FR Doc E8-2180

[Federal Register: February 6, 2008 (Volume 73, Number 25)]
[Proposed Rules]
[Page 6888-6895]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06fe08-17]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WC Docket No. 07-267; FCC 07-202]

Petition To Establish Procedural Requirements To Govern
Proceedings for Forbearance Under Section 10 of the Communications Act
of 1934, as Amended

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission seeks comment regarding
whether to adopt procedural rules to govern the Commission's
consideration of petitions to forbear from enforcing rules that are
alleged to be unnecessary or inconsistent with the public interest
(forbearance petitions). The Commission is responding to arguments that
current procedures governing consideration of forbearance petitions are
unfair, and to several proposed new rules that would include, for
example, requiring forbearance petitions to be complete-as-filed, and
assigning the burden of proof on parties that file forbearance
petitions. The Commission intends both to solicit comment on the
proposals before it and to encourage suggestions of other rules that
the Commission should consider that would govern the form and content
of forbearance petitions.

DATES: Comments are due March 7, 2008 and Reply Comments are due March
24, 2008. Written comments on the Paperwork Reduction Act proposed
information collection requirements must be submitted by the public,
Office of Management and Budget (OMB), and other interested parties on
or before April 7, 2008.

ADDRESSES: You may submit comments, identified by WC Docket No. 07-267,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.
Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/.
Follow the instructions for submitting comments. E-mail: 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. Include the docket number in the subject line
of the message.
Mail: Secretary, Federal Communications Commission, 445
12th Street, SW., Washington, DC 20554.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or 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. In addition to filing comments
with the Secretary, a copy of any comments on the Paperwork Reduction
Act information collection requirements contained herein should be
submitted to the Federal Communications Commission via e-mail to
PRA@fcc.gov and to Nicholas A. Fraser, Office of Management and Budget,

via e-mail to Nicholas_A._Fraser@omb.eop.gov or via fax at 202-395-
5167.

FOR FURTHER INFORMATION CONTACT: Jonathan Reel, Wireline Competition
Bureau, (202) 418-1580. For additional information concerning the
Paperwork Reduction Act information collection requirements contained
in this document, contact Jerry R. Cowden at (202) 418-0447, or via the
Internet at PRA@fcc.gov.

SUPPLEMENTARY INFORMATION: Pursuant to Sec. Sec. 1.415 and 1.419 of
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may
file Comments on or before March 7, 2008 and Reply Comments on or
before March 24, 2008. 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,
May 1, 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 Web site 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. 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 can 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). All filings must be addressed to the Commission's
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).

ADDRESSES: You may submit comments, identified by WC Docket No. 07-267,
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.

[[Page 6889]]

E-mail: 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. Include the docket number in the subject line
of the message.
Mail: Secretary, Federal Communications Commission, 445
12th Street, SW., Washington, DC 20554.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or 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.

Initial Paperwork Reduction Act of 1995 Analysis

This document does not contain proposed information collection
requirements subject to the Paperwork Reduction Act of 1995, Public Law
104-13. In addition, therefore, it does not contain any proposed
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).

