[Federal Register: May 16, 2007 (Volume 72, Number 94)]
[Proposed Rules]
[Page 27519-27535]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16my07-35]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1, 20, and 43
[WC Docket No. 07-38; FCC 07-17]
Development of Nationwide Broadband Data To Evaluate Reasonable
and Timely Deployment of Advanced Services to All Americans,
Improvement of Wireless Broadband Subscribership Data, and Development
of Data on Interconnected Voice Over Internet Protocol (VoIP)
Subscribership
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Commission requests comment about how it
can continue to acquire the information it needs to develop and
maintain appropriate broadband policies. In particular, it seeks
comment on: How best to ensure that it receives sufficient information
about the availability and deployment of broadband services nationwide,
particularly in rural and other hard-to-serve areas; how it can improve
the data about wireless broadband Internet access services that it
currently collects on FCC Form 477; and whether it should modify the
speed-tier information it currently collects. It also requests comment
on how it can best collect information about subscribership to
interconnected voice over Internet Protocol service, or VoIP.
DATES: Comments must be filed on or before June 15, 2007, and reply
comments must be filed on or before July 16, 2007.
ADDRESSES: You may submit comments, identified by WC Docket No. 07-38,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/.
Follow the instructions for submitting comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: fcc504@fcc.gov, phone: 202-418-
0530, or TTY: 202-418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Alan Feldman or Ellen Burton, Wireline
Competition Bureau, Industry Analysis and Technology Division, 202-418-
0940.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM) in WC Docket No. 07-38, released April
16, 2007. The complete text of this document, including attachments, is
available for inspection and copying during normal business hours in
the FCC Reference Center (Room CY-A257), 445 12th Street, SW.,
Washington, DC 20554. It is available on the Commission's Web site:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-17A1.pdf,
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-17A1.doc, and
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-17A1.txt. The
complete text may be purchased from the Commission's copy contractor,
Best Copy and Printing, Inc., 445 12th Street, SW., Room, CY-B402,
Washington, DC 20554, via Web site: http://www.bcpiweb.com or phone:
800-378-3160. When ordering documents from BCPI please provide the
appropriate FCC document number (in this case: FCC 07-17).
Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47
CFR 1.415, 1.419, interested parties may file comments on or before
June 15, 2007 and reply comments on or before July 16, 2007. Comments
may be filed using: (1) the Commission's Electronic Comment Filing
System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3)
by filing paper copies. See Electronic Filing of Documents in
Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking Portal: http://www.regulations.gov. Filers
should follow the instructions provided on the website for submitting
comments.
For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number (in this case: 07-38).
Parties may also submit an electronic comment by Internet e-mail. To
get filing instructions, filers should send an e-mail to ecfs@fcc.gov,
and include the following words in the body of the message, ``get
form.'' A sample form and directions will be sent in response.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
Filings may be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail (although we continue to experience delays in receiving U.S.
Postal Service mail). Paper filings must be addressed to: Marlene H.
Dortch, Secretary; Office of the Secretary; Federal Communications
Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street, SW., Washington DC 20554.
People with Disabilities: To request materials in
accessible formats for people with disabilities (braille, large print,
electronic files, audio format), send an e-mail to fcc504@fcc.gov or
call the Consumer & Governmental Affairs Bureau at 202-418-0530
(voice), 202-418-0432 (TTY).
Comments filed in WC Docket No. 07-38 will be available for public
inspection and copying during business hours at the FCC Reference
Information Center (Room CY-A257), 445 12th Street, SW., Washington, DC
20554. They will also be available via the
[[Page 27520]]
Commission's ECFS: http://www.fcc.gov/cgb/ecfs/.
Initial Paperwork Reduction Act of 1995 Analysis
This document does not contain proposed information collection(s)
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. In addition, therefore, it does not contain any new or modified
``information collection burden for small business concerns with fewer
than 25 employees,'' pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).
Summary of the Notice of Proposed Rulemaking
I. Introduction
1. In this NPRM, the Commission seeks comment about how it can
continue to acquire the information it needs to develop and maintain
appropriate broadband policies. First, the NPRM seeks comment about how
the Commission can best ensure that it receives sufficient information
about the availability and deployment of broadband services nationwide,
particularly in rural and other hard-to-serve areas, including tribal
lands. Second, it seeks comment about how the Commission can improve
the data about wireless broadband Internet access services that it
currently collects on FCC Form 477. Third, it asks whether the
Commission should modify the speed-tier information it currently
collects. Fourth and finally, it seeks comment about how the Commission
can best collect information about subscribership to interconnected
voice over Internet Protocol (interconnected VoIP) service.
2. The NPRM specifically solicits comment about the balance between
the burden of additional data collection and the benefits such
information provides.
II. Background
3. To date, the Commission has based its analysis of nationwide
broadband deployment on three sources of information: data submitted on
FCC Form 477; public comment submitted in response to inquiries
undertaken pursuant to Section 706(b) of the Telecommunications Act of
1996, Public Law 104-104; and ancillary information gathered by
Commission staff from publicly available sources. The Commission
adopted the Form 477 program in 2000, after concluding that the
collected information would materially improve its ability to develop,
evaluate, and revise policy regarding broadband deployment and local
telephone service competition, and provide valuable benchmarks for
Congress, the Commission, other policy makers, and consumers. Pursuant
to the broadband portions of the Form 477, facilities-based providers
of broadband connections list, by state, those Zip Codes in which they
have at least one broadband subscriber. Reporting entities include
incumbent and competitive local exchange carriers (LECs), cable
companies, operators of terrestrial and satellite wireless facilities,
municipalities, and any other facilities-based provider of broadband
connections to end users.
4. The Commission significantly improved the Form 477 in 2004 by
extending the data collection program for five years beyond its
original sunset; eliminating reporting thresholds which effectively
exempted small entities from reporting requirements; requiring more
granular reporting of broadband data, e.g., about services offered at
speeds in excess of 200 kbps, about symmetric xDSL connections as
distinguished from T-1/DS1 and other ``traditional wireline''
connections, and about power line connections; requiring technology-
specific lists of Zip Codes; requiring cable companies to report, by
state, the extent to which cable modem service is available to the
households to whom they can provide cable TV service, and requiring
incumbent LECs to report comparable information about their DSL
connections; and adopting various other modifications. The Commission
acknowledged that mobile broadband services differ in particular
respects from fixed broadband services--noting that the end user of a
mobile wireless broadband service must be within a mobile wireless
broadband service coverage area to make use of the service, but may
move around within and among coverage areas--and made provisions for
such differences in the data collection. The Commission rejected
suggestions to add to the Form 477 questions specifically about VoIP
service, noting that only a very small portion of local telephone
service was being provided by entities exclusively utilizing VoIP and
that LECs may already include information about VoIP subscribers in
their Form 477 filings.
5. Based in large part on analysis of Form 477 data, the
Commission's various reports have demonstrated significant and steady
progress in broadband deployment and availability nationwide.
Reflecting such robust deployment statistics, the Commission's Section
706 reports have consistently concluded that broadband is being
deployed nationwide in a reasonable and timely fashion.
6. A report issued by the United States Government Accountability
Office (GAO), Broadband Deployment Is Extensive throughout the United
States, but It Is Difficult to Assess the Extent of Deployment Gaps in
Rural Areas (May 2006), reviews the strengths and weaknesses of
available data about broadband availability, including FCC Form 477
data. The report concludes that, while broadband deployment is
extensive nationwide, it remains very difficult to assess the extent of
deployment gaps in rural areas. It recommends that, in order to develop
a better understanding of the dynamics of broadband deployment and
availability in rural areas particularly, the Commission should
``develop information regarding the degree of cost and burden that
would be associated with various options for improving the information
about broadband deployment.''
7. Mobile wireless services have developed rapidly since the
Commission revised the Form 477 program in 2004, as nationwide mobile
telephone operators Verizon Wireless, Sprint Nextel, and Cingular, and
some regional wireless carriers such as Alltel, have expanded or
initiated their deployment of Third Generation (or ``3G'') wireless
networks based on the EV-DO and WCDMA/HSDPA standards.
8. Interconnected VoIP subscribership in the United States also
appears to have grown rapidly. In a separate proceeding, the Commission
has explained that the growth of interconnected VoIP services is one of
the changing market conditions that are placing under significant
strain the existing system to preserve and advance universal service,
which is a fundamental goal of communications policy in the United
States.
III. Discussion
9. Notwithstanding the robust statistics and the more granular
broadband data that have been reported on FCC Form 477 beginning
September 1, 2005, the Commission continues to consider the need to
improve its data collection, particularly regarding data reflecting
broadband deployment and availability in rural and other hard-to-serve
areas, and also regarding subscribership to new broadband-enabled
services such as interconnected VoIP service.
10. Broadband Deployment Data. In rural and other hard-to-serve
areas, the Commission questions whether submission of simple Zip Code
information such as that currently required by the Form 477 is
sufficient to provide a truly accurate picture of the state of
broadband deployment.
[[Page 27521]]
Wireline broadband service providers filing Form 477 are currently
required to list those Zip Codes where they have at least one broadband
subscriber. In sparsely populated rural Zip Codes this could mean that
a given provider has just one broadband subscriber who is located in a
small town or at some other location convenient to telephone or cable
facilities. Broadband ``availability'' could be non-existent for that
carrier's other customers located a few blocks or many miles away from
that single customer. Ideally, information would be available about the
choices that a customer faces on a house-by-house and business-by-
business basis. The NPRM discusses several options that might move the
Commission closer to that ideal.
11. Wireless Broadband Data. The Commission believes it should
modify the Form 477 reporting instructions for wireless broadband
providers in certain respects and seeks comment on how best to do so.
12. First, the Commission believes that it should modify the
reporting instructions for terrestrial mobile wireless providers to
solicit data that will enable the Commission to distinguish among the
numbers of subscribers to month-to-month or longer term broadband
Internet access packages and casual users. In the current Form 477,
information about numbers and types of broadband connections is
collected in Part I.A, where filers are directed to ``[c]omplete Part
I.A if you provide one or more lines or wireless channels in the state
that connect end users to the Internet [at broadband speed].'' However,
the detailed reporting instructions for terrestrial mobile wireless
providers are to ``[r]eport the number of subscribers to broadband
services provided over terrestrial mobile wireless facilities * * * .''
More specifically, the instructions are to ``report the number of end
users whose mobile device, such as wireless modem laptop cards,
smartphones, or handsets, are capable of sending or receiving data at
speeds in excess of 200 kbps * * *.'' The Commission finds that it is
currently unable to determine from the reported data the number of
subscribers who make regular use of a broadband Internet access service
as part of their mobile service package. Moreover, the Commission
believes the current instructions make it likely that more and more
mobile voice service subscribers will be reported as mobile broadband
subscribers merely by virtue of purchasing a broadband-capable handset,
rather than a specific Internet plan.
13. The Commission has observed that many mobile data services are
marketed primarily as an add-on to mobile voice service. These services
include mobile data services that enable subscribers to send text and
multimedia messages, download ringtones and games, and access other
content on handsets, as well as mobile data services that enable
subscribers to browse web sites customized for handsets. The Commission
has discussed how mobile service subscribers who wish to browse web
sites customized for handsets generally may choose a month-to-month
plan that includes such browsing, and that some carriers also offer a
casual usage plan. And the Commission has observed that, aside from
handset-based applications, mobile wireless carriers offer month-to-
month Internet access packages for data users who access the Internet
through laptop computers or certain Personal Digital Assistants
(``PDAs''), including mobile wireless Internet access packages for
wireless broadband networks.
14. Based on these observations about various mobile wireless data
services, the NPRM seeks comment on whether the Commission should
revise the Form 477 instructions to require mobile wireless providers
to report, separately, the number of month-to-month (or longer term)
subscriptions to broadband Internet access service designed for
wireless devices that have their own browsers (``full Internet
browsing'' for purposes of this NPRM), such as laptop computers and
PDAs. The NPRM also asks whether the Commission should require mobile
wireless providers to report, separately, the number of month-to-month
(or longer term) subscriptions for broadband-speed browsing of
customized-for-mobile web sites (``mobile web browsing'' for purposes
of this NPRM). Further, the NPRM seeks comment on whether the
Commission should require mobile wireless providers to report,
separately, the number of unique mobile voice service subscribers who
are not month-to-month (or longer term) subscribers to an Internet
access service, as discussed above, but who nevertheless made any news,
music, video, or other entertainment downloads to the subscriber's
handset at broadband speed during the month preceding the Form 477
reporting date (i.e., during June, or during December). The NPRM seeks
specific comment on whether the above-described delineations among
types and levels of service are appropriate in light of market and
technological factors. Commenters should explain how an alternative
approach would ensure that mobile voice service subscribers will not be
reported as mobile broadband subscribers merely by virtue of purchasing
a broadband-capable handset, rather than a specific Internet plan.
15. The NPRM also seeks comment about whether the Commission should
modify any other parts of the Form 477 instructions for mobile wireless
broadband providers. The current instructions direct these providers to
include in their subscriber counts those end users ``whose billing
addresses are within the areas of terrestrial mobile wireless broadband
availability * * *.'' The idea behind this instruction is that end
users should not be reported as broadband subscribers if they are not
generally present in an area where mobile broadband service is
available. While this may become less likely as wireless broadband
networks are more extensively deployed, it appears that some voice
service subscribers are reported as mobile broadband subscribers only
because they have broadband-capable handsets and that this may include
persons who do not reside (or work) where mobile broadband is
available. However, the billing address for some business end users may
not indicate where the broadband Internet access service is primarily
used, i.e., if a single corporate address is the billing address for
subscriptions used by employees working in various areas. Therefore,
the NPRM invites comments on how this particular instruction might be
improved, while keeping in mind that the Commission does not want to
count, as broadband subscribers, mobile voice service subscribers who
have purchased a broadband-capable handset but not an Internet plan.
16. The NPRM also seeks comment about how the Commission could
improve the Form 477 instructions for reporting the percentage of
mobile wireless broadband subscribers who are residential end users.
Experience with the current Form 477 suggests that mobile wireless
broadband providers are not using comparable methodologies to estimate
the residential percentage. In the latest aggregated Form 477 data,
about 11 percent of mobile wireless broadband subscribers are reported
as residential. This percentage may be low, since broadband-capable
handsets are widely available and appear to be an increasingly popular
consumer product. Therefore, the NPRM seeks comment on whether the
Commission should modify the instructions for mobile wireless broadband
providers to require that they report, as residential subscribers, all
subscriptions that are not billed to a
[[Page 27522]]
corporate customer account, to a non-corporate business customer
account, or to a government or institutional account. Would this
modification result in more accurate estimates of residential end users
than the Commission currently receives? Are there different
modifications to the current reporting instructions that would yield
even better estimates? Or, instead, should the Commission explicitly
require providers to undertake special studies for this purpose?
17. Regarding wireless broadband Internet access services more
generally, the NPRM invites comment in three areas. First, it asks
whether, and how, the Commission could modify our Form 477 instructions
to collect useful information about households and businesses who
subscribe to commercially deployed community Wi-Fi broadband Internet
access service, for primary use at the subscriber's residence or
business location. Second, it specifically invites comment on whether
the Commission should add a terrestrial portable (or nomadic) wireless
broadband technology category to the Form 477. Adding this technology
category could provide the Commission with an improved ability to
monitor the development of terrestrial wireless broadband services,
including services over WiMax infrastructures, which need not be used
on a fixed basis but cannot be used while traveling at high speeds with
signal handoff. Third, it seeks comment on whether the Commission needs
to clarify how the Form 477 instructions apply to satellite broadband
capabilities provided by carriers to enterprise customers who operate
their own corporate networks.
18. Speed Tiers. The NPRM seeks comment on whether the Commission
should refine the speed-tier information currently collected on Form
477 by splitting into two tiers the speed tier defined by information
transfer rates greater than 200 kbps and less than 2.5 mbps.
Specifically, would be appropriate to define the lower of the resulting
two tiers by information transfer rates greater than 200 kbps and less
than 1.0 mbps?
19. The NPRM asks whether the Commission should develop a higher or
more varied measurement of broadband speed in the Form 477 program. Do
the current speed-tier definitions enable the Commission to understand
the evolving dynamics of the broadband marketplace as providers offer
faster and faster connections? Would the Commission's understanding of
the rapidly evolving broadband marketplace be enhanced if it raised the
current minimum threshold for reporting the speed-tier information
specified on Form 477 (i.e., greater than 200 kbps in both directions)?
More generally, should the Commission's definition of broadband allow
different upstream and downstream speeds? The NPRM also asks if the
Commission should raise the current minimum threshold for reporting any
connections on the Form 477 (i.e., greater than 200 kbps in at least
one direction, which is generally ``downstream'' to the end user)? Do
services with downstream connection speeds only slightly greater than
200 kbps continue to be an important stepping stone for broadband
adoption by households, including households in rural and other hard-
to-serve areas?
20. The NPRM seeks comment on whether and how the Commission could
establish a system whereby the Form 477 speed tiers would be
automatically adjusted upwards over time to reflect technological
advances. What information would the Commission need to design a
meaningful system? Would the bandwidth requirements of particular
services and applications provide useful guidance? The NPRM
specifically invites comment on the extent to which there is general
industry agreement on the bandwidth requirements of such regularly
cited applications as distance learning, telemedicine, downloading of
movies, latency-sensitive video services, and high definition TV. How
should the Commission account for differences in the bandwidth
requirements of particular applications across different delivery
platforms (e.g., high definition TV requires about half of a 6 MHz
channel on a cable system using 264 QAM modulation and MPEG-2
compression encoding, but about half that bandwidth when MPEG-4
encoding is used)?
21. The NPRM asks whether broadband providers are placing their
reported broadband connections into speed tiers in a consistent manner.
It seeks comment on industry practices for matching advertised ``up
to'' speeds with probable customer experience. The Commission also
wishes to refresh the record on whether the Commission effectively
could modify the Form 477 reporting instructions to require filers to
categorize broadband connections by the download and upload speeds
experienced by actual customers rather than the theoretical maximum
that a given network can support or the particular service
configuration allow. Are there existing, administratively workable
industry standards or practices for measuring typical or actual speeds
delivered to end users?
22. Interconnected VoIP Subscribership Data. At present, only some
LECs include interconnected VoIP subscribers in the local telephone
service information they report on Form 477. Interconnected VoIP
service providers who are not LECs are not required to file Form 477.
Therefore, the NPRM invites comment on how the Commission could modify
the Form 477 to collect useful information about the number of
interconnected VoIP service subscribers in service in the least
burdensome manner. It specifically invites comment on whether
collecting the following state-level information, from all retail and
wholesale providers of interconnected VoIP service, would yield
sufficient information for us to track deployment and adoption of VoIP
service across the nation. The NPRM proposes requiring all retailers of
interconnected VoIP service to report: (1) The number of interconnected
VoIP subscribers in service for whom the filer is the service retailer,
(2) the percentage of retail interconnected VoIP subscribers who are
residential, as opposed to business, end users, and (3) the percentage
of retail interconnected VoIP subscribers who receive that service over
a broadband connection provided by the filer (or by the filer's
affiliate). The NPRM also proposes requiring wholesalers of
interconnected service to report the number of interconnected VoIP
service subscribers the filer serves on a wholesale basis.
23. Proposals for Refining Commission Analysis of Broadband
Deployment and Availability. The NPRM discusses several possible
methods for increasing the Commission's understanding of broadband
deployment and availability. Some approaches for increasing our
understanding of broadband deployment place little or no additional
burdens on data filers but may yield commensurately modest analytic
benefits. Other approaches could yield a more detailed and dynamic
understanding of broadband deployment, some of which could prove to be
costly to data reporters or impractical. The NPRM seeks comment about
whether, and how, data filers should be required to report information
about the prices at which they offer broadband services. It seeks
comment about the technical feasibility, costs and benefits of each of
the approaches discussed below. In order to appropriately analyze the
costs and benefits of each approach/proposal, the Commission seeks
evidence that quantifies the costs of each alternative, including
initial set up costs, recurring
[[Page 27523]]
direct costs and reasonably attributable indirect costs. Commenters
should identify all costs with as much precision as they can and should
identify and analyze the potential benefits that each approach yields.
The Commission also invites commenters to suggest and to explain in
detail alternative methods of data collection beyond those identified
herein.
24. The Commission concluded in 2004 that the benefits to the
policymaking process that derive from requiring all filers--including
smaller entities that serve sparse populations over wide geographical
areas--to report the same data outweigh the reporting burdens on new
Form 477 filers (i.e., entities required to file Form 477 once
mandatory reporting thresholds were eliminated). The Commission
recognized, however, the particular concerns about the reporting
burdens of some smaller carriers, and consequently decided not to
pursue at that time certain options similar to options about which this
NPRM seeks comment. Therefore, this NPRM seeks comment on whether, if
the Commission requires the submission of additional information, it
should require all filers to report those data. The NPRM also invites
comment on ways to mitigate the burden on smaller filers short of
implementing reporting thresholds or other exemptions.
25. Additional Analysis of Current Broadband Subscribership Data.
The NPRM first asks whether the Commission could more closely analyze
the broadband subscribership data it currently collects to identify
more precisely the areas where broadband is not available, particularly
to households. For example, currently available data suggest that about
12 percent of 5-digit geographical Zip Codes have no providers of
primarily residential, wired high-speed Internet access services
delivered over ``last mile'' facilities the provider primarily owns.
These Zip Codes contain about 2 percent of the U.S. population. Should
the Commission simply identify such areas for further, individual
study? For these identified areas, should it analyze the full range of
competitive choices including deployed broadband infrastructure,
service offerings in the marketplace, and service offering prices? How
should the Commission conduct such studies? Do existing data sources
available to the Commission, including the Form 477 data, allow it to
study the needs of discrete communities of users, for example, Native
Americans on tribal lands? Are there better and more fruitful ways to
frame questions about Form 477 data in the context of particular
technologies utilized by broadband providers, for example, providers
using satellite technology?
26. As the Commission considers the possible need for additional
data, it remains vigilant for ways to use the data it has currently as
effectively as possible. GAO worked with a state broadband alliance
(ConnectKentucky) to use their data to troubleshoot Form 477 data
regarding broadband availability in Kentucky. Based on its comparison
analysis, GAO concluded that the Form 477 data ``may overstate the
availability and competitive deployment of nonsatellite broadband.''
Should the Commission explore collaborations, such as the one between
GAO and ConnectKentucky, to troubleshoot its own data or to prepare
discrete state or region-specific reports? How feasible is this given
related costs and company concerns about sharing confidential
information with private/commercial third parties? Would information
developed by collaboration with various third parties be consistent?
Which states have public-private economic development or other
initiatives that have developed comprehensive localized information
about broadband availability? Where such information exists, can it be
shared with the Commission? Where such information does not exist, are
there plans to develop it? For example, might the ConnectKentucky
approach be readily adaptable in other states? In sum, the NPRM invites
comment regarding methods of analyzing currently available data that
could provide better or more focused insights into the dynamics of
broadband deployment and availability nationwide or in particular
geographic regions, in connection with specific technologies, or with
regards to the needs of discrete communities of users.
27. The NPRM seeks comment on ways to better utilize Zip Code data
currently submitted by Form 477 filers. Would requiring filers to
submit customer counts along with Zip Code lists facilitate better
analysis of broadband availability/deployment in specific Zip Codes?
The Commission is skeptical that analysis of customer totals submitted
at the 5-digit level of aggregation could significantly increase our
understanding of the dynamics of broadband availability and deployment,
i.e., because any methodology based on a 5-digit Zip Code aggregation
will continue to yield results that do not accurately depict broadband
availability in particular, localized areas within a Zip Code.
Nevertheless, the NPRM seeks comment on whether such an approach could
be fruitful. In particular, the Commission seeks detailed comment
regarding the costs as well as the benefits of such an approach. It
asks commenting providers to provide projected costs and related
analysis at a level of detail sufficient to support their assertions,
as well as other relevant information. For example, what steps would
providers have to implement to furnish this information per available
network/system technology and personnel and other resources? Do the
characteristics of particular technologies make counting subscribers by
Zip Code problematic and, if so, are there useful substitute approaches
for those technologies? The NPRM asks commenters to estimate separately
the cost for an initial collection, which would presumably entail
certain start-up costs, and the cost of subsequent collections, which
might be able to realize certain efficiencies.
28. The NPRM invites comment on whether the Commission should
require all broadband providers to report the number of residential
customers served (in place of the current requirement to report the
percentage of total broadband connections in service that are
residential connections) and also the number of homes ``passed'' by
their broadband-enabled infrastructure. Collecting both the number of
residential customers served and the number of homes passed by each
Form 477 filer's broadband-enabled infrastructure could enable the
Commission to calculate and compare consumer broadband uptake figures
(i.e., the ratio between adoption and availability). The NPRM seeks
specific comment on how ``passing'' should be defined for this purpose,
for each of the broadband technologies specified in the current Form
477, to enable us meaningfully to compare consumer uptake figures.
29. The NPRM asks generally whether there are other ways in which
the Commission could make better use of the broadband data it currently
collects on Form 477. For example, the semiannual report based on the
Form 477 data includes tables showing how broadband Internet
subscribership varies among 5-digit geographical Zip Codes based on
population density and household incomes. The Commission is able to
develop these tables because a commercial vendor has translated Census
Bureau data (which is not collected by Zip Code) into Zip Code-level
data for those particular variables (i.e., population density and
income). The NPRM invites commenters to identify, with specificity,
comparable commercial products that translate, to the Zip Code level,
Census Bureau
[[Page 27524]]
information about household education, race (including tribal lands),
or disability status, so that the Commission might include in its
semiannual report tables showing how broadband Internet subscribership
varies among Zip Codes based on these demographic variables.
30. The NPRM also invites comment on whether the Commission's
semiannual report should include figures about international broadband
adoption, prices, or other measures that are developed by the
Organization for Economic Cooperation and Development (OECD) or the
International Telecommunications Union (ITU). It asks for comment about
which such figures the Commission should include. Ideally, any such
figures will be published regularly and will be based on comparable
definitions, measurement standards, and reporting practices. The NPRM
asks, in particular, if a regularly published, reliably comparable
figure is available on the cost per bit in leading industrial nations
(for both residential and business customers). More generally, how
could the Commission conduct a regular analysis of broadband policies
in other nations and how their regulatory policies have played out? The
NPRM seeks specific comment on whether and how the Commission should
present such an analysis, e.g., either in its semiannual report or the
less frequent Section 706 report.
31. Subscribers per 9-digit Zip Code. The NPRM seeks comment about
whether the Commission should require Form 477 data filers to submit 9-
digit Zip Codes and associated customer counts. A 9-digit level of
geographic aggregation coupled with such customer information could
provide more granular information about deployment than 5-digit
information. Nevertheless, associated costs could be greater. The NPRM
asks, specifically, whether current Form 477 filers, including any of
their affiliates, or their marketing partners or agents maintain
information about the end-user termination locations (e.g., service
addresses) of wired and fixed wireless broadband connections that
includes the 9-digit Zip Codes of those locations--particularly
information about residential end-user termination locations. If not,
do Form 477 filers maintain billing address information at the 9-digit
Zip Code level, and would such data be a sufficiently accurate proxy
for service location? Do Form 477 filers typically maintain any other
types of information that could be used to identify the 9-digit Zip
Codes of end-user termination locations? The NPRM asks commenters to
undertake the same kind of cost/benefit analysis regarding 9-digit Zip
Code data as discussed in the previous paragraphs, i.e., by discussing
costs associated with implementation and associated potential benefits.
It also seeks comment about whether there is significant value
associated with simply requiring data filers to report lists of 9-digit
Zip Codes where they have at least one customer, but without requiring
associated customer counts by Zip Code.
32. Purchase of Commercial Databases or Services. The NPRM seeks
specific comment regarding the availability of commercial sources of
broadband deployment data or data-processing programs that could
augment or otherwise add value to the Commission's use of Form 477
data, or reduce the associated costs and other burdens imposed on
reporting providers. What existing databases could the Commission
combine productively with the current Form 477 data? Are such databases
accurate, current, and national in scope? The NPRM asks, specifically,
whether the online-search software, and associated databases, that many
broadband providers have developed to allow households to check whether
broadband service is available at their home telephone number, street
address, or Zip Code can readily be adapted to provide localized
broadband deployment information. Do data-processing or consulting
companies exist whose operations or services could add value, or
diminish associated collection burdens? For example, if (as discussed
below) the Commission decides to require additional Zip Code
information (9-digit codes) or subscriber information per Zip Code in
connection with the current Form 477 program, would it be feasible and/
or desirable for a data-processing company, rather than the provider
itself, to add 5-digit or 9-digit Zip Codes to subscriber lists, and to
identify the number of subscribers per Zip Code? Would there be
economies of scope and scale to a region- or nationwide contract that
would make such private assistance affordable to providers? Would such
an approach raise special concerns about confidentially-submitted
company information or consumer privacy, and how could such concerns be
addressed? As the Commission seeks to understand more clearly the cost
to providers of gathering and reporting additional broadband data,
should it also explore engaging commercial data processors to conduct
sample surveys and report sample information? Commenters are encouraged
to carefully consider such approaches to current data augmentation as
well as ways to reduce associated burdens.
33. Geocoded Information about Subscriber Locations. The NPRM also
seeks comment about non-Zip Code based approaches to using subscriber-
based information to more precisely identify the geographic areas where
broadband is deployed, such as requiring providers to report geocoded
information (e.g., latitude and longitude) for the premises of their
subscribers. Requiring subscriber counts by Zip Code could prove to be
the least costly and most feasible change to our Form 477 data
collection, i.e., to most efficiently produce additional information
that would materially advance the Commission's understanding of
broadband availability. Are there other, more exact and accurate means
of attaining that goal? How would such a method of data collection
operate? The NPRM encourages suggestions from commenters that envision
a non-Zip Code based approach to data collection, particularly
alternatives that would yield data that is at least as granular as 9-
digit Zip Code data augmented with customer counts by Zip Code.
34. Develop Automated System of Voluntary Reporting by Non-served
Households. The NPRM also seeks comment about the feasibility and value
of implementing a voluntary self-reporting system by non-served
households, patterned after the National Do-Not-Call Registry. Under
this proposal, non-served households could identify themselves at a
Commission-maintained electronic bulletin board (web page address) and/
or telephone number call-in address where they would provide the
limited information, e.g., home address with (preferably 9-digit) Zip
Code, and the wired or fixed wireless telephone number at that
particular location, that is needed to identify the particular non-
served location. Would such a system be an effective and efficient way
to identify localized areas where broadband services are not available?
Would the reported information be accurate or, for example, might
potential subscribers not be aware of all broadband options available
to them? Would such a system in fact enable the Commission and other
governmental entities to focus (limited) government resources to
encourage broadband availability more efficiently, i.e., by targeting
areas where there is evidence of actual demand for broadband services?
The NPRM seeks comment on the costs and potential benefits of such a
proposal.
[[Page 27525]]
35. Broadband-enabled Service Territory Report by Provider. Each of
the previously discussed approaches relies on broadband subscription as
a proxy for broadband availability. The approaches assume that, in Zip
Codes where none or very few of the residents subscribe to broadband
services, such services are unavailable, and vice versa. As GAO has
found, while broadband infrastructure deployment is extensive,
information about where subscribers are served may not depict with a
high degree of accuracy the local deployment of broadband, especially
in rural areas. Alternatively, the Commission could require data filers
to report information about their customers and the broadband-enabled
service territory--i.e., the specific geographic area, which might
include only parts of particular Zip Codes--where they offer and/or
currently deploy broadband services, particularly residential services.
By collecting and studying such data comparatively, the Commission
could arrive at a far clearer understanding of the actual dynamics of
broadband availability in discrete geographic areas and to different
communities of users. The NPRM seeks comment about the need for and
feasibility of requiring broadband providers to report information that
delineates in detail the boundaries of their broadband-enabled service
territories. What methodologies are available for developing such
information? What requirements would the Commission need to specify to
ensure that providers apply a methodology with enough uniformity to
yield useful information? Terrestrial mobile wireless broadband service
providers are currently required to report Zip Codes that best
represent their coverage areas. Does this standard yield a sufficient
level of detail about the deployment of those services? Are there
alternate or additional reporting requirements that would provide more
useful data on mobile wireless broadband deployment without imposing an
undue burden on the providers? The NPRM asks commenters to undertake
the same kind of cost/benefit analysis discussed earlier with respect
to 5-digit and/or 9-digit Zip Code information, i.e., by discussing
costs associated with implementation and associated potential benefits.
36. While, at present, precise information about the boundaries of
the localized areas where broadband is generally available might be
difficult for certain broadband providers to gauge, results achieved by
broadband mapping initiatives such as those in Kentucky and Wyoming
suggest that the difficulties are not insurmountable. For example,
municipal cable systems and the Kentucky Cable Telecommunications
Association (KCTA) are working with ConnectKentucky to map in fine
detail (e.g., street-by-street, and sometimes block-by-block) the
boundaries of the areas where cable modem broadband is available. The
Kentucky mapping initiative has identified localized areas of DSL
broadband availability by obtaining, from at least some carriers,
detailed location information (i.e., latitude and longitude) for the
carrier's DSL-enabled wire centers and remote terminals, and assuming
that DSL service is available within a 13,200-foot (2.5-mile) radius
around the DSL-enabled equipment. The Kentucky initiative has also
collected detailed facilities information (e.g., latitude and longitude
of towers, type of antenna technology, whether coverage is omni-
directional or partial) from at least some commercial providers of
wireless broadband service. Therefore, the Kentucky experience suggests
that providers can delineate their areas of broadband deployment at
much finer levels of detail than the Zip Code based data now collected
on Form 477. The Commission is also aware that, in localized areas
where broadband is generally available, site-specific factors may
impede availability to individual households. What steps, if any,
should the Commission take to enable providers to report broadband
availability, not by subscriber proxy but by actual territory served
(e.g., a data collection or mapping system)?
37. The NPRM invites comment on whether this approach is feasible
for tribal lands and how it could most effectively be implemented on
tribal lands. As GAO found in its report Challenges to Assessing and
Improving Telecommunications for Native Americans on Tribal Lands
(January 2006), subscribership to Internet-access services (of any
speed) by Native American households on tribal lands is unknown because
no federal survey has been designed to track this information. As GAO
also found, the Commission's Form 477 data cannot be used to determine
the number of residential Internet subscribers on tribal lands. The
NPRM seeks specific comment on how the Commission can best measure
broadband deployment/availability and adoption on tribal lands.
38. Other Alternatives. The NPRM asks whether there are other
alternatives the Commission can explore to better identify the extent
of broadband deployment in rural areas and tribal lands across the
nation.
39. Extrapolating Nationwide Competitive Conditions from Conditions
in Representative Areas. The NPRM invites comment on whether, even if
more granular data cannot reasonably be collected across the entire
country, it would be appropriate and feasible for the Commission to
develop more accurate estimates of the competitive choices in
representative urban, metropolitan, exurban, low-income, tribal, and
rural areas and then use weighted extrapolation techniques to get a
picture of nationwide competitive conditions. It asks whether detailed
infrastructure deployment maps for representative areas could be
developed, based on the location of municipal cable-system facilities
and local exchange carrier DSLAMs, which would give a house-by-house
picture of where those broadband infrastructures are deployed.
40. The NPRM seeks comment on whether the Commission should collect
key demographic information (e.g., income, education, race (including
tribal status), and disability status) about households located in
those parts of the representative areas in which cable modem or DSL
infrastructures have been deployed, to illustrate the relationship
between these factors and broadband adoption. Which demographic
variables should the Commission measure? Does conducting meaningful
analysis require demographic information about individual households?
If it does, could the cable system and/or DSL service provider in the
representative area provide that information? Alternatively, could the
Commission effectively use publicly available Census Bureau detailed
demographic information (which would not identify individual
households)? In general, are there public sources of detailed
demographic information for representative areas? Commenters who are
aware of such sources should identify them with specificity and explain
why they are appropriate to use.
41. The NPRM asks if the Commission should also collect income,
education, and other demographic information about households located
in the parts of the representative areas where broadband
infrastructures have not been deployed, to illustrate the relationship
between these factors and broadband deployment. Which demographic
variables should the Commission measure? Could the cable system and DSL
service provider (or the local exchange carrier, if DSL infrastructure
has not been deployed) provide that information? Would it be more cost
effective or appropriate to use
[[Page 27526]]
demographic information that is publicly available from the Census
Bureau (which does not identify individual households)? Are there
publicly available commercial sources of geographically detailed
demographic data that the Commission could use? The NPRM asks
commenters to identify such sources with specificity and to explain why
they are appropriate to use.
42. The NPRM asks whether collecting detailed information about
deployment of two broadband technologies (i.e., cable modem and DSL)
would be sufficient to inform broadband policy making. Are there any
other broadband technologies for which it is feasible to develop a
house-by-house picture of infrastructure deployment and key household
demographic variables (e.g., income, education, race (including tribal
status), and disability status) in representative areas?
43. The NPRM invites specific comment on how the Commission should
identify particular areas as representative areas, to ensure that
weighted extrapolation techniques will provide a statistically accurate
picture of nationwide competitive conditions. Is there at this time a
known set of such representative areas? If not, what is the Census
Bureau or other source of data that can be used to select specific
areas to represent urban, metropolitan, exurban, low-income, tribal,
and rural areas, respectively? The NPRM asks commenters to identify
that data source, or sources, with specificity and to explain why the
source is appropriate to use. Should the extent of broadband deployment
in an area be taken into account in selecting the representative areas?
If so, how should it be taken into account? As noted above, there is a
detailed broadband deployment mapping initiative underway in Kentucky.
While there are no tribal lands in Kentucky, would it be appropriate
for the Commission to select Kentucky areas to represent each of the
other types of areas (i.e., urban, metropolitan, exurban, low-income,
and rural)?
44. The NPRM asks for comment about how to select a representative
area for tribal lands, in particular. As GAO has found, tribal lands
vary dramatically in size, demographics, and location. GAO conducted
interviews with 26 tribes and 12 Alaska regional native nonprofit
organizations and visited 6 of the tribes that have taken action to
improve their telecommunications. The NPRM seeks comment on whether,
and why, a particular one of the six tribes would be an appropriate
choice for the representative tribal lands area.
45. Price, Broadband Availability, and Consumer Uptake. The NPRM
seeks comment on whether and how the Commission could collect price
information that depicts competitive choice in representative areas.
Would it be sufficient to collect price information only for cable
modem and DSL service options? If so, should the Commission collect
price information for the full range of cable modem and DSL service
options in the representative areas? How should it treat the prices of
introductory offers and bundled services? Should it calculate separate
representative prices for residential and non-residential service
offerings? How should it treat service offerings that appear both in
advertisements for residential services and in advertisements for
business services?
46. The NPRM also asks whether the Commission should modify Form
477 to collect price information from all entities that report
broadband connections. What price information should it collect? Should
it collect the price information at the Zip Code, state, regional, or
national level? What would be an appropriate way to define a region for
this purpose? Should the Commission require filers to estimate and
report the cost of residential broadband services measured as price per
bit?
47. The NPRM seeks specific comment on whether and how the
Commission could provide a deeper understanding of the market for
broadband services by collecting price information and comparing it to
consumer uptake of broadband (i.e., the ratio between adoption and
deployment). Commenters should address how non-price variables found to
be correlated with consumer broadband uptake (e.g., income, education,
race (including tribal lands), and disability status) should be
incorporated into the comparison.
Procedural Matters
Ex Parte Rules. This matter shall be treated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte
rules. 47 CFR 1.1200 et seq. Persons making oral ex parte presentations
are reminded that memoranda summarizing the presentations must contain
summaries of the substance of the presentations and not merely a
listing of the subjects discussed. More than a one- or two-sentence
description of the views and arguments presented generally is required.
47 CFR 1.1206(b)(2). Other requirements pertaining to oral and written
presentations are set forth in Section 1.1206(b) of the Commission's
rules. 47 CFR 1.1206(b).
Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared the present Initial
Regulatory Flexibility Analysis (IRFA) of the possible significant
economic impact on small entities that might result from today's NPRM.
Written public comments are requested on this IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments on the NPRM provided above. The Commission will send a
copy of the NPRM, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration. In addition, the NPRM
and IRFA (or summaries thereof) will be published in the Federal
Register.
A. Need for, and Objectives of, the Proposed Rules
2. In the NPRM, the Commission seeks comment on various proposals
that would deepen and refine its current understanding of broadband
availability and deployment and its understanding of end user adoption
of relatively new broadband-enabled services such as interconnected
VoIP service. The Commission believes that a better understanding would
assist it to adopt policies to promote the deployment of broadband
services. At the same time, it recognizes that certain methods of
collecting more precise data might impose burdens on small entities,
and invites comment on ways to mitigate burdens on smaller entities. In
this regard, the NPRM proposes many methods for collecting further data
and analyzing current data that would impose little or no burden on
small entities whatsoever.
B. Legal Basis
3. The legal basis for any action that may be taken pursuant to the
NPRM is contained in Sections 1-5, 10, 11, 201-205, 215, 218-220, 251-
271, 303(r), 332, 403, 502, and 503 of the Communications Act of 1934,
as amended, 47 U.S.C. 151-155, 160, 161, 201-205, 215, 218-220, 251-
271, 303(r), 332, 403, 502, and 503, and Section 706 of the
Telecommunications Act of 1996, 47 U.S.C. 157 nt.
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules May Apply
4. The RFA directs agencies to provide a description of, and, where
feasible, an estimate of, the number of small entities that may be
affected by
[[Page 27527]]
the proposed rules. The RFA generally defines the term ``small entity''
as having the same meaning as the terms ``small business,'' ``small
organization,'' and ``small governmental jurisdiction.'' In addition,
the term ``small business'' has the same meaning as the term ``small
business concern'' under the Small Business Act. A ``small business
concern'' is one which: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration
(SBA). As discussed in sections D and E below, many of the proposals
contained in the NPRM would not impose any burden whatsoever on small
entities. However, to the extent that other proposals contained in the
NPRM might impact small entities, those possible entities are listed
below. The Commission has perhaps been overbroad in the list of
entities directly affected, below, in an effort to encourage comment.
5. As noted above, in addition to covering small businesses, the
RFA covers small organizations. 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 2002,
there were approximately 1.6 million small organizations. The term
``small governmental jurisdiction'' is defined generally as
``governments of cities, towns, townships, villages, school districts,
or special districts, with a population of less than fifty thousand.''
Census Bureau data for 2002 indicate that there were 87,525 local
governmental jurisdictions in the United States. We estimate that, of
this total, 84,377 entities were ``small governmental jurisdictions.''
Thus, we estimate that most governmental jurisdictions are small.
6. The most reliable source of information regarding the total
numbers of certain common carrier and related providers nationwide, as
well as the number of commercial wireless entities, is the data that
the Commission publishes in its Trends in Telephone Service report. The
SBA has developed small business size standards for wireline and
wireless small businesses within the three commercial census categories
of Wired Telecommunications Carriers, Paging, and Cellular and Other
Wireless Telecommunications. Under these categories, a business is
small if it has 1,500 or fewer employees. Below, using the above size
standards and others, we discuss the total estimated numbers of small
businesses that might be affected by our actions.
7. We have included small incumbent local exchange carriers (LECs)
in this present RFA analysis. As noted above, a ``small business''
under the RFA is one that, inter alia, meets the pertinent small
business size standard (e.g., a telephone communications business
having 1,500 or fewer employees), and ``is not dominant in its field of
operation.'' The SBA's Office of Advocacy contends that, for RFA
purposes, small incumbent LECs are not dominant in their field of
operation because any such dominance is not ``national'' in scope. We
have therefore included small incumbent LECs in this RFA analysis,
although we emphasize that this RFA action has no effect on Commission
analyses and determinations in other, non-RFA contexts.
8. Wireline Carriers and Service Providers. We have included small
incumbent local exchange carriers in this present RFA analysis. As
noted above, a ``small business'' under the RFA is one that, inter
alia, meets the pertinent small business size standard (e.g., a
telephone communications business having 1,500 or fewer employees), and
``is not dominant in its field of operation.'' The SBA's Office of
Advocacy contends that, for RFA purposes, small incumbent local
exchange carriers are not dominant in their field of operation because
any such dominance is not ``national'' in scope. We have therefore
included small incumbent local exchange carriers in this RFA analysis,
although we emphasize that this RFA action has no effect on Commission
analyses and determinations in other, non-RFA contexts.
9. Incumbent Local Exchange Carriers (ILECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to incumbent local exchange
services. The closest applicable size standard under SBA rules is for
Wired Telecommunications Carriers. Under that size standard, such a
business is small if it has 1,500 or fewer employees. According to
Commission data, 1,307 carriers reported that they were engaged in the
provision of local exchange services. Of these 1,307 carriers, an
estimated 1,019 have 1,500 or fewer employees and 288 have more than
1,500 employees. Consequently, the Commission estimates that most
providers of incumbent local exchange service are small businesses that
may be affected by our action.
10. Competitive Local Exchange Carriers (CLECs), Competitive Access
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other
Local Service Providers.'' Neither the Commission nor the SBA has
developed a small business size standard specifically for these service
providers. The appropriate size standard under SBA rules is for the
category Wired Telecommunications Carriers. Under that size standard,
such a business is small if it has 1,500 or fewer employees. According
to Commission data, 859 carriers reported that they were engaged in the
provision of either competitive local exchange carrier or competitive
access provider services. Of these 859 carriers, an estimated 741 have
1,500 or fewer employees and 118 have more than 1,500 employees. In
addition, 16 carriers have reported that they are ``Shared-Tenant
Service Providers,'' and all 16 are estimated to have 1,500 or fewer
employees. In addition, 44 carriers have reported that they are ``Other
Local Service Providers.'' Of the 44, an estimated 43 have 1,500 or
fewer employees and one has more than 1,500 employees. Consequently,
the Commission estimates that most providers of competitive local
exchange service, competitive access providers, ``Shared-Tenant Service
Providers,'' and ``Other Local Service Providers'' are small entities
that may be affected by our action.
11. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 184 carriers have reported
that they are engaged in the provision of local resale services. Of
these, an estimated 181 have 1,500 or fewer employees and three have
more than 1,500 employees. Consequently, the Commission estimates that
the majority of local resellers are small entities that may be affected
by our action.
12. Toll Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 881 carriers have reported
that they are engaged in the provision of toll resale services. Of
these, an estimated 853 have 1,500 or fewer employees and 28 have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of toll resellers are small entities that may be affected by
our action.
13. Payphone Service Providers (PSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
payphone
[[Page 27528]]
services providers. The appropriate size standard under SBA rules is
for the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 657 carriers have reported that they are
engaged in the provision of payphone services. Of these, an estimated
653 have 1,500 or fewer employees and four have more than 1,500
employees. Consequently, the Commission estimates that the majority of
payphone service providers are small entities that may be affected by
our action.
14. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to interexchange services. The closest applicable size
standard under SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees. According to Commission data, 330 companies reported
that their primary telecommunications service activity was the
provision of interexchange services. Of these 330 companies, an
estimated 309 have 1,500 or fewer employees and 21 have more than 1,500
employees. Consequently, the Commission estimates that the majority of
interexchange service providers are small entities that may be affected
by our action.
15. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 23 carriers have reported that
they are engaged in the provision of operator services. Of these, an
estimated 22 have 1,500 or fewer employees and one has more than 1,500
employees. Consequently, the Commission estimates that the majority of
OSPs are small entities that may be affected by our action.
16. Prepaid Calling Card Providers. Neither the Commission nor the
SBA has developed a small business size standard specifically for
prepaid calling card providers. The appropriate size standard under SBA
rules is for the category Telecommunications Resellers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 104 carriers have reported that they are
engaged in the provision of prepaid calling cards. Of these, an
estimated 102 have 1,500 or fewer employees and two have more than
1,500 employees. Consequently, the Commission estimates that the
majority of prepaid calling card providers are small entities that may
be affected by our action.
17. 800 and 800-Like Service Subscribers. Neither the Commission
nor the SBA has developed a small business size standard specifically
for 800 and 800-like service (``toll free'') subscribers. The
appropriate size standard under SBA rules is for the category
Telecommunications Resellers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. The most reliable source
of information regarding the number of these service subscribers
appears to be data the Commission collects on the 800, 888, 877, and
866 numbers in use. According to our data, at the beginning of July
2006, the number of 800 numbers assigned was 7,647,941; the number of
888 numbers assigned was 5,318,667; the number of 877 numbers assigned
was 4,431,162; and the number of 866 numbers assigned was 6,008,976. 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 businesses
under the SBA size standard. Consequently, we estimate that there are
7,647,941 or fewer small entity 800 subscribers; 5,318,667 or fewer
small entity 888 subscribers; 4,431,162 or fewer small entity 877
subscribers; and 5,318,667 or fewer small entity 866 subscribers.
18. Wireless Carriers and Service Providers. Below, for those
services subject to auctions, we note that, as a general matter, the
number of winning bidders that qualify as small businesses at the close
of an auction does not necessarily represent the number of small
businesses currently in service. Also, the Commission does not
generally track subsequent business size unless, in the context of
assignments or transfers, unjust enrichment issues are implicated.
19. Wireless Service Providers. The SBA has developed a small
business size standard for wireless firms within the two broad economic
census categories of ``Paging'' and ``Cellular and Other Wireless
Telecommunications.'' Under both categories, the SBA deems a wireless
business to be small if it has 1,500 or fewer employees. For the census
category of Paging, Census Bureau data for 2002 show that there were
807 firms in this category that operated for the entire year. Of this
total, 804 firms had employment of 999 or fewer employees, and three
firms had employment of 1,000 employees or more. Thus, under this
category and associated small business size standard, the majority of
firms can be considered small. For the census category of Cellular and
Other Wireless Telecommunications, Census Bureau data for 2002 show
that there were 1,397 firms in this category that operated for the
entire year. Of this total, 1,378 firms had employment of 999 or fewer
employees, and 19 firms had employment of 1,000 employees or more.
Thus, under this second category and size standard, the majority of
firms can, again, be considered small.
20. Cellular Licensees. The SBA has developed a small business size
standard for wireless firms within the broad economic census category
``Cellular and Other Wireless Telecommunications.'' Under this SBA
category, a wireless business is small if it has 1,500 or fewer
employees. According to Commission data, 432 carriers reported that
they were engaged in the provision of cellular service, Personal
Communications Service (PCS), or Specialized Mobile Radio (SMR)
Telephony services, which are placed together in the data. We have
estimated that 221 of these are small, under the SBA small business
size standard. Thus, under this category and size standard, about half
of firms can be considered small. This information is also included in
the discussion of Wireless Telephony, below.
21. Common Carrier Paging. The SBA has developed a small business
size standard for Paging, under which a business is small if it has
1,500 or fewer employees. According to Commission data, 365 carriers
have reported that they are engaged in Paging or Messaging Service. Of
these, an estimated 360 have 1,500 or fewer employees, and 5 have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of paging providers are small entities that may be affected by
our action. In addition, in the Paging Third Report and Order, we
developed a small business size standard for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments. A ``small business'' is an entity that, together with its
affiliates and controlling principals, has average gross revenues not
exceeding $15 million for the preceding three years. Additionally, a
``very small business'' is an entity that, together with
[[Page 27529]]
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 small business size standards. An auction of
Metropolitan Economic Area licenses commenced on February 24, 2000, and
closed on March 2, 2000. Of the 985 licenses auctioned, 440 were sold.
Fifty-seven companies claiming small business status won.
22. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses. The Commission established small business size standards for the
wireless communications services (WCS) auction. A ``small business'' is
an entity with average gross revenues of $40 million for each of the
three preceding years, and a ``very small business'' is an entity with
average gross revenues of $15 million for each of the three preceding
years. The SBA has approved these small business size standards. The
Commission auctioned geographic area licenses in the WCS service. In
the auction, held in April 1997, there were seven winning bidders that
qualified as ``very small business'' entities, and one that qualified
as a ``small business'' entity.
23. Wireless Telephony. Wireless telephony includes cellular,
personal communications services (PCS), and specialized mobile radio
(SMR) telephony carriers. As noted earlier, the SBA has developed a
small business size standard for ``Cellular and Other Wireless
Telecommunications'' services. Under that SBA small business size
standard, a business is small if it has 1,500 or fewer employees.
According to Commission data, 432 carriers reported that they were
engaged in the provision of wireless telephony. We have estimated that
221 of these are small under the SBA small business size standard.
24. Broadband Personal Communications Service. The broadband
Personal Communications Service (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission defined ``small entity'' for
Blocks C and F as an entity that has average gross revenues of $40
million or less in the three previous calendar years. For Block F, an
additional classification for ``very small business'' was added and is
defined as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years. These standards defining ``small entity'' in the
context of broadband PCS auctions have been approved by the SBA. No
small businesses, within the SBA-approved small business size standards
bid successfully for licenses in Blocks A and B. There were 90 winning
bidders that qualified as small entities in the Block C auctions. A
total of 93 small and very small business bidders won approximately 40
percent of the 1,479 licenses for Blocks D, E, and F. On March 23,
1999, the Commission re-auctioned 347 C, D, E, and F Block licenses.
There were 48 small business winning bidders. On January 26, 2001, the
Commission completed the auction of 422 C and F Broadband PCS licenses
in Auction No. 35. Of the 35 winning bidders in this auction, 29
qualified as ``small'' or ``very small'' businesses. Subsequent events,
concerning Auction 35, including judicial and agency determinations,
resulted in a total of 163 C and F Block licenses being available for
grant.
25. Narrowband Personal Communications Services. To date, two
auctions of narrowband personal communications services (PCS) licenses
have been conducted. For purposes of the two auctions that have already
been held, ``small businesses'' were entities with average gross
revenues for the prior three calendar years of $40 million or less.
Through these auctions, the Commission has awarded a total of 41
licenses, out of which 11 were obtained by small businesses. To ensure
meaningful participation of small business entities in future auctions,
the Commission has adopted a two-tiered small business size standard in
the Narrowband PCS Second Report and Order. A ``small business'' is an
entity that, together with affiliates and controlling interests, has
average gross revenues for the three preceding years of not more than
$40 million. A ``very small business'' is an entity that, together with
affiliates and controlling interests, has average gross revenues for
the three preceding years of not more than $15 million. The SBA has
approved these small business size standards. In the future, the
Commission will auction 459 licenses to serve Metropolitan Trading
Areas (MTAs) and 408 response channel licenses. There is also one
megahertz of narrowband PCS spectrum that has been held in reserve and
that the Commission has not yet decided to release for licensing. The
Commission cannot predict accurately the number of licenses that will
be awarded to small entities in future actions. However, four of the 16
winning bidders in the two previous narrowband PCS auctions were small
businesses, as that term was defined under the Commission's Rules. The
Commission assumes, for purposes of this analysis, that a large portion
of the remaining narrowband PCS licenses will be awarded to small
entities. The Commission also assumes that at least some small
businesses will acquire narrowband PCS licenses by means of the
Commission's partitioning and disaggregation rules.
26. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
small business size standard for small entities specifically applicable
to such incumbent 220 MHz Phase I licensees. To estimate the number of
such licensees that are small businesses, we apply the small business
size standard under the SBA rules applicable to ``Cellular and Other
Wireless Telecommunications'' companies. Under this category, the SBA
deems a wireless business to be small if it has 1,500 or fewer
employees. The Commission estimates that nearly all such licensees are
small businesses under the SBA's small business size standard.
27. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service
has both Phase I and Phase II licenses. The Phase II 220 MHz service is
a new service, and is subject to spectrum auctions. In the 220 MHz
Third Report and Order, we adopted a small business size standard for
``small'' and ``very small'' businesses for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. This small business size standard indicates that
a ``small business'' is an entity that, together with its affiliates
and controlling principals, has average gross revenues not exceeding
$15 million for the preceding three years. A ``very small business'' is
an entity that, together with its affiliates and controlling
principals, has average gross revenues that do not exceed $3 million
for the preceding three years. The SBA has approved these small
business size standards. Auctions of Phase II licenses commenced on
September 15, 1998, and closed on October 22, 1998. In the first
auction, 908 licenses were auctioned in three different-sized
geographic areas: three nationwide licenses, 30 Regional Economic Area
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908
licenses auctioned, 693 were
[[Page 27530]]
sold. Thirty-nine small businesses won licenses in the first 220 MHz
auction. The second auction included 225 licenses: 216 EA licenses and
9 EAG licenses. Fourteen companies claiming small business status won
158 licenses.
28. 800 MHz and 900 MHz Specialized Mobile Radio Licensees. The
Commission awards ``small entity'' and ``very small entity'' bidding
credits in auctions for Specialized Mobile Radio (SMR) geographic area
licenses in the 800 MHz and 900 MHz bands to firms that had revenues of
no more than $15 million in each of the three previous calendar years,
or that had revenues of no more than $3 million in each of the previous
calendar years, respectively. These bidding credits apply to SMR
providers in the 800 MHz and 900 MHz bands that either hold geographic
area licenses or have obtained extended implementation authorizations.
The Commission does not know how many firms provide 800 MHz or 900 MHz
geographic area SMR service pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of
no more than $15 million. One firm has over $15 million in revenues.
The Commission assumes, for purposes here, that all of the remaining
existing extended implementation authorizations are held by small
entities, as that term is defined by the SBA. The Commission has held
auctions for geographic area licenses in the 800 MHz and 900 MHz SMR
bands. There were 60 winning bidders that qualified as small or very
small entities in the 900 MHz SMR auctions. Of the 1,020 licenses won
in the 900 MHz auction, bidders qualifying as small or very small
entities won 263 licenses. In the 800 MHz auction, 38 of the 524
licenses won were won by small and very small entities.
29. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order,
we adopted a small business size standard for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments. A ``small business'' 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 an entity that, together with its affiliates
and controlling principals, has average gross revenues that are not
more than $3 million for the preceding three years. An auction of 52
Major Economic Area (MEA) licenses commenced on September 6, 2000, and
closed on September 21, 2000. Of the 104 licenses auctioned, 96
licenses were sold to nine bidders. Five of these bidders were small
businesses that won a total of 26 licenses. A second auction of 700 MHz
Guard Band licenses commenced on February 13, 2001 and closed on
February 21, 2001. All eight of the licenses auctioned were sold to
three bidders. One of these bidders was a small business that won a
total of two licenses.
30. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service. A significant subset of the Rural Radiotelephone Service is
the Basic Exchange Telephone Radio System (BETRS). The Commission uses
the SBA's small business size standard applicable to ``Cellular and
Other Wireless Telecommunications,'' i.e., an entity employing no more
than 1,500 persons. There are approximately 1,000 licensees in the
Rural Radiotelephone Service, and the Commission estimates that there
are 1,000 or fewer small entity licensees in the Rural Radiotelephone
Service that may be affected by the rules and policies adopted herein.
31. Air-Ground Radiotelephone Service. The Commission has not
adopted a small business size standard specific to the Air-Ground
Radiotelephone Service. We will use SBA's small business size standard
applicable to ``Cellular and Other Wireless Telecommunications,'' i.e.,
an entity employing no more than 1,500 persons. There are approximately
100 licensees in the Air-Ground Radiotelephone Service, and we estimate
that almost all of them qualify as small under the SBA small business
size standard.
32. Aviation and Marine Radio Services. Small businesses in the
aviation and marine radio services use a very high frequency (VHF)
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator
transmitter. The Commission has not developed a small business size
standard specifically applicable to these small businesses. For
purposes of this analysis, the Commission uses the SBA small business
size standard for the category ``Cellular and Other
Telecommunications,'' which is 1,500 or fewer employees. Most
applicants for recreational licenses are individuals. Approximately
581,000 ship station licensees and 131,000 aircraft station licensees
operate domestically and are not subject to the radio carriage
requirements of any statute or treaty. For purposes of our evaluations
in this analysis, we estimate that there are up to approximately
712,000 licensees that are small businesses (or individuals) under the
SBA standard. In addition, between December 3, 1998 and December 14,
1998, the Commission held an auction of 42 VHF Public Coast licenses in
the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz
(coast transmit) bands. For purposes of the auction, the Commission
defined a ``small'' business as an entity that, together with
controlling interests and affiliates, has average gross revenues for
the preceding three years not to exceed $15 million dollars. In
addition, a ``very small'' business is one that, together with
controlling interests and affiliates, has average gross revenues for
the preceding three years not to exceed $3 million dollars. There are
approximately 10,672 licensees in the Marine Coast Service, and the
Commission estimates that almost all of them qualify as ``small''
businesses under the above special small business size standards.
33. Fixed Microwave Services. Fixed microwave services include
common carrier, private operational-fixed, and broadcast auxiliary
radio services. At present, there are approximately 22,015 common
carrier fixed licensees and 61,670 private operational-fixed licensees
and broadcast auxiliary radio licensees in the microwave services. The
Commission has not created a size standard for a small business
specifically with respect to fixed microwave services. For purposes of
this analysis, the Commission uses the SBA small business size standard
for the category ``Cellular and Other Telecommunications,'' which is
1,500 or fewer employees. The Commission does not have data specifying
the number of these licensees that have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of fixed microwave service licensees that would qualify as small
business concerns under the SBA's small business size standard.
Consequently, the Commission estimates that there are up to 22,015
common carrier fixed licensees and up to 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in the
microwave services that may be small and may be affected by the rules
and policies adopted herein. We noted, however, that the common carrier
microwave fixed licensee category includes some large entities.
34. Offshore Radiotelephone Service. This service operates on
several UHF television broadcast channels that are not used for
television broadcasting in the coastal areas of states bordering the
[[Page 27531]]
Gulf of Mexico. There are presently approximately 55 licensees in this
service. We are unable to estimate at this time the number of licensees
that would qualify as small under the SBA's small business size
standard for ``Cellular and Other Wireless Telecommunications''
services. Under that SBA small business size standard, a business is
small if it has 1,500 or fewer employees.
35. 39 GHz Service. The Commission created a special small business
size standard for 39 GHz licenses--an entity that has average gross
revenues of $40 million or less in the three previous calendar years.
An additional size standard for ``very small business'' is: an entity
that, together with affiliates, has average gross revenues of not more
than $15 million for the preceding three calendar years. The SBA has
approved these small business size standards. The auction of the 2,173
39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The
18 bidders who claimed small business status won 849 licenses.
Consequently, the Commission estimates that 18 or fewer 39 GHz
licensees are small entities that may be affected by our action.
36. Multipoint Distribution Service, Multichannel Multipoint
Distribution Service, and ITFS. Multichannel Multipoint Distribution
Service (MMDS) systems, often referred to as ``wireless cable,''
transmit video programming to subscribers using the microwave
frequencies of the Multipoint Distribution Service (MDS) and
Instructional Television Fixed Service (ITFS). In connection with the
1996 MDS auction, the Commission established a small business size
standard as an entity that had annual average gross revenues of less
than $40 million in the previous three calendar years. The MDS auctions
resulted in 67 successful bidders obtaining licensing opportunities for
493 Basic Trading Areas (BTAs). Of the 67 auction winners, 61 met the
definition of a small business. MDS also includes licensees of stations
authorized prior to the auction. In addition, the SBA has developed a
small business size standard for Cable and Other Program Distribution,
which includes all such companies generating $13.5 million or less in
annual receipts. According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year. Of this total, 1,087 firms had annual receipts of under $10
million, and 43 firms had receipts of $10 million or more but less than
$25 million. Consequently, we estimate that the majority of providers
in this service category are small businesses that may be affected by
the rules and policies adopted herein. This SBA small business size
standard also appears applicable to ITFS. There are presently 2,032
ITFS licensees. All but 100 of these licenses are held by educational
institutions. Educational institutions are included in this analysis as
small entities. Thus, we tentatively conclude that at least 1,932
licensees are small businesses.
37. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (LMDS) is a fixed broadband point-to-multipoint
microwave service that provides for two-way video telecommunications.
The auction of the 1,030 Local Multipoint Distribution Service (LMDS)
licenses began on February 18, 1998 and closed on March 25, 1998. The
Commission established a small business size standard for LMDS licenses
as an entity that has average gross revenues of less than $40 million
in the three previous calendar years. An additional small business size
standard for ``very small business'' was added as an entity that,
together with its affiliates, has average gross revenues of not more
than $13.5 million for the preceding three calendar years. The SBA has
approved these small business size standards in the context of LMDS
auctions. There were 93 winning bidders that qualified as small
entities in the LMDS auctions. A total of 93 small and very small
business bidders won approximately 277 A Block licenses and 387 B Block
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses;
there were 40 winning bidders. Based on this information, we conclude
that the number of small LMDS licenses consists of the 93 winning
bidders in the first auction and the 40 winning bidders in the re-
auction, for a total of 133 small entity LMDS providers. The license
terms require the licensees to build their wireless facilities within
ten years of the grant. As a result, more information on the licensees
will become available in the year 2008, when the licensees are required
to show the Commission that they have achieved substantial service as
part of the application renewal process.
38. 218-219 MHz Service. The first auction of 218-219 MHz spectrum
resulted in 170 entities winning licenses for 594 Metropolitan
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by
entities qualifying as a small business. For that auction, the small
business size standard was an entity that, together with its
affiliates, has no more than a $6 million net worth and, after federal
income taxes (excluding any carry over losses), has no more than $2
million in annual profits each year for the previous two years. In the
218-219 MHz Report and Order and Memorandum Opinion and Order, we
established a small business size standard for a ``small business'' as
an entity that, together with its affiliates and persons or entities
that hold interests in such an entity and their affiliates, has average
annual gross revenues not to exceed $15 million for the preceding three
years. A ``very small business'' is defined as an entity that, together
with its affiliates and persons or entities that hold interests in such
an entity and its affiliates, has average annual gross revenues not to
exceed $3 million for the preceding three years. These size standards
will be used in future auctions of 218-219 MHz spectrum.
39. 24 GHz--Incumbent Licensees. This analysis may affect incumbent
licensees who were relocated to the 24 GHz band from the 18 GHz band,
and applicants who wish to provide services in the 24 GHz band. The
applicable SBA small business size standard is that of ``Cellular and
Other Wireless Telecommunications'' companies. This category provides
that such a company is small if it employs no more than 1,500 persons.
We believe that there are only two licensees in the 24 GHz band that
were relocated from the 18 GHz band, Teligent and TRW, Inc. It is our
understanding that Teligent and its related companies have less than
1,500 employees, though this may change in the future. TRW is not a
small entity. Thus, only one incumbent licensee in the 24 GHz band is a
small business entity.
40. 24 GHz--Future Licensees. With respect to new applicants in the
24 GHz band, the small business size standard for ``small business'' is
an entity that, together with controlling interests and affiliates, has
average annual gross revenues for the three preceding years not in
excess of $15 million. ``Very small business'' in the 24 GHz band is an
entity that, together with controlling interests and affiliates, has
average gross revenues not exceeding $3 million for the preceding three
years. The SBA has approved these small business size standards. These
size standards will apply to the future auction, if held.
41. Satellite Telecommunications and Other Telecommunications.
There is no small business size standard developed specifically for
providers of international service. The appropriate size standards
under SBA rules are for the two broad census categories of ``Satellite
Telecommunications'' and ``Other Telecommunications.'' Under both
categories, such a business is small
[[Page 27532]]
if it has $13.5 million or less in average annual receipts.
42. The first category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing point-to-point
telecommunications services to other establishments in the
telecommunications and broadcasting industries by forwarding and
receiving communications signals via a system of satellites or
reselling satellite telecommunications.'' For this category, Census
Bureau data for 2002 show that there were a total of 371 firms that
operated for the entire year. Of this total, 307 firms had annual
receipts of under $10 million, and 26 firms had receipts of $10 million
to $24,999,999. Consequently, we estimate that the majority of
Satellite Telecommunications firms are small entities that might be
affected by our action.
43. The second category of Other Telecommunications ``comprises
establishments primarily engaged in (1) providing specialized
telecommunications applications, such as satellite tracking,
communications telemetry, and radar station operations; or (2)
providing satellite terminal stations and associated facilities
operationally connected with one or more terrestrial communications
systems and capable of transmitting telecommunications to or receiving
telecommunications from satellite systems.'' For this category, Census
Bureau data for 2002 show that there were a total of 332 firms that
operated for the entire year. Of this total, 259 firms had annual
receipts of under $10 million and 15 firms had annual receipts of $10
million to $24,999,999. Consequently, we estimate that the majority of
Other Telecommunications firms are small entities that might be
affected by our action.
44. Cable and OVS Operators. In addition to the estimates provided
above, we consider certain additional entities that may be affected by
the data collection from broadband service providers. Because Section
706 requires us to monitor the deployment of broadband regardless of
technology or transmission media employed, we anticipate that some
broadband service providers will not provide telephone service.
Accordingly, we describe below other types of firms that may provide
broadband services, including cable companies, MDS providers, and
utilities, among others.
45. Cable and Other Program Distribution. The Census Bureau defines
this category as follows: ``This industry comprises establishments
primarily engaged as third-party distribution systems for broadcast
programming. The establishments of this industry deliver visual, aural,
or textual programming received from cable networks, local television
stations, or radio networks to consumers via cable or direct-to-home
satellite systems on a subscription or fee basis. These establishments
do not generally originate programming material.'' The SBA has
developed a small business size standard for Cable and Other Program
Distribution, which is: all such firms having $13.5 million or less in
annual receipts. According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year. Of this total, 1,087 firms had annual receipts of under $10
million, and 43 firms had receipts of $10 million or more but less than
$25 million. Thus, under this size standard, the majority of firms can
be considered small.
46. Cable Companies and Systems. The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide. Industry data
indicate that, of 1,076 cable operators nationwide, all but eleven are
small under this size standard. In addition, under the Commission's
rules, a ``small system'' is a cable system serving 15,000 or fewer
subscribers. Industry data indicate that, of 7,208 systems nationwide,
6,139 systems have under 10,000 subscribers, and an additional 379
systems have 10,000-19,999 subscribers. Thus, under this second size
standard, most cable systems are small.
47. Cable System Operators. The Communications Act of 1934, as
amended, also contains a size standard for small cable system
operators, which is ``a cable operator that, directly or through an
affiliate, serves in the aggregate fewer than 1 percent of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' The Commission has determined that an operator serving
fewer than 677,000 subscribers shall be deemed a small operator, if its
annual revenues, when combined with the total annual revenues of all
its affiliates, do not exceed $250 million in the aggregate. Industry
data indicate that, of 1,076 cable operators nationwide, all but ten
are small under this size standard. We note that the Commission neither
requests nor collects information on whether cable system operators are
affiliated with entities whose gross annual revenues exceed $250
million, and therefore we are unable to estimate more accurately the
number of cable system operators that would qualify as small under this
size standard.
48. Open Video Services. Open Video Service (OVS) systems provide
subscription services. As noted above, the SBA has created a small
business size standard for Cable and Other Program Distribution. This
standard provides that a small entity is one with $13.5 million or less
in annual receipts. The Commission has certified approximately 45 OVS
operators to serve 75 areas, and some of these are currently providing
service. Affiliates of Residential Communications Network, Inc. (RCN)
received approval to operate OVS systems in New York City, Boston,
Washington, DC, and other areas. RCN has sufficient revenues to assure
that they do not qualify as a small business entity. Little financial
information is available for the other entities that are authorized to
provide OVS and are not yet operational. Given that some entities
authorized to provide OVS service have not yet begun to generate
revenues, the Commission concludes that up to 44 OVS operators (those
remaining) might qualify as small businesses that may be affected by
the rules and policies adopted herein.
49. Electric Power Generation, Transmission and Distribution. The
Census Bureau defines this category as follows: ``This industry group
comprises establishments primarily engaged in generating, transmitting,
and/or distributing electric power. Establishments in this industry
group may perform one or more of the following activities: (1) Operate
generation facilities that produce electric energy; (2) operate
transmission systems that convey the electricity from the generation
facility to the distribution system; and (3) operate distribution
systems that convey electric power received from the generation
facility or the transmission system to the final consumer.'' The SBA
has developed a small business size standard for firms in this
category: ``A firm is small if, including its affiliates, it is
primarily engaged in the generation, transmission, and/or distribution
of electric energy for sale and its total electric output for the
preceding fiscal year did not exceed 4 million megawatt hours.''
According to Census Bureau data for 2002, there were 1,644 firms in
this category that operated for the entire year. Census data do not
track electric output and we have not determined how many of these
firms fit the SBA size standard for small, with no more than 4 million
megawatt hours of electric output. Consequently, we
[[Page 27533]]
estimate that 1,644 or fewer firms may be considered small under the
SBA small business size standard.
