[Federal Register Volume 74, Number 126 (Thursday, July 2, 2009)]
[Proposed Rules]
[Pages 31667-31675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15131]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 52
[WC Docket No. 07-244; CC Docket No. 95-116; FCC 09-41]
Local Number Portability Porting Interval and Validation
Requirements; Telephone Number Portability
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Communications Commission (Commission) adopted a
Further Notice of Proposed Rulemaking (60 FR 39136, August 1, 1995)
seeking comment on what further steps the Commission should take, if
any, to improve the process of changing telecommunications providers
and discussing any new ideas that reflect and build upon the new one-
business-day interval for simple ports.
DATES: Comments are due on or before August 3, 2009, and reply comments
are due on or before August 31, 2009.
ADDRESSES: You may submit comments, identified by WC Docket No. 07-244
and CC Docket No. 95-116, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
E-mail: [email protected], and include the following words in
the body of the message, ``get form.'' A sample form and directions
will be sent in response. Include the docket number(s) in the subject
line of the message.
Mail: Secretary, Federal Communications Commission, 445
12th Street, SW., Washington, DC 20554.
Hand Delivery/Courier: 236 Massachusetts Avenue, NE.,
Suite 110, Washington, DC 20002.
People with Disabilities: Contact the FCC to request
reasonable
[[Page 31668]]
accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
All submissions received must include the agency name and docket
numbers for this rulemaking, WC Docket No. 07-244 and CC Docket No. 95-
116. All comments received will be posted without change to http://www.fcc.gov/cgb/ecfs. 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: Michelle Sclater, Wireline Competition
Bureau, (202) 418-0388.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Further Notice of Proposed Rulemaking (FNPRM) in WC Docket No. 07-244
and CC Docket No. 95-116, FCC 09-41, adopted May 13, 2009 and released
May 13, 2009. The complete text of this document is available for
inspection and copying during normal business hours in the FCC
Reference Information Center, Portals II, 445 12th Street, SW., Room
CY-A257, Washington, DC 20554. This document may also be purchased from
the Commission's duplicating contractor, Best Copy and Printing, Inc.,
445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone
(800) 378-3160 or (202) 863-2893, facsimile (202) 863-2898, or via e-
mail at http://www.bcpiweb.com. It is also available on the
Commission's Web site at http://www.fcc.gov.
Public Participation
Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47
CFR 1.415, 1.419, interested parties may file comments and reply
comments on or before the dates indicated on the first page of this
document. All filings related to this Further Notice of Proposed
Rulemaking should refer to WC Docket No. 07-244 and CC Docket No. 95-
116. Comments may be filed using: (1) The Commission's Electronic
Comment Filing System (ECFS), (2) the Federal Government's eRulemaking
Portal, or (3) by filing paper copies. See Electronic Filing of
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers
should follow the instructions provided on the Web site for submitting
comments.
For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number. Parties may also submit
an electronic comment by Internet e-mail. To get filing instructions,
filers should send an e-mail to [email protected], and include the following
words in the body of the message, ``get form.'' A sample form and
directions will be sent in response.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail (although we continue to experience delays in
receiving U.S. Postal Service mail). All filings must be addressed to
the Commission's Secretary, Office of the Secretary, Federal
Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street, SW., Washington, DC 20554.
Parties should send a copy of their filings to the Competition
Policy Division, Wireline Competition Bureau, Federal Communications
Commission, Room 5-C140, 445 12th Street, SW., Washington, DC 20554, or
by e-mail to [email protected]. Parties shall also serve one copy with
the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI),
Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554,
(202) 488-5300, or via e-mail to [email protected].
Documents in WC Docket No. 07-244 and CC Docket No. 95-116 will be
available for public inspection and copying during business hours at
the FCC Reference Information Center, Portals II, 445 12th Street, SW.,
Room CY-A257, Washington, DC 20554. The documents may also be purchased
from BCPI, telephone (202) 488-5300, facsimile (202) 488-5563, TTY
(202) 488-5562, e-mail [email protected].
Synopsis of Notice of Proposed Rulemaking
Through this FNPRM, the Commission seeks comment on what further
steps, if any, it should take to improve the process of changing
telecommunications providers and discuss any new ideas that reflect and
build upon the new one business day interval. The Commission asks
parties to address whether there are additional ways to streamline the
number porting processes or improve efficiencies for simple and non-
simple ports. For example, should the Commission modify the definition
of simple ports? Are different or additional information fields
necessary for completing simple ports? Is it appropriate to standardize
Local Service Request forms and, if so, how should that be
accomplished? Is a single standard time interval in which providers
must return Customer Service Record requests appropriate? Finally, what
are the benefits and burdens, especially the burdens on small entities,
of adopting any new rules regarding the porting process?
Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared the present Initial
Regulatory Flexibility Analysis (IRFA) of the possible significant
economic impact on small entities that might result from this FNPRM.
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 FNPRM provided above. The Commission will send a
copy of the FNPRM, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration. In addition, the FNPRM
and the IRFA (or summaries thereof) will be published in the Federal
Register.
A. Need for, and Objective of, the Proposed Rules
2. The Commission now requires providers subject to its local
number portability rules to complete simple
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wireline-to-wireline and simple intermodal ports within one business
day. The Commission believes that a one-business day porting interval
is a much needed improvement over the previous four-business day
interval--one that will provide considerable immediate benefits to
consumers. It is important, however, that the Commission remains
vigilant in its efforts to improve the effectiveness and efficiency of
the porting process as technological and market developments demand.
Therefore, and in light of the actions recently taken, the Commission
asks commenters to refresh the record on what further steps it should
take, if any, to improve the process of changing telecommunications
providers and discuss any new ideas that reflect and build upon the new
one-business day interval. The Commission asks parties to address
whether there are additional ways to streamline the number porting
processes or improve efficiencies for simple and non-simple ports. For
example, should the Commission modify the definition of a simple port?
Are different or additional information fields are necessary for
completing simple ports? Is it appropriate to standardize Local Service
Request forms and, if so, how that could should that be accomplished?
Is a single standard time interval in which providers must return
Customer Service Record requests appropriate? Finally, what are the
benefits and burdens, especially the burdens on small entities, of
adopting any new rules regarding the porting process?
B. Legal Basis
3. The legal basis for any action that may be taken pursuant to
this FNPRM is contained in Sections 1, 4(i), 4(j), 251, and 303(r) of
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i)-(j),
251, 303(r).
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
4. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the rules adopted herein. The RFA generally defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one which: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the SBA.
5. Small Businesses. Nationwide, there are a total of approximately
22.4 million small businesses according to SBA data.
6. Small Organizations. Nationwide, there are approximately 1.6
million small organizations.
1. Wireline Carriers and Service Providers
7. The Commission has included small incumbent local exchange
carriers (LECs) in this present RFA analysis. As noted above, a ``small
business'' under the RFA is one that, inter alia, meets the pertinent
small business size standard (e.g., a telephone communications business
having 1,500 or fewer employees) and ``is not dominant in its field of
operation.'' The SBA's Office of Advocacy contends that, for RFA
purposes, small incumbent LECs are not dominant in their field of
operation because any such dominance is not ``national'' in scope. The
Commission has therefore included small incumbent LECs in this RFA
analysis, although it emphasizes that this RFA action has no effect on
Commission analyses and determinations in other, non-RFA contexts.
8. Incumbent LECs. Neither the Commission nor the SBA has developed
a small business size standard specifically for incumbent LECs. The
appropriate size standard under SBA rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. According to Commission
data, 1,303 carriers have reported that they are engaged in the
provision of incumbent local exchange services. Of these 1,303
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have
more than 1,500 employees. Consequently, the Commission estimates that
most providers of incumbent local exchange service are small businesses
that may be affected by our action.
9. Competitive LECs, Competitive Access Providers (CAPs), ``Shared-
Tenant Service Providers,'' and ``Other Local Service Providers.''
Neither the Commission nor the SBA has developed a small business size
standard specifically for these service providers. The appropriate size
standard under SBA rules is for the category Wired Telecommunications
Carriers. Under that size standard, such a business is small if it has
1,500 or fewer employees. According to Commission data, 859 carriers
have reported that they are engaged in the provision of either
competitive access provider services or competitive LEC services. Of
these 859 carriers, an estimated 741 have 1,500 or fewer employees and
118 have more than 1,500 employees. In addition, 16 carriers have
reported that they are ``Shared-Tenant Service Providers,'' and all 16
are estimated to have 1,500 or fewer employees. In addition, 44
carriers have reported that they are ``Other Local Service Providers.''
Of the 44, an estimated 43 have 1,500 or fewer employees and one has
more than 1,500 employees. Consequently, the Commission estimates that
most providers of competitive local exchange service, competitive
access providers, ``Shared-Tenant Service Providers,'' and ``Other
Local Service Providers'' are small entities.
10. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a small business size standard specifically for
providers of interexchange services. The appropriate size standard
under SBA rules is for the category Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees. According to Commission data, 330 carriers have
reported that they are engaged in the provision of interexchange
service. Of these, an estimated 309 have 1,500 or fewer employees and
21 have more than 1,500 employees. Consequently, the Commission
estimates that the majority of IXCs are small entities that may be
affected by our action.
11. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 184 carriers have reported
that they are engaged in the provision of local resale services. Of
these, an estimated 181 have 1,500 or fewer employees and three have
more than 1,500 employees. Consequently, the Commission estimates that
the majority of local resellers are small entities that may be affected
by our action.