Synopsis of the Notice of Proposed Rulemaking

Petition To Establish Procedural Requirements To Govern Proceedings for
Forbearance Under Section 10 of the Communications Act of 1934, as
Amended
1. In this Notice of Proposed Rulemaking (NPRM), the Commission
addresses the Petition filed on September 19, 2007 by Covad
Communications Group, NuVox Communications, XO Communications, LLC,
Cavalier Telephone Corp., and McLeod USA Telecommunications Services,
Inc. (Petitioners or Covad, et al.) asking the Commission to consider
the adoption of procedural rules to govern the Commission's
consideration of petitions for forbearance pursuant to the
Communications Act of 1934, as amended (Act).
2. Pursuant to section 10 of the Act, the Commission is required to
forbear from any statutory provision or regulation if it determines
that: (1) Enforcement of the regulation is not necessary to ensure that
the telecommunications carrier's charges, practices, classifications,
or regulations are just, reasonable, and not unjustly or unreasonably
discriminatory; (2) enforcement of the regulation is not necessary to
protect consumers; and (3) forbearance from applying such provision or
regulation is consistent with the public interest. In determining
whether forbearance is consistent with the public interest, the
Commission also must consider whether forbearance from enforcing the
provision or regulation will promote competitive market conditions. In
addition, section 332(c)(1)(A) of the Act authorizes the Commission to
``forbear'' from applying the provisions of Title II to commercial
mobile radio service (CMRS) providers, except for sections 201, 202,
and 208, if certain criteria are satisfied. In particular, the
Commission may exercise its forbearance authority pursuant to section
332 if it determines that: (1) Enforcement of the requirement is
unnecessary to ensure that rates are just, reasonable, and non-
discriminatory; (2) the requirement is not needed to protect consumers;
and (3) forbearance is consistent with the public interest. The
Commission also must consider whether any proposed forbearance from the
requirements of Title II will enhance competition among CMRS providers.
3. The Commission seeks comment in general on the need for
procedural rules to govern the Commission's consideration of petitions
for forbearance pursuant to section 10 and/or section 332
(collectively, forbearance petitions), and with respect to the issues
raised and rules proposed by the Petitioners in particular. For
example, the Petitioners cite the need to apply Administrative
Procedure Act (APA) notice-and-comment rules to forbearance petitions.
The Petitioners state that to date the Commission's practice has been
to provide interested parties with the opportunity to comment on a
forbearance petition. Petitioners argue, however, that the Commission
should institutionalize this practice to ensure that potentially-
affected parties have a well-defined right to have their views taken
into account. The Commission seeks comment both on the Petitioners'
specific proposal and, more generally, on how the Commission should
provide notice and an opportunity to comment in forbearance
proceedings.
4. The Petitioners also request the adoption of rules governing the
format and content of forbearance petitions, including a complete-as-
filed requirement. In particular, the Petitioners contend that a
complete-as-filed rule would facilitate Commission review and would
help ensure that all interested parties have a full and fair
opportunity to present their views to the Commission. The Petitioners
note that the Commission has adopted similar requirements in other
circumstances, such as section 271 proceedings and formal complaint
proceedings subject to statutory deadlines. The Commission seeks
comment on the Petitioners' specific proposal for complete-as-filed
requirements, including whether the Commission should specify certain
information necessary for a prima facie showing that forbearance is
warranted as the Petitioners recommend. The Commission also seeks
comment on the Petitioners' proposal for a rule specifying that the
forbearance petitioner has the burden of proof. The Commission also
seeks comment on whether there are other particular rules governing the
form and content of forbearance petitions that the Commission should
consider.
5. In addition, the Petitioners propose that the Commission require
a forbearance petitioner to separately demonstrate how it has satisfied
each component of the forbearance standard. They assert that such a
requirement is consistent with the Commission's pleading requirements
in other contexts. The Petitioners contend that, in past practice,
petitioners have failed to address each element of the section 10
standard individually, instead generally asserting that the forbearance
criteria are satisfied with respect to all of the regulations and
statutory provisions from which they are seeking forbearance. The
Commission seeks comment on the Petitioners' specific proposal,
including its relationship to the section 10 or section 332 forbearance
standard and the Commission's forbearance analysis set forth in prior
orders.
6. The Commission also seeks comment on the Petitioners' request
that the Commission adopt particular rules addressing the scope and
interpretation of protective orders in forbearance proceedings. The
Petitioners suggest rules governing the timing of adoption of
protective orders and the terms of access to, and use of, documents and
information submitted pursuant to those protective orders. For example,
the Petitioners suggest that all interested parties should be permitted
to obtain copies of confidential and highly confidential documents. In
addition, the Petitioners recommend that parties be allowed to use
information submitted pursuant to protective order in one forbearance
proceeding in other Commission forbearance proceedings in which a
petitioning party seeks relief from the same rules and/or statutory
provisions and that states be permitted

[[Page 6890]]

to use documents designated as Confidential and Highly Confidential in
related state proceedings. The Commission seeks comment on the
Petitioners' specific proposals, as well as any other comments
regarding the submission of, access to, and use of documents and
information covered by protective orders in forbearance proceedings.
The Commission also seeks comment specifically on the relationship
between the rules proposed by Petitioners or other commenters and the
Commission's rules and precedent regarding information withheld from
public inspection.
7. The Petitioners further seek rules establishing a timetable for
Commission proceedings addressing forbearance petitions, which, among
other things, incorporates a limited period for a petitioning party to
cure minor defects in its petition without having to re-start the
statutory clock, provides a specific vehicle for state commission input
in the forbearance process; addresses motions to dismiss, and
establishes a standard comment cycle; as well as a time limit on
substantive ex parte submissions and other requirements. The Commission
seeks comment on each of the proposals suggested by the Petitioners, as
well as their general recommendation for the adoption of specific
timetables for the Commission's review of forbearance petitions. The
Commission also seeks comment on other proposals for steps the
Commission could take to facilitate the participation of state
commissions, as well as other parties, in forbearance proceedings.
8. The Petitioners propose that the Commission adopt additional
requirements for petitions seeking forbearance from sections 251 and/or
271 of the Act. For example, the Petitioners propose that petitioners
seeking forbearance from sections 251 or 271 must provide supporting
data at the wire center level. The Petitioners further propose that the
Commission adopt a rule inviting states to report to the Commission on
the potential effects of sections 251 and/or 271 forbearance in their
states.
9. The Petitioners also suggest certain procedural requirements
governing the resolution of forbearance petitions, including a proposal
that the Commission adopt a rule requiring the issuance of a written
order on all forbearance petitions, including those petitions that
previously have been ``deemed granted.'' The Commission seeks comment
on that proposal.
10. To the extent that the Commission adopts procedural rules to
govern forbearance petitions, the Petitioners request that those rules
apply both to forbearance petitions filed in the future, as the well as
forbearance petitions already pending before the Commission. The
Commission seeks comment on the extent of the Commission's authority to
adopt procedural rules governing both future forbearance petitions as
well as those that already are pending before the Commission,
particularly with respect to the procedural rules proposed by the
Petitioners. The Commission also seeks comment on the propriety, as a
policy matter, of extending particular procedural rules in such manner.
11. In recent years, the Commission has witnessed a significant
increase in the number of petitions seeking forbearance submitted by
telecommunications carriers that the Commission oversees. These
petitions have had different results, such as petitions being approved,
denied, withdrawn or deemed granted. In the course of Congressional
oversight, some Members of Congress have raised concerns with how
forbearance is used. Some companies have indicated serious concerns
with the forbearance process, while others argue that it is an
important tool for the Commission to eliminate rules, consistent with
the public interest. The Commission therefore seeks comment on whether
forbearance is an effective means for the Commission to make changes to
its regulations. The Commission also seeks comment on whether
forbearance is being utilized for the purposes intended by Congress.
The Commission asks whether there are unintended consequences of
forbearance, such as a focus on these petitions at the expense of other
industry-wide proceedings, including burdens on stakeholders from
forbearance proceedings, such as administrative and financial costs.
The Commission asks whether there are additional burdens placed on
stakeholders due to the fact that there is a statutory deadline on the
completion of forbearance petitions. The Commission also seeks comment
regarding the effects of having a company-specific petition drive
agency decisions, rather than the Commission deciding to take industry-
wide actions.
12. Finally, the Commission seeks comment on any other aspects of
the Petition, as well as any other comments regarding the need for any
other procedural rules to govern the Commission's consideration of
forbearance petitions. The Commission also invites comment on the
possible effect on small entities from adopting any of the Petitioners'
proposed rules, or variations of those proposals set forth above. To
the extent that the Commission were to adopt any procedural rules
governing forbearance petitions proposed by the Petitioners or
otherwise justified in the record, the Commission asks what would be
the appropriate remedy for a violation of those rules.

Ex Parte Presentations

13. The rulemaking this NPRM initiates shall be treated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules. 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. Other requirements
pertaining to oral and written presentations are set forth in Sec.
1.1206(b) of the Commission's rules.

Initial Regulatory Flexibility Analysis

14. As required by the Regulatory Flexibility Act of 1980, the
Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant economic impact on small entities of
the policies and rules addressed in this document. The IRFA is set
forth separately below. Written public comments are requested on this
IRFA. Comments must be identified as responses to the IRFA. Comments
are due March 7, 2008 and Reply Comments are due March 24, 2008.

