1998 Biennial Regulatory ReviewStreamlined Contributor Reporting Requirements Associated with Administration of Telecommunications Relay Services, North American Numbering Plan, Local Number Portability, and Universal Service Support Mechanisms

Federal RegisterJul 30, 1999

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 52, 54, and 64

[FCC 99-175]

1998 Biennial Regulatory Review--Streamlined Contributor

Reporting Requirements Associated with Administration of

Telecommunications Relay Services, North American Numbering Plan, Local

Number Portability, and Universal Service Support Mechanisms

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission combined four reporting requirements so that

carriers need only file one worksheet to satisfy the contributor

reporting requirements associated with: the universal service support

mechanisms; telecommunications relay services; cost recovery mechanism

for numbering administration; and cost recovery mechanism for shared

costs of long-term local number portability. The Commission also made

other modifications designed to rationalize requirements, including

changing the revenue measure for assessing contributions to the TRS

Fund and numbering administration cost recovery so that contributions

will be based on end-user telecommunications revenues.

DATES: Effective August 30, 1999.

FOR FURTHER INFORMATION CONTACT: Scott K. Bergmann, Industry Analysis

Division, Common Carrier Bureau, at (202) 418-7102; or Jim Lande,

Industry Analysis Division, Common Carrier Bureau at (202) 418-0948.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report

and Order released July 14, 1999 (FCC 99-175). The full text of the

Report and Order is available for inspection and copying during normal

business hours in the FCC Reference Center, Room CY-A257, 445 12th

Street, S.W., Washington, D.C. 20554. The complete text also may be

purchased from the Commission's copy contractor, International

Transcription Service, Inc. (202) 857-3800, 1231 20th St., NW,

Washington, D.C. 20036.

I. Summary of the Report and Order

1. In the Report and Order summarized here, the Commission acted to

simplify its filing requirements for communications service providers

by replacing several different--but largely duplicative--forms with one

consolidated form, the Telecommunications Reporting Worksheet. At

present, telecommunications carriers and certain telecommunications

service providers must comply with separate reporting requirements for

their contributions to finance interstate Telecommunications Relay

Services Fund, federal universal service support mechanisms,

administration of the North American Numbering Plan (NANP), and the

shared costs of long-term local number portability.1 We act

here to harmonize these multiple contributor reporting requirements and

to minimize the administrative burdens for carriers and service

providers. Thus, in lieu of making four separate filings in the spring

of 2000, reporting carriers will simply file one copy of the new

worksheet on April 1, 2000.2 We emphasize that we are not

imposing new reporting requirements in this proceeding; rather, our

goal is to simplify the requirements to the greatest extent possible

while continuing to ensure the efficient administration of the support

and cost recovery mechanisms.

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\1\ See 47 U.S.C. 151, 225, 251, 254. The Communications Act of

1934, as amended, (the Communications Act or the Act) is codified at

47 U.S.C. 151 et seq.

\2\ The Common Carrier Bureau will release, by Public Notice,

the worksheet and instructions to be used for the September 1999

universal service filing. See, infra, paragraph 32.

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II. Background

2. In a series of separate proceedings, the Commission has

established procedures to finance interstate telecommunications relay

services,3 universal service support mechanisms,4

administration of the North American Numbering Plan,5 and

shared costs of local number portability.6 To

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accomplish each of these goals, contributions are collected from

telecommunications carriers and certain other providers of

telecommunications services. As currently structured, our rules require

telecommunications carriers having interstate revenues to file, at

different times throughout the year, a number of contributor reporting

worksheets that reflect often duplicative reporting requirements. Such

carriers must file four forms (Form 431, TRS Fund Worksheet;

7 Form 457, Universal Service Worksheet; 8 Form

496, NANPA Funding Worksheet; 9 and Form 487, LNP Worksheet

10) containing revenue and other data on which contributions

to support or cost recovery mechanisms are based. For each of these

forms, with the exception of the Universal Service Worksheet, carriers

seeking confidential treatment of the data submitted in these forms

must also file separate requests for nondisclosure with the

Commission.11 In addition to these contributor reporting

requirements, all carriers must also file data concerning contact

information for an agent for service of process located in the District

of Columbia.12

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\3\ See Public Law 101-336, Sec. 401, 104 Stat. 327, 366-69

(adding section 225 to the Communications Act of 1934, as amended,

47 U.S.C. 225). See also Telecommunications Relay Services and the

Americans With Disabilities Act of 1990, Third Report and Order, FCC

93-357, CC Docket No. 90-571, 8 FCC Rcd 5300, 58 FR 39671 (July 26,

1993) (TRS Third Report and Order) (``recovering interstate relay

costs from all common carriers who provide interstate service on the

basis of their interstate revenues will accomplish this goal'').

\4\ See 47 U.S.C. 254. See also Federal-State Joint Board on

Universal Service, Report and Order, FCC 97-157, CC Docket No. 96-

45, 12 FCC Rcd 8776, 62 FR 32862 (June 17, 1997) (Universal Service

Order).

\5\ See 47 U.S.C. 251(e)(2). Administration of the North

American Numbering Plan, Toll Free Service Access Codes, Third

Report and Order and Third Report and Order, FCC 97-372, CC Docket

No. 92-237, 95-155, 12 FCC Rcd 23040, 62 FR 55179 (October 23,

1997).

\6\ See 47 U.S.C. 251(e)(2). See also Telephone Number

Portability, Third Report and Order, FCC 98-82, CC Docket 95-116, 63

FR 35150 (June 29, 1998) (LNP Cost Recovery Order). This Report and

Order is limited to the cost recovery mechanism for the shared costs

of long-term local number portability.

\7\ See 47 CFR 64.604(c)(4)(iii)(B). See also Telecommunications

Relay Services and the Americans With Disabilities Act of 1990,

Order, DA 98-2481, CC Docket No. 90-571 (rel. Dec. 2, 1998) (1999

TRS Fund Worksheet Order).

\8\ See 47 CFR 54.711. Common Carrier Bureau Announces Release

of Revised Universal Service Worksheet (FCC Form 457) To Reflect

Change in Reporting of Revenues From Inside Wiring Maintenance,

Public Notice, DA 99-432, CC Docket No. 96-45 (rel. Mar. 5, 1999)

(1999 Universal Service Worksheet Notice).

\9\ See 47 CFR 52.16. See also Common Carrier Bureau Announces

Release of 1999 North American Numbering Plan Funding Worksheet, FCC

Form 496, Public Notice, 13 FCC Rcd 17888, DA 98-1865 (rel. Sept.

15, 1998) (1999 NANP Funding Worksheet Notice).

\10\ See 47 CFR 52.32. See also All Telecommunications Carriers

Must Begin Contributing To the Regional Database Costs for Long-Term

Number Portability in 1999, Public Notice, DA 99-544, CC Docket No.

95-116 (rel. Mar. 15, 1999) (1999 LNP Worksheet Notice).

\11\ See 47 CFR 0.459.

\12\ See 47 U.S.C. 413; 47 CFR 1.47(h).

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3. On September 25, 1998, the Commission released a Notice of

Proposed Rulemaking and Notice of Inquiry, 63 FR 54090 (October 8,

1998), to initiate this proceeding.13 Twenty-eight parties

filed comments and ten parties filed reply comments to the Notice.

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\13\ Contributor Reporting Requirements Notice, 13 FCC Rcd

19295, 63 FR 54090 (October 8, 1998).

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III. Streamlining Contributor Reporting Requirements

A. Use of a Consolidated Worksheet

4. We adopt a new Telecommunications Reporting Worksheet to replace

the four existing worksheets used to collect contributor data. The new

worksheet will also be used by carriers to identify agents for service

of process, as required by section 413 of the Act. We note that

carriers and administrators were nearly unanimous in their support of

this proposal, indicating that it would result in tangible

administrative savings. We also conclude that adopting one worksheet to

satisfy these obligations will reduce confusion for carriers and should

increase compliance, particularly by smaller carriers. Finally, we

believe that adopting a consolidated worksheet and granting

administrators the ability to share revenue data will reduce the costs

for administrators and, thereby, further effect savings overall.

5. To consolidate the worksheets, we amend the corresponding

sections of the Commission's rules for universal service, TRS, local

number portability, and numbering administration, so that those rule

sections now refer to the Telecommunications Reporting

Worksheet.14 To the same end, we also amend our rules

concerning agents for service of process in section 1.47 to provide for

the use of the worksheet.15 Attached, as Appendix D to the

Report and Order, is the initial Telecommunications Reporting Worksheet

(including both the April and the streamlined September versions) that

will be used for the September 1, 1999 filing.16 The new

Telecommunications Reporting Worksheet will provide the necessary

information while reducing to the lowest possible level the burden for

carriers and service providers.

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\14\ See Attachment to this Summary (Rules Changes).

\15\ See Attachment to this Summary (Rules Changes).

\16\ See Section III. B. of this Summary (concerning Timing

Issues).

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6. We do not adopt, however, the Commission's proposal to use the

Telecommunications Reporting Worksheet to collect revenue and plant

data required under section 43.21(c) of the Commission's

rules.17

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\17\ See Contributor Reporting Requirements Notice, 13 FCC Rcd

19295, 19309, 63 FR 54090 (October 8, 1998); 47 CFR 43.21(c).

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B. Timing Issues

1. Uniform Filing Date

7. Consolidating the multiple existing filings into the

Telecommunications Reporting Worksheet will reduce the number of times

that carriers will need to assemble data and report it. We direct the

Bureau to utilize a single filing date for the Telecommunications

Reporting Worksheet for the purposes of universal service, TRS, NANP,

and local number portability.18 Our decision to adopt a

single filing date is bolstered by all of the commenters to address

this proposal. Since we adopt the first iteration of the

Telecommunications Reporting Worksheet in this order, we direct that,

for the first year's filing, the Telecommunications Reporting Worksheet

should be filed on April 1st.

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\18\ Agent for service of process data required pursuant to

section 413 of the Act is not necessarily filed at one time of the

year, but at the time the carrier changes its agent for service of

process in the District of Columbia. This requirement will remain

unchanged. See 47 CFR 1.47(h).

