751 square kilometers (km 2 )) near the 240-foot (73-meter) contour, also known as the 40-fathom contour, off northwest and west Florida. The area of Madison-Swanson is 115 nmi 2 (394 km 2 ) and the area of Steamboat Lumps is 104 nmi 2 (357 km 2 ). The distance between these MPAs is approximately 69 nmi (127 km). The Council and NMFS created the MPAs to provide protection to spawning aggregations of gag, which is a species of grouper, and other reef fish. When the MPAs were implemented, all fishing inside the MPAs was prohibited, except for Atlantic highly migratory species (HMS) such as tunas, billfishes, and oceanic sharks, which are managed separately by NMFS' Atlantic HMS Management Division. Since 2004, surface trolling has been allowed for non-reef fish species in the MPAs from May 1 through October 31 annually (69 FR 24532, May 4, 2004). In 2006, NMFS implemented complementary management measures to prohibit fishing for Atlantic HMS except by surface trolling from May 1 through October 31 annually (71 FR 58058, October 2, 2006). In addition, the possession of Gulf reef fish while inside the MPAs is prohibited, except on a vessel in transit with fishing gear stowed as specified in § 622.34(a)(4).

At its October 2019 meeting, the Council's Reef Fish Advisory Panel (AP) discussed observations of illegal harvest of reef fish species under the appearance of trolling within the boundaries of the MPAs. Reef Fish AP members believed that the MPAs are not a legitimate trolling destination for non-reef fish species and that the illegal harvest of reef fish is occurring in these areas. Reef Fish AP members also acknowledged that it was possible to drift through the MPAs with fishing tackle weighted deep below the vessel to increase the probability of hooking a reef fish. At this meeting, an enforcement officer from the Florida Fish and Wildlife Conservation Commission noted that enforcement of the MPAs is challenging due to the remote locations.

At its January 2020 meeting, the Council discussed the Reef Fish AP's recommendation to prohibit all fishing (other than for Atlantic HMS) in the MPAs year-round to reduce the potential for targeting reef fish while bottom fishing under the guise of trolling within the MPAs. The U.S. Coast Guard representative on the Council agreed that enforcement in the MPAs can be difficult due to the distance from port.

In response to these concerns, the Council developed a framework action that would modify the restrictions on fishing in, and transiting through, the Madison-Swanson and Steamboat Lumps MPAs in the eastern Gulf. The framework action would prohibit all fishing, except for HMS, year-round in the Madison-Swanson and Steamboat Lumps MPAs, and prohibit the possession of Gulf reef fish year-round in these areas unless a vessel has a valid Federal commercial permit for Gulf reef fish, an operating satellite-based VMS, and is in transit with fishing gear appropriately stowed. The Council determined that eliminating surface trolling from May 1 through October 31, which would effectively close the MPAs to fishing year-round, would make it easier for law enforcement to detect whether a vessel was fishing within the MPAs and result in direct positive effects for mature spawning gag that are known to inhabit the MPAs, as well as other resident federally managed reef fish. The Council also determined that a prohibition on possession Gulf reef fish would aid law enforcement. However, in response to concerns raised by fishermen who hold Federal commercial reef fish permits, the Council made an exception to this prohibition for vessels issued these permits because those vessels are easily tracked through the required VMS.

These prohibitions would not apply to Atlantic HMS. However, on July 20, 2020, the Council sent a letter that requested the NMFS Atlantic HMS Management Division consider developing compatible regulations for HMS to the proposed management measures in the framework action. Federal regulations currently applicable to Atlantic HMS in the MPAs are located at 50 CFR 635.

This proposed rule would prohibit fishing year-round in the Madison-Swanson and Steamboat Lumps MPAs. Additionally, the possession of any Gulf reef fish would be prohibited year-round in the MPAs, with a limited exception.

This proposed rule would revise current fishing restrictions in the MPAs. Currently, surface trolling is the only allowable fishing activity and is only permitted from May through October each year. Surface trolling is defined in § 622.34(a)(5) as fishing with lines trailing behind a vessel which is in constant motion at speeds in excess of four knots (4.6 mph) with a visible wake, and the use of downriggers, wire lines, planers, or similar devices is not allowed. Federally managed species that may be targeted by surface trolling in the MPAs include the Gulf CMP species king mackerel and Spanish mackerel, and HMS.

This proposed rule would prohibit fishing year-round for all species except HMS. However, as stated earlier, NMFS may implement compatible regulations for HMS later, as requested by the Council.

