BNUMBER:  B-271810.7, GAO/OGC-96-21 
DATE:  July 2, 1996
TITLE: Amendments of Parts 2 and 15 of the Federal Communication
Commis, B-271810.7, GAO/OGC-96-21, July 2, 1996
**********************************************************************

Subject:   Amendments of Parts 2 and 15 of the Federal Communication 
Commission Rules to Deregulate the Equipment Authorization 
Requirements for Digital Devices 

File:        B-271810.7, GAO/OGC-96-21

Date:        July 2, 1996

B-271810.7

July 2, 1996

The Honorable Larry Pressler
Chairman
The Honorable Ernest F. Hollings
Ranking Minority Member
Committee on Commerce, Science and Transportation
United States Senate

The Honorable Thomas J. Bliley, Jr.
Chairman
The Honorable John D. Dingell
Ranking Minority Member
Committee on Commerce
House of Representatives

Subject:Amendment of Parts 2 and 15 of the Federal Communication 
        Commission Rules to Deregulate the Equipment Authorization 
        Requirements for Digital Devices

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this 
is our report on a major rule promulgated by Federal Communications 
Commission (FCC), entitled "Amendment of Parts 2 and 15 of the 
Commission's Rules to Deregulate the Equipment Authorization 
Requirements for Digital Devices" (ET Docket No. 95-19: FCC 96-208).  
We received the rule on May 30, 1996.  It was published in the Federal 
Register as a final rule on June 19, 1996.

The FCC's  Report and Order amending Parts 2 and 15 of Title 47 of the 
Code of Federal Regulations, deregulates the equipment authorization 
requirements for personal computers and peripherals.  The Order 
provides for a new self-authorization process based on a 
manufacturer's or supplier's declaration of compliance with all FCC 
requirements.  The original certification procedure required 
submission of a written application, test report and fee (and a device 
for testing in some cases) to the FCC laboratory.  The FCC estimates 
that the new procedure will save industry approximately $250 million 
annually in administrative expenses.

Enclosed is our assessment of the FCC's compliance with the procedural 
steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with 
respect to the rule. Our review indicates that the FCC complied with 
the applicable requirements.

If you have any questions about this report, please contact Alan  
Zuckerman, Assistant General Counsel, at (202) 512-4586.  The official 
responsible for GAO evaluation work relating to the Federal 
Communications Commission is John  Anderson, Director, Transportation 
and Telecommunications Issues.  Mr. Anderson can be reached at (202) 
512-8234.

Robert P. Murphy
General Counsel

Enclosure

cc:
Andrew S. Fishel, Managing Director
Federal Communications Commission
 
ENCLOSURE

ANALYSIS OF AMENDMENT OF PARTS 2 AND 15 OF THE COMMISSION'S RULES TO 
DEREGULATE THE EQUIPMENT AUTHORIZATION REQUIREMENTS FOR DIGITAL 
DEVICES RULE UNDER 5 U.S.C.  sec.  801(A)(i)(B)(I)-(iv)

(i) Cost-benefit analysis

The Commission indicated in its submission that it was not required to 
prepare a cost-benefit analysis of the rule.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 
U.S.C.  sec.  603-605, 607 and 609

Section 603:  Initial regulatory flexibility analysis

Pursuant to section 603 of the Act, the Commission incorporated an 
Initial Regulatory Flexibility Analysis in it Notice of Proposed Rule 
Making. The Commission's Proposed Rule Making was published in the 
Federal Register, 61 Fed. Reg. 15116, March 22, 1995.  Our review of 
the initial analysis indicates that the requirements of section 603 
have been met.  At that time, written comments on the proposal were 
requested.  The Commission also reports that it forwarded a copy of 
its initial regulatory flexibility analysis to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA) as required by the 
Act, and that the SBA did not file comments. 

Section 604:  Final regulatory flexibility analysis

The Commission prepared a Final Regulatory Flexibility Analysis 
pursuant to section 604. That analysis notes that the rule was needed 
in order to reduce regulatory burdens on computer manufacturers, to 
remove impediments to flexible systems design and construction 
techniques, and to reduce the potential for interference to radio 
services by improving the Commission's ability to ensure that personal 
computers comply with the Commission's standards and testing 
procedures.  The Commission further notes that no commenting parties 
raised issues specifically in response to the initial regulatory 
flexibility analysis, and that no significant alternatives were 
considered. 

Section 605:  Avoidance of duplicative or unnecessary analysis

The Commission did not invoke any of the exemptions or special 
procedures authorized by section 605 in preparing its regulatory 
flexibility analysis.

Section 607:  Preparation of analyses

Under section 607, the Commission's submission does not specifically 
indicate the potential economic impact or the number of small entities 
affected.  However, the initial regulatory flexibility analysis 
indicates that the rule will result in a significant decrease in the 
amount of testing and Commission authorization of computer systems 
with a resultant reduction in economic burden.  The Commission notes 
that there are 100-150 manufacturers of various component devices but 
does not indicate what the ratio of large to small business might be 
in this mix.  

Section 609: Participation by small entities

In addition to the actions required by 5 U.S.C.  sec.  553, the Commission 
also made available a complete copy of the proposed and final 
rulemaking materials via the Internet.  There were no special efforts 
made by the Commission to involve small entities in the rulemaking 
process. 

(iii) Agency actions relevant to sections 202-205 of the Unfunded 
Mandates Reform Act of 1995, 2 U.S.C.  sec.  1532-1535

As an independent regulatory agency, the Commission is not subject to 
Title II of the Unfunded Mandates Reform Act of 1995.

(iv) Other relevant information or requirements under Acts and 
Executive orders

Administrative Procedure Act, 5 U.S.C.  sec.  551 et seq.

The rule was promulgated through the general notice of proposed 
rulemaking procedures of the Act, 5 U.S.C.  sec.  553.  The Commission 
afforded interested persons the opportunity to comment on the proposed 
rule, and the Commission's Report and Order adopted on May 9, 1996, 
and released May 14, 1996, addresses these comments.

Paperwork Reduction Act, 44 U.S.C.  sec.  3501-3520

The Final Report and Order is subject to the Paperwork Reduction Act 
of 1995, and has received OMB clearance (OMB #3060-0636).

Statutory authorization for the rule

The new rules are promulgated with the authority provided in the 
Communications Act of 1934, as amended, 47 U.S.C. Sections 154(i), 
301, 302, 303(e), 303(f), 303(r), 304 and 307.  In addition, the 
Telecommunications Act of 1996, Pub. L. No. 104-114, 110 Stat.56 
(1996), provides specific new authority to the Commission to eliminate 
unnecessary regulations and functions, and among other things, 
authorizes the use of private organizations for testing and certifying 
the compliance of devices with regulations promulgated by the FCC. 

The Commission did not identify any other statutes or Executive Orders 
imposing requirements relevant to the rule.