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8. We clarify that the new Telecommunications Reporting Worksheet

will become effective upon approval by the Office of Management and

Budget (OMB), but not less than thirty days from publication in the

Federal Register. It is our intention that contributors to the

universal service support mechanisms should use the streamlined Form

499-S version (FCC Form 499S) to satisfy the September 1, 1999

universal service filing. However, because we are required to seek

approval from the Office of Management and Budget for this revised

information collection, it is possible that the new form may not be

available for use for the September 1999 filing. We direct the Bureau

to announce by Public Notice whether contributors should file the new

September version or whether contributors should file, for a final

time, the existing Universal Service Worksheet. For the purposes of

TRS, NANP, LNP, universal service, the Form 499-A version of the

worksheet will be used to satisfy the April 1, 2000 filing. In

addition, the worksheet will be available to be used by carriers to

satisfy their section 413 obligations concerning agents for service of

process,19 as soon as it is approved by OMB, but not less

than thirty days after publication in the Federal Register. This

timeframe should give administrators sufficient time to prepare their

systems for the new worksheet and should give filers sufficient time to

become familiar with the new worksheet.

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\19\ See Section III. B. of the Order.

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2. September 1st Filing Date for Universal Service Support Mechanisms

9. We conclude that a more streamlined form is acceptable for the

September 1st filing. Accordingly, we adopt a ``short form'' for

purposes of the

[[Page 41322]]

September 1st filing that will omit data that is not essential for the

mid-year calculation of universal service contributions.

E. Filing Location(s)

10. We conclude that subject carriers and service providers need

only file one copy of their completed Telecommunications Reporting

Worksheet, rather than separate copies with each administrator. We

facilitate a single filing location by instructing the administrators

to develop procedures for collecting, validating, and distributing the

contributor data provided in the new Telecommunications Reporting

Worksheet.20

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\20\ See Section III. G. (discussing data entry of the

Telecommunications Reporting Worksheet) of the Order. The Bureau

will announce by Public Notice the location for filing the April

2000 Telecommunications Reporting Worksheet.

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F. Procedures for Future Changes to the Telecommunications Reporting

Worksheet

11. We adopt our proposal and delegate authority to make future

changes to the Telecommunications Reporting Worksheet to the Chief of

the Common Carrier Bureau.21 The Bureau already has broad

authority to waive, reduce, or eliminate the contributor reporting

requirements for universal service, and the Bureau has latitude with

respect to the administration of the NANP, LNP, and TRS contributor

reporting requirements. These delegations extend to administrative

aspects of the requirements, e.g., where and when worksheets are filed,

incorporating edits to reflect Commission changes to the substance of

the mechanisms, and other similar details.

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\21\ See Contributor Reporting Requirements Notice, 13 FCC Rcd

19295, 19319-20, 63 FR 54090 (October 8, 1998).

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12. So that these delegations are consistent, we amend the

Commission's rules to grant the Common Carrier Bureau delegated

authority, in keeping with the current delegation for universal service

purposes, to waive, reduce, modify, or eliminate the contributor

reporting requirements for the TRS, LNP, and NANP mechanisms, as

necessary to preserve the sound and efficient administration of these

support and cost recovery mechanisms.22 We specify that the

Bureau has the authority to ``modify'' these reporting requirements as

a matter of clarification, because we believe that this authority is

implied within the existing grant. We reaffirm that this delegation

extends only to making changes to the administrative aspects of the

reporting requirements, not to the substance of the underlying

programs.

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\22\ See Appendix B, Rules Amended.

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G. Information Sharing and Delegation of Data Entry Functions Between

Administrators

13. We amend our rules to allow the administrators to share

confidential contributor information with one another for the purposes

of comparing individual contributors' revenue, contact, and payment

history information. Based on our experience with the limited sharing

provisions currently allowed under our rules and on the record in this

proceeding, we conclude that the ability to share contributor data will

assist the administrators in monitoring compliance with the

contribution requirements by revealing inconsistencies between revenue

data reported to the different administrators. This sharing of

information will also enhance the administrators' performance of their

collection functions and thereby better ensure the integrity and

efficient administration of the support and cost recovery mechanisms.

Moreover, we amend our rules to ensure that such information cannot be

used for purposes unrelated to the administration of the mechanisms;

thus, ensuring proper treatment of confidential contributor

information.23

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\23\ See Section III.H. (concerning Confidentiality Issues) of

the Order.

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14. Starting with the April 2000 filing of the consolidated

worksheet, the administrators will have a practical need to share

carrier-provided information because we direct in this order that

filers need only submit one copy of their completed

worksheets.24 Rather than mandate particular data sharing

procedures, we order the administrators to develop efficient and

effective procedures for collecting, validating, and distributing the

centrally-filed contributor data amongst themselves. We expect, for

example, that it might be more cost effective to have one administrator

perform the data entry and preliminary verification functions for more

than one of the support and cost recovery mechanisms. Whatever their

decision, we direct the administrators to file with the Bureau, within

90 days after release of this order, a summary of their proposed

procedures for distributing the data from the worksheet.

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\24\ See Section III.E. (discussing the filing location for the

consolidated worksheet) of the Order. The Bureau will announce by

Public Notice the location for filing the April 2000

Telecommunications Reporting Worksheet.

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15. We conclude that the costs of collecting, validating, and

distributing the carrier-provided information--and, any savings derived

from consolidating redundant administrative tasks--should be allocated

equitably among the administrators. Accordingly, we order the

administrators to include in their filed summary a description of how

related costs will be equitably apportioned. We delegate to the Bureau

the authority to review the administrators' summary, including the

proposed cost allocation plan.

16. To preserve the integrity of the support and cost recovery

mechanisms, it is important to ensure that all contributor data is

collected. We thus expect that the summarized procedures should reflect

the administrators' commitment to ensuring that all required data is

collected and validated.

H. Additional Confidentiality Issues

17. We adopt our proposal to permit carriers filing the

Telecommunications Reporting Worksheet to certify that the revenue data

contained in their submissions are privileged or confidential

commercial or financial information and that disclosure of such

information would likely cause substantial harm to the competitive

position of the entity filing the worksheet.25 As proposed,

we amend our rules so that filers will be able to make this

certification on their Telecommunications Reporting Worksheet and

request Commission nondisclosure of information contained in the

worksheet simply by checking a box on the worksheet, in lieu of

submitting a separate request pursuant to section 0.459 of the

Commission's rules.

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\25\ See Appendix D, Telecommunications Reporting Worksheet. We

note that Blooston requests that the Commission grant confidential

treatment for other information on the worksheet, such as the

facsimile numbers and e-mail addresses of the contact persons. Any

such request for confidential treatment would have to be separately

pleaded pursuant to section 0.459. 47 CFR 0.459. We note, however,

that the Commission does not plan to routinely release this

information.

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18. We make clear, however, that simply requesting confidential

treatment by means of this check-box does not necessarily entitle the

filer to nondisclosure. Indeed, if the Commission is to receive a

request for disclosure of the information on the worksheets, or if the

Commission proposes to disclose the information, the filer would be

required to make the full showing required under our

rules.26

[[Page 41323]]

For example, we expect that the Commission would be disinclined to

withhold information related to the size of an individual carrier's

contribution (information which third parties could potentially use to

estimate that carrier's revenues) in an enforcement action against a

carrier for failure to make a required contribution to one of the

support or cost recovery mechanisms.

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\26\ See 47 CFR 0.459. See also Examination of Current Policy

Concerning the Treatment of Confidential Information Submitted to

the Commission, FCC 98-184, GC Docket No. 96-55, 63 FR 44161 (August

18, 1998) (listing the showings required in a request that

information be withheld and stating that the Commission may defer

action on such requests until a formal request for public inspection

has been made).

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19. In light of our decision to allow administrators to share

contributor revenue data, we take additional measures to ensure the

nondisclosure of confidential submissions. We accordingly modify our

rules to extend each administrator's confidentiality obligations to the

data obtained from other funds. Moreover, we amend our rules to ensure

that the administrators shall only use contributor data--whether

obtained directly from contributors or from administrators--for the

purpose administering the support and cost recovery

mechanisms.27

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\27\ We note that the TRS rules enable the TRS administrator to

use data obtained from contributors to be used for calculating the

regulatory fees of interstate common carriers, and aggregating such

fee payments for submission to the Commission. We do not alter these

provisions.

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I. Electronic Filing

20. We conclude, based on our experience in other proceedings, that

making available an electronic filing system for the Telecommunications

Reporting Worksheet may allow filers and administrators to reduce costs

and improve accuracy. Accordingly, we take initial steps in this

proceeding to develop and move to an electronic filing system. We

expect, however, that the costs and benefits of an electronic filing

system can vary significantly depending on the design of the system.

Indeed, in light of the complexities raised in the record by both

carriers and administrators, we conclude that it is imperative for the

development of and the transition to an eventual electronic filing

system to be conducted with great involvement from the administrators

and carriers.28

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\28\ See, e.g., MCI Comments at 5; GTE Comments at 4; Blooston

Reply Comments at 7-9.

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21. As an initial step, we direct the administrators to assess and

report to the Bureau, within 180 days of the release of this order, on

the feasibility of implementing electronic filing. We expect the

administrators to address the potential start-up and on-going operating

costs to the administrators and carriers of an electronic system. The

administrators should also address measures and costs associated with

ensuring the accuracy and security of filed contributor data. We agree

with those commenters that state that any proposal for electronic

filing should not require expensive start-up costs for

filers.29 Moreover, we conclude that any electronic filing

proposal must satisfy a cost-benefit analysis and instruct the

administrators to conduct such an analysis. Finally, we restate our

commitment to making electronic filing and other electronic

applications accessible to persons with disabilities to the fullest

extent possible.30 Therefore, the administrators' report

should address their ability--both now and on a continuing basis--to

make electronic systems accessible to persons with disabilities.

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\29\ See, e.g., Blooston Comments at 15-16; MCI Comments at 5.

\30\ Electronic filing is subject to the program accessibility

requirements of section 1.850 of our rules. 47 CFR 1.850. See also

Workforce Investment Act of 1998, Public Law 105-220, 112 Stat. 936

(Aug. 7, 1998).

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IV. Contributions to TRS and NANPA Mechanisms

A. Overview

22. We adopt our proposals to alter the revenue bases for the TRS

and NANP mechanisms so that end-user telecommunications revenues will

be used to calculate contributions for all four mechanisms. In

addition, we also alter the current practices for assessing minimum

contributions to the TRS and NANP mechanisms to lessen regulatory

burdens on small carriers and telecommunications service providers.