12. Toll Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 881 carriers have reported
that they are engaged in the provision of toll resale services. Of
these, an estimated 853 have 1,500 or fewer employees and 28 have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of toll
[[Page 31670]]
resellers are small entities that may be affected by our action.
13. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 23 carriers have reported that
they are engaged in the provision of operator services. Of these, an
estimated 22 have 1,500 or fewer employees and one has more than 1,500
employees. Consequently, the Commission estimates that the majority of
OSPs are small entities that may be affected by our action.
14. Prepaid Calling Card Providers. Neither the Commission nor the
SBA has developed a small business size standard specifically for
prepaid calling card providers. The appropriate size standard under SBA
rules is for the category Telecommunications Resellers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 104 carriers have reported that they are
engaged in the provision of prepaid calling cards. Of these, 102 are
estimated to have 1,500 or fewer employees and two have more than 1,500
employees. Consequently, the Commission estimates that all or the
majority of prepaid calling card providers are small entities that may
be affected by our action.
15. 800 and 800-Like Service Subscribers. These toll-free services
fall within the broad economic census category of Telecommunications
Resellers. This category ``comprises establishments engaged in
purchasing access and network capacity from owners and operators of
telecommunications networks and reselling wired and wireless
telecommunications services (except satellite) to businesses and
households. Establishments in this industry resell telecommunications;
they do not operate transmission facilities and infrastructure.'' The
SBA has developed a small business size standard for this category,
which is: all such firms having 1,500 or fewer employees. Census Bureau
data for 2002 show that there were 1,646 firms in this category that
operated for the entire year. Of this total, 1,642 firms had employment
of 999 or fewer employees, and four firms had employment of 1,000
employees or more. Thus, the majority of these firms can be considered
small. Additionally, it may be helpful to know the total numbers of
telephone numbers assigned in these services. Commission data show
that, as of June 2006, the total number of 800 numbers assigned was
7,647,941, the total number of 888 numbers assigned was 5,318,667, the
total number of 877 numbers assigned was 4,431,162, and the total
number of 866 numbers assigned was 6,008,976.
a. International Service Providers
16. The first category, Satellite Telecommunications, ``comprises
establishments primarily engaged in providing point-to-point
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.'' The size standard for this
industry is $15.0 million; the NACIS code is 517410. For this category,
Census Bureau data for 2002 show that there were a total of 371 firms
that operated for the entire year. Of this total, 307 firms had annual
receipts of under $10 million, and 26 firms had receipts of $10 million
to $24,999,999. Consequently, the Commission estimates that the
majority of Satellite Telecommunications firms are small entities that
might be affected by our action.
17. The second category of Other Telecommunications ``comprises
establishments primarily engaged in (1) providing specialized
telecommunications applications, such as satellite tracking,
communications telemetry, and radar station operations; or (2)
providing satellite terminal stations and associated facilities
operationally connected with one or more terrestrial communications
systems and capable of transmitting telecommunications to or receiving
telecommunications from satellite systems.'' The size standard for this
category is $25.0 million and the NAICS code is 517919. For this
category, Census Bureau data for 2002 show that there were a total of
332 firms that operated for the entire year. Of this total, 274 firms
had annual receipts of under $24,999,999. Consequently, the Commission
estimates that the majority of Other Telecommunications firms are small
entities that might be affected by our action.
2. Wireless Telecommunications Service Providers
18. Below, for those services subject to auctions, 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. Also, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated.
19. Wireless Service Providers. The SBA has developed a small
business size standard for wireless firms within the two broad economic
census categories of ``Paging'' and ``Cellular and Other Wireless
Telecommunications.'' Under both SBA categories, a wireless business is
small if it has 1,500 or fewer employees. For the census category of
Paging, Census Bureau data for 2002 show that there were 807 firms in
this category that operated for the entire year. Of this total, 804
firms had employment of 999 or fewer employees, and three firms had
employment of 1,000 employees or more. Thus, under this category and
associated small business size standard, the majority of firms can be
considered small. For the census category of Cellular and Other
Wireless Telecommunications, Census Bureau data for 2002 show that
there were 1,397 firms in this category that operated for the entire
year. Of this total, 1,378 firms had employment of 999 or fewer
employees, and 19 firms had employment of 1,000 employees or more.
Thus, under this second category and size standard, the majority of
firms can, again, be considered small. The Commission notes that that
the categories of ``Paging'' and ``Cellular and Other Wireless
Telecommunications'' are now obsolete, and have been replaced with a
new category, ``Wireless Telecommunications Carriers (except
Satellite).'' Under this new category, a wireless business is small if
it has 1,500 or few employees.
20. Wireless Telephony. Wireless telephony includes cellular,
personal communications services (PCS), and specialized mobile radio
(SMR) telephony carriers. As noted above, the SBA has developed a small
business size standard for ``Wireless Telecommunications Carriers
(except Satellite).'' Under that SBA small business size standard, a
business is small if it has 1,500 or fewer employees. According to
Commission data, 432 carriers reported that they were engaged in the
provision of wireless telephony. The Commission has estimated that 221
of these are small under the SBA small business size standard.
21. Broadband Personal Communications Service. The broadband
Personal Communications Service (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
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auctions for each block. The Commission defined ``small entity'' for
Blocks C and F as an entity that has average gross revenues of $40
million or less in the three previous calendar years. For Block F, an
additional classification 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 qualified as small entities in the Block C auctions. A
total of 93 small and very small business bidders won approximately 40
percent of the 1,479 licenses for Blocks D, E, and F. On March 23,
1999, the Commission re-auctioned 347 C, D, E, and F Block licenses.
There were 48 small business winning bidders. On January 26, 2001, the
Commission completed the auction of 422 C and F Broadband PCS licenses
in Auction No. 35. Of the 35 winning bidders in this auction, 29
qualified as ``small'' or ``very small'' businesses. Subsequent events,
concerning Auction 35, including judicial and agency determinations,
resulted in a total of 163 C and F Block licenses being available for
grant.
22. Narrowband Personal Communications Services. The Commission
held an auction for Narrowband PCS licenses that commenced on July 25,
1994, and closed on July 29, 1994. A second auction commenced on
October 26, 1994 and closed on November 8, 1994. For purposes of the
first two Narrowband PCS auctions, ``small businesses'' were entities
with average gross revenues for the prior three calendar years of $40
million or less. Through these auctions, the Commission awarded a total
of 41 licenses, 11 of which were obtained by four small businesses. To
ensure meaningful participation by small business entities in future
auctions, the Commission adopted a two-tiered small business size
standard in the Narrowband PCS Second Report and Order. A ``small
business'' is an entity that, together with affiliates and controlling
interests, has average gross revenues for the three preceding years of
not more than $40 million. A ``very small business'' is an entity that,
together with affiliates and controlling interests, has average gross
revenues for the three preceding years of not more than $15 million.
The SBA has approved these small business size standards. A third
auction commenced on October 3, 2001 and closed on October 16, 2001.
Here, five bidders won 317 (Metropolitan Trading Areas and nationwide)
licenses. Three of these claimed status as a small or very small entity
and won 311 licenses.
23. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
small business size standard for small entities specifically applicable
to such incumbent 220 MHz Phase I licensees. To estimate the number of
such licensees that are small businesses, the Commission applies the
small business size standard under the SBA rules applicable to
``Cellular and Other Wireless Telecommunications'' companies. This
category provides that a small business is a wireless company employing
no more than 1,500 persons. Census Bureau data for 2002 show that there
were 1,397 firms in this category that operated for the entire year. Of
this total, 1,378 firms had employment of 999 or fewer employees, and
19 firms had employment of 1,000 employees or more. Thus, under this
category and size standard, the majority of firms can be considered
small.
24. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service
has both Phase I and Phase II licenses. The Phase II 220 MHz service is
a new service and is subject to spectrum auctions. In the 220 MHz Third
Report and Order, the Commission adopted a small business size standard
for ``small'' and ``very small'' businesses for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. This small business size standard indicates that
a ``small business'' is an entity that, together with its affiliates
and controlling principals, has average gross revenues not exceeding
$15 million for the preceding three years. A ``very small business'' is
an entity that, together with its affiliates and controlling
principals, has average gross revenues that do not exceed $3 million
for the preceding three years. The SBA has approved these small
business size standards. Auctions of Phase II licenses commenced on
September 15, 1998, and closed on October 22, 1998. In the first
auction, 908 licenses were auctioned in three different-sized
geographic areas: Three nationwide licenses, 30 Regional Economic Area
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908
licenses auctioned, 693 were sold. Thirty-nine small businesses won
licenses in the first 220 MHz auction. The second auction included 225
licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies
claiming small business status won 158 licenses. A third auction
included four licenses: 2 BEA licenses and 2 EAG licenses in the 220
MHz Service. No small or very small business won any of these licenses.
25. 800 MHz and 900 MHz Specialized Mobile Radio Licenses. The
Commission awards ``small entity'' and ``very small entity'' bidding
credits in auctions for Specialized Mobile Radio (SMR) geographic area
licenses in the 800 MHz and 900 MHz bands to firms that had revenues of
no more than $15 million in each of the three previous calendar years,
or that had revenues of no more than $3 million in each of the previous
calendar years, respectively. These bidding credits apply to SMR
providers in the 800 MHz and 900 MHz bands that either hold geographic
area licenses or have obtained extended implementation authorizations.
The Commission does not know how many firms provide 800 MHz or 900 MHz
geographic area SMR service pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of
no more than $15 million. One firm has over $15 million in revenues.
The Commission assumes, for purposes here, that all of the remaining
existing extended implementation authorizations are held by small
entities, as that term is defined by the SBA. The Commission has held
auctions for geographic area licenses in the 800 MHz and 900 MHz SMR
bands. There were 60 winning bidders that qualified as small or very
small entities in the 900 MHz SMR auctions. Of the 1,020 licenses won
in the 900 MHz auction, bidders qualifying as small or very small
entities won 263 licenses. In the 800 MHz auction, 38 of the 524
licenses won were won by small and very small entities.
26. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order,
the Commission adopted a small business size standard for ``small
businesses'' and ``very small businesses'' for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. A ``small business'' is an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $15 million for the preceding
[[Page 31672]]
three years. Additionally, a ``very small business'' is an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than $3 million for the preceding
three years. An auction of 52 Major Economic Area (MEA) licenses
commenced on September 6, 2000, and closed on September 21, 2000. Of
the 104 licenses auctioned, 96 licenses were sold to nine bidders. Five
of these bidders were small businesses that won a total of 26 licenses.
A second auction of 700 MHz Guard Band licenses commenced on February
13, 2001 and closed on February 21, 2001. All eight of the licenses
auctioned were sold to three bidders. One of these bidders was a small
business that won a total of two licenses. Subsequently, in the 700 MHz
Second Report and Order, the Commission reorganized the licenses
pursuant to an agreement among most of the licensees, resulting in a
spectral relocation of the first set of paired spectrum block licenses,
and an elimination of the second set of paired spectrum block licenses
(many of which were already vacant, reclaimed by the Commission from
Nextel). A single licensee that did not participate in the agreement
was grandfathered in the initial spectral location for its two licenses
in the second set of paired spectrum blocks. Accordingly, at this time
there are 54 licenses in the 700 MHz Guard Bands and there is no
auction data applicable to determine which are held by small
businesses.
27. 39 GHz Service. The Commission created a special small business
size standard for 39 GHz licenses--an entity that has average gross
revenues of $40 million or less in the three previous calendar years.
An additional size standard for ``very small business'' is: An entity
that, together with affiliates, has average gross revenues of not more
than $15 million for the preceding three calendar years. The SBA has
approved these small business size standards. The auction of the 2,173
39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The
18 bidders who claimed small business status won 849 licenses.
Consequently, the Commission estimates that 18 or fewer 39 GHz
licensees are small entities that may be affected by the rules and
policies adopted herein.
28. Wireless Cable Systems. Wireless cable systems use 2 GHz band
frequencies of the Broadband Radio Service (``BRS''), formerly
Multipoint Distribution Service (``MDS''), and the Educational
Broadband Service (``EBS''), formerly Instructional Television Fixed
Service (``ITFS''), to transmit video programming and provide broadband
services to residential subscribers. These services were originally
designed for the delivery of multichannel video programming, similar to
that of traditional cable systems, but over the past several years
licensees have focused their operations instead on providing two-way
high-speed Internet access services. The Commission estimates that the
number of wireless cable subscribers is approximately 100,000, as of
March 2005. Local Multipoint Distribution Service (``LMDS'') is a fixed
broadband point-to-multipoint microwave service that provides for two-
way video telecommunications. As described below, the SBA small
business size standard for the broad census category of Cable and Other
Program Distribution, which consists of such entities generating $13.5
million or less in annual receipts, appears applicable to MDS, ITFS and
LMDS. Other standards also apply, as described.
29. The Commission has defined small MDS (now BRS) and LMDS
entities in the context of Commission license auctions. In the 1996 MDS
auction, the Commission defined a small business as an entity that had
annual average gross revenues of less than $40 million in the previous
three calendar years. This definition of a small entity in the context
of MDS auctions has been approved by the SBA. In the MDS auction, 67
bidders won 493 licenses. Of the 67 auction winners, 61 claimed status
as a small business. At this time, the Commission estimates that of the
61 small business MDS auction winners, 48 remain small business
licensees. In addition to the 48 small businesses that hold BTA
authorizations, there are approximately 392 incumbent MDS licensees
that have gross revenues that are not more than $40 million and are
thus considered small entities. MDS licensees and wireless cable
operators that did not receive their licenses as a result of the MDS
auction fall under the SBA small business size standard for Cable and
Other Program Distribution. Information available to us indicates that
there are approximately 850 of these licensees and operators that do
not generate revenue in excess of $13.5 million annually. Therefore,
the Commission estimates that there are approximately 850 small entity
MDS (or BRS) providers, as defined by the SBA and the Commission's
auction rules.
30. Educational institutions are included in this analysis as small
entities; however, the Commission has not created a specific small
business size standard for ITFS (now EBS). The Commission estimates
that there are currently 2,032 ITFS (or EBS) licensees, and all but 100
of the licenses are held by educational institutions. Thus, the
Commission estimates that at least 1,932 ITFS licensees are small
entities.
31. In the 1998 and 1999 LMDS auctions, the Commission defined a
small business as an entity that has annual average gross revenues of
less than $40 million in the previous three calendar years. Moreover,
the Commission added an additional classification for a ``very small
business,'' which was defined as an entity that had annual average
gross revenues of less than $15 million in the previous three calendar
years. These definitions of ``small business'' and ``very small
business'' in the context of the LMDS auctions have been approved by
the SBA. In the first LMDS auction, 104 bidders won 864 licenses. Of
the 104 auction winners, 93 claimed status as small or very small
businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based
on this information, the Commission believes that the number of small
LMDS licenses will include the 93 winning bidders in the first auction
and the 40 winning bidders in the re-auction, for a total of 133 small
entity LMDS providers as defined by the SBA and the Commission's
auction rules.
32. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (LMDS) is a fixed broadband point-to-multipoint
microwave service that provides for two-way video telecommunications.
The auction of the 1,030 LMDS licenses began on February 18, 1998 and
closed on March 25, 1998. The Commission established a small business
size standard for LMDS licensees as an entity that has average gross
revenues of less than $40 million in the three previous calendar years.
An additional small business size standard for ``very small business''
was added as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years. The SBA has approved these small business size
standards in the context of LMDS auctions. There were 93 winning
bidders that qualified as small entities in the LMDS auctions. A total
of 93 small and very small business bidders won approximately 277 A
Block licenses and 387 B Block licenses. On March 27, 1999, the
Commission re-auctioned 161 licenses; there were 40 winning bidders.
Based on this information, the Commission concludes that the number of
small LMDS licenses consists of the 93 winning bidders in the first
auction and the 40 winning bidders in the re-auction, for a total of
133 small entity LMDS providers.
[[Page 31673]]
33. 218-219 MHz Service. The first auction of 218-219 MHz spectrum
resulted in 170 entities winning licenses for 594 Metropolitan
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by
entities qualifying as a small business. For that auction, the small
business size standard was an entity that, together with its
affiliates, has no more than a $6 million net worth and, after Federal
income taxes (excluding any carry over losses), has no more than $2
million in annual profits each year for the previous two years. In the
218-219 MHz Report and Order and Memorandum Opinion and Order, the
Commission established a small business size standard for a ``small
business'' as an entity that, together with its affiliates and persons
or entities that hold interests in such an entity and their affiliates,
has average annual gross revenues not to exceed $15 million for the
preceding three years. A ``very small business'' is defined as an
entity that, together with its affiliates and persons or entities that
hold interests in such an entity and its affiliates, has average annual
gross revenues not to exceed $3 million for the preceding three years.
The Commission cannot estimate, however, the number of licenses that
will be won by entities qualifying as small or very small businesses
under our rules in future auctions of 218-219 MHz spectrum.
34. 24 GHz--Incumbent Licensees. This analysis may affect incumbent
licensees who were relocated to the 24 GHz band from the 18 GHz band
and applicants who wish to provide services in the 24 GHz band. The
applicable SBA small business size standard is that of ``Cellular and
Other Wireless Telecommunications'' companies. This category provides
that such a company is small if it employs no more than 1,500 persons.
According to Census Bureau data for 1997, there were 977 firms in this
category, total, that operated for the entire year. Of this total, 965
firms had employment of 999 or fewer employees, and an additional 12
firms had employment of 1,000 employees or more. Thus, under this size
standard, the great majority of firms can be considered small. These
broader census data notwithstanding, the Commission believes that there
are only two licensees in the 24 GHz band that were relocated from the
18 GHz band, Teligent and TRW, Inc. It is our understanding that
Teligent and its related companies have less than 1,500 employees,
though this may change in the future. TRW is not a small entity. Thus,
only one incumbent licensee in the 24 GHz band is a small business
entity.
35. 24 GHz--Future Licensees. With respect to new applicants in the
24 GHz band, the small business size standard for ``small business'' is
an entity that, together with controlling interests and affiliates, has
average annual gross revenues for the three preceding years not in
excess of $15 million. ``Very small business'' in the 24 GHz band is an
entity that, together with controlling interests and affiliates, has
average gross revenues not exceeding $3 million for the preceding three
years. The SBA has approved these small business size standards. These
size standards will apply to the future auction, if held.
