82_FR_31873 82 FR 31743 - Modernization of Payphone Compensation Rules; Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996; 2016 Biennial Review of Telecommunications Regulations

82 FR 31743 - Modernization of Payphone Compensation Rules; Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996; 2016 Biennial Review of Telecommunications Regulations

FEDERAL COMMUNICATIONS COMMISSION

Federal Register Volume 82, Issue 130 (July 10, 2017)

Page Range31743-31749
FR Document2017-14256

In this document, the Wireline Competition Bureau seeks comment on eliminating the Commission's payphone call tracking system annual audit requirement and associated reporting requirement. In light of the dramatic decline in payphone use and the high cost of compliance in proportion to payphone compensation at issue, the proposal will remove costly yet no longer necessary requirements. The Commission adopted the NPRM in conjunction with an Order waiving the 2017 and 2018 audit and associated reporting requirements while it considers the proposals in this NPRM.

Federal Register, Volume 82 Issue 130 (Monday, July 10, 2017)
[Federal Register Volume 82, Number 130 (Monday, July 10, 2017)]
[Proposed Rules]
[Pages 31743-31749]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-14256]



[[Page 31743]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 17-141, CC Docket No. 96-128, WC Docket No. 16-132; FCC 
17-79]


Modernization of Payphone Compensation Rules; Implementation of 
the Pay Telephone Reclassification and Compensation Provisions of the 
Telecommunications Act of 1996; 2016 Biennial Review of 
Telecommunications Regulations

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Wireline Competition Bureau seeks 
comment on eliminating the Commission's payphone call tracking system 
annual audit requirement and associated reporting requirement. In light 
of the dramatic decline in payphone use and the high cost of compliance 
in proportion to payphone compensation at issue, the proposal will 
remove costly yet no longer necessary requirements. The Commission 
adopted the NPRM in conjunction with an Order waiving the 2017 and 2018 
audit and associated reporting requirements while it considers the 
proposals in this NPRM.

DATES: Comments are due on or before August 9, 2017, and reply comments 
are due on or before September 8, 2017. Written comments on the 
Paperwork Reduction Act proposed information collection requirements 
must be submitted by the public, Office of Management and Budget (OMB), 
and other interested parties on or before September 8, 2017.

ADDRESSES: You may submit comments, identified by WC Docket No. 17-141, 
by any of the following methods:
    [ssquf] Federal Communications Commission's Web site: http://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.
    [ssquf] Mail: Parties who choose to file by paper must file an 
original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission. 
All hand-delivered or messenger-delivered paper filings for the 
Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building. Commercial overnight mail (other than 
U.S. Postal Service Express Mail and Priority Mail) must be sent to 
9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service 
first-class, Express, and Priority mail must be addressed to 445 12th 
Street SW., Washington, DC 20554.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format), send an email to [email protected] or 
call the Consumer & Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (tty).
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document. In addition to filing comments 
with the Secretary, a copy of any comments on the Paperwork Reduction 
Act information collection requirements contained herein should be 
submitted to the Federal Communications Commission via email to 
[email protected] and to Nicole Ongele, Federal Communications Commission, 
via email to [email protected].

FOR FURTHER INFORMATION CONTACT: Wireline Competition Bureau, 
Competition Policy Division, Michele Berlove, at (202) 418-1477, 
[email protected]. For additional information concerning the 
Paperwork Reduction Act information collection requirements contained 
in this document, send an email to [email protected] or contact Nicole Ongele 
at (202) 418-2991.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in WC Docket No. 17-141, adopted and 
released June 22, 2017. The full text of this document is available for 
public inspection during regular business hours in the FCC Reference 
Information Center, Portals II, 445 12th Street SW., Room CY-A257, 
Washington, DC 20554. It is available on the Commission's Web site at 
https://www.fcc.gov/document/modernization-payphone-compensation-rules-nprm-and-order.
    Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document. Comments may be filed using the Commission's Electronic 
Comment Filing System (ECFS). See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121 (1998), http://www.fcc.gov/Bureaus/OGC/Orders/1998/fcc98056.pdf.
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission. 
All hand-delivered or messenger-delivered paper filings for the 
Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building. Commercial overnight mail (other than 
U.S. Postal Service Express Mail and Priority Mail) must be sent to 
9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service 
first-class, Express, and Priority mail must be addressed to 445 12th 
Street SW., Washington, DC 20554.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format), send an email to [email protected] or 
call the Consumer & Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (tty).

Synopsis

I. Introduction

    1. In this Notice of Proposed Rulemaking (NPRM), we propose 
eliminating the Commission's payphone call tracking system annual audit 
requirement and associated reporting requirement. In light of the 
dramatic decline in payphone use and the high cost of compliance in 
proportion to payphone compensation at issue, we anticipate that our 
proposal will remove

[[Page 31744]]

costly yet no longer necessary requirements.

II. Background

    3. Section 276 of the Communications Act of 1934, as amended (the 
Act), which was adopted in the Telecommunications Act of 1996, directs 
the Commission to implement rules to ensure that payphone service 
providers (PSPs) are fairly compensated for all completed calls made 
from their payphones. Pursuant to Congress' directive, the Commission 
adopted rules governing payphone compensation in 1996. In doing so, the 
Commission noted that fair compensation to PSPs was not possible 
without an effective per-call tracking mechanism. It thus required that 
the carriers to whom coinless access code and subscriber toll-free 
calls are routed, known as ``Completing Carriers,'' ``be responsible 
for tracking each compensable call and remitting per-call compensation 
to the PSP.''
    4. In 2003, the Commission revised its payphone compensation rules 
to require, among other things, that Completing Carriers annually must 
file an audit report prepared by an independent third-party auditor in 
order to verify ongoing compliance. Specifically, the auditor must 
``(1) [v]erify that no material changes have occurred concerning the 
Completing Carrier's compliance with the criteria of the prior year's 
System Audit Report; or (2) [i]f a material change has occurred . . . 
verify that the material changes do not affect compliance with the 
audit criteria set forth in paragraph (c) of this section.'' Completing 
Carriers are required to make all documentation underlying the audit 
report, including working papers, available to PSPs for inspection upon 
request. Completing Carriers can avoid the need to comply with the 
audit and related requirements only by entering into alternative 
compensation arrangements with PSPs.
    5. Sprint and Cincinnati Bell each recently filed petitions with 
the Commission seeking a waiver of the annual audit requirement. The 
two carriers also filed comments in response to the Commission's 2016 
Biennial Review Public Notice urging the Commission to consider 
eliminating the annual payphone call tracking system audit requirement. 
In both sets of pleadings, the carriers point to the tremendous decline 
in payphone calling, the lack of a similar decline in the cost of the 
annual audit, and the companies' consistent compliance with the 
Commission's payphone compensation rules. USTelecom, ITTA, and Puerto 
Rico Telephone each filed in support of the Waiver Petitions and 
requested that the Commission broaden the relief to encompass 
additional carriers.

III. Discussion

    6. After reviewing the record in the 2016 Biennial Review 
proceeding, the Waiver Petitions and supporting comments, and based on 
our own observations of the changing communications landscape, we find 
that the best course is to reevaluate the necessity of the annual 
payphone call tracking system audit requirement and associated 
reporting requirement on an industrywide basis. Below, we propose to 
eliminate or modify this requirement and seek comment on this proposal.
    7. We propose to eliminate the annual audit requirement and 
associated reporting requirement embodied in section 64.1320(f) of the 
rules in its entirety, and we seek detailed comment on this proposal. 
Have circumstances changed such that the benefits of these rules in 
helping to ensure PSPs are fairly compensated no longer justify the 
costs of the rule?
    8. First, we seek comment on the assertion that the precipitous 
decline in payphone usage supports modernizing our compensation 
compliance regime by eliminating the annual audit requirement. At the 
peak of payphone usage in 1999, there were over 2.1 million payphones 
in service across the United States. Since that time, however, the 
rapid growth of mobile service seems to have resulted in a dramatic 
decline in the number of payphones in service in this country. By 2013, 
more than 90 percent of payphones had been disconnected, with only 
192,286 remaining. Almost half of those were disconnected over the 
following three years, so that there were only 99,832 payphones in 
service at the end of 2016. Is there any reason to expect this 
declining trend to change in the future? We seek comment, and 
supporting data, on this issue.
    9. Second, we seek comment on the costs of compliance. Are Sprint 
and Cincinnati Bell correct that those costs have not declined over 
time and in fact may have increased? Is there other data or evidence 
establishing the costs of compliance, including evidence establishing 
whether those costs have increased or decreased over time? Is it the 
case that the costs of compliance have not declined at the same pace as 
the payphone business such that over time the compliance costs per 
payphone and per payphone call have increased?
    10. Third, we seek comment on the amount of payphone compensation 
that Completing Carriers pay relative to the cost of compliance. Not 
surprisingly, in light of declining payphone usage, the amount of 
compensation paid to PSPs has likewise significantly declined over 
time. ITTA asserts that the amount of payphone compensation paid each 
year has declined even more across the industry than the 97 percent 
decline seen by Cincinnati Bell. According to Cincinnati Bell, the 
annual audit cost is currently five times the amount of payphone 
compensation it pays annually, while Sprint projects that the cost of 
its annual audit will be approximately 15 percent of payphone 
compensation paid in 2016. We encourage commenters to provide similarly 
specific information. How has compensation paid to PSPs relative to the 
costs of compliance changed since the rule was adopted? How should we 
evaluate whether the audit costs relative to payphone compensation are 
too high? Is comparison with total payphone compensation relevant, or 
should we compare the costs of compliance against some other value(s)? 
For instance, should the costs of compliance be compared against the 
likely benefits of avoiding incorrect compensation payments? We believe 
that the existing evidence about audit costs relative to payphone 
compensation suggests the costs of the rule now outweigh the benefits, 
and we seek comment on this analysis.
    11. Fourth, we seek comment on whether section 64.1320(f) is still 
necessary to ensure compliance with the underlying payphone 
compensation requirements. What effect would elimination of this annual 
audit and associated reporting requirement have on Completing Carriers' 
compliance with our rules regarding compensation to PSPs, including, 
among other things, requirements to maintain a system for accurately 
tracking coinless access code or subscriber toll-free payphone calls to 
completion; to provide a quarterly sworn statement from the company's 
Chief Financial Officer; and, to provide quarterly reports to PSPs that 
contain information for identifying compensable and noncompensable 
calls? Importantly, relieving Completing Carriers of the audit 
requirement would not relieve them of their obligation to ensure that 
they are compensating PSPs for all compensable calls. Payphone 
compensation compliance issues occurred in years past, but we believe 
that those issues are no longer apparent. Indeed, no formal payphone 
compensation-related complaints have been brought to the Commission's 
attention since 2010, and the last informal dispute of which we are 
aware