23. As a preliminary matter, we reject MCI's procedural argument

that the Commission may not alter the revenue base or minimum

contributions rules because it did not give adequate notice of these

changes. Section 553(b) of the Administrative Procedures Act (APA)

requires that an agency afford interested parties adequate notice of,

and an opportunity to comment on, the provisions that appear in the

agency's final regulations. 31 Courts have interpreted this

to require that an agency provide ``sufficient factual detail and

rationale for the rule to permit interested parties to comment

meaningfully.'' 32 The Contributor Reporting Requirements

Notice, 63 FR 54090 (October 8, 1998), appeared in the Federal

Register, and it contained adequate, indeed explicit, notice of the

provisions we adopt today. We also observe that the caption to this

docket specifically references the four underlying mechanisms; a point

which we believe is not essential to satisfy the requirements of the

APA, but that further undercuts MCI's claim that it did not have

adequate notice of these proposals. Moreover, MCI cannot claim any

actual lack of notice, as it has participated fully in this proceeding,

filing both initial and reply comments. Accordingly, we believe that no

further notice is required to comply with the notice provisions of the

APA.

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\31\ 5 U.S.C. 553.

\32\ Florida Power & Light Co. v. United States, 846 F.2d 765,

771 (D.C. Cir. 1988), cert. denied, 490 U.S. 1045 (1989).

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B. Basis for Assessing Contributions

24. In light of the Commission's experience since adopting revenue

bases for TRS and NANP and in light of our efforts to streamline

contributor reporting requirements, we modify our rules for

contributions to the TRS and NANP mechanisms so that contributions will

be based on end-user telecommunications revenues. Basing contributions

to these mechanisms on end-user telecommunications revenue will

effectively carry out the statutory mandates in section 225 and 251 for

financing of TRS and NANP. 33 In addition to fulfilling the

statutory directives, moving to an end-user telecommunications revenue

basis will reduce carriers' administrative expenses associated with

these reporting requirements. Indeed, given our proposal to create a

unified contributor collection worksheet, we believe that changing the

funding basis to end-user telecommunications revenue will appreciably

reduce administrative burdens overall for carriers.

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\33\ See 47 U.S.C. 225, 251(e).

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25. Basing contributions on end-user telecommunications revenues is

consistent with the statutory language of section 225 and its

requirement that ``costs caused by interstate telecommunications relay

services shall be recovered from all subscribers for every interstate

service.'' 34 Recovering interstate relay costs from all

common carriers that provide interstate service on the basis of their

interstate revenues will accomplish this goal. End users are a

reasonable proxy for subscribers, so collecting contributions from

carriers based on revenue derived from end users satisfies section 225.

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\34\ 47 U.S.C. 225(d)(3)(B).

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26. Similarly, collecting contributions to the NANP cost recovery

on the basis of end-user telecommunications satisfies the requirements

of section 251(e). Section 251(e) of the Act directs that ``[t]he cost

of establishing

[[Page 41324]]

telecommunications numbering administration arrangements and number

portability shall be borne by all telecommunications carriers on a

competitively neutral basis as determined by the Commission.''

35 The end-user telecommunications revenue basis satisfies

the section 251 directive that contributions be assessed on a

competitively neutral basis. In particular, the Commission found this

basis to be competitively neutral because it does not give one service

provider an appreciable, incremental cost advantage when competing for

a subscriber. Further, basing contributions on end-user

telecommunications revenues will prevent contributions to the NANP

administration cost recovery from disparately affecting the ability of

carriers to earn a normal return. We affirm this analysis and conclude

that collecting contributions to the NANP administration cost recovery

based on end-user telecommunications revenues will be competitively

neutral.36

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\35\ 47 U.S.C. 251(e)(2). Even though there is no explicit

statutory requirement to do so in section 225, we conclude that the

principle of competitive neutrality is consistent with section 225

and that basing contributions to the TRS Fund on a competitively

neutral mechanism would advance the intent embodied in the

Congressional goal of ``a pro-competitive, de-regulatory national

policy framework.'' See Joint Explanatory Statement of the Committee

of Conference, S. Conf. Rep. No. 230, 104th Cong., 2d Sess. 113

(1996).

\36\ See, e.g., BellSouth Comments at 4-5; IDT Comments at 16;

Star Comments at 2-4. We note that several Bell Operating Companies

argued to the United States Court of Appeals for the 8th Circuit

that the net telecommunications revenue methodology would not be

competitively neutral if states do not permit carriers to flow

through their numbering administration costs in the prices that they

charge their competitors for telecommunications services and

facilities. California v. FCC, 124 F.3d 934 (8th Cir., 1997). The

Court of Appeals ruled that petitioners' contentions were

speculative and not ripe for review because no state had concluded

that carriers could not include numbering administration charges in

the prices for services or facilities sold to other

telecommunications service providers. Id. at 944. Adoption of an

end-user telecommunications revenue basis should moot this issue.

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27. In the case of NANP, we note that section 251(e)(2) requires

that the ``cost of establishing telecommunications numbering

administration arrangements . . . shall be borne by all

telecommunications carriers on a competitively neutral basis. . . .''

37 Given the statutory directive that contributions be

collected from ``all telecommunications carriers,'' we require carriers

that provided telecommunications service during the base year and that

have no end-user telecommunications revenue to make a fixed

contribution of twenty-five dollars ($25) to the NANP cost recovery

mechanism.38 We conclude that assessing this sum will

satisfy the statutory language of section 251(e)(2) and at the same

time will not be economically burdensome for these primarily-large

wholesale carriers. Finally, we observe that although an end-user

telecommunications revenue basis would otherwise relieve pure

wholesalers, which have no end-user revenue, from directly bearing

costs of number administration, the end-user method does not exclude

wholesale revenues from the revenue base that determines carriers'

contributions. As the Commission explained in the Universal Service

Order, 62 FR 32862 (June 17, 1997), wholesale charges are built into

retail rates, and thus the revenue basis still reflects wholesale

revenue.39

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\37\ 47 U.S.C. 251(e)(2).

\38\ While the Commission proposed in the Notice a fixed

contribution of $100 for carriers with no end-user

telecommunications revenues, we believe that the $25 contribution

will be easier to administer, since it is consistent with the $25

minimum contribution rule that we adopt for contributors with end-

user telecommunications revenues. See Section IV. C. of the Order.

\39\ See Universal Service Order, 12 FCC Rcd 8776, 9207, 62 FR

32862 (June 17, 1997).

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28. To minimize confusion for contributors and the administrators,

we wish to make the transition to contributions based on end-user

telecommunications revenues as soon as possible. For purposes of TRS,

we recognize that many contributors are still making monthly

installment payments toward their funding year 1999 contribution (which

covers the April 26, 1999 through March 26, 2000 period) and we make

clear that those contributions to the TRS Fund for the current funding

period will continue to be based on gross telecommunications revenues.

Because the contributor data needed to calculate TRS contributions for

the funding year 2000 will not be available until April 2000, we will

extend the current TRS funding period, so that contributions to the TRS

Fund will continue to be based on gross telecommunications revenues and

the current fund factor through the end of June 2000.40 As

of July 1, 2000 contributions to the TRS Fund will be based on end-user

telecommunications revenues. A new factor will be developed in time for

contributions in July 2000 and we will shift the fiscal year for TRS,

so that the funding period will run from July 1st of each year through

June 30th of the following year.

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\40\ See Telecommunications Relay Services and the Americans

with Disabilities Act of 1990, Order, DA 98-2481, CC Docket No. 90-

571 (rel. Dec. 2, 1998) (determining contribution factor for the

April 26, 1999 through March 26, 2000 period).

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29. Indeed, we will shift the fiscal years for both TRS and NANP,

so that the funding periods for these mechanisms will be more closely

timed with the receipt of annual contributor data in the April filing

of the new consolidated worksheet. We also make clear that

contributions to the NANP cost recovery will continue to be based on

net telecommunications revenues through the end of the current funding

year, which covers fund administration from March 1999 through February

2000. The NANP Billing and Collection Agent will begin collecting

contributions based on end-user telecommunications revenues for the

funding year 2000. So that we may transition the NANP funding period to

run from July 1st of each year through June 30th of the following year,

we direct that the funding year 2000 will cover the sixteen month

period from March 2000 through June 2001. We direct that, for purposes

of the NANP funding year 2000, the Billing and Collection Agent will

use contributor data filed in the September consolidated worksheet to

develop the fund factor and should use the contributor data filed in

the April consolidated worksheet to perform a ``true-up'' for the

contributions in July 2000.41 Thereafter, the NANP funding

period will return to the twelve month cycle from July to June with

contributions based on the April filing of the worksheet.

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\41\ A ``true-up'' will be necessary because the September

worksheet reports only half year revenue data and because it may not

collect data from all NANP contributors, e.g., some

telecommunications carriers that are de minimis for universal

service purposes will not file the September worksheet. We

nevertheless expect that the revisions performed in the ``true-up''

will be minor in terms of contributors added and contributions

adjusted.

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C. Minimum and Fixed Annual Contributions to TRS and NANPA Mechanisms

30. We modify our proposals and amend our rules to reduce

substantially the one hundred dollar minimum contributions to a twenty-

five dollar minimum. Our experience with the TRS and NANP mechanisms

persuades us that it is possible to lower the one hundred dollar

minimum while protecting the administrative integrity and efficiency of

the TRS and NANP mechanisms.

V. Procedural Matters

A. Final Paperwork Reduction Act Analysis

31. As required by the Paperwork Reduction Act of 1995, the

Contributor Reporting Requirements Notice, 63 FR 54090 (October 8,

1998), invited the

[[Page 41325]]

general public and the Office of Management and Budget (OMB) to comment

on the proposed information collection requirements contained in the

Notice, in particular, the Telecommunications Reporting Worksheet. On

December 9, 1998, OMB approved the proposed information collection, as

submitted to OMB.42 In this Report and Order, we adopt the

proposed Telecommunications Reporting Worksheet, but modify our

proposal to reflect comments received from OMB and other commenters.

The revised Telecommunications Reporting Worksheet is subject to

approval by OMB. The worksheet that we adopt in this Order reflects our

efforts to collect the information necessary to implement the

congressional directives, while reducing to the lowest possible level

the burden on carriers and service providers.43

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\42\ In its approval of the proposed worksheet, OMB requests

that the Commission address several issues. See Section V.A. of the

Order for a discussion of those issues.