3. Cable and OVS Operators
36. Cable Television Distribution Services. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' The SBA has developed a small business size standard
for this category, which is: All such firms having 1,500 or fewer
employees. To gauge small business prevalence for these cable services
the Commission must, however, use current census data that are based on
the previous category of Cable and Other Program Distribution and its
associated size standard; that size standard was: All such firms having
$13.5 million or less in annual receipts. According to Census Bureau
data for 2002, there were a total of 1,191 firms in this previous
category that operated for the entire year. Of this total, 1,087 firms
had annual receipts of under $10 million, and 43 firms had receipts of
$10 million or more but less than $25 million. Thus, the majority of
these firms can be considered small.
37. Cable Companies and Systems. The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide. Industry data
indicate that, of 1,076 cable operators nationwide, all but eleven are
small under this size standard. In addition, under the Commission's
rules, a ``small system'' is a cable system serving 15,000 or fewer
subscribers. Industry data indicate that, of 7,208 systems nationwide,
6,139 systems have under 10,000 subscribers, and an additional 379
systems have 10,000-19,999 subscribers. Thus, under this second size
standard, most cable systems are small.
38. Cable System Operators. The Communications Act of 1934, as
amended, also contains a size standard for small cable system
operators, which is ``a cable operator that, directly or through an
affiliate, serves in the aggregate fewer than 1 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.'' The Commission has determined that an operator serving
fewer than 677,000 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. Industry
data indicate that, of 1,076 cable operators nationwide, all but ten
are small under this size standard. The Commission notes that the
Commission neither requests nor collects information on whether cable
system operators are affiliated with entities whose gross annual
revenues exceed $250 million, and therefore the Commission is unable to
estimate more accurately the number of cable system operators that
would qualify as small under this size standard.
39. Open Video Systems (OVS). In 1996, Congress established the
open video system (OVS) framework, one of four statutorily recognized
options for the provision of video programming services by local
exchange carriers (LECs). The OVS framework provides opportunities for
the distribution of video programming other than through cable systems.
Because OVS operators provide subscription services, OVS previously
fell within the now obsolete SBA small business size standard of Cable
and Other Program Distribution Services, which consists of such
entities having $13.5 million or less in annual receipts. The
Commission has certified 25 OVS operators, with some now providing
service. Broadband service providers (BSPs) are currently the only
significant holders of OVS certifications or local OVS franchises. As
of June, 2005, BSPs served approximately 1.4 million subscribers,
representing 1.5 percent of all MVPD households. Affiliates of
Residential Communications Network, Inc. (RCN), which serves about
371,000 subscribers as of June, 2005, is currently the largest BSP and
14th largest MVPD. RCN received approval to operate OVS
[[Page 31674]]
systems in New York City, Boston, Washington, D.C. and other areas. The
Commission does not have financial information regarding the entities
authorized to provide OVS, some of which may not yet be operational.
The Commission thus believes that at least some of the OVS operators
may qualify as small entities.
4. Internet Service Providers
40. Internet Service Providers. The SBA has developed a small
business size standard for Internet Service Providers (ISPs). ISPs
``provide clients access to the Internet and generally provide related
services such as Web hosting, Web page designing, and hardware or
software consulting related to Internet connectivity.'' The new size
standard is 500 employees. However, data is not yet available under
this new standard. Under the previous SBA size standard, such a
business is small if it has average annual receipts of $23 million or
less. According to Census Bureau data for 2002, there were 2,529 firms
in this category that operated for the entire year.\\ Of these, 2,437
firms had annual receipts of under $10 million, and an additional 47
firms had receipts of between $10 million and $24,999,999.
Consequently, the Commission estimates that the majority of these firms
are small entities that may be affected by our action.
41. All Other Information Services. ``This industry comprises
establishments primarily engaged in providing other information
services (except new syndicates and libraries and archives).'' The SBA
has developed a small business size standard for this category; that
size standard is $7.0 million or less in average annual receipts.
However, data has not yet been collected under the new size standard,
and so the Commission refers to data collected under the previous size
standard, $6.5 million or less in average annual receipts. According to
Census Bureau data for 2002, there were 155 firms in this category that
operated for the entire year. Of these, 138 had annual receipts of
under $5 million, and an additional four firms had receipts of between
$5 million and $9,999,999. Consequently, the Commission estimates that
the majority of these firms are small entities that may be affected by
our action.
5. Equipment Manufacturers
42. SBA small business size standards are given in terms of
``firms.'' Census Bureau data concerning computer manufacturers, on the
other hand, are given in terms of ``establishments.'' The Commission
notes that the number of ``establishments'' is a less helpful indicator
of small business prevalence in this context than would be the number
of ``firms'' or ``companies,'' because the latter take into account the
concept of common ownership or control. Any single physical location
for an entity is an establishment, even though that location may be
owned by a different establishment. Thus, the census numbers provided
below may reflect inflated numbers of businesses in the given category,
including the numbers of small businesses.
