[Federal Register Volume 87, Number 82 (Thursday, April 28, 2022)]
[Proposed Rules]
[Pages 25181-25196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-09029]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WC Docket No. 17-84; FCC 22-20; FRS 83033]


Accelerating Wireline and Wireless Broadband Deployment by 
Removing Barriers to Infrastructure Investment

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) seeks comment on measures that the Commission may adopt to 
better align the financial incentives of utilities and attachers with 
respect to pole replacements. Specifically, the Commission seeks 
comment on the circumstances in which attachers should not be required 
to pay the entire cost of pole replacements needed to accommodate their 
new attachments and the proper allocation of costs in those situations, 
whether and how the Commission should revise its rules to address pole 
replacement cost issues, whether there are changes the Commission could 
make to its rules that would help utilities and attachers avoid 
disputes and expedite the resolution of pole attachment complaints, and 
the appropriate scope of refunds ordered by the Commission when it 
determines that a pole attachment rate, term, or condition is unjust 
and unreasonable.

DATES: Comments are due on or before June 27, 2022, and reply comments 
are due on or before July 27, 2022.

ADDRESSES: You may submit comments, identified by WC Docket No. 17-84, 
by any of the following methods:
    [ssquf] Federal Communications Commission's Website: https://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.
    [ssquf] Mail: Parties who choose to file by paper must file an 
original and one copy of each filing. Filings can be sent by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission. Commercial 
overnight mail (other than U.S. Postal Service Express Mail and 
Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, 
MD 20701. U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 45 L Street NE, Washington, DC 20554. Effective 
March 19, 2020, and until further notice, the Commission no longer 
accepts any hand or messenger delivered filings. This is a temporary 
measure taken to help protect the health and safety of individuals, and 
to mitigate the transmission of COVID-19. See FCC Announces Closure of 
FCC Headquarters Open Window and Change in Hand-Delivery Policy, Public 
Notice, DA 20-304 (March 19, 2020), https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.
    [ssquf] People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Michael Ray, Competition Policy 
Division, Wireline Competition Bureau, at (202) 418-0357, 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Further Notice of Proposed Rulemaking (Second Further Notice) in WC 
Docket No. 17-84, adopted March 16, 2022, released March 18, 2022. The 
full text of this document is available for public inspection on the 
Commission's website at https://www.fcc.gov/document/fcc-seeks-comment-resolving-disputes-over-pole-replacement-costs. To request materials in 
accessible formats for people with disabilities (e.g., braille, large 
print, electronic files, audio format, etc.) or to request reasonable 
accommodations (e.g., accessible format documents, sign language 
interpreters, CART, etc.), send an email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice) or 
(202) 418-0432 (TTY).

Synopsis

I. Second Further Notice of Proposed Rulemaking

    1. In this Second Further Notice, we seek comment on ways to 
eliminate or expedite the resolution of pole replacement disputes by 
establishing clear standards for when and how utilities and attachers 
must share in the costs of a pole replacement that is precipitated by a 
new attachment request. In the Pole Replacement Declaratory Ruling, the 
Bureau found that it would be contrary to the Commission's rules and 
policies to require a new attacher to pay the entire cost of a pole 
replacement when a pole already requires replacement (e.g., because the 
pole is out of compliance with current safety and utility construction 
standards or it has been red-tagged) at the time a request for a new or 
modified attachment is made. According to the Bureau, even if the new 
attacher might benefit from that type of pole replacement, it is not 
``necessitated solely as a result'' of the new attachment pursuant to 
the language in Section 1.1408(b) of our rules and therefore the 
utility may not impose all make-ready costs of that pole replacement on 
the new attacher. The Bureau based its clarification on the cost 
causation and cost sharing principles codified in Section 1.1408(b). We 
affirm the Bureau's findings in the Pole Replacement Declaratory Ruling 
as consistent with Section 224, the Commission's rules, and past 
Commission precedent.
    2. On July 16, 2020, NCTA--the internet & Television Association 
filed a Petition asking the Commission to clarify its rules in the 
context of pole replacements. The record developed in response to the 
NCTA Petition indicates significant disagreement between utilities and 
attachers about when a pole replacement is not ``necessitated solely'' 
by a new attachment when the circumstances do not involve a preexisting 
violation or red-tagged pole. We seek comment on these more ambiguous 
situations and the role the Commission should take in providing further 
guidance regarding pole replacements. We also take this opportunity to 
seek comment on additional scenarios in which financial responsibility 
for pole replacements should be shared by attachers and utilities and 
how those costs should be apportioned. Additionally, we seek comment on 
the scope of utility liability for pole attachment rate refunds when 
rates are found to be unjust and unreasonable.

A. Determining the Applicability of Cost Causation and Cost Sharing

    3. In the Pole Replacement Declaratory Ruling, the Bureau 
clarified, pursuant to the language in Section 1.1408(b) of our rules, 
that when a new attachment request precipitates a pole replacement, but 
the pole must also be replaced for other reasons, the pole replacement 
is not ``necessitated solely'' by the new attachment and all of the 
parties that benefit from the replacement must share proportionally in 
the cost, including utilities. Under this standard, and consistent with 
the 2018 Wireline Infrastructure Order, the Bureau made clear that this 
standard applies when the pole must be replaced

[[Page 25182]]

due to a preexisting violation or because it has been red-tagged.
    4. We seek comment on whether there are additional situations in 
which a pole replacement is not ``necessitated solely'' by a new 
attachment request. Is it possible for a future planned pole 
replacement to serve as grounds for concluding that the pole must be 
replaced for other reasons at the time of the new attachment request? 
If so, in what circumstances? For example, if the utility has already 
scheduled the requested pole for replacement one or two years after the 
new attachment request is made, could we deem that known and scheduled 
replacement as necessary at the time that the new attachment request is 
made and therefore consider the replacement of the pole to not be 
``necessitated solely'' by the new attachment? Should the Commission 
codify a definition of ``necessitated solely'' for the purposes of 
Section 1.1408(b) and, if so, what should that definition be? When 
considering situations ``necessitated solely'' by a need to create 
capacity for a new attachment, should the term ``capacity'' refer to 
both additional space needed to accommodate the new attachment and/or 
the need for a stronger pole to increase loading capacity? Should the 
Commission codify a definition of ``red-tagging'' or other terminology 
that distinguishes between priority replacements that need to be 
performed immediately due to the status of a pole from non-priority 
replacements that may be implemented at a later time? The Commission 
has previously described a ``red-tagged'' pole as one found to be non-
compliant with safety standards and placed on a utility's replacement 
schedule. Crown Castle argues that the Commission should employ a 
broader definition that includes ``any pole where, based on an existing 
condition, the utility contends the pole must be replaced before any 
new attachment, or change to an existing attachment, may be made.''
    5. Even if a pole replacement is necessitated for a reason other 
than a new attachment request, Section 1.1408(b) requires existing 
attachers (including the utility) to pay a proportional share of the 
replacement costs only if they ``directly benefit'' from the 
replacement. The Commission has previously determined that an 
incidental benefit is not sufficient to hold these attachers 
accountable for the pole replacement costs. When addressing additional 
circumstances to which the clarification in the Pole Replacement 
Declaratory Ruling should apply, if any, we ask that commenters specify 
whether any benefits that accrue to existing attachers are direct 
versus incidental and how they define those terms for the purposes of 
their arguments. We ask that commenters be clear about the criteria 
that distinguish a direct benefit from an incidental benefit and cite 
all economic and legal authorities that support their positions.
    6. We seek comments specifically addressing whether a utility 
directly benefits from a pole replacement that is necessary to correct 
a preexisting violation that the utility did not cause. As stated in 
the 2018 Wireline Infrastructure Order, utilities may not hold new 
attachers responsible for the costs of correcting a preexisting 
violation. That does not necessarily mean, however, that the utility is 
ultimately responsible for all of the costs in all cases. Rather, the 
party that is responsible for the violation is responsible for the 
costs of correcting the violation, and the utility is authorized to 
seek recovery from the violating party. What are the circumstances 
under which existing attachers, as opposed to utilities, may be 
responsible for preexisting violations that require an entire pole to 
be replaced? In such situations, are there ways that a utility directly 
benefits from a pole replacement that corrects a preexisting violation 
within the meaning of the first two sentences of Section 1.1408(b), 
even if it did not cause the violation? For instance, in concluding 
that a utility may not hold a new attacher responsible for costs 
arising from the correction of safety violations caused by other 
attachers, the former Cable Services Bureau determined that it was up 
to the utility ``to require other attachers to reimburse [the utility] 
or otherwise pay for corrections of safety violations.'' In the 2018 
Wireline Infrastructure Order, the Commission found that a utility may 
not hold a new attacher responsible for the costs of a preexisting 
violation caused by another attacher or delay the completion of make-
ready to accommodate a new attachment while it ``attempts to identify 
or collect from the party who should pay for correction of the 
preexisting violation.'' In the context of pole replacements, should we 
construe these precedents to mean that the utility is responsible for 
the costs of correcting the violation vis-[agrave]-vis the new 
attacher, and, therefore, directly benefits when the pole replacement 
needed to accommodate the new attachment corrects the violation? If so, 
does that financial responsibility and direct benefit require the 
utility to share in the costs of the replacement under Section 
1.1408(b)?
    7. We also seek comment on how to identify and quantify the costs 
of a pole replacement that are proportional to the direct benefit 
obtained by a utility from a pole replacement that is not necessitated 
solely by a new attachment request. We remain committed to the long-
standing principle that when ``capital costs would not have been 
incurred `but for' the pole attachment demand . . . the attacher--the 
cost causer--pays for these costs.'' In the context of make-ready 
charges for a new attachment, that includes the ``direct incremental 
costs of making space available to the [attacher],'' but excludes costs 
that are not required to accommodate the new attachment. Make-ready is 
``the modification or replacement of a utility pole, or of the lines or 
equipment on the utility pole, to accommodate additional facilities on 
the utility pole.'' Make-ready charges to prepare a pole for a new 
attachment are ``non-recurring costs for which the utility is directly 
compensated and as such are excluded from expenses used in the rate 
calculation.''
    8. How should we distinguish the incremental costs attributable to 
the new attacher from the costs that should be attributable to 
utilities when a pole replacement is necessary to make space for the 
new attachment and for a reason that directly benefits the utility? In 
the context of a pole that also needs to be replaced to correct a 
preexisting violation or because it has been red-tagged, should the new 
attacher be responsible for the difference in cost between a taller or 
stronger pole needed to accommodate its attachment and what it would 
cost to replace the existing pole with one of the same type and size or 
strength? Is there a different way to apportion the cost of the new 
pole between its owner and the new attacher? How should other costs 
associated with pole replacements, such as the cost of transferring 
existing attachments to the new pole, be apportioned between the 
utility and new attacher? We ask that commenters submit data and 
documents describing and substantiating the precise costs of pole 
replacements in each scenario addressed above and specify the party 
that causes them to be incurred.
    9. Finally, we seek comment on whether we should revise our cost 
allocation rules to modify or replace the direct benefit versus 
incidental benefit standard set forth in Section 1.1408(b). Is there a 
more equitable and efficient standard for determining when parties 
should share in the costs of modifying a facility? What are the costs 
and benefits of applying an alternate standard? We ask that commenters

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proposing alternate standards detail how costs would be allocated under 
the proposed standard's terms in real-world scenarios, specifically 
addressing the economic and operational impacts on the parties, 
including whether the standard would allow utilities to fully recover 
the costs of establishing additional capacity on their poles. We also 
ask that commenters explain whether any proposed alternate standard 
would promote or deter broadband deployment or the ability of utilities 
and attachers to successfully negotiate pole attachment agreements, 
including whether it would lead to an increase or decrease in pole 
attachment disputes.