Paperwork Reduction Act

15. This document contains proposed new or modified information
collection requirements. The Commission, as part of its continuing
effort to reduce paperwork burdens, invites the general public and the
Office of Management and Budget (OMB) to comment on the information
collection requirements contained in this document, as required by the
Paperwork Reduction Act of 1995, Public Law 104-13. In addition,
pursuant to the Small Business Paperwork Relief Act of 2002, Public Law
107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we
might ``further reduce the information collection burden for small
business concerns with fewer than 25 employees.''

Accessible Formats

16. 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 &

[[Page 6891]]

Governmental Affairs Bureau at 202-418-0530 (voice) or 202-418-0432
(TTY). Contact the FCC to request reasonable accommodations for filing
comments (accessible format documents, sign language interpreters,
CART, etc.) by e-mail: FCC504@fcc.gov; phone: 202-418-0530 or TTY: 202-
418-0432.

Initial Regulatory Flexibility Analysis

17. 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 this 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 the IRFA (or summaries thereof) will be published in the Federal
Register.

A. Need For, and Objectives Of, the Proposed Rules

18. In this NPRM, we seek comment on whether the Commission should
adopt procedural rules governing its consideration of petitions for
forbearance pursuant to section 10 or section 332 of the Act. In
particular, we seek comment on the need to apply APA notice-and-comment
rules to forbearance petitions. We also seek comment on the burdens of
proof and production in forbearance proceedings. Additionally, we seek
comment on whether to adopt rules governing the form and content of
forbearance petitions, including possibly a ``complete-as-filed''
requirement and a requirement that the petitioner demonstrate that it
has satisfied each element of the forbearance standard. Further, we
solicit comment on the need for rules governing the scope and
interpretation of protective orders in forbearance proceedings. In
addition, we seek comment on the need for rules establishing timetables
for Commission proceedings addressing forbearance petitions. In the
NPRM, we also seek comment on whether additional rules are warranted
for petitions seeking forbearance from section 251 or section 271 of
the Act. We further seek comment on whether we should adopt procedural
requirements governing the resolution of forbearance petitions. We also
seek comment on the need for any other procedural rules governing
forbearance petitions, the scope of application of such rules, and the
appropriate remedies for violation should the Commission adopt such
rules. For each of these issues, we seek comment on the possible
effects on small entities, associated with any rules the Commission
might adopt.

B. Legal Basis

19. The legal basis for any action that may be taken pursuant to
this NPRM is contained in sections 1, 4(i), 4(j), 10, 303, 332 and 403
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i)-
(j), 160, 303, 332, 403.

C. Description and Estimate of the Number of Small Entities To Which
the Proposed Rules May Apply

20. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules and policies, if adopted. The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' In addition, the term ``small business''
has the same meaning as the term ``small business concern'' under the
Small Business Act. A ``small business concern'' is one which: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
SBA.
21. Small Businesses. Nationwide, there are a total of 22.4 million
small businesses, according to SBA data.
22. Small Organizations. Nationwide, there are approximately 1.6
million small organizations.
23. Small Governmental Jurisdictions. The term ``small governmental
jurisdiction'' is defined generally as ``governments of cities, towns,
townships, villages, school districts, or special districts, with a
population of less than fifty thousand.'' Census Bureau data for 2002
indicate that there were 87,525 local governmental jurisdictions in the
United States. We estimate that, of this total, 84,377 entities were
``small governmental jurisdictions.'' Thus, we estimate that most
governmental jurisdictions are small.
24. Incumbent Local Exchange Carriers (ILECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent local exchange services. The appropriate
size standard under SBA rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. According to Commission
data, 1,303 carriers have reported that they are engaged in the
provision of incumbent local exchange services. Of these 1,303
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 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 proposed action.
25. 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, 769 carriers have reported that they are engaged in
the provision of either competitive access provider services or
competitive local exchange carrier services. Of these 769 carriers, an
estimated 676 have 1,500 or fewer employees and 94 have more than 1,500
employees. In addition, 12 carriers have reported that they are
``Shared-Tenant Service Providers,'' and all 12 are estimated to have
1,500 or fewer employees. In addition, 39 carriers have reported that
they are ``Other Local Service Providers.'' Of the 39, an estimated 38
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 proposed
action.
26. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a small business size standard specifically for
providers of interexchange services. The appropriate size standard
under SBA rules is for the category Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees. According to Commission data, 316 carriers have
reported that they are engaged in the provision of interexchange
service. Of these, an estimated 292 have 1,500 or fewer employees and
24 have more than 1,500 employees. Consequently, the Commission
estimates that the majority

[[Page 6892]]

of IXCs are small entities that may be affected by our proposed action.
27. International Service Providers. 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
if it has $13.5 million or less in average annual receipts.
28. 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.
29. 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.
30. 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.
31. Cellular Licensees. 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.
32. Common Carrier Paging. As noted, the SBA has developed a small
business size standard for wireless firms within the broad economic
census categories of ``Cellular and Other Wireless
Telecommunications.'' Under this SBA category, a wireless business is
small if it has 1,500 or fewer employees. For the census category of
Paging, U.S. Census Bureau data for 1997 show that there were 1,320
firms in this category, total, that operated for the entire year. Of
this total, 1,303 firms had employment of 999 or fewer employees, and
an additional 17 firms had employment of 1,000 employees or more. Thus,
under this category and associated small business size standard, the
great majority of firms can be considered small.
33. In addition, in the Paging Second Report and Order, the
Commission adopted a size standard for ``small businesses'' for
purposes of determining their eligibility for special provisions such
as bidding credits and installment payments. A small business is an
entity that, together with its affiliates and controlling principals,
has average gross revenues not exceeding $15 million for the preceding
three years. The SBA has approved this definition. An auction of
Metropolitan Economic Area (MEA) licenses commenced on February 24,
2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985
were sold. Fifty-seven companies claiming small business status won 440
licenses. An auction of MEA and Economic Area (EA) licenses commenced
on October 30, 2001, and closed on December 5, 2001. Of the 15,514
licenses auctioned, 5,323 were sold. One hundred thirty-two companies
claiming small business status purchased 3,724 licenses. A third
auction, consisting of 8,874 licenses in each of 175 EAs and 1,328
licenses in all but three of the 51 MEAs commenced on May 13, 2003, and
closed on May 28, 2003. Seventy-seven bidders claiming small or very
small business status won 2,093 licenses. Currently, there are
approximately 74,000 Common Carrier Paging licenses. According to the
most recent Trends in Telephone Service, 408 private and common
carriers reported that they were engaged in the provision of either
paging or ``other mobile'' services. Of these, we estimate that 589 are
small, under the SBA-approved small business size standard. We estimate
that the majority of common carrier paging providers would qualify as
small entities under the SBA definition.
34. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses. The Commission defined ``small business'' for the wireless
communications services (WCS) auction as an entity with average gross
revenues of $40 million for each of the three preceding years, and a
``very small business'' as an entity with average gross revenues of $15
million for each of the three preceding years. The SBA has approved
these definitions. The Commission auctioned geographic area licenses in
the WCS service. In the auction, which commenced on April 15, 1997 and
closed on April 25, 1997, there were seven bidders that won 31 licenses
that qualified as very small business entities,

[[Page 6893]]

