[Federal Register Volume 74, Number 127 (Monday, July 6, 2009)]
[Rules and Regulations]
[Pages 31860-31874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15822]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 9
[WC Docket No. 08-171; FCC 08-249]
Implementation of the Net 911 Improvement Act of 2008
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Federal Communications Commission (Commission) has adopted
rules implementing certain key provisions of the New and Emerging
Technologies 911 Improvement Act of 2008 (NET 911 Act), which was
enacted on July 23, 2008. Congress directed the Commission to issue
rules implementing certain key provisions of the NET 911 Act no later
than October 21, 2008. In particular, to effectuate the statutory
requirement that providers of interconnected voice over Internet
Protocol (interconnected VoIP) service provide 911 and enhanced 911
(E911) service in full compliance with the Commission's rules, Congress
mandated that the Commission issue regulations in this time frame that,
among other
[[Page 31861]]
things, ensure that interconnected VoIP providers have access to any
and all capabilities they need to satisfy that requirement.
DATES: Effective October 5, 2009, except for Sec. 9.7(a) which
contains information collection requirements that are not effective
until approved by the Office of Management and Budget (OMB). The
Commission will publish a document in the Federal Register announcing
the effective date of such requirements.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW.,
Washington, DC 20554.
Interested parties may submit PRA comments identified by OMB
Control Number 3060-1085, 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: Parties who choose to file by e-mail should submit
their comments to [email protected]. Please include WC Docket Number
08-171 and FCC No. 08-249 in the subject line of the message.
Mail: Parties who choose to file by paper should submit
their comments to Tim Stelzig, Federal Communications Commission, Room
5-C261, 445 12th Street, SW., Washington, DC 20554.
In addition to filing comments with the Office of the Secretary, a
copy of any comments on the Paperwork Reduction Act information
collection requirements contained herein should be submitted to Judith
B. Herman, Federal Communications Commission, Room 1-B441, 445 12th
Street, SW., Washington, DC 20554, or via the Internet to [email protected].
FOR FURTHER INFORMATION CONTACT: Tim Stelzig, Competition Policy
Division, Wireline Competition Bureau, at (202) 418-0942. For
additional information concerning the Paperwork Reduction Act
information collection requirements contained in this document, contact
Judith B. Herman at (202) 418-0214, or via the Internet at [email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order (Order) in WC Docket No. 08-171, FCC 08-249, adopted and
released October 21, 2008. 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.
Final Paperwork Reduction Act of 1995 Analysis
This document contains new information collection requirements. The
Commission, as part of its continuing effort to reduce paperwork
burdens, invites the general public to comment on the information
collection requirements contained in this Order as required by the
Paperwork Reduction Act of 1995, Public Law 104-13. In addition, the
Commission notes that pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we
previously sought specific comment on how the Commission might
``further reduce the information collection burden for small business
concerns with fewer than 25 employees.''
In this present document, we have assessed the effects of the rules
implementing the Net 911 Improvement Act of 2008, and find the rules
adopted are warranted. The reasons for this conclusion are explained in
more detail below.
Report to Congress: On January 27, 2009, the Commission sent a copy
of the Order, including this FRFA, in a report to Congress and the
Government Accountability Office pursuant to the Congressional Review
Act, see 5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a
copy of the Order, including this FRFA, to the Chief Counsel for
Advocacy of the SBA. [A copy of this present summarized Order and FRFA
is also hereby published in the Federal Register.]
Synopsis of the Order
1. Background. The Commission released a notice of proposed
rulemaking on August 25, 2008, seeking comment regarding the specific
duties imposed by the NET 911 Act and the regulations that the
Commission is required to adopt. See 73 FR 50741 (Aug. 28, 2008). The
Commission sought comment, for example, on what 911 and E911
capabilities must be made available to interconnected VoIP providers,
and how such capabilities could be made available on the same rates,
terms, and conditions afforded to wireless providers. The Commission
also sought comment on what technical, network security, or information
privacy requirements regarding 911 and E911 calls are specific to
interconnected VoIP service.
2. Discussion. In the Order, the Commission turned first to its
obligation under section 6(c)(1) of the Wireless 911 Act to issue
regulations ensuring that interconnected VoIP providers can exercise
their rights of access to any and all ``capabilities'' they need to be
able to provide 911 and E911 service in full compliance with the
Commission's rules from ``an entity with ownership or control over such
capabilities.'' Congress did not define key terms of these provisions,
such as the ``capabilities'' to which interconnected VoIP providers
have a right of access, or an ``entity'' with ownership or control over
capabilities, but left the elucidation of these terms to the
Commission. The Commission interpreted these terms, examining the
statutory language itself, its legislative history, and the record. The
Commission next discussed the ``rates, terms and conditions'' that
apply to that access. It then imposed certain security requirements to
protect the integrity of the 911 system.
3. Access to E911 Capabilities. Need for Rules in General. The
Order first discussed the scope of the Commission's obligation to
``issue regulations implementing the [NET 911] Act, including
regulations that * * * ensure that IP-enabled voice service providers
have the ability to exercise their rights [to access].'' The Commission
concluded that having rules establishing standards for access to
capabilities best fulfills the Commission's obligations and the goals
of the NET 911 Act. Congress clearly intended for the Commission to
implement regulations more specific than the statutory language itself.
In section 6(c), Congress specifically directed the Commission to
conduct this rulemaking to assure interconnected VoIP providers' rights
under section (6)(b), taking into account specific factors, such as
``any technical, network security, or information privacy requirements
that are specific to IP-enabled voice services.'' If Congress had not
intended the Commission to implement rules more detailed than the
statute itself, it would not have instructed the Commission to take
certain things into account; it would have left the statutory language
as sufficient and self-effectuating. The Commission therefore disagreed
with commenters who suggested that no specific rules are needed, or
that any rules can simply parrot the statutory language.
[[Page 31862]]
4. The Commission also declined to issue highly detailed rules
listing capabilities or entities with ownership or control of those
capabilities. As recognized above and explained further in the Order,
the nation's 911 system varies from locality to locality, and overly
specific rules would fail to reflect these local variations.
Furthermore, as Congress recognized, the nation's 911 system is
evolving from its origins in the circuit-switched world into an IP-
based network. The Commission stated that its rules should be
sufficiently flexible to accommodate this ongoing process. Indeed,
Congress specifically prohibited the Commission from ``issu[ing]
regulations that require or impose a specific technology or
technological standard,'' which specific, invariable rules could do.
The Commission therefore adopted rules that establish standards for
determining to what capabilities interconnected VoIP providers have a
right of access and from which entities, and explained in the Order
what capabilities and entities would typically (but not necessarily) be
encompassed in today's architecture.