Currently, fishing vessels with Gulf reef fish on board may transit through the MPAs as long as all fishing gear is appropriately stowed. This provision allows transiting fishing vessels to proceed between destinations, without the need to reroute to avoid a specific area even if they are in possession of reef fish. For these MPAs, transit means non-stop progression through the area and fishing gear appropriately stowed is defined in 50 CFR 622.34(a)(4)(i) through (iv). This proposed rule would prohibit the possession of Gulf reef fish in the MPAs even when transiting unless the vessel was issued a valid Federal commercial permit for Gulf reef fish, which requires an operating satellite-based VMS. As with the current regulation, all fishing gear would need to be appropriately stowed.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the framework amendment, the FMP, the Magnuson-Stevens Act, and other applicable laws, subject to further consideration after public comment.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The factual basis for this certification is as follows. A copy of the full analysis is available from NMFS (see ADDRESSES ).

A description of the action, why it is being considered, and the objectives of and legal basis for this action are contained at the beginning of this SUPPLEMENTARY INFORMATION section and in the SUMMARY section of the preamble.

The Magnuson-Stevens Act provides the statutory basis for this proposed rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting or recordkeeping compliance requirements are introduced in this proposed rule.

The proposed rule concerns recreational and commercial fishing within the Madison-Swanson and Steamboat Lumps MPAs within the Gulf exclusive economic zone (EEZ). Currently, the possession of Gulf reef fish in these MPAs is generally prohibited, and surface trolling is the only allowable fishing activity during May through October. As stated previously, this proposed rule does not affect Atlantic HMS. Therefore, the proposed rule directly affects both anglers (recreational fishers) and commercial fishing businesses that harvest non-reef fish species, such as king mackerel, Spanish mackerel, or cobia within the MPAs by surface trolling and both anglers, and charter vessels and headboats (for-hire) fishing businesses that operate vessels that transit through the MPAs with reef fish onboard. Because of the proximity of the MPAs to the west coast of Florida, NMFS expects that any entity that may surface troll for CMP species within the MPAs or operate a vessel that transits through the MPAs with reef fish onboard lands its catch in Florida.

Anglers are not considered small entities as that term is defined in 5 U.S.C. 601(6), whether fishing from for-hire fishing, private, or leased vessels. Therefore, neither estimates of the number of anglers, nor the impacts on them are required or provided in this analysis.

Any business that operates a commercial fishing vessel that harvests either king mackerel or Spanish mackerel in the Gulf EEZ must have a valid Federal permit for these Gulf CMP species issued to that vessel. From 2014 through 2018, an annual average of 2,081 vessels had Federal commercial permits for one or both of those CMP species, and 77 (3.7 percent) of those permitted vessels used surface trolling to harvest the CMP species and land their catch in Florida. An estimated 74 businesses operate the 77 vessels, and all of these businesses are expected to operate primarily in the commercial fishing industry (NAICS code 11411).

No Federal permit is required for the commercial harvest and sale of Gulf cobia. However, from 2014 through 2018, an annual average of 5 of the above 77 commercial fishing vessels reported harvesting Gulf cobia by surface trolling.

For Regulatory Flexibility Act purposes, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily involved in commercial fishing (NAICS 11411) is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and its combined annual receipts are not in excess of $11 million for all of its affiliated operations worldwide. The average annual revenue per vessel for the 77 vessels that harvest CMP species by surface trolling and land those fish in Florida is $14,707 (2018 dollars). Therefore, the 74 commercial fishing businesses that operate the 77 vessels are classified as small.

Any business that operates a for-hire fishing vessel that has reef fish onboard in the Gulf EEZ must have a valid Federal charter vessel/headboat permit for Gulf reef fish. As of June 23, 2020, there were 770 such permits held by entities residing in Florida. That figure is also consistent with the average annual number of Federal charter vessel/headboat permits for Gulf reef fish held by entities residing in Florida from 2014 through 2018. The proposed rule would not directly affect for-hire vessels with both valid Federal charter vessel/headboat permits and commercial permits for Gulf reef fish, and approximately 24 percent (183) of the for-hire vessels have both permits. Therefore, 587 vessels with a Federal charter vessel/headboat permit for Gulf reef fish could be directly affected by the proposed rule. An estimated 411 businesses operate these 587 vessels.

A business in the for-hire fishing industry (NAICS code 487210) is a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates) and its combined annual receipts that are no more than $8.0 million for all of its affiliated operations worldwide. The average charter vessel operating in the Gulf with a Federal reef fish permit is estimated to receive approximately $88,095 (2018 dollars) in gross revenue annually. The average headboat operating in the Gulf with a Federal reef fish permit is estimated to receive approximately $267,358 (2018 dollars) in gross revenue annually. From that, NMFS concludes that the above 411 for-hire fishing businesses are classified as small.