[[Page 31745]]

occurred almost four years ago. Are there any specific, recent examples 
of failure to appropriately compensate PSPs for coinless access code 
and subscriber toll-free calls originating from their payphones? Is 
ITTA correct that ``most long-distance providers use a clearinghouse . 
. . to process quarterly payments to PSPs'' and that the clearinghouses 
used by PSPs ``have effective investigation and dispute resolution 
processes in place to address any disparities between Completing 
Carrier and PSP data that may arise,'' and if so does the prevalence of 
such clearinghouses support repeal of the audit requirement? Is the 
infrequency of complaints, disputes, and disparities related to the 
existence of the audit requirement? If not, should we expect the 
frequency of such problems to change if we eliminate the audit 
requirement, or would the remaining safeguards be sufficient? If 
eliminating the audit requirement would increase such problems (e.g., 
failure to adequately compensate PSPs), we seek estimates of the likely 
annual costs the relevant parties would incur to resolve those 
increased problems or bounds around those costs.
    12. Finally, we do not believe that the option under our rules to 
enter into an alternative compensation agreement with each PSP, which 
thus removes the need to conduct an annual audit, is an economically 
feasible alternative. We believe that Sprint, Cincinnati Bell, and 
USTelecom are correct that the transaction costs of negotiating, 
implementing, and managing such alternative compensation arrangements 
with numerous PSPs would outweigh the amount of compensation to be 
paid. Consequently, the availability of this option under our rules 
appears to provide no basis to justify retention of the audit 
requirement. We seek comment on this issue.
    13. Alternatives. We propose simply eliminating the audit 
requirement and associated reporting requirement. In the alternative, 
should we instead eliminate the requirement but adopt some less 
burdensome requirement, such as a self-certification, as Sprint and 
Cincinnati Bell each offer to provide in lieu of the annual audit? If 
so, what form would such a self-certification take? Would it be 
sufficient for a Completing Carrier to self-certify that there have 
been no material changes to its payphone call tracking system, or would 
it also need to self-certify that there have been no changes to its 
network that affect the functioning or accuracy of the tracking system? 
Could such an annual self-certification replace the section 
64.1310(a)(3) quarterly sworn statement from the CFO? If we retain the 
requirement of a quarterly sworn statement, we seek comment on whether 
we should revise the requirement to allow certification by a company 
official other than the company's CFO, and, if so, which officials.
    14. Additional Reforms. Finally, we seek comment on whether the 
changing communications landscape since 2003 warrants additional 
changes to our rules governing the payphone compensation process. For 
example, does section 64.1320(a)'s initial payphone call tracking 
system audit requirement, and the attendant requirements set forth in 
sections 64.1320(b)-(e) and (g), remain relevant today? Do new carriers 
still occasionally become Completing Carriers such that we should 
retain this requirement? How often do PSPs or clearinghouses request 
underlying documents pursuant to section 64.1320(g)? Are all of the 
remaining requirements imposed by these rules still warranted to 
protect PSPs' right to full compensation for coinless access code and 
subscriber toll-free calls originating from their payphones? Can some 
of these requirements be streamlined or eliminated while still 
affording full protection to PSPs, and if so, how?
    15. In proposing to modernize specific part 64 subpart M 
requirements herein, we note that other subsections regarding the 
provision of payphone service were intended to apply solely on an 
interim basis and their terms have long since expired. For example, 
sections 64.1301(a)-(c) set forth interim per-payphone compensation 
provisions that applied only from November 7, 1996 through October 6, 
1997. Similarly, section 64.1301(d) set forth intermediate per-payphone 
compensation provisions that applied only from October 7, 1997 through 
April 20, 1999. We believe sections 64.1301(a)-(d), by their terms, no 
longer apply to any entity and can be eliminated. We further seek 
comment on whether additional provisions of part 64 subpart M that we 
have not specifically identified may similarly have expired and no 
longer apply to any entity, and if so, can be eliminated.

IV. Initial Regulatory Flexibility Analysis

    16. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared this present Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on small 
entities by the policies and rules proposed in this Notice of Proposed 
Rule Making (NPRM). Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments provided on the first page of this NPRM. 
The Commission will send a copy of this NPRM, including this IRFA, to 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA). In addition, the NPRM and IRFA (or summaries thereof) will be 
published in the Federal Register.

A. Need for, and Objectives of, the Proposed Rules

    17. The NPRM proposes to eliminate a burden on carriers responsible 
for completing coinless access and subscriber toll-free calls 
originating from payphones (Completing Carriers). The changing 
communications landscape has altered the balance of cost to Completing 
Carriers versus benefit to payphone service providers. Thus, the 
Commission seeks comment on a proposal to eliminate the annual payphone 
call tracking system audit and associated reporting requirement 
embodied in section 64.1320(f) of the Commission's rules, whether there 
are other steps the Commission might take to ease the burden on 
Completing Carriers, and if certain subsections of part 64 subpart M 
have expired and can be eliminated.

B. Legal Basis

    18. The proposed action is authorized under sections 1, 2, 4(i), 
11, and 276 of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 152, 154(i), 161, 276.

C. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    19. The RFA directs agencies to provide a description and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and by the rule revisions on which the 
NPRM seeks comment, 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.
    20. The proposal on which we seek comment in the NPRM will affect 
obligations on facilities-based carriers responsible for completing 
coinless access code and subscriber toll-free calls

[[Page 31746]]