B. Allocating Costs When Utilities Directly Benefit From Pole 
Replacements

    10. Attachers have represented to the Commission that utilities 
often seek to hold them responsible for all costs of replacing a pole 
that is needed to make space for a new attachment, even if all of those 
costs are not needed to accommodate the new attachment (e.g., pole 
upgrades, increasing capacity beyond the needs of the new attachment). 
While some utilities indicate that this is not the case and that new 
rules in this area are unnecessary, others have not denied it or have 
attempted to justify it with a broad interpretation of the Commission's 
cost causation policy, i.e., but for the new attachment request, the 
pole replacement would not have occurred at all, so the attacher should 
pay all costs of the replacement. Stated differently, some utilities 
contend that while implementing a pole replacement is necessitated 
solely by the new attachment, they should be able to enhance the pole 
in some way that is not necessitated by the new attachment without 
incurring financial responsibility for those enhancements. Attachers 
have also argued that utilities receive a windfall when they hold new 
attachers responsible for all the costs of a pole replacement because 
it eliminates or reduces the costs they would have otherwise had to pay 
to replace the pole in the future (i.e., financial responsibility for 
the utility's deteriorating and aging infrastructure is shifted to the 
attacher). In particular, the white paper submitted by Charter's 
economist, Dr. Patricia Kravtin, states that ``since the future 
replacement of the pole from the utility's perspective is `an 
inevitable event' that it would eventually have to pay for itself, the 
practice of transferring the full cost of that replacement onto new 
attachers (who must either pay to obtain access or choose to abandon 
their investment plans) results in burdens to the attaching entity far 
exceeding the costs they actually cause the pole owner to incur over a 
more meaningful time horizon.'' We seek comment on the conclusions 
reached by Dr. Kravtin as they relate to the cost allocations and 
causes of pole replacements. Utilities counter that the early 
retirement of their poles precipitated by a new attachment comes at a 
cost--the value they lose in a capital asset that has not yet reached 
the end of its useful life--and that under the Commission's cost 
causation policy, they are entitled to compensation for the unrealized 
value of a pole that would otherwise remain in service.
    11. While we acknowledge that the economic and legal arguments made 
by utilities could have merit, we are concerned by the frequent 
statements in the record that attachers are being required to absorb 
costs that are not caused by their attachments and/or result in 
attachers assuming financial responsibility for a utility's capital 
assets. Our concern is rooted in the potential impact on the deployment 
of broadband networks if the financial resources available for 
deployments are depleted by these costs. That said, we are keenly aware 
of the need to carefully examine the impact any changes to our cost 
allocation rules may have on the ability of utilities to fully recover 
the costs of expanding capacity to accommodate new attachments to avoid 
the unintended consequence of increased attachment denials. Section 224 
does not provide the Commission with authority to require utilities to 
replace poles when additional capacity is needed to accommodate a new 
attachment. Utility commenters argue that ``[i]f utilities are no 
longer compensated for pole replacements and can no longer control the 
pole replacement process, many utility pole owners will decide they can 
no longer economically or safely replace poles on a voluntary basis for 
new attachers. The `clarification' would deny new attachers access to 
poles that require replacement to accommodate them.''
    12. To evaluate and resolve these competing concerns, we seek 
comment on whether the Commission should revise its pole attachment 
rules to expressly recognize that utilities directly benefit from pole 
replacements that are precipitated by a new attachment request and 
establish clear standards for when and how utilities should be required 
to pay a proportional share of the total pole replacement costs. We 
limit our inquiries to situations where a pole replacement is needed to 
accommodate a new attachment due to lack of capacity. We are aware of 
allegations by attachers that some utilities erroneously or 
disingenuously claim that an existing pole lacks capacity to 
accommodate a new attachment and insist that the pole must be replaced 
at the attacher's cost. The rules clearly prohibit such conduct by 
utilities, and the Commission is fully capable of adjudicating such 
disputes through its complaint process, and we believe that is the 
appropriate avenue for attachers asserting such claims to seek relief. 
Would clear standards on these points expedite cost dispute resolution 
between the parties? Or, are any disputes likely to be fact-specific 
and better addressed in adjudicatory proceedings? Are further cost 
allocation rules for pole replacements unnecessary and/or could they 
result in more attachment requests being denied as some utilities 
claim?
1. Responsibility for Pole Upgrades and Modifications Unrelated to New 
Attachments
    13. Attachers have represented to the Commission that, when a pole 
replacement is needed to expand capacity for a new attachment, 
utilities use that pole replacement as an opportunity to upgrade a pole 
(e.g., increase its class or grade) or expand their own use of the pole 
in a manner that is unrelated to the new attachment (e.g., expand 
capacity for future use by the utility itself or to rent to a different 
attacher). When that occurs, attachers represent that they are held 
accountable for the cost of upgrade/expanded use modifications made at 
the same time as the make-ready for their new attachments. According to 
NCTA, utilities insist that they are entitled to shift those costs to 
the new attacher because, even if the upgrade/expanded use 
modifications are not required to effectuate the new attachment, the 
utility would not have made them if a pole replacement had not been 
required to accommodate the new attachment. Attachers argue that, under 
the Commission's rules and precedent, they may not be held accountable 
for such costs because they are not necessitated by the new attachment. 
Utilities who shift the costs of upgrade/expanded use modifications to 
new attachers claim that, as described above, the pole replacement 
required to accommodate the new attachment is the ``but for'' cause of 
those modification costs. We note that some utilities have represented 
to the Commission that they do not hold new attachers responsible for 
pole upgrades that are not required by a new attachment and that new 
rules are unnecessary in this area.

[[Page 25184]]

    14. We seek comment on whether utilities directly benefit when they 
use pole replacements precipitated by an attachment request to upgrade 
or enhance their poles and whether utilities should pay a proportional 
share of the total pole replacement costs. As an initial matter, we 
seek comment on whether the Commission's existing cost allocation rules 
and precedent require clarification on this point. Section 1.1408(b) of 
the Commission's rules states, in pertinent part, that ``[t]he costs of 
modifying a facility shall be borne . . . by all parties that directly 
benefit from the modification,'' and that each party that directly 
benefits from the modification shall share proportionally in its costs, 
but it then qualifies that language by stating, ``[n]otwithstanding the 
foregoing, a party with a preexisting attachment to a pole . . . shall 
not be required to bear any of the costs of rearranging or replacing 
its attachment if such rearrangement or replacement is necessitated 
solely as a result of an additional attachment . . . sought by another 
party.'' If a pole upgrade is necessitated at the time a pole is 
replaced to create capacity for a new attachment, does the text of 
Section 1.1408(b) allocate all costs of the pole replacement, including 
those for unrelated upgrade/expansion modifications, to the new 
attacher? Or does it merely shield other attachers, and not the 
utility, from bearing any upgrade costs? We note that the text of 
Section 1.1408(b) does not appear to include replacing a pole after 
receiving a modification request as an instance of ``piggybacking.'' 
The third sentence of the rule states that ``[a] party with a 
preexisting attachment to the modified facility shall be deemed to 
directly benefit from a modification if, after receiving notification 
of such modification . . . it adds to or modifies its attachment.'' 
While a ``facility'' may include a pole and a ``modification'' includes 
replacing a pole, adding to or modifying an attachment is not the same 
thing as installing a new, upgraded pole.
    15. In the Local Competition Order, the Commission stated that an 
attacher is responsible for the entire cost of a new pole needed to 
create new capacity for its attachment ``unless [other parties with 
attachments] expanded their own use of the facilities at the same 
time.'' In the latter event, the other parties that expanded their own 
use of the facilities would need to share in the cost of the new pole. 
This language is broader than the text of Section 1.1408(b) of the 
Commission's rules. Whereas the rule text speaks to pole replacements 
that are ``necessitated solely as a result of'' the new attachment, the 
language in the Local Competition Order addresses situations where the 
pole replacement is an ``opportunity'' for the utility and other 
attachers to ``expand their own use'' of the new pole.
    16. We seek comment on how to reconcile these cost attribution 
standards in the Commission's rules and precedent in the context of a 
utility using a pole replacement that is ``necessitated solely'' by a 
new attachment request as an opportunity to upgrade the requested pole 
in a manner that is not required by the new attachment. Does Section 
1.1408(b) of our rules limit the cost-sharing statements in our 
precedent? Do the statements in our precedent establish a cost-sharing 
standard for a set of facts that is not contemplated by the codified 
rule?
    17. Should the Commission address this issue by revising Section 
1.1408(b) to expressly create a presumption that utilities directly 
benefit when they use a pole replacement precipitated by a new 
attachment request as an opportunity to upgrade the pole or expand it 
for its own use and should, therefore, pay a proportional share of the 
pole replacement costs? If so, what are the specific circumstances to 
which such a presumption would apply? Specifically, we seek comment on 
when an upgrade or expanded use of a pole by a utility confers an 
incidental versus direct benefit to a utility. For instance, NCTA and 
other commenters urge us to require utilities to share in the costs of 
a pole replacement that results in the utility obtaining excess 
capacity for its own use. The Commission has previously stated that, 
while that excess capacity may confer benefits on utilities, utilities 
are not under any obligation to share the future revenue they may 
receive due to that excess capacity, even if they did not share in the 
costs of the modification that created the excess capacity. Further, 
the Commission found that excess pole capacity could be ``particularly 
cumbersome'' if it remains unused for extended periods. Should these 
statements be understood to mean that the Commission has considered 
excess pole capacity to be an incidental benefit of a pole replacement 
rather than a direct benefit? Are there grounds for the Commission to 
conclude that excess capacity resulting from a pole replacement is a 
direct benefit to utilities and they should, therefore, share in the 
replacement costs? Are there other benefits that a utility obtains when 
a pole is replaced to accommodate a new attachment that the Commission 
should treat as incidental as opposed to direct? Or, as utilities 
claim, is it unnecessary to modify our rules to address cost allocation 
when utilities use a new attachment request that precipitates a pole 
replacement as an opportunity to upgrade the pole or expand it for its 
own use? In addressing these questions, we ask that commenters be 
specific with respect to how they are defining incidental and direct 
benefits, their economic bases for those definitions, and how they 
apply or do not apply to each circumstance proposed as a benefit to 
utilities.
    18. If the Commission were to adopt the presumption described 
above, what would be a proportional allocation of the costs of a pole 
replacement that is precipitated by a new attacher and then used as an 
opportunity for the utility to upgrade or expand its use of the pole? 
What are the incremental costs of upgrading the class or grade of the 
taller pole being installed to accommodate the new attachment? Should 
the new attacher be responsible for the difference in cost between a 
taller pole of a same type as the existing pole and the upgraded pole, 
along with other typical make-ready costs of a new attachment (e.g., 
the cost of transferring existing attachments to the new pole)? If not, 
what measure should be used? If the Commission revisits its position on 
the installation of excess pole capacity, should those costs be 
apportioned in a manner similar to when multiple attachers use an 
attachment request to upgrade their existing facilities, requiring 
expanded pole capacity, i.e., a ratio of the new space on the taller 
pole occupied by the new attacher to the total amount of excess 
capacity on the taller pole?
    19. We also seek comment on whether adopting a presumption that 
utilities directly benefit from pole replacements precipitated by a new 
attachment when the utility uses the pole replacement as an opportunity 
to upgrade or expand its use of the pole would have a positive or 
negative effect on pole attachment negotiations and, relatedly, the 
deployment of broadband facilities. Would it facilitate and expedite 
successful negotiations by eliminating areas of dispute? Conversely, 
would it increase the frequency of pole attachment denials and delay 
the deployment of broadband networks due to utility concerns that they 
will not be fully compensated for the costs caused by the attachments? 
Are there potential adverse impacts for utility ratepayers? If so, 
would any of these adverse impacts be lessened if the Commission were 
to recognize specific circumstances under which the presumption could 
be rebutted? What would those circumstances be? What evidentiary