Currently, from May through October, surface trolling is allowed within the MPAs. The proposed rule would prohibit surface trolling within the MPAs year-round.

Average annual dockside revenue from CMP species landed by federally permitted commercial vessels from May through October of 2014 through 2018 accounted for 20 percent ($2,948 in 2018 dollars) of the annual dockside revenue from all landings by the average federally permitted vessel that used surface trolling and landed CMP species in Florida. If all May through October landings of CMP species by these vessels were entirely of CMP species harvested from the MPAs, the average adverse economic impact of the proposed rule would be $2,948 annually per vessel for 77 CMP federally permitted vessels. However, that is highly unlikely. The MPAs are small and represent a relatively small percentage of the Gulf EEZ. Madison-Swanson is 115 nmi 2 (394 km 2 ) and Steamboat Lumps is 104 nmi 2 (357 km 2 ). Moreover, the MPAs are considered as relatively poor destinations for successful surface trolling. Therefore, NMFS expects any adverse economic impact of a year-round surface trolling prohibition on the 74 small commercial fishing businesses to be minimal.

Currently, possession of Gulf reef fish year-round or any other species of fish from November through April, including CMP species, is prohibited in the MPAs, except on a vessel in transit with fishing gear appropriately stowed. Under the proposed rule, the possession of any species of Gulf reef fish would be prohibited year-round in the MPAs, except for a vessel with a valid Federal commercial Gulf reef fish permit, which is required to have an operating satellite-based VMS, that is in transit with fishing gear stowed.

Under the proposed rule, the 411 small businesses that operate the 587 for-hire fishing vessels that have a for-hire reef fish permit, but do not have a Gulf commercial reef fish permit, would no longer be able to transit through the MPAs with reef fish onboard. It is unknown how many, if any, of the 587 for-hire vessels transit through the MPAs with reef fish onboard. However, because of the relatively small size of the MPAs and the distance between them, NMFS expects that any of those vessels could relatively easily avoid transiting through the MPAs if they have reef fish on board and any additional cost to transit around the MPAs would be minimal.

From the above, NMFS expects any impacts from the proposed rule on small businesses in the commercial fishing and for-hire fishing industries to be minimal. Therefore, NMFS concludes that this proposed rule would not have a significant economic impact on a substantial number of small entities. As a result, an initial regulatory flexibility analysis is not required and none has been prepared.

This proposed rule contains no information collection requirements under the Paperwork Reduction Act of 1995.

For the reasons set out in the preamble, 50 CFR part 622 is proposed to be amended as follows:

The revisions read as follows:

The dolphin and wahoo fishery off the Atlantic states is managed under the FMP. The FMP was prepared by the Council and implemented through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

The Council manages dolphin and wahoo under the Dolphin Wahoo FMP in Federal waters off the Atlantic states from Maine south to the Florida Keys in the Atlantic. In the western North Atlantic, bullet mackerel are found from Cape Cod to the Gulf of Mexico, and frigate mackerel are found mostly from North Carolina to Florida. As described in Amendment 12, both bullet mackerel and frigate mackerel are found in the diets of dolphin and wahoo in the North Atlantic. In particular, wahoo has been demonstrated to have a strong dietary reliance on bullet and frigate mackerel, indicating that these mackerel species are the most dominant forage species observed in the diets of wahoo. Dolphin tend to have more diverse diets than wahoo and have a lower reliance on these mackerel species as prey. Additionally, bullet and frigate mackerel have been identified as important forage species for other offshore pelagic predatory species in the Atlantic such as blue marlin and yellowfin tuna. Bullet mackerel feed on a variety of prey, especially clupeoids ( i.e., herrings and sardines), crustaceans, and squids. Frigate mackerel feed on a variety of fish, squid, and small crustaceans. Therefore, given their presence as a common forage fish and prey food source, bullet mackerel and frigate mackerel are an important component of the marine environment in the Atlantic. There is no stock assessment for dolphin, wahoo, bullet mackerel, or frigate mackerel. In Atlantic Federal waters, dolphin and wahoo are targeted both commercially and recreationally. Annual reported commercial and recreational landings of bullet mackerel and frigate mackerel are low along the entire Atlantic coastline.

