Local Competition and Broadband Reporting

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 20, and 43

[CC Docket No. 99-301, FCC 99-283]

Local Competition and Broadband Reporting

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, the Federal Communications Commission

proposes to collect basic information about the status of local

telephone service competition and the deployment of advanced

telecommunications capability, also known as broadband. The Commission

seeks comment on all aspects of the proposal, including how it can best

structure such a program to satisfy its needs without overburdening

those entities that would be required to file.

DATES: Comments are due on or before December 3, 1999. Reply comments

are due on or before December 20, 1999. Written comments by the public

on the proposed information collections are due on or before December

3, 1999. Written comments must be submitted by the Office of Management

and Budget (OMB) on the proposed and/or modified information

collections on or before January 3, 2000.

ADDRESSES: Comments and reply comments should be sent to the Office of

the Secretary, Federal Communications Commission, 445 12th Street, SW,

Washington, DC 20554, with a copy to Ms. Terry Conway of the Common

Carrier Bureau, Federal Communications Commission, 445 12th Street, SW,

6A-100, Washington, DC 20554. Parties should also file one copy of any

documents filed in this docket with the Commission's copy contractor,

International Transcription Services, Inc. (ITS), 1231 20th Street, NW,

Washington, DC 20037. Parties may file electronically through the

Internet at http://www.fcc.gov/e-file/ecfs.html>. In addition to

filing comments with the Secretary, a copy of any comments on the

information collections contained herein should be submitted to Judy

Boley, Federal Communications Commission, Room 1-C804, 445 12th Street,

SW, Washington, DC 20554, or via the Internet to [email protected], and to

Virginia Huth, OMB Desk Officer, 10236 NEOB, 725--17th Street, NW,

Washington, DC 20503 or via the Internet to VH[email protected].

FOR FURTHER INFORMATION CONTACT: Dr. Ellen Burton, Industry Analysis

Division, Common Carrier Bureau, at (202) 418-0958, or Thomas Beers,

Deputy Chief of the Industry Analysis Division, Common Carrier Bureau,

at (202) 418-0952. For additional information concerning the

information collections contained in the Notice of Proposed Rulemaking

(NPRM) contact Judy Boley at 202-418-0214, or via the Internet at

[email protected].

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

of Proposed Rulemaking (NPRM) released October 22, 1999 (FCC 99-283).

The full text of the NPRM is available for inspection and copying

during normal business hours in the FCC Reference Center, Room CY-A257,

445 12th Street, SW, Washington, DC 20554. The complete text also may

be purchased from the Commission's copy contractor, International

Transcription Services, Inc. (202) 857-3800, 1231 20th Street, NW,

Washington, DC 20037. Additionally, the complete item is available on

the Commission's website at http://www.fcc.gov/Bureaus/

Common__Carrier/Notices/1999/>.

Paperwork Reduction Act

The NPRM summarized here contains either a proposed or modified

information collection. The Commission, as part of its continuing

effort to reduce paperwork burdens, invites the general public and the

Office of Management and Budget (OMB) to comment on the information

collection contained in the NPRM, as required by the Paperwork

Reduction Act of 1995, Public Law 104-13. Public and agency comments

are due at the same time as other comments on the NPRM; OMB

notification of action is due 60 days from date of publication of this

NPRM in the Federal Register. Comments

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should address: (a) Whether the proposed collection of information is

necessary for the proper performance of the functions of the

Commission, including whether the information shall have practical

utility; (b) the accuracy of the Commission's burden estimates; (c)

ways to enhance the quality, utility, and clarity of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

OMB Approval Number: 3060-0816.

Title: ``Local Competition and Broadband Reporting, CC Docket No.

99-301.''

Form Number: FCC Form 477.

Type of Review: Revision of Existing Collection.

Respondents: Business or Not-for-profit institutions, including

small businesses.

Burden Estimate:

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Estimated time

Number of respondents per response Total annual burden

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(1) Local Competition and Broadband

Reporting:

(a) Entities completing entire Up to 75.................... 120-576 Up to 19,144.

data collection except section

VI.

(b) Entities completing only Up to 70.................... 32-236 Up to 4,792.

section VI.

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Total Annual Burden: Up to 23,936 person-hours.

Estimated Costs per Respondent: $0.00.

Needs and Uses: The information collection for which approval is

sought would be used by the Commission to gather information on the

state of the development of local competition and broadband deployment.

Without such information, the Commission faces significant difficulty

in assessing the development of these markets and, therefore, is less

able to fulfill its statutory responsibilities in accordance with the

Communications Act of 1934, as amended.