[[Page 25185]]

showing would utilities need to make to substantiate that circumstances 
exist to rebut the presumption? Do these considerations vary based on 
whether the pole is located in an ``unserved area,'' and, if so, how 
should that term be defined in this context?
    20. Additionally, we seek comment on how the last sentence of 
Section 1.1408(b) should be interpreted with respect to pole 
replacements. That sentence states, ``If a party makes an attachment to 
the facility after the completion of the modification, such party shall 
share proportionately in the cost of the modification if such 
modification rendered possible the added attachment.'' What time period 
is reasonable ``after'' the pole replacement occurs for the subsequent 
attacher to share in the costs of the pole replacement? Would any 
subsequent attachment to a new pole be considered ``rendered possible'' 
by the pole replacement even if it occurred a significant time later?
2. Costs and Benefits of Early Pole Retirement
    21. According to NCTA and other attachers, ``[p]oles, like other 
utility infrastructure, have a finite life and require maintenance and 
intermittent replacement. Replacing an older pole with a new one 
necessarily allows the utility to defer the next scheduled replacement, 
including transfer of its facilities to the new pole, and reduces 
maintenance costs.'' In NCTA's view, ``where existing utility 
infrastructure is . . . near the end of its useful life, it is unjust 
and unreasonable [under Section 224(b) of the Act] for pole owners to 
shift the entire cost of a pole replacement to a new attacher when the 
pole owner itself derives the predominant financial gain, including in 
the form of betterment, from replacing and upgrading the pole.'' 
Attachers argue that utilities should, therefore, be required to pay a 
proportional share of pole replacement costs whenever a pole is 
replaced to accommodate a new attachment, and irrespective of whether 
they have otherwise improved the pole. NCTA also argues that shifting 
the entire cost of a pole replacement to a new attacher is inconsistent 
with Section 224(f) of the Act because it discriminates against new 
attachers ``seeking to bring broadband to an unserved area by imposing 
unjust and unreasonable conditions upon access.''
    22. Utilities counter that the attachers' position is barred by 
Section 1.1408(b) of the Commission's rules, which mandates that new 
attachers bear the costs of pole replacements necessitated solely as a 
result of their new attachments. They also assert that the attachers 
misstate or misunderstand the process and economics of scheduling a 
pole for replacement. The record indicates that utilities use internal 
pole replacement programs to determine when a pole needs to be replaced 
because it is unsafe, unreliable, or unfit. These programs involve 
inspections scheduled at periodic intervals during which the condition 
of a pole is evaluated. If the pole is deemed to be in poor condition 
or reaching the end of its useful life--a status that utilities 
emphasize is distinct from a pole's age--the utility will schedule it 
for replacement. The timing of that replacement appears to vary based 
on the provisions of a particular utility's replacement program, but a 
pole that is deteriorating but still safe and serviceable may not be 
scheduled for replacement for a period of years after the inspection. 
For example, the POWER Coalition explains that its members conduct 
their inspections at 8-10 year cycles and that if it is determined that 
a pole is not likely to remain serviceable until the next cycle (i.e., 
for another 8-10 years), it will be replaced in one to two years. 
Utilities argue that when those pole replacements are accelerated to 
create capacity for new attachments, they lose the value of their 
capital asset that is being retired before it has reached the end of 
its useful life. For these reasons, utilities dispute that they obtain 
a benefit when a pole is replaced before the end of its useful life. 
Rather, they argue that requiring a new attacher to pay the costs of 
the pole replacement ensures that utilities are compensated for, among 
other things, the lost value of an asset that would otherwise remain in 
service for years. Some utilities have also indicated that state-level 
oversight of their capital budgets and spending cycles limits their 
flexibility to assume increased capital expenditures in a given year to 
accommodate communications deployments.
    23. We seek additional information and documents that will better 
substantiate the economic, legal, and practical implications of 
potentially revising our rules governing cost sharing. We are 
particularly interested in additional information and analyses that 
expand the economic arguments made by utilities and attachers, 
including those addressing their respective economic incentives and how 
our rules do or do not effectively align them. We recognize that our 
current cost sharing rules have been interpreted to shift the financial 
responsibility of utilities for maintaining and replacing their capital 
assets to attachers, and that this shift inflates attachers' pole 
attachment costs. We also recognize that the ability of utilities to 
deny access to their poles due to insufficient capacity, together with 
the substantial cost to attachers having to deploy underground 
infrastructure in lieu of an attachment, potentially confers 
significant leverage to utilities that may disadvantage attachers in 
negotiations to obtain what they believe is an equitable allocation of 
pole replacement costs. Utilities counter that if they are prevented 
from fully realizing the value of their infrastructure assets when a 
new attachment request requires the early retirement of an otherwise 
serviceable pole, there is little incentive for them to approve the 
request.
    24. We seek comment on whether revising our pole attachment rules 
to require utilities to pay some portion of the costs of replacing a 
pole that is necessitated solely to accommodate a new attachment would 
better align the economic incentives of the parties, or whether it 
would, as some utilities suggest, simply incent utilities to deny 
access to the pole in this circumstance. If we were to revise our rules 
on this point, what standards or formula should be used to apportion 
the costs between the utility, the new attacher, and any other existing 
attachers? Should we adopt NCTA's suggestion that new attachers be 
responsible for the remaining net book value of the pole being 
replaced, measured by the average depreciated bare pole investment 
derived using the Commission's pole attachment rate formula? If we were 
to adopt that standard, what, if any, additional costs would need to be 
allocated to the new and/or existing attachers to ensure that utilities 
are compensated for the costs of attachments to their poles? What, if 
any, impact would the standard proposed by NCTA have on pole attachment 
rates, costs borne by existing attachers other than the utilities, and 
utility ratepayers? The Electric Utilities argue that shifting some of 
the cost of pole replacements to utilities ``would actually 
discriminate against existing attachers that have already paid the 
actual cost of make-ready necessary to accommodate their attachments.'' 
According to Electric Utilities ``[i]f electric utilities are bearing 
the vast majority of make-ready pole replacement costs, then those 
costs will be booked to the appropriate capital and O&M accounts 
(principally FERC Accounts 364 and 593), which will, in turn, lead to 
an increase in pole attachment rates paid by all attaching

[[Page 25186]]