Regulations implemented under the Magnuson-Stevens Act define EC species as “stocks that a Council or the Secretary has determined do not require conservation and management, but desire to list in a FMP in order to achieve ecosystem management objectives” (50 CFR 600.305(d)(13)). National Standards (NS) General guidelines state that a Council should consider a non-exhaustive list of 10 factors when deciding whether additional stocks require Federal conservation and management (50 CFR 600.305(c)(1)). The proposed EC designation for bullet and frigate mackerel was recommended to the Council by the Council's Scientific and Statistical Committee (SSC), their Dolphin Wahoo Advisory Panel (AP), and the Habitat Protection and Ecosystem-Based Management (Habitat) AP, and received extensive positive comments from the public during scoping of Amendment 12. The Dolphin Wahoo AP and Habitat AP members acknowledged that wahoo, in particular, target these mackerel species as prey. The AP members also stated that the Council should consider a conservative approach to ensure there are no major increases in the harvest of bullet mackerel and frigate mackerel in the foreseeable future as a result of any EC designation. This designation would address the Council's growing emphasis on developing ecosystem management approaches to fisheries management and advancing ecosystem management objectives in the Dolphin Wahoo FMP.

The extent to which the low landings of bullet mackerel and frigate mackerel occur within the dolphin and wahoo fishery is unknown; however, it is unlikely that these species are often harvested in conjunction with efforts to target dolphin and wahoo, especially in the commercial sector. Bullet and frigate mackerel have largely been landed commercially in the Mid-Atlantic region using gill net, pound net, float trap, and otter trawl gear, none of which are allowable gear types in the dolphin and wahoo fishery. Recreational landings of bullet and frigate mackerel have largely occurred in the South Atlantic Region, with some limited catches reported from the Mid-Atlantic Region. Furthermore, recreational fishermen have also noted that these species are used as bait for tuna and billfish, such as blue marlin. NMFS and the Council have determined that bullet mackerel and frigate mackerel are currently not in need of conservation and management, making them eligible for consideration as EC species. This preliminary eligibility determination was done after consideration of the provisions within the NS Guidelines and requirements of the Magnuson-Stevens Act. Furthermore, adding bullet mackerel and frigate mackerel to the Dolphin Wahoo FMP as EC species meets the FMP's ecosystem management objectives (50 CFR 600.305(c)(5) and 600.310(d)(1)).

This proposed rule would add bullet mackerel and frigate mackerel to the Dolphin Wahoo FMP and designate them as EC species. This proposed rule would add no additional management measures to the Dolphin Wahoo FMP as a result of this EC species designation, either for bullet and frigate mackerel, or for dolphin and wahoo.

The proposed rule could be expected to result in potential indirect benefits such as increased awareness among the fishermen, fishing communities, data collecting agencies, and regulatory entities managing dolphin, wahoo, bullet mackerel, and frigate mackerel. If landings for these two mackerel species were to greatly increase in the future to unsustainable levels, fisheries managers could be made aware of the changing stock status before the stocks are depleted, which may have subsequent beneficial effects on populations of several economically important predatory fish species, including dolphin, wahoo, blue marlin, and yellowfin tuna.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with Amendment 12, the Dolphin and Wahoo FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866.

The Magnuson-Stevens Act provides the legal basis for this proposed rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting and record-keeping requirements are introduced by this proposed rule. Accordingly, the Paperwork Reduction Act does not apply to this proposed rule. A description of this proposed rule, why it is being considered, and the purposes of this proposed rule are contained in the preamble and in the SUMMARY section of this proposed rule. The objective of this proposed rule is to acknowledge the ecological role of bullet mackerel and frigate mackerel as forage fish in general and specifically as prey for wahoo.

The Chief Counsel for Regulation of the Department of Commerce has certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule, if adopted, will not have a significant economic impact on a substantial number of small entities. A description of the factual basis for this determination follows.

This proposed rule, if implemented, would add bullet mackerel and frigate mackerel to the Dolphin and Wahoo FMP as EC species. Even though this proposed rule would alter the existing regulations to indicate that bullet mackerel and frigate mackerel are EC species in the Dolphin and Wahoo FMP, it would not implement any new management measures, and, therefore, is administrative in nature. As such, this proposed rule would not directly regulate any small entities.

Because this proposed rule, if implemented, is not expected to directly regulate any small entities, it is not expected to affect a substantial number of small entities. Further, because no entities are expected to be affected by this proposed rule, the profits of small entities are also not expected to change, and thus no economic impacts on small entities are expected.

Because this proposed rule, if implemented, would not have a significant economic impact on a substantial number of small entities, an initial regulatory flexibility analysis is not required and none has been prepared.

For the reasons set out in the preamble, 50 CFR part 622, is proposed to be amended as follows: