[Federal Register: March 31, 2004 (Volume 69, Number 62)]
[Proposed Rules]
[Page 16873-16886]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31mr04-36]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CG Docket Nos. 04-53 and 02-278; FCC 04-52]
Rules and Regulations Implementing the Controlling the Assault of
Non-Solicited Pornography and Marketing Act of 2003; Rules and
Regulations Implementing the Telephone Consumer Protection Act of 1991
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: This document seeks comment on how best to implement
[[Page 16874]]
regulations to protect consumers from unwanted mobile service
commercial messages. This document also seeks comment on two possible
revisions to rules implementing the national do-not-call registry.
DATES: Comments in CG Docket No. 04-53, concerning unwanted mobile
service commercial messages and the CAN-SPAM Act, are due on or before
April 30, 2004 and reply comments are due on or before May 17, 2004.
Comments in CG Docket No. 02-278, concerning both a limited safe harbor
under the TCPA and the required frequency for telemarketers to access
the national do-not-call registry, are due on or before April 15, 2004
and reply comments are due on or before April 26, 2004. Written
comments by the public on the proposed information for this collection
for CG Docket No. 04-53 and CG Docket No. 02-278, are due April 30,
2004. Written comments must be submitted by the Office of Management
and Budget (OMB) on the proposed information collection on or before
June 1, 2004.
ADDRESSES: Parties who choose to file comments by paper must file an
original and four copies to the Commission's Secretary, Marlene H.
Dortch, Office of the Secretary, Federal Communications Commission, 445
12th Street, SW., Room TW-A325, Washington, DC 20554. Comments may also
be filed using the Commission's Electronic Filing System, which can be
accessed via the Internet at http://www.fcc.gov/e-file/ecfs.html. In
addition to filing comments with the Secretary, a copy of any comments
on the information collections contained herein should be submitted to
Les Smith, Federal Communications Commission, Room 1-A804, 445 12th
Street, SW., Washington, DC 20554, or via the Internet to
lesmith@fcc.gov and to Kristy L. LaLonde, OMB Desk Officer, Room 10234
NEOB, 725 17th Street, NW., Washington, DC 20503 via the Internet to
Kristy_L._LaLonde@omb.eop.gov or by fax to 202-395-5167.
FOR FURTHER INFORMATION CONTACT: Ruth Yodaiken, of the Consumer &
Government Affairs Bureau at (202) 418-2512 (voice), or e-mail
ruth.yodaiken@fcc.gov. For additional information concerning the
information collection contained in this document, contact Leslie Smith
at (202) 418-0217 or via the Internet at Leslie.Smith@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), Rules and Regulations Implementing the
Controlling the Assault of Non-Solicited Pornography and Marketing Act
of 2003; CG Docket No. 04-53; and this Further Notice of Proposed
Rulemaking (FNPRM), Rules and Regulations Implementing the Telephone
Consumer Protection Act of 1991, CG Docket No. 02-278, FCC 04-53,
adopted March 11, 2004, and released March 19, 2004. The full text of
this document is available on the Commission's Web site Electronic
Comment Filing System and for public inspection during regular business
hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW.,
Washington, DC 20554. 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) 418-0531 (voice), (202) 418-7365
(TTY).
Comments filed through the ECFS can be sent as an electronic file
via the Internet to http://www.fcc.gov/e-file/ecfs.html. Generally,
only one copy of an electronic submission must be filed. If multiple
docket or rulemaking numbers appear in the caption of this proceeding,
however, commenters must transmit one electronic copy of the comments
to each docket or rulemaking number referenced in the caption. In
completing the transmittal screen, commenters should include their full
name, Postal Service mailing address, and the applicable docket or
rulemaking number. Parties may also submit an electronic comment by
Internet e-mail. To get filing instructions for e-mail comments,
commenters should send an e-mail to ecfs@fcc.gov, and should include
the following words in the body of the message, ``get form .'' A sample form and directions will be sent in
reply. 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, commenters 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 Services mail (although we continue to experience delays in
receiving U.S. Postal Service mail). The Commission's contractor,
Natek, Inc., 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 mail, Express Mail, and Priority Mail should be addressed
to 445 12th Street, SW., Washington, DC 20554. All filings must be
addressed to the Commission's Secretary, Marlene H. Dortch, Office of
the Secretary, Federal Communications Commission, 445 12th Street, SW.,
Room TW-B204, Washington, DC 20554. Parties who choose to file paper
comments also should send four paper copies of their filings to Kelli
Farmer, Federal Communications Commission, Room 4-C734, 445 12th
Street, SW., Washington, DC 20554. In addition, commenters choosing to
file in paper must send copies to the Commission's copy contractor,
Qualex International, Portals II, 445 12th Street, SW., Room CY-B402,
Washington, D.C. 20554. Copies of any subsequently filed documents in
this matter will be available for public inspection and copying during
regular business hours at the FCC Reference Information Center, Portals
II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554.
Paperwork Reduction Act
This NPRM and FNRPM contain proposed and modified information
collections. The Commission, as part of its continuing effort to reduce
paperwork burdens, invited the general public and OMB to comment on the
information collection contained in this NPRM and FNPRM, as required by
the Paperwork Reduction Act of 1995, Public Law 104-13. Public and
agency comments are due at the same time as other comments on this
NPRM; OMB notification of action is due 60 days from date of
publication of this NPRM and FNPRM in the Federal Register. Comments
should address: (a) Whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
OMB Control Number: 3060-xxxx.
Title: Rules and Regulations Implementing the Controlling the
Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-
SPAM); FCC 04-52.
[[Page 16875]]
Form Number: N/A.
Type of Review: New Collection.
Respondents: Business or other for-profit entities.
Number of Respondents: There are approximately 22,620,000 total
businesses in the USA. We would assume that only--at most--half of
those send unwanted commercial electronic mail messages.
Estimated Time per Response: Varies with proposed rules. For the
domain name proposals, this might only affect CMRS carriers to report
domain names, and senders of commercial messages to check periodically.
Census data indicates that there are approximately 350 CMRS carriers.
The proposal involving a registry of individual addresses would involve
checking a list of mail addresses regularly and comparing that to any
list the sender has. We note that with the adoption of the CAN-SPAM Act
in general, since January 1, 2004, senders are prohibited from sending
commercial electronic mail messages to any recipient who makes a
request not to receive any more such mail from that sender. Hence,
senders must already check a list of electronic mail addresses against
a list they must keep of anyone who has requested not to receive such
mail. The Commission noted in the CMRS Competition Report that there
are approximately 142 million mobile subscribers. 1.5-12 hours
Frequency of Responses: On occasion. This is a recordkeeping
requirement.
Total Annual Burden: Approximately 17 million hours-132 million
hours (depending on the options).
Total Annual Cost: $1,750,000.
Needs and Uses: The item asks how senders can identify electronic
mail addresses as belonging to mobile services messaging systems, which
the statute requires the FCC to protect. We seek comment in particular
on whether there could be a list or standard naming convention of
domain names; or an individual registry of electronic mail addresses.
Further we ask about whether there are automatic challenge-response
mechanisms that would alert senders that they are sending their message
to such a subscriber. Further, we explore mechanisms that do not
require the sender to recognize the addresses. These methods are
filtering mechanisms. We also explore the use of senders tagging their
messages to identify them as commercial. These steps are examined for
their usefulness in giving wireless subscribers the ability to stop
receiving unwanted commercial mobile services messages.
OMB Control Number: 3060-0519.
Title: Rules and Regulations Implementing the Telephone Consumer
Protection Act (TCPA) of 1991, NPRM, CG Docket No. 02-278, FCC 04-52.
Form Number: N/A.
Type of Review: Revision of a currently approved collection.
Respondents: Business or other for-profit entities; Not-for-profit
institutions.
Number of Respondents: 30,000.
Estimated Time per Response: 3 hours (average).
Frequency of Response: On occasion. This is a reporting
requirement.