entities subject to the FCC's formulas.'' Is there a different standard 
of cost allocation that would better balance the incentives of the 
parties, be administratively simple to apply, and be more amenable to 
utilities? Have states that regulate pole attachments adopted rules 
specifying how to allocate the upfront cost to replace a pole between 
utilities and attachers that the Commission should consider adopting or 
modifying for its own use?
    25. We also seek comment on the relationship between the upfront 
costs incurred to replace a pole versus the recovery of pole 
replacement costs through recurring pole attachment rates. 
Specifically, would it be more efficient and effective to require all 
costs incurred to replace a pole (except where a pole replacement is 
solely necessitated by a new attachment) to be recovered over time 
through the allowance for depreciation reflected in recurring rates 
calculated pursuant to the Commission's pole attachment rate formulas, 
rather than upfront through make-ready fees? Would the utility be made 
whole for early replacement of a structurally sound pole through the 
allowance for depreciation expense reflected in recurring pole rental 
rates, given the use of accurate depreciation rates? Do utilities use 
group depreciation for poles? Do utilities' pole depreciation rates 
equally reflect the probability of late pole replacement, relative to 
average expected useful life, and the probability of early replacement, 
whether caused by the addition of an attachment or by some other 
reason? Under this approach, would the allowance reflected in recurring 
pole attachment rates through the application of the rate of return 
component of the carrying charge rate to the net cost of a bare pole, 
as in the Commission's rate formula, fully compensate the utility for 
the cost of capital used to finance the remaining undepreciated cost of 
a replacement pole? Pole replacement costs (other than for pole 
replacements solely necessitated by a new attachment) under this 
approach would be allocated in the same way that capital, maintenance, 
and administrative costs are allocated under the Commission's recurring 
pole attachment rate formulas. Would this approach reduce barriers to 
entry and at the same time send efficient pricing signals for pole 
investment and broadband deployment? Would this approach reduce cost 
allocation and rate disputes related to pole replacement? Could such an 
approach be used for recovery of all upfront pole replacement costs, 
regardless of the reason for replacement? What are the advantages and 
disadvantages of such an approach?
    26. If we were to adopt a standard for allocating the costs of a 
pole replacement precipitated by a new attachment between utility and 
attachers, should utilities be able to contest that the allocation is 
sufficiently compensatory during negotiations with attachers and, if 
necessary, in complaint proceedings at the Commission, and what showing 
would be required for them to do so?
    27. To help us understand the scale of the pole replacement costs 
at issue, we seek data from attachers for a broad sample of recent, 
large broadband network buildouts showing the total number of poles to 
which they attached and, of those poles, the number for which they paid 
the full cost to replace an existing pole. For each project identified, 
we ask that attachers specify the total non-recurring costs of the 
project (i.e., costs for the physical material of the poles and any and 
all other assets, such as fiber and electronic equipment, and labor 
costs for design, engineering, and construction of the network) and the 
total non-recurring cost specifically for replacement poles. We ask 
that attachers and utilities provide information concerning the 
condition of the poles that were replaced and their status within the 
utility's pole inspection and replacement program, including any 
available information concerning the term of the pole's useful life. We 
also request that utilities provide data from their year-end 2021 
accounts showing: (1) Gross pole investment; (2) accumulated pole 
depreciation expense; (3) accumulated deferred income taxes 
attributable to poles; (4) net pole investment (i.e., gross pole 
investment minus accumulated depreciation expense minus accumulated 
deferred income taxes, a result that is equivalent to the net cost of a 
bare pole under the Commission's pole attachment formulas); and (5) 
pole investment excluded from gross pole investment (to avoid double 
recovery of the same pole costs through the collection of both non-
recurring make-ready and recurring rental fees).
    28. We seek comment on whether revising our cost sharing rules to 
recognize that utilities directly benefit from pole replacements needed 
to create capacity for new attachments and should pay a proportional 
share of those costs would have a positive or negative impact on the 
negotiation of pole attachment agreements and broadband deployment. As 
the Commission has previously recognized, Section 224 of the Act does 
not authorize us to mandate that utilities replace poles to create 
capacity for new attachments. We ask that commenters supporting or 
recommending specific cost allocation methodologies address why their 
favored solution will expedite pole attachment approvals without 
increasing denials, benefit consumers by connecting more people to 
broadband, and otherwise be in the public interest. We also seek 
comment on whether there are constraints on a utility's ability to deny 
attachment based on lack of capacity, such as the nondiscrimination 
requirement in Section 224(f)(2) of the Act. For instance, if a utility 
itself provides broadband, would it be discriminatory to deny 
attachment to another broadband provider based on lack of capacity?

C. Avoiding and Resolving Disputes Between Utilities and Attachers

    29. In addition to the questions above, we seek comment on 
additional measures that the Commission could adopt that would enable 
attachers and utilities to avoid pole replacement disputes and/or 
quickly resolve them when they occur. For instance, ExteNet argues that 
the Commission should require utilities to provide potential attachers 
with information concerning the condition of, and replacement plans 
for, their poles. Would disputes concerning the need for pole 
replacements and associated costs be avoided if attachers had access to 
such information when planning their deployments? What specific data 
points would utilities need to provide potential attachers for such 
disputes to be avoided? What mechanism could utilities use to provide 
such information to attachers if required to do so (e.g., an internal 
utility database) and what costs would be associated with establishing 
the mechanism(s)? Does the Commission have jurisdiction to require 
utilities to provide potential attachers with information concerning 
the status of their poles? Are there any other revisions or additions 
that the Commission can make to its rules that would enable parties to 
avoid disputes concerning pole replacements or facilitate the private 
resolution of those disputes? Beyond the topic of pole replacements, 
are there other recurring issues with the pole attachment process that 
hinder the ability of broadband providers to deploy new facilities? Are 
there other infrastructure-related barriers that broadband providers 
are facing in their efforts to quickly deploy broadband? What steps 
should the Commission take to address these and other problems that may 
arise, and to accelerate their resolution?

[[Page 25187]]

    30. When pole replacement disputes cannot be avoided or resolved 
privately by the parties, are there additional procedures the 
Commission should adopt to expedite the resolution of pole attachment 
complaints? In November 2017, the Commission established a 180-day shot 
clock for the Enforcement Bureau to resolve pole access complaints. 
NCTA argues that the Commission should take the additional step of 
announcing policies favoring the placement of pole attachment 
complaints arising in unserved areas on the Accelerated Docket, which 
requires that proceedings on a complaint be concluded within 60 days. 
We seek comment on whether such a step is necessary given the 180-day 
shot clock for pole access complaints and the discretion already 
afforded to Commission staff to place a complaint on the Accelerated 
Docket if they deem it suitable. We seek comment on the specific 
criteria the Commission would include in a policy that would guide 
Commission staff on when pole attachment complaints should be placed on 
the Accelerated Docket. For example, should the Commission's policy 
take into account the number and complexity of the claims, need for 
discovery, need for expert affidavits, and ability of the parties to 
stipulate to facts? If the Commission were to adopt a policy that 
favors including pole attachment complaints on the Accelerated Docket, 
should it be limited to complaints that raise only discrete pole access 
issues and do not require the Commission to consider whether a rate, 
term, or condition of attachment is unjust or unreasonable? We also 
seek comment on any other procedural mechanisms that would expedite the 
resolution of complaints before the Commission concerning pole 
replacements. We also seek comment on whether there is additional 
clarity the Commission can provide on the scope of refunds available 
under the Commission's existing rules governing pole attachment 
complaints.
    31. The Commission, as part of its continuing effort to advance 
digital equity for all, including people of color, persons with 
disabilities, persons who live in rural or Tribal areas, and others who 
are or have been historically underserved, marginalized, or adversely 
affected by persistent poverty or inequality, invites comment on any 
equity-related considerations and benefits (if any) that may be 
associated with the proposals and issues discussed herein. 
Specifically, we seek comment on how our proposals may promote or 
inhibit advances in diversity, equity, inclusion, and accessibility, as 
well the scope of the Commission's relevant legal authority.

II. Initial Regulatory Flexibility Analysis

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

A. Need for, and Objectives of, the Proposed Rule Changes

    33. The Second Further Notice seeks comment on ways to eliminate or 
expedite the resolution of pole replacement disputes by establishing 
clear standards for when and how the cost causation and cost sharing 
requirements in Section 1.1408(b) of the Commission's rules apply to 
pole replacements. The Second Further Notice specifically seeks comment 
on situations in which a pole replacement is not ``necessitated 
solely'' by a new attachment request, whether and to what extent 
utilities directly benefit from various types of pole replacements, and 
if the Commission should establish standards for when utilities should 
be required to pay a proportional share of pole replacement costs. 
Additionally, the Second Further Notice seeks comment on whether the 
Commission should adopt an express presumption with regard to whether 
utilities directly benefit when they use pole replacements precipitated 
by attachment requests to upgrade or enhance their poles, as well as 
whether the Commission has previously embraced or rejected such a 
presumption. Comments are also sought regarding the circumstances in 
which such a presumption would apply, how relevant costs would be 
allocated, and whether this presumption would positively or negatively 
impact pole attachment negotiations and, relatedly, broadband 
deployment.
    34. The Second Further Notice also seeks comment on the costs and 
benefits of early pole retirements. Specifically, when retiring a pole 
early to accommodate a new attachment, the Second Further Notice seeks 
comment on whether a revision of the Commission's pole attachment rules 
to require utilities to pay a portion of the costs of the pole 
replacement would help to align parties' economic incentives. The 
Second Further Notice seeks comment on whether it would be more 
efficient and effective to require all costs incurred to replace a 
structurally sound pole for reasons other than insufficient capacity to 
be recovered over time through the allowance for depreciation reflected 
in recurring rates calculated pursuant to the Commission's pole 
attachment rate formulas, rather than upfront through make-ready fees. 
It also seeks comment on whether a revision of the Commission's cost 
sharing rules to recognize that utilities directly benefit from pole 
replacements that create capacity for new attachments and should thus 
pay a proportional share of the costs would positively or negatively 
affect negotiations of pole attachment agreements and broadband 
deployment. The Second Further Notice seeks comment on whether the 
Commission should explicitly define certain key terms related to pole 
replacements and the rules governing them, including ``necessitated 
solely'' and ``red-tagged.'' Finally, the Second Further Notice seeks 
comment on measures the Commission could adopt to avoid disputes 
concerning pole replacements and expedite the resolution of complaints 
concerning pole replacements and provide more clarity with respect to 
the scope of refunds and payments that may be ordered if the Commission 
determines that a pole attachment rate, term, or condition is unjust 
and unreasonable.

B. Legal Basis

    35. The proposed action is authorized under Sections 1-4, 201, 202, 
214, 224, 251, and 303(r) of the Communications Act of 1934, as 
amended, 47 U.S.C. 151-54, 201, 202, 214, 224, 251, and 303(r).