\43\ See Sections III.B. of the Order (discussing data requested

in the worksheet); and V.A. of the Order (discussing comments on the

proposed information collections).

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B. Final Regulatory Flexibility Act Analysis

32. As required by the Regulatory Flexibility Act

(RFA),44 the Commission has prepared a Final Regulatory

Flexibility Analysis (FRFA) of the possible significant economic impact

on small entities of the policies and rules adopted in this Order. A

copy of this FRFA is set forth as part of this summary. The Office of

Public Affairs, Reference Operations Division, will send a copy of this

Order, including the FRFA, to the Chief Counsel for Advocacy of the

Small Business Administration.

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\44\ See 5 U.S.C. 604. The RFA, see 5 U.S.C. 601 et. seq., has

been amended by the Contract With America Advancement Act of 1996,

Public Law 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the

CWAAA is the Small Business Regulatory Enforcement Fairness Act of

1996 (SBREFA).

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VI. Ordering Clauses

33. Accordingly, it is ordered, pursuant to sections 1, 4(i), 4(j),

11, 201-205, 210, 214, 218, 225, 251, 254, 303(r), 332, and 403 of the

Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j),

161, 201-205, 210, 214, 218, 225, 251, 254, 303(r), 332 and 403 that

this Order is hereby Adopted.

34. It is further ordered that the rule changes set forth in

Appendix B are hereby adopted, effective thirty (30) days from the date

of publication in the Federal Register. The information collection

adopted herein is contingent upon approval by the Office of Management

and Budget, but, in any event, will not become effective before thirty

(30) days after publication in the Federal Register.

35. It is further ordered that the Commission's Office of Public

Affairs, Reference Operations Division, shall send a copy of this

order, including the Final Regulatory Flexibility Analysis, to the

Chief Counsel for Advocacy of the Small Business Administration.

Final Regulatory Flexibility Act Analysis

36. In compliance with the Regulatory Flexibility Act

(RFA),45 an Initial Regulatory Flexibility Analysis (IRFA)

was incorporated into the Contributor Reporting Requirements Notice, 63

FR 54090 (October 8, 1998). The Commission sought written public

comment on the proposals in the Notice, including comment on the IRFA.

The comments received are discussed below. This present Final

Regulatory Flexibility Analysis (FRFA) conforms to the

RFA.46

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\45\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et. seq., has

been amended by the Contract With America Advancement Act of 1996,

Public Law 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the

CWAAA is the Small Business Regulatory Enforcement Fairness Act of

1996 (SBREFA).

\46\ See 5 U.S.C. 604.

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I. Need for, and Objectives of, the Contributor Reporting Requirements

Order:

37. The Commission undertakes this examination of its contributor

reporting requirements 47 as a part of its 1998 biennial

review of regulations as required by section 11 of the Communications

Act, as amended.48 This Order simplifies the Commission's

filing requirements by consolidating several different forms currently

filed under our existing rules associated with the Telecommunications

Relay Services (TRS) Fund,49 federal universal service

support mechanisms,50 the cost recovery mechanism for the

North American Numbering Plan (NANP) administration,51 and

the cost recovery mechanism for long-term local number portability

(LNP) administration.52 This Order also establishes end-user

telecommunications revenues as the basis for contributions to the NANP

and TRS mechanisms--making consistent the revenue bases for all four

support and cost recovery mechanisms. Our objective is to reduce or

eliminate unnecessary or duplicative regulatory requirements,

consistent with section 11 of the Act,53 and the

Telecommunications Act of 1996.54

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\47\ See 47 CFR 64.601 et seq.; 47 CFR 54.1 et seq.; 47 CFR 52.1

et seq.; 47 CFR 52.21 et seq.

\48\ 47 U.S.C. 161.

\49\ 47 CFR 64.601 et seq.

\50\ 47 CFR 54.1 et seq., 69.1 et seq.

\51\ 47 CFR 52.1 et seq.

\52\ 47 CFR 52.21 et seq.

\53\ 47 U.S.C. 161.

\54\ Telecommunications Act of 1996, Public Law 104-104, 110

Stat. 56 (1996 Act), codified at 47 U.S.C. 151 et seq. See Joint

Explanatory Statement of the Committee of Conference, S. Conf. Rep.

No. 230, 104th Cong., 2d Sess. 113 (1996) (Joint Explanatory

Statement).

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II. Summary of Significant Issues Raised by Public Comments in Response

to the IRFA

38. Only one party filed comments addressing the Commission's

compliance with the RFA,55 but many parties commented on the

Commission's proposals to streamline the Commission's reporting

requirements. As noted above, the record provided by all of these

commenting parties clearly supports the Commission's efforts to reduce

the amount of paperwork required by the current contributor reporting

requirements.56 Consistent with those comments, this Order

reduces significantly the amount of paperwork required of

telecommunications carriers.

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\55\ See GST Comments at 15.

\56\ See Section III.B. (discussing use of a consolidated

worksheet) of the Order.

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39. In comments to the Notice, GST argues that the proposed

Telecommunications Reporting Worksheet is particularly burdensome for

small carriers because it assumes that small carriers have developed

sophisticated accounting infrastructure.57 We disagree with

GST's assessment and note that the worksheet provides flexibility for

carriers that do not have sophisticated accounting systems. In contrast

to GST's portrayal, the categories of revenue sought in the worksheet

correspond to major categories of service, reflecting our expectation

that most carriers track the relative magnitudes of their major product

offerings for internal management reporting and cost accounting

purposes. GST offers no evidence to the contrary. The worksheet

collects the minimum amount of information necessary to ensure that

individual carriers and segments of the industry are contributing on a

fair and equitable basis. Further, the worksheet and its instructions

incorporate alternative, less burdensome approaches where it has been

determined that supplying certain information is particularly

burdensome for certain carriers. Thus, for example, the worksheet

permits carriers to use good

[[Page 41326]]

faith estimates to determine interstate and international revenues

where these figures cannot be directly determined from corporate books

of account or subsidiary records. Similarly, we adopt a streamlined

version of the worksheet to satisfy the September universal service

filing and to reduce costs for carriers.

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\57\ See GST Comments at 7, 9, 15.

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40. While not in direct response to the IRFA, both NECA and

Blooston encourage the Commission not to implement an electronic filing

system that would require costly investments by small

carriers.58 We agree that proposals for electronic filing of

the Telecommunications Reporting Worksheet should not require expensive

start-up costs for filers, so that all carriers, including small

entities, should be able to utilize a more efficient

system.59

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\58\ NECA Comments at 4; Blooston Reply Comments at 9.

\59\ See Section III.I. (discussing electronic filing) of the

Order.

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IV. Description and Estimate of the Number of Small Entities to Which

the Rules Will Apply:

41. The Commission's contributor reporting requirements apply to a

wide range of entities, including all telecommunications carriers and

other providers of interstate telecommunications that offer

telecommunications for a fee.60 Thus, we expect that the

rules adopted in this Order will have a positive economic impact on a

substantial number of small entities. Based on the number of carriers

that file the existing forms--and this Order does not increase the

number of entities that must comply with these requirements--we predict

that not more than 5,000 entities, total, will file the worksheet. Of

those 5,000 potential filers, we do not know how many are small

entities, but we offer below a detailed estimate of the number of small

entities within each of several major carrier-type categories. We

state, again, that the economic impact of these proposals is, of

course, a positive and beneficial impact, in the form of reduced

regulatory burdens and recordkeeping requirements, for these entities.

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\60\ 47 CFR 52.17 (applying to all telecommunications carriers),

52.32 (applying to all telecommunications carriers), 54.703

(applying to every telecommunications carrier that provides

interstate telecommunications services, every provider of interstate

telecommunications that offers telecommunications for a fee on a

non-common carrier basis, and certain payphone providers),

64.604(c)(4)(iii)(A) (applying to every carrier providing interstate

telecommunications services). We note that the Commission's rules

for universal service exempt certain small contributors, i.e.,

contributors that have revenue below a stated threshold. 47 CFR

54.705.

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42. To estimate the number of small entities that would benefit

from this positive economic impact, we first consider the statutory

definition of ``small entity'' under the RFA. The RFA generally defines

``small entity'' as having the same meaning as the term ``small

business,'' ``small organization,'' and ``small governmental

jurisdiction.'' 61 In addition, the term ``small business''

has the same meaning as the term ``small business concern'' under the

Small Business Act, unless the Commission has developed one or more

definitions that are appropriate to its activities.62 Under

the Small Business Act, a ``small business concern'' is one that: (1)

is independently owned and operated; (2) is not dominant in its field

of operation; and (3) meets any additional criteria established by the

Small Business Administration (SBA).63 The SBA has defined a

small business for Standard Industrial Classification (SIC) categories

4812 (Radiotelephone Communications) and 4813 (Telephone

Communications, Except Radiotelephone) to be small entities when they

have no more than 1,500 employees.64 We first discuss the

number of small telephone companies falling within these SIC

categories, then attempt to refine further those estimates to

correspond with the categories of telephone companies that are commonly

used under our rules.

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\61\ 5 U.S.C. 601(6).

\62\ 5 U.S.C. 601(3) (incorporating by reference the definition

of ``small business concern'' in 5 U.S.C. 632). Pursuant to 5 U.S.C.

601(3), the statutory definition of a small business applies

``unless an agency after consultation with the Office of Advocacy of

the Small Business Administration and after opportunity for public

comment, establishes one or more definitions of such term which are

appropriate to the activities of the agency and publishes such

definition in the Federal Register.''

\63\ 15 U.S.C. 632. See, e.g., Brown Transport Truckload, Inc.

v. Southern Wipers, Inc., 176 B.R. 82 (N.D. Ga. 1994).

\64\ 13 CFR 121.201.

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43. The most reliable source of information regarding the total

numbers of certain common carrier and related providers nationwide, as

well as the numbers of commercial wireless entities, appears to be data

the Commission publishes annually in its Carrier Locator report,

derived from filings made in connection with the Telecommunications

Relay Service (TRS).65 According to data in the most recent

report, there are 3,604 interstate carriers.66 These

carriers include, inter alia, local exchange carriers, wireline

carriers and service providers, interexchange carriers, competitive

access providers, operator service providers, pay telephone operators,

providers of telephone toll service, providers of telephone exchange

service, and resellers.