Total Annual Burden: 90,000 hours.
Total Annual Costs: $1,710,000.
Needs and Uses: The current total public disclosure and
recordkeeping burden for collections of information under the TCPA
rules is 1,728,600 hours, as stated most recently in the Commission's
OMB submission to extend approval of the information collection in
connection with the TCPA rules. We believe that the amended safe
harbor, which would require telemarketers to scrub their call lists
monthly, could increase the burdens by 60,000 hours and increase the
total annual costs by $855,000 to $1,710,000.
Proposal Revision to Certain Recordkeeping Requirements
The Commission seeks comment on whether to revise certain
recordkeeping requirements that must be met before companies may avail
themselves of any ``safe harbor'' protections for violating the do-not-
call rules. Companies that conduct telemarketing already maintain their
own do-not-call lists and many of them must reconcile their lists with
the national do-not-call list on a quarterly basis. We believe that any
additional recordkeeping burden as a result of specific ``safe harbor''
requirements would be minimal for most telemarketers. We estimate that
this requirement will account for an additional 2 hours of
recordkeeping burden per company, or an additional 60,000 hours.
Synopsis
I. CAN-SPAM
A. Definition of Mobile Service Commercial Messages
Section 14(b)(1) of the Controlling the Assault of Non-Solicited
Pornography and Marketing Act of 2003 (CAN-SPAM Act or the Act) states
that the Commission shall adopt rules to provide subscribers with the
ability to avoid receiving a ``mobile service commercial message''
(MSCM) unless the subscriber has expressly authorized such messages
beforehand. The Act defines an MSCM as a ``commercial electronic mail
message that is transmitted directly to a wireless device that is
utilized by a subscriber of commercial mobile service'' as defined in
47 U.S.C. 332(d) ``in connection with that service.'' For purposes of
this discussion, we shall refer to mobile service messaging as MSM. As
a threshold matter, we commence our inquiry by exploring the scope of
messages covered by section 14.
1. Commercial Electronic Mail Message
Although the Act defines an electronic mail message broadly as a
message having a unique electronic mail address with ``a reference to
an Internet domain,'' the scope of electronic messages covered under
section 14 is narrowed. MSCMs are only those electronic mail messages
``transmitted directly to a wireless device that is utilized by a
subscriber of commercial mobile service'' as defined in 47 U.S.C.
332(d) ``in connection with that service.'' Section 332(d) defines the
term ``commercial mobile service'' as a mobile service that is provided
for profit and makes interconnected service available to the public or
to such classes of eligible users as to be effectively available to a
substantial portion of the public. The Commission equates the statutory
term ``commercial mobile service'' with ``commercial mobile radio
service'' or CMRS used in its rules.
Accordingly, it appears that only commercial electronic messages
transmitted directly to a wireless device used by a CMRS subscriber
would fall within the definition of MSCMs under the Act. Further, we
note that the Act states that an electronic mail message shall include
a unique electronic mail address, which is defined to include two
parts: (1) ``a unique user name or mailbox;'' and (2) ``a reference to
an Internet domain.'' Thus, it appears that MSCM would be limited under
the Act, to a message that is transmitted to an electronic mail address
provided by a CMRS provider for delivery to the addressee subscriber's
wireless device. We seek comment on this interpretation and its
alternatives. Commenters should address whether only these or other
messages would fall under the definition of MSCM.
Under the Act, whether an electronic mail message is considered
``commercial'' is based upon its ``primary purpose.'' It meets this
definition if its primary purpose is ``the commercial advertisement or
promotion of a commercial product or service (including content on an
Internet website operated for a commercial purpose).'' A ``commercial''
message for
[[Page 16876]]
purposes of the Act does not include a transactional or relationship
message. The Act requires the FTC to issue regulations defining the
relevant criteria to facilitate the determination of the primary
purpose of an electronic mail message by January of 2005.
2. Transmitted Directly to a Wireless Device Used by a Subscriber of
Commercial Mobile Service
As explained above, in order to satisfy the definition of an MSCM,
the message must be ``transmitted directly to a wireless device.'' In
light of the definition of an MSCM, as discussed above, it appears that
the statutory language would be satisfied when a message is transmitted
to an electronic mail address provided by a CMRS provider for delivery
to the addressee subscriber's wireless device. As discussed below, we
believe that the specific transmission technique used in delivering a
particular message may not be relevant under the statute, and that
messages ``forwarded'' by a subscriber to his or her own wireless
device are not covered under section 14. We seek comment on these
interpretations as well as the issues described below.
We have asked above whether a message becomes an MSCM only if it is
transmitted to a wireless device used by a subscriber of CMRS ``in
connection with that service.'' We seek comment on whether an
interpretation that all commercial electronic mail messages sent to
CMRS carriers' mobile messaging systems are MSCMs would be consistent
with the definition of MSCM in the Act. For example, do CMRS carriers
offer services through which electronic mail messages are sent directly
to wireless devices other than in connection with commercial mobile
service as defined in section 332(d)? Commenters should also discuss
any other relevant issues involving the definition of MSCM.
Transmission techniques. Currently, there appear to be two main
methods for transmitting messages to a wireless device, and those
methods are through push and pull technologies. Message transmission
techniques using ``pull'' technologies store messages on a server until
a recipient initiates a request to access the messages from either a
wireless or non-wireless device. ``Push'' technologies automatically--
without action from the recipient--send messages to a recipient's
wireless device. Certain messages that are initiated as electronic mail
messages on the Internet and converted for delivery to a wireless
device, discussed below in the context of SMS messaging, are examples
of messages delivered to wireless devices using such push technologies.
We believe that the definition of a MSCM should include all messages
transmitted to an electronic mail address provided by a CMRS provider
for delivery to the addressee subscriber's wireless device irrespective
of the transmission technique. We seek comment on this interpretation
and alternatives.
The legislative history of the Act suggests section 14, in
conjunction with the Telephone Consumer Protection Act (TCPA), was
intended to address wireless text messaging. SMS messages are text
messages directed to wireless devices through the use of the telephone
number assigned to the device. When SMS messages are sent between
wireless devices, the messages generally do not traverse the Internet
and therefore do not include a reference to an Internet domain.
However, a message initially may be sent through the Internet as an
electronic mail message, and then converted by the service provider
into an SMS message associated with a telephone number. We seek comment
on whether the definition of an MSCM should include messages using such
technology and similar methods, and specifically whether it should
include either or both of these types of SMS messages described above.
We note here that the TCPA and Commission rules prohibit calls using
autodialers to send certain voice calls and text calls, including SMS
messages, to wireless numbers.
Forwarding. The manner in which recipients of MSCMs utilize
messaging options may also be relevant to our interpretation of the
definition of MSCM. For example, another way for a commercial mobile
service subscriber to obtain electronic mail messages is for that
subscriber to take steps to have messages forwarded from a server to
the subscriber's wireless device. With this type of electronic mail
transmission, a subscriber can, for example, obtain messages initially
sent to an electronic mail account that is normally accessed by a
personal computer. We do not believe that section 14 was intended to
apply to all such messages. First, defining the scope of section 14 to
include all ``forwarded'' messages could result in our rules applying
to virtually all electronic mail covered by the CAN-SPAM Act because
subscribers can forward most electronic mail to their wireless devices.
We do not believe that Congress intended such a result given that it
would duplicate in large measure the FTC's authority under the Act.
Moreover, the legislative history of the Act suggests that section 14
was not intended to address messages ``forwarded'' in this manner.
Congressman Markey, in support of section 14, stated: ``Spam sent to a
desktop computer e-mail address, and which is then forwarded over to a
wireless network to a wireless device, i.e., delivered `indirectly'
from the initiator to the wireless device, would be treated by the rest
of this bill and not by the additional section 14 wireless-specific
provisions we subject to an FCC rulemaking.'' We seek comment on the
view that such transmissions fall outside the category of those
``transmitted directly to a wireless device.'' Commenters should
address our assumption that a broad interpretation of ``transmitted
directly to a wireless device'' to cover ``forwarded'' electronic mail
messages would expand the scope of section 14 to cover all electronic
mail covered by the CAN-SPAM Act in general.
Section 14 requires that the FCC ``consider the ability of a sender
of a commercial electronic mail message to reasonably determine that
the message is a mobile service commercial message.'' We seek comment
on how a sender would know that it was sending an MSCM if any action by
a recipient to retrieve his messages by a wireless device could convert
a non-MSCM into an MSCM, or vice-versa. We seek comment on the
technical and administrative characteristics relevant to distinguishing
forwarded messages as well as other messages.
B. The Ability To Avoid Receiving MSCMs
1. How To Enable Consumers To Avoid Unwanted MSCMs
We seek comment on ways in which we can implement Congress's
directive to protect consumers from ``unwanted mobile service
commercial messages.'' As explained above, section 14(b)(1) of the CAN-
SPAM Act states that the Commission shall adopt rules to provide
subscribers with the ``ability to avoid receiving [MSCMs] unless the
subscriber has provided express prior authorization to the sender.''
The legislative history of the Act suggests that section 14 was
included so that wireless subscribers would have greater protections
from commercial electronic mail messages than those protections
provided elsewhere in the Act. As explained below, we believe that
section 14(b)(1) is intended to provide consumers the opportunity to
generally bar receipt of all MSCMs (except those from senders who have
obtained the consumer's prior express consent). However, we believe
that in order to do so, the consumer must take affirmative action to
bar the MSCMs in the first
[[Page 16877]]
instance. Although it appears that Congress intended to afford wireless
subscribers greater protection from unwanted commercial electronic mail
messages than those protections provided elsewhere in the Act, it is
not clear that Congress necessarily sought to impose a flat prohibition
against such messages in the first instance. However, as set forth
below, we seek comment on both of these different interpretations of
section 14(b)(1).
The language of the CAN-SPAM Act requires the Commission to
``protect consumers from unwanted mobile service commercial messages.''
The protections extend to unwanted MSCMs from senders who may ignore
the provisions of the CAN-SPAM Act. As a practical matter, the
particular protections for wireless subscribers required by the Act may
require comprehensive solutions. Therefore, in addition to those
considerations directed by the CAN-SPAM Act discussed below, we seek
comment generally on technical mechanisms that could be made available
to wireless subscribers so that they may voluntarily, and at the
subscriber's discretion, protect themselves against unwanted mobile
service commercial messages. We seek comment on means by which wireless
providers might protect consumers from MSCMs transmitted by senders who
may willfully violate the wireless provisions of the CAN-SPAM Act
addressed in this proceeding. We seek comment on how, in particular,
small businesses would be affected by the various proposals we
consider.
We are aware that a number of other countries have taken a variety
of technical and regulatory steps to protect their consumers from
unwanted electronic mail messages in general. In doing so, some
countries such as Japan and South Korea have adopted an opt-out
approach; while others such as the United Kingdom, France, and Germany
had adopted an opt-in approach. Still others have a mixed approach.
Also, different countries have taken a variety of positions on whether
labeling and identification of commercial messages is required, whether
a Do-Not-E-Mail registry can be developed, and whether the use of
``spamware'' is prohibited. We seek comment on any of these approaches,
consistent with section 14, applicable to unwanted mobile service
commercial messages, with particular emphasis on their effectiveness,
associated costs and burdens, if any, on carriers, subscribers or other
relevant entities. Commenters should not only focus on the present, but
also on the foreseeable future.
a. Prohibiting the Sending of MSCMs. Section 14(b)(1) states that
the Commission's rules shall ``provide subscribers to commercial mobile
services the ability to avoid receiving mobile service commercial
messages unless the subscriber has provided express prior authorization
to the sender.'' One possible interpretation of this provision is that
Congress intended to prohibit all senders of commercial electronic mail
from sending MSCMs unless the senders first obtain express
authorization from the recipient. This reading would allow the
subscriber to avoid all MSCMs unless the subscriber acts affirmatively
to give express permission for messages from individual senders.
Another interpretation of this provision is that Congress intended
the subscriber to take affirmative steps to avoid receiving MSCMs to
indicate his or her desire not to receive such messages. For example,
under this interpretation, the customer might, at the time he or she
subscribes to the mobile service, affirmatively decline to receive
MSCMs. The subscriber would still have the option to agree to accept
MSCMs from particular senders. We invite comment on both
interpretations, particularly in light of the technological abilities
and any constitutional concerns.
We also ask for comment on the practical aspects of either
interpretation of this provision, given potential problems senders
might have currently in determining whether the message sent is an
MSCM. Commenters should address enforcement and administrative concerns
associated with any Commission action taken to protect subscribers from
unwanted MSCMs. We also ask whether the mechanisms described below
might help alleviate those problems. In addition, we ask for comment on
the effect either interpretation might have upon small businesses.
We seek comment on whether senders at this time have the practical
ability to ``reasonably determine'' whether an electronic mail message
is sent directly to a wireless device or elsewhere. Some MSM subscriber
addresses might be identifiable if they use a phone number in front of
a reference to an Internet domain of a recognizable wireless carrier.
For example, ``2024189999@[wireless company].com'' would be such an
address. However, we understand that other MSM subscriber addresses do
not have such easily distinguishable addresses, such as
``nickname@[wireless company].com.'' Moreover, as technology evolves,
the options available for accessing and reading electronic mail
messages from mobile devices will only expand. Therefore, as required
by the Act, we must ``consider the ability of a sender'' of a
commercial message to ``reasonably determine'' that the message is an
MSCM.
There appear to be a variety of mechanisms that, if implemented,
could allow a sender to reasonably determine that a message is being
sent to an MSM subscriber. We seek comment on the efficacy and cost
considerations of each of the specific mechanisms identified below, as
well as any reasonable alternatives, whether they are offered at the
network level by service providers, at the device level by
manufacturers, or even by other mechanisms involving subscribers
themselves. We especially seek comment from small businesses on these
issues. If wireless providers are to follow direction from subscribers
as to which senders' messages should be blocked or allowed to pass
through any filter, we seek comment on whether such information about
the subscribers' choices is adequately protected. We seek comment on
whether other protections are needed and what they might be.
In this section we focus on possible mechanisms to enable senders
to recognize MSMs by the recipient's electronic mail message address,
specifically the Internet domain address portion.
List of MSM domain names. We seek comment on whether we should
establish a list of all domain names that are used exclusively for MSM
subscribers, to allow senders to identify the electronic mail addresses
that belong to MSM subscribers. We note that this list would not
include unique user names or mailboxes--rather, it would solely be a
registry of a small number of mail domains to allow senders to identify
whether any messages they were planning to send would in fact be MSCMs.
If an MSM provider were to use a portion of their domain exclusively
for MSMs, the list would include the portion of its domain devoted to
that purpose. In that case, we believe that a sender could consult such
a list to reasonably determine if a message was addressed to a mobile
service subscriber. We seek comment on whether it is industry practice
for providers to employ subdomains that are exclusively used to serve
their MSM subscribers that distinguish such customers from other
customers. For example, if a company offers both MSM and non-MSM
services, does it assign subscribers to those different services the
same or different domain names for their addresses? If not, we seek
[[Page 16878]]
comment on whether we should require MSM providers to do so. We seek
comment on whether using exclusive subdomain names should be required
for all MSM service, or whether we should require carriers to offer
subscribers the option of using such a name.
In connection with this approach, we seek comment on whether we
should establish such a list and prohibit the sending of commercial
electronic mail messages to domains on that list as violations of the
Act. We seek comment on what steps the Commission may take to encourage
or require the use of domain name oriented solutions by entities
subject to our jurisdiction. Further, we seek comment on what steps the
Commission could take to facilitate these solutions through interaction
with industry and other entities not directly regulated by the
Commission. We seek comment on any practical, enforceability, cost or
other concerns related to establishing such a list. We seek comment on
how it might be established, maintained, accessed and updated. We seek
comment regarding any burdens on small business owners who advertise
using electronic mail to check such a list in order to comply with the
Act.
Registry of individual subscriber addresses. We seek comment on
whether we should establish a limited national registry containing
individual electronic mail addresses, similar to the national ``do-not-
call'' registry. The FTC is tasked with reviewing how a nationwide
marketing ``Do-Not-E-Mail'' registry might offer protection for those
consumers who choose to join. Would a similar registry just for MSM
addresses be consistent with the Act in general and with the greater
protections provided in section 14(b)(1) for MSM subscribers? If the
FTC implements a registry, how would ours differ? We seek comment on
any practical, technical, security, privacy, enforceability, and cost
concerns related to establishing such a registry. In particular, we
seek comment on how it might be established, maintained, accessed and
updated. We seek information about the volume of addresses potentially
included in such a registry, how MSM providers could verify that
submitted addresses were only for MSM service, and how such a registry
might be funded. In particular, could the confidentiality of MSM
subscriber electronic mail addresses be adequately protected if
maintained on a widely-accessible list? We seek comment on the burdens
on small businesses to participate in such a registry. We seek comment
on whether the establishment of a registry of electronic mail addresses
could result in more, rather than less, unwanted electronic mail
messages being sent to those addresses.
MSM-only domain name. We seek comment on whether it would be
possible and useful to require the use of specific top-level and
second-level domains, which form the last two portions of the Internet
domain address. For example, could we allow carriers to use a top-level
domain, particularly the ``.us'' country-code top-level domain, and
require that to be preceded by a standard second-level domain (such as
``'' for mobile message service)? Under such
an approach, MSM providers wireless company ABC and wireless company
XYZ would gradually transition the domain parts of their subscribers'
electronic mail addresses to ``@[wireless company ABC]..us'' and ``@[wireless company XYZ]..us'' respectively. Could carriers or other parties
subject to the Commission's jurisdiction implement such solutions
independently, or would such approaches require cooperation of entities
not generally under our jurisdiction? We seek comment on the burdens on
small businesses to use such domain names.
Common MSM subdomain names. We seek comment on whether we should
require one portion of the domain to follow a standard naming
convention to be used for all MSM service, or whether each carrier
could choose its own naming convention within its own domains, as long
as it was only used for such service. We note that one apparently
significant difficulty with this approach is that entities that do not
provide MSM service might also adopt such names. Thus, the sender might
not be able to distinguish those addresses to which sending an MSCM was
prohibited from some other addresses to which it is not prohibited. We
seek comment on these and any other domain name-based approaches, their
respective merits, and their practicality. In addition, we seek comment
as to the effect a domain-name based approach will have on small
communications carriers and whether there are less burdensome
alternatives for such businesses.
b. Challenge and Response Mechanisms. As an alternative, we seek
comment on whether we should require wireless providers to adopt
mechanisms that would offer what is known as a ``challenge-response''
system. A challenge-response mechanism sends back a challenge that
requires a response verifying some aspect of the message. It is our
understanding that technical mechanisms exist that could automatically
hold a message and send a response to the sender to let the sender know
the message was addressed to an MSM subscriber. For example, such
technology might either ask for confirmation from the sender before
forwarding the message to the intended recipient, or just return the
first message from a sender with a standard response noting that the
intended recipient was an MSM subscriber. Data suggests that this
``challenge-response'' approach is available in countering unwanted
electronic mail, and a number of variants are possible. We seek comment
on such mechanisms and alternatives. Is it reasonable to expect the
sender to note the addressee's status and refrain from sending future
messages to that address unless the sender has prior express
authorization? Could mechanisms notifying the sender after he has sent
an MSCM serve as an alternative or supplement to other mechanisms for
enabling the sender to identify MSM subscriber addresses before an MSCM
is sent? Would this practice be less burdensome to small businesses
than alternative proposals? Would a challenge-response mechanism
designed to filter out commercial electronic mail present an
inappropriate impediment to non-commercial messages?
c. Commercial Message Identification. We note that, in order to
make any blocking or filtering mechanisms respond only to commercial
messages, rather than to all messages, commercial messages would first
need to be identified. We seek comment on the best methods that could
be used by an MSM provider to identify such messages as commercial, if
such methods are needed to make a filtering system effective. For
example, would it be useful to use characters at the start of the
subject line, or other methods? We seek comment on methods for
``tagging'' such messages so that they are identifiable as commercial
messages. In addition, we ask about the practicality of having an MSM
provider automatically request a response from the sender's server for
any MSCMs identified by unique characters in the subject line labeling.
We seek comment on this and other similar approaches and their
respective merits and practicality. We seek comment on specific
alternative approaches.
By itself, a prohibition against anyone sending MSCMs without prior
express permission would place the burden on the sender to ensure that
it is not sending its messages to MSM addresses. We seek comment
therefore on whether
[[Page 16879]]
it would be necessary or useful to consider the option of ``tagging''
commercial messages to identify them. We seek comment on this issue and
on our authority to require such tagging on all commercial electronic
mail. We note that the Act requires the FTC to tender a report to
Congress outlining a plan to address the labeling of commercial
electronic mail messages in general. We are especially interested in
the comments of small businesses about this alternative. Is it less
burdensome than other alternatives?
2. Express Prior Authorization
Congress directed the FCC to adopt rules to provide consumers with
the ability to avoid receiving MSCMs, unless the subscriber has
provided express prior authorization to the sender. We seek comment on
the form and content of such ``express prior authorization.'' We seek
comment on whether it should be required to be in writing, and how any
such requirement could be met electronically. We note that certain
other requirements of the Act do not apply if the sender has obtained
the subscriber's ``affirmative consent.'' As defined in the Act,
``affirmative consent'' means: (1) That the recipient expressly
consented either in response to a clear and conspicuous request for
such consent, or at the recipient's own initiative; and (2) in cases
when the message is from a party other than the party which received
consent, that the recipient was given clear and conspicuous notice at
the time of consent that the electronic mail address could be
transferred for the purpose of initiating commercial e-mail messages.
We seek comment on whether the definition of ``affirmative consent''
would also be suited to use in defining ``express prior
authorization.''
We seek comment on whether any additional requirements are needed
and the technical mechanisms that a subscriber could use to give
express prior authorization. For example, should there be a notice to
the recipient about the possibility that costs could be incurred in
receiving any message? What technical constraints imposed by the unique
limitations of wireless devices are relevant in considering the form
and content of express prior authorization. We seek comment on ways to
ease the burdens on both consumers and businesses, especially small
businesses, of obtaining ``express prior authorization'' while
maintaining the protections intended by Congress.
3. Electronically Rejecting Future MSCMs
Section 14(b)(2) specifically requires that we develop rules that
``allow recipients of MSCMs to indicate electronically a desire not to
receive future MSCMs from the sender.'' We seek comment on whether
there are any technical options that might be used, such as a code that
could be entered by the subscriber on her wireless device to indicate
her withdrawal of permission to receive messages. For example, could an
interface be accessed over the Internet (not necessarily through the
wireless device) so that a user would access his or her account and
modify the senders' addresses for which messages would be blocked or
allowed through? We seek comment on whether carriers, especially small
carriers, already have systems in place to allow subscribers to block
messages from a sender upon request of a subscriber. We also seek
comment on whether a challenge-and-response system, as discussed above,
could be used to accomplish this goal. A challenge-response mechanism
sends back a challenge that requires a response verifying some aspect
of the message. In addition to the challenge-response systems, could an
MSM subscriber select a ``secret code'' or other personal identifier
that a subscriber could distribute selectively to entities who she
wanted to be able to send MSCMs to her? Could such an approach enable a
carrier to filter out all commercial messages that do not include that
``secret code'' or personal identifier? We seek comment on whether
there is some mechanism using the customer's wireless equipment, rather
than the network, that could be used by a subscriber to screen out
future MSCMs. We seek comment on these and any other methods that would
allow the recipient of MSCMs to indicate electronically a desire not to
receive future MSCMs from the sender. We especially seek comment from
small businesses that might be affected by such a requirement. Further
we seek comment on whether it would be appropriate to require or allow
senders of MSCMs to give subscribers the option of going to an Internet
Web site address provided by the sender to indicate their desire not to
receive future MSCMs from the sender. Additionally, we seek comment on
whether there are additional considerations needed for MSCMs sent to
subscribers who are roaming on the network, given, for example, that
different networks may have different technological capabilities.
4. Exemption for Providers of Commercial Mobile Services
Section 14(b)(3) requires the Commission to take into consideration
whether to subject providers of commercial mobile services to paragraph
(1) of the Act. As a result, the Commission may exempt CMRS providers
from the requirement to obtain express prior authorization from their
current customers before sending them any MSCM. In making any such
determination, the Commission must consider the relationship that
exists between CMRS providers and their subscribers.
We seek comment on whether there is a need for such an exemption
and how it would impact consumers. As discussed above, the Act already
excludes certain ``transactional and relationship'' messages from the
definition of unsolicited commercial electronic mail. These
transactional and relationship messages include those sent regarding
product safety or security information, notification to facilitate a
commercial transaction, and notification about changes in terms,
features, or the customer's status. We seek comment then on whether
there is a need for a separate exemption for CMRS providers from the
section 14 ``express prior permission'' requirement. In particular, we
seek specific examples of messages, if any, that CMRS providers send to
their customers that are not already excluded under the Act in general.
Should any exemptions for carriers be limited to only those messages
sent by CMRS carriers regarding their own service? What would be the
impact of any such exemption on small businesses?
If the Commission opts to exempt CMRS carriers from obtaining prior
express authorization, Congress has required that such providers, in
addition to complying with other provisions of the Act, must allow
subscribers to indicate a desire to receive no future MSCMs from the
provider: (1) At the time of subscribing to such service and (2) in any
billing mechanism. We seek comment on how we might implement those
requirements, if we provide an exemption. Finally, we seek comment
regarding whether small wireless service providers should be treated
differently with respect to any of these issues, and if so, how.
C. Senders of MSCMs and the CAN-SPAM Act in General
Section 14(b)(4) of the Act requires the Commission to determine
how a sender of an MSCM may comply with
[[Page 16880]]
the provisions of the CAN-SPAM Act in general, considering the ``unique
technical aspects, including the functional and character limitations,
of devices that receive such messages.'' If a sender is not prohibited
from sending MSCMs to an address, either because the subscriber has not
used his ability to stop such messages or because the sender has
received ``express prior authorization,'' then the message must still
comply with the Act in general. Therefore, we ask for comment on
specific compliance issues that senders of MSCM might have with other
sections of the Act.
We believe that a large segment of MSM subscribers who receive and
send text-based messages on their wireless devices today do so on
digital cellular phones that are designed principally for voice
communications and that provide limited electronic mail message
functionality. Currently, text messages are often limited to a maximum
message length of ranging from 120 to 500 characters. Some MSM
providers limit the length of messages allowed on their systems to
approximately 160 characters. As a result, it might be difficult for
senders to supply information required by the CAN-SPAM Act (such as
header information and required identifier, material on how to request
no more messages, and postal address), because that content might be
limited in length or might not be readily displayable. Consequently,
there might be some technical difficulties in ensuring that electronic
mail content is provided to subscribers in compliance with the
requirements of the Act. We seek comment on these issues, particularly
as they affect small wireless providers and other small businesses. We
ask for comment on whether any such issues will be mitigated in the
near future with advances in technology. For example, we understand
that some commercial mobile service subscribers may already supplement
the limited text handling functionality with ancillary personal
computer technology. We seek comment on this and any other possible
technical considerations for senders of MSCMs that must comply with the
Act.
II. TCPA
A. Safe Harbor for Calls to Wireless Numbers
We now seek additional comment on the ability of telemarketers,
especially small businesses, to comply with the TCPA's prohibition on
calls to wireless numbers since implementation of intermodal Local
Number Portability (LNP). We specifically seek comment on whether the
Commission should adopt a limited safe harbor for autodialed and
prerecorded message calls to wireless numbers that were recently ported
from a wireline service to a wireless service provider.
The Direct Marketing Association (DMA) indicates that it is in the
process of creating a ported number database. It contends, however,
that this solution will not allow marketers to update their call lists
instantaneously when consumers port their wireline numbers. The DMA
argues that, even with a direct link to Neustar's database of wireless
service numbers that have recently been ported from wireline service,
there will be time lags throughout the process, during which a consumer
who has just ported a wireline number to wireless service could receive
a call from a marketer.
As the Commission stated in the 2003 TCPA Order, the TCPA rules
prohibiting telemarketers from placing autodialed and prerecorded
message calls to wireless numbers have been in place for 12 years and
the Commission's porting requirements have been in place for over five
years. Telemarketers have received sufficient notice of these
requirements in order to develop business practices that will allow
them to continue to comply with the TCPA. The record continues to
demonstrate that information is currently available to assist
telemarketers in determining which numbers are assigned to wireless
carriers. Nevertheless, we recognize that once a number is ported to a
wireless service, a telemarketer may not have access to that
information immediately in order to avoid calling the new wireless
number.
We seek comment on the narrow issue of whether the Commission
should adopt a limited safe harbor during which a telemarketer will not
be liable for violating the rule prohibiting autodialed and prerecorded
message calls to wireless numbers once a number is ported from wireline
to wireless service. If so, we seek comment on the appropriate safe
harbor period given both the technical limitations on telemarketers and
the significant privacy and safety concerns regarding calls to wireless
subscribers. For example, would a period of up to seven days be a
reasonable amount of time for telemarketers to obtain data on recently
ported numbers and to scrub their call lists of those numbers? Or, as
the DMA has requested, should any safe harbor the Commission adopt
provide telemarketers with up to 30 days to do so? Are there other
options in the marketplace available to telemarketers that should
affect whether we adopt a limited safe harbor as well as the duration
of any such safe harbor? We also seek comment on whether any safe
harbor period adopted should sunset in the future and, if so, when. In
addition, we seek comments from small businesses which engage in
telemarketing about the appropriateness of such a limited safe harbor
and its parameters.
B. National Do-Not-Call Registry and Monthly Updates by Telemarketers
We seek comment on whether we should amend our safe harbor
provision to mirror any amendment made by the FTC to its safe harbor.
The Appropriations Act does not require the FCC to amend its rules.
However, in the Do-Not-Call Implementation Act (Do-Not-Call Act),
Congress directed the FCC to consult and coordinate with the FTC to
``maximize consistency'' with the rules promulgated by the FTC. In
addition, we note that, absent action to amend our safe harbor, many
telemarketers will face inconsistent standards because the FTC's
jurisdiction extends only to certain entities, while our jurisdiction
extends to all telemarketers.
Therefore, in an effort to remain consistent with the FTC's rules,
we propose amending our safe harbor to require sellers and
telemarketers acting on behalf of sellers to use a version of the
national do-not-call registry obtained from the administrator of the
registry no more than 30 days prior to the date any call is made. We
seek comment on how amending our safe harbor provision, or failing to
do so, would affect telemarketers' ability to comply with the
Commission's do-not-call rules. What problems will telemarketers,
including small businesses, face in ``scrubbing'' their call lists
every 30 days that they do not experience under the current rules? Are
there any reasons the Commission should not amend its rules to be
consistent with the FTC?
Initial Regulatory Flexibility Analysis (IRFA)
As required by the Regulatory Flexibility Act (RFA), 5 U.S.C. 603
et seq., the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on small entities by the policies and rules proposed in this NPRM. See
5 U.S.C. 603. A substantial number of small entities might be affected
by our action. 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 or FNPRM, as applicable. The
[[Page 16881]]
Commission will send a copy of the NPRM and FNPRM, including this IRFA,
to the Chief Counsel for Advocacy of the Small Business Administration.
See 5 U.S.C. 603(a).
Need for, and Objectives of, the Proposed Rules
On December 8, 2003, Congress passed the Controlling the Assault of
Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act) to
address the growing number of unwanted commercial electronic mail
messages, which Congress determined to be costly, inconvenient, and
often fraudulent or deceptive. Congress found that recipients ``who
cannot refuse to accept such mail'' may incur costs for storage, and
``time spent accessing, reviewing, and discarding such mail.'' The CAN-
SPAM Act prohibits any person from transmitting such messages that are
false or misleading and gives recipients the right to decline to
receive additional messages from the same source. Certain agencies,
including the Commission, are charged with enforcement of the CAN-SPAM
Act.
Section 14 of the CAN-SPAM Act requires the Commission to (1)
promulgate rules to protect consumers from unwanted mobile service
commercial messages, and (2) in doing so consider the ability of
senders to determine whether a message is a mobile commercial
electronic mail message. In addition, the Commission shall consider the
ability of senders of mobile service commercial messages to comply with
the CAN-SPAM Act in general. Furthermore, the CAN-SPAM Act requires the
Commission to consider the relationship that exists between providers
of such services and their subscribers.
The Telephone Consumer Protection Act (TCPA) was enacted to address
certain telemarketing practices, including calls to wireless telephone
numbers, which Congress found to be an invasion of consumer privacy and
even a risk to public safety. The TCPA specifically prohibits calls
using an autodialer or artificial or prerecorded message ``to any
telephone number assigned to a paging service, cellular telephone
service, specialized mobile radio service, or other common carrier
service, or any service for which the called party is charged.'' In
addition, the TCPA required the Commission to ``initiate a rulemaking
proceeding concerning the need to protect residential telephone
subscribers' privacy rights'' and to consider several methods to
accommodate telephone subscribers who do not wish to receive
unsolicited advertisements.
In 2003, the Commission released a Report and Order (2003 TCPA
Order) revising the TCPA rules to respond to changes in the marketplace
for telemarketing. Specifically, we established in conjunction with the
Federal Trade Commission (FTC) a national do-not-call registry for
consumers who wish to avoid unwanted telemarketing calls. The national
do-not-call registry supplements long-standing company-specific rules
which require companies to maintain lists of consumers who have
directed the company not to contact them. In addition, we determined
that the TCPA prohibits any call using an automatic telephone dialing
system or an artificial or prerecorded message to any wireless
telephone number. We concluded that this encompasses both voice calls
and text calls to wireless numbers including, for example, Short
Message Service calls. We acknowledged that, beginning in November of
2003, numbers previously used for wireline service could be ported to
wireless service providers and that telemarketers will need to take the
steps necessary to identify these numbers. Intermodal local number
portability (LNP) went into effect November, 2003.
The 2003 TCPA Order required that telemarketers use the national
do-not-call registry maintained by the FTC to identify consumers who
have requested not to receive telemarketing calls. Currently, in order
to avail themselves of the safe harbor for telemarketers, a
telemarketer is required to update or ``scrub'' its call list against
the national do-not-call registry every 90 days. Recently the FTC
released a Notice of Proposed Rulemaking proposing to amend its safe-
harbor provision and require telemarketers to update their call lists
every 30 days. This Notice proposes to modify the Commission's rules to
parallel any changes to the FTC's rules. With this amendment, all
telemarketers would be required to scrub their lists against the
national do-not-call registry every 30 days in order to avail
themselves of that safe harbor.
Issues Raised in Notice
This Notice addresses three policy and rule modifications. First,
it initiates a proceeding to implement the CAN-SPAM Act by enacting
regulations to protect consumers from unwanted mobile service
commercial messages. Second, under the TCPA we are exploring the need
for a safe harbor for telemarketers who call telephone numbers that
have been recently ported from wireline to wireless service. Third, we
propose a change to the existing telemarketing safe-harbor provision
which would require telemarketers to access the do-not-call registry
every 30 days.
Legal Basis
The proposed action is authorized under Sections 1-4, 227, and
303(r) of the Communications Act of 1934, as amended; the Controlling
the Assault of Non-Solicited Pornography and Marketing Act of 2003,
Public Law Number 108-187, 117 Statute 2699; and the Do-Not-Call
Implementation Act, Public Law Number 108-10, 117 Statute 557.
Description and Estimate of the Number of Small Entities to Which the
Proposed Rule Will Apply
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.
The regulations and policies proposed in this item on telephone
solicitation and the prohibitions of sending electronic commercial mail
messages apply to a wide range of entities, including all entities that
use the telephone or electronic messaging to advertise. That is, our
actions affect the myriad of businesses throughout the nation that use
telemarketing or electronic messaging to advertise. We have attempted
to identify, with as much specificity as possible, all business
entities that potentially may be affected by the policies and rules
proposed herein, but are not expanding in this analysis the scope of
entities possibly subject to requirements adopted in this proceeding
beyond the scope described in the Notice itself. In order to assure
that we have covered all possible entities we have included general
categories, such as Wireless Service Providers and Wireless
Communications Equipment Manufacturers, while also including more
specific categories, such as Cellular Licensees and Common Carrier
Paging. Similarly, for completeness, we have also included descriptions
of small entities in various categories, such as 700 MHz Guard Band
Licenses, who
[[Page 16882]]
may potentially be affected by this proceeding but who would not be
subject to regulation simply because of their membership in that
category.
Sometimes when identifying small entities we provide information
describing auctions' results, including the number of small entities
that were winning bidders. We note, however, that the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily reflect the total number of small entities
currently in a particular service. The Commission does not generally
require that applicants provide business size information, nor does the
Commission track subsequent business size, except in the context of an
assignment or transfer of control application where unjust enrichment
issues are implicated. Consequently, to assist the Commission in
analyzing the total number of potentially affected small entities, we
request that commenters estimate the number of small entities that may
be affected by any changes.
Small Businesses. Nationwide, there are a total of 22.4 million
small businesses, according to SBA data.
Telemarketers. SBA has determined that ``telemarketing bureaus''
with $6 million or less in annual receipts qualify as small businesses.
For 1997, there were 1,727 firms in the ``telemarketing bureau''
category, total, which operated for the entire year. Of this total,
1,536 reported annual receipts of less than $5 million, and an
additional 77 reported receipts of $5 million to $9,999,999. Therefore,
the majority of such firms can be considered to be small businesses.
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 SBA categories, a wireless business is
small if it has 1,500 or fewer employees. For the census category of
Paging, 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. For the census category
Cellular and Other Wireless Telecommunications, Census Bureau data for
1997 show that there were 977 firms in this category, total, that
operated for the entire year. Of this total, 965 firms had employment
of 999 or fewer employees, and an additional 12 firms had employment of
1,000 employees or more. Thus, under this second category and size
standard, the great majority of firms can, again, be considered small.
Internet Service Providers. The SBA has developed a small business
size standard for Internet Service Providers. This category comprises
establishments ``primarily engaged in providing direct access through
telecommunications networks to computer-held information compiled or
published by others.'' Under the SBA size standard, such a business is
small if it has average annual receipts of $21 million or less.
According to Census Bureau data for 1997, there were 2,751 firms in
this category that operated for the entire year. Of these, 2,659 firms
had annual receipts of under $10 million, and an additional 67 firms
had receipts of between $10 million and $24,999,999. Thus, under this
size standard, the great majority of firms can be considered small
entities.
Wireless Communications Equipment Manufacturers. The Commission has
not developed special small business size standards for entities that
manufacture radio, television, and wireless communications equipment.
Therefore, the applicable small business size standard is the
definition under the SBA rules applicable to ``Radio and Television
Broadcasting and Wireless Communications Equipment Manufacturing.''