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

    36. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein. The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small

[[Page 25188]]

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.
    37. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three broad groups of small entities that could be directly 
affected herein. First, while there are industry specific size 
standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the Small Business 
Administration's (SBA) Office of Advocacy, in general a small business 
is an independent business having fewer than 500 employees. These types 
of small businesses represent 99.9% of all businesses in the United 
States, which translates to 32.5 million businesses.
    38. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 
or less to delineate its annual electronic filing requirements for 
small exempt organizations. Nationwide, for tax year 2020, there were 
approximately 447,689 small exempt organizations in the U.S. reporting 
revenues of $50,000 or less according to the registration and tax data 
for exempt organizations available from the IRS.
    39. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2017 Census of Governments indicate that there 
were 90,075 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 36,931 general purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,040 special purpose governments--independent school 
districts with enrollment populations of less than 50,000. Accordingly, 
based on the 2017 U.S. Census of Governments data, we estimate that at 
least 48,971 entities fall into the category of ``small governmental 
jurisdictions.''
    40. Wired Broadband internet Access Service Providers. (Wired 
ISPs). Providers of wired broadband internet access service include 
various types of providers except dial-up internet access providers. 
Wireline service that terminates at an end user location or mobile 
device and enables the end user to receive information from and/or send 
information to the internet at information transfer rates exceeding 200 
kilobits per second (kbps) in at least one direction is classified as a 
broadband connection under the Commission's rules. Wired broadband 
internet services fall in the Wired Telecommunications Carriers 
industry. The SBA small business size standard for this industry 
classifies firms having 1,500 or fewer employees as small. U.S. Census 
Bureau data for 2017 show that there were 3,054 firms that operated in 
this industry for the entire year. Of this number, 2,964 firms operated 
with fewer than 250 employees. Additionally, according to Commission 
data on internet access services as of December 31, 2018, nationwide 
there were approximately 2,700 providers of connections over 200 kbps 
in at least one direction using various wireline technologies. The 
Commission does not collect data on the number of employees for 
providers of these services, therefore, at this time we are not able to 
estimate the number of providers that would qualify as small under the 
SBA's small business size standard. However, in light of the general 
data on fixed technology service providers in the Commission's 2020 
Communications Marketplace Report, we believe that the majority of 
wireline internet access service providers can be considered small 
entities.
    41. Internet Service Providers (Non-Broadband). Internet access 
service providers using client-supplied telecommunications connections 
(e.g., dial-up ISPs) as well as VoIP service providers using client-
supplied telecommunications connections fall in the industry 
classification of All Other Telecommunications. The SBA small business 
size standard for this industry classifies firms with annual receipts 
of $35 million or less as small. For this industry, U.S. Census Bureau 
data for 2017 show that there were 1,079 firms in this industry that 
operated for the entire year. Of those firms, 1,039 had revenue of less 
than $25 million. Consequently, under the SBA size standard a majority 
of firms in this industry can be considered small.
    42. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired communications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies. Establishments in this industry use the wired 
telecommunications network facilities that they operate to provide a 
variety of services, such as wired telephony services, including VoIP 
services, wired (cable) audio and video programming distribution, and 
wired broadband internet services. By exception, establishments 
providing satellite television distribution services using facilities 
and infrastructure that they operate are included in this industry. 
Wired Telecommunications Carriers are also referred to as wireline 
carriers or fixed local service providers.
    43. The SBA small business size standard for Wired 
Telecommunications Carriers classifies firms having 1,500 or fewer 
employees as small. U.S. Census Bureau data for 2017 show that there 
were 3,054 firms that operated in this industry for the entire year. Of 
this number, 2,964 firms operated with fewer than 250 employees. 
Additionally, based on Commission data in the 2021 Universal Service 
Monitoring Report, as of December 31, 2020, there were 5,183 providers 
that reported they were engaged in the provision of fixed local 
services. Of these providers, the Commission estimates that 4,737 
providers have 1,500 or fewer employees. Consequently, using the SBA's 
small business size standard, most of these providers can be considered 
small entities.
    44. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. Providers of these services 
include both incumbent and competitive local exchange service 
providers. Wired Telecommunications Carriers is the closest industry 
with an SBA small business size standard. Wired Telecommunications 
Carriers are also referred to as wireline carriers or fixed local 
service providers. The SBA small business size standard for Wired 
Telecommunications Carriers classifies firms having 1,500 or fewer 
employees as small. U.S. Census Bureau data for 2017 show that there 
were 3,054 firms that operated in this industry for the entire year. Of 
this number, 2,964 firms operated with fewer than 250 employees. 
Additionally, based on

[[Page 25189]]

Commission data in the 2021 Universal Service Monitoring Report, as of 
December 31, 2020, there were 5,183 providers that reported they were 
fixed local exchange service providers. Of these providers, the 
Commission estimates that 4,737 providers have 1,500 or fewer 
employees. Consequently, using the SBA's small business size standard, 
most of these providers can be considered small entities.
    45. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the 
Commission nor the SBA have developed a small business size standard 
specifically for incumbent local exchange carriers. Wired 
Telecommunications Carriers is the closest industry with an SBA small 
business size standard. The SBA small business size standard for Wired 
Telecommunications Carriers classifies firms having 1,500 or fewer 
employees as small. U.S. Census Bureau data for 2017 show that there 
were 3,054 firms in this industry that operated for the entire year. Of 
this number, 2,964 firms operated with fewer than 250 employees. 
Additionally, based on Commission data in the 2021 Universal Service 
Monitoring Report, as of December 31, 2020, there were 1,227 providers 
that reported they were incumbent local exchange service providers. Of 
these providers, the Commission estimates that 929 providers have 1,500 
or fewer employees. Consequently, using the SBA's small business size 
standard, the Commission estimates that the majority of incumbent local 
exchange carriers can be considered small entities.
    46. Competitive Local Exchange Carriers (LECs). Neither the 
Commission nor the SBA has developed a size standard for small 
businesses specifically applicable to local exchange services. 
Providers of these services include several types of competitive local 
exchange service providers. Wired Telecommunications Carriers is the 
closest industry with an SBA small business size standard. The SBA 
small business size standard for Wired Telecommunications Carriers 
classifies firms having 1,500 or fewer employees as small. U.S. Census 
Bureau data for 2017 show that there were 3,054 firms that operated in 
this industry for the entire year. Of this number, 2,964 firms operated 
with fewer than 250 employees. Additionally, based on Commission data 
in the 2021 Universal Service Monitoring Report, as of December 31, 
2020, there were 3,956 providers that reported they were competitive 
local exchange service providers. Of these providers, the Commission 
estimates that 3,808 providers have 1,500 or fewer employees. 
Consequently, using the SBA's small business size standard, most of 
these providers can be considered small entities.
    47. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
Interexchange Carriers. Wired Telecommunications Carriers is the 
closest industry with an SBA small business size standard. The SBA 
small business size standard for Wired Telecommunications Carriers 
classifies firms having 1,500 or fewer employees as small. U.S. Census 
Bureau data for 2017 show that there were 3,054 firms that operated in 
this industry for the entire year. Of this number, 2,964 firms operated 
with fewer than 250 employees. Additionally, based on Commission data 
in the 2021 Universal Service Monitoring Report, as of December 31, 
2020, there were 151 providers that reported they were engaged in the 
provision of interexchange services. Of these providers, the Commission 
estimates that 131 providers have 1,500 or fewer employees. 
Consequently, using the SBA's small business size standard, the 
Commission estimates that the majority of providers in this industry 
can be considered small entities.
    48. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator service providers. The closest applicable industry with an SBA 
small business size standard is Wired Telecommunications Carriers. The 
SBA small business size standard classifies a business as small if it 
has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show 
that there were 3,054 firms in this industry that operated for the 
entire year. Of this number, 2,964 firms operated with fewer than 250 
employees. Additionally, based on Commission data in the 2021 Universal 
Service Monitoring Report, as of December 31, 2020, there were 32 
providers that reported they were engaged in the provision of operator 
services. Of these providers, the Commission estimates that all 32 
providers have 1,500 or fewer employees. Consequently, using the SBA's 
small business size standard, all of these providers can be considered 
small entities.
    49. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a definition for small businesses specifically applicable to 
Other Toll Carriers. This category includes toll carriers that do not 
fall within the categories of interexchange carriers, operator service 
providers, prepaid calling card providers, satellite service carriers, 
or toll resellers. Wired Telecommunications Carriers is the closest 
industry with an SBA small business size standard. The SBA small 
business size standard for Wired Telecommunications Carriers classifies 
firms having 1,500 or fewer employees as small. U.S. Census Bureau data 
for 2017 show that there were 3,054 firms in this industry that 
operated for the entire year. Of this number, 2,964 firms operated with 
fewer than 250 employees. Additionally, based on Commission data in the 
2021 Universal Service Monitoring Report, as of December 31, 2020, 
there were 115 providers that reported they were engaged in the 
provision of other toll services. Of these providers, the Commission 
estimates that 113 providers have 1,500 or fewer employees. 
Consequently, using the SBA's small business size standard, most of 
these providers can be considered small entities.
    50. The broadband internet access service provider category covered 
by these new rules may cover multiple wireless firms and categories of 
regulated wireless services. Thus, to the extent the wireless services 
listed below are used by wireless firms for broadband internet access 
service, the actions may have an impact on those small businesses as 
set forth above and further below. In addition, for those services 
subject to auctions, we note that, as a general matter, the number of 
winning bidders that claim to qualify as small businesses at the close 
of an auction does not necessarily represent the number of small 
businesses currently in service. Also, the Commission does not 
generally track subsequent business size unless, in the context of 
assignments and transfers or reportable eligibility events, unjust 
enrichment issues are implicated.
    51. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
SBA size standard for this industry classifies a business as small if 
it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show 
that there were 2,893 firms in this industry that operated for the 
entire year. Of that number, 2,837 firms employed fewer

[[Page 25190]]