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\65\ FCC, Carrier Locator: Interstate Service Providers, Figure

1 (Jan. 1999) (Carrier Locator). See also 47 CFR 64.601 et seq.

\66\ Carrier Locator at Fig. 1.

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44. Although some affected incumbent local exchange carriers

(ILECs) may have 1,500 or fewer employees, we do not believe that such

entities should be considered small entities within the meaning of the

RFA because they are either dominant in their field of operations or

are not independently owned and operated, and therefore by definition

not ``small entities'' or ``small business concerns'' under the RFA.

Accordingly, our use of the terms ``small entities'' and ``small

businesses'' does not encompass small ILECs. Out of an abundance of

caution, however, for regulatory flexibility analysis purposes, we will

separately consider small ILECs within this analysis and use the term

``small ILECs'' to refer to any ILECs that arguably might be defined by

the SBA as ``small business concerns.'' 67

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\67\ See 13 CFR 121.201, Standard Industrial Classification

(SIC) 4813. Since the time of the Commission's 1996 decision,

Implementation of the Local Competition Provisions in the

Telecommunications Act of 1996, First Report and Order, 11 FCC Rcd

15499, 16144-45 (1996), 61 FR 45476 (August 29, 1996), the

Commission has consistently addressed in its regulatory flexibility

analyses the impact of its rules on such ILECs.

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45. Total Number of Telephone Companies Affected. The United States

Bureau of the Census (``the Census Bureau'') reports that, at the end

of 1992, there were 3,497 firms engaged in providing telephone

services, as defined therein, for at least one year.68 This

number contains a variety of different categories of carriers,

including local exchange carriers, interexchange carriers, competitive

access providers, cellular carriers, mobile service carriers, operator

service providers, pay telephone operators, PCS providers, covered SMR

providers, and resellers. It seems certain that some of those 3,497

telephone service firms may not qualify as small entities or small

incumbent LECs because they are not ``independently owned and

operated.'' 69 For example, a PCS provider that is

affiliated with an interexchange carrier having more than 1,500

employees would not meet the definition of a small business. It seems

[[Page 41327]]

reasonable to conclude, therefore, that fewer than 3,497 telephone

service firms are small entity telephone service firms or small

incumbent LECs that may be affected by the decisions and rule changes

adopted in this Order.

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\68\ United States Department of Commerce, Bureau of the Census,

1992 Census of Transportation, Communications, and Utilities:

Establishment and Firm Size, at Firm Size 1-123 (1995) (``1992

Census'').

\69\ 15 U.S.C. 632(a)(1).

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46. Wireline Carriers and Service Providers. SBA has developed a

definition of small entities for telephone communications companies

other than radiotelephone companies. The Census Bureau reports that,

there were 2,321 such telephone companies in operation for at least one

year at the end of 1992.70 According to SBA's definition, a

small business telephone company other than a radiotelephone company is

one employing no more than 1,500 persons.71 All but 26 of

the 2,321 non-radiotelephone companies listed by the Census Bureau were

reported to have fewer than 1,000 employees. Thus, even if all 26 of

those companies had more than 1,500 employees, there would still be

2,295 non-radiotelephone companies that might qualify as small entities

or small incumbent LECs. Although it seems certain that some of these

carriers are not independently owned and operated, we are unable at

this time to estimate with greater precision the number of wireline

carriers and service providers that would qualify as small business

concerns under SBA's definition. Consequently, we estimate that there

are fewer than 2,295 small entity telephone communications companies

other than radiotelephone companies that may be affected by the

decisions and rule changes adopted in this Order.

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\70\ 1992 Census, supra, at Firm Size 1-123.

\71\ 13 CFR 121.201, SIC Code 4813.

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47. Local Exchange Carriers, Interexchange Carriers, Competitive

Access Providers, Operator Service Providers, and Resellers. Neither

the Commission nor SBA has developed a definition of small local

exchange carriers (LECs), interexchange carriers (IXCs), competitive

access providers (CAPs), operator service providers (OSPs), or

resellers. The closest applicable definition for these carrier-types

under SBA rules is for telephone communications companies other than

radiotelephone (wireless) companies.72 The most reliable

source of information regarding the number of these carriers nationwide

of which we are aware appears to be the data that we collect annually

in connection with the Telecommunications Relay Service

(TRS).73 According to our most recent data, there are 1,410

LECs, 151 IXCs, 129 CAPs, 32 OSPs, and 351 resellers.74

Although it seems certain that some of these carriers are not

independently owned and operated, or have more than 1,500 employees, we

are unable at this time to estimate with greater precision the number

of these carriers that would qualify as small business concerns under

SBA's definition. Consequently, we estimate that there are fewer than

1,410 small entity LECs or small incumbent LECs, 151 IXCs, 129 CAPs, 32

OSPs, and 351 resellers that may be affected by the decisions and rule

changes adopted in this Order.

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\72\ 13 CFR 121.210, SIC Code 4813.

\73\ See 47 CFR 64.601 et seq.; Carrier Locator at Fig. 1.

\74\ Carrier Locator at Fig. 1. The total for resellers includes

both toll resellers and local resellers.

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48. Wireless (Radiotelephone) Carriers. SBA has developed a

definition of small entities for radiotelephone (wireless) companies.

The Census Bureau reports that there were 1,176 such companies in

operation for at least one year at the end of 1992.75

According to SBA's definition, a small business radiotelephone company

is one employing no more than 1,500 persons.76 The Census

Bureau also reported that 1,164 of those radiotelephone companies had

fewer than 1,000 employees. Thus, even if all of the remaining 12

companies had more than 1,500 employees, there would still be 1,164

radiotelephone companies that might qualify as small entities if they

are independently owned and operated. Although it seems certain that

some of these carriers are not independently owned and operated, we are

unable at this time to estimate with greater precision the number of

radiotelephone carriers and service providers that would qualify as

small business concerns under SBA's definition. Consequently, we

estimate that there are fewer than 1,164 small entity radiotelephone

companies that may be affected by the decisions and rule changes

adopted in this Order.

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\75\ United States Department of Commerce, Bureau of the Census,

1992 Census of Transportation, Communications, and Utilities:

Establishment and Firm Size, at Firm Size 1-123 (1995) (``1992

Census'').

\76\ 13 CFR 121.201, SIC Code 4812.

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49. Cellular, PCS, SMR and Other Mobile Service Providers. In an

effort to further refine our calculation of the number of

radiotelephone companies that may be affected by the rules adopted

herein, we consider the data that we collect annually in connection

with the TRS for the subcategories Wireless Telephony (which includes

Cellular, PCS, and SMR) and Other Mobile Service Providers. Neither the

Commission nor the SBA has developed a definition of small entities

specifically applicable to these broad subcategories, so we will

utilize the closest applicable definition under SBA rules--which, for

both categories, is for telephone companies other than radiotelephone

(wireless) companies.77 To the extent that the Commission

has adopted definitions for small entities providing PCS and SMR

services, we discuss those definitions below. According to our most

recent TRS data, 732 companies reported that they are engaged in the

provision of Wireless Telephony services and 23 companies reported that

they are engaged in the provision of Other Mobile

Services.78 Although it seems certain that some of these

carriers are not independently owned and operated, or have more than

1,500 employees, we are unable at this time to estimate with greater

precision the number of Wireless Telephony Providers and Other Mobile

Service Providers, except as described below, that would qualify as

small business concerns under SBA's definition. Consequently, we

estimate that there are fewer than 732 small entity Wireless Telephony

Providers and fewer than 23 small entity Other Mobile Service Providers

that might be affected by the decisions and rule changes adopted in

this Order.

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\77\ Id.

\78\ Carrier Locator at Fig. 1.

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50. Broadband PCS Licensees. The broadband 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 less than $40 million in the three previous calendar

years.79 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.80

These regulations defining ``small entity'' in the context of broadband

PCS auctions have been approved by SBA.81 No small

businesses within the SBA-approved definition 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

[[Page 41328]]

and very small business bidders won approximately 40% of the 1,479

licenses for Blocks D, E, and F. However, licenses for Blocks C through

F have not been awarded fully, therefore there are few, if any, small

businesses currently providing PCS services. Based on this information,

we estimate that the number of small broadband PCS licenses will

include the 90 winning C Block bidders and the 93 qualifying bidders in

the D, E, and F blocks, for a total of 183 small PCS providers as

defined by the SBA and the Commissioner's auction rules.

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\79\ See Amendment of Parts 20 and 24 of the Commission's

Rules--Broadband PCS Competitive Bidding and the Commercial Mobile

Radio Service Spectrum Cap, Report and Order, FCC 96-278, WT Docket

No. 96-59, Paras. 57-60 (June 24, 1996), 61 FR 33859 (July 1, 1996);

see also 47 CFR 24.720(b).

\80\ Id., at para. 60.

\81\ Implementation of Section 309(j) of the Communications

Act--Competitive Bidding, PP Docket No. 93-253, Fifth Report and

Order, 9 FCC Rcd 5532, 5581-84, 59 FR 63210 (December 7, 1994).

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51. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission

has defined ``small entity'' in auctions for geographic area 800 MHz

and 900 MHz SMR licenses as a firm that had average annual gross

revenues of less than $15 million in the three previous calendar years.

The definition of a ``small entity'' in the context of 800 MHz SMR has

been approved by the SBA,\82\ and approval for the 900 MHz SMR

definition has been sought. The rules proposed in this FRFA may apply

to SMR providers in the 800 MHz and 900 MHz bands that either hold

geographic area licenses or have obtained extended implementation

authorizations. We do 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

less than $15 million. We assume, for purposes of this FRFA, that all

of the extended implementation authorizations may be held by small

entities, that may be affected by the decisions and rule changes

adopted in this Order.

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\82\ See Amendment of Parts 2 and 90 of the Commission's Rules

to Provide for the Use of 200 Channels Outside the Designated Filing

Areas in the 896-901 MHz and the 935-940 MHz Bands Allotted to the

Specialized Mobile Radio Pool, PR Docket No. 89-583, Second Order on

Reconsideration and Seventh Report and Order, 11 FCC Rcd 2639, 2693-

702, 60 FR 48913 (September 21, 1995); Amendment of Part 90 of the

Commission's Rules to Facilitate Future Development of SMR Systems

in the 800 MHz Frequency Band, PR Docket No. 93-144, First Report

and Order, Eighth Report and Order, and Second Further Notice of

Proposed Rulemaking, 11 FCC Rcd 1463, 61 FR 06212 (February 16,

1996).

