Access to Telecommunications Service, Telecommunications Equipment and Customer Premises Equipment by Persons with Disabilities

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 6 and 7

[WT Docket 96-198; FCC 99-181]

Access to Telecommunications Service, Telecommunications

Equipment and Customer Premises Equipment by Persons with Disabilities

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document establishes rules to ensure that people with

disabilities have access to telecommunications services and related

equipment, if readily achievable. These rules are required to implement

section 255 of Telecommunications Act

[[Page 63236]]

of 1996. These rules will increase the accessible products and services

available in the marketplace.

DATES: These rules become effective January 28, 2000, except for

Secs. 6.18 and 7.18, which contain modified information collection

requirements that have not been approved by the Office of Management

and Budget (``OMB''). The Commission will publish a document in the

Federal Register announcing the effective date of those sections.

Written comments by the public on the modified information collection

requirements should be submitted on or before December 20, 1999.

ADDRESSES: Office of the Secretary, Federal Communications Commission,

445 Twelfth Street SW, Room TW-A325, Washington, DC 20554. A copy of

any comments on the information collection contained herein should be

submitted to Judy Boley, Federal Communications Commission, Room 1C804,

445 12th Street, SW, Washington, DC 20554, or via the internet to

[email protected].

FOR FURTHER INFORMATION CONTACT: Ellen Blackler, Common Carrier Bureau.

(202) 418-0491.

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

and Order in WT Docket 96-198, adopted on July 14, 1999 and released on

September 29, 1999. The full text of the Report and Order, including

Commissioners' statements, is available for inspection and copying

during normal business hours in the FCC Reference Center, 445 Twelfth

Street, SW, Room CY-257, Washington, D.C. Alternate formats (computer

diskette, large print, audio cassette and Braille) are available to

persons with disabilities by contacting Martha Contee at (202) 418-0260

(voice), (202) 418-2555 (TTY), or at [email protected]. The Report and

Order can be downloaded in WP or ASCII text at: http//www.fcc.gov/dtf/.

This report and order contains modified information subject to the

Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be

submitted to the Office of Management and Budget (OMB) for review under

Section 3507(d) of the PRA. OMB, the general public and other federal

agencies are invited to comment on the modified information collection

contained in this proceeding.

Synopsis of Report and Order

1. In this Report and Order (Order) we adopt rules and policies to

implement sections 255 and 251(a)(2) of the Communications Act of 1934,

as amended (Act). These provisions, which were added by the

Telecommunications Act of 1996 (1996 Act), are the most significant

opportunity for the advancement of people with disabilities since the

passage of the Americans with Disabilities Act (ADA) in 1990. These

rules are based on the Access Boards Guidelines, 63 FR 5631, and the

comments after issuance of a Notice of Proposed Rulemaking, 63 FR

28456.

2. We conclude that we have authority to adopt regulations to

implement section 255. We find that the language of section 255(f),

which bars any private right of action ``to enforce any requirement of

this section or any regulation thereunder,'' expressly contemplates the

Commission's enactment of regulations to carry out its enforcement

obligations under the provisions of section 255. We conclude that at a

minimum, section 255 itself grants us authority to enact rules to

implement the provisions of section 255.

3. The extensive record herein supports the adoption of rules

consistent with the Access Board's guidelines. Accordingly, we adopt

rules in this Order that are identical to or based upon the Access

Board guidelines, with a few minor exceptions. We conclude that the

Access Board guidelines can effectively serve as the basis of rules for

both covered services and equipment.

4. We note, however, that we have the discretion to depart from the

Access Board guidelines where merited. We find that the Commission

would not be bound to adopt the Access Board's guidelines as its own,

or to use them as minimum standards, if it were to conclude, after

notice and comment, that such guidelines were inappropriate.

I. Requirements for Covered Entities

5. As stated in the statute, a manufacturer of telecommunications

equipment or customer premises equipment shall ensure that the

equipment is designed, developed, and fabricated to be accessible to

and usable by individuals with disabilities, if readily achievable.

Second, a provider of telecommunications service shall ensure that the

service is accessible to and usable by individuals with disabilities,

if readily achievable. Finally, whenever the requirements set forth

above are not readily achievable, such a manufacturer or provider shall

ensure that the equipment or service is compatible with existing

peripheral devices or specialized customer premises equipment commonly

used by individuals with disabilities to achieve access, if readily

achievable.

6. We adopt the ADA definition of disability in its entirety, as

required under section 255 of the Act. We further agree with commenters

that, in implementing section 255, we should follow any applicable

judicial and administrative precedent stemming from this definition,

except in those limited circumstances in which such precedent is shown

to be unsuitable to a specific factual situation.

7. We conclude further that, at a minimum, the statutory reference

to ``individuals with disabilities'' includes those with hearing,

vision, movement, manipulative, speech, and cognitive disabilities. By

no means, however, is the definition of ``disability'' limited to these

specific groups. Determinations of what constitutes a ``disability''

under section 255 must be made on a case-by-case basis.

8. We adopt the Access Board's definitions of ``accessible to'' and

``usable by.'' We initially proposed in the NPRM to combine these terms

under one definition under our rules, reasoning that the term

``accessible to'' should be used in its broadest sense to refer to the

ability of persons with disabilities actually to use the equipment or

service by virtue of its inherent capabilities and functions. Upon

further review, however, we believe that it is more precise, and will

provide clearer guidance to entities covered by section 255, for us to

follow the lead of the Access Board and define these two terms

separately because the requirements of ``accessible to'' and ``usable

by'' embrace two distinct concepts. Although the Access Board

guidelines were designed in the context of equipment and CPE

accessibility, we conclude that these guidelines are equally applicable

to the services context, and thus our definition of accessibility and

usable applies to both equipment and services. We also adopt the

proposal made in the NPRM to ensure that support services (such as

consumer information and documentation) associated with equipment and

services are accessible to and usable by people with disabilities.

9. We conclude that, with one technical exception and one addition,

the input, control and mechanical functions in Sec. 1193.41 of the

Access Board guidelines and the output, display and control functions

in Sec. 1193.43 of the Access Board guidelines shall constitute the

definition of ``accessible to'' under the Commission's rules. The list

is not a set of mandates, but rather a list of areas covered entities

should be considering when designing products and services.

[[Page 63237]]

10. We do not adopt Sec. 1193.43(e) of the Access Board rules,

which would require that volume control telephones provide a minimum of

20 dB adjustable volume gain. We decline to adopt this 20 dB volume

control standard under our rules because it conflicts with rules that

we have previously adopted pursuant to the Hearing Aid Compatibility

Act.

11. We also do not adopt a separate requirement regarding net

reductions similar to that in section 1193.30 of the Access Board's

guidelines. We believe that this requirement is addressed under the

readily achievable definition and analysis. The flexibility of the

readily achievable analysis recognizes that it will generally be

unacceptable to completely eliminate an existing accessibility feature,

but that legitimate feature trade-offs as products evolve are not

prohibited.

12. We do, however, add to our rules one input factor to the list

developed by the Access Board. Specifically, the definition of

``accessible to'' shall include being ``operable with prosthetic

devices.'' Because some people with disabilities rely on prosthetic

devices, we conclude that consideration of direct access by such

persons is appropriately encompassed in the definition of ``accessible

to''.

13. We adopt the Access Board's definition of ``usable by'' as our

definition under the rules. As many commenters that addressed this

issue recognized, providing access to all supporting documentation and

support services is an essential ingredient for the successful

implementation of section 255 and is encompassed by our definition of

``usable by.'' Support services include, but are not limited to, access

to technical support hotlines and databases, access to repair services,

billing and any other services offered by a manufacturer or service

provider that facilitate the continued and complete use of a product or

service. Support services also include efforts by manufacturers and

service providers to educate its sales force about the accessibility of

their products and how accessibility features can be used.

14. We further conclude, consistent with the Access Board's

guidelines and supported by the record, that ``usable by'' means

manufacturers and service providers ensure that consumers with

disabilities are included in product research projects, focus groups,

and product trials, where applicable, to further enhance the

accessibility and usability of a product, if readily achievable.

15. We also conclude, consistent with the Access Board guidelines

and the statutory definition of CPE, that specialized CPE, such as

direct-connect TTYs, are considered a subset of CPE. The statute's

requirement that manufacturers and service providers ensure

compatibility with CPE which has a specialized use does not change the

fact that this equipment still meets the definition of CPE as discussed

infra in paragraphs 80 et. seq. We define specialized CPE as CPE which

is commonly used by individuals with disabilities to achieve access.

Thus, manufacturers and service providers have the same obligations to

ensure accessibility and usability of SCPE as they do for any other

CPE.

16. We adopt four of the five criteria set forth by the Access

Board as the definition of ``compatibility'' under section 255. We do

not adopt the criterion of ``compatibility of controls with prosthetic

devices,'' which we have instead added to the definition of

accessibility. We adopt the Access Board's definitions of ``peripheral

devices'' and ``specialized CPE.'' As proposed in the NPRM, the

definitions of the terms ``peripheral devices'' and ``specialized CPE''

limit the compatibility requirement to those devices that have a

specific telecommunications function or are designed to be used

primarily to achieve access to telecommunications.

17. A manufacturer or service provider must assess whether it is

readily achievable to install features or design equipment and services

so that the equipment or service can meet the criteria of

compatibility. Compliance with these criteria must be mandatory. As

technology evolves, the guidelines and the definition of

``compatibility'' may need to be revised.

18. We require manufacturers and service providers to exercise due

diligence to identify the types of peripheral devices and specialized

CPE ``commonly used'' by people with disabilities with which their

products and services should be made compatible, if it has not been

readily achievable to make those products and services accessible. In

the NPRM, we had proposed using the concepts of affordability and

availability to help define the statutory term ``commonly used'' in

section 255(d) of the Act. We conclude that affordability and general

market availability are insufficient, and in some cases inappropriate,

criteria for determining whether a specific peripheral device or piece

of specialized CPE is ``commonly used'' by persons with disabilities.

19. Section 251(a)(2) of the Act requires that telecommunications

carriers not install network features, functions, or capabilities that

do not comply with the guidelines or standards established pursuant to

section 255. We conclude that telecommunications carriers must not

install service logic and databases associated with routing

telecommunications services, whether residing in hardware or software,

that do not comply with the accessibility requirements of these rules.

II. Readily Achievable

1. Definition of ``Readily Achievable''

20. We adopt the ADA's definition of ``readily achievable.'' We

agree with the DOJ that this definition is intended to ensure that a

``wide range of factors be considered in determining whether an action

is readily achievable.''

21. The primary focus of a ``readily achievable'' analysis should

be upon three general considerations delineated in the ADA definition,

namely (1) the cost of the action; (2) the nature of the action; and

(3) the overall resources available to the entity, including resources

made available to the entity by a parent corporation, if applicable,

depending on the type of operation and the relationship between the two

entities. We decline to include consideration of feasibility, expense,

and practicality, as proposed in our NPRM. We have modified the

definition so that it more closely correlates with the terms used in

section 255. For example, we have replaced the word ``facility''

throughout the definition with the terms ``manufacturer'' and ``service

provider,'' as appropriate. We also have inserted the terms ``if

applicable'' before the third and fourth prongs of the definition.

Furthermore, we agree with those parties who have argued that, in

interpreting section 255, we should look to the ``substantial body of

judicial decisions interpreting and applying'' the terms of the ADA,

including the phrase ``readily achievable.''

2. Application of Readily Achievable

a. In General

22. In implementing the requirements of section 255, we decline to

adopt a ``product line'' framework proposed primarily by manufacturers

of equipment. Under this approach, a manufacturer or service provider

would not need to conduct a ``readily achievable'' analysis for each

produce or service, but instead would ensure that select products

within its product lines are accessible to persons with disabilities.

We conclude that section 255, by its terms, applies to the design and

production of individual products and service offered by a manufacturer

or service provider.

[[Page 63238]]

23. We recognize that there are accessibility features that can be

incorporated into the design of products with very little or no

difficulty or expense. These features must be deployed universally. We

will not identify specific features that fall into this category,

because it necessarily varies given the individual circumstances.

Manufacturers and service providers must make their own determinations

based on the factors in the readily achievable definition. Thus,

manufacturers and service providers cannot decline to incorporate

modest features that will enhance accessibility simply because some

other product or service with the feature may be available. We expect

that, over time, more and more features will be incorporated into all

products in this manner, and that features that today may not be

readily achievable soon will become routine and universally adopted.

24. With respect to those features or actions that are not readily

achievable to be deployed universally, but are readily achievable to be

incorporated into some products and services, manufacturers and service

providers have the flexibility to distribute those features across

product or service lines as long as they do all that is readily

achievable. In addition, we expressly encourage manufacturers and

service providers to work closely with the disability community to

ensure that under-represented disability groups, and multiple

disabilities (such as deaf-blindness), are not ignored.

25. In those instances where accessibility under paragraphs (b) or

(c) of section 255 is not readily achievable, service providers and

manufacturers are required to comply with paragraph (d), which states

that they must ensure that their equipment or services are compatible

with existing specialized CPE or peripheral devices commonly used by

persons with disabilities to achieve access, if readily achievable.

26. We believe this framework will provide manufacturers and

service providers a viable means for compliance with section 255, while

promoting accessibility to the maximum extent possible. We expect that

different companies, faced with their unique circumstances, may well

come to different conclusions about deployment of accessibility

features. We believe that is a desirable outcome that will maximize the

range and depth of accessible products and services available to

customers and will capitalize on the positive forces of competition.

b. Cost of the Action Needed

27. We conclude that ``cost,'' for purposes of the ``readily

achievable'' evaluation, is the incremental amount that a manufacturer

or service provider expends to design, develop, or fabricate a product

or service to ensure that it is accessible. Although we tentatively

concluded in the NPRM that it would be appropriate to consider net

costs, taking into account such factors as the potential for recovery

of expenses from consumers through increased sales or higher product

prices, we now reject that approach for several reasons. We believe

that an assessment of market factors, such as the ability of a service

provider or manufacturer to recover its costs through price changes,

would involve speculation. Moreover, not considering market factors is

consistent with ADA precedent, and we are not convinced that there are

any factors specific to telecommunications that compel us to adopt an

interpretation of costs different from that under the ADA. We also are

persuaded that introducing cost recovery or market considerations into

the meaning of ``cost'' could defeat one of the primary purposes of

section 255--enhancing access to telecommunications equipment and

service for a population whose needs have not been addressed by the

market alone.