than 250 employees. Additionally, based on Commission data in the 2021 
Universal Service Monitoring Report, as of December 31, 2020, there 
were 797 providers that reported they were engaged in the provision of 
wireless services. Of these providers, the Commission estimates that 
715 providers have 1,500 or fewer employees. Consequently, using the 
SBA's small business size standard, most of these providers can be 
considered small entities.
    52. Wireless Communications Services. Wireless Communications 
Services (WCS) can be used for a variety of fixed, mobile, 
radiolocation, and digital audio broadcasting satellite services. 
Wireless spectrum is made available and licensed for the provision of 
wireless communications services in several frequency bands subject to 
Part 27 of the Commission's rules. Wireless Telecommunications Carriers 
(except Satellite) is the closest industry with an SBA small business 
size standard applicable to these services. The SBA small business size 
standard for this industry classifies a business as small if it has 
1,500 or fewer employees. U.S. Census Bureau data for 2017 show that 
there were 2,893 firms that operated in this industry for the entire 
year. Of this number, 2,837 firms employed fewer than 250 employees. 
Thus under the SBA size standard, the Commission estimates that a 
majority of licensees in this industry can be considered small.
    53. The Commission's small business size standards with respect to 
WCS involve eligibility for bidding credits and installment payments in 
the auction of licenses for the various frequency bands included in 
WCS. When bidding credits are adopted for the auction of licenses in 
WCS frequency bands, such credits may be available to several types of 
small businesses based average gross revenues (small, very small and 
entrepreneur) pursuant to the competitive bidding rules adopted in 
conjunction with the requirements for the auction and/or as identified 
in the designated entities section in Part 27 of the Commission's rules 
for the specific WCS frequency bands.
    54. In frequency bands where licenses were subject to auction, the 
Commission notes that as a general matter, the number of winning 
bidders that qualify as small businesses at the close of an auction 
does not necessarily represent the number of small businesses currently 
in service. Further, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated. Additionally, since the 
Commission does not collect data on the number of employees for 
licensees providing these services, at this time we are not able to 
estimate the number of licensees with active licenses that would 
qualify as small under the SBA's small business size standard.
    55. 1670-1675 MHz Services. These wireless communications services 
can be used for fixed and mobile uses, except aeronautical mobile. 
Wireless Telecommunications Carriers (except Satellite) is the closest 
industry with an SBA small business size standard applicable to these 
services. The SBA size standard for this industry classifies a business 
as small if it has 1,500 or fewer employees. U.S. Census Bureau data 
for 2017 show that there were 2,893 firms that operated in this 
industry for the entire year. Of this number, 2,837 firms employed 
fewer than 250 employees. Thus under the SBA size standard, the 
Commission estimates that a majority of licensees in this industry can 
be considered small.
    56. According to Commission data as of November 2021, there were 
three active licenses in this service. The Commission's small business 
size standards with respect to 1670-1675 MHz Services involve 
eligibility for bidding credits and installment payments in the auction 
of licenses for these services. For licenses in the 1670-1675 MHz 
service band, a ``small business'' is defined as an entity that, 
together with its affiliates and controlling interests, has average 
gross revenues not exceeding $40 million for the preceding three years, 
and a ``very small business'' is defined as an entity that, together 
with its affiliates and controlling interests, has had average annual 
gross revenues not exceeding $15 million for the preceding three years. 
The 1670-1675 MHz service band auction's winning bidder did not claim 
small business status.
    57. In frequency bands where licenses were subject to auction, the 
Commission notes that as a general matter, the number of winning 
bidders that qualify as small businesses at the close of an auction 
does not necessarily represent the number of small businesses currently 
in service. Further, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated. Additionally, since the 
Commission does not collect data on the number of employees for 
licensees providing these services, at this time we are not able to 
estimate the number of licensees with active licenses that would 
qualify as small under the SBA's small business size standard.
    58. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. The closest applicable industry with an SBA small 
business size standard is Wireless Telecommunications Carriers (except 
Satellite). The size standard for this industry under SBA rules is that 
a business is small if it has 1,500 or fewer employees. For this 
industry, U.S. Census Bureau data for 2017 show that there were 2,893 
firms that operated for the entire year. Of this number, 2,837 firms 
employed fewer than 250 employees. Additionally, based on Commission 
data in the 2021 Universal Service Monitoring Report, as of December 
31, 2020, there were 407 providers that reported they were engaged in 
the provision of cellular, personal communications services, and 
specialized mobile radio services. Of these providers, the Commission 
estimates that 333 providers have 1,500 or fewer employees. 
Consequently, using the SBA's small business size standard, most of 
these providers can be considered small entities.
    59. Broadband Personal Communications Service. The broadband 
personal communications services (PCS) spectrum encompasses services in 
the 1850-1910 and 1930-1990 MHz bands. The closest industry with an SBA 
small business size standard applicable to these services is Wireless 
Telecommunications Carriers (except Satellite). The SBA small business 
size standard for this industry classifies a business as small if it 
has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show 
that there were 2,893 firms that operated in this industry for the 
entire year. Of this number, 2,837 firms employed fewer than 250 
employees. Thus under the SBA size standard, the Commission estimates 
that a majority of licensees in this industry can be considered small.
    60. Based on Commission data as of November 2021, there were 
approximately 5,060 active licenses in the Broadband PCS service. The 
Commission's small business size standards with respect to Broadband 
PCS involve eligibility for bidding credits and installment payments in 
the auction of licenses for these services. In auctions for these 
licenses, the Commission defined ``small business'' as an entity that, 
together with its affiliates and controlling interests, has average 
gross revenues not exceeding $40 million for the preceding three years, 
and a ``very small business'' as an entity that, together with its 
affiliates and controlling interests, has had

[[Page 25191]]

average annual gross revenues not exceeding $15 million for the 
preceding three years. Winning bidders claiming small business credits 
won Broadband PCS licenses in C, D, E, and F Blocks.
    61. In frequency bands where licenses were subject to auction, the 
Commission notes that as a general matter, the number of winning 
bidders that qualify as small businesses at the close of an auction 
does not necessarily represent the number of small businesses currently 
in service. Further, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated. Additionally, since the 
Commission does not collect data on the number of employees for 
licensees providing these, at this time we are not able to estimate the 
number of licensees with active licenses that would qualify as small 
under the SBA's small business size standard.
    62. Broadband Personal Communications Service. The broadband 
personal communications services (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission initially defined a ``small 
business'' for C- and F-Block licenses as an entity that has average 
gross revenues of $40 million or less in the three previous calendar 
years. For F-Block licenses, an additional small business size standard 
for ``very small business'' was added and is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. These 
standards, defining ``small entity'' in the context of broadband PCS 
auctions, have been approved by the SBA. No small businesses within the 
SBA-approved small business size standards bid successfully for 
licenses in Blocks A and B. There were 90 winning bidders that claimed 
small business status in the first two C-Block auctions. A total of 93 
bidders that claimed small business status won approximately 40% of the 
1,479 licenses in the first auction for the D, E, and F Blocks. On 
April 15, 1999, the Commission completed the reauction of 347 C-, D-, 
E-, and F-Block licenses in Auction No. 22. Of the 57 winning bidders 
in that auction, 48 claimed small business status and won 277 licenses.
    63. Specialized Mobile Radio Licenses. Special Mobile Radio (SMR) 
licenses allow licensees to provide land mobile communications services 
(other than radiolocation services) in the 800 MHz and 900 MHz spectrum 
bands on a commercial basis including but not limited to services used 
for voice and data communications, paging, and facsimile services, to 
individuals, Federal Government entities, and other entities licensed 
under Part 90 of the Commission's rules. Wireless Telecommunications 
Carriers (except Satellite) is the closest industry with an SBA small 
business size standard applicable to these services. The SBA size 
standard for this industry classifies a business as small if it has 
1,500 or fewer employees. For this industry, U.S. Census Bureau data 
for 2017 show that there were 2,893 firms in this industry that 
operated for the entire year. Of this number, 2,837 firms employed 
fewer than 250 employees. Additionally, based on Commission data in the 
2021 Universal Service Monitoring Report, as of December 31, 2020, 
there were 119 providers that reported they were of SMR (dispatch) 
providers. Of this number, the Commission estimates that all 119 
providers have 1,500 or fewer employees. Consequently, using the SBA's 
small business size standard, these 119 SMR licensees can be considered 
small entities.
    64. Based on Commission data as of December 2021, there were 3,924 
active SMR licenses. However, since the Commission does not collect 
data on the number of employees for licensees providing SMR services, 
at this time we are not able to estimate the number of licensees with 
active licenses that would qualify as small under the SBA's small 
business size standard. Nevertheless, for purposes of this analysis the 
Commission estimates that the majority of SMR licensees can be 
considered small entities using the SBA's small business size standard.
    65. Lower 700 MHz Band Licenses. The lower 700 MHz band encompasses 
spectrum in the 698-746 MHz frequency bands. Permissible operations in 
these bands include flexible fixed, mobile, and broadcast uses, 
including mobile and other digital new broadcast operation; fixed and 
mobile wireless commercial services (including FDD- and TDD-based 
services); as well as fixed and mobile wireless uses for private, 
internal radio needs, two-way interactive, cellular, and mobile 
television broadcasting services. Wireless Telecommunications Carriers 
(except Satellite) is the closest industry with an SBA small business 
size standard applicable to licenses providing services in these bands. 
The SBA small business size standard for this industry classifies a 
business as small if it has 1,500 or fewer employees. U.S. Census 
Bureau data for 2017 show that there were 2,893 firms that operated in 
this industry for the entire year. Of this number, 2,837 firms employed 
fewer than 250 employees. Thus under the SBA size standard, the 
Commission estimates that a majority of licensees in this industry can 
be considered small.
    66. According to Commission data as of December 2021, there were 
approximately 2,824 active Lower 700 MHz Band licenses. The 
Commission's small business size standards with respect to Lower 700 
MHz Band licensees involve eligibility for bidding credits and 
installment payments in the auction of licenses. For auctions of Lower 
700 MHz Band licenses the Commission adopted criteria for three groups 
of small businesses. A very small business was defined as an entity 
that, together with its affiliates and controlling interests, has 
average annual gross revenues not exceeding $15 million for the 
preceding three years, a small business was defined as an entity that, 
together with its affiliates and controlling interests, has average 
gross revenues not exceeding $40 million for the preceding three years, 
and an entrepreneur was defined as an entity that, together with its 
affiliates and controlling interests, has average gross revenues not 
exceeding $3 million for the preceding three years. In auctions for 
Lower 700 MHz Band licenses seventy-two winning bidders claiming a 
small business classification won 329 licenses, twenty-six winning 
bidders claiming a small business classification won 214 licenses, and 
three winning bidders claiming a small business classification won all 
five auctioned licenses.
    67. In frequency bands where licenses were subject to auction, the 
Commission notes that as a general matter, the number of winning 
bidders that qualify as small businesses at the close of an auction 
does not necessarily represent the number of small businesses currently 
in service. Further, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated. Additionally, since the 
Commission does not collect data on the number of employees for 
licensees providing these services, at this time we are not able to 
estimate the number of licensees with active licenses that would 
qualify as small under the SBA's small business size standard.
    68. Upper 700 MHz Band Licenses. The upper 700 MHz band encompasses 
spectrum in the 746-806 MHz bands. Upper 700 MHz D Block licenses are 
nationwide licenses associated with the 758-763 MHz and 788-793 MHz 
bands. Permissible operations in these bands