originating from payphones, including incumbent LECs, competitive LECs, 
and interexchange carriers.
1. Total Small Entities
    21. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three comprehensive small entity size standards that could 
be directly affected herein. First, while there are industry specific 
size standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the SBA's Office of 
Advocacy, in general a small business is an independent business having 
fewer than 500 employees. These types of small businesses represent 
99.9% of all businesses in the United States which translates to 28.8 
million businesses. Next, the type of small entity described as a 
``small organization'' is generally ``any not-for-profit enterprise 
which is independently owned and operated and is not dominant in its 
field.'' Nationwide, as of 2007, there were approximately 1,621,215 
small organizations. Finally, the small entity described as a ``small 
governmental jurisdiction'' is defined generally as ``governments of 
cities, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data published in 2012 indicate that there were 89,476 local 
governmental jurisdictions in the United States. We estimate that, of 
this total, as many as 88,761 entities may qualify as ``small 
governmental jurisdictions.'' Thus, we estimate that most governmental 
jurisdictions are small.
2. Wireline Providers
    22. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``establishments primarily engaged in 
operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having 1,500 or fewer employees. Census data for 2012 show 
that there were 3,117 firms that operated that year. Of this total, 
3,083 operated with fewer than 1,000 employees. Thus, under this size 
standard, the majority of firms in this industry can be considered 
small.
    23. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable NAICS 
Code category is Wired Telecommunications Carriers as defined above. 
Under the applicable SBA size standard, such a business is small if it 
has 1,500 or fewer employees. According to Commission data, census data 
for 2012 shows that there were 3,117 firms that operated that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. The 
Commission therefore estimates that most providers of local exchange 
carrier service are small entities that may be affected by the rules 
adopted.
    24. Incumbent LECs. Neither the Commission nor the SBA has 
developed a small business size standard specifically for incumbent 
local exchange services. The closest applicable NAICS Code category is 
Wired Telecommunications Carriers as defined above. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 3,117 firms operated in that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. 
Consequently, the Commission estimates that most providers of incumbent 
local exchange service are small businesses that may be affected by the 
rules and policies adopted. Three hundred and seven (307) Incumbent 
Local Exchange Carriers reported that they were incumbent local 
exchange service providers. Of this total, an estimated 1,006 have 
1,500 or fewer employees.
    25. Competitive Local Exchange Carriers (Competitive LECs), 
Competitive Access Providers (CAPs), Shared-Tenant Service Providers, 
and Other Local Service Providers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate NAICS Code category is Wired 
Telecommunications Carriers, as defined above. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
U.S. Census data for 2012 indicate that 3,117 firms operated during 
that year. Of that number, 3,083 operated with fewer than 1,000 
employees. Based on this data, the Commission concludes that the 
majority of Competitive LECS, CAPs, Shared-Tenant Service Providers, 
and Other Local Service Providers, are small entities. According to 
Commission data, 1,442 carriers reported that they were engaged in the 
provision of either competitive local exchange services or competitive 
access provider services. Of these 1,442 carriers, an estimated 1,256 
have 1,500 or fewer employees. In addition, 17 carriers have reported 
that they are Shared-Tenant Service Providers, and all 17 are estimated 
to have 1,500 or fewer employees. Also, 72 carriers have reported that 
they are Other Local Service Providers. Of this total, 70 have 1,500 or 
fewer employees. Consequently, based on internally researched FCC data, 
the Commission estimates that most providers of competitive local 
exchange service, competitive access providers, Shared-Tenant Service 
Providers, and Other Local Service Providers are small entities.
    26. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on Commission analyses and determinations 
in other, non-RFA contexts.
    27. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a definition for Interexchange Carriers. The closest 
NAICS Code category is Wired Telecommunications Carriers as defined 
above. The applicable size standard under SBA rules is that such a 
business is small if it has 1,500 or fewer employees. U.S. Census data 
for 2012 indicates that 3,117 firms operated during that year. Of that 
number, 3,083 operated with fewer than 1,000 employees. According to 
internally developed Commission data, 359 companies reported that their 
primary telecommunications service activity was

[[Page 31747]]

the provision of interexchange services. Of this total, an estimated 
317 have 1,500 or fewer employees. Consequently, the Commission 
estimates that the majority of IXCs are small entities that may be 
affected by our proposed rules.
    28. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator service providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 33 carriers have reported that 
they are engaged in the provision of operator services. Of these, an 
estimated 31 have 1,500 or fewer employees and two have more than 1,500 
employees. Consequently, the Commission estimates that the majority of 
OSPs are small entities that may be affected by our proposed rules.
    29. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a definition for small businesses specifically applicable to 
Other Toll Carriers. This category includes toll carriers that do not 
fall within the categories of interexchange carriers, operator service 
providers, prepaid calling card providers, satellite service carriers, 
or toll resellers. The closest applicable NAICS Code category is for 
Wired Telecommunications Carriers as defined above. Under the 
applicable SBA size standard, such a business is small if it has 1,500 
or fewer employees. Census data for 2012 shows that there were 3,117 
firms that operated that year. Of this total, 3,083 operated with fewer 
than 1,000 employees. Thus, under this category and the associated 
small business size standard, the majority of Other Toll Carriers can 
be considered small. According to internally developed Commission data, 
284 companies reported that their primary telecommunications service 
activity was the provision of other toll carriage. Of these, an 
estimated 279 have 1,500 or fewer employees. Consequently, the 
Commission estimates that most Other Toll Carriers are small entities 
that may be affected by rules adopted pursuant to the NPRM.
    30. Payphone Service Providers. Neither the Commission nor the SBA 
has developed a definition of small entities specifically applicable to 
payphone service providers (PSPs). The closest applicable definition 
under the SBA rules is for Wired Telecommunications Carriers. Under 
that SBA definition, such a business is small if it has 1,500 or fewer 
employees. According to the Commission's Form 499 Filer Database, 1100 
PSPs reported that they were engaged in the provision of payphone 
services. The Commission does not have data regarding how many of these 
1100 companies have 1,500 or fewer employees. The Commission does not 
have data specifying the number of these payphone service providers 
that are not independently owned and operated, and thus is unable at 
this time to estimate with greater precision the number of PSPs that 
would qualify as small business concerns under the SBA's definition. 
Consequently, the Commission estimates that there are 1100 or fewer 
PSPs that may be affected by the rules.
    31. Prepaid Calling Card Providers. The SBA has developed a 
definition for small businesses within the category of 
Telecommunications Resellers. Under that SBA definition, such a 
business is small if it has 1,500 or fewer employees. According to the 
Commission's Form 499 Filer Database, 500 companies reported that they 
were engaged in the provision of prepaid calling cards. The Commission 
does not have data regarding how many of these 500 companies have 1,500 
or fewer employees. Consequently, the Commission estimates that there 
are 500 or fewer prepaid calling card providers that may be affected by 
the rules.
3. Wireless Providers--Fixed and Mobile
    32. For wireless services subject to auctions, we note that, as a 
general matter, the number of winning bidders that claim to qualify as 
small businesses at the close of an auction does not necessarily 
represent the number of small businesses currently in service. Also, 
the Commission does not generally track subsequent business size 
unless, in the context of assignments and transfers or reportable 
eligibility events, unjust enrichment issues are implicated.
    33. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census data for 2012 show that there were 967 firms that operated for 
the entire year. Of this total, 955 firms had employment of 999 or 
fewer employees and 12 had employment of 1000 employees or more. Thus 
under this category and the associated size standard, the Commission 
estimates that the majority of wireless telecommunications carriers 
(except satellite) are small entities.
    34. The Commission's own data--available in its Universal Licensing 
System--indicate that, as of October 25, 2016, there are 280 Cellular 
licensees that will be affected by our actions today. The Commission 
does not know how many of these licensees are small, as the Commission 
does not collect that information for these types of entities. 
Similarly, according to internally developed Commission data, 413 
carriers reported that they were engaged in the provision of wireless 
telephony, including cellular service, Personal Communications Service, 
and Specialized Mobile Radio Telephony services. Of this total, an 
estimated 261 have 1,500 or fewer employees, and 152 have more than 
1,500 employees. Thus, using available data, we estimate that the 
majority of wireless firms can be considered small.
    35. 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.
    36. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite). Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Commission data, 
413 carriers reported that they were engaged in wireless telephony. Of 
these, an estimated 261 have 1,500 or fewer employees and 152 have more 
than 1,500 employees. Therefore, a little less than one third of these 
entities can be considered small.
4. All Other Telecommunications
    37. ``All Other Telecommunications'' is defined as follows: This 
U.S. industry is comprised of establishments that are primarily engaged 
in providing

[[Page 31748]]

specialized telecommunications services, such as satellite tracking, 
communications telemetry, and radar station operation. This industry 
also includes establishments primarily engaged in providing satellite 
terminal stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. 
Establishments providing Internet services or voice over Internet 
protocol (VoIP) services via client-supplied telecommunications 
connections are also included in this industry. The SBA has developed a 
small business size standard for ``All Other Telecommunications,'' 
which consists of all such firms with gross annual receipts of $32.5 
million or less. For this category, census data for 2012 show that 
there were 1,442 firms that operated for the entire year. Of these 
firms, a total of 1,400 had gross annual receipts of less than $25 
million. Consequently, we estimate that the majority of All Other 
Telecommunications firms are small entities that might be affected by 
our action.

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

    38. The NPRM proposes and seeks comment on a rule change that will 
affect reporting, recordkeeping, and other compliance requirements. We 
expect the rule revision proposed in the NPRM to reduce reporting, 
recordkeeping, and other compliance requirements. The rule revision 
should have a beneficial reporting, recordkeeping, or compliance impact 
on small entities because all carriers will be subject to fewer such 
burdens. This change is described below.
    39. The NPRM proposes to eliminate section 64.1320(f) of the 
Commission's rules and, thus, the annual payphone call tracking system 
audit and associated reporting requirement. Should the Commission adopt 
this proposal, such action would result in reduced reporting, 
recordkeeping, or other compliance requirements for Completing 
Carriers, as that term is defined in section 64.1300(a) of the 
Commission's rules.

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

    40. The RFA requires an agency to describe any significant 
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 or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    41. The Commission proposes to eliminate the annual payphone call 
tracking system audit requirement for Completing Carriers. The 
Commission believes that its proposal upon which the NPRM seeks comment 
will benefit all carriers, regardless of size. The proposal would 
further the goal of reducing unnecessary regulatory burdens on affected 
carriers. We anticipate that a more modernized regulatory scheme with 
the associated reduction in compliance costs will allow carriers to 
invest their resources elsewhere to the benefit of consumers.