28. While we have concluded that we will not consider market

factors in determining what is readily achievable, we do not rule out

the ability of manufacturers and service providers to take these market

factors into account when making the decisions regarding deployment of

more significant readily achievable accessibility features throughout

its products.

29. We will permit manufacturers and service providers to consider

the cost of disability access actions for a product or service in

conjunction with the cost of other actions taken by them to comply with

these rules during a fiscal period, as proposed by a number of

commenters. We agree it may be appropriate to consider the cost of

other accessibility actions as a factor in determining whether a

measure is readily achievable. Therefore, manufacturers and service

providers may take into account the cumulative cost of all

accessibility actions over a specific fiscal period in determining

whether an action is ``readily achievable.'' We underscore, however,

that ``cumulative costs'' cannot be the only factor used by a

manufacturer or service provider to determine whether a measure is

``readily achievable.'' In particular, the ability to take into account

cumulative costs shall not permit a manufacturer or service provider to

predetermine caps or quotas on its total spending for section 255

compliance for a given fiscal period.

30. A manufacturer or service provider may consider whether

inclusion of an accessibility feature significantly will delay

production or release of a product, and therefore increase production

costs, provided that the manufacturer or service provider demonstrates

that it did in fact consider accessibility at the design stage. Of

course, the mere fact that inclusion of a feature will add time and

cost to production will not, alone, render the measure not readily

achievable.

c. Nature of the Action Needed

31. Another consideration in the ``readily achievable'' analysis is

the nature of the action needed to make equipment or service accessible

to persons with disabilities. While commenters generally have not

framed their comments in terms of ``nature of the action,'' many

address the concepts of ``fundamental alterations'' and ``technical

feasibility,'' which we believe fall within the ambit of ``nature of

the action.''

32. We agree with the Access Board found that the ``fundamental

alteration'' concept derives from the ``undue burden'' test under the

ADA and, since ``undue burden'' is a higher standard than ``readily

achievable,'' that the concept of fundamental alteration is implicit in

the readily achievable analysis. Since a covered entity must,

hypothetically, demonstrate a much more onerous burden in order to be

relieved of any obligations under the ``undue burden'' standard of the

ADA, it follows that any actions that constitute an undue burden,

including fundamental alterations, are also not ``readily achievable.''

Manufacturer or service provider is not required to install an

accessibility feature if it can demonstrate that the feature

fundamentally would alter the product.

33. In the NPRM, we tentatively concluded that technical

infeasibility should be one factor in determining whether an

accessibility feature is readily achievable. We now conclude that, when

assessing the ``nature of the action'' in a readily achievable

analysis, manufacturers and service providers are not required to

incorporate accessibility features that are technically infeasible,

subject to several limitations.

34. We agree with several commenters, however, that in some rare

instances, ``technical infeasibility'' may result from legal or

regulatory constraints. We also agree with several

[[Page 63239]]

commenters that technical infeasibility encompasses not only a

product's technological limitations, but also its physical limitations.

We note, however, that manufacturers and service providers should not

make conclusions about technical infeasibility within the ``four

corners'' of a product's current design. Section 255 requires a

manufacturer or service provider to consider physical modifications or

alterations to the existing design of a product. Finally, we agree with

commenters that manufacturers and service providers cannot make bald

assertions of technical infeasibility. Any engineering or legal

conclusions that implementation of a feature is technically infeasible

should be substantiated by empirical evidence or documentation.

d. Resources of the Covered Entity

35. We conclude that we should follow the two-step analysis of a

covered entity's resources set forth by the DOJ in its ADA regulation.

Accordingly, the resources of the ``covered entity'' (i.e., the

manufacturer or service provider) first are examined. The resources of

any parent corporation or comparable entity with a legal relationship

with the manufacturer or service provider would be examined and taken

into account, unless the covered entity or parent can demonstrate why

any legal or other constraints prevent the parent's resources from

being available to the covered entity.

36. For purposes of the readily achievable analysis, the covered

entity must take into account any and all financial resources available

to it, including resources from third parties.

37. This would include any capital or other financial assets,

recourse to guarantees that may be used for the covered entity's debt

financing or to otherwise assist its business, resources in the form of

labor or services, or any other items that would affect the ``overall

financial resources'' available to the manufacturer or service

provider. Resources of another entity shall be taken into account

regardless of whether that other entity is a telecommunications

manufacturer or service provider.

38. In some cases, consideration of the resources of another entity

may not be applicable because of the nature of the legal relationship

between the parties, or because no resources in fact are available to

the manufacturer or service provider from the outside entity.

39. In the NPRM, we proposed establishing a ``rebuttable

presumption'' that reasonably-available resources are those of the

covered entity legally responsible for the equipment or service that is

subject to the requirements of section 255. After reviewing the record,

we have concluded that the better approach is to evaluate the resources

of any parent company, or comparable entity with legal obligations to

the covered entity, but permit any covered entity (or parent company)

to demonstrate why legal or other constraints prevent those resources

from being available to the covered entity.

3. Timing of Readily Achievable Assessments

40. The readily achievable obligation imposed by section 255 is

both prospective and continuing. While it is appropriate to consider

the time needed to incorporate accessibility solutions into new and

upgraded products, technological advances that present opportunities

for readily achievable accessibility enhancements can occur at any time

in a product cycle. A manufacturer's or service provider's obligation

to review the accessibility of a product or service, and add

accessibility features where readily achievable, is not limited to the

initial design stage of a product. We conclude that manufacturers and

service providers, at a minimum, must assess whether it is readily

achievable to install any accessibility features in a specific product

whenever a natural opportunity to review the design of a service or

product arises. If it is readily achievable to include an accessibility

feature during one of these natural opportunities, the manufacturer or

service provider must install the feature. Natural opportunities could

include, for example, the redesign of a product model, upgrades of

services, significant rebundling or unbundling of product and service

packages, or any other modifications to a product or service that

require the manufacturer or service provider to substantially re-design

the product or service.

4. Documentation of Readily Achievable Assessments

41. As proposed in the NPRM, we conclude that we should not at this

time delineate specific documentation requirements for ``readily

achievable'' analyses. We fully expect, however, that manufacturers and

service providers, in the ordinary course of business, will maintain

records of their accessibility efforts that can be presented to the

Commission to demonstrate compliance with section 255 in the event

consumers with disabilities file complaints.

III. Services and Equipment Covered by the Rules

42. Section 255 applies to any ``manufacturer of telecommunications

equipment or customer premises equipment'' and to any ``provider of

telecommunications service.'' We conclude that, in so far as these

phrases are broadly grounded in the Communications Act, our sole task

here is to explain their application in the context of section 255. We

will, however, as explained below, assert our ancillary jurisdiction to

cover two non-telecommunications services.

a. Telecommunications and Telecommunications Service

43. Section 255(c) requires that any ``provider of

telecommunications service shall ensure that the service is accessible

to and usable by individuals with disabilities, if readily

achievable.'' Section 3 of the Act defines ``telecommunications'' as

``the transmission, between or among points specified by the user, of

information of the user's choosing, without change in the form or

content of the information as sent and received.'' It defines

``telecommunications service'' as ``the offering of telecommunications

for a fee directly to the public, or to such classes of users as to be

effectively available directly to the public, regardless of the

facilities used.''

44. We adopt our tentative conclusion in the NPRM that the phrases

``telecommunications'' and ``telecommunications services'' have the

general meanings set forth in the Act. Telecommunications services,

however, does include services previously classified as adjunct-to-

basic. Adjunct-to-basic services are services which literally meet the

definition of enhanced services, now called information services,

established under the Commission's rules, but which the Commission has

determined facilitate the completion of calls through utilization of

basic telephone service facilities and are included in the term

``telecommunications services.'' Adjunct-to-basic services include such

services as call waiting, speed dialing, call forwarding, computer-

provided directory assistance, call monitoring, caller identification,

call tracing, and repeat dialing.

45. We decline to expand the meaning of ``telecommunications

services'' to include information services for purposes of section 255,

as urged by some commenters. In the NPRM, we recognized that under our

interpretation of these terms, some important and widely used services,

such as voicemail

[[Page 63240]]

and electronic mail, would fall outside the scope of section 255

because they are considered information services. We conclude, however,

that we may not reinterpret the definition of telecommunications

services, either for purposes of section 255 only or for all Title II

regulation. First, we emphasize that the term ``information services''

is defined separately in the Act. As we noted in the NPRM, there was no

indication in the legislative history of the 1996 Act that Congress

intended these terms to have any different, specialized meaning for

purposes of accessibility.

b. Provider of Telecommunications Services

46. We conclude that all entities offering telecommunications

services (i.e., whether by sale or resale), including aggregators,

should be subject to section 255. An entity that provides both

telecommunications and non-telecommunications services, however, is

subject to section 255 only to the extent that it provides a

telecommunications service.

c. Telecommunications Equipment and Customer Premises Equipment

47. The Act defines ``telecommunications equipment'' as

``equipment, other than customer premises equipment, used by a carrier

to provide telecommunications services, and includes software integral

to such equipment (including upgrades).'' It defines ``customer

premises equipment'' (CPE) as ``equipment employed on the premises of a

person (other than a carrier) to originate, route, or terminate

telecommunications.''

48. In accordance with the proposal made in the NPRM, the express

statutory language, and the views of commenters, we find that

telecommunications equipment includes software integral to

telecommunications equipment. Operation of today's technologically

sophisticated telecommunications networks would be impossible without

software, and we believe that Congress' decision to expressly clarify

that software and upgrades to software are to be considered

``equipment'' acknowledges the important role played by software

products. Further, by referencing ``upgrades'' to software as

equipment, the definition expressly contemplates that stand-alone

software should be considered equipment. For these reasons, we conclude

that all software integral to telecommunications equipment is covered

by the definition, whether such software is sold with a piece of

telecommunications equipment hardware or is sold separately.

49. The statutory definition of CPE under section 3(14) of the Act

encompasses all ``equipment employed on the premises of a person (other

than a carrier) to originate, route, or terminate telecommunications.''

Although section 3(14) does not specifically reference software

integral to CPE, we find, nonetheless, that CPE includes software

integral to the operation of the telecommunications functions of the

equipment, whether sold separately or not. We note that this conclusion

is contrary to our tentative conclusion in the NPRM that software sold

separately from CPE would not fall within the definition of CPE. After

review of the record, however, we are persuaded that stand-alone

software that originates, terminates and routes telecommunications

should be deemed ``equipment'' under the CPE definition.

50. In connection with multipurpose equipment, we adopt our

tentative conclusion that customer premises equipment is covered by

section 255 only to the extent that it provides a telecommunications

function. Specifically, equipment that generates or receives an

electrical, optical or radio signal used to originate, route or

terminate telecommunications is covered, even if the equipment is

capable of providing non-telecommunications functions. We believe that

our interpretation ensures consistency between the obligations of

manufacturers to ensure that telecommunications equipment and CPE is

designed, developed and fabricated to be accessible, and the

obligations of service providers to ensure that the service is

accessible.

51. Furthermore, as supported by the record, we conclude that

manufacturers will be liable under section 255 for all

telecommunications equipment and CPE to the extent that such equipment

provides a telecommunications function. In those instances, where a

piece of equipment undergoes substantial modifications after its sale,

however, we agree with those commenters who argue that it would be

unfair to hold the manufacturer liable under section 255. In those

instances, which we expect to be infrequent, manufacturers shall bear

the burden of proving, by a preponderance of the evidence, that a piece

of equipment has undergone substantial modifications after its sale.

d. Manufacturer

52. The Act does not define ``manufacturer of telecommunications or

customer premises equipment.'' The Access Board guidelines define a

``manufacturer'' as an entity ``that sells to the public or to vendors

that sell to the public; a final assembler.'' This approach, according

to the Access Board, would generally cover ``the final assembler of

separate subcomponents; that is, the entity whose brand name appears on

the product.'' In the NPRM, the Commission proposed to adopt a

definition of ``manufacturer'' based upon the Access Board guidelines.

53. In light of our enforcement obligations and based on the

record, we now believe that we need a more precise definition of

manufacturer than that adopted by the Access Board. In our rules,

therefore, we define manufacturer as an entity that makes or produces a

product. This definition puts responsibility on those who have direct

control over the products produced, and provides a ready point of

contact for consumers and the Commission in getting answers to

accessibility questions and resolving complaints. We decline to adopt

the Access Board's definition because we find that it is so broad that

it could include retailers, who simply sell products and may not

control any aspect of their actual manufacture.

54. We do not intend this definition to include those who simply

sell or distribute a product manufactured by another entity. Nor do we

extend the concept of manufacturer to anyone who might modify the

equipment before sale to the public. We do not believe as a general

matter that retailers, wholesalers, and other post-manufacturing

distribution entities can be considered manufacturers who have

accessibility obligations under the Act.

55. As supported by the record, we adopt our tentative conclusion

to construe section 255 to apply to all manufacturers offering

equipment for use in the United States, regardless of their location or

national affiliation. Exempting foreign manufacturers would

disadvantage American manufacturers, and would deny the American public

the full protection section 255 offers.

e. Voicemail and Interactive Menus

56. The record has convinced us that in order for us to carry out

meaningfully the accessibility requirements of section 255,

requirements comparable to those under section 255 should apply to two

information services that are critical to making telecommunications

accessible and usable by people with disabilities. We assert ancillary

jurisdiction to extend these accessibility requirements to the

providers of voicemail and interactive menu service and to the

manufacturers of the equipment that

[[Page 63241]]

perform those functions. By enacting section 255, Congress has charged

the Commission with ensuring that telecommunications services and

equipment are accessible to, and usable by, persons with disabilities.

We cannot fully achieve that objective without this limited use of our

ancillary jurisdiction.

57. We decline to extend accessibility obligations to any other

information services. While some commenters have argued that there is

an overwhelming need for all information services to be accessible to

people with disabilities, we assess the record differently, and use our

discretion to reach only those services we find essential to making

telecommunications services accessible. Unlike voicemail and

interactive menus, other information services discussed by commenters

do not have the potential to render telecommunications services

themselves inaccessible. Therefore, we decline to exercise our

ancillary jurisdiction over those additional services. Many of these

other services are alternatives to telecommunications services, but not

essential to their effective use. For example, e-mail, electronic

information services, and web pages are alternative ways to receive

information which can also be received over the phone using

telecommunications services. In contrast, inaccessible and unusable

voicemail and interactive menus operate in a manner that can render the

telecommunications service itself inaccessible and unusable.

IV. Enforcement of Section 255

58. Damages. We adopt our tentative conclusion in the NPRM that

damages are available for violations of section 255 or our implementing

rules against common carriers. In so holding, we reject the claim that

section 255(f)'s preclusion of private rights of action deprives the

Commission of any authority to entertain requests for damages by or on

behalf of individual complainants.

59. Other Sanctions and Remedies. We affirm our conclusion in the

NPRM that we should employ the full range of sanctions and remedies

available to us under the Act in enforcing section 255. We conclude

that we need not delineate in this Order the various sanctions and

remedies available to us under the Act to address violations of section

255 and our rules. We recognize that sanctionable behavior may involve

a wide range of conduct by manufacturers and service providers and we

will use our considerable discretion to tailor sanctions or remedies to

the individual circumstances of a particular violation. While we will

view retrofitting as an extreme remedy to be used in egregious cases of

willful misconduct, we nevertheless believe that the prospect of such

action will serve as a major deterrent to willful and repeated

violations of the Act and our rules.

60. We adopt our tentative conclusion in the NPRM that we should

encourage consumers to express informally their concerns or grievances

about a product to the manufacturer or supplier who brought the product

to market before complaining to the Commission. We believe that this

policy should apply with equal force to grievances or concerns relating

to service providers. We fully expect that many accessibility-related

disputes will be satisfactorily resolved through such communications

without the need to file complaints. We decline, however, to adopt a

rule that would require consumers to contact the manufacturer or

service provider about an accessibility barrier before a complaint

could be filed with the Commission. Under our section 208 rules,

consumers are encouraged but not required to contact the carrier in

advance of filing an informal complaint. Our rules governing formal

section 208 complaints require both the complainant and defendant to

certify, as part of the complaint and answer respectively, that they

discussed, or attempted in good faith to discuss, the possibility of

settlement with the opposing party prior to filing of the complaint. We

conclude that this model is also appropriate for section 255 formal

complaints.

61. Form. We adopt our proposal to allow informal complaints all to

be transmitted to the Commission by any reasonable means such as by

letter, facsimile transmission, voice telephone (voice and TTY),

Internet e-mail, audio-cassette recording, and braille.

62. Content. We adopt a rule providing that any section 255

complaint filed with the Commission include: (1) the name and address

of the complainant; (2) the name and address of the manufacturer or

service provider against whom the complaint is made; (3) details about

the equipment or service about which the complaint is made; (4) the

date or dates on which the complainant or person on whose behalf the

complaint is being filed either purchased, acquired, used or attempted

to purchase or use the equipment or service about which the complaint

is being made; (5) a statement of facts supporting the complainant's

allegation that the equipment or service is not accessible to a person

or persons with a disability; (6) the specific relief or satisfaction

sought by the complainant; and (7) the complainant's preferred method

of response to the complaint (e.g., letter, facsimile transmission,

telephone (voice or TTY), Internet e-mail, audio-cassette, braille, or

another method that will provide effective communication with the

complainant.

63. Standing to File. We conclude that our minimum form and content

requirements will alleviate concerns raised by a number of commenters

regarding the need for a standing requirement for filing section 255

complaints. The concerns raised by the commenters about possible

frivolous complaints are too speculative to warrant a standing

requirement where none otherwise exists under our common carrier

complaint rules. There is no evidence that frivolous complaints have

been a problem under our common carrier rules; nor is there any basis

in the record to reasonably conclude that such will be the case for

section 255 complaints. In any event, we believe that the minimum

content requirements for section 255 complaints will effectively deter

the filing of frivolous complaints.

64. Service. We adopt a rule requiring the staff to promptly

forward complaints that satisfy our content rules to the manufacturer

or service provider involved, along with specific instruction to the

defendant company to investigate and attempt to satisfy the complaint

within a specified period, generally thirty days. The rule further

provides that Commission staff may, in its discretion, request from the

defendant company whatever additional information it deems useful to

its consideration of the complaint.

65. Designation of Contacts/Agents. We adopt a rule requiring

affected manufacturers and service providers to designate an agent or

contact whose principal function will be to ensure the manufacturer's

or service provider's prompt receipt and handling of accessibility

concerns raised by consumers or Commission staff.

66. The Commission will provide access to a listing of the contact

representatives or agents designated by manufacturers and service

providers. In order to establish this listing, we will require covered

manufacturers and service providers to file the required contact

information with the Secretary of the Commission within thirty days

after the effective date of the rules adopted herein.

67. As a related matter, we note that certain commenters urged that

we adopt a requirement that defendant manufacturers and service

providers make reasonable, good faith efforts to contact the

complainant within five business days of receipt of a complaint

[[Page 63242]]

to acknowledge such receipt and discuss how the company intends to

proceed with its handling of the complaint. We agree with these

commenters that this measure is consistent with our point of contact

requirement and will not unduly burden affected companies, and adopt

this requirement.

68. Our rules require defendant manufacturers and service providers

to prepare their responses in the format requested by the complainant,

except where the defendant service provider or equipment manufacturer

is incapable of doing so. In cases in which the defendant is incapable

of preparing a response using the format requested by the complainant,

Commission staff will take actions necessary to ensure that the

response is accessible to the complainant.

69. Time to Respond. The commenters are generally supportive of a

thirty day period in which to respond to informal complaints, although

certain commenters argue that the response should be shortened to 15

days while others favor a longer period of 60-90 days. We believe that

a thirty day response period, which mirrors the response time afforded

under our common carrier complaint rules, strikes a reasonable balance

between our goals of promoting the prompt resolution of accessibility

disputes and ensuring that manufacturers and service providers have

sufficient time in which to evaluate the complaint and provide

meaningful solutions or explanations to consumers.

70. Applicability of Secs. 1.720 through 1.736 of the rules. We

agree with a number of the commenters that certain accessibility

disputes, by their nature or complexity, may not be able to be resolved

by the disputing parties. Therefore, we adopt a rule providing that any

person seeking formal adjudication of a problem or dispute with a

manufacturer or service provider may do so pursuant to the procedures

specified under Secs. 1.720 through 1.736 of our rules.

71. We conclude that the existing accelerated dispute procedures

may be used by the staff for purposes of section 255 formal complaints.

Such accelerated procedures will minimize the opportunity for

manufacturers and service providers to continue to delay otherwise

readily achievable accessibility solutions because the lawfulness of

such practices will be subject to expedited review.

72. Eligibility Requirements. Not all accessibility disputes raised

in the context of formal complaints will be appropriate for handling

under these accelerated procedures. Therefore, we adopt the following

requirements that a complainant must satisfy in requesting accelerated

resolution of its complaint:

First, a complainant desiring accelerated dispute

resolution must allege in good faith that a person with a disability is

not able to access/use particular equipment or services is due to a

product's lack of accessibility, and that such lack of access is having

or will have an immediate adverse impact on consumers' ability to use

the services and equipment covered by our rules.

Second, the complainant must demonstrate that he or she

has contacted or attempted in good faith to contact the manufacturer or

service provider against whom the allegations are made and gave or

attempted to give the manufacturer or service provider a reasonable

period of time (not less than 30 days) to address the problem;

Third, the complainant must have given prior advance

notice to the manufacturer or service provider of its intention to file

a formal complaint; and

Fourth, the complainant must agree to participate in any

settlement negotiations scheduled and supervised by Commission staff

with respect to the matters alleged in the complaint.

73. Accelerated Dispute Resolution Procedures. Any person with a

disability or entity acting on behalf of any such person who satisfies

the above-listed conditions may submit its formal complaint, along with

a request for accelerated dispute resolution, to the Common Carrier

Bureau's Enforcement Division. Where practicable, such complaint and

request may be submitted to the Commission by any reasonable means. The

filing must include at a minimum: (1) the information described in

Secs. 1.721 through 1.724 of our rules and (2) a representation by the

complainant that the conditions specified in Sec. 1.730 have been met.

Complaints accepted for accelerated dispute resolution will be promptly

forwarded by the Commission to the named manufacturer or service

provider, which shall be called on to answer the complaint in 15 days

or such shorter time as the staff may prescribe. Commission staff may,

in its discretion, require the complainant and defendant to appear

before it, via telephone conference or in person, to bring and give

evidence bearing on accessibility, usability or compatibility. In

appropriate cases, the staff may schedule and supervise settlement

negotiations between the parties.

74. Decisions Issued in Accelerated Proceedings. We adopt a 60-day

timetable for issuing a decision in section 255 complaint proceedings

under our accelerated procedures. At the same time, we recognize that

some disputes that are likely to arise over the proper interpretation

and application of our rules will be cases of first impression, the

resolution of which may not be possible within the 60 day period.

Therefore, staff administering the accelerated docket will have the

discretion to extend the 60-day period.

75. We noted in the NPRM that the most common defenses likely to be

mounted by manufacturers and service providers in response to either a

complaint or an inquiry by the Commission are claims that: (1) the

product or service lies beyond the scope of section 255; (2) the

product or service is in fact accessible; or (3) accessibility is not

readily achievable. We noted that while the first two defenses are

relatively straightforward, the readily achievable defense is complex.

We therefore proposed to use the Access Board Guidelines applicable to

manufacturers as examples of the kinds of compliance measures we would

consider in this regard.

76. While we believe some weight should be given to evidence that a

respondent made good faith efforts to comply with section 255, we

decline to adopt a rule establishing a presumption of compliance in

favor of manufacturers and service providers in section 255 complaint

actions. Instead, we will review section 255 complaints on a case-by-

case basis, giving due consideration to whether the defendant took

actions consistent with the rules and guidance we set forth today, as

well as any other compliance measures that the respondent has

undertaken, such as those set forth in the Access Board's Advisory

Appendix.

77. Time Limit for Filing Complaints. We decline to adopt either

the 6-month or 1-year limitations period on the filing of section 255

complaints urged by some commenters. We do not agree that a limitations

period more restrictive than the 2-years prescribed in section 415 of

the Act pertaining to damages claims against common carriers is

necessary or desirable to guard against stale or unmeritorious claims.

78. To ensure that this Commission's resources remain properly

focused, we adopt a general policy that complaints against

manufacturers and service providers determined by the staff to raise

issues that are dated or stale due to the passage of time or moot

because of industry or product changes (and which do not raise timely

damages claims within the meaning of section 415(b)) may, absent

indications of an ongoing compliance problem, be subject to summary

disposition by the staff.

[[Page 63243]]

79. We do not agree with the claim by certain commenters that the

five-month complaint resolution deadline imposed on the Commission

under section 208(b) of the Act is also applicable to all complaints

alleging violations of section 255.

80. We conclude that section 208(b) would apply to a properly filed

section 255 formal complaint only to the extent that the complaint

raised issues concerning a matter contained in a service provider's

tariff or that would have been included in the service provider's

tariff but for our forbearance policies.

81. We conclude that our existing rules governing confidential

materials adequately address the concerns raised by the commenters and,

therefore, do not adopt the additional requirements proposed in the

NPRM. As an initial matter, we note that we do not anticipate that

confidentiality issues will arise frequently in informal section 255

complaint proceedings. Informal complaint actions, which are exempt

proceedings under our ex parte rules, are by nature not designed or

intended to facilitate the exchange of confidential information between

disputing parties. Defendant manufacturers and service providers are

not typically required to submit information designated as confidential

or proprietary directly to a complainant; nor is the staff required to

transmit confidential information provided by a complainant to a

defendant company. To the extent that such information is deemed

necessary to the staff's evaluation of an informal complaint, the

submitting party may invoke the protection afforded under Secs. 0.457

through 0.459 of our rules by clearly designating the information as

confidential or proprietary at the time it is submitted to the

Commission.

82. Formal complaints filed against common carriers pursuant to

Secs. 1.720 through 1.736 of our rules are classified as ``restricted''

proceedings under our ex parte rules. This ``restricted'' designation,

as with other proceedings not designated as exempt or permit-but-

disclose, expressly prohibits ex parte presentations in these

adjudicatory proceedings from any source. Formal section 255 complaints

filed against manufacturers or service providers shall be similarly

treated as restricted proceedings.

83. We emphasize that to the extent that compliance issues or

problems requiring regulatory intervention are perceived by the staff

during the processing of an accessibility-related informal complaint or

are otherwise brought to the Commission's attention, the staff will be

poised to pursue the matter on its own motion and, when warranted, take

or recommend appropriate remedial actions or sanctions from those

available to us under the Act and our rules. We reject the suggestion

by certain commenters that we establish specific guidelines for

initiating investigations and other section 255 enforcement actions on

our own motion.

84. As we noted earlier, the Commission has a responsibility to

prohibit discrimination on the basis of disability in its programs and

activities, as required by the Rehabilitation Act of 1973, as amended.

The Commission's rules implementing these responsibilities are set

forth at 47 CFR 1.1801 through 1.1870. These requirements apply to the

Commission's enforcement provisions and activities. If a member of the

public believes that the Commission is not providing equal access to

its programs and activities, the procedures for filing a program

accessibility complaint are set forth in 47 CFR 1.1870. Complaints

regarding access to Commission programs and activities should be sent

to the Commission's Office of the Managing Director. Commission staff

will provide technical assistance to any member of the public wishing

to file a complaint pursuant to Secs. 1.1801 through 1.1870 of the

rules; regarding access to Commission programs and activities; and any

such complaint will not predispose the Commission negatively against

any section 255 complaints.

V. Additional Implementation and Enforcement Measures

85. In the NPRM, the Commission sought comment regarding whether

existing Commission processes (and associated forms) would be efficient

vehicles for any requirements the Commission might develop in this

proceeding, such as information collection, or providing notice to

firms dealing with the Commission that they may be subject to section

255. The Commission listed the following examples: (1) The Commission's

equipment authorization processes under part 2, subpart J of the

Commission's rules; (2) equipment import documentation requirements

under part 2, subpart K of the rules; (3) licensing proceedings under

section 307 of the Act for various radio services used by entities

subject to section 255 obligations; and (4) various common carrier

filing processes.

86. The Commission also expressed the view that there could be

other measures the Commission might take, or might encourage others to

take, to foster increased accessibility of telecommunications products

such as the establishment of a clearinghouse for current information

regarding telecommunications disabilities issues, including product

accessibility information, and accessibility solutions.