Summary of the Notice of Proposed Rulemaking

1. In the NPRM summarized here, we propose to collect basic

information about the status of local telephone service competition and

the deployment of advanced telecommunications capability, also known as

broadband. We tentatively concludes that we need timely and reliable

information about the pace and extent of developing local competition

in different geographic areas in order to evaluate the effectiveness of

actions that this Commission and the states are taking to promote local

competition. We also tentatively conclude that we need timely and

reliable information to assess the deployment of broadband services, as

required by section 706 of the Telecommunications Act of 1996.

2. Moreover, we tentatively conclude that this information would

allow us to avoid ``one size fits all'' regulation, and, specifically,

to reduce regulation wherever we can pursuant to new sections 10 and 11

of the Act. 47 U.S.C. 160, 161. The Commission proposes a simple filing

that should enable it to make better informed decisions, while placing

as low a burden as possible on reporting entities. A proposed data

collection form is attached to the NPRM as Attachment A. Currently, the

Commission does not gather data of the type requested under this

proposed program.

3. Throughout the NPRM, we seek comment on all of the tentative

conclusions we reach. We also encourage commenters to propose

alternative means of collecting the needed information. The following

text represents a brief summary of issues set out for discussion and

comment in the NPRM.

4. Types of Entities that Must Report: In the NPRM, we discuss the

types of entities that should be required to report data describing the

extent and intensity of local competition and the extent of broadband

services deployment. Based on our determination that we need

comprehensive data about developing local services competition, we

tentatively conclude that large and medium incumbent local exchange

carriers (LECs)--as well as their wireline and fixed wireless telephony

competitors, and also their mobile wireless telephony potential

competitors--should complete sections I-III of the survey if the

reporting entity is a wireline or fixed wireless LEC and section VI if

the entity is a mobile wireless telephony carrier. Consistent with our

need for comprehensive local competition information, we tentatively

conclude that the obligation to complete the survey should not depend

on the type of technology that an incumbent LEC or competitive LEC uses

to provide local service. We tentatively conclude that we should

require carriers with 50,000 or more local access lines or channels (of

any capacity) nationwide, or 50,000 or more subscribers nationwide to

file information pursuant to this program. Further, we propose to

collect information about certain mobile wireless services because of

their potential to become substitutes for wireline service. Thus, we

propose to require any carrier who provides mobile telephony (defined

here as, real time, two-way switched voice service that is

interconnected with the public switched network utilizing an in-network

switching facility that enables the provider to reuse frequencies and

accomplish seamless handoffs of subscriber calls) to report if such an

entity has more than 50,000 subscribers nationwide. We note that

providers of mobile telephony services may include facilities-based

providers of cellular, broadband personal communications service (PCS),

specialized mobile radio services (SMR), as well as providers using

satellite technology. We ask commenters to address whether the 50,000

nationwide access line/subscribers threshold that we propose is

sufficient to provide the information that the Commission needs, while

not burdening smaller entities.

5. We next turn to a consideration of those entities that should

report data on deployment of broadband services. The Notice tentatively

concludes that given our broad statutory mandate under section 706 of

the Telecommunications Act of 1996, to evaluate the deployment of

broadband services, regardless of the transmission media or technology

employed, the survey should include questions about the deployment of

what we term ``full broadband'' services. For purposes of the proposed

data collection, ``full broadband'' service is defined, consistent with

the Advanced Telecommunications Report, as having an information

carrying capacity of over 200 Kilobits per second (Kbps) in each

direction, simultaneously. An Inquiry Concerning the Deployment of

Advanced Telecommunications Capabilities to All Americans in a

Reasonable and Timely Fashion, 14 FCC 2d 2398, paragraphs 20-25

(Advanced Telecommunications Report). The Notice recognizes, however,

that entities may provide services with bandwidth that exceeds voice

grade (i.e. 48 Kbps) but is less than 200 Kbps, and seeks

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comment on the extent to which the Commission should consider services

deployed in this range of bandwidth in assessing the progress of

broadband deployment. Actual or potential providers of broadband

services may include: LECs (incumbent and competitive, both resale and

facilities-based, regardless of the technology used), cable television

companies, utilities, MMDS/MDS/''wireless cable'' carriers, mobile

wireless carriers (both terrestrial and satellite-based), fixed

wireless providers, and others. We believe that only by casting our net

wide enough to include all such entities can we discern progress, or

the lack of it, in meeting the goals stated in the Advanced

Telecommunications Report. We also tentatively conclude, that any

entity that provides at least 1,000 full broadband service lines (or

wireless channels), or has at least 1,000 full broadband subscribers,

should be required to complete all relevant parts of the survey,

regardless of whether that entity meets the criterion for reporting

local competition data (i.e., at least 50,000 nationwide local access

lines or telephony subscribers). Therefore, it is possible, for

example, that a LEC with fewer than 50,000 local access lines in

service could have 1,000 or more full broadband lines in service, in

which case that LEC would complete both the sections of the survey

related to broadband services and the sections concerning local

competition.