5. Standard for Right of Access to Capabilities. Consistent with
the approach just described, the Commission adopted rules establishing
a standard for determining to what capabilities interconnected VoIP
providers have a right of access, and also providing examples of the
capabilities that will typically be required in most local 911 and E911
architectures. In later parts of the Order, the Commission explained
that capabilities may only be used for the provision of 911 and E911
service.
6. The analysis in the Order begins first with the statutory
language. While the statute does not define the term ``capabilities,''
it does provide that interconnected VoIP providers have a right of
access to capabilities on the same ``rates, terms, and conditions that
are provided to a provider of commercial mobile service.'' Pursuant to
its authority under the NET 911 Act, the Commission issued rules to
grant interconnected VoIP providers a right of access to the
capabilities commercial mobile radio service (CMRS) providers use to
provide E911 service equal to the access rights made available to CMRS
providers. Congress clearly recognized a commonality between the
capabilities needed by interconnected VoIP providers and those already
used by CMRS providers. Indeed, if an owner or controller of a
capability used to provide E911 service made it available to a CMRS
provider at a certain rate but refused to grant interconnected VoIP
providers access to that same capability, that interconnected VoIP
provider would not ``have a right of access to such capabilities * * *
to provide [E911] service on the same rates, terms, and conditions that
are provided to a provider of [CMRS].'' The Commission also found
support for this position in the context in which this legislation was
enacted. As explained above, the capabilities used by interconnected
VoIP providers--particularly those providing a nomadic or mobile
service--to provide E911 service are similar to those used by CMRS
providers; interpreting the statute to mean that interconnected VoIP
providers have a right of access to those capabilities used by CMRS
providers furthers Congress's goal of ``ensur[ing] that consumers using
Voice over Internet Protocol (VoIP) service can access enhanced 911 (E-
911) emergency services by giving VoIP providers access to the
emergency services infrastructure.''
7. Second, with respect to any capabilities that are not provided
to CMRS providers for their provision of E911 service, the Commission
interpreted the NET 911 Act as granting interconnected VoIP providers a
right of access if the capability is necessary for the interconnected
VoIP provider to provide E911 service in compliance with the
Commission's rules. For reasons similar to those outlined in the
previous paragraph, the Commission stated the Commission's belief that
the right of an interconnected VoIP provider to certain rates, terms,
and conditions necessarily includes a right of access to such
capability. Section 6(c)(1)(C) of the Wireless 911 Act provides that
``with respect to any capabilities that are not required to be made
available to a [CMRS] provider but that the Commission determines * * *
are necessary for an [interconnected VoIP] provider to comply with its
obligations [to provide E911 service in accordance with the
Commission's rules], that such capabilities shall be available at the
same rates, terms, and conditions as would apply if such capabilities
were made available to a [CMRS] provider.'' The Commission also found
that this text limits interconnected VoIP providers' right of access to
such capabilities to those that are necessary to provide E911 service
in compliance with the Commission's rules.
8. Third, regardless whether a capability is used by a CMRS
provider or not, for any capability an interconnected VoIP provider
gets pursuant to rights granted in the NET 911 Act and the Commission's
implementing rules, the Order stated that such capability may be used
by that provider only for the purpose of providing E911 service in
accordance with the Commission's rules. The NET 911 Act explicitly
mandates this limit on interconnected VoIP providers' statutory access
rights with respect to capabilities CMRS providers use to provide E911
service. The Commission recognized that the statute does not expressly
contain a similar limitation in section 6(c)(1)(C), which grants
interconnected VoIP providers a right to access the capabilities they
need to provide E911 service even if they are not capabilities CMRS
providers use to provide E911 service. Nevertheless, the Commission's
interpretation of the NET 911 Act is informed by the legislative
history as well as Congress's overarching purpose in enacting the
provisions at issue here. Both with respect to capabilities that are
used by CMRS providers and those that are not, the NET 911 Act is clear
that its purpose is to facilitate interconnected VoIP providers'
ability to provide E911 service in compliance with the Commission's
rules, without granting access rights to additional capabilities. This
overarching purpose indicates that Congress intended that any
capabilities to which access is gained pursuant to the NET 911 Act may
be used exclusively for the purpose of providing E911 service. In
addition, the record indicates that CMRS providers use most of the
capabilities interconnected VoIP providers need to provide E911
service. The Commission did not find any reason to believe that
Congress would have granted interconnected VoIP providers more
expansive rights with respect to the relatively small subset of
capabilities that are not used by CMRS providers to provide E911
service than those capabilities that are. Therefore, the Commission
stated it is reasonable to require that interconnected VoIP providers
use all capabilities that they obtain pursuant to the NET 911 Act and
this Order exclusively for the provision of E911 service in compliance
with the Commission's rules.
9. Typical Capabilities. The record reflects general consensus as
to what capabilities are used by CMRS providers today and what
capabilities are not used by CMRS providers but are ``necessary'' for
interconnected VoIP providers to comply with the Commission's rules. As
AT&T explains, CMRS providers have been offering E911 services for many
years and even interconnected VoIP providers have been providing such
services since 2005. The Commission therefore interpreted
``capabilities'' to include all those items described in part II of the
Order that are used by wireless
[[Page 31863]]
providers today or that are not used by wireless providers but are
necessary to interconnected VoIP providers' compliance with the
Commission's rules. Thus, in a typical local architecture,
``capabilities'' will include: the Selective Router; the trunk line(s)
between the Selective Router and the PSAP(s); the Automatic Location
Information Database (ALI Database); the Selective Router Database (SR
Database); the Database Management System (DBMS), the Master Street
Address Guide (MSAG); pseudo-ANIs (p-ANIs); Emergency Service Numbers
(ESNs); mobile switching center capabilities; mobile positioning center
capabilities; shell records; the data circuits connecting these
elements; and the network elements, features, processes, and agreements
necessary to enable the use of these elements.
10. Entities with Ownership or Control of Capabilities. The
Commission concluded that interconnected VoIP providers are entitled to
access to capabilities from any entity that owns or controls such
capabilities. Again, it found this interpretation to be the most
natural reading of the statutory language. Section 6(b) grants
interconnected VoIP providers a right to access ``such capabilities,''
with ``such'' referring back to the ``capabilities [an interconnected
VoIP seeks] to provide 9-1-1 and enhanced 9-1-1 service from an entity
with ownership or control over such capabilities.'' Congress's use of
the term ``an entity'' instead of ``the entity'' strongly suggests that
Congress understood that capabilities might be available from multiple
sources and intended a broad interpretation of the scope of
``entities'' obligated to provide access to capabilities. The
Commission therefore interpreted the NET 911 Act to impose obligations
of access on each of the entities described in Part II.D of the Order,
including in typical E911 architectures: incumbent LECs, PSAPs and
local authorities, VoIP Positioning Centers (VPCs), CMRS providers,
competitive carriers, and the Interim RNA to the extent any of these
entities has ``ownership or control'' over any capabilities to which
interconnected VoIP providers have a right of access.