[[Page 25192]]

include flexible fixed, mobile, and broadcast uses, including mobile 
and other digital new broadcast operation; fixed and mobile wireless 
commercial services (including FDD- and TDD-based services); as well as 
fixed and mobile wireless uses for private, internal radio needs, two-
way interactive, cellular, and mobile television broadcasting services. 
Wireless Telecommunications Carriers (except Satellite) is the closest 
industry with an SBA small business size standard applicable to 
licenses providing services in these bands. The SBA small business size 
standard for this industry classifies a business as small if it has 
1,500 or fewer employees. U.S. Census Bureau data for 2017 show that 
there were 2,893 firms that operated in this industry for the entire 
year. Of that number, 2,837 firms employed fewer than 250 employees. 
Thus, under the SBA size standard, the Commission estimates that a 
majority of licensees in this industry can be considered small.
    69. According to Commission data as of December 2021, there were 
approximately 152 active Upper 700 MHz Band licenses. The Commission's 
small business size standards with respect to Upper 700 MHz Band 
licensees involve eligibility for bidding credits and installment 
payments in the auction of licenses. For the auction of these licenses, 
the Commission defined a ``small business'' as an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $40 million for the preceding three years, and a 
``very small business'' an entity that, together with its affiliates 
and controlling principals, has average gross revenues that are not 
more than $15 million for the preceding three years. Pursuant to these 
definitions, three winning bidders claiming very small business status 
won five of the twelve available licenses.
    70. Air-Ground Radiotelephone Service. Air-Ground Radiotelephone 
Service is a wireless service in which licensees are authorized to 
offer and provide radio telecommunications service for hire to 
subscribers in aircraft. A licensee may provide any type of air-ground 
service (i.e., voice telephony, broadband internet, data, etc.) to 
aircraft of any type, and serve any or all aviation markets 
(commercial, government, and general). A licensee must provide service 
to aircraft and may not provide ancillary land mobile or fixed services 
in the 800 MHz air-ground spectrum.
    71. The closest industry with an SBA small business size standard 
applicable to these services is Wireless Telecommunications Carriers 
(except Satellite). The SBA small business size standard for this 
industry classifies a business as small if it has 1,500 or fewer 
employees. U.S. Census Bureau data for 2017 show that there were 2,893 
firms that operated in this industry for the entire year. Of this 
number, 2,837 firms employed fewer than 250 employees. Thus under the 
SBA size standard, the Commission estimates that a majority of 
licensees in this industry can be considered small.
    72. Based on Commission data as of December 2021, there were 
approximately four licensees with 110 active licenses in the Air-Ground 
Radiotelephone Service. The Commission's small business size standards 
with respect to Air-Ground Radiotelephone Service involve eligibility 
for bidding credits and installment payments in the auction of 
licenses. For purposes of auctions, the Commission defined ``small 
business'' as an entity that, together with its affiliates and 
controlling interests, has average gross revenues not exceeding $40 
million for the preceding three years, and a ``very small business'' as 
an entity that, together with its affiliates and controlling interests, 
has had average annual gross revenues not exceeding $15 million for the 
preceding three years. In the auction of Air-Ground Radiotelephone 
Service licenses in the 800 MHz band, neither of the two winning 
bidders claimed small business status.
    73. In frequency bands where licenses were subject to auction, the 
Commission notes that as a general matter, the number of winning 
bidders that qualify as small businesses at the close of an auction 
does not necessarily represent the number of small businesses currently 
in service. Further, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated. Additionally, the Commission 
does not collect data on the number of employees for licensees 
providing these services therefore, at this time we are not able to 
estimate the number of licensees with active licenses that would 
qualify as small under the SBA's small business size standard.
    74. 3650-3700 MHz band. Wireless broadband service licensing in the 
3650-3700 MHz band provides for nationwide, non-exclusive licensing of 
terrestrial operations, utilizing contention-based technologies, in the 
3650 MHz band (i.e., 3650-3700 MHz). Licensees are permitted to provide 
services on a non-common carrier and/or on a common carrier basis. 
Wireless broadband services in the 3650-3700 MHz band fall in the 
Wireless Telecommunications Carriers (except Satellite) industry with 
an SBA small business size standard that classifies a business as small 
if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 
show that there were 2,893 firms that operated in this industry for the 
entire year. Of this number, 2,837 firms employed fewer than 250 
employees. Thus under the SBA size standard, the Commission estimates 
that a majority of licensees in this industry can be considered small.
    75. The Commission has not developed a small business size standard 
applicable to 3650-3700 MHz band licensees. Based on the licenses that 
have been granted, however, we estimate that the majority of licensees 
in this service are small internet Access Service Providers (ISPs). As 
of November 2021, Commission data shows that there were 902 active 
licenses in the 3650-3700 MHz band. However, since the Commission does 
not collect data on the number of employees for licensees providing 
these services, at this time we are not able to estimate the number of 
licensees with active licenses that would qualify as small under the 
SBA's small business size standard.
    76. Fixed Microwave Services. Fixed microwave services include 
common carrier, private-operational fixed, and broadcast auxiliary 
radio services. They also include the Upper Microwave Flexible Use 
Service (UMFUS), Millimeter Wave Service (70/80/90 GHz), Local 
Multipoint Distribution Service (LMDS), the Digital Electronic Message 
Service (DEMS), 24 GHz Service, Multiple Address Systems (MAS), and 
Multichannel Video Distribution and Data Service (MVDDS), where in some 
bands licensees can choose between common carrier and non-common 
carrier status. Wireless Telecommunications Carriers (except Satellite) 
is the closest industry with an SBA small business size standard 
applicable to these services. The SBA small size standard for this 
industry classifies a business as small if it has 1,500 or fewer 
employees. U.S. Census Bureau data for 2017 show that there were 2,893 
firms that operated in this industry for the entire year. Of this 
number, 2,837 firms employed fewer than 250 employees. Thus under the 
SBA size standard, the Commission estimates that a majority of fixed 
microwave service licensees can be considered small.
    77. The Commission's small business size standards with respect to 
fixed microwave services involve eligibility for bidding credits and 
installment payments in the auction of licenses for

[[Page 25193]]

the various frequency bands included in fixed microwave services. When 
bidding credits are adopted for the auction of licenses in fixed 
microwave services frequency bands, such credits may be available to 
several types of small businesses based average gross revenues (small, 
very small and entrepreneur) pursuant to the competitive bidding rules 
adopted in conjunction with the requirements for the auction and/or as 
identified in Part 101 of the Commission's rules for the specific fixed 
microwave services frequency bands.
    78. In frequency bands where licenses were subject to auction, the 
Commission notes that as a general matter, the number of winning 
bidders that qualify as small businesses at the close of an auction 
does not necessarily represent the number of small businesses currently 
in service. Further, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated. Additionally, since the 
Commission does not collect data on the number of employees for 
licensees providing these services, at this time we are not able to 
estimate the number of licensees with active licenses that would 
qualify as small under the SBA's small business size standard.
    79. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service systems, previously referred to as Multipoint 
Distribution Service (MDS) and Multichannel Multipoint Distribution 
Service (MMDS) systems, and ``wireless cable,'' transmit video 
programming to subscribers and provide two-way high speed data 
operations using the microwave frequencies of the Broadband Radio 
Service (BRS) and Educational Broadband Service (EBS) (previously 
referred to as the Instructional Television Fixed Service (ITFS)). 
Wireless cable operators that use spectrum in the BRS often 
supplemented with leased channels from the EBS, provide a competitive 
alternative to wired cable and other multichannel video programming 
distributors. Wireless cable programming to subscribers resembles cable 
television, but instead of coaxial cable, wireless cable uses microwave 
channels.
    80. In light of the use of wireless frequencies by BRS and EBS 
services, the closest industry with an SBA small business size standard 
applicable to these services is Wireless Telecommunications Carriers 
(except Satellite). The SBA small business size standard for this 
industry classifies a business as small if it has 1,500 or fewer 
employees. U.S. Census Bureau data for 2017 show that there were 2,893 
firms that operated in this industry for the entire year. Of this 
number, 2,837 firms employed fewer than 250 employees. Thus under the 
SBA size standard, the Commission estimates that a majority of 
licensees in this industry can be considered small.
    81. According to Commission data as December 2021, there were 
approximately 5,869 active BRS and EBS licenses. The Commission's small 
business size standards with respect to BRS involves eligibility for 
bidding credits and installment payments in the auction of licenses for 
these services. For the auction of BRS licenses, the Commission adopted 
criteria for three groups of small businesses. A very small business is 
an entity that, together with its affiliates and controlling interests, 
has average annual gross revenues exceed $3 million and did not exceed 
$15 million for the preceding three years, a small business is an 
entity that, together with its affiliates and controlling interests, 
has average gross revenues exceed $15 million and did not exceed $40 
million for the preceding three years, and an entrepreneur is an entity 
that, together with its affiliates and controlling interests, has 
average gross revenues not exceeding $3 million for the preceding three 
years. Of the ten winning bidders for BRS licenses, two bidders 
claiming the small business status won 4 licenses, one bidder claiming 
the very small business status won three licenses and two bidders 
claiming entrepreneur status won six licenses. One of the winning 
bidders claiming a small business status classification in the BRS 
license auction has an active licenses as of December 2021.
    82. The Commission's small business size standards for EBS define a 
small business as an entity that, together with its affiliates, its 
controlling interests and the affiliates of its controlling interests, 
has average gross revenues that are not more than $55 million for the 
preceding five (5) years, and a very small business is an entity that, 
together with its affiliates, its controlling interests and the 
affiliates of its controlling interests, has average gross revenues 
that are not more than $20 million for the preceding five (5) years. In 
frequency bands where licenses were subject to auction, the Commission 
notes that as a general matter, the number of winning bidders that 
qualify as small businesses at the close of an auction does not 
necessarily represent the number of small businesses currently in 
service. Further, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated. Additionally, since the 
Commission does not collect data on the number of employees for 
licensees providing these services, at this time we are not able to 
estimate the number of licensees with active licenses that would 
qualify as small under the SBA's small business size standard.
    83. Satellite Telecommunications. This industry comprises firms 
``primarily engaged in providing telecommunications services to other 
establishments in the telecommunications and broadcasting industries by 
forwarding and receiving communications signals via a system of 
satellites or reselling satellite telecommunications.'' Satellite 
telecommunications service providers include satellite and earth 
station operators. The SBA small business size standard for this 
industry classifies a business with $35 million or less in annual 
receipts as small. U.S. Census Bureau data for 2017 show that 275 firms 
in this industry operated for the entire year. Of this number, 242 
firms had revenue of less than $25 million. Additionally, based on 
Commission data in the 2021 Universal Service Monitoring Report, as of 
December 31, 2020, there were 71 providers that reported they were 
engaged in the provision of satellite telecommunications services. Of 
these providers, the Commission estimates that approximately 48 
providers have 1,500 or fewer employees. Consequently using the SBA's 
small business size standard, a little more than of these providers can 
be considered small entities.
    84. All Other Telecommunications. This industry is comprised of 
establishments primarily engaged in providing specialized 
telecommunications services, such as satellite tracking, communications 
telemetry, and radar station operation. This industry also includes 
establishments primarily engaged in providing satellite terminal 
stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. Providers of 
internet services (e.g. dial-up ISPs) or voice over internet protocol 
(VoIP) services, via client-supplied telecommunications connections are 
also included in this industry. The SBA small business size standard 
for this industry classifies firms with annual receipts of $35 million 
or less as small. U.S. Census Bureau data for 2017 show that there