43. Radio and Television Broadcasting and Wireless Communications
Equipment Manufacturing. The Census Bureau defines this category as
follows: ``This industry comprises establishments primarily engaged in
manufacturing radio and television broadcast and wireless
communications equipment. Examples of products made by these
establishments are: Transmitting and receiving antennas, cable
television equipment, GPS equipment, pagers, cellular phones, mobile
communications equipment, and radio and television studio and
broadcasting equipment.'' The SBA has developed a small business size
standard for Radio and Television Broadcasting and Wireless
Communications Equipment Manufacturing, which is: all such firms having
750 or fewer employees. According to Census Bureau data for 2002, there
were a total of 1,041 establishments in this category that operated for
the entire year. Of this total, 1,010 had employment of under 500, and
an additional 13 had employment of 500 to 999. Thus, under this size
standard, the majority of firms can be considered small.
44. Telephone Apparatus Manufacturing. The Census Bureau defines
this category as follows: ``This industry comprises establishments
primarily engaged in manufacturing wire telephone and data
communications equipment. These products may be standalone or board-
level components of a larger system. Examples of products made by these
establishments are central office switching equipment, cordless
telephones (except cellular), PBX equipment, telephones, telephone
answering machines, LAN modems, multi-user modems, and other data
communications equipment, such as bridges, routers, and gateways.'' The
SBA has developed a small business size standard for Telephone
Apparatus Manufacturing, which is: all such firms having 1,000 or fewer
employees. According to Census Bureau data for 2002, there were a total
of 518 establishments in this category that operated for the entire
year. Of this total, 511 had employment of under 1,000, and an
additional 7 had employment of 1,000 to 2,499. Thus, under this size
standard, the majority of firms can be considered small.
45. Semiconductor and Related Device Manufacturing. Examples of
manufactured devices in this category include ``integrated circuits,
memory chips, microprocessors, diodes, transistors, solar cells and
other optoelectronic devices.'' The SBA has developed a small business
size standard for this category of manufacturing; that size standard is
500 or fewer employees. According to Census Bureau data, there were
1,032 establishments in this category that operated with payroll during
2002. Of these, 950 had employment of under 500, and 42 establishments
had employment of 500 to 999. Consequently, the Commission estimates
that the majority of these establishments are small entities.
46. Computer Storage Device Manufacturing. These establishments
manufacture ``computer storage devices that allow the storage and
retrieval of data from a phase change, magnetic, optical, or magnetic/
optical media.'' The SBA has developed a small business size standard
for this category of manufacturing; that size standard is 1,000 or
fewer employees. According to Census Bureau data, there were 170
establishments in this category that operated with payroll during 2002.
Of these, 164 had employment of under 500, and five establishments had
employment of 500 to 999. Consequently, the Commission estimates that
the majority of these establishments are small entities.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
47. Should the Commission decide to adopt any rules to further
improve the process of changing providers, such action could
potentially result in increased, reduced, or otherwise modified
recordkeeping, reporting, or other compliance requirements for affected
providers of service. The Commission seeks comment on the effect of any
proposals on small entities. Entities, especially small businesses, are
encouraged to quantify the costs and benefits of any reporting,
recordkeeping, or compliance requirement that may be established in
this proceeding.
[[Page 31675]]
E. Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
48. 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 and 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 part thereof, for small
entities.
49. The Commission asks commenters to refresh the record on what
further steps the Commission should take to improve the process of
changing providers and provide any new ideas that reflect and build
upon the new one-business day interval. The Commission also seeks
comment on the benefits and burdens, especially the burdens on small
entities, of adopting any new rules regarding the porting process. The
Commission expects to consider the economic impact on small entities,
as identified in comments filed in response to the FNPRM, in reaching
its final conclusions and taking action in this proceeding.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
50. None.
Initial Paperwork Reduction Act of 1995 Analysis
This document does not contain proposed information collection(s)
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. In addition, therefore, it does not contain any new or modified
``information collection burden for small business concerns with fewer
than 25 employees,'' pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).
Ordering Clauses
It is ordered that pursuant to Sections 1, 4(i), 4(j), 251, and
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151,
154(i)-(j), 251, 303(r), the Further Notice of Proposed Rulemaking in
WC Docket No. 07-244 and CC Docket No. 95-116 is adopted.
It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order and Further Notice of Proposed
Rulemaking, including the Final Regulatory Flexibility Analysis and the
Initial Regulatory Flexibility Analysis, to the Chief Counsel for
Advocacy of the Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E9-15131 Filed 7-1-09; 8:45 am]
BILLING CODE 6712-01-P