11. The Commission recognized that in some instances, multiple
entities may have ownership or control of similar capabilities in the
same local area. It saw nothing in the NET 911 Act to suggest that only
certain of those entities would have the obligation to provide access.
Indeed, if some but not all entities had that obligation, disputes
would certainly arise over which entities were subject to the Act,
causing delays in granting interconnected VoIP providers access and
thwarting Congress's ultimate goal of ``facilitating the rapid
deployment of IP-enabled 911 and E911 services.'' Finally, the
Commission recognize that it does not normally regulate some of the
entities it described in this part of the Order, such as PSAPs and
VPCs. Yet Congress has imposed a duty on them and instructed the
Commission to issue regulations to ``ensure that IP-enabled voice
service providers have the ability to exercise their rights under
subsection (b).'' As Congress has instructed the Commission to take
these actions, it has also given the Commission the authority it needs
to do so.
12. Rates, Terms, and Conditions. The NET 911 Act also mandates
that the rates, terms, and conditions under which access to 911 and
E911 capabilities is provided are to be the same as made available to
CMRS providers. Under the rules the Commission issued in the Order,
interconnected VoIP providers may exercise these rights to fulfill
their obligation to provide 911 and E911 in full compliance with the
Commission's rules.
13. As a threshold matter, the Commission found that issuing rules
of general applicability regarding rates, terms, and conditions best
fulfills the goals of the NET 911 Act. The rules adopted in the Order
are specific enough to bring market certainty and clear direction while
also being flexible enough to ensure that Congress's aims are met in a
wide variety of circumstances. Contrary to the approach advocated by
some commenters, the Commission found no indication that Congress
intended the Commission to issue detailed regulations regarding the
pricing methodology under which E911 capabilities must be made
available. Instead, the Commission found it sufficient to specify that
those rates, terms, and conditions must in all instances be reasonable.
One indicia of reasonableness will be whether the rates, terms, and
conditions under which E911 capabilities are made available to
interconnected VoIP providers are the same as the rates, terms, and
conditions made available to CMRS providers.
14. First, the Commission considered the case where a capability is
in fact provided to CMRS carriers, such that the owner or controller of
that capability must grant interconnected VoIP providers access to that
capability. In that case, the statute is clear on its face that the
capability must be made available ``on the same rates, terms, and
conditions that are provided to'' a CMRS provider. The Commission
interpreted the term ``provided'' as used in this provision as
encompassing not only those capabilities that are actually provisioned
to a CMRS provider as well as the rates, terms, and conditions under
which they are provisioned, but also those capabilities that are
currently offered to a CMRS provider as well as the rates, terms, and
conditions under which they are offered. The Commission interpreted
``provided'' broadly to ensure that interconnected VoIP providers are
able to access the same capabilities that CMRS providers may access on
the same rates, terms, and conditions that are available to CMRS
providers.
15. In addition, if an owner or controller of a capability does not
provide a capability to CMRS providers but is required to grant
interconnected VoIP providers access to such capability under the rules
described in Part III.A of the Order, such access must be provided on
the rates, terms, and conditions that would be offered to a CMRS
provider. The Commission did not believe that Congress intended for it,
within the 90-day timeframe the Commission was given to adopt rules
implementing the NET 911 Act, to conduct detailed pricing proceedings
to determine, for each such capability offered by each type of provider
in various localities around the country, what the exact price for each
capability would be if it were offered to CMRS providers. Congress
clearly did intend, however, for the Commission to provide guidance as
to how the rates, terms, and conditions for these capabilities should
be determined. To further that intent, minimize disputes over these
rates, terms, and conditions, and help achieve Congress's ultimate goal
``[t]o promote and enhance public safety by facilitating the rapid
deployment of IP-enabled 911 and E911 services,'' the Commission
provided further guidance. Specifically, if an owner or controller does
not provide a capability to CMRS providers but is required to give
interconnected VoIP providers access to such capability under the rules
described in Part III.A of the Order, such access must be made
available on the same rates, terms, and conditions that are offered to
other telecommunications carriers or any other entities. The Commission
stated that such rates, terms, and conditions are a reasonable proxy
for the rates, terms and conditions that would be provided to a CMRS
provider. To the extent an owner or controller of a capability used to
provide E911 service provides a single capability to more than one CMRS
provider or other entity, an interconnected VoIP provider that
[[Page 31864]]
requests access to such capability is entitled to the rates, terms and
conditions provided to any such single other provider.
16. If an owner or controller of a capability required to be made
available does not currently make that capability available to any
other entities, the rates, terms and conditions under which that owner
or controller must provide access to a requesting interconnected VoIP
provider must be reasonable, and should be reached through commercial
negotiation. Given the industry's track record in working diligently
and on an accelerated time table to implement the VoIP 911 Order and
the importance all industry participants attach to having a reliable
and effective 911 and E911 network, the Commission stated that the
capability owner or controller and the interconnected VoIP provider
will be able to expeditiously negotiate reasonable rates, terms, and
conditions for that capability. The Commission clarified that in
granting interconnected VoIP providers new contractual rights, it did
not abrogate any existing commercial agreements that interconnected
VoIP providers may already have reached for access to capabilities for
the provision of E911 service. Finally, the Commission emphasized that
all rights to capabilities that the NET 911 Act grants to an
interconnected VoIP provider are ``for the exclusive purpose of
complying with * * * its obligations under subsection (a) [i.e. the
Commission's existing E911 rules].'' The NET 911 Act does not grant,
and the Commission's rules do not grant, access to capabilities beyond
what interconnected VoIP providers need to provide 911 and E911
service, nor does the statute or the Commission's rules grant access to
capabilities for any purpose other than compliance with the
Commission's 911 and E911 rules.
17. Technical, Network Security, and Information Privacy
Requirements. To protect the security and reliability of the E911
network, interconnected VoIP providers may obtain access to E911
capabilities only in compliance with the specific criteria set forth
below. The safety of our nation's citizens vitally depends upon
protecting the emergency services network from security threats. In the
Order, as required by the NET 911 Act, the Commission granted
interconnected VoIP providers access to E911 capabilities. Expanding
the range of entities that have access to the E911 network raises new
challenges. As NENA has said, VoIP technology ``presents new challenges
and security issues [for 911 service] as it breaks the bond between
access and service provider characteristics of legacy networks and at
this time lacks the legislative and regulatory requirements that apply
to more conventional telephone services.''
18. Although Congress has granted interconnected VoIP providers
additional rights to access E911 capabilities, in most cases, the
Commission did not anticipate significant deviation from current
practices. Commenters agree that interconnected VoIP providers today
are successfully using numbering partners and other 911 service
providers to deliver E911 calls to the appropriate PSAP. For example,
Vonage reports that for ``98.45% of its customers, Vonage [currently]
provides the full suite of E911 service'' pursuant to NENA's standard
and is in the process of obtaining the capabilities it needs to provide
E911 service for most of the remainder of its customers.
19. NENA has developed national VoIP E911 requirements, referred to
as NENA's i2 standard, that are ``designed to ensure that VoIP 9-1-1
calls are routed and presented in a wireline equivalent manner.'' The
Commission stated that any interconnected VoIP provider that is in
compliance with this standard already is coordinating its efforts with
the other organizational entities responsible for providing E911
service.
20. The Commission required interconnected VoIP providers to comply
with all applicable industry network security standards to the same
extent as traditional telecommunications carriers when they access
capabilities traditionally used by carriers. The Commission recognized
the security of the nation's emergency services network depends on many
interlocking measures that collectively preserve the integrity of the
911 system from unauthorized access and use. For instance, in addition
to the security concerns discussed above, the network elements used to
provide 911 service must be kept physically secure. The E911 network
must also be kept secure against unauthorized electronic access, such
as through hacking. NENA reports that ``[t]he existing Emergency
services network provides a relatively high degree of security for
correctness of information, integrity, and authorization of access,
authenticity/secrecy, and accuracy of information.'' By requiring
interconnected VoIP providers to comply with the same standards as
carriers, the Commission was able to expand access to the E911 system
without compromising network security.
21. Finally, the Commission's rules contemplate that incumbent LECs
and other owners or controllers of 911 or E911 infrastructure will
acquire information regarding interconnected VoIP providers and their
customers for use in the provision of emergency services. The
Commission stated it fully expects that these entities will use this
information only for the provision of E911 service. The Commission
further clarified that no entity may use customer information obtained
as a result of the provision of 911 or E911 services for marketing
purposes.
Final Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the NET 911 Notice in WC Docket 08-171. See 73 FR 50741
(Aug. 28, 2008). The Commission sought written public comment on the
proposals in the Net 911 Notice, including comment on the IRFA. The
Commission received no comments on the IRFA. This Final Regulatory
Flexibility Analysis (FRFA) conforms to the RFA.
A. Need for, and Objectives of, the Rules
2. In the Report and Order (Order), the Commission adopted rules
implementing certain key provisions of the New and Emerging
Technologies 911 Improvement Act of 2008 (NET 911 Act). The NET 911
Act, signed into law on July 23, 2008, is designed to ``promote and
enhance public safety by facilitating the rapid deployment of IP-
enabled 911 and E911 services, encourage the Nation's transition to a
national IP-enabled emergency network, and improve 911 and enhanced 911
(E911) access to those with disabilities.'' Congress directed the
Commission to issue rules implementing certain key provisions of the
NET 911 Act no later than October 21, 2008. In particular, to
effectuate the requirement that providers of interconnected voice over
Internet Protocol (interconnected VoIP) service provide 911 and
enhanced 911 (E911) service without exception, Congress mandated that
the Commission issue regulations in this time frame that, among other
things, ensure that interconnected VoIP providers have access to any
capabilities they need to satisfy that requirement. In the Order, the
Commission fulfilled that duty and took steps to ensure that
interconnected VoIP providers will use the capabilities they gain as a
result of the Order to provide 911 and E911 in complete accord with the
Commission's rules.
[[Page 31865]]
3. Specifically, in the Order the Commission issued rules that give
interconnected VoIP providers rights of access to any and all
capabilities necessary to provide E911 from any entity that owns or
controls those capabilities. The Commission establish a standard to
determine the rates, terms, and conditions that will apply to that
access and also restrict interconnected VoIP provider's access to
capabilities for the sole purpose of providing 911 or E911 service.
Finally, interconnected VoIP providers must comply with all applicable
industry network security standards to the same extent as traditional
telecommunications carriers when they access capabilities traditionally
used by carriers.
B. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
4. No comments were submitted specifically in response to the IRFA.
C. Description and Estimate of the Number of Small Entities to Which
Rules Will Apply
5. 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.
6. Small Businesses. Nationwide, there are a total of approximately
22.4 million small businesses according to SBA data.
7. Small Organizations. Nationwide, there are approximately 1.6
million small organizations.
8. Small Governmental Jurisdictions. The term ``small governmental
jurisdiction'' is defined generally as ``governments of cities, towns,
townships, villages, school districts, or special districts, with a
population of less than fifty thousand.'' Census Bureau data for 2002
indicate that there were 87,525 local governmental jurisdictions in the
United States. We estimate that, of this total, 84,377 entities were
``small governmental jurisdictions.'' Thus, we estimate that most
governmental jurisdictions are small.
1. Telecommunications Service Entities
9. Wireline Carriers and Service Providers. We have 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. We have therefore included small incumbent LECs
in this RFA analysis, although we emphasize that this RFA action has no
effect on Commission analyses and determinations in other, non-RFA
contexts.
10. 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, 1,311 carriers have reported that they are engaged in
the provision of incumbent local exchange services. Of these 1,311
carriers, an estimated 1,024 have 1,500 or fewer employees and 287 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 the Order.
11. 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, 1,005 carriers have reported that they are engaged in the
provision of either competitive access provider services or competitive
LEC services. Of these 1,005 carriers, an estimated 918 have 1,500 or
fewer employees and 87 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, 89 carriers have reported that they are ``Other Local
Service Providers,'' and all 89 have 1,500 or fewer 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.
12. 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, 151 carriers have reported
that they are engaged in the provision of local resale services. Of
these, an estimated 149 have 1,500 or fewer employees and two 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.
13. 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, 815 carriers have reported
that they are engaged in the provision of toll resale services. Of
these, an estimated 787 have 1,500 or fewer employees and 28 have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of toll resellers are small entities that may be affected by
our action.
14. Payphone Service Providers (PSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
payphone services 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, 526 carriers have reported
that they are engaged in the provision of payphone services. Of these,
an estimated 524 have 1,500 or fewer employees and two have more than
1,500 employees. Consequently, the Commission estimates that the
majority of payphone service providers are small entities that may be
affected by our action.
15. 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
[[Page 31866]]
a business is small if it has 1,500 or fewer employees. According to
Commission data, 300 carriers have reported that they are engaged in
the provision of interexchange service. Of these, an estimated 268 have
1,500 or fewer employees and 32 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.
16. 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, 28 carriers have reported that
they are engaged in the provision of operator services. Of these, an
estimated 27 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.
17. 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, 88 carriers have reported that they are
engaged in the provision of prepaid calling cards. Of these, 85 are
estimated to have 1,500 or fewer employees and three 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.
18. 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 December 2007, the total number of 800 numbers assigned was
7,860,000, the total number of 888 numbers assigned was 5,210,184, the
total number of 877 numbers assigned was 4,388,682, and the total
number of 866 numbers assigned was 7,029,116.
19. International Service Providers. The Commission has not
developed a small business size standard specifically for providers of
international service. The appropriate size standards under SBA rules
are for the two broad census categories of ``Satellite
Telecommunications'' and ``All Other Telecommunications.''
20. The first category of 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.'' For this category, a business
is small if it has $15.0 million or less in average annual receipts.
Census Bureau data for 2002 show that there were a total of 371 firms
under this category 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, we estimate that
the majority of Satellite Telecommunications firms are small entities
that might be affected by our action.
21. The second category of All 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.'' For this category, a
business is small if it has $25.0 million or less in average annual
receipts. Census Bureau data for 2002 show that for this category there
were a total of 332 firms that operated for the entire year. Of this
total, 259 firms had annual receipts of under $10 million and 15 firms
had annual receipts of $10 million to $24,999,999. Consequently, we
estimate that the majority of All Other Telecommunications firms are
small entities that might be affected by our action.
22. Wireless Telecommunications Service Providers. Below, for those
services subject to auctions, we note 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.
23. Wireless Telecommunications Carriers (except Satellite). The
SBA has developed a small business size standard for wireless firms
under the broad category of ``Wireless Telecommunications Carriers
(except Satellite).'' Under this category, a wireless business is small
if it has 1,500 or fewer employees. Because the data currently
available were gathered under previous NAICS codes, the discussion in
the remainder of this section tracks these formerly used categories.
24. Under its prior categories, the SBA categorized wireless firms
within the two broad economic census categories of ``Paging'' and
``Cellular and Other Wireless Telecommunications.'' For the former
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 former 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.
25. Cellular Licensees. The SBA has developed a small business size
standard for wireless firms within the broad economic census category
``Cellular and Other Wireless Telecommunications.'' Under this SBA
[[Page 31867]]
category, a wireless business is small if it has 1,500 or fewer
employees. 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
category and size standard, the majority of firms can be considered
small. Also, according to Commission data, 434 carriers reported that
they were engaged in the provision of cellular service, Personal
Communications Service (PCS), or Specialized Mobile Radio (SMR)
Telephony services, which are placed together in the data. We have
estimated that 222 of these are small under the SBA small business size
standard.
26. Paging. The SBA has developed a small business size standard
for the broad economic census category of ``Paging.'' Under this
category, the SBA deems a wireless business to be small if it has 1,500
or fewer employees. 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. In addition, according
to Commission data, 281 carriers have reported that they are engaged in
the provision of ``Paging and Messaging Service.'' Of this total, we
estimate that 279 have 1,500 or fewer employees, and two have more than
1,500 employees. Thus, in this category the majority of firms can be
considered small.
27. We also note that, in the Paging Second Report and Order, the
Commission adopted a size standard for ``small businesses'' for
purposes of determining their eligibility for special provisions such
as bidding credits and installment payments. In this context, 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. The SBA has approved this
definition. An auction of Metropolitan Economic Area (MEA) licenses
commenced on February 24, 2000, and closed on March 2, 2000. Of the
2,499 licenses auctioned, 985 were sold. Fifty-seven companies claiming
small business status won 440 licenses. An auction of MEA and Economic
Area (EA) licenses commenced on October 30, 2001, and closed on
December 5, 2001. Of the 15,514 licenses auctioned, 5,323 were sold.
One hundred thirty-two companies claiming small business status
purchased 3,724 licenses. A third auction, consisting of 8,874 licenses
in each of 175 EAs and 1,328 licenses in all but three of the 51 MEAs
commenced on May 13, 2003, and closed on May 28, 2003. Seventy-seven
bidders claiming small or very small business status won 2,093
licenses. We also note that, currently, there are approximately 74,000
Common Carrier Paging licenses.
28. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses. The Commission established small business size standards for the
wireless communications services (WCS) auction. A ``small business'' is
an entity with average gross revenues of $40 million or less for each
of the three preceding years, and a ``very small business'' is an
entity with average gross revenues of $15 million or less for each of
the three preceding years. The SBA has approved these small business
size standards. The Commission auctioned geographic area licenses in
the WCS service. In the auction, there were seven winning bidders that
qualified as ``very small business'' entities, and one that qualified
as a ``small business'' entity.
29. Wireless Telephony. Wireless telephony includes cellular,
personal communications services (PCS), and specialized mobile radio
(SMR) telephony carriers. As noted earlier, the SBA has developed a
small business size standard for ``Cellular and Other Wireless
Telecommunications'' services. Under that SBA small business size
standard, a business is small if it has 1,500 or fewer employees.
According to Commission data, 434 carriers reported that they were
engaged in the provision of wireless telephony. We have estimated that
222 of these are small under the SBA small business size standard.
30. 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
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.
31. 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.
32. 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
[[Page 31868]]
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, we apply 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.
For the census category Cellular and Other Wireless Telecommunications,
Census Bureau data for 1997 show that 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
second category and size standard, the majority of firms can, again, be
considered small. Assuming this general ratio continues in the context
of Phase I 220 MHz licensees, the Commission estimates that nearly all
such licensees are small businesses under the SBA's small business size
standard. In addition, limited preliminary census data for 2002
indicate that the total number of cellular and other wireless
telecommunications carriers increased approximately 321 percent from
1997 to 2002.
33. 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, we 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.
34. 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 three
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.
35. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order,
we 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 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.
36. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service. A significant subset of the Rural Radiotelephone Service is
the Basic Exchange Telephone Radio System (BETRS). The Commission uses
the SBA's small business size standard applicable to ``Cellular and
Other Wireless Telecommunications,'' i.e., an entity employing no more
than 1,500 persons. There are approximately 1,000 licensees in the
Rural Radiotelephone Service, and the Commission estimates that there
are 1,000 or fewer small entity licensees in the Rural Radiotelephone
Service that may be affected by the rules and policies adopted herein.