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

    42. None.

V. Procedural Matters

A. Ex Parte Rules

    43. This proceeding shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making ex parte presentations must file a copy of any written 
presentation or a memorandum summarizing any oral presentation within 
two business days after the presentation (unless a different deadline 
applicable to the Sunshine period applies). Persons making oral ex 
parte presentations are reminded that memoranda summarizing the 
presentation must (1) list all persons attending or otherwise 
participating in the meeting at which the ex parte presentation was 
made, and (2) summarize all data presented and arguments made during 
the presentation. If the presentation consisted in whole or in part of 
the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with Rule 1.1206(b). In proceedings governed by 
Rule 1.49(f) or for which the Commission has made available a method of 
electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

B. Initial Regulatory Flexibility Analysis

    44. Pursuant to the Regulatory Flexibility Act (RFA), the 
Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities of 
the policies and actions considered in this NPRM. The text of the IRFA 
is set forth above. 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. The Commission's Consumer 
and Governmental Affairs Bureau, Reference Information Center, will 
send a copy of the NPRM, including the IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration.

C. Paperwork Reduction Act

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

D. Filing of Comments and Reply Comments

    46. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document. Comments may be filed using the Commission's

[[Page 31749]]

Electronic Comment Filing System (ECFS). See Electronic Filing of 
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
    [ssquf] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    [ssquf] 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.
    [ssquf] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington, DC 20554.
    [ssquf] People with Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format), send an email to [email protected] or 
call the Consumer & Governmental Affairs Bureau at 202-418-0530 
(voice), 202-418-0432 (tty).

E. Contact Person

    47. For further information about this proceeding, please contact 
Michele Berlove, FCC Wireline Competition Bureau, Competition Policy 
Division, Room 5-C313, 445 12th Street SW., Washington, DC 20554 (202) 
418-1477, [email protected]

VI. Ordering Clauses

    48. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1-4, 11, and 276 of the Communications Act of 
1934, as amended, 47 U.S.C. 151-154, 161, 276, this Notice of Proposed 
Rulemaking is adopted.
    49. 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, including the Initial 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

List of Subjects in 47 CFR Part 64

    Common Carriers, Communications, Telecommunications, Telephone.


Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Proposed Rules

    For the reasons set forth in the preamble, the Federal 
Communications Commission proposes to amend CFR part 64 as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. The authority citation for part 64 continues to read as follows:

    Authority: 47 U.S.C. 154, 225, 254(k); 403(b)(2)(B), (c), 715, 
Pub.L. 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 218, 
222, 225, 226, 227, 228, 254(k), 616, 620, and the Middle Class Tax 
Relief and Job Creation Act of 2012, Pub.L. 112-96, unless otherwise 
noted.

Sec.  64.1320  [Amended]

0
2. In Sec.  64.1320, remove paragraph (f).

[FR Doc. 2017-14256 Filed 7-7-17; 8:45 am]
 BILLING CODE 6712-01-P



                                                                           Federal Register / Vol. 82, No. 130 / Monday, July 10, 2017 / Proposed Rules                                           31743

                                                 FEDERAL COMMUNICATIONS                                   delivered to FCC Headquarters at 445                  before the dates indicated on the first
                                                 COMMISSION                                               12th St. SW., Room TW–A325,                           page of this document. Comments may
                                                                                                          Washington, DC 20554. The filing hours                be filed using the Commission’s
                                                 47 CFR Part 64                                           are 8:00 a.m. to 7:00 p.m. All hand                   Electronic Comment Filing System
                                                 [WC Docket No. 17–141, CC Docket No. 96–                 deliveries must be held together with                 (ECFS). See Electronic Filing of
                                                 128, WC Docket No. 16–132; FCC 17–79]                    rubber bands or fasteners. Any                        Documents in Rulemaking Proceedings,
                                                                                                          envelopes and boxes must be disposed                  63 FR 24121 (1998), http://www.fcc.gov/
                                                 Modernization of Payphone                                of before entering the building.                      Bureaus/OGC/Orders/1998/
                                                 Compensation Rules; Implementation                       Commercial overnight mail (other than                 fcc98056.pdf.
                                                 of the Pay Telephone Reclassification                    U.S. Postal Service Express Mail and                     D Electronic Filers: Comments may be
                                                 and Compensation Provisions of the                       Priority Mail) must be sent to 9300 East              filed electronically using the Internet by
                                                 Telecommunications Act of 1996; 2016                     Hampton Drive, Capitol Heights, MD                    accessing the ECFS: https://
                                                 Biennial Review of                                       20743. U.S. Postal Service first-class,               www.fcc.gov/ecfs/.
                                                 Telecommunications Regulations                           Express, and Priority mail must be
                                                                                                                                                                   D Paper Filers: Parties who choose to
                                                 AGENCY:  Federal Communications                          addressed to 445 12th Street SW.,
                                                                                                                                                                file by paper must file an original and
                                                 Commission.                                              Washington, DC 20554.
                                                                                                                                                                one copy of each filing. If more than one
                                                                                                             D People with Disabilities: To request
                                                 ACTION: Proposed rule.                                                                                         docket or rulemaking number appears in
                                                                                                          materials in accessible formats for
                                                                                                                                                                the caption of this proceeding, filers
                                                 SUMMARY:    In this document, the                        people with disabilities (braille, large
                                                                                                                                                                must submit two additional copies for
                                                 Wireline Competition Bureau seeks                        print, electronic files, audio format),
                                                                                                                                                                each additional docket or rulemaking
                                                 comment on eliminating the                               send an email to fcc504@fcc.gov or call
                                                                                                                                                                number. Filings can be sent by hand or
                                                 Commission’s payphone call tracking                      the Consumer & Governmental Affairs
                                                                                                                                                                messenger delivery, by commercial
                                                 system annual audit requirement and                      Bureau at 202–418–0530 (voice), 202–
                                                                                                                                                                overnight courier, or by first-class or
                                                 associated reporting requirement. In                     418–0432 (tty).
                                                                                                                                                                overnight U.S. Postal Service mail. All
                                                 light of the dramatic decline in                            For detailed instructions for
                                                                                                                                                                filings must be addressed to the
                                                 payphone use and the high cost of                        submitting comments and additional
                                                                                                                                                                Commission’s Secretary, Office of the
                                                 compliance in proportion to payphone                     information on the rulemaking process,
                                                                                                                                                                Secretary, Federal Communications
                                                 compensation at issue, the proposal will                 see the SUPPLEMENTARY INFORMATION
                                                                                                                                                                Commission. All hand-delivered or
                                                 remove costly yet no longer necessary                    section of this document. In addition to
                                                                                                                                                                messenger-delivered paper filings for
                                                 requirements. The Commission adopted                     filing comments with the Secretary, a
                                                                                                                                                                the Commission’s Secretary must be
                                                 the NPRM in conjunction with an Order                    copy of any comments on the
                                                                                                                                                                delivered to FCC Headquarters at 445
                                                 waiving the 2017 and 2018 audit and                      Paperwork Reduction Act information
                                                                                                                                                                12th St. SW., Room TW–A325,
                                                 associated reporting requirements while                  collection requirements contained
                                                                                                                                                                Washington, DC 20554. The filing hours
                                                 it considers the proposals in this NPRM.                 herein should be submitted to the
                                                                                                                                                                are 8:00 a.m. to 7:00 p.m. All hand
                                                 DATES: Comments are due on or before                     Federal Communications Commission
                                                                                                                                                                deliveries must be held together with
                                                 August 9, 2017, and reply comments are                   via email to PRA@fcc.gov and to Nicole
                                                                                                                                                                rubber bands or fasteners. Any
                                                 due on or before September 8, 2017.                      Ongele, Federal Communications
                                                                                                                                                                envelopes and boxes must be disposed
                                                 Written comments on the Paperwork                        Commission, via email to
                                                                                                                                                                of before entering the building.
                                                 Reduction Act proposed information                       Nicole.Ongele@fcc.gov.
                                                                                                                                                                Commercial overnight mail (other than
                                                 collection requirements must be                          FOR FURTHER INFORMATION CONTACT:
                                                                                                                                                                U.S. Postal Service Express Mail and
                                                 submitted by the public, Office of                       Wireline Competition Bureau,                          Priority Mail) must be sent to 9300 East
                                                 Management and Budget (OMB), and                         Competition Policy Division, Michele                  Hampton Drive, Capitol Heights, MD
                                                 other interested parties on or before                    Berlove, at (202) 418–1477,                           20743. U.S. Postal Service first-class,
                                                 September 8, 2017.                                       michele.berlove@fcc.gov. For additional               Express, and Priority mail must be
                                                 ADDRESSES: You may submit comments,                      information concerning the Paperwork                  addressed to 445 12th Street SW.,
                                                 identified by WC Docket No. 17–141, by                   Reduction Act information collection                  Washington, DC 20554.
                                                 any of the following methods:                            requirements contained in this
                                                                                                          document, send an email to PRA@                          D People with Disabilities: To request
                                                    D Federal Communications                                                                                    materials in accessible formats for
                                                 Commission’s Web site: http://                           fcc.gov or contact Nicole Ongele at (202)
                                                                                                          418–2991.                                             people with disabilities (braille, large
                                                 apps.fcc.gov/ecfs/. Follow the                                                                                 print, electronic files, audio format),
                                                 instructions for submitting comments.                    SUPPLEMENTARY INFORMATION: This is a
                                                                                                                                                                send an email to fcc504@fcc.gov or call
                                                    D Mail: Parties who choose to file by                 summary of the Commission’s Notice of                 the Consumer & Governmental Affairs
                                                 paper must file an original and one copy                 Proposed Rulemaking (NPRM) in WC                      Bureau at 202–418–0530 (voice), 202–
                                                 of each filing. If more than one docket                  Docket No. 17–141, adopted and                        418–0432 (tty).
                                                 or rulemaking number appears in the                      released June 22, 2017. The full text of
                                                 caption of this proceeding, filers must                  this document is available for public                 Synopsis
                                                 submit two additional copies for each                    inspection during regular business                    I. Introduction
                                                 additional docket or rulemaking                          hours in the FCC Reference Information
                                                 number. Filings can be sent by hand or                   Center, Portals II, 445 12th Street SW.,                 1. In this Notice of Proposed
                                                 messenger delivery, by commercial                        Room CY–A257, Washington, DC 20554.                   Rulemaking (NPRM), we propose
nlaroche on DSK30NT082PROD with PROPOSALS




                                                 overnight courier, or by first-class or                  It is available on the Commission’s Web               eliminating the Commission’s payphone
                                                 overnight U.S. Postal Service mail. All                  site at https://www.fcc.gov/document/                 call tracking system annual audit
                                                 filings must be addressed to the                         modernization-payphone-                               requirement and associated reporting
                                                 Commission’s Secretary, Office of the                    compensation-rules-nprm-and-order.                    requirement. In light of the dramatic
                                                 Secretary, Federal Communications                           Pursuant to sections 1.415 and 1.419               decline in payphone use and the high
                                                 Commission. All hand-delivered or                        of the Commission’s rules, 47 CFR                     cost of compliance in proportion to
                                                 messenger-delivered paper filings for                    1.415, 1.419, interested parties may file             payphone compensation at issue, we
                                                 the Commission’s Secretary must be                       comments and reply comments on or                     anticipate that our proposal will remove


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                                                 31744                     Federal Register / Vol. 82, No. 130 / Monday, July 10, 2017 / Proposed Rules

                                                 costly yet no longer necessary                           support of the Waiver Petitions and                   cost of compliance. Not surprisingly, in
                                                 requirements.                                            requested that the Commission broaden                 light of declining payphone usage, the
                                                                                                          the relief to encompass additional                    amount of compensation paid to PSPs
                                                 II. Background
                                                                                                          carriers.                                             has likewise significantly declined over
                                                    3. Section 276 of the Communications                                                                        time. ITTA asserts that the amount of
                                                 Act of 1934, as amended (the Act),                       III. Discussion
                                                                                                                                                                payphone compensation paid each year
                                                 which was adopted in the                                    6. After reviewing the record in the               has declined even more across the
                                                 Telecommunications Act of 1996,                          2016 Biennial Review proceeding, the                  industry than the 97 percent decline
                                                 directs the Commission to implement                      Waiver Petitions and supporting                       seen by Cincinnati Bell. According to
                                                 rules to ensure that payphone service                    comments, and based on our own                        Cincinnati Bell, the annual audit cost is
                                                 providers (PSPs) are fairly compensated                  observations of the changing                          currently five times the amount of
                                                 for all completed calls made from their                  communications landscape, we find that                payphone compensation it pays
                                                 payphones. Pursuant to Congress’                         the best course is to reevaluate the                  annually, while Sprint projects that the
                                                 directive, the Commission adopted rules                  necessity of the annual payphone call                 cost of its annual audit will be
                                                 governing payphone compensation in                       tracking system audit requirement and                 approximately 15 percent of payphone
                                                 1996. In doing so, the Commission                        associated reporting requirement on an                compensation paid in 2016. We
                                                 noted that fair compensation to PSPs                     industrywide basis. Below, we propose                 encourage commenters to provide
                                                 was not possible without an effective                    to eliminate or modify this requirement               similarly specific information. How has
                                                 per-call tracking mechanism. It thus                     and seek comment on this proposal.                    compensation paid to PSPs relative to
                                                 required that the carriers to whom                          7. We propose to eliminate the annual              the costs of compliance changed since
                                                 coinless access code and subscriber toll-                audit requirement and associated                      the rule was adopted? How should we
                                                 free calls are routed, known as                          reporting requirement embodied in                     evaluate whether the audit costs relative
                                                 ‘‘Completing Carriers,’’ ‘‘be responsible                section 64.1320(f) of the rules in its
                                                                                                                                                                to payphone compensation are too high?
                                                 for tracking each compensable call and                   entirety, and we seek detailed comment
                                                                                                                                                                Is comparison with total payphone
                                                 remitting per-call compensation to the                   on this proposal. Have circumstances
                                                                                                                                                                compensation relevant, or should we
                                                 PSP.’’                                                   changed such that the benefits of these
                                                                                                                                                                compare the costs of compliance against
                                                    4. In 2003, the Commission revised its                rules in helping to ensure PSPs are
                                                                                                                                                                some other value(s)? For instance,
                                                 payphone compensation rules to                           fairly compensated no longer justify the
                                                                                                                                                                should the costs of compliance be
                                                 require, among other things, that                        costs of the rule?
                                                                                                             8. First, we seek comment on the                   compared against the likely benefits of
                                                 Completing Carriers annually must file
                                                                                                          assertion that the precipitous decline in             avoiding incorrect compensation
                                                 an audit report prepared by an
                                                                                                          payphone usage supports modernizing                   payments? We believe that the existing
                                                 independent third-party auditor in order
                                                 to verify ongoing compliance.                            our compensation compliance regime by                 evidence about audit costs relative to
                                                 Specifically, the auditor must ‘‘(1)                     eliminating the annual audit                          payphone compensation suggests the
                                                 [v]erify that no material changes have                   requirement. At the peak of payphone                  costs of the rule now outweigh the
                                                 occurred concerning the Completing                       usage in 1999, there were over 2.1                    benefits, and we seek comment on this
                                                 Carrier’s compliance with the criteria of                million payphones in service across the               analysis.
                                                 the prior year’s System Audit Report; or                 United States. Since that time, however,                 11. Fourth, we seek comment on
                                                 (2) [i]f a material change has occurred                  the rapid growth of mobile service                    whether section 64.1320(f) is still
                                                 . . . verify that the material changes do                seems to have resulted in a dramatic                  necessary to ensure compliance with the
                                                 not affect compliance with the audit                     decline in the number of payphones in                 underlying payphone compensation
                                                 criteria set forth in paragraph (c) of this              service in this country. By 2013, more                requirements. What effect would
                                                 section.’’ Completing Carriers are                       than 90 percent of payphones had been                 elimination of this annual audit and
                                                 required to make all documentation                       disconnected, with only 192,286                       associated reporting requirement have
                                                 underlying the audit report, including                   remaining. Almost half of those were                  on Completing Carriers’ compliance
                                                 working papers, available to PSPs for                    disconnected over the following three                 with our rules regarding compensation
                                                 inspection upon request. Completing                      years, so that there were only 99,832                 to PSPs, including, among other things,
                                                 Carriers can avoid the need to comply                    payphones in service at the end of 2016.              requirements to maintain a system for
                                                 with the audit and related requirements                  Is there any reason to expect this                    accurately tracking coinless access code
                                                 only by entering into alternative                        declining trend to change in the future?              or subscriber toll-free payphone calls to
                                                 compensation arrangements with PSPs.                     We seek comment, and supporting data,                 completion; to provide a quarterly
                                                    5. Sprint and Cincinnati Bell each                    on this issue.                                        sworn statement from the company’s
                                                 recently filed petitions with the                           9. Second, we seek comment on the                  Chief Financial Officer; and, to provide
                                                 Commission seeking a waiver of the                       costs of compliance. Are Sprint and                   quarterly reports to PSPs that contain
                                                 annual audit requirement. The two                        Cincinnati Bell correct that those costs              information for identifying compensable
                                                 carriers also filed comments in response                 have not declined over time and in fact               and noncompensable calls? Importantly,
                                                 to the Commission’s 2016 Biennial                        may have increased? Is there other data               relieving Completing Carriers of the
                                                 Review Public Notice urging the                          or evidence establishing the costs of                 audit requirement would not relieve
                                                 Commission to consider eliminating the                   compliance, including evidence                        them of their obligation to ensure that
                                                 annual payphone call tracking system                     establishing whether those costs have                 they are compensating PSPs for all
                                                 audit requirement. In both sets of                       increased or decreased over time? Is it               compensable calls. Payphone
nlaroche on DSK30NT082PROD with PROPOSALS