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52. The Commission recently held auctions for geographic area

licenses in the 900 MHz SMR band. There were 60 winning bidders who

qualified as small entities in the 900 MHz auction. Based on this

information, we conclude that the number of geographic area SMR

licensees that may be affected by the decisions and rule changes

adopted in this Order includes these 60 small entities. No auctions

have been held for 800 MHz geographic area SMR licenses. Therefore, no

small entities currently hold these licenses. A total of 525 licenses

will be awarded for the upper 200 channels in the 800 MHz geographic

area SMR auction. The Commission, however, has not yet determined how

many licenses will be awarded for the lower 230 channels in the 800 MHz

geographic area SMR auction. There is no basis, moreover, on which to

estimate how many small entities will win these licenses. Given that

nearly all radiotelephone companies have fewer than 1,000 employees and

that no reliable estimate of the number of prospective 800 MHz

licensees can be made, we assume, for purposes of this FRFA, that all

of the licenses may be awarded to small entities who may be affected by

the decisions and rule changes adopted in this Order.

53. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service

has both Phase I and Phase II licenses. There are approximately 1,515

such non-nationwide licensees and four nationwide licensees currently

authorized to operate in the 220 MHz band. The Commission has not

developed a definition of 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 definition under

the SBA rules applicable to Radiotelephone Communications

companies.\83\ According to the Bureau of the Census, only 12

radiotelephone firms out of a total of 1,178 such firms which operated

during 1992 had 1,000 or more employees.\84\ Therefore, if this general

ratio continues to 1999 in the context of Phase I 220 MHz licensees, we

estimate that nearly all such licensees are small businesses under the

SBA's definition.

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\83\ 13 CFR 121.201, SIC Code 4812. This definition provides

that a small entity is a radiotelephone company employing no more

than 1,500 persons.

\84\ U.S. Bureau of the Census, U.S. Department of Commerce,

1992 Census of Transportation, Communications, and Utilities, UC92-

S-1, Subject Series, Establishment and Firm Size, Table 5,

Employment Size of Firms; 1992, SIC code 4812 (issued May 1995).

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54. 220 MHz Radio Service--Phase II Licensees. The Phase II 220 MHz

service is a new service, and is subject to spectrum auctions. The

Commission has adopted criteria for defining small businesses and very

small businesses for purposes of determining their eligibility for

special provisions such as bidding credits and installment payments. We

have defined a small business as 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 defined as 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 Phase II licenses commenced on September 15, 1998, and closed on

October 22, 1998. 908 licenses were auctioned in 3 different-sized

geographic areas: three nationwide licenses, 30 Regional Economic Area

Group Licenses, and 875 Economic Area (EA) Licenses. Of the 908

licenses auctioned, 693 were sold. Companies claiming small business

status won: one of the Nationwide licenses, 67% of the Regional

licenses, and 54% of the EA licenses. As of January 22, 1999, the

Commission announced that it was prepared to grant 654 of the Phase II

licenses won at auction.

55. Paging. The Commission has proposed a two-tier definition of

small businesses in the context of auctioning licenses in the Common

Carrier Paging and exclusive Private Carrier Paging services.\85\ Under

the proposal, a small business will be defined as either (1) an entity

that, together with its affiliates and controlling principals, has

average gross revenues for the three preceding years of not more than

$3 million, or (2) an entity that, together with affiliates and

controlling principals, has average gross revenues for the three

preceding calendar years of not more than $15 million. Because the SBA

has not yet approved this definition for paging services, we will

utilize the SBA's definition applicable to radiotelephone companies,

i.e., an entity employing no more than 1,500 persons.\86\ At present,

there are approximately 24,000 Private Paging licenses and 74,000

Common Carrier Paging licenses. According to the most recent Carrier

Locator data, 137 carriers reported that they were engaged in the

provision of either paging or messaging services, which are placed

together in the data.\87\ We do not have data specifying the number of

these carriers that are not independently owned and operated or have

more than 1,500 employees, and thus are unable at this time to estimate

with greater precision the number of paging carriers that would qualify

as small business concerns under the SBA's definition. Consequently, we

estimate that there are fewer than 137 small paging carriers that may

be affected by the decisions

[[Page 41329]]

and rule changes adopted in this Order. We estimate that the majority

of private and common carrier paging providers would qualify as small

entities under the SBA definition.

---------------------------------------------------------------------------

\85\ See 47 CFR 20.9(a)(1) (noting that private paging services

may be treated as common carriage services).

\86\ 13 CFR 121.201, SIC Code 4812.

\87\ Carrier Locator at Fig. 1.

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56. Narrowband PCS. The Commission has auctioned nationwide and

regional licenses for narrowband PCS. There are 11 nationwide and 30

regional licensees for narrowband PCS. The Commission does not have

sufficient information to determine whether any of these licensees are

small businesses within the SBA-approved definition for radiotelephone

companies. At present, there have been no auctions held for the major

trading area (MTA) and basic trading area (BTA) narrowband PCS

licenses. The Commission anticipates a total of 561 MTA licenses and

2,958 BTA licenses will be awarded by auction. Such auctions have not

yet been scheduled, however. Given that nearly all radiotelephone

companies have no more than 1,500 employees and that no reliable

estimate of the number of prospective MTA and BTA narrowband licensees

can be made, we assume, for purposes of this FRFA, that all of the

licenses will be awarded to small entities, as that term is defined by

the SBA.

57. Rural Radiotelephone Service. The Commission has not adopted a

definition of small entity specific to the Rural Radiotelephone

Service.\88\ A significant subset of the Rural Radiotelephone Service

is the Basic Exchange Telephone Radio Systems (BETRS).\89\ We will use

the SBA's definition applicable to radiotelephone companies, i.e., an

entity employing no more than 1,500 persons.\90\ There are

approximately 1,000 licensees in the Rural Radiotelephone Service, and

we estimate that almost all of them qualify as small entities under the

SBA's definition.

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\88\ The service is defined in section 22.99 of the Commission's

rules, 47 CFR 22.99.

\89\ BETRS is defined in sections 22.757 and 22.759 of the

Commission's rules, 47 CFR 22.757, 22.759.

\90\ 13 CFR 121.201, SIC Code 4812.

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58. Air-Ground Radiotelephone Service. The Commission has not

adopted a definition of small entity specific to the Air-Ground

Radiotelephone Service.\91\ Accordingly, we will use the SBA's

definition applicable to radiotelephone companies, i.e., an entity

employing no more than 1,500 persons.\92\ There are approximately 100

licensees in the Air-Ground Radiotelephone Service, and we estimate

that almost all of them qualify as small entities under the SBA

definition.

---------------------------------------------------------------------------

\91\ The service is defined in section 22.99 of the Commission's

rules, 47 CFR 22.99.

\92\ 13 CFR 121.201, SIC Code 4812.

---------------------------------------------------------------------------

59. Private Land Mobile Radio (PLMR). PLMR systems serve an

essential role in a range of industrial, business, land transportation,

and public safety activities.\93\ These radios are used by companies of

all sizes operating in all U.S. business categories. The Commission has

not developed a definition of small entity specifically applicable to

PLMR licensees due to the vast array of PLMR users. For the purpose of

determining whether a licensee is a small business as defined by the

SBA, each licensee would need to be evaluated within its own business

area.

---------------------------------------------------------------------------

\93\ See 47 CFR 20.9(a)(2) (noting that certain Industrial/

Business Pool service may be treated as common carriage service).

---------------------------------------------------------------------------

60. The Commission is unable at this time to estimate the number

of, if any, small businesses which could be impacted by the rules.

However, the Commission's 1994 Annual Report on PLMRs \94\ indicates

that at the end of fiscal year 1994 there were 1,087,267 licensees

operating 12,481,989 transmitters in the PLMR bands below 512 MHz.

Because any entity engaged in a commercial activity is eligible to hold

a PLMR license, the proposed rules in this context could potentially

impact every small business in the United States.

---------------------------------------------------------------------------

\94\ Federal Communications Commission, 60th Annual Report,

Fiscal Year 1994, at 116.

---------------------------------------------------------------------------

61. Fixed Microwave Services. Microwave services include common

carrier,\95\ private-operational fixed,\96\ and broadcast auxiliary

radio services.\97\ At present, there are approximately 22,015 common

carrier fixed licensees in the microwave services. The Commission has

not yet defined a small business with respect to microwave services.

For purposes of this FRFA, we will utilize the SBA's definition

applicable to radiotelephone companies--i.e., an entity with no more

than 1,500 persons.\98\ We estimate, for this purpose, that all of the

Fixed Microwave licensees (excluding broadcast auxiliary licensees)

would qualify as small entities under the SBA definition for

radiotelephone companies.

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\95\ 47 CFR 101 et seq. (formerly, Part 21 of the Commission's

rules).

\96\ Persons eligible under Parts 80 and 90 of the Commission's

rules can use Private Operational-Fixed Microwave services. See 47

CFR Parts 80 and 90. Stations in this service are called

operational-fixed to distinguish them from common carrier and public

fixed stations. Only the licensee may use the operational-fixed

station, and only for communications related to the licensee's

commercial, industrial, or safety operations.

\97\ Auxiliary Microwave Service is governed by Part 74 of Title

47 of the Commission's Rules. See 47 CFR 74 et seq. Available to

licensees of broadcast stations and to broadcast and cable network

entities, broadcast auxiliary microwave stations are used for

relaying broadcast television signals from the studio to the

transmitter, or between two points such as a main studio and an

auxiliary studio. The service also includes mobile TV pickups, which

relay signals from a remote location back to the studio.

\98\ 13 CFR 121.201, SIC Code 4812.

---------------------------------------------------------------------------

62. Offshore Radiotelephone Service. This service operates on

several UHF TV broadcast channels that are not used for TV broadcasting

in the coastal area of the states bordering the Gulf of Mexico.\99\ At

present, there are approximately 55 licensees in this service. We are

unable at this time to estimate the number of licensees that would

qualify as small entities under the SBA's definition for radiotelephone

communications.

---------------------------------------------------------------------------

\99\ This service is governed by Subpart I of Part 22 of the

Commission's Rules. See 47 CFR 22.1001-22.1037.