87. We find that modifying the current equipment certification or

other existing Commission processes for purposes of compliance with

section 255 is not appropriate. As outlined in the discussion on

enforcement and the application of the readily achievable standard, no

specific documentation is being required at this time.

88. We believe that the dissemination of technical assistance,

including information on product capabilities and availability, as well

as information about manufacturer and service provider compliance with

section 255, is vitally important. It will both help ensure that people

have access to needed products and serve as an enforcement tool. After

we determine the best way to present the relevant data, we intend to

publish information regarding entities' compliance with these rules. We

also intend to provide technical assistance and conduct outreach

efforts to inform customers and companies of their rights and

responsibilities under these rules.

VI. Procedural Matters

A. Final Regulatory Flexibility Analysis

89. As required by the Regulatory Flexibility Act (RFA), an Initial

Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice

of Proposed Rulemaking issued in this proceeding. The Commission sought

written public comments on the proposals included in the Notice,

including comment on the IRFA. This Final Regulatory Flexibility

Analysis (FRFA) conforms to the RFA.

1. Need for and Objectives of the Report and Order and Rules Adopted

Therein

90. This rulemaking proceeding was initiated to propose means of

implementing and enforcing section 255 of the Communications Act, as

added by the Telecommunications Act of 1996. Section 255 is intended to

ensure that telecommunications equipment and services will be

accessible to persons with disabilities, if such accessibility is

readily achievable. If accessibility is not readily achievable, then

the telecommunications equipment and services are to be made compatible

with specialized customer premises equipment (CPE) or peripheral

devices to the extent that so doing is readily achievable.

[[Page 63244]]

91. Given the fundamental role that telecommunications has come to

play in today's world, we believe that the provisions of section 255

represent the most significant governmental action for people with

disabilities since the passage of the Americans with Disabilities Act

of 1990 (ADA). Inability to use telecommunications equipment and

services can be life-threatening in emergency situations, can severely

limit educational and employment opportunities, and can otherwise

interfere with full participation in business, family, social, and

other activities. We must do all we can to ensure that people with

disabilities are not left behind in the telecommunications revolution

and consequently isolated from contemporary life.

92. In the Notice, we set forth proposals to implement and enforce

the requirement in section 255 that telecommunications offerings be

accessible to the extent readily achievable. We proposed a ``fast-

track'' process for resolving accessibility complaints informally and

quickly and more conventional remedial processes for cases where fast-

track solutions are not possible, or where there appears to be an

underlying noncompliance with section 255. We noted that, in either

case, we would look favorably upon demonstrations by companies that

they had considered accessibility throughout the development of

telecommunications products when assessing whether service providers

and equipment manufacturers have met their accessibility obligations

under section 255. In the accompanying Report and Order we have made

the following decisions.

(1) We have incorporated most of the Access Board guidelines into

our rules with two minor exceptions and have applied them to the

services covered;

(2) We have asserted our ancillary jurisdiction to extend section

255's coverage to voicemail and interactive menu services and service

providers and equipment used to provide these services;

(3) We have clarified that section 255 applies to each piece of

equipment and all service offerings, but have noted that the industry

has the discretion to determine which accessibility features should be

incorporated in all products and which ones can be less than

universally deployed, so long as all that is readily achievable is

done; and

(4) We have adopted enforcement rules patterned after our long-

standing rules governing complaints filed against common carriers under

section 208 of the Act, with certain modifications we have concluded

are necessary to fulfill the goals of section 255.

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

to the IRFA

93. We noted in the IRFA that the resources of the regulated entity

are taken into account in the determination of whether accessibility of

a given product or service is readily achievable and that there is thus

an inherent consideration of the financial burden on the entity in its

obligation to provide accessibility: if not readily achievable, the

obligation is removed. Nevertheless, we acknowledged that all regulated

entities would be required to assess whether providing accessibility is

readily achievable and that an important issue for RFA purposes is thus

not the absolute cost of providing accessibility, but, rather, the

extent to which the cost of performing an assessment as to whether an

accessibility feature is readily achievable is unduly burdensome on

small entities.

94. We received four comments specifically captioned as being in

response to the IRFA. In its comments to the IRFA, CEMA states that

``the Commission must take all steps necessary to ensure that any

Section 255 implementation rules are not unduly burdensome to small

manufacturers; it should also adopt those rules that serve to minimize

the economic impact of this rulemaking on small entities.'' Lucent's

comments question the apparent conflict between Sec. 1193.43 of the

Access Board's Guidelines and Sec. 68.317 of the Commission's rules

dealing with telephone volume control standards, especially in view of

the Commission's tentative conclusion in the Notice that the Access

Board's Guidelines do not overlap, duplicate or conflict with existing

Commission Rules. Motorola comments that the Fast Track process imposes

a substantial information collection requirement on manufacturers at

each decisional point in the product design, development and

fabrication process. Both Motorola and TIA contend that the cost of

this information collection requirement should be considered as part of

the readily achievable analysis. We believe that the information

collection requirement on manufacturers has been minimized by the

implementation of informal complaint procedures.

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

the Rules Adopted in the Report and Order Will Apply

93. The RFA directs agencies to provide a description and, where

feasible, an estimate of the number of small entities that may be

affected by the rules adopted in the accompanying Report and Order. The

RFA generally defines the term ``small entity'' as having the same

meaning as the terms ``small business,'' ``small organization,'' and

``small governmental jurisdiction.'' In addition, the term ``small

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

under the Small Business Act. A small business concern is one that: (1)

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

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

the Small Business Administration (SBA). A small organization is

generally ``any not-for-profit enterprise which is independently owned

and operated and is not dominant in its field.'' Nationwide, as of

1992, there were approximately 275,801 small organizations.

96. The rules adopted in the Report and Order will apply to

manufacturers of telecommunications equipment and CPE to the extent it

provides telecommunications, voicemail and interactive menu functions.

In addition, telecommunications service providers of many types will be

affected, including wireline common carriers and commercial mobile

radio service (CMRS) providers. To the extent that software performs a

telecommunication function, software developers or manufacturers may

also be affected. We have described and estimated the number of small

entity licensees and other covered entities that may be affected by the

rules adopted in the Report and Order.

97. Equipment Manufacturers. The following chart contains estimated

numbers of domestic entities that may be affected by the rules

promulgated in this proceeding. It is based, in part, on firm counts

that reflect product lines not involved in telecommunications, as

defined by the 1996 Act, and reflects overlapping firm counts and firm

counts that have been deliberately commingled to avoid disclosing the

value of individual firms' equipment shipments for the reporting

period.

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

Estimated

Product class/code Product description firm

count

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

3571...................... Personal computer, terminals and 546

workstations.

3661...................... Telephone and telegraph equipment 540

3663...................... Communications systems and 938

equipment.

[[Page 63245]]

3577...................... Computer peripheral equipment, 259

not elsewhere classified.

3577...................... Parts and subassemblies for 72

computer peripherals and input/

output equipment.

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

98. Software Manufacturers. We sought comment in the IRFA on the

impact of our proposed rules on the small businesses within this

industrial category. No comments on this issue were forthcoming. The

SBA has two small business size standard to be used for software

publishers: (1) Entities that design, develop or produce prepackaged

software have a size standard of $18 million in average annual

revenues; and, (2) entities that sell existing, off-the-shelf

prepackaged software as a finished product have a size standard of 500

employees or less. According to the Software Information Industry

Association (SIIA), there are approximately 8,000 publishers of

packaged software. Of these 8,000, we estimate that only about 500 are

involved in the production of software specific to telecommunications.

We do not have information on the number of these publishers 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 software publishers that would qualify as small

business concerns under the SBA definition. Consequently, we estimate

that there are equal to or fewer than 500 telecommunications software

publishers that will be affected by section 255.

99. Telecommunications Service Entities. The United States Bureau

of the Census reports that, at the end of 1992, there were 3,497 firms

engaged in providing telephone services for at least one year. This

number contains a variety of different categories of carriers,

including LECs, IXCs, CAPs, cellular carriers, other mobile service

carriers, operator service providers, pay telephone providers, personal

communications services (PCS) providers, covered specialized mobile

radio (SMR) providers, and resellers. In the IRFA, we noted 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.'' As an example, we cited a PCS provider that is

affiliated with an IXC having more than 1,500 employees and tentatively

concluded that fewer than 3,497 telephone service firms are small

entity telephone service firms or small incumbent LECs.

100. According to the Telecommunications Industry Revenue:

Telecommunications Relay Service Fund Worksheet Data (TRS Worksheet),

there are 3,604 interstate carriers. These carriers include, inter

alia, LECs, wireline carriers and service providers, IXCs, CAPs,

operator service providers, pay telephone providers, providers of

telephone toll service, providers of telephone exchange service, and

resellers. In the IRFA we sought information regarding how many

providers of telecommunications services, existing and potential, are

considered small businesses. We did not receive comment on this issue,

so we conclude that this data is acceptable to the industry. We noted

that the SBA has defined a small business for Radiotelephone

Communications (SIC 4812) and Telephone Communications, Except

Radiotelephone (SIC 4813), as a small entities having no more than

1,500 employees, and sought comment as to whether this definition is

appropriate for our purposes here. Additionally, we requested that each

commenter identify whether it is a small business under this definition

and, if a subsidiary of another entity, provide this information for

both itself and its parent corporation or entity.

101. Wireline Carriers and Service Providers. The Census Bureau

reports that there were 2,321 such telephone companies in operation for

at least one year at the end of 1992. According to the SBA 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.

102. 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. We noted in

the IRFA that we did not have information regarding which of these

carriers are not independently owned and operated, and thus were unable

to estimate with greater precision the number of wireline carriers and

service providers that would qualify as small business concerns under

the SBA definition. Consequently, we estimated that there are fewer

than 2,295 small telephone communications companies other than

radiotelephone companies.

103. Incumbent Local Exchange Carriers. Neither the Commission nor

the SBA has developed a definition for small providers of local

exchange services. The closest applicable definition under the SBA

rules is for telephone communications companies other than

radiotelephone (wireless) companies. The most reliable source of

information of which we are aware regarding the number of LECs

nationwide appears to be the data that we collect annually in

connection with the TRS Worksheet. According to our most recent data,

1,410 companies reported that they were engaged in the provision of

local exchange 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 LECs that would qualify as small business

concerns under the SBA definition. Consequently, we estimate that there

are equal to or fewer than 1,410 small incumbent LECs. Because the

small incumbent LECs subject to these rules are either dominant in

their field of operations or are not independently owned and operated,

they would be excluded from the definition of ``small entity'' and

``small business concern,'' consistent with our prior practice.

104. Interexchange Carriers. Neither the Commission nor SBA has

developed a definition of small entities specifically applicable to

providers of interexchange services. The closest applicable definition

under the SBA rules is for telephone communications companies except

radiotelephone (wireless) companies. The most reliable source of

information regarding the number of IXCs nationwide is the data that we

collect annually in connection with the TRS Worksheet. According to our

most recent data, 151 companies reported that they were engaged in the

provision of interexchange services. We do not have information on the

number of these carriers that are not independently owned and operated,

or have more than 1,500 employees, and thus we are unable at this time

to estimate with greater precision the number of IXCs that would

qualify as small business concerns under the SBA definition.

Consequently, we estimate that there are equal to or fewer than 151

small entity IXCs.

105. Competitive Access Providers and Competitive Local Exchange

Carriers. Neither the Commission nor SBA has developed a definition of

small entities specifically applicable to providers of competitive

access services (CAPs) and competitive local exchange

[[Page 63246]]

carriers (CLECs). The closest applicable definition under the SBA rules

is for telephone communications companies except radiotelephone

(wireless) companies. The most reliable source of information regarding

the number of CAPs and CLECs nationwide is the data that we collect

annually in connection with the TRS Worksheet. According to our most

recent data, 129 companies reported that they were engaged in the

provision of competitive access services. We do not have information on

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 CAPs and

CLECs that would qualify as small business concerns under the SBA

definition. Consequently, we estimate that there are equal to or fewer

than 129 small CAPs and CLECs.

106. Operator Service Providers. Carriers engaged in providing

interstate operator services from aggregator locations (OSPs) currently

are required under section 226(b)(1)(D) of the Communications Act of

1934, as amended, 47 U.S.C. S 226, to ensure that each aggregator for

which such provider is the presubscribed OSP is in compliance with the

posting required of such aggregator. OSPs also are required under

section 226 to file and maintain informational tariffs at the

Commission. The number of such tariffs on file appears to be the most

reliable source of information of which we are aware regarding the

number of OSPs nationwide, including small business concerns, that will

be affected by decisions and rules adopted in this Second Report and

Order. As of July 12, 1999, approximately 760 carriers had

informational tariffs on file at the Commission. The SBA has developed

a definition of small entities for telecommunications companies other

than radiotelephone (wireless) companies (Telephone Communications,

Except Radiotelephone). According to the SBA's definition, a small

business telephone company other than a radiotelephone company is one

employing no more than 1,500 persons. Although it seems certain that

some of these entities 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 OSPs that would qualify as small

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

that there are fewer than 760 small entity OSPs that may be affected by

the decisions and rules adopted in this Report and Order.

107. Pay Telephone Providers. Neither the Commission, nor SBA has

developed a definition of small entities specifically applicable to pay

telephone providers. The closest applicable definition under SBA rules

is for telephone communications companies except radiotelephone

(wireless) companies. The most reliable source of information regarding

the number of pay telephone providers nationwide is the data that we

collect annually in connection with the TRS Worksheet. According to our

most recent data, 509 companies reported that they were engaged in the

provision of pay telephone services. We do not have information on 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 pay telephone providers

that would qualify as small business concerns under SBA definition.

Consequently, we estimate that there are equal to or fewer than 509

small pay telephone providers.

108. Resellers (Including Debit Card Providers). Neither the

Commission, nor SBA has developed a definition of small entities

specifically applicable to resellers. The closest applicable SBA

definition for a reseller is a telephone communications company except

radiotelephone (wireless) companies. The most reliable source of

information regarding the number of resellers nationwide is the data

that the Commission collects annually in connection with the TRS

Worksheet. According to our most recent data, 369 companies report that

they are engaged in the resale of telephone service. We do not have

information on the number of these carriers that are not independently

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

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

resellers that would qualify as small entities or small incumbent LEC

concerns under the SBA definition. Consequently, we estimate that there

are equal to or fewer than 369 small entity resellers.