                                                 pleadings, the carriers point to the                     the case that the costs of compliance                 compensation compliance issues
                                                 tremendous decline in payphone                           have not declined at the same pace as                 occurred in years past, but we believe
                                                 calling, the lack of a similar decline in                the payphone business such that over                  that those issues are no longer apparent.
                                                 the cost of the annual audit, and the                    time the compliance costs per payphone                Indeed, no formal payphone
                                                 companies’ consistent compliance with                    and per payphone call have increased?                 compensation-related complaints have
                                                 the Commission’s payphone                                   10. Third, we seek comment on the                  been brought to the Commission’s
                                                 compensation rules. USTelecom, ITTA,                     amount of payphone compensation that                  attention since 2010, and the last
                                                 and Puerto Rico Telephone each filed in                  Completing Carriers pay relative to the               informal dispute of which we are aware


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                                                                           Federal Register / Vol. 82, No. 130 / Monday, July 10, 2017 / Proposed Rules                                            31745

                                                 occurred almost four years ago. Are                      from the CFO? If we retain the                        responses to the IRFA and must be filed
                                                 there any specific, recent examples of                   requirement of a quarterly sworn                      by the deadlines for comments provided
                                                 failure to appropriately compensate                      statement, we seek comment on whether                 on the first page of this NPRM. The
                                                 PSPs for coinless access code and                        we should revise the requirement to                   Commission will send a copy of this
                                                 subscriber toll-free calls originating                   allow certification by a company official             NPRM, including this IRFA, to the Chief
                                                 from their payphones? Is ITTA correct                    other than the company’s CFO, and, if                 Counsel for Advocacy of the Small
                                                 that ‘‘most long-distance providers use a                so, which officials.                                  Business Administration (SBA). In
                                                 clearinghouse . . . to process quarterly                    14. Additional Reforms. Finally, we                addition, the NPRM and IRFA (or
                                                 payments to PSPs’’ and that the                          seek comment on whether the changing                  summaries thereof) will be published in
                                                 clearinghouses used by PSPs ‘‘have                       communications landscape since 2003                   the Federal Register.
                                                 effective investigation and dispute                      warrants additional changes to our rules
                                                                                                          governing the payphone compensation                   A. Need for, and Objectives of, the
                                                 resolution processes in place to address
                                                                                                          process. For example, does section                    Proposed Rules
                                                 any disparities between Completing
                                                 Carrier and PSP data that may arise,’’                   64.1320(a)’s initial payphone call                       17. The NPRM proposes to eliminate
                                                 and if so does the prevalence of such                    tracking system audit requirement, and                a burden on carriers responsible for
                                                 clearinghouses support repeal of the                     the attendant requirements set forth in               completing coinless access and
                                                 audit requirement? Is the infrequency of                 sections 64.1320(b)–(e) and (g), remain               subscriber toll-free calls originating
                                                 complaints, disputes, and disparities                    relevant today? Do new carriers still                 from payphones (Completing Carriers).
                                                 related to the existence of the audit                    occasionally become Completing                        The changing communications
                                                 requirement? If not, should we expect                    Carriers such that we should retain this              landscape has altered the balance of cost
                                                 the frequency of such problems to                        requirement? How often do PSPs or                     to Completing Carriers versus benefit to
                                                 change if we eliminate the audit                         clearinghouses request underlying                     payphone service providers. Thus, the
                                                 requirement, or would the remaining                      documents pursuant to section                         Commission seeks comment on a
                                                 safeguards be sufficient? If eliminating                 64.1320(g)? Are all of the remaining                  proposal to eliminate the annual
                                                 the audit requirement would increase                     requirements imposed by these rules                   payphone call tracking system audit and
                                                 such problems (e.g., failure to                          still warranted to protect PSPs’ right to             associated reporting requirement
                                                 adequately compensate PSPs), we seek                     full compensation for coinless access                 embodied in section 64.1320(f) of the
                                                 estimates of the likely annual costs the                 code and subscriber toll-free calls                   Commission’s rules, whether there are
                                                 relevant parties would incur to resolve                  originating from their payphones? Can                 other steps the Commission might take
                                                 those increased problems or bounds                       some of these requirements be                         to ease the burden on Completing
                                                 around those costs.                                      streamlined or eliminated while still                 Carriers, and if certain subsections of
                                                    12. Finally, we do not believe that the               affording full protection to PSPs, and if             part 64 subpart M have expired and can
                                                 option under our rules to enter into an                  so, how?                                              be eliminated.
                                                 alternative compensation agreement                          15. In proposing to modernize specific
                                                 with each PSP, which thus removes the                    part 64 subpart M requirements herein,                B. Legal Basis
                                                 need to conduct an annual audit, is an                   we note that other subsections regarding                18. The proposed action is authorized
                                                 economically feasible alternative. We                    the provision of payphone service were                under sections 1, 2, 4(i), 11, and 276 of
                                                 believe that Sprint, Cincinnati Bell, and                intended to apply solely on an interim                the Communications Act of 1934, as
                                                 USTelecom are correct that the                           basis and their terms have long since                 amended, 47 U.S.C. 151, 152, 154(i),
                                                 transaction costs of negotiating,                        expired. For example, sections                        161, 276.
                                                 implementing, and managing such                          64.1301(a)–(c) set forth interim per-
                                                                                                                                                                C. Description and Estimate of the
                                                 alternative compensation arrangements                    payphone compensation provisions that
                                                                                                                                                                Number of Small Entities to Which the
                                                 with numerous PSPs would outweigh                        applied only from November 7, 1996
                                                                                                                                                                Proposed Rules Will Apply
                                                 the amount of compensation to be paid.                   through October 6, 1997. Similarly,
                                                 Consequently, the availability of this                   section 64.1301(d) set forth intermediate                19. The RFA directs agencies to
                                                 option under our rules appears to                        per-payphone compensation provisions                  provide a description and, where
                                                 provide no basis to justify retention of                 that applied only from October 7, 1997                feasible, an estimate of the number of
                                                 the audit requirement. We seek                           through April 20, 1999. We believe                    small entities that may be affected by
                                                 comment on this issue.                                   sections 64.1301(a)–(d), by their terms,              the proposed rules and by the rule
                                                    13. Alternatives. We propose simply                   no longer apply to any entity and can                 revisions on which the NPRM seeks
                                                 eliminating the audit requirement and                    be eliminated. We further seek comment                comment, if adopted. The RFA generally
                                                 associated reporting requirement. In the                 on whether additional provisions of part              defines the term ‘‘small entity’’ as
                                                 alternative, should we instead eliminate                 64 subpart M that we have not                         having the same meaning as the terms
                                                 the requirement but adopt some less                      specifically identified may similarly                 ‘‘small business,’’ ‘‘small organization,’’
                                                 burdensome requirement, such as a self-                  have expired and no longer apply to any               and ‘‘small governmental jurisdiction.’’
                                                 certification, as Sprint and Cincinnati                  entity, and if so, can be eliminated.                 In addition, the term ‘‘small business’’
                                                 Bell each offer to provide in lieu of the                                                                      has the same meaning as the term
                                                 annual audit? If so, what form would                     IV. Initial Regulatory Flexibility                    ‘‘small-business concern’’ under the
                                                 such a self-certification take? Would it                 Analysis                                              Small Business Act. A ‘‘small-business
                                                 be sufficient for a Completing Carrier to                  16. As required by the Regulatory                   concern’’ is one which: (1) Is
                                                 self-certify that there have been no                     Flexibility Act (RFA), the Commission                 independently owned and operated; (2)
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                                                 material changes to its payphone call                    has prepared this present Initial                     is not dominant in its field of operation;
                                                 tracking system, or would it also need                   Regulatory Flexibility Analysis (IRFA)                and (3) satisfies any additional criteria
                                                 to self-certify that there have been no                  of the possible significant economic                  established by the SBA.
                                                 changes to its network that affect the                   impact on small entities by the policies                 20. The proposal on which we seek
                                                 functioning or accuracy of the tracking                  and rules proposed in this Notice of                  comment in the NPRM will affect
                                                 system? Could such an annual self-                       Proposed Rule Making (NPRM). Written                  obligations on facilities-based carriers
                                                 certification replace the section                        public comments are requested on this                 responsible for completing coinless
                                                 64.1310(a)(3) quarterly sworn statement                  IRFA. Comments must be identified as                  access code and subscriber toll-free calls


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                                                 31746                     Federal Register / Vol. 82, No. 130 / Monday, July 10, 2017 / Proposed Rules