37. Air-Ground Radiotelephone Service. The Commission has not
adopted a small business size standard specific to the Air-Ground
Radiotelephone Service. We will use SBA's small business size standard
applicable to ``Cellular and Other Wireless Telecommunications,'' i.e.,
an entity employing no more than 1,500 persons. There are approximately
100 licensees in the Air-Ground Radiotelephone Service, and we estimate
that almost all of them qualify as small under the SBA small business
size standard.
38. Aviation and Marine Radio Services. Small businesses in the
aviation and marine radio services use a very high frequency (VHF)
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator
transmitter. The Commission has not developed a small business size
standard specifically applicable to these small businesses. For
purposes of this analysis, the Commission uses the SBA small business
size standard for the category ``Cellular and Other
Telecommunications,'' which is 1,500 or fewer employees. Most
applicants for recreational licenses are individuals. Approximately
581,000 ship station licensees and 131,000 aircraft station licensees
operate domestically and are not subject to the radio carriage
[[Page 31869]]
requirements of any statute or treaty. For purposes of our evaluations
in this analysis, we estimate that there are up to approximately
712,000 licensees that are small businesses (or individuals) under the
SBA standard. In addition, between December 3, 1998 and December 14,
1998, the Commission held an auction of 42 VHF Public Coast licenses in
the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz
(coast transmit) bands. For purposes of the auction, the Commission
defined a ``small'' business as an entity that, together with
controlling interests and affiliates, had average gross revenues for
the preceding three years not to exceed $15 million dollars. In
addition, a ``very small'' business is one that, together with
controlling interests and affiliates, had average gross revenues for
the preceding three years not to exceed $3 million dollars. There are
approximately 10,672 licensees in the Marine Coast Service, and the
Commission estimates that almost all of them qualify as ``small''
businesses under the above special small business size standards.
39. Offshore Radiotelephone Service. This service operates on
several UHF television broadcast channels that are not used for
television broadcasting in the coastal areas of states bordering the
Gulf of Mexico. There are presently approximately 55 licensees in this
service. We are unable to estimate at this time the number of licensees
that would qualify as small under the SBA's small business size
standard for ``Cellular and Other Wireless Telecommunications''
services. Under that SBA small business size standard, a business is
small if it has 1,500 or fewer employees.
40. 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
polices adopted herein.
41. 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. We estimate 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.
42. 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, we
estimate that there are approximately 850 small entity MDS (or BRS)
providers, as defined by the SBA and the Commission's auction rules.
43. 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). We estimate that there are
currently 2,032 ITFS (or EBS) licensees, and all but 100 of the
licenses are held by educational institutions. Thus, we estimate that
at least 1,932 ITFS licensees are small entities.
44. 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, we believe 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.
45. 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, we conclude that
[[Page 31870]]
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.
46. 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, we
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. We 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.
47. 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, we believe 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.
47A. 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.
2. Cable and OVS Operators
48. 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
we 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.
49. 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.
50. 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. We note 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 we are unable to estimate more accurately the
number of cable system operators that would qualify as small under this
size standard.
51. 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 falls within
the 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
systems in New York City, Boston,
[[Page 31871]]
Washington, DC 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. We thus believe that at least some of
the OVS operators may qualify as small entities.
3. Internet Service Providers
52. 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.'' Under the 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, we estimate that the majority of these
firms are small entities that may be affected by our action.
4. Other Internet-Related Entities
53. Web Search Portals. Our action pertains to VoIP services, which
could be provided by entities that provide other services such as e-
mail, online gaming, Web browsing, video conferencing, instant
messaging, and other, similar IP-enabled services. The Commission has
not adopted a size standard for entities that create or provide these
types of services or applications. However, the Census Bureau has
identified firms that ``operate Web sites that use a search engine to
generate and maintain extensive databases of Internet addresses and
content in an easily searchable format. Web search portals often
provide additional Internet services, such as e-mail, connections to
other Web sites, auctions, news, and other limited content, and serve
as a home base for Internet users.'' The SBA has developed a small
business size standard for this category; that size standard is $6.5
million or less in average annual receipts. According to Census Bureau
data for 2002, there were 342 firms in this category that operated for
the entire year. Of these, 303 had annual receipts of under $5 million,
and an additional 15 firms had receipts of between $5 million and
$9,999,999. Consequently, we estimate that the majority of these firms
are small entities that may be affected by our action.
54. Data Processing, Hosting, and Related Services. Entities in
this category ``primarily * * * provid[e] infrastructure for hosting or
data processing services.'' The SBA has developed a small business size
standard for this category; that size standard is $23 million or less
in average annual receipts. According to Census Bureau data for 2002,
there were 6,877 firms in this category that operated for the entire
year. Of these, 6,418 had annual receipts of under $10 million, and an
additional 251 firms had receipts of between $10 million and
$24,999,999. Consequently, we estimate that the majority of these firms
are small entities that may be affected by our action.
55. All Other Information Services. ``This industry comprises
establishments primarily engaged in providing other information
services (except new syndicates and libraries and archives).'' Our
action pertains to VoIP services, which could be provided by entities
that provide other services such as e-mail, online gaming, Web
browsing, video conferencing, instant messaging, and other, similar IP-
enabled services. The SBA has developed a small business size standard
for this category; that size standard is $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, we estimate that the majority of these firms
are small entities that may be affected by our action.
56. Internet Publishing and Broadcasting. ``This industry comprises
establishments engaged in publishing and/or broadcasting content on the
Internet exclusively. These establishments do not provide traditional
(non-Internet) versions of the content that they publish or
broadcast.'' The SBA has developed a small business size standard for
this census category; that size standard is 500 or fewer employees.
According to Census Bureau data for 2002, there were 1,362 firms in
this category that operated for the entire year. Of these, 1,351 had
employment of 499 or fewer employees, and six firms had employment of
between 500 and 999. Consequently, we estimate that the majority of
these firms are small entities that may be affected by our action.
57. Software Publishers. These companies may design, develop or
publish software and may provide other support services to software
purchasers, such as providing documentation or assisting in
installation. The companies may also design software to meet the needs
of specific users. The SBA has developed a small business size standard
of $25 million or less in average annual receipts for all of the
following pertinent categories: Software Publishers, Custom Computer
Programming Services, and Other Computer Related Services. For Software
Publishers, Census Bureau data for 2002 indicate that there were 6,155
firms in the category that operated for the entire year. Of these,
7,633 had annual receipts of under $10 million, and an additional 403
firms had receipts of between $10 million and $24,999,999. For
providers of Custom Computer Programming Services, the Census Bureau
data indicate that there were 32,269 firms that operated for the entire
year. Of these, 31,416 had annual receipts of under $10 million, and an
additional 565 firms had receipts of between $10 million and
$24,999,999. For providers of Other Computer Related Services, the
Census Bureau data indicate that there were 6,357 firms that operated
for the entire year. Of these, 6,187 had annual receipts of under $10
million, and an additional 101 firms had receipts of between $10
million and $24,999,999. Consequently, we estimate that the majority of
the firms in each of these three categories are small entities that may
be affected by our action.