---------------------------------------------------------------------------

63. Wireless Communications Services. This service can be used for

fixed, mobile, radio location and digital audio broadcasting satellite

uses. The Commission defined ``small business'' for the wireless

communications services (WCS) auction as an entity with average gross

revenues of $40 million for each of the three preceding years, and a

``very small business'' as an entity with average gross revenues of $15

million for each of the three preceding years. 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. We conclude that the

number of geographic area WCS licensees that may be affected by the

decisions and rule changes adopted in this Order includes these eight

entities.

IV. Description of Projected Reporting, Recordkeeping, and Other

Compliance Requirements:

64. The decisions and rule changes adopted in this Order will

reduce the reporting and recordkeeping requirements on

telecommunications service providers regulated under the Communications

Act. As currently structured, telecommunications carriers and other

service providers having interstate revenues are required to file, at

different times throughout the year, a number of contributor reporting

worksheets that often reflect duplicative reporting requirements. In

this Order, the Commission reduces these regulatory burdens by

combining the multiple worksheets into one unified Telecommunications

Reporting Worksheet. In addition, the Commission

[[Page 41330]]

further reduces carrier filing burdens by allowing carriers to use the

proposed Telecommunications Reporting Worksheet to designate agents for

service of process pursuant to section 413 of the Communications Act of

1934, as amended.\100\ We expect that, by adopting these proposals,

telecommunications service providers will experience an appreciable

reduction in reporting, recordkeeping, and other compliance burdens.

---------------------------------------------------------------------------

\100\ 47 U.S.C. 413.

---------------------------------------------------------------------------

V. Steps Taken to Minimize Significant Economic Impact on Small

Entities, and Significant Alternatives Considered:

65. In the Contributor Reporting Requirements Notice, 63 FR 54090

(October 8, 1998), the Commission sought comment on ways to simplify

its contributor reporting requirements and, in particular, whether a

unified worksheet would reduce regulatory and administrative burden on

reporting carriers.\101\ Commenters were nearly unanimous in their

support of the Commission's proposals in the Notice. In response to

numerous proposals to modify the data collected in the worksheet, the

Commission developed the final Telecommunications Reporting Worksheet

so that it will collect the minimum information necessary to ensure the

equitable and efficient funding of the support and cost recovery

mechanisms.\102\ Accordingly, we conclude that the impact of this

proceeding should be beneficial to small businesses because the

decisions and rule changes adopted in this Order will reduce the

reporting or recordkeeping requirements on all communications common

carriers.

---------------------------------------------------------------------------

\101\ See Contributor Reporting Requirements Notice, 13 FCC Rcd

19295, 19304, 63 FR 54090 (October 8, 1998).

\102\ See Sections III. B. of the Order (discussing the use of a

consolidated worksheet), and III.D.2.b. of the Order (discussing the

September universal service filing).

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Report to Congress: The Commission will send a copy of the

Contributor Reporting Requirements Order, including this FRFA, in a

report to be sent to Congress pursuant to the Small Business Regulatory

Enforcement Fairness Act of 1996.\103\ In addition, the Commission will

send a copy of the Order, including this FRFA, to the Chief Counsel for

Advocacy of the Small Business Administration. A copy of the Order and

FRFA (or summaries thereof) will also be published in the Federal

Register.\104\

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\103\ See 5 U.S.C. 801(a)(1)(A).

\104\ See 5 U.S.C. 604(b).

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List of Subjects

47 CFR Part 1

Communications common carriers, Reporting and recordkeeping

requirements, Telecommunications, Telephone.

47 CFR Part 52

Communications common carriers, Numbering administration, Number

portability, Reporting and recordkeeping requirements,

Telecommunications, Telephone.

47 CFR Part 54

Communications common carriers, Reporting and recordkeeping

requirements, Telecommunications, Telephone, Universal service.

Communications common carriers, Reporting and recordkeeping

requirements, Telecommunications, Telephone, Universal service.

47 CFR Part 64

Communications common carriers, Reporting and recordkeeping

requirements, Telecommunications, Telecommunications relay services,

Telephone.

Federal Communications Commission.

Shirley S. Suggs,

Chief, Publications Branch.

Rule Changes

Parts 1, 52, 54, and 64 of the Code of Federal Regulations are

amended as follows:

PART 1--PRACTICE AND PROCEDURE

1. The authority citation for part 1 continues to read as follows:

Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, and 303(r),

309.

2. Section 1.47(h) is revised to read as follows:

Sec. 1.47 Service of documents and proof of service.

* * * * *

(h) Every common carrier subject to the Communications Act of 1934,

as amended, shall designate an agent in the District of Columbia, and

may designate additional agents if it so chooses, upon whom service of

all notices, process, orders, decisions, and requirements of the

Commission may be made for and on behalf of said carrier in any

proceeding before the Commission. Such designation shall include, for

both the carrier and its designated agents, a name, business address,

telephone or voicemail number, facsimile number, and, if available,

Internet e-mail address. The carrier shall additionally list any other

names by which it is known or under which it does business, and, if the

carrier is an affiliated company, the parent, holding, or management

company. Within thirty (30) days of the commencement of provision of

service, each carrier shall file such information with the Formal

Complaints and Investigations Branch of the Common Carrier Bureau.

Carriers may file a hard copy of the relevant portion of the

Telecommunications Reporting Worksheet, as delineated by the Commission

in the Federal Register, to satisfy this requirement. Each

Telecommunications Reporting Worksheet filed annually by a common

carrier must contain a name, business address, telephone or voicemail

number, facsimile number, and, if available, Internet e-mail address

for its designated agents, regardless of whether such information has

been revised since the previous filing. Carriers must notify the

Commission within one week of any changes in their designation

information by filing revised portions of the Telecommunications

Reporting Worksheet with the Formal Complaints and Investigations

Branch of the Common Carrier Bureau. A paper copy of this designation

list shall be maintained in the Office of the Secretary of the

Commission. Service of any notice, process, orders, decisions or

requirements of the Commission may be made upon such carrier by leaving

a copy thereof with such designated agent at his office or usual place

of residence. If a carrier fails to designate such an agent, service of

any notice or other process in any proceeding before the Commission, or

of any order, decision, or requirement of the Commission, may be made

by posting such notice, process, order, requirement, or decision in the

Office of the Secretary of the Commission.

PART 52--NUMBERING

3. The authority citation for part 52 continues to read as follows:

Authority: Sec. 1, 2 , 4, 5, 48 Stat. 1066, as amended; 47

U.S.C. 151, 152, 154, 155 unless otherwise noted. Interpret or apply

secs. 3, 4, 201-205, 207-209, 218, 225-7, 251-2, 271 and 332, 48

Stat. 1070, as amended, 1077; 47 U.S.C. 153, 154, 201-205, 207-09,

218, 225-7, 251-2, 271 and 332 unless otherwise noted.

4. Section 52.16 is amended by revising paragraphs (b) and (c) to

read as follows:

Sec. 52.16 Billing and Collection Agent.

* * * * *

[[Page 41331]]

(b) Distribute to carriers the ``Telecommunications Reporting

Worksheet,'' described in Sec. 52.17(b).

(c) Keep confidential all data obtained from carriers and not

disclose such data in company-specific form unless authorized by the

Commission. Subject to any restrictions imposed by the Chief of the

Common Carrier Bureau, the B & C Agent may share data obtained from

carriers with the administrators of the universal service support

mechanism (See 47 CFR 54.701 of this chapter), the TRS Fund (See 47 CFR

64.604(c)(4)(iii)(H) of this chapter), and the local number portability

cost recovery (See 47 CFR 52.32). The B & C Agent shall keep

confidential all data obtained from other administrators. The B & C

Agent shall use such data, from carriers or administrators, only for

calculating, collecting and verifying payments. The Commission shall

have access to all data reported to the Administrator. Contributors may

make requests for Commission nondisclosure of company-specific revenue

information under Sec. 0.459 of this chapter by so indicating on the

Telecommunications Reporting Worksheet at the time that the subject

data are submitted. The Commission shall make all decisions regarding

nondisclosure of company-specific information.

* * * * *

5. Section 52.17 is revised to read as follows:

Sec. 52.17 Costs of number administration.

All telecommunications carriers in the United States shall

contribute on a competitively neutral basis to meet the costs of

establishing numbering administration.

(a) Contributions to support numbering administration shall be the

product of the contributors' end-user telecommunications revenues for

the prior calendar year and a contribution factor determined annually

by the Chief of the Common Carrier Bureau; such contributions to be no

less than twenty-five dollars ($25). The contribution factor shall be

based on the ratio of expected number administration expenses to end-

user telecommunications revenues. Carriers that have no end-user

telecommunications revenues shall contribute twenty-five dollars ($25).

In the event that contributions exceed or are inadequate to cover

administrative costs, the contribution factor for the following year

shall be adjusted by an appropriate amount.

(b) All telecommunications carriers in the United States shall

complete and submit a ``Telecommunications Reporting Worksheet'' (as

published by the Commission in the Federal Register), which sets forth

the information needed to calculate contributions referred to in

paragraph (a) of this section. The worksheet shall be certified to by

an officer of the contributor, and subject to verification by the

Commission or the B & C Agent at the discretion of the Commission. The

Chief of the Common Carrier Bureau may waive, reduce, modify, or

eliminate contributor reporting requirements that prove unnecessary and

require additional reporting requirements that the Bureau deems

necessary to the sound and efficient administration of the number

administration cost recovery.

6. Section 52.32 is amended by revising paragraphs (b) and (c) and

by adding paragraph (d) to read as follows:

Sec. 52.32 Allocation of the shared costs of long-term number

portability.

* * * * *

(b) All telecommunications carriers providing service in the United

States shall complete and submit a ``Telecommunications Reporting

Worksheet'' (as published by the Commission in the Federal Register),

which sets forth the information needed to calculate contributions

referred to in paragraph (a) of this section. The worksheet shall be

certified to by an officer of the contributor, and subject to

verification by the Commission or the administrator at the discretion

of the Commission. The Chief of the Common Carrier Bureau may waive,

reduce, modify, or eliminate contributor reporting requirements that

prove unnecessary and require additional reporting requirements that

the Bureau deems necessary to the sound and efficient administration of

long-term number portability.