                                                 originating from payphones, including                    establishments providing satellite                    size standard, such a business is small
                                                 incumbent LECs, competitive LECs, and                    television distribution services using                if it has 1,500 or fewer employees. U.S.
                                                 interexchange carriers.                                  facilities and infrastructure that they               Census data for 2012 indicate that 3,117
                                                                                                          operate are included in this industry.’’              firms operated during that year. Of that
                                                 1. Total Small Entities
                                                                                                          The SBA has developed a small                         number, 3,083 operated with fewer than
                                                    21. Small Businesses, Small                           business size standard for Wired                      1,000 employees. Based on this data, the
                                                 Organizations, Small Governmental                        Telecommunications Carriers, which                    Commission concludes that the majority
                                                 Jurisdictions. Our actions, over time,                   consists of all such companies having                 of Competitive LECS, CAPs, Shared-
                                                 may affect small entities that are not                   1,500 or fewer employees. Census data                 Tenant Service Providers, and Other
                                                 easily categorized at present. We                        for 2012 show that there were 3,117                   Local Service Providers, are small
                                                 therefore describe here, at the outset,                  firms that operated that year. Of this                entities. According to Commission data,
                                                 three comprehensive small entity size                    total, 3,083 operated with fewer than                 1,442 carriers reported that they were
                                                 standards that could be directly affected                1,000 employees. Thus, under this size                engaged in the provision of either
                                                 herein. First, while there are industry                  standard, the majority of firms in this               competitive local exchange services or
                                                 specific size standards for small                        industry can be considered small.                     competitive access provider services. Of
                                                 businesses that are used in the                             23. Local Exchange Carriers (LECs).                these 1,442 carriers, an estimated 1,256
                                                 regulatory flexibility analysis, according               Neither the Commission nor the SBA                    have 1,500 or fewer employees. In
                                                 to data from the SBA’s Office of                         has developed a size standard for small               addition, 17 carriers have reported that
                                                 Advocacy, in general a small business is                 businesses specifically applicable to                 they are Shared-Tenant Service
                                                 an independent business having fewer                     local exchange services. The closest                  Providers, and all 17 are estimated to
                                                 than 500 employees. These types of                       applicable NAICS Code category is                     have 1,500 or fewer employees. Also, 72
                                                 small businesses represent 99.9% of all                  Wired Telecommunications Carriers as                  carriers have reported that they are
                                                 businesses in the United States which                    defined above. Under the applicable                   Other Local Service Providers. Of this
                                                 translates to 28.8 million businesses.                   SBA size standard, such a business is                 total, 70 have 1,500 or fewer employees.
                                                 Next, the type of small entity described                 small if it has 1,500 or fewer employees.             Consequently, based on internally
                                                 as a ‘‘small organization’’ is generally                 According to Commission data, census                  researched FCC data, the Commission
                                                 ‘‘any not-for-profit enterprise which is                 data for 2012 shows that there were                   estimates that most providers of
                                                 independently owned and operated and                     3,117 firms that operated that year. Of               competitive local exchange service,
                                                 is not dominant in its field.’’                          this total, 3,083 operated with fewer                 competitive access providers, Shared-
                                                 Nationwide, as of 2007, there were                       than 1,000 employees. The Commission                  Tenant Service Providers, and Other
                                                 approximately 1,621,215 small                            therefore estimates that most providers               Local Service Providers are small
                                                 organizations. Finally, the small entity                 of local exchange carrier service are                 entities.
                                                 described as a ‘‘small governmental                      small entities that may be affected by                   26. We have included small
                                                 jurisdiction’’ is defined generally as                   the rules adopted.                                    incumbent LECs in this present RFA
                                                 ‘‘governments of cities, towns,                             24. Incumbent LECs. Neither the                    analysis. As noted above, a ‘‘small
                                                 townships, villages, school districts, or                Commission nor the SBA has developed                  business’’ under the RFA is one that,
                                                 special districts, with a population of                  a small business size standard                        inter alia, meets the pertinent small
                                                 less than fifty thousand.’’ U.S. Census                  specifically for incumbent local                      business size standard (e.g., a telephone
                                                 Bureau data published in 2012 indicate                   exchange services. The closest                        communications business having 1,500
                                                 that there were 89,476 local                             applicable NAICS Code category is                     or fewer employees), and ‘‘is not
                                                 governmental jurisdictions in the                        Wired Telecommunications Carriers as                  dominant in its field of operation.’’ The
                                                 United States. We estimate that, of this                 defined above. Under that size standard,              SBA’s Office of Advocacy contends that,
                                                 total, as many as 88,761 entities may                    such a business is small if it has 1,500              for RFA purposes, small incumbent
                                                 qualify as ‘‘small governmental                          or fewer employees. According to                      LECs are not dominant in their field of
                                                 jurisdictions.’’ Thus, we estimate that                  Commission data, 3,117 firms operated                 operation because any such dominance
                                                 most governmental jurisdictions are                      in that year. Of this total, 3,083 operated           is not ‘‘national’’ in scope. We have
                                                 small.                                                   with fewer than 1,000 employees.                      therefore included small incumbent
                                                                                                          Consequently, the Commission                          LECs in this RFA analysis, although we
                                                 2. Wireline Providers
                                                                                                          estimates that most providers of                      emphasize that this RFA action has no
                                                    22. Wired Telecommunications                          incumbent local exchange service are                  effect on Commission analyses and
                                                 Carriers. The U.S. Census Bureau                         small businesses that may be affected by              determinations in other, non-RFA
                                                 defines this industry as ‘‘establishments                the rules and policies adopted. Three                 contexts.
                                                 primarily engaged in operating and/or                    hundred and seven (307) Incumbent                        27. Interexchange Carriers (IXCs).
                                                 providing access to transmission                         Local Exchange Carriers reported that                 Neither the Commission nor the SBA
                                                 facilities and infrastructure that they                  they were incumbent local exchange                    has developed a definition for
                                                 own and/or lease for the transmission of                 service providers. Of this total, an                  Interexchange Carriers. The closest
                                                 voice, data, text, sound, and video using                estimated 1,006 have 1,500 or fewer                   NAICS Code category is Wired
                                                 wired communications networks.                           employees.                                            Telecommunications Carriers as defined
                                                 Transmission facilities may be based on                     25. Competitive Local Exchange                     above. The applicable size standard
                                                 a single technology or a combination of                  Carriers (Competitive LECs),                          under SBA rules is that such a business
                                                 technologies. Establishments in this                     Competitive Access Providers (CAPs),                  is small if it has 1,500 or fewer
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                                                 industry use the wired                                   Shared-Tenant Service Providers, and                  employees. U.S. Census data for 2012
                                                 telecommunications network facilities                    Other Local Service Providers. Neither                indicates that 3,117 firms operated
                                                 that they operate to provide a variety of                the Commission nor the SBA has                        during that year. Of that number, 3,083
                                                 services, such as wired telephony                        developed a small business size                       operated with fewer than 1,000
                                                 services, including VoIP services, wired                 standard specifically for these service               employees. According to internally
                                                 (cable) audio and video programming                      providers. The appropriate NAICS Code                 developed Commission data, 359
                                                 distribution, and wired broadband                        category is Wired Telecommunications                  companies reported that their primary
                                                 internet services. By exception,                         Carriers, as defined above. Under that                telecommunications service activity was


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                                                                           Federal Register / Vol. 82, No. 130 / Monday, July 10, 2017 / Proposed Rules                                           31747