5. Equipment Manufacturers
58. 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.'' We note 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.
59. Electronic Computer Manufacturing. This category ``comprises
establishments primarily engaged in manufacturing and/or assembling
electronic computers, such as mainframes, personal computers,
workstations, laptops, and computer servers.'' The SBA has developed a
small business size standard for this
[[Page 31872]]
category of manufacturing; that size standard is 1,000 or fewer
employees. According to Census Bureau data, there were 485
establishments in this category that operated with payroll during 2002.
Of these, 476 had employment of under 1,000, and an additional four
establishments had employment of 1,000 to 2,499. Consequently, we
estimate that the majority of these establishments are small entities.
60. 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, we estimate that the majority
of these establishments are small entities.
61. Computer Terminal Manufacturing. ``Computer terminals are
input/output devices that connect with a central computer for
processing.'' 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 71
establishments in this category that operated with payroll during 2002,
and all of the establishments had employment of under 1,000.
Consequently, we estimate that all of these establishments are small
entities.
62. Other Computer Peripheral Equipment Manufacturing. Examples of
peripheral equipment in this category include keyboards, mouse devices,
monitors, and scanners. 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
860 establishments in this category that operated with payroll during
2002. Of these, 851 had employment of under 1,000, and an additional
five establishments had employment of 1,000 to 2,499. Consequently, we
estimate that the majority of these establishments are small entities.
63. Audio and Video Equipment Manufacturing. These establishments
manufacture ``electronic audio and video equipment for home
entertainment, motor vehicle, public address and musical instrument
amplifications.'' The SBA has developed a small business size standard
for this category of manufacturing; that size standard is 750 or fewer
employees. According to Census Bureau data, there were 571
establishments in this category that operated with payroll during 2002.
Of these, 560 had employment of under 500, and ten establishments had
employment of 500 to 999. Consequently, we estimate that the majority
of these establishments are small entities.
64. Electron Tube Manufacturing. These establishments are
``primarily engaged in manufacturing electron tubes and parts (except
glass blanks).'' The SBA has developed a small business size standard
for this category of manufacturing; that size standard is 750 or fewer
employees. According to Census Bureau data, there were 102
establishments in this category that operated with payroll during 2002.
Of these, 97 had employment of under 500, and one establishment had
employment of 500 to 999. Consequently, we estimate that the majority
of these establishments are small entities.
65. Bare Printed Circuit Board Manufacturing. These establishments
are ``primarily engaged in manufacturing bare (i.e., rigid or flexible)
printed circuit boards without mounted electronic components.'' 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 936 establishments in this category
that operated with payroll during 2002. Of these, 922 had employment of
under 500, and 12 establishments had employment of 500 to 999.
Consequently, we estimate that the majority of these establishments are
small entities.
66. 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, we estimate that the
majority of these establishments are small entities.
67. Electronic Capacitor Manufacturing. These establishments
manufacture ``electronic fixed and variable capacitors and
condensers.'' 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 104
establishments in this category that operated with payroll during 2002.
Of these, 101 had employment of under 500, and two establishments had
employment of 500 to 999. Consequently, we estimate that the majority
of these establishments are small entities.
68. Electronic Resistor Manufacturing. These establishments
manufacture ``electronic resistors, such as fixed and variable
resistors, resistor networks, thermistors, and varistors.'' 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 79 establishments in this category
that operated with payroll during 2002. All of these establishments had
employment of under 500. Consequently, we estimate that all of these
establishments are small entities.
69. Electronic Coil, Transformer, and Other Inductor Manufacturing.
These establishments manufacture ``electronic inductors, such as coils
and transformers.'' 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 365
establishments in this category that operated with payroll during 2002.
All of these establishments had employment of under 500. Consequently,
we estimate that all of these establishments are small entities.
70. Electronic Connector Manufacturing. These establishments
manufacture ``electronic connectors, such as coaxial, cylindrical, rack
and panel, pin and sleeve, printed circuit and fiber optic.'' 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 321 establishments in this category
that operated with payroll during 2002. Of these, 315 had employment of
under 500, and three establishments had employment of 500 to 999.
Consequently, we estimate that the majority of these establishments are
small entities.
71. Printed Circuit Assembly (Electronic Assembly) Manufacturing.
[[Page 31873]]
These are establishments ``primarily engaged in loading components onto
printed circuit boards or who manufacture and ship loaded printed
circuit boards.'' 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 868
establishments in this category that operated with payroll during 2002.
Of these, 839 had employment of under 500, and 18 establishments had
employment of 500 to 999. Consequently, we estimate that the majority
of these establishments are small entities.
72. Other Electronic Component Manufacturing. 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 1,627 establishments in this category that operated
with payroll during 2002. Of these, 1,616 had employment of under 500,
and eight establishments had employment of 500 to 999. Consequently, we
estimate that the majority of these establishments are small entities.
73. Fiber Optic Cable Manufacturing. These establishments
manufacture ``insulated fiber-optic cable from purchased fiber-optic
strand.'' 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 96
establishments in this category that operated with payroll during 2002.
Of these, 95 had employment of under 1,000, and one establishment had
employment of 1,000 to 2,499. Consequently, we estimate that the
majority or all of these establishments are small entities.
74. Other Communication and Energy Wire Manufacturing. These
establishments manufacture ``insulated wire and cable of nonferrous
metals from purchased wire.'' 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
356 establishments in this category that operated with payroll during
2002. Of these, 353 had employment of under 1,000, and three
establishments had employment of 1,000 to 2,499. Consequently, we
estimate that the majority or all of these establishments are small
entities.
D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
75. Although the Commission granted interconnected VoIP providers
additional rights to access E911 capabilities in the Order, in most
cases, the Commission does not anticipate significant deviation from
current practices. In the Commission's VoIP 911 Order, the Commission
required interconnected VoIP providers to provide E911 service using
the existing wireline 911 infrastructure. Under the Commission's VoIP
rules, many interconnected VoIP providers today are successfully using
numbering partners and other 911 service providers to deliver 911 or
E911 calls to the appropriate PSAP, designated statewide default
answering point, or appropriate local emergency authority.