109. 800 and 800-Like Service Subscribers. Neither the Commission,

nor the SBA has developed a definition of small entities specifically

applicable to 800 and 800-like service (``toll free'') subscribers. The

most reliable source of information regarding the number of these

service subscribers appears to be data the Commission collects on the

800, 888, and 877 numbers in use. According to our most recent data, at

the end of January 1999, the number of 800 numbers assigned was

7,692,955; the number of 888 numbers that had been assigned was

7,706,393; and the number of 877 numbers assigned was 1,946,538. We do

not have data specifying the number of these subscribers 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 toll free subscribers that would qualify as small business

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

there are fewer than 7,692,955 small entity 800 subscribers, fewer than

7,706,393 small entity 888 subscribers, and fewer than 1,946,538 small

entity 877 subscribers.

110. International Service Providers. The Commission has not

developed a definition of small entities applicable to licensees in the

international services. Therefore, the applicable definition of small

entity is the definition under the SBA rules applicable to

Communications Services, Not Elsewhere Classified (NEC). This

definition provides that a small entity is one with $11.0 million or

less in average annual receipts. According to the Census Bureau, there

were a total of 848 communications services, 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. Many of these

services do not have specified uses and it is uncertain, at this point

in time, whether they will ultimately provide telecommunications

services.

111. International Public Fixed Radio (Public and Control

Stations). Commission records show there are 3 licensees in this

service. We do not request or collect annual revenue information, and

thus are unable to estimate the number of international public fixed

radio licensees that would constitute a small business under the SBA

definition. Consequently, we estimate that there are equal to or fewer

than 3 small entities that are international public fixed radio

licensees.

112. Fixed Satellite Transmit/Receive Earth Stations and Fixed

Satellite Small Transmit/Receive Earth Stations. Based on actual

payments, there are approximately 3,100 earth station authorizations, a

portion of which are Fixed Satellite Transmit/Receive Earth Stations

and a portion of which are Fixed Satellite Small Transmit/Receive Earth

Stations. We do not request or collect annual revenue information, and

thus are unable to estimate the number of the earth stations of either

category that would be owned by a small

[[Page 63247]]

business under the SBA definition. Consequently, we estimate that there

are equal to or fewer than 3,100 small entities that hold such

authorizations.

113. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems.

These stations operate on a primary basis, and frequency coordination

with terrestrial microwave systems is not required. Thus, a single

``blanket'' application may be filed for a specified number of small

antennas and one or more hub stations. The Commission has processed 377

applications. We do not request or collect annual revenue information,

and thus are unable to estimate the number of VSAT systems that would

be owned by a small business under the SBA definition. Consequently, we

estimate that there are equal to or fewer than 377 small entities that

hold such authorizations.

114. Mobile Satellite Earth Stations. There are 11 licensees. We do

not request or collect annual revenue information, and thus are unable

to estimate whether either of these licensees would constitute a small

business under the SBA definition. Consequently, we estimate that there

are 11 or less small entities that hold such licenses.

115. Space Stations (Geostationary). There are 43 space station

licensees. We do not request or collect annual revenue information, and

thus are unable to estimate the number of geostationary space stations

that would be owned by a small business under the SBA definition.

Consequently, we estimate that there are equal to or fewer than 43

small entities that hold such licenses.

116. Space Stations (Non-Geostationary). There are twelve Non-

Geostationary Space Station licensees, of which only two systems are

operational. We do not request or collect annual revenue information,

and thus are unable to estimate the number of non-geostationary space

stations that would be owned by a small business under the SBA

definition. Consequently, we estimate that there are twelve or less

small entities that hold such licenses.

117. Mobile Satellite Services (MSS). Mobile Satellite Services or

Mobile Satellite Earth Stations are intended to be used while in motion

or during halts at unspecified points. These stations operate as part

of a network that includes a fixed hub or stations. The stations that

are capable of transmitting while a platform is moving are included

under section 20.7(c) of the Commission's rules as mobile services

within the meaning of sections 3(27) and 332 of the Communications Act.

Those MSS services are treated as CMRS if they connect to the Public

Switched Network (PSN) and also satisfy other criteria in Section 332.

Facilities provided through a transportable platform that cannot move

when the communications service is offered are excluded from section

20.7(c) of the rules.

118. The MSS networks may provide a variety of land, maritime and

aeronautical voice and data services. There are eight mobile satellite

licensees. At this time, we are unable to make a precise estimate of

the number of small businesses that are mobile satellite earth station

licensees and could be considered CMRS providers of telecommunications

service. Consequently, we estimate that there eight or less small

entities that hold such licenses.

119. Wireless Telecommunications Service Providers. The Commission

has not yet developed a definition of small entities with respect to

the provision of CMRS services. Therefore, for CMRS providers not

falling within any other established SBA category (i.e., Radiotelephone

Communications or Telephone Communications, Except Radiotelephone), the

applicable definition of a small entity would be the SBA definition

applicable to the ``Communications Services, Not Elsewhere

Classified.'' This definition provides that a small entity is one with

$11.0 million or less in average annual receipts. The Census Bureau

estimates indicate that of the 848 firms in the ``Communications

Services, Not Elsewhere Classified'' category, 775 are small

businesses. It is not possible to predict which of these would be small

entities (in absolute terms or by percentage) or to classify the number

of small entities by particular forms of service.

120. Cellular Radio Telephone Service. The Commission has not

developed a definition of small entities specifically applicable to

cellular licensees. Therefore, the applicable definition of a small

entity is the SBA definition applicable to radiotelephone companies,

which provides that a small entity is a radiotelephone company

employing no more than 1,500 persons. The size data provided by SBA do

not enable us to make a meaningful estimate of the number of cellular

providers that are small entities because it combines all

radiotelephone companies with 500 or more employees. We therefore have

used the 1992 Census of Transportation, Communications, and Utilities,

conducted by the Bureau of the Census, which is the most recent

information available. That census shows that only 12 radiotelephone

firms out of a total of 1,178 such firms operating during 1992 had

1,000 or more employees. Therefore, even if all 12 of these large firms

were cellular telephone companies, all of the remainder would be small

businesses under the SBA definition.

121. There are presently 1,758 cellular licenses. However, the

number of cellular licensees is not known, since a single cellular

licensee may own several licenses. In addition, we note that there are

1,758 cellular licenses; however, a cellular licensee may own several

licenses. In addition, according to the most recent Telecommunications

Industry Revenue data, 732 carriers reported that they were engaged in

the provision of either cellular service or Personal Communications

Service (PCS) services, which are placed together in the data. 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 cellular service carriers that would qualify as small

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

that there are 732 or fewer small cellular service carriers that may be

affected by the rules, herein adopted.

122. Broadband Personal Communications Service. 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 their 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 the 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. Based

on this information, we conclude that the number of small broadband PCS

licensees 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

entity PCS providers

[[Page 63248]]

as defined by the SBA and the Commission's auction rules.

123. 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.

124. Specialized Mobile Radio. Pursuant to section 90.814(b)(1) of

the Commission's Rules, the Commission has defined ``small entity'' for

geographic area 800 MHz and 900 MHz SMR licenses as a firm that had

average gross revenues of less than $15 million in the three previous

calendar years. This regulation defining ``small entity'' in the

context of 800 MHz and 900 MHz SMR has been approved by SBA. The rules

promulgated in the Report and Order may apply to SMR providers in the

800 MHz and 900 MHz bands. We do not know how many firms provide 800

MHz or 900 MHz geographic area SMR service, or how many of these

providers have average annual gross revenues of less than $15 million.

125. 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 under the Commission's definition in the

900 MHz auction. Based on this information, we conclude that the number

of geographic area SMR licensees affected by the rules promulgated in

the Report and Order includes these 60 small entities.

126. Based on the auctions held for 800 MHz geographic area SMR

licenses, there are 10 small entities currently holding 38 of the 524

licenses for the upper 200 channels of this service. However, the

Commission 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 to estimate, moreover, how many small entities within

the SBA definition will win these licenses. Given the facts that nearly

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

no reliable estimate of the number of prospective 800 MHz SMR licensees

can be made, we assume, for purposes of our evaluations and conclusions

in this FRFA, that all of the licenses will be awarded to small

entities, as that term is defined by SBA.

127. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service

has both Phase I and Phase II licenses. Phase I licensing was conducted

by lotteries in 1992 and 1993. There are approximately 1,515 such non-

nationwide licensees and four nationwide licensees currently authorized

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

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. This definition

provides that a small entity is a radiotelephone company employing no

more than 1,500 persons. 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 in 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.

128. 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. The SBA has approved these definitions. An

auction of Phase II licenses commenced on September 15, 1998, and

closed on October 22, 1998. Nine hundred and eight (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. A re-auction of the

remaining, unsold licenses was completed on June 30, 1999, wherein 222

of the remaining licenses were sold, but have yet to be licensed.

129. Paging. To ensure the more meaningful participation of small

business entities in the auctions, the Commission adopted a two-tiered

definition of small businesses in the Paging Second Report and Order,

stating that: (1) An entity that, together with affiliates and

controlling interests, 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 interests, has average gross

revenues for the three preceding years of not more than $15 million. In

December 1998, the Small Business Administration approved the two-

tiered size standards for paging services set forth in the Second

Report and Order.

130. MEA and EA Licenses. In the Final Regulatory Flexibility

Analysis incorporated in Appendix C of the Second Report and Order, the

Commission anticipated that approximately 16,630 non-nationwide

geographic area licenses will be auctioned. While we are unable to

predict accurately how many paging licensees meeting one of the above

definitions will participate in or be successful at auction, our Third

CMRS Competition Report estimated that, as of January 1998, there were

more than 600 paging companies in the United States. The Third CMRS

Competition Report also indicates that at least ten of the top twelve

publicly held paging companies had average gross revenues in excess of

$15 million for the three years preceding 1998. The Commission expects

that these ten companies will participate in the paging auction and may

employ the partitioning or disaggregation rules. The Commission also

expects, for purposes of the evaluations and conclusions in this Final

Regulatory Flexibility Analysis, that a number of paging licenses will

be awarded to small businesses, and at least some of those small

business licensees will likely also take advantage of the partitioning

and disaggregation rules. We are unable to predict accurately the

number of small

[[Page 63249]]

businesses that may choose to acquire partitioned or disaggregated MEA

or EA licenses. The Commission expects, however, that entities meeting

one of the above definitions will use partitioning and disaggregation

as a means to obtain a paging license from an MEA or EA licensee at a

cost lower than the cost of the license for the entire MEA or EA.

131. Nationwide Geographic Area Licenses. The partitioning and

disaggregation rules pertaining to nationwide geographic area licenses

will affect the 26 licensees holding nationwide geographic area

licenses to the extent they choose to partition or disaggregate, as

well as any entity that enters into a partitioning or disaggregation

agreement with a nationwide geographic area licensee. No parties,

however, commented on the number of small business nationwide

geographic area licensees that might elect to partition or disaggregate

their licenses and no reasonable estimate can be made. While we are

unable to state accurately how many nationwide geographic area

licensees meet one of the above small business definitions, our Third

CMRS Competition Report indicates that at least eight of the top twelve

publicly held paging companies hold nationwide geographic area licenses

and had average gross revenues in excess of $15 million for the three

years preceding 1998. The Commission expects at least some of these

eight companies to employ the partitioning or disaggregation rules, and

also expects, for the purposes of evaluations and conclusions in this

Final Regulatory Flexibility Analysis, that nationwide geographic area

licensees meeting one of the above definitions may use the partitioning

or disaggregation rules. While we are unable to predict accurately the

number of small businesses that may choose to acquire partitioned or

disaggregated licenses from nationwide geographic area licensees, the

Commission expects, for purposes of the evaluations and conclusions in

the Final Regulatory Flexibility Analysis, that entities meeting one of

the above small business definitions will use partitioning and

disaggregation as a means to obtain a paging license from a nationwide

geographic area licensee.

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

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

Radiotelephone Service, which is defined in Section 22.99 of the

Commission's rules. Accordingly, we will use the SBA 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 under the SBA definition.

133. Local Multipoint Distribution Service (LMDS). LMDS licensees

may use spectrum for any number of services. We anticipate that the

greatest intensity of use will be for either radio telephone or pay

television services. SBA has developed definitions applicable to each

of these services; however, because pay television is not a

telecommunications service subject to section 255, that definition is

not relevant to this FRFA. The Commission has adopted a definition of

small entities applicable to LMDS licensees, which is a new service. In

the LMDS Order we adopted criteria for defining small businesses for

determining bidding credits in the auction, but we believe these

criteria are applicable for evaluating the burdens imposed by section

255. We defined a small business as an entity that, together with

affiliates and controlling principals, has average gross revenues not

exceeding $40 million for the three preceding years. Additionally,

small entities are those which together with their affiliates and

controlling principals, have average gross revenues for the three

preceding years of more than $40 million but not more than $75 million.

This definition has been approved by the SBA. Upon completion of the

LMDS auction, 93 of the 104 bidders qualified as small entities,

smaller businesses, or very small businesses. These 93 bidders won 664

of the 864 licenses. We estimate that all of these 93 bidders would

qualify as small under the SBA definitions, but cannot yet determine

what percentage would be offering telecommunications services subject

to the requirements of section 255.

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

definition of a small entity specific to the Rural Radiotelephone

Service. A significant subset of the Rural Radiotelephone Service is

the Basic Exchange Telephone Radio Systems (BETRS). Thus, 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.

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

fixed, mobile, radiolocation 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. 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 affected

includes these eight entities.

136. 39 GHz Band. In the 39 GHz Band NPRM and Order, we proposed to

define a small business as an entity that, together with its affiliates

and attributable investors, has average gross revenues for the three

preceding years of less than $40 million. We have not yet received

approval by the SBA for this definition. Therefore, the applicable

definition of a small entity is the SBA definition applicable to

radiotelephone companies, which is a radiotelephone company employing

no more than 1,500 persons. As noted previously, the 1992 Census of

Transportation, Communications, and Utilities, conducted by the Bureau

of the Census, shows that only 12 radiotelephone firms out of a total

of 1,178 such firms which operated during 1992 had 1,000 or more

employees. Therefore, a majority of 39 GHz entities providing

radiotelephone services could be small businesses under the SBA

definition, and we assume, for purposes of our evaluation here, that

nearly all of the 39 GHz licensees will be small entities, as that term

is defined by the SBA.