[[Page 25194]]

were 1,079 firms in this industry that operated for the entire year. Of 
those firms, 1,039 had revenue of less than $25 million. Based on this 
data, the Commission estimates that the majority of ``All Other 
Telecommunications'' firms can be considered small.
    85. Because Section 706 of the Act requires us to monitor the 
deployment of broadband using any technology, we anticipate that some 
broadband service providers may not provide telephone service. 
Accordingly, we describe below other types of firms that may provide 
broadband services, including cable companies, MDS providers, and 
utilities, among others.
    86. Cable and Other Subscription Programming. The U.S. Census 
Bureau defines this industry as establishments primarily engaged in 
operating studios and facilities for the broadcasting of programs on a 
subscription or fee basis. The broadcast programming is typically 
narrowcast in nature (e.g., limited format, such as news, sports, 
education, or youth-oriented). These establishments produce programming 
in their own facilities or acquire programming from external sources. 
The programming material is usually delivered to a third party, such as 
cable systems or direct-to-home satellite systems, for transmission to 
viewers. The SBA small business size standard for this industry 
classifies firms with annual receipts less than $41.5 million as small. 
Based on U.S. Census Bureau data for 2017, 378 firms operated in this 
industry during that year. Of that number, 149 firms operated with 
revenue of less than $25 million a year and 44 firms operated with 
revenue of $25 million or more. Based on this data, the Commission 
estimates that a majority of firms in this industry are small.
    87. Cable Companies and Systems (Rate Regulation). The Commission 
has developed its own small business size standard for the purpose of 
cable rate regulation. Under the Commission's rules, a ``small cable 
company'' is one serving 400,000 or fewer subscribers nationwide. Based 
on available data, as of December 2020, there were approximately 
45,308,192 basic cable video subscribers in the top Cable MSOs in the 
United States. Only five cable operators serving cable video 
subscribers in the top Cable MSOs had more than 400,000 subscribers. 
Accordingly, the Commission estimates that the majority of cable 
operators are small.
    88. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, contains a size standard for 
small cable system operators, which classifies ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 
one percent of all subscribers in the United States and is not 
affiliated with any entity or entities whose gross annual revenues in 
the aggregate exceed $250,000,000,'' as small. As of December 2020, 
there were approximately 45,308,192 basic cable video subscribers in 
the top Cable MSOs in the United States. Accordingly, an operator 
serving fewer than 453,082 subscribers shall be deemed a small operator 
if its annual revenues, when combined with the total annual revenues of 
all its affiliates, do not exceed $250 million in the aggregate. Based 
on available data, all but five of the cable operators in the Top Cable 
MSOs have less than 453,082 subscribers and can be considered small 
entities under this size standard. We note however, that the Commission 
neither requests nor collects information on whether cable system 
operators are affiliated with entities whose gross annual revenues 
exceed $250 million. Therefore, we are unable at this time to estimate 
with greater precision the number of cable system operators that would 
qualify as small cable operators under the definition in the 
Communications Act.
    89. Electric Power Generators, Transmitters, and Distributors. The 
U.S. Census Bureau defines the utilities sector industry as comprised 
of ``establishments, primarily engaged in generating, transmitting, 
and/or distributing electric power. Establishments in this industry 
group may perform one or more of the following activities: (1) Operate 
generation facilities that produce electric energy; (2) operate 
transmission systems that convey the electricity from the generation 
facility to the distribution system; and (3) operate distribution 
systems that convey electric power received from the generation 
facility or the transmission system to the final consumer.'' This 
industry group is categorized based on fuel source and includes 
Hydroelectric Power Generation, Fossil Fuel Electric Power Generation, 
Nuclear Electric Power Generation, Solar Electric Power Generation, 
Wind Electric Power Generation, Geothermal Electric Power Generation, 
Biomass Electric Power Generation, Other Electric Power Generation, 
Electric Bulk Power Transmission and Control and Electric Power 
Distribution.
    90. The SBA has established a small business size standard for each 
of these groups based on the number of employees which ranges from 
having fewer than 250 employees to having fewer than 1,000 employees. 
U.S. Census Bureau data for 2017 indicate that for the Electric Power 
Generation, Transmission and Distribution industry there were 1,693 
firms that operated in this industry for the entire year. Of this 
number, 1,552 firms had less than 250 employees. Based on this data and 
the associated SBA size standards, the majority of firms in this 
industry can be considered small entities.

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

    91. The Second Further Notice seeks comment on ways to effectively 
resolve pole replacement disputes through the establishment of 
standards for when and how utilities and attachers must share in the 
costs of a pole replacement necessitated by an attachment request. The 
Second Further Notice does not definitively propose any changes to the 
Commission's current pole attachment rules, but does request that 
commenters address the legal implications of any rule revisions they 
propose, which may include reporting, recordkeeping, and other 
compliance requirements. For example, the Second Further Notice seeks 
comment on whether the Commission has jurisdiction to require utilities 
to share information concerning the status of utility poles with 
attachers and, if so, the mechanism through which such information 
would be provided.
    92. The Second Further Notice seeks comment on what situations 
exist in which a pole replacement is not ``necessitated solely'' by a 
new attachment request and whether codifying a definition of this 
phrase would be helpful for parties seeking to comply with Section 
1.1408(b) of the Commission's rules. With respect to utility benefits, 
the Second Further Notice seeks comment on how to identify and quantify 
the costs associated with a pole replacement that are proportional to 
the direct benefit obtained by a utility from a replacement not 
necessitated solely by a new attachment request. The Second Further 
Notice also seeks comment on whether the Commission should revise its 
pole attachment rules to recognize that utilities directly benefit from 
pole replacements caused by new attachment requests and establish clear 
standards for when utilities should be required to pay a proportional 
share of pole replacement costs. Further, the Second Further Notice 
seeks comment on whether the Commission should adopt an express 
presumption that utilities directly benefit when they use pole

[[Page 25195]]

replacements precipitated by an attachment request to upgrade or 
enhance their poles. The Commission then asks how costs should be 
allocated between utilities and attachers if such a presumption is 
adopted and whether the Commission should revise its cost sharing rules 
to require utilities to pay a portion of the costs of replacing a pole 
to create capacity for new attachments. The Commission also seeks 
comment on the scope of utility liability for pole attachment rate 
refunds when rates are found to be unjust and unreasonable. Should 
commenters provide compelling arguments, some or all of these proposals 
could be adopted. The guidance and clarity offered by these proposals 
would lessen the compliance impact on small utilities and attaching 
entities with regard to pole replacements and pole attachment rate 
refunds.

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

    93. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    94. The Second Further Notice does not propose specific changes to 
the Commission's pole attachment rules, but seeks comment on whether 
the Commission should revise its rules to eliminate and expedite the 
resolution of pole replacement disputes between utilities and attachers 
and provide clarity with respect to the pole attachment rate refund 
liability for utilities. The Commission's objective in requesting this 
information is to determine whether it can and should establish clear 
standards for when and how attachers and utilities must share the costs 
of a pole replacement precipitated by a new attachment request. In 
considering the cost allocations, the Commission seeks comment on 
alternatives that might help smaller utilities and attaching entities. 
For example, it asks that when a pole needs to be replaced both to 
accommodate a new attachment and to correct a preexisting violation, 
whether the new attacher should be responsible for the difference in 
cost between the taller pole needed for its attachment and what it 
would cost to replace the existing pole with one of the same type and 
size. The Second Further Notice also seeks comment on what other 
methods of apportioning costs are available in this situation in an 
attempt to properly balance this burden on different types of entities. 
Additionally, the Second Further Notice seeks comment on the Commission 
recognizing an express presumption regarding whether utilities directly 
benefit when they use pole replacements precipitated by an attachment 
request to upgrade or enhance their poles. The Commission seeks comment 
on cost allocation alternatives related to the presumption, were it to 
be adopted, that could be helpful to smaller attachers and utilities. 
Specifically, the Second Further Notice asks whether the new attacher 
should be responsible for the difference in cost between a taller pole 
of the same type as the existing pole and the upgraded pole, along with 
other typical make-ready costs of a new attachment, or if another 
measure is more appropriate when specific parties are involved. 
Notably, at the conclusion of the Second Further Notice, the Commission 
also asks commenters recommending certain cost allocation methodologies 
to address why their favored solution will expedite pole attachment 
approvals, benefit consumers, and otherwise be in the public interest. 
The Commission further seeks comment on the scope of refunds available 
to attachers when pole attachment rates are found to be unjust and 
unreasonable. Information submitted in response to these requests for 
comment will enable the Commission to evaluate the impact that revising 
its cost sharing and rate refund rules would impact smaller entities.

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

    95. None.

III. Procedural Matters

    96. Ex Parte Rules. This proceeding shall be treated as a ``permit-
but-disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making ex parte presentations must file a copy of any 
written presentation or a memorandum summarizing any oral presentation 
within two business days after the presentation (unless a different 
deadline applicable to the Sunshine period applies). Persons making 
oral ex parte presentations are reminded that memoranda summarizing the 
presentation must (1) list all persons attending or otherwise 
participating in the meeting at which the ex parte presentation was 
made, and (2) summarize all data presented and arguments made during 
the presentation. If the presentation consisted in whole or in part of 
the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda, or other filings in the 
proceeding, then the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with 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.
    97. Initial Regulatory Flexibility Analysis. Pursuant to the 
Regulatory Flexibility Act, the Commission has prepared an Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on small entities of the policies and actions 
considered in the Second Further Notice. The text of the IRFA is set 
forth herein. Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the Second Further Notice. The 
Commission's Consumer and Governmental Affairs Bureau, Reference 
Information Center, will send a copy of the Second Further Notice, 
including the IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    98. Contact Person. For further information about this proceeding, 
contact Michael Ray, FCC, Wireline Competition Bureau, Competition 
Policy Division, 45 L Street NE, Washington, DC 20554, (202) 418-0357, 
[email protected].
    99. Paperwork Reduction Act Analysis. This document contains

[[Page 25196]]

proposed 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, see 44 U.S.C. 3506(c)(4), we seek specific 
comment on how we might further reduce the information collection 
burden for small business concerns with fewer than 25 employees.

IV. Ordering Clauses

    100. Accordingly, it is ordered that, pursuant to Sections 1-4, 
201, and 224 of the Communications Act of 1934, as amended, 47 U.S.C. 
151-154, 201, and 224, this Second Notice of Proposed Rulemaking is 
adopted.
    101. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Second Further Notice of Proposed Rulemaking, including 
the Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2022-09029 Filed 4-27-22; 8:45 am]
BILLING CODE 6712-01-P