6. Frequency of Reports: We also ask commenters to address the

frequency with which the Commission should gather the information

sought by this proposed program. The majority of commenters to our

Local Competition Public Notice proceeding concluded that for the

program to be effective, the information should be collected quarterly.

Public Notice, 63 FR 29409, CC Docket No. 91-141, DA 98-839, 13 FCC Rcd

9279 (May 28, 1998). We ask for comment on whether quarterly, semi-

annual or annual reporting would best serve the goals of this

information collection program.

7. Exempting Smaller Entities: We want to explore whether we can

totally exempt some carriers from reporting without materially

affecting our ability to effectively assess the development of local

competition. Thus, we again ask commenters to address the desirability

of the proposed threshold levels for local competition and broadband

reporting. With regard to cable companies providing local exchange

telephony, we seek comment on how best to measure the threshold for

complying with our proposed reporting requirement.

8. With respect to broadband, we tentatively conclude that we

should establish a more comprehensive reporting requirement for

providers of broadband services. We promised in the Advanced

Telecommunications Report to keep a close watch on deployment of

broadband services to rural and other insular groups. Thus, to ensure

that we do not miss broadband deployment by smaller entities, we seek

comment on whether our threshold of 1,000 customers will allow us to

accurately gauge its deployment, particularly to rural America.

9. Finally, we seek comment on whether, to reduce reporting burdens

even further, we should allow an incumbent LEC of any size to file a

brief letter in lieu of reporting local competition and broadband

deployment data for states where that incumbent faces no local service

competition and if it provides a de minimis number of broadband lines.

We tentatively conclude that such an approach would reduce reporting

burdens imposed on carriers without compromising our ability to get

necessary information.

10. Definition of Reporting Area: To minimize the burden the

reporting requirement places on reporting entities, we tentatively

conclude that information should be reported by state. The Commission

recognizes that collecting information about competitive activity and

broadband services deployment in smaller geographic areas might yield

sharper pictures of the extent and intensity of these developments. At

the same time, we recognize that companies may regard such information

as confidential, and we seek comment on whether a requirement that they

disclose such information is appropriate to the extent such

confidentiality concerns exist. Therefore, we seek comment on whether a

level more narrowly defined than state level would be appropriate.

11. Confidentiality of Data: We think it extremely important that

all local competition and broadband information collected pursuant to

the proposed survey be made available to the public. Public

availability will assist Commission staff in interpreting and utilizing

such data, and it will facilitate Commission publication of data and

analysis in Commission reports. Notwithstanding our belief that

submitted information will not ordinarily raise legitimate protection

issues, we cannot prevent parties submitting data from asserting

confidentiality or other claims and seeking protection from public

release. We, of course, expect such parties to follow Commission rules

and guidelines when seeking protection pursuant, primarily, to relevant

sections of the Freedom of Information Act. We seek comment on our

tentative conclusions regarding the confidentiality of the type of

information to be gathered.

12. Electronic Filing: Because we seek to ensure that the filing

requirement does not impose undue burdens on those entities that must

complete the form and to allow the staff of the Commission to more

efficiently analyze the data, we tentatively conclude that data should

be submitted in spreadsheet form, utilizing Excel format. Additionally,

we propose that filers make their submissions to an e-mail address over

the Internet. We ask commenters about the desirability of such an e-

mail/spreadsheet-based electronic filing system, as well as other

electronic filing systems.

13. Survey Modification and Termination: We expect the local

services and broadband services markets will become increasingly

dynamic as competition develops. Therefore, it may be necessary to make

changes to the form, content, or reporting obligations of this

information collection to ensure its continuing value, while minimizing

filing burdens on respondents. Finally, to ensure that the program does

not outlive its usefulness, we ask commenters whether it would be best

to ``sunset'' this program, or perhaps to require a regular review

process.

14. Data to be Reported: We describe and seek comment on, in the

NPRM, the specific items set out in the proposed data collection form.

A brief description of the proposed data collection form follows, with

greater detail found in the complete NPRM.