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
76. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include (among others) the following four alternatives: (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.
77. The NET 911 Notice sought comment regarding the specific duties
imposed by the NET 911 Act and the regulations that the Commission is
required to adopt. Specifically, in the NET 911 Notice, the Commission
invited comment on what costs and burdens any new rules might impose
upon small entities and how they could be ameliorated. For instance,
the Commission specifically sought comment as to whether there are any
issues or significant alternatives that the Commission should consider
to ease the burden on small entities. The Commission emphasized that it
must assess the interests of small businesses in light of the NET 911
Act's goal of ensuring that interconnected VoIP providers have access
to any and all capabilities they need to provide 911 and E911 service.
78. While, like the Net 911 Act, the rules the Commission adopted
in the Order apply to all providers of interconnected VoIP service and
any entity that owns or controls 911 or E911 capabilities, the
Commission attempted to minimize the impact of the new rules on small
entities to the extent consistent with Congress's intent. The
Commission considered several alternatives, and in the Order, imposed
minimal regulation on small entities to the extent possible. As an
initial matter, as noted above, many interconnected VoIP providers
today are successfully delivering E911 calls to the appropriate PSAP
and the Commission does not anticipate significant deviation from
current practices, particularly from small entities. As they have done
in the past, small interconnected VoIP providers may still offer E911
service indirectly through a third party, such as a competitive LEC, or
through any other solution that allows the provider to offer E911
service in compliance with the Commission's rules.
79. Furthermore, the Commission considered but declined to issue
highly detailed rules listing specific capabilities or entities with
ownership or control of those capabilities. As recognized above, the
nation's 911 system varies from locality to locality, and overly
specific rules would fail to reflect these local variations, thereby
placing undue burdens on all entities, including any small entities,
involved in providing E911 service. Small interconnected VoIP providers
and small entities that own or control those capabilities will benefit
from the flexibility of the Commission's rules, which, as noted above,
will accommodate the local variations as well as the various
technologies necessary for 911 and E911 service.
80. The Commission also considered but declined to issue highly
detailed rules setting forth the pricing methodology under which a
capability would be provided to an interconnected VoIP provider. The
Commission's rules required that the rates, terms, and conditions shall
be: (1) The same as the rates, terms, and conditions that are made
available to CMRS providers, or (2) in the event such capability is not
made available to CMRS providers, the same rates, terms, and conditions
that are made available to any telecommunications carrier or other
entity for the provision of 911 or E911 service; or (3) otherwise on
the rates, terms, and conditions reached through commercial agreement;
and (4) in any case, reasonable. The Commission concluded that it was
important that the rates, terms, and conditions be consistent with
Congress' intent and in all instances be reasonable. Thus, those small
entities that seek to access
[[Page 31874]]
capabilities directly will be assured they have access to capabilities
under reasonable rates, terms, and conditions, thereby minimizing
significant economic impact on small entities.
Ordering Clauses
81. Accordingly, it is ordered that pursuant to sections 1, 4(i)-
(j), 251(e) and 303(r) of the Communications Act of 1934, as amended,
47 U.S.C. 151, 154(i)-(j), 251(e), 303(r), and section 101 of the NET
911 Act, the Report and Order in WC Docket No. 08-171 is adopted, and
that part 9 of the Commission's Rules, 47 CFR part 9, is added as set
forth in the rule changes. Effective October 5, 2009, except for Sec.
9.7(a) which contains information collection requirements that have not
been approved by the Office of Management and Budget (OMB).
82. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
List of Subjects in 47 CFR Part 9
Communications, Interconnected Voice over Internet Protocol
Services, Telephone.
Marlene H. Dortch,
Secretary, Federal Communications Commission.
Final Rules
0
For the reasons discussed in the preamble, part 9 of Title 47 of the
Code of Federal Regulations is amended to read as follows:
PART 9-INTERCONNECTED VOICE OVER INTERNET PROTOCOL SERVICES
0
1. The authority citation for part 9 is amended to read as follows:
Authority: 47 U.S.C. 151, 154(i)-(j), 251(e), 303(r), and 615a-1
unless otherwise noted.
0
2. Section 9.1 is revised to read as follows.
Sec. 9.1 Purposes.
The purposes of this part are to set forth the 911 and E911 service
requirements and conditions applicable to interconnected Voice over
Internet Protocol service providers, and to ensure that those providers
have access to any and all 911 and E911 capabilities they need to
comply with those 911 and E911 service requirements and conditions.
0
3. Section 9.3 is amended by adding in alphabetical order definitions
of ``Automatic Location Information (ALI)'' and ``CMRS'' to read as
follows.
Sec. 9.3 Definitions.
* * * * *
Automatic Location Information (ALI). Information transmitted while
providing E911 service that permits emergency service providers to
identify the geographic location of the calling party. CMRS. Commercial
Mobile Radio Service, as defined in Sec. 20.9 of this chapter.
* * * * *
0
4. Section 9.7 is added to read as follows.
Sec. 9.7 Access to 911 and E911 service capabilities.
(a) Access. Subject to the other requirements of this part, an
owner or controller of a capability that can be used for 911 or E911
service shall make that capability available to a requesting
interconnected VoIP provider as set forth in paragraphs (a)(1) and
(a)(2) of this section.
(1) If the owner or controller makes the requested capability
available to a CMRS provider, the owner or controller must make that
capability available to the interconnected VoIP provider. An owner or
controller makes a capability available to a CMRS provider if the owner
or controller offers that capability to any CMRS provider. (2) If the
owner or controller does not make the requested capability available to
a CMRS provider within the meaning of paragraph (a)(1) of this section,
the owner or controller must make that capability available to a
requesting interconnected VoIP provider only if that capability is
necessary to enable the interconnected VoIP provider to provide 911 or
E911 service in compliance with the Commission's rules.
(b) Rates, terms, and conditions. The rates, terms, and conditions
on which a capability is provided to an interconnected VoIP provider
under paragraph (a) of this section shall be reasonable. For purposes
of this paragraph, it is evidence that rates, terms, and conditions are
reasonable if they are:
(1) The same as the rates, terms, and conditions that are made
available to CMRS providers, or
(2) In the event such capability is not made available to CMRS
providers, the same rates, terms, and conditions that are made
available to any telecommunications carrier or other entity for the
provision of 911 or E911 service.
(c) Permissible use. An interconnected VoIP provider that obtains
access to a capability pursuant to this section may use that capability
only for the purpose of providing 911 or E911 service in accordance
with the Commission's rules.
[FR Doc. E9-15822 Filed 7-2-09; 8:45 am]
BILLING CODE 6712-01-P