Examples of products that fall under this category include
``transmitting and receiving antennas, cable television equipment, GPS
equipment, pagers, cellular phones, mobile communications equipment,
and radio and television studio and broadcasting equipment'' and may
include other devices that transmit and receive Internet Protocol
enabled services, such as personal digital assistants. Under that
standard, firms are considered small if they have 750 or fewer
employees. Census Bureau data for 1997 indicate that, for that year,
there were a total of 1,215 establishments in this category. Of those,
there were 1,150 that had employment under 500, and an additional 37
that had employment of 500 to 999. The percentage of wireless equipment
manufacturers in this category is approximately 61.35%, so the
Commission estimates that the number of wireless equipment
manufacturers with employment under 500 was actually closer to 706,
with an additional 23 establishments having employment of between 500
and 999. Given the above, the Commission estimates that the great
majority of wireless communications equipment manufacturers are small
businesses.
Radio Frequency Equipment Manufacturers. The Commission has not
developed a special small business size standard applicable to Radio
Frequency Equipment Manufacturers. Therefore, the applicable small
business size standard is the definition under the SBA rules applicable
to ``Radio and Television Broadcasting and Wireless Communications
Equipment Manufacturing.'' Under that standard, firms are considered
small if they have 750 or fewer employees. Census Bureau data for 1997
indicate that, for that year, there were a total of 1,215
establishments in this category. Of those, there were 1,150 that had
employment under 500, and an additional 37 that had employment of 500
to 999. Thus, under this size standard, the majority of establishments
can be considered small entities.
Paging Equipment Manufacturers. The Commission has not developed a
special small business size standard applicable to Paging Equipment
Manufacturers. Therefore, the applicable small business size standard
is the definition under the SBA rules applicable to ``Radio and
Television Broadcasting and Wireless Communications Equipment
Manufacturing.'' Under that standard, firms are considered small if
they have 750 or fewer employees. Census Bureau data for 1997 indicate
that, for that year, there were a total of 1,215 establishments in this
category. Of those, there were 1,150 that had employment under 500, and
an additional 37 that had employment of 500 to 999. Thus, under this
size standard, the majority of establishments can be considered small
entities.
Telephone Equipment Manufacturers. The Commission has not developed
a special small business size standard applicable to Telephone
Equipment Manufacturers. Therefore, the applicable small business size
standard is the definition under the SBA rules applicable to
``Telephone Apparatus Manufacturing.'' Under that standard, firms are
considered small if they have 1,000 or fewer employees. Census Bureau
data indicates that for 1997 there were 598 establishments that
manufacture telephone equipment. Of those, there were 574 that had
fewer than 1,000 employees, and an additional 17 that had employment of
1,000 to 2,499. Thus, under this size standard, the majority of
establishments can be considered small.
As noted in paragraph 10, we believe that all small entities
affected by the policies and proposed rules contained
[[Page 16883]]
in this Notice will fall into one of the large SBA categories described
above. In an attempt to provide as specific information as possible,
however, we are providing the following more specific categories.
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. For the census category Cellular and Other Wireless
Telecommunications firms, Census Bureau data for 1997 show that there
were 977 firms in this category, total, that operated for the entire
year. Of this total, 965 firms had employment of 999 or fewer
employees, and an additional 12 firms had employment of 1,000 employees
or more. Thus, under this category and size standard, the great
majority of firms can be considered small. According to the most recent
Trends in Telephone Service data, 719 carriers reported that they were
engaged in the provision of cellular service, personal communications
service, or specialized mobile radio telephony services, which are
placed together in the data. We have estimated that 294 of these are
small, under the SBA small business size standard.
Common Carrier Paging. 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, 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.
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, 608 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.
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, 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.
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 that
SBA small business size standard, a business is small if it has 1,500
or fewer employees. According to the most recent Trends in Telephone
Service data, 719 carriers reported that they were engaged in the
provision of wireless telephony. We have estimated that 294 of these
are small under the SBA small business size standard.
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.
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.
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
[[Page 16884]]
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.
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.
Upper 700 MHz Band Licenses. The Commission released a Report and
Order, authorizing service in the upper 700 MHz band. This auction,
previously scheduled for January 13, 2003, has been postponed.
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 sold to three bidders. One of
these bidders was a small business that won a total of two licenses.
Specialized Mobile Radio. The Commission awards ``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. The Commission awards ``very small entity'' bidding
credits to firms that had revenues of no more than $3 million in each
of the three previous calendar years. The SBA has approved these small
business size standards for the 900 MHz Service. The Commission has
held auctions for geographic area licenses in the 800 MHz and 900 MHz
bands. The 900 MHz SMR auction began on December 5, 1995, and closed on
April 15, 1996. Sixty bidders claiming that they qualified as small
businesses under the $15 million size standard won 263 geographic area
licenses in the 900 MHz SMR band. The 800 MHz SMR auction for the upper
200 channels began on October 28, 1997, and was completed on December
8, 1997. Ten bidders claiming that they qualified as small businesses
under the $15 million size standard won 38 geographic area licenses for
the upper 200 channels in the 800 MHz SMR band. A second auction for
the 800 MHz band was held on January 10, 2002 and closed on January 17,
2002 and included 23 BEA licenses. One bidder claiming small business
status won five licenses.
The auction of the 1,053 800 MHz SMR geographic area licenses for
the General Category channels began on August 16, 2000, and was
completed on September 1, 2000. Eleven bidders won 108 geographic area
licenses for the General Category channels in the 800 MHz SMR band
qualified as small businesses under the $15 million size standard. In
an auction completed on December 5, 2000, a total of 2,800 Economic
Area licenses in the lower 80 channels of the 800 MHz SMR service were
sold. Of the 22 winning bidders, 19 claimed small business status and
won 129 licenses. Thus, combining all three auctions, 40 winning
bidders for geographic licenses in the 800 MHz SMR band claimed status
as small business.
In addition, there are numerous incumbent site-by-site SMR
licensees and licensees with extended implementation authorizations in
the 800 and 900 MHz bands. We do not know how many firms provide 800
MHz or 900 MHz geographic area SMR 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. We
assume, for purposes of this analysis, that all of the remaining
existing extended implementation authorizations are held by small
entities, as that small business size standard is approved by the SBA.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
I. CAN-SPAM
It is difficult to assess the cost of compliance for this item
given the multiple avenues and the varied, layered approaches to
protecting consumers from the unwanted commercial electronic mail
messages under consideration. The umbrella analysis is that if a small
business which currently engages in sending commercial electronic mail
messages as part of its advertising campaign ceases sending such
commercial messages, then there is no cost to comply with any
prohibition being considered. Congress noted that the CAN-SPAM Act only
addresses unwanted messages, so the
[[Page 16885]]
loss of business for senders that may result from the decrease in
advertising in this manner should be nominal.
Proposed in this item is the development of a small list of
electronic mail addressing domains. The development of specific domain
names might require providers to change addressing systems if domain
names are not already distinguishable, and to register such names. If
the Commission then prohibited the sending of commercial messages to
such domains, businesses, including small businesses, that send
commercial electronic mail would be required to check such a list
before sending such messages. Because the list would be small, only
containing the list of relevant providers of such domains, we do not
anticipate the compliance burden of checking such a list to be great.
The alternative considered that creates the greatest compliance
burden on small entities appears to be the use of a registry of
individual electronic addresses. This alternative would not require
providers to register names, but would instead require subscribers,
including small businesses, to register their addresses on a list
similar to the telemarketing do-not-call registry. Small businesses
sending commercial electronic mail messages would then be required to
prescreen or check this list. It is unclear how many listings there
would be, but given consumer frustration over the number of unwanted
electronic commercial messages, we expect a large number of individuals
and businesses to register. The costs to small businesses sending
commercial electronic mail messages associated with this requirement
would be the cost of acquiring the ``Do-Not-E-Mail'' list and the cost
of ``scrubbing'' the small business's solicitation list against the
``Do-Not-E-Mail'' list. We know the cost of obtaining the FTC's do-not-
call registry is a maximum of $7,375 per year and for many small
businesses it is free. We estimate that the cost of scrubbing against a
Do-Not-E-Mail registry to be approximately $300--400 per month for a
small telemarketing business. Who would pay for such a list to be
compiled and maintained has not been determined; however, we expect
this burden on small businesses to be significant.