and one bidder that won one license that qualified as a small business
entity. An auction for one license in the 1670-1674 MHz band commenced
on April 30, 2003 and closed the same day. One license was awarded. The
winning bidder was not a small entity.
35. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. The SBA has developed a small business size
standard for ``Cellular and Other Wireless Telecommunications''
services. Under the SBA small business size standard, a business is
small if it has 1,500 or fewer employees. According to Trends in
Telephone Service data, 437 carriers reported that they were engaged in
wireless telephony. We have estimated that 260 of these are small under
the SBA small business size standard.
36. Broadband Personal Communications Service. The broadband
personal communications services (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission has created a small business
size standard for Blocks C and F as an entity that has average gross
revenues of less than $40 million in the three previous calendar years.
For Block F, an additional small business size standard 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 small business
size standards, 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 reauctioned 155
C, D, E, and F Block licenses; there were 113 small business winning
bidders.
38. 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. On February 15, 2005, the
Commission completed an auction of 188 C Block licenses and 21 F Block
licenses in Auction No. 58. There were 24 winning bidders for 217
licenses. Of the 24 winning bidders, 16 claimed small business status
and won 156 licenses.
39. Narrowband Personal Communications Services. The Commission
held an auction for Narrowband PCS licenses that commenced on July 25,
1994, and closed on July 29, 1994. A second auction commenced on
October 26, 1994 and closed on November 8, 1994. For purposes of the
first two Narrowband PCS auctions, ``small businesses'' were entities
with average gross revenues for the prior three calendar years of $40
million or less. Through these auctions, the Commission awarded a total
of 41 licenses, 11 of which were obtained by four small businesses. To
ensure meaningful participation by small business entities in future
auctions, the Commission adopted a two-tiered small business size
standard in the Narrowband PCS Second Report and Order. A ``small
business'' is an entity that, together with affiliates and controlling
interests, has average gross revenues for the three preceding years of
not more than $40 million. A ``very small business'' is an entity that,
together with affiliates and controlling interests, has average gross
revenues for the three preceding years of not more than $15 million.
The SBA has approved these small business size standards. A third
auction commenced on October 3, 2001 and closed on October 16, 2001.
Here, five bidders won 317 (Metropolitan Trading Areas and nationwide)
licenses. Three of these claimed status as a small or very small entity
and won 311 licenses.
40. Lower 700 MHz Band Licenses. We adopted criteria for defining
three groups of small businesses for purposes of determining their
eligibility for special provisions such as bidding credits. We have
defined a ``small business'' as an entity that, together with its
affiliates and controlling principals, has average gross revenues not
exceeding $40 million for the preceding three years. A ``very small
business'' is defined as an entity that, together with its affiliates
and controlling principals, has average gross revenues that are not
more than $15 million for the preceding three years. Additionally, the
lower 700 MHz Service has a third category of small business status
that may be claimed for Metropolitan/Rural Service Area (MSA/RSA)
licenses. The third category is ``entrepreneur,'' which is defined as
an entity that, together with its affiliates and controlling
principals, has average gross revenues that are not more than $3
million for the preceding three years. The SBA has approved these small
size standards. An auction of 740 licenses (one license in each of the
734 MSAs/RSAs and one license in each of the six Economic Area
Groupings (EAGs)) commenced on August 27, 2002, and closed on September
18, 2002. Of the 740 licenses available for auction, 484 licenses were
sold to 102 winning bidders. Seventy-two of the winning bidders claimed
small business, very small business or entrepreneur status and won a
total of 329 licenses. A second auction commenced on May 28, 2003, and
closed on June 13, 2003, and included 256 licenses: 5 EAG licenses and
476 Cellular Market Area licenses. Seventeen winning bidders claimed
small or very small business status and won 60 licenses, and nine
winning bidders claimed entrepreneur status and won 154 licenses. On
July 26, 2005, the Commission completed an auction of 5 licenses in the
Lower 700 MHz band (Auction No. 60). There were three winning bidders
for five licenses. All three winning bidders claimed small business
status.
41. Upper 700 MHz Band Licenses. In Service Rules for the 746-764
and 776-794 MHz Bands, 16 FCC Rcd 1239 (January 12, 2001), the
Commission authorized service in the upper 700 MHz band. This auction,
previously scheduled for January 13, 2003, has been postponed.
42. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order,
we adopted size standards 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 in this service is an entity that, together with its
affiliates and controlling principals, has average gross revenues not
exceeding $40 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 $15 million for the preceding three years. SBA approval of these
definitions is not required. 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