50. Internet Service Providers. The SBA has developed a small
business size standard for Internet Service Providers (ISPs). ISPs
``provide clients access to the Internet and generally provide related
services such as web hosting, web page designing, and hardware or
software consulting related to Internet connectivity.'' Under the SBA
size standard, such a business is small if it has average annual
receipts of $23 million or less. According to Census Bureau data for
2002, there were 2,529 firms in this category that operated for the
entire year. Of these, 2,437 firms had annual receipts of under $10
million, and an additional 47 firms had receipts of between $10 million
and $24,999,999. Consequently, we estimate that the majority of these
firms are small entities that may be affected by our action.
51. Web Search Portals. Our action pertains to VoIP services, which
could be provided by entities that provide other services such as e-
mail, online gaming, web browsing, video conferencing, instant
messaging, and other, similar IP-enabled services. The Commission has
not adopted a size standard for entities that create or provide these
types of services or applications. However, the Census Bureau has
identified firms that ``operate web sites that use a search engine to
generate and maintain extensive databases of Internet addresses and
content in an easily searchable format. Web search portals often
provide additional Internet services, such as e-mail, connections to
other web sites, auctions, news, and other limited content, and serve
as a home base for Internet users.'' The SBA has developed a small
business size standard for this category; that size standard is $6.5
million or less in average annual receipts. According to Census Bureau
data for 2002, there were 342 firms in this category that operated for
the entire year. Of these, 303 had annual receipts of under $5 million,
and an additional 15 firms had receipts of between $5 million and
$9,999,999. Consequently, we estimate that the majority of these firms
are small entities that may be affected by our action.
52. Data Processing, Hosting, and Related Services. Entities in
this category ``primarily * * * provid[e] infrastructure for hosting or
data processing services.'' The SBA has developed a small business size
standard for this category; that size standard is $23 million or less
in average annual receipts. According to Census Bureau data for 2002,
there were 6,877 firms in this category that operated for the entire
year. Of these, 6,418 had annual receipts of under $10 million, and an
additional 251 firms had receipts of between $10 million and
$24,999,999. Consequently, we estimate that the majority of these firms
are small entities that may be affected by our action.
53. All Other Information Services. ``This industry comprises
establishments primarily engaged in providing other information
services (except new syndicates and libraries and archives).'' Our
action pertains to VoIP services, which could be provided by entities
that provide other services such as e-mail, online gaming, web
browsing, video conferencing, instant messaging, and other, similar IP-
enabled services. The SBA has developed a small business size standard
for this category; that size standard is $6.5 million or less in
average annual receipts. According to Census Bureau data for 2002,
there were 155 firms in this category that operated for the entire
year. Of these, 138 had annual receipts of under $5 million, and an
additional four firms had receipts of between $5 million and
$9,999,999. Consequently, we estimate that the majority of these firms
are small entities that may be affected by our action.
54. Internet Publishing and Broadcasting. ``This industry comprises
establishments engaged in publishing and/or broadcasting content on the
Internet exclusively. These establishments do not provide traditional
(non-Internet) versions of the content that they publish or
broadcast.'' The SBA has developed a small business size standard for
this census category; that size standard is 500 or fewer employees.
According to Census Bureau data for 2002, there were 1,362 firms in
this category that operated for the entire year. Of these, 1,351 had
employment of 499 or fewer employees, and six firms had employment of
between 500 and 999. Consequently, we estimate that the majority of
these firms are small entities that may be affected by our action.
55. Software Publishers. These companies may design, develop or
publish software and may provide other support services to software
purchasers, such as providing documentation or assisting in
installation. The companies may also design software to meet the needs
of specific users. The SBA has developed a small business size standard
of $23 million or less in average annual receipts for all of the
following pertinent categories: Software Publishers, Custom Computer
Programming Services, and Other Computer Related Services. For Software
Publishers, Census Bureau data for 2002 indicate that there were 6,155
firms in the category that operated for the entire year. Of these,
7,633 had annual receipts of under $10 million, and an additional 403
firms had receipts of between $10 million and $24,999,999. For
providers of Custom Computer Programming Services, the Census Bureau
data indicate that there were 32,269 firms that operated for the entire
year. Of these, 31,416 had annual receipts of under $10 million, and an
additional 565 firms had receipts of between $10 million and
$24,999,999. For providers of Other Computer Related Services, the
Census Bureau data indicate that there were 6,357 firms that operated
for the entire year. Of these, 6,187 had annual receipts of under $10
million, and an additional 101 firms had receipts of between $10
million and $24,999,999. Consequently, we estimate that the majority of
the firms in each of these three categories are small entities that may
be affected by our action.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
56. In the NPRM, many of the proposals to increase the Commission's
understanding of broadband availability would impose no reporting,
recordkeeping or other compliance requirements on small entities.
However, the NPRM invites comment on several other proposals that would
impose further reporting and recordkeeping requirements on current Form
477 filers. Specifically, the NPRM invites comment on whether current
Form 477 filers should (1) report numbers of subscribers per 5-digit
Zip Code, (2) report 9-digit Zip Codes where there is at least one
subscriber or report numbers of subscribers per 9-digit Zip Code, (3)
report geocoded information about subscriber locations, or (4) report
information that delineates in detail the boundaries of their
broadband-enabled service territories. The NPRM also seeks comment on
whether the Commission should (1) refine the speed-tier information the
Commission currently collects by splitting an existing speed tier into
two; (2) require all broadband filers to report the number of
residential customers served and also the number of homes ``passed'' by
their broadband enabled infrastructure; (3) collect demographic
information about households from filers located in representative
areas; and (4) collect price information from filers in representative
areas or from filers more
[[Page 27534]]
generally. In addition, the NPRM invites comment whether there are any
alternatives not discussed in the NPRM that would also serve the
objectives of the NPRM. The Commission invites comment on ways to
mitigate the burden that might be imposed on small entities by
proposals discussed in the NPRM. The Commission also invites comment on
alternatives to these proposals that would meet the objectives of the
NPRM but would impose lesser burdens on small entities.
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
57. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include (among others) the following four alternatives: (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.
58. From the outset, the NPRM invites comments on significant
alternatives to improving data about broadband availability throughout
the nation--particularly availability in rural and other hard-to-serve
areas--that would impose no burden on small entities whatsoever. These
alternatives ask whether the Commission would be able to meet its
objectives by conducting further analysis of current data, conducting
its own studies, or purchasing databases from other entities to
supplement Commission data. The NPRM asks whether the Commission should
simply identify for further, individual study those Zip Code areas
where deployment appears to be particularly limited. The NPRM invites
comment on whether the Commission might collaborate with state public-
private economic development or other initiatives to supplement and
refine Commission data. Furthermore, the NPRM invites comment whether
it might purchase commercial databases or services that would provide
data without imposing additional burdens on filers. Finally, the
Commission inquires whether it might rely on a voluntary self-reporting
system by non-served households, patterned after the National Do-Not-
Call Registry, to identify localized areas where broadband services are
not available. None of these alternatives would impose burdens on small
entities, but commenters are invited to comment on whether these
alternatives would provide sufficient information for the Commission to
assess whether it should institute new policies to encourage deployment
of broadband services to rural and hard-to-serve areas.
59. With regard to proposals that would increase the reporting
requirements of small entities, the NPRM invites comments on how these
proposals might be tailored to mitigate the burden on smaller entities
but nevertheless obtain data that would enable the Commission to
determine whether subscribers in those territories have access to
broadband services. As noted above, the NPRM invites comment on whether
current Form 477 filers should (1) report numbers of subscribers per 5-
digit Zip Code, (2) report 9-digit Zip Codes where there is at least
one subscriber or report numbers of subscribers per 9-digit Zip Code,
(3) report geocoded information about subscriber locations, or (4)
report information that delineates in detail the boundaries of their
broadband-enabled service territories. The NPRM also seeks comment on
whether the Commission should (1) refine the speed-tier information the
Commission currently collects by splitting an existing speed tier into
two; (2) require all broadband filers to report the number of
residential customers served and also the number of homes ``passed'' by
their broadband enabled infrastructure; (3) collect demographic
information about households from filers located in representative
areas; and (4) collect price information from filers in representative
areas or from filers more generally. To analyze the impact on small
entities, the NPRM specifically asks whether entities maintain these
types of information in billing or marketing databases and asks
commenters to demonstrate the burden for the entities to collect and
report this type of information. This information will assist the
Commission in determining whether these various proposals would impose
a significant economic impact on small entities. Commenters are invited
to comment on whether there are alternative methods that would obtain
the same information while lessening the economic impact on small
entities.
60. The NPRM also invites comment on how we should modify the
reporting requirements for wireless broadband providers and
interconnected VoIP providers. Specifically, the NPRM invites comment
on whether mobile wireless providers should (1) report the number of
month-to-month (or longer term) subscriptions to broadband Internet
access service designed for full Internet browsing; (2) report the
number of month-to-month (or longer term) subscriptions for broadband-
speed browsing of customized-for-mobile web sites; and (3) report the
number of unique mobile voice service subscribers who are not month-to-
month subscribers to an Internet access service, but who nevertheless
made any news, video, or other entertainment downloads to the
subscriber's handset at broadband speed during the month preceding the
Form 477 reporting date. The NPRM also seeks comment on how to improve
the reporting estimate of the percentage of mobile wireless broadband
subscribers who are residential end users. In doing so, the NPRM
specifically suggests and seeks comment on alternative methods for
arriving at the best estimates of residential end users. Finally, the
NPRM specifically invites comment on how to collect useful information
about the number of interconnected VoIP subscribers in the least
burdensome manner. This information will assist the Commission in
determining whether these various proposals would impose a significant
economic impact on small entities. Commenters are invited to comment on
whether there are alternative methods that would obtain the same
information while lessening the economic impact on small entities.
61. Based on these questions, and the alternatives discussed is the
NPRM, the Commission anticipates that the record will be developed
concerning alternative ways in which it could lessen the burden on
small entities of obtaining improved data about broadband availability
throughout the nation.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
62. None.
Ordering Clauses
Accordingly, it is ordered that, pursuant to Sections 1-5, 10, 11,
201-205, 215, 218-220, 251-271, 303(r), 332, 403, 502, and 503 of the
Communications Act of 1934, as amended, 47 U.S.C. 151-155, 160, 161,
201-205, 215, 218-220, 251-271, 303(r), 332, 403, 502, and 503, and
Section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt,
this NPRM, with all attachments, is adopted.
It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of
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this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E7-9300 Filed 5-15-07; 8:45 am]
BILLING CODE 6712-01-P