D. Summary of Projected Reporting, Recordkeeping, and Other Compliance

Requirements

137. As we have noted, the objective of section 255 is to give

persons with disabilities increased access to telecommunications. Both

equipment manufacturers and telecommunications service providers are

obligated to provide accessibility for persons with any one or more

different disabilities to the extent that it is readily achievable for

them to do so. In the broadest sense, compliance consists of an on-

going, disciplined, and systematic effort to provide the greatest level

of accessibility.

138. We have declined to adopt suggestions that we require

manufacturers and service providers to establish specific internal

systems and recordkeeping practices for purposes of responding to

section 255 complaints and inquiries or require manufacturers to

maintain public files recording their

[[Page 63250]]

compliance with section 255 and our rules. We see no need to burden

manufacturers and service providers with detailed processing and

reporting requirements which could hinder rather than hasten the

resolution of accessibility disputes. The only reporting requirement

imposed by the rules is that each covered entity designate an agent or

contact whose principal function will be to ensure the manufacturer's

or service provider's prompt receipt and handling of accessibility

concerns raised by consumers or Commission staff. We proposed this

requirement in the Notice, and it received universal support among the

commenters.

E. Steps Taken To Minimize Significant Economic Impact on Small

Entities Consistent with Stated Objectives, and Significant

Alternatives Considered

139. We noted in the IRFA that the resources of the regulated

entity are taken into account in the determination of whether

accessibility of a given product or service is readily achievable and

that there is thus an inherent consideration of the financial burden on

the entity in its obligation to provide accessibility: if not readily

achievable, that obligation is removed. Nevertheless, we acknowledged

that all regulated entities would be required to assess whether

providing accessibility is readily achievable and that an important

issue for RFA purposes is thus not the absolute cost of providing

accessibility, but, rather, the extent to which the cost of performing

an assessment as to whether an accessibility feature is readily

achievable is unduly burdensome on small entities.

140. As early as the Notice of Inquiry, we sought comment on three

possible approaches for implementing and enforcing the provisions of

section 255: (1) Case-by-case determinations; (2) guidelines or a

policy statement; or (3) rules setting forth procedural or performance

requirements intended to promote accessibility. The Notice focused

principally on procedural requirements as a practical, common sense

means to ensure that consumers with disabilities would have access to

telecommunications services and equipment. In the Notice we considered

using case-by-case determinations exclusively, in lieu of any rules,

but tentatively discarded this approach because we believed that in a

rapidly changing market with unpredictable technological breakthroughs,

the slow development of case law would be insufficient to guide covered

entities and to provide an understanding of their accessibility

obligations.

141. We also considered issuing guidelines or a policy statement,

but tentatively discarded this approach, as well, because of our view

that a greater degree of regulatory and administrative certainty would

best serve the interests of both consumers and businesses that must

comply with section 255. Although we acknowledged that a policy

statement might serve the purpose of informing case-by-case

determinations in complaint proceedings and lend some predictability to

the process, we tentatively decided that, in order for accessibility to

be addressed in a pro-active manner, equipment manufacturers and

service providers should have clear expressions of the demands that

section 255 places on their operations before the beginning of the

design process. Therefore, we tentatively concluded that the potential

drawbacks of exclusive reliance on case-by-case determinations as a

means of implementing section 255 would not be sufficiently diminished

by the adoption of guidelines or a policy statement.

142. We also considered and tentatively rejected the option of

promulgating specific performance requirements. Such an approach, under

which the Commission would attempt to establish an array of specific

parameters for features and functions across a broad range of

telecommunications services and equipment, was viewed as potentially

burdensome to covered entities. We also considered it to be fraught

with other potential problems, such as rapid changes in technology,

that would require frequent revision of the performance requirements

and could cause confusion in the telecommunications marketplace. We

tentatively decided that the promulgation of specific rules governing

the design process would also impose burdens on covered entities whose

resources would be better spent in achieving and improving

accessibility.

143. As a result of our tentative decision to rely primarily on

procedural rules, we took several steps in the Notice to minimize the

burdens on all regulated entities. First, we sought to provide

incentives to industry for early and on-going consideration of

accessibility issues by indicating that we would look favorably upon

efforts to implement the Access Board's guidelines by such means as

formalizing self-assessment, external outreach, internal management,

and user information and support to address accessibility issues.

Second, we attempted to unravel the statutory terminology to give

guidance on the interpretation of key language within the

telecommunications context. Third, we proposed a two-phase process for

dealing with section 255 consumer complaints. In the first phase, which

we referred to as the ``fast-track,'' we proposed that Commission staff

be required to refer any complaint or inquiry to the manufacturer or

service provider concerned, who would have a period of five business

days to address the problem. Where fast-track efforts failed to produce

a satisfactory solution, we proposed to apply complaint processes

similar to those used in section 208 complaint proceedings.

144. Although we initially viewed the ``fast-track'' process as an

efficient, consumer-friendly means of dealing with problems associated

with accessibility compliance, parties representing both consumer and

industry interests criticized the proposed mandatory ``fast-track''

mechanism as burdensome and confusing and agreed that our section 208

processes provide an appropriate model for section 255 enforcement.

Hence, in the Report and Order, we decided to abandon the 5-day ``fast

track'' proposal and to adopt rules modeled after our section 208

complaint rules, thus reducing the implicit burden placed on both

consumers and industry alike.

145. Under the procedures adopted by the Report and Order, consumer

complaints filed pursuant to section 255 will be handled through an

informal complaint process where the staff refers complaints to the

manufacturers or service providers involved. The focus at this stage

will be on addressing the accessibility needs of the complainant.

Because the nature or complexity of certain accessibility disputes may

not be susceptible to informal resolution by the disputing parties,

complainants have the option of seeking the formal adjudication of a

problem or dispute with a manufacturer or service provider at any time

pursuant to our existing section 208 complaint rules.

146. As outlined in the Report and Order we have declined to

promulgate specific rules governing the design process, although

certain of the Access Board Guidelines that we have may require

manufacturers to include persons with disabilities in any group testing

performed during the design process.

147. We believe we have reduced regulatory burdens wherever

possible. For burdens imposed by achieving accessibility, the structure

of the statute inherently acknowledges varying degrees of economic

impact. The ``readily achievable'' standard is

[[Page 63251]]

proportional, not absolute, and adjusts the burden of providing

accessible features commensurate with the resources of the covered

entity. For burdens associated with enforcement, we anticipate that the

informal complaint process will significantly reduce the number of

complaints, thus minimizing the burden on all covered entities of

providing a legal defense. Moreover, the range of choices for resolving

complaints is designed to reduce costs to the opposing parties.

Encouraging the use of streamlined, informal complaints or alternative

dispute resolution primarily benefits individual plaintiffs who may be

persons with disabilities with limited financial resources, but should

also enable covered entities to defend themselves at a lower cost.

148. The Commission will forward a copy of the Report and Order,

including this FRFA, in a report to be sent to Congress pursuant to the

Small Business Regulatory Enforcement Fairness Act of 1996. In

addition, the Commission will forward a copy of the Report and Order,

including this FRFA, to the Chief Counsel for Advocacy for the Small

Business Administration. A copy of the Report and Order and FRFA (or

summaries thereof) will also be published in the Federal Register.

VII. Paperwork Reduction Act

149. The decision herein has been analyzed with respect to the

Paperwork Reduction Act of 1995, Public Law 104-13, and the Office of

Management and Budget (``OMB'') has approved some of its information

collection requirements in OMB No. 3060-0833, dated August 4, 1998.

This Order also contains some modified information collection. The

Commission, as part of its continuing effort to reduce paperwork

burdens, invites the general public to comment on the information

collection contained in the Order as required by the Paperwork

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

are due December 20, 1999. Comments should address: (a) Whether the

modified 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 the 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.

VIII. Ordering Clauses

150. The authority contained in sections 1, 2, 4, 201(b), 208,

251(a)(2), 255, and 303(r) of the Communications Act of 1934, as

amended, 47 U.S.C. 151, 152, 154, 201(b), 208, 251(a)(2), 255, 303(r),

this Order IS ADOPTED.

151. It is ordered That 47 C.F.R. part 1 is revised, and parts 6

and 7 are added as set forth below.

152. It is ordered That the Commission's Office of Public affairs

SHALL SEND a copy of this Report and Order, including the FRFA, 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.

153. The Report and Order IS ADOPTED, and the requirements

contained herein will become effective January 28, 2000, expect for

Secs. 6.18 and 7.18, which will become effective upon approval of OMB

of the modified information requirements contained herein. Notice of

that approval will be published in the Federal Register.

List of Subjects in 47 CFR Part 1, 6 and 7

Communications equipment, Individuals with disabilities,

Telecommunications.

Federal Communications Commission.

William F. Caton,

Deputy Secretary.

Rule Changes

For the reasons discussed in the preamble, the Federal

Communications Commission amends 47 CFR chapter I as set forth below:

PART 1--PRACTICE AND PROCEDURE

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

Authority: 47 U.S.C. 1, 154(i), 154 (j), 208, and 255.

2. Section 1.1202 is amended by revising paragraph (d)(2) to read

as follows:

Sec. 1.1202 Definitions.

* * * * *

(d) * * *

(2) Any person who files a complaint which shows that the

complainant has served it on the subject of the complaint or which is a

formal complaint under 47 U.S.C. 208 and Sec. 1.721 or 47 U.S.C. 255

and either Secs. 6.17 or 7.17 of this chapter, and the person who is

the subject of such a complaint that shows service or is a formal

complaint under 47 U.S.C. 208 and Sec. 1.721 or 47 U.S.C. 255 and

either Secs. 6.17 or 7.17 of this chapter;

* * * * *

3. Section 1.1204 is amended by revising paragraph (b)(5) to read

as follows:

Sec. 1.1204 Example ex parte presentations and proceedings.

* * * * *

(b) * * *

(5) An informal complaint proceeding under 47 U.S.C. 208 and

Sec. 1.717 of this chapter or 47 U.S.C. 255 and either Secs. 6.17 or

7.17 of this chapter; and

* * * * *

4. Add part 6 to read as follows:

PART 6--ACCESS TO TELECOMMUNICATIONS SERVICE, TELECOMMUNICATIONS

EQUIPMENT AND CUSTOMER PREMISES EQUIPMENT BY PERSONS WITH

DISABILITIES

Subpart A--Scope--Who Must Comply With These Rules?

6.1 Applicability.

Subpart B--Definitions

6.3 Definitions.

Subpart C--Obligations--What Must Covered Entities Do?

6.5 General obligations.

6.7 Product design, development and evaluation.

6.9 Information pass through.

6.11 Information, documentation and training.

Subpart D--Enforcement

6.15 Generally.

6.16 Informal or formal complaints.

6.17 Informal complaints; form and content.

6.18 Procedure; designation of agents for service.

6.19 Answers to informal complaints.

6.20 Review and disposition of informal complaints.

6.21 Formal complaints, applicability of Secs. 1.720 through 1.736

of this chapter.

6.22 Formal complaints based on unsatisfied informal complaints.

6.23 Actions by the Commission on its own motion.

Authority: 47 U.S.C. 154(i), 154(j), 208, 255.

Subpart A--Scope--Who Must Comply With These Rules?

Sec. 6.1 Applicability.

The rules in this part apply to:

(a) Any provider of telecommunications service;

(b) Any manufacturer of telecommunications equipment or customer

premises equipment; and

(c) Any telecommunications carrier.

[[Page 63252]]

Subpart B--Definitions

Sec. 6.3 Definitions.

(a) The term accessible shall mean that:

(1) Input, control, and mechanical functions shall be locatable,

identifiable, and operable in accordance with each of the following,

assessed independently:

(i) Operable without vision. Provide at least one mode that does

not require user vision.

(ii) Operable with low vision and limited or no hearing. Provide at

least one mode that permits operation by users with visual acuity

between 20/70 and 20/200, without relying on audio output.

(iii) Operable with little or no color perception. Provide at least

one mode that does not require user color perception.

(iv) Operable without hearing. Provide at least one mode that does

not require user auditory perception.

(v) Operable with limited manual dexterity. Provide at least one

mode that does not require user fine motor control or simultaneous

actions.

(vi) Operable with limited reach and strength. Provide at least one

mode that is operable with user limited reach and strength.

(vii) Operable with a Prosthetic Device. Controls shall be operable

without requiring body contact or close body proximity.

(viii) Operable without time-dependent controls. Provide at least

one mode that does not require a response time or allows response time

to be by-passed or adjusted by the user over a wide range.

(ix) Operable without speech. Provide at least one mode that does

not require user speech.

(x) Operable with limited cognitive skills. Provide at least one

mode that minimizes the cognitive, memory, language, and learning

skills required of the user.

(2) All information necessary to operate and use the product,

including but not limited to, text, static or dynamic images, icons,

labels, sounds, or incidental operating cues, comply with each of the

following, assessed independently:

(i) Availability of visual information. Provide visual information

through at least one mode in auditory form.

(ii) Availability of visual information for low vision users.

Provide visual information through at least one mode to users with

visual acuity between 20/70 and 20/200 without relying on audio.

(iii) Access to moving text. Provide moving text in at least one

static presentation mode at the option of the user.

(iv) Availability of auditory information. Provide auditory

information through at least one mode in visual form and, where

appropriate, in tactile form.

(v) Availability of auditory information for people who are hard of

hearing. Provide audio or acoustic information, including any auditory

feedback tones that are important for the use of the product, through

at least one mode in enhanced auditory fashion (i.e., increased

amplification, increased signal-to-noise ratio, or combination).

(vi) Prevention of visually-induced seizures. Visual displays and

indicators shall minimize visual flicker that might induce seizures in

people with photosensitive epilepsy.

(vii) Availability of audio cutoff. Where a product delivers audio

output through an external speaker, provide an industry standard

connector for headphones or personal listening devices (e.g., phone-

like handset or earcup) which cuts off the speaker(s) when used.

(viii) Non-interference with hearing technologies. Reduce

interference to hearing technologies (including hearing aids, cochlear

implants, and assistive listening devices) to the lowest possible level

that allows a user to utilize the product.

(ix) Hearing aid coupling. Where a product delivers output by an

audio transducer which is normally held up to the ear, provide a means

for effective wireless coupling to hearing aids.