15. Section I of the survey collects information about: (1) The

number of voice grade and equivalent wireline or fixed wireless lines/

channels in service that connect residential and, separately, non-

residential end users to the public switched telephone network (for

convenience, ``voice grade lines''); and (2) the extent to which LECs

use their own facilities, and the facilities or services of other LECs,

in providing these lines.

16. Section II of the survey collects information about numbers of

voice grade lines served from LEC switching centers, as defined in

Attachment A of the NPRM, in which local service competitors have

operational collocation arrangements.

17. Section III of the survey collects information from LECs about

the number of high capacity lines or channels in service connecting end

users to the public switched network (for convenience, ``high-capacity

lines'').

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High capacity lines are defined as lines with information carrying

capacity capability to the customer's premises in excess of 200 Kbps in

at least one direction, and at least 48 Kbps (i.e., voice grade) in the

other direction.

18. Providers of mobile telephony services (including mobile

telephony affiliates of LECs) would not report data in sections I, II

or III, but would instead report data on number of subscribers to voice

grade mobile telephony service in section VI.

19. Sections IV and V of the survey collect information about the

number of broadband lines in service to consumers. This includes

information about both ``full broadband'' lines, with information

carrying capacity in excess of 200 Kbps in both directions,

simultaneously, and asymmetric ``one way broadband'' lines, with

information carrying capacity in excess of 200 Kbps in one direction

but not both. Section IV collects information about broadband lines in

service to all customers, and section V collects information about

broadband lines in service to residential customers. From the total and

residential information, we will be able to derive information about

broadband deployment to all other customers, such as business,

government, and institutional customers.

20. The Notice seeks comment on whether answers to the survey

questions are necessary and sufficient to describe and understand the

state of local competition and deployment of broadband services in

diverse areas of the nation.

Procedural Matters

A. Initial Paperwork Reduction Act of 1995 Analysis

21. The NPRM summarized here contains a proposed or modified

information collection. As part of its continuing effort to reduce

paperwork burdens, we invite the general public and the Office of

Management and Budget (OMB) to take this opportunity to comment on the

information collections contained in the NPRM, as required by the

Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency

comments are due at the same time as other comments on the NPRM; OMB

comments are due 60 days from the date of the publication of this

summary of the NPRM in the Federal Register. Comments should address:

(a) Whether the proposed collection of information is necessary for the

proper performance of the functions of the Commission, including

whether the information shall have practical utility; (b) the accuracy

of the Commission's burden estimates; (c) ways to enhance the quality,

utility, and clarity of the information collected; and (d) ways to

minimize the burden of collection of information on respondents,

including the use of automated collection techniques or other forms of

information technology.

B. Initial Regulatory Flexibility Act

22. As required by the Regulatory Flexibility Act (RFA), the

Commission has prepared an Initial Regulatory Flexibility Analysis

(IRFA) of the possible significant economic impact on small entities of

the policies and rules proposed in the NPRM. A copy of the IRFA is

attached to this summary. Written public comments are requested with

respect to the IRFA. These comments must be filed in accordance with

the same filing deadlines for comments on the rest of the NPRM and they

must have a separate and distinct heading, designating the comments as

responses to the IRFA. The Office of Public Affairs, Reference

Operations Division, will send a copy of the NPRM, including the IRFA,

to the Chief Counsel for Advocacy of the Small Business Administration.

23. This proceeding will be treated as a ``permit-but-disclose''

proceedings subject to the ``permit-but-disclose'' requirements under

Sec. 1.1206 of the Commission's rules, as revised. Additional rules

pertaining to oral and written presentations are set forth in

Sec. 1.1206.

C. Notice and Comment Provisions

24. General. Pursuant to Secs. 1.415 and 1.419 of the Commission's

rules, 47 CFR 1.415, 1.419, interested parties may file comments on or

before December 3, 1999, and reply comments on or before Decemeber 20,

1999. Comments may be filed using the Commission's Electronic Comment

Filing System (ECFS) or by filing paper copies.

25. Comments filed through the ECFS can be sent as an electronic

file via the Internet to http://www.fcc.gov/e-file/ecfs.html>.

Generally, only one copy of an electronic submission must be filed. If

multiple docket or rulemaking numbers appear in the caption of this

proceeding, however, commenters must transmit one electronic copy of

the comments to each docket or rulemaking number referenced in the

caption. In completing the transmittal screen, commenters should

include their full name, Postal Service mailing address, and the

applicable docket or rulemaking number. Parties may also submit an

electronic comment by Internet e-mail. To get filing instructions for

e-mail comments, commenters should send an e-mail to [email protected], and

should include the following words in the body of the message, ``get

form ''. A sample form and directions will be sent

in reply.

26. Parties who choose to file by paper must file an original and

four copies of each filing. If more than one docket or rulemaking

number appear in the caption of this proceeding, commenters must submit

two additional copies for each additional docket or rulemaking number.

All filings must be sent to the Commission's Secretary, Magalie Roman

Salas, Office of the Secretary, Federal Communications Commission, 445

12th St. SW, Washington, DC 20554, with a copy to: Ms. Terry Conway,

Common Carrier Bureau, Industry Analysis Division, 445 12th St. SW,

Room 6A-100, Washington, DC 20554. Written comments by the public on

the proposed information collection are due on or before December 3,

1999. Written comments must be submitted by the Office of Management

and Budget (OMB) on the proposed information collection on or before

January 3, 2000. In addition to filing comments with the Secretary, a

copy of any comments on the information collection contained herein

should be submitted to Judy Boley, Federal Communications Commission,

Room 1-C804, 445 12th Street, SW, Washington, DC 20554, or via the

Internet to [email protected] and to Virginia Huth, OMB Desk Officer,

10236 NEOB, 725--17th Street, NW, Washington, DC 20503 or via the

Internet to VH[email protected].

27. Parties who choose to file by paper should also submit their

comments on diskette. These diskettes should be submitted to: Ms. Terry

Conway, Common Carrier Bureau, Industry Analysis Division, 445 12th St.

SW, Room 6A-100, Washington, DC 20554. Such a submission should be on a

3.5 inch diskette formatted in an IBM compatible format using

WordPerfect 5.1 for Windows or compatible software. The diskette should

be accompanied by a cover letter and should be submitted in ``read

only'' mode. The diskette should be clearly labelled with the

commenter's name, proceeding (CC Docket No. 99-301), type of pleading

(comment or reply comment), date of submission, and the name of the

electronic file on the diskette. The label should also include the

following phrase ``Disk Copy--Not an Original.'' Each diskette should

contain only one party's pleading, preferably in a single electronic

file. In addition, commenters must send diskette copies to the

Commission's copy contractor, International Transcription Service,

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Inc., 1231 20th Street, NW, Washington, DC 20037.

Initial Regulatory Flexibility Act Analysis

28. As required by the Regulatory Flexibility Act (RFA), the

Commission has prepared an Initial Regulatory Flexibility Analysis

(IRFA) of any possible significant economic impact on small entities by

the policies and rules proposed in the Notice. Written public comments

are requested on the IRFA. Comments must be identified as responses to

the IRFA and must be filed by the deadlines for comments on the Notice,

which are set out in paragraph 91 of the Notice. The Commission will

send a copy of the Notice, including the IRFA, to the Chief Counsel for

Advocacy of the Small Business Administration. In addition, the Notice

and IRFA (or summaries thereof) will be published in the Federal

Register.

I. Need for, and Objectives of, the Proposed Action

29. The Commission has initiated this proceeding to determine

whether it should require certain providers of communications services

to report a limited amount of information about the development of

local telephone competition and the deployment of broadband services as

mandated by the Telecommunications Act of 1996. The 1996 Act--in

particular, sections 251 and 271--tasked this Commission and the states

with important roles in opening up local telephone markets to

competition. The Commission needs timely and reliable information about

the pace and extent of developing competition in different geographic

markets in order to evaluate the effectiveness of the actions this

Commission and the states are taking to promote local telephone

competition. Moreover, the Commission tentatively concluded that

gathering broadband deployment information is critical given that

section 706 of the 1996 Act requires the Commission to issue periodic

reports on the state of broadband deployment.

II. Legal Basis

30. The legal basis for the action as proposed for this rulemaking

is contained in sections 1-5, 10, 11, 201-205, 215, 218-220, 251-271,

303(r), 332, and 403 of the Communications Act of 1934, as amended, 47

U.S.C. 151-155, 160, 161, 201-205, 215, 218-220, 251-271, 303(r), 332

and 403, and pursuant to section 706 of the Telecommunications Act of

1996, 47 U.S.C. 157 nt.

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

the Proposed Action May Apply

31. The Commission tentatively concludes that local exchange

carriers and providers of mobile telephony services that serve 50,000

or more subscribers, and any entity that provides at least 1,000 full

broadband lines, should comply with the proposed reporting requirement.

Based on data available to it at present, the Commission estimates that

fewer than 50 of the nation's largest local exchange carriers and

between 40 and 70 mobile telephony providers would be required to

comply with the proposed requirement. Nevertheless, and out of an

abundance of caution, we set out below a detailed description of the

types of entities that could possibly be required to comply with the

proposed reporting requirement and we detail our understanding of the

number of small entities within each of these categories.

32. To estimate the number of small entities that may be affected

by the proposed rules, 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.'' 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. 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). 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. 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.

33. The most reliable source of information regarding the total

numbers of 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). According to data in the most recent report, there are

3,604 interstate carriers. 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.

34. We have included small incumbent LECs in the present RFA

analysis. As noted above, a ``small business'' under the RFA is one

that, inter alia, meets the pertinent small business size standard

(e.g., a telephone communications business having 1,500 or fewer

employees), and ``is not dominant in its field of operation.'' The

SBA's Office of Advocacy contends that, for RFA purposes, small

incumbent LECs are not dominant in their field of operation because any

such dominance is not ``national'' in scope. We have therefore included

small incumbent LECs in the RFA analysis, although we emphasize that

the RFA action has no effect on FCC analyses and determinations in

other, non-RFA contexts.

35. 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. 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.'' 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 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 rules proposed in the Notice.

36. 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

[[Page 59724]]

such telephone companies in operation for at least one year at the end

of 1992. According to SBA's definition, a small business telephone

company other than a radiotelephone company is one employing no more

than 1,500 persons. 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

rules proposed in the Notice.

37. 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. 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). According

to our most recent data, there are 1,410 LECs, 151 IXCs, 129 CAPs, 32

OSPs, and 351 resellers. 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 rules proposed in the Notice.

38. 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. According to SBA's

definition, a small business radiotelephone company is one employing no

more than 1,500 persons. 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 are

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 rules proposed in the Notice.

39. 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. We will

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

both categories, is for telephone companies other than radiotelephone

(wireless) companies, however, 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. 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 in

paragraphs 40-52, 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 rules proposed in the Notice.

40. 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.

For Block F, an additional classification for ``very small business''

was added, and is defined as an entity that, together with its

affiliates, has average gross revenues of not more than $15 million for

the preceding three calendar years. These regulations defining ``small

entity'' in the context of broadband PCS auctions have been approved by

SBA. 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 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 SBA and the Commissioner's auction rules.

41. 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, and approval for the 900 MHz SMR definition

has been sought. The proposed rules 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.

Consequently, we estimate, for purposes of this IRFA, that all of the

extended implementation authorizations may be

[[Page 59725]]

held by small entities, some of which may be affected by the decisions

and rules proposed in the Notice. 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 estimate that the number of geographic

area SMR licensees that may be affected by the decisions and rules

proposed in the Notice 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 estimate, for purposes of this IRFA, that all

of the licenses may be awarded to small entities, some of which may be

affected by the decisions and rules proposed in the Notice.

42. 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.

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. 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, some of

which may be affected by the decisions and rules proposed in the

Notice.

43. 220 MHz Radio Service--Phase II Licensees. The Phase II 220 MHz

service is a new service, and is subject to spectrum auctions. In the

220 MHz Third Report and Order we adopted 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 October 7, 1999, the Commission had granted 681 of the Phase II 220

MHz licenses won at a first auction and an additional 221 Phase II

licenses won at a second auction.

44. Paging. The Commission has adopted a two-tier definition of

small businesses in the context of auctioning licenses in the Common

Carrier Paging and exclusive Private Carrier Paging services. A small

business is 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. The SBA approved this definition for paging services on

December 12, 1999. 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. We do not have data specifying

the number of these carriers that meet this two-tiered definition, 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 and rules proposed in the Notice.

45. 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 IRFA, that all of the

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

the SBA.

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

definition of small entity specific to the Rural Radiotelephone

Service. A significant subset of the Rural Radiotelephone Service is

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

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

entity employing no more than 1,500 persons. 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.

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

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

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

applicable to radiotelephone companies, i.e., an entity employing no

more than 1,500 persons. There are approximately 100 licensees in the

Air-Ground Radiotelephone Service, and we estimate that almost all of

them qualify as small entities under the SBA definition.

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

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

and public safety activities. 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

[[Page 59726]]

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. The Commission is unable at this time to estimate

the number of, if any, small businesses that could be impacted by the

proposed rules. However, the Commission's 1994 Annual Report on PLMRs

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. We note,

however, that because the vast majority of these licensees are end-

users, not providers of telephony or broadband services, they would not

be directly affected by the rules proposed in this Notice.

49. Fixed Microwave Services. Microwave services include common

carrier, private-operational fixed, and broadcast auxiliary radio

services. 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 IRFA, we will utilize the SBA's definition applicable

to radiotelephone companies--i.e., an entity with no more than 1,500

persons. 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.

50. 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. 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.

51. 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 rules proposed in the Notice includes these eight

entities.

52. Satellite Services. The Commission has not developed a

definition of small entities applicable to satellite service licensees.

Therefore, the applicable definition of small entity is generally the

definition under the SBA rules applicable to Communications Services,

Not Elsewhere Classified (NEC). This definition provides that a small

entity is expressed as one with $11.0 million or less in annual

receipts. According to the Census Bureau, there were a total of 848

communications services providers, NEC, in operation in 1992, and a

total of 775 had annual receipts of less than $9.999 million. The

Census report does not provide more precise data.

53. In addition to the estimates provided in paragraphs 40-52, we

consider certain additional entities that may be affected by the data

collection from broadband service providers. Because section 706

requires us to monitor the deployment of broadband regardless of

technology or transmission media employed, we anticipate that some

broadband service providers will not provide telephone service.

Accordingly, we describe in paragraphs 54-61 other types of firms that

may provide broadband services, including cable companies, MDS

providers, and utilities, among others.

54. Cable Services or Systems: The SBA has developed a definition

of small entities for cable and other pay television services, which

includes all such companies generating $11 million or less in revenue

annually. This definition includes cable systems operators, closed

circuit television services, direct broadcast satellite services,

multipoint distribution systems, satellite master antenna systems and

subscription television services. According to the Census Bureau data

from 1992, there were 1,788 total cable and other pay television

services and 1,423 had less than $11 million in revenue.

55. The Commission has developed its own definition of a small

cable system operator for the purposes of rate regulation. Under the

Commission's rules, a ``small cable company'' is one serving fewer than

400,000 subscribers nationwide. Based on our most recent information,

we estimate that there were 1,439 cable operators that qualified as

small cable system operators at the end of 1995. Since then, some of

those companies may have grown to serve over 400,000 subscribers, and

others may have been involved in transactions that caused them to be

combined with other cable operators. Consequently, we estimate that

there are fewer than 1,439 small entity cable system operators.

56. The Communications Act also contains a definition of a small

cable system operator, which is ``a cable operator that, directly or

through an affiliate, serves in the aggregate fewer than 1 percent of

all subscribers in the United States and is not affiliated with any

entity or entities whose gross annual revenues in the aggregate exceed

$250,000,000.'' The Commission has determined that there are 66,000,000

subscribers in the United States. Therefore, we found that an operator

serving fewer than 660,000 subscribers shall be deemed a small

operator, if its annual revenues, when combined with the total annual

revenues of all of its affiliates, do not exceed $250 million in the

aggregate. Based on available data, we find that the number of cable

operators serving 660,000 subscribers or less totals 1,450. We do not

request nor do we collect information concerning whether cable system

operators are affiliated with entities whose gross annual revenues

exceed $250,000,000, and thus are unable at this time to estimate with

greater precision the number of cable system operators that would

qualify as small cable operators under the definition in the

Communications Act. It should be further noted that recent industry

estimates project that there will be a total of 66,000,000 subscribers,

and we have based our fee revenue estimates on that figure.

57. Multipoint Distribution Systems (MDS): The Commission has

defined ``small entity'' for the auction of MDS as an entity that,

together with its affiliates, has average gross annual revenues that

are not more than $40 million for the preceding three calendar years.

This definition of a small entity in the context of MDS auctions has

been approved by the SBA. The Commission completed its MDS auction in

March 1996 for authorizations in 493 basic trading areas (BTAs). Of 67

winning bidders, 61 qualified as small entities.

58. MDS is also heavily encumbered with licensees of stations

authorized prior to the auction. The SBA has developed a definition of

small entities for pay television services, which includes all such

companies generating $11 million or less in annual receipts. This

definition includes multipoint

[[Page 59727]]

distribution systems, and thus applies to MDS licensees and wireless

cable operators which did not participate in the MDS auction.

Information available to us indicates that there are 832 of these

licensees and operators that do not generate revenue in excess of $11

million annually. Therefore, for purposes of this IRFA, we find there

are approximately 892 small MDS providers as defined by the SBA and the

Commission's auction rules, some which may be affected by the decisions

and rules proposed in the Notice.

59. Electric Services (SIC 4911): The SBA has developed a

definition for small electric utility firms. The Census Bureau reports

that a total of 1379 electric utilities were in operation for at least

one year at the end of 1992. According to SBA, a small electric utility

is an entity whose gross revenues did not exceed five million dollars

in 1992. The Census Bureau reports that 447 of the 1379 firms listed

had total revenues below five million dollars.