II. TCPA
The proposed change in the safe-harbor rules, which would require
telemarketers to update their lists monthly instead of quarterly, has
no additional compliance cost for accessing the national do-not-call
registry, because once a telemarketer has paid its fee to the FTC the
telemarketer may access the list as often as it wants, up to once a
day. There may, however, be an increase in costs associated with
scrubbing the telemarketer's call list more frequently. These increased
costs might include an increase in staff time to scrub the call list or
payments to a third party for ``scrubbing'' services. Many small
businesses perform these ``scrubbing'' operations internally and
therefore the cost is in staff time and data processing resources.
Other small businesses chose to hire outside parties to scrub their
lists. We estimate the cost of scrubbing such a list to be $300-400 per
month for a small telemarketing business.
Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): ``(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 and
reporting requirements under the rule for such 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 such small
entities.''
I. CAN-SPAM
Initially, we note that the rules are intended to protect
subscribers, including small businesses, from unwanted mobile service
commercial messages. Congress found these unwanted messages to be
costly and time-consuming. Therefore, these measures should benefit
small businesses by reducing cost and time burdens on small businesses
that receive such messages.
There are two alternatives, which might be used in combination,
considered in the Notice to minimize the burden on some small
businesses that send mobile commercial electronic mail messages. These
alternatives are (1) the use of a domain name to indicate those
entities to which sending a mobile service commercial message is not
acceptable; and (2) the use of a challenge-response mechanism to reject
electronic commercial messages. The burden of each alternative on small
businesses as senders is minimal. We expect that the burden of
alternative one on small carriers to be minimal as well.
Alternative one allows senders to recognize mobile service
messaging by the recipient's electronic mail message address. The
Commission is considering the requirement that domain names be used to
identify carriers' mobile service messaging clients. We expect that if
domain name changes are required, the burden will rest on carriers,
including small carriers, to change the domain names of their clients.
We anticipate that this burden on carriers will be minimal. We also
expect there to be a slight burden on those small businesses that chose
to use the special domain names to limit incoming commercial messages.
These small businesses might need to reprint or alter letterhead,
business cards, or advertising material to reflect the name change. We
note, however, that for businesses choosing this option, those burdens
would be offset by the savings they would realize from a reduction in
unwanted mobile service commercial messages. We consider this burden on
small businesses receiving commercial messages to be a less burdensome
alternative than the alternative described in paragraph 37 above that
would require the establishment of an individual ``Do-Not-E-Mail''
registry and would result in a significant burden on small businesses
sending commercial messages.
The second alternative considered is the challenge-response
alternative, which might also require electronic mail messages to be
identified as commercial. The identification process, known as
``tagging,'' would then allow recipients to use software that would
reject or hold such electronic mail. This challenge-response process
requires a software trigger that would require confirmation from the
sender before forwarding the message to the intended recipient or would
return the first message from a sender with a standard response noting
that the intended recipient is a mobile service messaging subscriber.
Although there might be a burden imposed on senders to mark their
commercial messages, this alternative would free all businesses,
including small businesses, from having to pre-screen their mailing
lists before sending messages. The burden on small business senders
would be to note the addressee's status and refrain from sending to
that address unless the recipient provided prior express authorization.
This alternative would place a slight burden on small businesses that
use electronic mail messaging for commercial purposes. We expect that
it would impose a significant burden on the software design companies
and the
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manufacturers of wireless message receiving devices.
In regard to rejecting future messages, we note that two
alternatives are discussed. One involves a filtering mechanism. A
filtering mechanism would burden senders in that they might need to
obtain and retain a secret code from particular subscribers. This code
would be required to get their commercial messages past the filter. We
expect that obtaining and retaining a code from particular subscribers
would be a minimal burden on the small business that chooses to filter
its messages to keep out unwanted ones. Depending on how the system is
set up, there might be a small burden on the carriers for enabling such
a filtering mechanism. In order for the system to work, there might be
a requirement that small businesses sending these messages mark or tag
them as commercial. We anticipate that any burden of marking or tagging
messages would be very small.
The other alternative we discuss is whether there should be an
option to use a website interface for subscribers, including small
businesses, to change their filtering options. The alternative might
require businesses, including small businesses, to develop a website
for collecting addresses of subscribers that want to reject future
messages. We also discuss the possibility of using a webpage for
subscribers to notify senders that they do not want such messages. As
far as we can determine at this time, this alternative would be the
most difficult for small businesses to implement in terms of staff
resources, cost, software development and use, and Internet access and
website development. We would appreciate hearing from small businesses
if this is an accurate assessment.
II. TCPA
The Commission is also considering modifications to the TCPA safe-
harbor provision. This modification would require that telemarketers
scrub their lists on a monthly, rather than quarterly, basis. An
alternative to this proposed rule change is to leave the rule the way
it currently stands. An advantage to not changing the rule is that
there would be no increased burden on small businesses. Businesses
would continue to scrub their own call lists every three months. The
disadvantage to not changing the rule is that the FTC and Commission
rules might be inconsistent with one another. Small businesses subject
to the jurisdiction of both agencies would be faced with this
inconsistency. Congress has directed us to maximize consistency with
the FTC's rules. In addition, we believe that it is easier and less
burdensome for small businesses if the two agencies have consistent
requirements.
The TCPA specifically prohibits calls using an autodialer or
artificial or prerecorded message to any wireless telephone number.
With the advent of intermodal number portability it became important
for companies engaged in telemarketing to track recently ported numbers
in order to ensure continued compliance with the TCPA. The Commission
is now considering the adoption of a limited safe harbor for autodialed
and prerecorded message calls to wireless numbers that were recently
ported from a wireline service to a wireless service provider. It is
our belief that such an alternative will not have a significant
economic impact on any small businesses, only a benefit. The
alternative would be to not adopt a safe harbor for calls to recently
ported wireless numbers which, according to telemarketers, could make
compliance with the TCPA's prohibition difficult for callers using
autodialers and prerecorded messages. Small businesses, which disagree
with the Commission's determination and believe the creation of a safe
harbor would impact their business in a negative way, are requested to
file comments and advise the Commission about such an impact.
Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
No federal rules conflict with the rules discussed in this item;
however, there are areas in which the CAN-SPAM Act and the TCPA may
overlap as indicated in the primary item. In addition, the Commission
is required to consult with the FTC on its rulemaking. The FTC is
charged with implementing and enforcing most of the CAN-SPAM Act,
including criteria that further defines items that the Commission rules
will reference. The FTC is conducting its own rulemaking concurrently,
although most of the FTC's deadlines occur after the Commission's rules
must be promulgated. The TCPA and the Telemarketing Sales Rule
(enforced by the FTC) are duplicative in part.
Ordering Clauses
Accordingly, it is ordered that, pursuant to the authority
contained in sections 1-4, 227 and 303(r) of the Communications Act of
1934, as amended; the Controlling the Assault of Non-Solicited
Pornography and Marketing Act of 2003, Public Law 108-187, 117 Statute
2699; and the Do-Not-Call Implementation Act, Public Law 108-10, 117
Statute 557; 47 U.S.C. 151-154, 227 and 303(r); the Notice of Proposed
Rulemaking and Further Notice of Proposed Rulemaking are Adopted.
It is further ordered that the commission's Consumer & Governmental
Affairs Bureau, Reference Information Center, shall send a copy of this
Notice of Proposed Rulemaking and Further Notice of Proposed
Rulemaking, 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. 04-7226 Filed 3-30-04; 8:45 am]
BILLING CODE 6712-01-P