(b) The term compatibility shall mean compatible with peripheral

devices and specialized customer premises equipment commonly used by

individuals with disabilities to achieve accessibility to

telecommunications services, and in compliance with the following

provisions, as applicable:

(1) External electronic access to all information and control

mechanisms. Information needed for the operation of products (including

output, alerts, icons, on-line help, and documentation) shall be

available in a standard electronic text format on a cross-industry

standard port and all input to and control of a product shall allow for

real time operation by electronic text input into a cross-industry

standard external port and in cross-industry standard format. The

cross-industry standard port shall not require manipulation of a

connector by the user.

(2) Connection point for external audio processing devices.

Products providing auditory output shall provide the auditory signal at

a standard signal level through an industry standard connector.

(3) TTY connectability. Products which provide a function allowing

voice communication and which do not themselves provide a TTY

functionality shall provide a standard non-acoustic connection point

for TTYs. It shall also be possible for the user to easily turn any

microphone on and off to allow the user to intermix speech with TTY

use.

(4) TTY signal compatibility. Products, including those providing

voice communication functionality, shall support use of all cross-

manufacturer non-proprietary standard signals used by TTYs.

(c) The term customer premises equipment shall mean equipment

employed on the premises of a person (other than a carrier) to

originate, route, or terminate telecommunications.

(d) The term disability shall mean a physical or mental impairment

that substantially limits one or more of the major life activities of

an individual; a record of such an impairment; or being regarded as

having such an impairment.

(e) The term manufacturer shall mean an entity that makes or

produces a product.

(f) The term peripheral devices shall mean devices employed in

connection with equipment covered by this part to translate, enhance,

or otherwise transform telecommunications into a form accessible to

individuals with disabilities.

(g) The term readily achievable shall mean, in general, easily

accomplishable and able to be carried out without much difficulty or

expense. In determining whether an action is readily achievable,

factors to be considered include:

(1) The nature and cost of the action needed;

(2) The overall financial resources of the manufacturer or service

provider involved in the action (the covered entity); the number of

persons employed by such manufacturer or service provider; the effect

on expenses and resources, or the impact otherwise of such action upon

the operations of the manufacturer or service provider;

(3) If applicable, the overall financial resources of the parent of

the entity; the overall size of the business of the parent entity with

respect to the number of its employees; the number, type, and location

of its facilities; and

(4) If applicable, the type of operation or operations of the

covered entity, including the composition, structure and functions of

the workforce of such entity; and the geographic separateness,

administrative or fiscal relationship of the covered entity in question

to the parent entity.

(h) The term specialized customer premises equipment shall mean

[[Page 63253]]

customer premise equipment which is commonly used by individuals with

disabilities to achieve access.

(i) The term telecommunications equipment shall mean equipment,

other than customer premises equipment, used by a carrier to provide

telecommunications services, and includes software integral to such

equipment (including upgrades).

(j) The term telecommunications service shall mean the offering of

telecommunications for a fee directly to the public, or to such classes

of users as to be effectively available directly to the public,

regardless of the facilities used.

(k) The term usable shall mean that individuals with disabilities

have access to the full functionality and documentation for the

product, including instructions, product information (including

accessible feature information), documentation, bills and technical

support which is provided to individuals without disabilities.

Subpart C--Obligations--What Must Covered Entities Do?

Sec. 6.5 General obligations.

(a) Obligation of Manufacturers. (1) A manufacturer of

telecommunications equipment or customer premises equipment shall

ensure that the equipment is designed, developed and fabricated so that

the telecommunications functions of the equipment are accessible to and

usable by individuals with disabilities, if readily achievable.

(2) Whenever the requirements of paragraph (a)(1) of this section

are not readily achievable, the manufacturer shall ensure that the

equipment is compatible with existing peripheral devices or specialized

customer premises equipment commonly used by individuals with

disabilities to achieve access, if readily achievable.

(b) Obligation of Service Providers. (1) A provider of a

telecommunications service shall ensure that the service is accessible

to and usable by individuals with disabilities, if readily achievable.

(2) Whenever the requirements of paragraph (b)(1) of this section

are not readily achievable, the service provider shall ensure that the

service is compatible with existing peripheral devices or specialized

customer premises equipment commonly used by individuals with

disabilities to achieve access, if readily achievable.

(c) Obligation of Telecommunications Carriers. Each

telecommunications carrier must not install network features,

functions, or capabilities that do not comply with the guidelines and

standards established pursuant to this part or part 7 of this chapter.

Sec. 6.7 Product design, development, and evaluation.

(a) Manufacturers and service providers shall evaluate the

accessibility, usability, and compatibility of equipment and services

covered by this part and shall incorporate such evaluation throughout

product design, development, and fabrication, as early and consistently

as possible. Manufacturers and service providers shall identify

barriers to accessibility and usability as part of such a product

design and development process.

(b) In developing such a process, manufacturers and service

providers shall consider the following factors, as the manufacturer

deems appropriate:

(1) Where market research is undertaken, including individuals with

disabilities in target populations of such research;

(2) Where product design, testing, pilot demonstrations, and

product trials are conducted, including individuals with disabilities

in such activities;

(3) Working cooperatively with appropriate disability-related

organizations; and

(4) Making reasonable efforts to validate any unproven access

solutions through testing with individuals with disabilities or with

appropriate disability-related organizations that have established

expertise with individuals with disabilities.

Sec. 6.9 Information pass through.

Telecommunications equipment and customer premises equipment shall

pass through cross-manufacturer, non-proprietary, industry-standard

codes, translation protocols, formats or other information necessary to

provide telecommunications in an accessible format, if readily

achievable. In particular, signal compression technologies shall not

remove information needed for access or shall restore it upon

decompression.

Sec. 6.11 Information, documentation, and training.

(a) Manufacturers and service providers shall ensure access to

information and documentation it provides to its customers, if readily

achievable. Such information and documentation includes user guides,

bills, installation guides for end-user installable devices, and

product support communications, regarding both the product in general

and the accessibility features of the product. Manufacturers shall take

such other readily achievable steps as necessary including:

(1) Providing a description of the accessibility and compatibility

features of the product upon request, including, as needed, in

alternate formats or alternate modes at no additional charge;

(2) Providing end-user product documentation in alternate formats

or alternate modes upon request at no additional charge; and

(3) Ensuring usable customer support and technical support in the

call centers and service centers which support their products at no

additional charge.

(b) Manufacturers and service providers shall include in general

product information the contact method for obtaining the information

required by paragraph (a) of this section.

(c) In developing, or incorporating existing training programs,

manufacturers and service providers, shall consider the following

topics:

(1) Accessibility requirements of individuals with disabilities;

(2) Means of communicating with individuals with disabilities;

(3) Commonly used adaptive technology used with the manufacturer's

products;

(4) Designing for accessibility; and

(5) Solutions for accessibility and compatibility.

Subpart D--Enforcement

Sec. 6.15 Generally.

(a) All manufacturers of telecommunications equipment or customer

premise equipment (CPE) and all providers of telecommunications

services, as defined under this subpart, are subject to the enforcement

provisions specified in the Act and the Commission's rules.

(b) For purposes of Secs. 6.15 through 6.23, the term

``manufacturers'' shall denote manufacturers of telecommunications

equipment or CPE and the term ``providers'' shall denote providers of

telecommunications services.

Sec. 6.16 Informal or formal complaints.

Complaints against manufacturers or providers, as defined under

this subpart, for alleged violations of this subpart may be either

informal or formal.

Sec. 6.17 Informal complaints; form and content.

(a) An informal complaint alleging a violation of section 255 of

the Act or this subpart may be transmitted to the Commission by any

reasonable means, e.g., letter, facsimile transmission, telephone

(voice/TRS/TTY), Internet e-mail, ASCII text, audio-cassette recording,

and braille.

(b) An informal complaint shall include:

[[Page 63254]]

(1) The name and address of the complainant;

(2) The name and address of the manufacturer or provider against

whom the complaint is made;

(3) A full description of the telecommunications equipment or CPE

and/or the telecommunications service about which the complaint is

made;

(4) The date or dates on which the complainant either purchased,

acquired or used, or attempted to purchase, acquire or use the

telecommunications equipment, CPE or telecommunications service about

which the complaint is being made;

(5) A complete statement of the facts, including documentation

where available, supporting the complainant's allegation that: such

telecommunications service, or such telecommunications equipment or

CPE, is not accessible to, or usable by, a person with a particular

disability or persons with disabilities within the meaning of this

subpart and section 255 of the Act; or that the defendant has otherwise

failed to comply with the requirements of this subpart;

(6) The specific relief or satisfaction sought by the complainant,

and

(7) The complainant's preferred format or method of response to the

complaint by the Commission and defendant (e.g., letter, facsimile

transmission, telephone (voice/TRS/TTY), Internet e-mail, ASCII text,

audio-cassette recording, braille; or some other method that will best

accommodate the complainant's disability)

Sec. 6.18 Procedure; designation of agents for service.

(a) The Commission shall promptly forward any informal complaint

meeting the requirements of Sec. 6.17 to each manufacturer and provider

named in or determined by the staff to be implicated by the complaint.

Such manufacturer(s) or provider(s) shall be called on to satisfy or

answer the complaint within the time specified by the Commission.

(b) To ensure prompt and effective service of informal and formal

complaints filed under this subpart, every manufacturer and provider

subject to the requirements of section 255 of the Act and this subpart,

shall designate an agent, and may designate additional agents if it so

chooses, upon whom service may be made of all notices, inquiries,

orders, decisions, and other pronouncements of the Commission in any

matter before the Commission. Such designation shall include, for both

the manufacturer or the provider, a name or department designation,

business address, telephone number, and, if available TTY number,

facsimile number, and Internet e-mail address.

Sec. 6.19 Answers to informal complaints.

Any manufacturer or provider to whom an informal complaint is

directed by the Commission under this subpart shall file an answer

within the time specified by the Commission. The answer shall:

(a) Be prepared or formatted in the manner requested by the

complainant pursuant to Sec. 6.17, unless otherwise permitted by the

Commission for good cause shown;

(b) Describe any actions that the defendant has taken or proposes

to take to satisfy the complaint;

(c) Advise the complainant and the Commission of the nature of the

defense(s) claimed by the defendant;

(d) Respond specifically to all material allegations of the

complaint; and

(e) Provide any other information or materials specified by the

Commission as relevant to its consideration of the complaint.

Sec. 6.20 Review and disposition of informal complaints.

(a) Where it appears from the defendant's answer, or from other

communications with the parties, that an informal complaint has been

satisfied, the Commission may, in its discretion, consider the informal

complaint closed, without response to the complainant or defendant. In

all other cases, the Commission shall inform the parties of its review

and disposition of a complaint filed under this subpart. Where

practicable, this information, the nature of which is specified in

paragraphs (b) through (d) of this section, shall be transmitted to the

complainant and defendant in the manner requested by the complainant,

(e.g., letter, facsimile transmission, telephone (voice/TRS/TTY),

Internet e-mail, ASCII text, audio-cassette recording, or braille).

(b) In the event the Commission determines, based on a review of

the information provided in the informal complaint and the defendant's

answer thereto, that no further action is required by the Commission

with respect to the allegations contained in the informal complaint,

the informal complaint shall be closed and the complainant and

defendant shall be duly informed of the reasons therefor. A complainant

unsatisfied with the defendant's response to the informal complaint and

the staff decision to terminate action on the informal complaint may

file a formal complaint with the Commission, as specified in Sec. 6.22.

(c) In the event the Commission determines, based on a review of

the information presented in the informal complaint and the defendant's

answer thereto, that a material and substantial question remains as to

the defendant's compliance with the requirements of this subpart, the

Commission may conduct such further investigation or such further

proceedings as may be necessary to determine the defendant's compliance

with the requirements of this subpart and to determine what, if any,

remedial actions and/or sanctions are warranted.

(d) In the event that the Commission determines, based on a review

of the information presented in the informal complaint and the

defendant's answer thereto, that the defendant has failed to comply

with or is presently not in compliance with the requirements of this

subpart, the Commission may order or prescribe such remedial actions

and/or sanctions as are authorized under the Act and the Commission's

rules and which are deemed by the Commission to be appropriate under

the facts and circumstances of the case.

Sec. 6.21 Formal complaints, applicability of Secs. 1.720 through

1.736 of this chapter.

Formal complaints against a manufacturer or provider, as defined

under this subpart, may be filed in the form and in the manner

prescribed under Secs. 1.720 through 1.736 of this chapter. Commission

staff may grant waivers of, or exceptions to, particular requirements

under Secs. 1.720 through 1.736 of this chapter for good cause shown;

provided, however, that such waiver authority may not be exercised in a

manner that relieves, or has the effect of relieving, a complainant of

the obligation under Secs. 1.720 and 1.728 of this chapter to allege

facts which, if true, are sufficient to constitute a violation or

violations of section 255 of the Act or this subpart.

Sec. 6.22 Formal complaints based on unsatisfied informal complaints.

A formal complaint filing based on an unsatisfied informal

complaint filed pursuant to Sec. 4.16 of this chapter shall be deemed

to relate back to the filing date of the informal complaint if it is

filed within ninety days from the date that the Commission notifies the

complainant of its disposition of the informal complaint and based on

the same operative facts as those alleged in the informal complaint.

[[Page 63255]]

Sec. 6.23 Actions by the Commission on its own motion.

The Commission may on its own motion conduct such inquiries and

hold such proceedings as it may deem necessary to enforce the

requirements of this subpart and section 255 of the Communications Act.

The procedures to be followed by the Commission shall, unless

specifically prescribed in the Act and the Commission's rules, be such

as in the opinion of the Commission will best serve the purposes of

such inquiries and proceedings.

2. Add part 7 to read as follows:

PART 7--ACCESS TO VOICEMAIL AND INTERACTIVE MENU SERVICES AND

EQUIPMENT BY PEOPLE WITH DISABILITIES

Subpart A--Scope--Who Must Comply With These Rules?

Sec.

7.1 Who must comply with these rules?

Subpart B--Definitions

7.3 Definitions.

Subpart C--Obligations--What Must Covered Entities Do?