60. Electric and Other Services Combined (SIC 4931): The SBA has

classified this entity as a utility whose business is less than 95%

electric in combination with some other type of service. The Census

Bureau reports that a total of 135 such firms were in operation for at

least one year at the end of 1992. The SBA's definition of a small

electric and other services combined utility is a firm whose gross

revenues did not exceed five million dollars in 1992. The Census Bureau

reported that 45 of the 135 firms listed had total revenues below five

million dollars.

61. Combination Utilities, Not Elsewhere Classified (SIC 4939): The

SBA defines this utility as providing a combination of electric, gas,

and other services which are not otherwise classified. The Census

Bureau reports that a total of 79 such utilities were in operation for

at least one year at the end of 1992. According to SBA's definition, a

small combination utility is a firm whose gross revenues did not exceed

five million dollars in 1992. The Census Bureau reported that 63 of the

79 firms listed had total revenues below five million dollars.

IV. Description of Proposed Reporting, Recordkeeping, and Other

Compliance Requirements

62. The very focus of this proceeding is whether the Commission

should require certain providers of communications services to report a

limited amount of information about the development of local telephone

competition and the deployment of broadband services. The Notice

tentatively concludes that the Commission should undertake such a data

collection and that local exchange carriers and providers of mobile

telephony services that serve 50,000 or more subscribers, and any

entity that provides at least 1,000 full broadband lines, should report

specifically targeted information. The Notice sets out in detail, and

seeks comment on, the Commission's tentative conclusions about the

types of carriers that should report, exempting smaller carriers,

frequency of reports, data to be reported, and methods (such as

electronic filing) of reporting. In particular, the Commission has

tentatively concluded that given the comprehensive data to be obtained

from large and medium-size carriers, it can exempt most small carriers

from completing the survey without materially affecting its ability to

assess the development of local competition and the deployment of

broadband services.

V. Steps Taken To Minimize Significant Economic Impact on Small

Entities, and Significant Alternatives Considered

63. The Commission makes specific provision to exempt most smaller

carriers from the proposed requirement to report local telephone

competition data. The Commission tentatively concludes that carriers

with fewer than 50,000 nationwide local access lines (or mobile

telephony subscribers, in the case of mobile telephony providers)

should be exempted from the proposed reporting requirement. Based on

this exemption, the Commission estimates that fewer than 50 of the

nation's largest service providers would remain subject to the proposed

requirement. The Commission provides a detailed explanation for this

proposed exemption and seeks comment on the 50,000 local access line

threshold in the Notice.

64. With respect to broadband service, and irrespective of the

criteria for reporting local competition data, the Commission

tentatively concludes that entities that provide full broadband

services to at least 1,000 customers should report. The Commission

tentatively concludes that this more comprehensive reporting

requirement is necessary to monitor broadband developments by smaller

entities, for example, in rural areas. The Commission seeks comment on

this proposed threshold and invites commenters to suggest alternative

thresholds.

65. Among significant alternatives, the Commission considers

whether it might rely on publicly available data or voluntary surveys,

in lieu of a mandatory data collection program. The Commission

tentatively concludes other publicly available information sources

present less than complete pictures of actual conditions and trends in

developing local service markets and in the deployment of broadband.

Further, the Commission considers the need for, and size of, its

proposed exemptions for small entities. The Commission tentatively

concludes that the proposed thresholds will allow it exempt most small

entities from completing the survey without materially affecting its

ability to assess the development of local competition and the

deployment of broadband services.

VI. Federal Rules That May Duplicate, Overlap, or Conflict With the

Proposed Rule

66. None.

Ordering Clause

67. Accordingly, it is ordered that, pursuant to sections 1-5, 10,

11, 201-205, 215, 218-220, 251-271, 303(r), 332, and 403 of the

Communications Act of 1934, as amended, 47 U.S.C. 151-155, 160, 161,

201-205, 215, 218-220, 251-271, 303(r), 332, and 403, and pursuant to

section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt,

this notice of proposed rulemaking is hereby adopted.

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

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

notice of proposed rulemaking, including the regulatory flexibility

certification, to the Chief Counsel for Advocacy of the Small Business

Administration in accordance with paragraph 603(a) of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq. (1981).

List of Subjects

47 CFR Parts 1 and 43

Communications common carriers, Reporting and recordkeeping

requirements, Telecommunications, Telephone.

47 CFR Part 20

Communications common carriers.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 99-28792 Filed 11-1-99; 11:13 am]

BILLING CODE 6712-01-P