(c) Local number portability administrators shall keep all data

obtained from contributors confidential and shall not disclose such

data in company-specific form unless directed to do so by the

Commission. Subject to any restrictions imposed by the Chief of the

Common Carrier Bureau, the local number portability administrators may

share data obtained from carriers with the administrators of the

universal service support mechanism (See 47 CFR 54.701 of this

chapter), the TRS Fund (See 47 CFR 64.604(c)(4)(iii)(H) of this

chapter), and the North American Numbering Plan cost recovery (See 47

CFR 52.16). The local number portability administrators shall keep

confidential all data obtained from other administrators. The

administrators shall use such data, from carriers or administrators,

only for purposes of administering local number portability. The

Commission shall have access to all data reported to the Administrator.

Contributors may make requests for Commission nondisclosure of company-

specific revenue information under Sec. 0.459 of this chapter by so

indicating on the Telecommunications Reporting Worksheet at the time

that the subject data are submitted. The Commission shall make all

decisions regarding nondisclosure of company-specific information.

(d) Once a telecommunications carrier has been allocated, pursuant

to paragraph (a)(1) or (a)(2) of this section, its portion of the

shared costs of long-term number portability attributable to a regional

database, the carrier shall treat that portion as a carrier-specific

cost directly related to providing number portability.

PART 54--UNIVERSAL SERVICE

7. The authority citation for part 54 continues to read as follows:

Authority: 47 U.S.C. 1, 4(i), 201, 205, 214, and 254 unless

otherwise noted.

8. Section 54.708 is revised to read as follows:

Sec. 54.708 De minimis exemption.

If a contributor's contribution to universal service in any given

year is less than $10,000 that contributor will not be required to

submit a contribution or Telecommunications Reporting Worksheet for

that year unless it is required to do so to by our rules governing

Telecommunications Relay Service (47 CFR 64.601 et seq. of this

chapter), numbering administration (47 CFR 52.1 et seq. of this

chapter), or shared costs of local number portability (47 CFR 52.21 et

seq. of this chapter). If a contributor improperly claims exemption

from the contribution requirement, it will subject to the criminal

provisions of sections 220(d) and (e) of the Act regarding willful

false submissions and will be required to pay the amounts withheld plus

interest.

9. Section 54.709 is amended by revising paragraphs (a)

introductory text, (a)(2), and (d) to read as follows:

Sec. 54.709 Computations of required contributions to universal

service support mechanisms.

(a) Contributions to the universal service support mechanisms shall

be based on contributors' end-user telecommunications revenues and

contribution factors determined quarterly by the Commission.

* * * * *

[[Page 41332]]

(2) The quarterly universal service contribution factors shall be

based on the ratio of total projected quarterly expenses of the

universal service support programs to total end-user telecommunications

revenues. The Commission shall determine two contribution factors, one

of which shall be applied to interstate and international end-user

telecommunications revenues and the other of which shall be applied to

interstate, intrastate, and international end-user telecommunications

revenues. The Commission shall approve the Administrator's quarterly

projected costs of universal service support programs, taking into

account demand for support and administrative expenses. The total

subject revenues shall be compiled by the Administrator based on

information contained in the Telecommunications Reporting Worksheets

described in Sec. 54.711(a).

* * * * *

(d) If a contributor fails to file a Telecommunications Reporting

Worksheet by the date on which it is due, the Administrator shall bill

that contributor based on whatever relevant data the Administrator has

available, including, but not limited to, the number of lines

presubscribed to the contributor and data from previous years, taking

into consideration any estimated changes in such data.

10. Section 54.711 is revised to read as follows:

Sec. 54.711 Contributor reporting requirements.

(a) Contributions shall be calculated and filed in accordance with

the Telecommunications Reporting Worksheet which shall be published in

the Federal Register. The Telecommunications Reporting Worksheet sets

forth information that the contributor must submit to the Administrator

on a semi-annual basis. The Commission shall announce by Public Notice

published in the Federal Register and on its website the manner of

payment and dates by which payments must be made. An officer of the

contributor must certify to the truth and accuracy of the

Telecommunications Reporting Worksheet, and the Commission or the

Administrator may verify any information contained in the

Telecommunications Reporting Worksheet at the discretion of the

Commission. Inaccurate or untruthful information contained in the

Telecommunications Reporting Worksheet may lead to prosecution under

the criminal provisions of Title 18 of the United States Code. The

Administrator shall advise the Commission of any enforcement issues

that arise and provide any suggested response.

(b) The Commission shall have access to all data reported to the

Administrator. Contributors may make requests for Commission

nondisclosure of company-specific revenue information under Sec. 0.459

of this chapter by so indicating on the Telecommunications Reporting

Worksheet at the time that the subject data are submitted. The

Commission shall make all decisions regarding nondisclosure of company-

specific information. The Administrator shall keep confidential all

data obtained from contributors, shall not use such data except for

purposes of administering the universal service support programs, and

shall not disclose such data in company-specific form unless directed

to do so by the Commission. Subject to any restrictions imposed by the

Chief of the Common Carrier Bureau, the Universal Service Administrator

may share data obtained from contributors with the administrators of

the North American Numbering Plan administration cost recovery (See 47

CFR 52.16 of this chapter), the local number portability cost recovery

(See 47 CFR 52.32 of this chapter), and the TRS Fund (See 47 CFR

64.604(c)(4)(iii)(H) of this chapter). The Administrator shall keep

confidential all data obtained from other administrators and shall not

use such data except for purposes of administering the universal

service support mechanisms.

(c) The Bureau may waive, reduce, modify, or eliminate contributor

reporting requirements that prove unnecessary and require additional

reporting requirements that the Bureau deems necessary to the sound and

efficient administration of the universal service support mechanisms.

11. Section 54.713 is revised to read as follows:

Sec. 54.713 Contributors' failure to report or to contribute.

A contributor that fails to file a Telecommunications Reporting

Worksheet and subsequently is billed by the Administrator shall pay the

amount for which it is billed. The Administrator may bill a contributor

a separate assessment for reasonable costs incurred because of that

contributor's filing of an untruthful or inaccurate Telecommunications

Reporting Worksheet, failure to file the Telecommunications Reporting

Worksheet, or late payment of contributions. Failure to file the

Telecommunications Reporting Worksheet or to submit required quarterly

contributions may subject the contributor to the enforcement provisions

of the Act and any other applicable law. The Administrator shall advise

the Commission of any enforcement issues that arise and provide any

suggested response. Once a contributor complies with the

Telecommunications Reporting Worksheet filing requirements, the

Administrator may refund any overpayments made by the contributor, less

any fees, interest, or costs.

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

12. The authority citation for part 64 continues to read as

follows:

Authority: 47 U.S.C. 10, 201, 218, 226, 228, 332, unless

otherwise noted.

13. Section 64.604 is amended by revising paragraphs

(c)(4)(iii)(A), (B), and (I) to read as follows:

Sec. 64.604 Mandatory minimum standards.

* * * * *

(c) * * *

(4) * * *

(iii) * * *

(A) Contributions. Every carrier providing interstate

telecommunications services shall contribute to the TRS Fund on the

basis of its relative share of interstate end-user telecommunications

revenues as described herein. Contributions shall be made by all

carriers who provide interstate services, including, but not limited

to, cellular telephone and paging, mobile radio, operator services,

personal communications service (PCS), access (including subscriber

line charges), alternative access and special access, packet-switched,

WATS, 800, 900, message telephone service (MTS), private line, telex,

telegraph, video, satellite, intraLATA, international and resale

services.

(B) Contribution computations. Contributors' contribution to the

TRS Fund shall be the product of their subject revenues for the prior

calendar year and a contribution factor determined annually by the

Commission. The contribution factor shall be based on the ratio between

expected TRS Fund expenses to interstate end-user telecommunications

revenues. In the event that contributions exceed TRS payments and

administrative costs, the contribution factor for the following year

will be adjusted by an appropriate amount, taking into consideration

projected cost and usage changes. In the event that contributions are

inadequate, the fund administrator may request authority from the

Commission to borrow funds

[[Page 41333]]

commercially, with such debt secured by future years contributions.

Each subject carrier must contribute at least $25 per year. Carriers

whose annual contributions total less than $1,200 must pay the entire

contribution at the beginning of the contribution period. Carriers

whose contributions total $1,200 or more may divide their contributions

into equal monthly payments. Carriers shall complete and submit, and

contributions shall be based on, a ``Telecommunications Reporting

Worksheet'' (as published by the Commission in the Federal Register).

The worksheet shall be certified to by an officer of the contributor,

and subject to verification by the Commission or the administrator at

the discretion of the Commission. Contributors' statements in the

worksheet shall be subject to the provisions of section 220 of the

Communications Act of 1934, as amended. The fund administrator may bill

contributors a separate assessment for reasonable administrative

expenses and interest resulting from improper filing or overdue

contributions. The Chief of the Common Carrier Bureau may waive,

reduce, modify, or eliminate contributor reporting requirements that

prove unnecessary and require additional reporting requirements that

the Bureau deems necessary to the sound and efficient administration of

the TRS Fund.

* * * * *

(I) Information filed with the administrator. The administrator

shall keep all data obtained from contributors and TRS providers

confidential and shall not disclose such data in company-specific form

unless directed to do so by the Commission. Subject to any restrictions

imposed by the Chief of the Common Carrier Bureau, the TRS Fund

administrator may share data obtained from carriers with the

administrators of the universal service support mechanisms (See 47 CFR

54.701 of this chapter), the North American Numbering Plan

administration cost recovery (See 47 CFR 52.16 of this chapter), and

the long-term local number portability cost recovery (See 47 CFR 52.32

of this chapter). The TRS Fund Administrator shall keep confidential

all data obtained from other administrators. The administrator shall

not use such data, from carriers or administrators, except for purposes

of administering the TRS Fund, calculating the regulatory fees of

interstate common carriers, and aggregating such fee payments for

submission to the Commission. The Commission shall have access to all

data reported to the administrator, and authority to audit TRS

providers. Contributors may make requests for Commission nondisclosure

of company-specific revenue information under Sec. 0.459 of this

chapter by so indicating on the Telecommunications Reporting Worksheet

at the time that the subject data are submitted. The Commission shall

make all decisions regarding nondisclosure of company-specific

information.

* * * * *

[FR Doc. 99-19686 Filed 7-29-99; 8:45 am]

BILLING CODE 6712-01-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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