7.5 General obligations.

7.7 Product design, development and evaluation.

7.9 Information pass through.

7.11 Information, documentation and training.

Subpart D--Enforcement

7.15 Generally.

7.16 Informal or formal complaints.

7.17 Informal complaints; form and content.

7.18 Procedure; designation of agents for service.

7.19 Answers to informal complaints.

7.20 Review and disposition of informal complaints.

7.21 Formal complaints, applicability of Secs. 1.720 through 1.736

of this chapter.

7.22 Formal complaints based on unsatisfied informal complaints.

7.23 Actions by the Commission on its own motion.

Authority: 47 U.S.C. 1, 154(i), 154(j) 208, and 255.

Subpart A--Scope--Who Must Comply With These Rules?

Sec. 7.1 Who must comply with these rules?

The rules in this part apply to:

(a) Any provider of voicemail or interactive menu service;

(b) Any manufacturer of telecommunications equipment or customer

premises equipment which performs a voicemail or interactive menu

function.

Subpart B--Definitions

Sec. 7.3 Definitions.

(a) The term accessible shall mean that:

(1) Input, control, and mechanical functions shall be locatable,

identifiable, and operable in accordance with each of the following,

assessed independently:

(i) Operable without vision. Provide at least one mode that does

not require user vision.

(ii) Operable with low vision and limited or no hearing. Provide at

least one mode that permits operation by users with visual acuity

between 20/70 and 20/200, without relying on audio output.

(iii) Operable with little or no color perception. Provide at least

one mode that does not require user color perception.

(iv) Operable without hearing. Provide at least one mode that does

not require user auditory perception.

(v) Operable with limited manual dexterity. Provide at least one

mode that does not require user fine motor control or simultaneous

actions.

(vi) Operable with limited reach and strength. Provide at least one

mode that is operable with user limited reach and strength.

(vii) Operable with a Prosthetic Device. Controls shall be operable

without requiring body contact or close body proximity.

(viii) Operable without time-dependent controls. Provide at least

one mode that does not require a response time or allows a response to

be by-passed or adjusted by the user over a wide range.

(ix) Operable without speech. Provide at least one mode that does

not require user speech.

(x) Operable with limited cognitive skills. Provide at least one

mode that minimizes the cognitive, memory, language, and learning

skills required of the user.

(2) All information necessary to operate and use the product,

including but not limited to, text, static or dynamic images, icons,

labels, sounds, or incidental operating cues, comply with each of the

following, assessed independently:

(i) Availability of visual information. Provide visual information

through at least one mode in auditory form.

(ii) Availability of visual information for low vision users.

Provide visual information through at least one mode to users with

visual acuity between 20/70 and 20/200 without relying on audio.

(iii) Access to moving text. Provide moving text in at least one

static presentation mode at the option of the user.

(iv) Availability of auditory information. Provide auditory

information through at least one mode in visual form and, where

appropriate, in tactile form.

(v) Availability of auditory information for people who are hard of

hearing. Provide audio or acoustic information, including any auditory

feedback tones that are important for the use of the product, through

at least one mode in enhanced auditory fashion (i.e., increased

amplification, increased signal-to-noise ratio, or combination).

(vi) Prevention of visually-induced seizures. Visual displays and

indicators shall minimize visual flicker that might induce seizures in

people with photosensitive epilepsy.

(vii) Availability of audio cutoff. Where a product delivers audio

output through an external speaker, provide an industry standard

connector for headphones or personal listening devices (e.g., phone-

like handset or earcup) which cuts off the speaker(s) when used.

(viii) Non-interference with hearing technologies. Reduce

interference to hearing technologies (including hearing aids, cochlear

implants, and assistive listening devices) to the lowest possible level

that allows a user to utilize the product.

(ix) Hearing aid coupling. Where a product delivers output by an

audio transducer which is normally held up to the ear, provide a means

for effective wireless coupling to hearing aids.

(b) The term compatibility shall mean compatible with peripheral

devices and specialized customer premises equipment commonly used by

individuals with disabilities to achieve accessibility to voicemail and

interactive menus, and in compliance with the following provisions, as

applicable:

(1) External electronic access to all information and control

mechanisms. Information needed for the operation of products (including

output, alerts, icons, on-line help, and documentation) shall be

available in a standard electronic text format on a cross-industry

standard port and all input to and control of a product shall allow for

real time operation by electronic text input into a cross-industry

standard external port and in cross-industry standard format. The

cross-industry standard port shall not require manipulation of a

connector by the user.

(2) Connection point for external audio processing devices.

Products providing auditory output shall provide the auditory signal at

a standard signal level through an industry standard connector.

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(3) TTY connectability. Products which provide a function allowing

voice communication and which do not themselves provide a TTY

functionality shall provide a standard non-acoustic connection point

for TTYs. It shall also be possible for the user to easily turn any

microphone on and off to allow the user to intermix speech with TTY

use.

(4) TTY signal compatibility. Products, including those providing

voice communication functionality, shall support use of all cross-

manufacturer non-proprietary standard signals used by TTYs.

(c) The term customer premises equipment shall mean equipment

employed on the premises of a person (other than a carrier) to

originate, route, or terminate telecommunications.

(d) The term disability shall mean a physical or mental impairment

that substantially limits one or more of the major life activities of

an individual; a record of such an impairment; or being regarded as

having such an impairment.

(e) The term interactive menu shall mean a feature that allows a

service provider or operator of CPE to transmit information to a caller

in visual and/or audible format for the purpose of management, control,

or operations of a telecommunications system or service; and/or to

request information from the caller in visual and/or audible format for

the purpose of management, control, or operations of a

telecommunications system or service; and/or to receive information

from the caller in visual and/or audible format in response to a

request, for the purpose of management, control, or operations of a

telecommunications system or service. This feature, however, does not

include the capability for generating, acquiring, storing,

transforming, processing, retrieving, utilizing, or making available

information via telecommunications for any purpose other than

management, control, or operations of a telecommunications system or

service.

(f) The term manufacturer shall mean an entity that makes or

produces a product.

(g) The term peripheral devices shall mean devices employed in

connection with equipment covered by this part to translate, enhance,

or otherwise transform telecommunications into a form accessible to

individuals with disabilities.

(h) The term readily achievable shall mean, in general, easily

accomplishable and able to be carried out without much difficulty or

expense. In determining whether an action is readily achievable,

factors to be considered include:

(1) The nature and cost of the action needed;

(2) The overall financial resources of the manufacturer or service

provider involved in the action (the covered entity); the number of

persons employed by such manufacturer or service provider; the effect

on expenses and resources, or the impact otherwise of such action upon

the operations of the manufacturer or service provider;

(3) If applicable, the overall financial resources of the parent of

the covered entity; the overall size of the business of the parent of

the covered entity with respect to the number of its employees; the

number, type, and location of its facilities; and

(4) If applicable, the type of operation or operations of the

covered entity, including the composition, structure and functions of

the workforce of such entity; and the geographic separateness,

administrative or fiscal relationship of covered entity in question to

the parent entity.

(i) The term specialized customer premises equipment shall mean

customer premise equipment which is commonly used by individuals with

disabilities to achieve access.

(j) The term telecommunications equipment shall mean equipment,

other than customer premises equipment, used by a carrier to provide

telecommunications services, and includes software integral to such

equipment (including upgrades).

(k) The term telecommunications service shall mean the offering of

telecommunications for a fee directly to the public, or to such classes

of users as to be effectively available directly to the public,

regardless of the facilities used.

(l) The term usable shall mean that individuals with disabilities

have access to the full functionality and documentation for the

product, including instructions, product information (including

accessible feature information), documentation, bills and technical

support which is provided to individuals without disabilities.

(m) The term Voicemail shall mean the capability of answering calls

and recording incoming messages when a line is busy or does not answer

within a pre-specified amount of time or number of rings; receiving

those messages at a later time; and may also include the ability to

determine the sender and time of transmission without hearing the

entire message; the ability to forward the message to another voice

massaging customer, with and/or without an appended new message; the

ability for the sender to confirm receipt of a message; the ability to

send, receive, and/or store facsimile messages; and possibly other

features.

Subpart C--Obligations--What Must Covered Entities Do?

Sec. 7.5 General Obligations.

(a) Obligation of Manufacturers. (1) A manufacturer of

telecommunications equipment or customer premises equipment covered by

this part shall ensure that the equipment is designed, developed and

fabricated so that the voicemail and interactive menu functions are

accessible to and usable by individuals with disabilities, if readily

achievable;

(2) Whenever the requirements of paragraph (a)(1) of this section

are not readily achievable, the manufacturer shall ensure that the

equipment is compatible with existing peripheral devices or specialized

customer premises equipment commonly used by individuals with

disabilities to achieve access, if readily achievable.

(b) Obligation of Service Providers. (1) A provider of voicemail or

interactive menu shall ensure that the service is accessible to and

usable by individuals with disabilities, if readily achievable.

(2) Whenever the requirements of paragraph (a)(1) of this section

are not readily achievable, the service provider shall ensure that the

service is compatible with existing peripheral devices or specialized

customer premises equipment commonly used by individuals with

disabilities to achieve access, if readily achievable.

Sec. 7.7 Product design, development, and evaluation.

(a) Manufacturers and service providers shall evaluate the

accessibility, usability, and compatibility of equipment and services

covered by this part and shall incorporate such evaluation throughout

product design, development, and fabrication, as early and consistently

as possible. Manufacturers and service providers shall identify

barriers to accessibility and usability as part of such a product

design and development process.

(b) In developing such a process, manufacturers and service

providers shall consider the following factors, as the manufacturer

deems appropriate:

(1) Where market research is undertaken, including individuals with

disabilities in target populations of such research;

(2) Where product design, testing, pilot demonstrations, and

product trials are conducted, including individuals with disabilities

in such activities;

(3) Working cooperatively with appropriate disability-related

organizations; and

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(4) Making reasonable efforts to validate any unproven access

solutions through testing with individuals with disabilities or with

appropriate disability-related organizations that have established

expertise with individuals with disabilities.

Sec. 7.9 Information pass through.

Telecommunications equipment and customer premises equipment shall

pass through cross-manufacturer, non-proprietary, industry-standard

codes, translation protocols, formats or other information necessary to

provide telecommunications in an accessible format, if readily

achievable. In particular, signal compression technologies shall not

remove information needed for access or shall restore it upon

decompression.

Sec. 7.11 Information, documentation, and training.

(a) Manufacturers and service providers shall ensure access to

information and documentation it provides to its customers, if readily

achievable. Such information and documentation includes user guides,

bills, installation guides for end-user installable devices, and

product support communications, regarding both the product in general

and the accessibility features of the product. Manufacturers shall take

such other readily achievable steps as necessary including:

(1) Providing a description of the accessibility and compatibility

features of the product upon request, including, as needed, in

alternate formats or alternate modes at no additional charge;

(2) Providing end-user product documentation in alternate formats

or alternate modes upon request at no additional charge; and

(3) Ensuring usable customer support and technical support in the

call centers and service centers which support their products at no

additional charge.

(b) Manufacturers and service providers shall include in general

product information the contact method for obtaining the information

required by paragraph (a) of this section.

(c) In developing, or incorporating existing training programs,

manufacturers and service providers shall consider the following

topics:

(1) Accessibility requirements of individuals with disabilities;

(2) Means of communicating with individuals with disabilities;

(3) Commonly used adaptive technology used with the manufacturer's

products;

(4) Designing for accessibility; and

(5) Solutions for accessibility and compatibility.

Subpart D--Enforcement

Sec. 7.15 Generally.

(a) For purposes of Secs. 7.15-7.23 of this subpart, the term

``manufacturers'' shall denote any manufacturer of telecommunications

equipment or customer premises equipment which performs a voicemail or

interactive menu function.

(b) All manufacturers of telecommunications equipment or customer

premise equipment (CPE) and all providers of voicemail and interactive

menu services, as defined under this subpart, are subject to the

enforcement provisions specified in the Act and the Commission's rules.

(c) The term ``providers'' shall denote any provider of voicemail

or interactive menu service.

Sec. 7.16 Informal or formal complaints.

Complaints against manufacturers or providers, as defined under

this subpart, for alleged violations of this subpart may be either

informal or formal.

Sec. 7.17 Informal complaints; form and content.

(a) An informal complaint alleging a violation of section 255 of

the Act or this subpart may be transmitted to the Commission by any

reasonable means, e.g., letter, facsimile transmission, telephone

(voice/TRS/TTY), Internet e-mail, ASCII text, Internet e-mail, audio-

cassette recording, and braille.

(b) An informal complaint shall include:

(1) The name and address of the complainant;

(2) The name and address of the manufacturer or provider against

whom the complaint is made;

(3) A full description of the telecommunications equipment or CPE

and/or the telecommunications service about which the complaint is

made;

(4) The date or dates on which the complainant either purchased,

acquired or used, or attempted to purchase, acquire or use the

telecommunications equipment, CPE or telecommunications service about

which the complaint is being made;

(5) A complete statement of the facts, including documentation

where available, supporting the complainant's allegation that: such

telecommunications service, or such telecommunications equipment or

CPE, is not accessible to, or usable by, a person with a particular

disability or persons with disabilities within the meaning of this

subpart and section 255 of the Act; or that the defendant has otherwise

failed to comply with the requirements of this subpart.

(6) The specific relief or satisfaction sought by the complainant,

and

(7) The complainant's preferred format or method of response to the

complaint by the Commission and defendant (e.g., letter, facsimile

transmission, telephone (voice/TRS/TTY), Internet e-mail, ASCII text,

audio-cassette recording, braille; or some other method that will best

accommodate the complainant's disability).

Sec. 7.18 Procedure; designation of agents for service.

(a) The Commission shall promptly forward any informal complaint

meeting the requirements of Sec. 7.17 to each manufacturer and provider

named in or determined by the staff to be implicated by the complaint.

Such manufacturer(s) or provider(s) shall be called on to satisfy or

answer the complaint within the time specified by the Commission.

(b) To ensure prompt and effective service of informal and formal

complaints filed under this subpart, every manufacturer and provider

subject to the requirements of section 255 of the Act and this subpart,

shall designate an agent, and may designate additional agents if it so

chooses, upon whom service may be made of all notices, inquiries,

orders, decisions, and other pronouncements of the Commission in any

matter before the Commission. Such designation shall include, for both

the manufacturer or the provider, a name or department designation,

business address, telephone number, and, if available TTY number,

facsimile number, and Internet e-mail address.

Sec. 7.19 Answers to informal complaints.

Any manufacturer or p

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