[[Page 6894]]

sold to three bidders. One of these bidders was a small business that
won a total of two licenses.
43. 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 no 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 22,015 or fewer
common carrier fixed licensees and 61,670 or fewer 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 proposed herein. We note, however, that the common carrier
microwave fixed licensee category includes some large entities.
44. 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.
45. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (LMDS) is a fixed broadband point-to-multipoint
microwave service that provides for two-way video telecommunications.
The auction of the 986 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 $15 million for the preceding three calendar years. The SBA has
approved these small business size standards in the context of LMDS
auctions. There were 93 winning bidders that qualified as small
entities in the LMDS auctions. A total of 93 small and very small
business bidders won approximately 277 A Block licenses and 387 B Block
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses;
there were 32 small and very small businesses that won 119 licenses.
46. 218-219 MHz Service. The first auction of 218-219 MHz
(previously referred to as the Interactive and Video Data Service or
IVDS) spectrum resulted in 178 entities winning licenses for 594
Metropolitan Statistical Areas (MSAs). Of the 594 licenses, 567 were
won by 167 entities qualifying as a small business. For that auction,
we defined a small business as 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
defined 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
exceeding $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 exceeding $3 million
for the preceding three years. The SBA has approved of these
definitions. A subsequent auction is not yet scheduled. Given the
success of small businesses in the previous auction, and the prevalence
of small businesses in the subscription television services and message
communications industries, we assume for purposes of this analysis that
in future auctions, many, and perhaps most, of the licenses may be
awarded to small businesses.
47. 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). In the present
context, we will use 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 proposed herein.
48. Incumbent 24 GHz 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.
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. These broader
census data notwithstanding, we believe that there are only two
licensees in the 24 GHz band that were relocated from the 18 GHz band,
Teligent and TRW, Inc. It is our understanding that Teligent and its
related companies have fewer 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.
49. Future 24 GHz Licensees. With respect to new applicants in the
24 GHz band, we have defined ``small business'' as an entity that,
together with controlling interests and affiliates, has average annual
gross revenues for the three preceding years not exceeding $15 million.
``Very small business'' in the 24 GHz band is defined as an entity
that, together with controlling interests and affiliates, has average
gross revenues not exceeding $3 million for the preceding

[[Page 6895]]

three years. The SBA has approved these definitions. The Commission
will not know how many licensees will be small or very small businesses
until the auction, if required, is held.

D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements

50. Should the Commission decide to adopt any procedural rules
governing petitions for forbearance, the associated rules potentially
could modify or impose new reporting or recordkeeping requirements. For
example, we seek comment on the possible need for rules governing the
form and content of forbearance petitions, such as ``complete-as-
filed'' requirements and obligations for forbearance petitioners to
demonstrate that they have satisfied each element of the forbearance
standard. The Commission also seeks comment on the possible need or
rules governing the scope and interpretation of protective orders in
forbearance proceedings, including rules governing the submission of,
access to, and use of information submitted pursuant to protective
orders in forbearance proceedings. In addition, we seek comment on the
need for rules establishing timetables for Commission proceedings
addressing forbearance petitions, including requirements governing
modification of forbearance petitions and processes for ex parte
filings. We further seek comment on whether we should adopt procedural
requirements governing petitions for reconsideration of forbearance
decisions. The Commission also seeks comment on the need for any other
procedural rules governing forbearance petitions, the scope of
application of such rules, and the appropriate remedies for violation
should the Commission adopt such rules. These proposals may impose
additional reporting and recordkeeping requirements on entities. Also,
we seek comment on the effects of any of these proposals on small
entities. Entities, especially small businesses, are encouraged to
quantify the costs and benefits or any reporting requirement that may
be established in this proceeding.

E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered

51. 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.
52. The Commission's primary objective is to implement the ``pro-
competitive, deregulatory'' framework established in sections 10 and
332 of the Act. We seek comment on the burdens, including those placed
on small carriers, associated with related Commission rules and whether
the Commission should adopt different requirements for small
businesses.

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

53. None.

Ordering Clauses

54. Accordingly, it is ordered that pursuant to sections 1, 4(i),
4(j), 10, 303, 332 and 403 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i)-(j), 160, 303, 332, 403, this Notice of
Proposed Rulemaking in WC Docket No. 07-267 is adopted.
55. It is further ordered that the Covad, et al. Petition to
Establish Procedural Requirements to Govern Proceedings for Forbearance
Under Section 10 of the Communications Act of 1934, as Amended, WC
Docket No. 07-267 (filed Sept. 19, 2007), is granted to the extent
indicated herein and otherwise is denied.
56. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this NPRM, including the Initial Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E8-2180 Filed 2-5-08; 8:45 am]

BILLING CODE 6712-01-P