                                                 the provision of interexchange services.                 According to the Commission’s Form                    employment of 999 or fewer employees
                                                 Of this total, an estimated 317 have                     499 Filer Database, 1100 PSPs reported                and 12 had employment of 1000
                                                 1,500 or fewer employees.                                that they were engaged in the provision               employees or more. Thus under this
                                                 Consequently, the Commission                             of payphone services. The Commission                  category and the associated size
                                                 estimates that the majority of IXCs are                  does not have data regarding how many                 standard, the Commission estimates that
                                                 small entities that may be affected by                   of these 1100 companies have 1,500 or                 the majority of wireless
                                                 our proposed rules.                                      fewer employees. The Commission does                  telecommunications carriers (except
                                                    28. Operator Service Providers (OSPs).                not have data specifying the number of                satellite) are small entities.
                                                 Neither the Commission nor the SBA                       these payphone service providers that                    34. The Commission’s own data—
                                                 has developed a small business size                      are not independently owned and                       available in its Universal Licensing
                                                 standard specifically for operator                       operated, and thus is unable at this time             System—indicate that, as of October 25,
                                                 service providers. The appropriate size                  to estimate with greater precision the                2016, there are 280 Cellular licensees
                                                 standard under SBA rules is for the                      number of PSPs that would qualify as                  that will be affected by our actions
                                                 category Wired Telecommunications                        small business concerns under the                     today. The Commission does not know
                                                 Carriers. Under that size standard, such                 SBA’s definition. Consequently, the                   how many of these licensees are small,
                                                 a business is small if it has 1,500 or                   Commission estimates that there are                   as the Commission does not collect that
                                                 fewer employees. According to                            1100 or fewer PSPs that may be affected               information for these types of entities.
                                                 Commission data, 33 carriers have                        by the rules.                                         Similarly, according to internally
                                                 reported that they are engaged in the                      31. Prepaid Calling Card Providers.                 developed Commission data, 413
                                                 provision of operator services. Of these,                The SBA has developed a definition for                carriers reported that they were engaged
                                                 an estimated 31 have 1,500 or fewer                      small businesses within the category of               in the provision of wireless telephony,
                                                 employees and two have more than                         Telecommunications Resellers. Under                   including cellular service, Personal
                                                 1,500 employees. Consequently, the                       that SBA definition, such a business is               Communications Service, and
                                                 Commission estimates that the majority                   small if it has 1,500 or fewer employees.             Specialized Mobile Radio Telephony
                                                 of OSPs are small entities that may be                   According to the Commission’s Form                    services. Of this total, an estimated 261
                                                 affected by our proposed rules.                          499 Filer Database, 500 companies                     have 1,500 or fewer employees, and 152
                                                    29. Other Toll Carriers. Neither the                  reported that they were engaged in the                have more than 1,500 employees. Thus,
                                                 Commission nor the SBA has developed                     provision of prepaid calling cards. The               using available data, we estimate that
                                                 a definition for small businesses                        Commission does not have data                         the majority of wireless firms can be
                                                 specifically applicable to Other Toll                    regarding how many of these 500                       considered small.
                                                 Carriers. This category includes toll                    companies have 1,500 or fewer                            35. Wireless Communications
                                                 carriers that do not fall within the                     employees. Consequently, the                          Services. This service can be used for
                                                 categories of interexchange carriers,                    Commission estimates that there are 500               fixed, mobile, radiolocation, and digital
                                                 operator service providers, prepaid                      or fewer prepaid calling card providers               audio broadcasting satellite uses. The
                                                 calling card providers, satellite service                that may be affected by the rules.                    Commission defined ‘‘small business’’
                                                 carriers, or toll resellers. The closest                                                                       for the wireless communications
                                                 applicable NAICS Code category is for                    3. Wireless Providers—Fixed and                       services (WCS) auction as an entity with
                                                 Wired Telecommunications Carriers as                     Mobile                                                average gross revenues of $40 million
                                                 defined above. Under the applicable                         32. For wireless services subject to               for each of the three preceding years,
                                                 SBA size standard, such a business is                    auctions, we note that, as a general                  and a ‘‘very small business’’ as an entity
                                                 small if it has 1,500 or fewer employees.                matter, the number of winning bidders                 with average gross revenues of $15
                                                 Census data for 2012 shows that there                    that claim to qualify as small businesses             million for each of the three preceding
                                                 were 3,117 firms that operated that year.                at the close of an auction does not                   years. The SBA has approved these
                                                 Of this total, 3,083 operated with fewer                 necessarily represent the number of                   definitions.
                                                 than 1,000 employees. Thus, under this                   small businesses currently in service.                   36. Wireless Telephony. Wireless
                                                 category and the associated small                        Also, the Commission does not                         telephony includes cellular, personal
                                                 business size standard, the majority of                  generally track subsequent business size              communications services, and
                                                 Other Toll Carriers can be considered                    unless, in the context of assignments                 specialized mobile radio telephony
                                                 small. According to internally                           and transfers or reportable eligibility               carriers. As noted, the SBA has
                                                 developed Commission data, 284                           events, unjust enrichment issues are                  developed a small business size
                                                 companies reported that their primary                    implicated.                                           standard for Wireless
                                                 telecommunications service activity was                     33. Wireless Telecommunications                    Telecommunications Carriers (except
                                                 the provision of other toll carriage. Of                 Carriers (except Satellite). This industry            Satellite). Under the SBA small business
                                                 these, an estimated 279 have 1,500 or                    comprises establishments engaged in                   size standard, a business is small if it
                                                 fewer employees. Consequently, the                       operating and maintaining switching                   has 1,500 or fewer employees.
                                                 Commission estimates that most Other                     and transmission facilities to provide                According to Commission data, 413
                                                 Toll Carriers are small entities that may                communications via the airwaves.                      carriers reported that they were engaged
                                                 be affected by rules adopted pursuant to                 Establishments in this industry have                  in wireless telephony. Of these, an
                                                 the NPRM.                                                spectrum licenses and provide services                estimated 261 have 1,500 or fewer
                                                    30. Payphone Service Providers.                       using that spectrum, such as cellular                 employees and 152 have more than
                                                 Neither the Commission nor the SBA                       services, paging services, wireless                   1,500 employees. Therefore, a little less
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                                                 has developed a definition of small                      internet access, and wireless video                   than one third of these entities can be
                                                 entities specifically applicable to                      services. The appropriate size standard               considered small.
                                                 payphone service providers (PSPs). The                   under SBA rules is that such a business
                                                 closest applicable definition under the                  is small if it has 1,500 or fewer                     4. All Other Telecommunications
                                                 SBA rules is for Wired                                   employees. For this industry, U.S.                       37. ‘‘All Other Telecommunications’’
                                                 Telecommunications Carriers. Under                       Census data for 2012 show that there                  is defined as follows: This U.S. industry
                                                 that SBA definition, such a business is                  were 967 firms that operated for the                  is comprised of establishments that are
                                                 small if it has 1,500 or fewer employees.                entire year. Of this total, 955 firms had             primarily engaged in providing


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                                                 31748                     Federal Register / Vol. 82, No. 130 / Monday, July 10, 2017 / Proposed Rules

                                                 specialized telecommunications                           others): (1) The establishment of                      during ex parte meetings are deemed to
                                                 services, such as satellite tracking,                    differing compliance or reporting                      be written ex parte presentations and
                                                 communications telemetry, and radar                      requirements or timetables that take into              must be filed consistent with Rule
                                                 station operation. This industry also                    account the resources available to small               1.1206(b). In proceedings governed by
                                                 includes establishments primarily                        entities; (2) the clarification,                       Rule 1.49(f) or for which the
                                                 engaged in providing satellite terminal                  consolidation, or simplification of                    Commission has made available a
                                                 stations and associated facilities                       compliance or reporting requirements                   method of electronic filing, written ex
                                                 connected with one or more terrestrial                   under the rule for small entities; (3) the             parte presentations and memoranda
                                                 systems and capable of transmitting                      use of performance, rather than design,                summarizing oral ex parte
                                                 telecommunications to, and receiving                     standards; and (4) an exemption from                   presentations, and all attachments
                                                 telecommunications from, satellite                       coverage of the rule, or any part thereof,             thereto, must be filed through the
                                                 systems. Establishments providing                        for small entities.                                    electronic comment filing system
                                                 Internet services or voice over Internet                    41. The Commission proposes to                      available for that proceeding, and must
                                                 protocol (VoIP) services via client-                     eliminate the annual payphone call                     be filed in their native format (e.g., .doc,
                                                 supplied telecommunications                              tracking system audit requirement for                  .xml, .ppt, searchable .pdf). Participants
                                                 connections are also included in this                    Completing Carriers. The Commission                    in this proceeding should familiarize
                                                 industry. The SBA has developed a                        believes that its proposal upon which                  themselves with the Commission’s ex
                                                 small business size standard for ‘‘All                   the NPRM seeks comment will benefit                    parte rules.
                                                 Other Telecommunications,’’ which                        all carriers, regardless of size. The                  B. Initial Regulatory Flexibility Analysis
                                                 consists of all such firms with gross                    proposal would further the goal of
                                                 annual receipts of $32.5 million or less.                reducing unnecessary regulatory                          44. Pursuant to the Regulatory
                                                 For this category, census data for 2012                  burdens on affected carriers. We                       Flexibility Act (RFA), the Commission
                                                 show that there were 1,442 firms that                    anticipate that a more modernized                      has prepared an Initial Regulatory
                                                 operated for the entire year. Of these                   regulatory scheme with the associated                  Flexibility Analysis (IRFA) of the
                                                 firms, a total of 1,400 had gross annual                 reduction in compliance costs will                     possible significant economic impact on
                                                 receipts of less than $25 million.                       allow carriers to invest their resources               small entities of the policies and actions
                                                 Consequently, we estimate that the                       elsewhere to the benefit of consumers.                 considered in this NPRM. The text of
                                                 majority of All Other                                                                                           the IRFA is set forth above. Written
                                                 Telecommunications firms are small                       F. Federal Rules That May Duplicate,                   public comments are requested on this
                                                 entities that might be affected by our                   Overlap, or Conflict With the Proposed                 IRFA. Comments must be identified as
                                                 action.                                                  Rule                                                   responses to the IRFA and must be filed
                                                                                                               42. None.                                         by the deadlines for comments on the
                                                 D. Description of Projected Reporting,                                                                          NPRM. The Commission’s Consumer
                                                 Recordkeeping, and Other Compliance                      V. Procedural Matters                                  and Governmental Affairs Bureau,
                                                 Requirements                                                                                                    Reference Information Center, will send
                                                                                                          A. Ex Parte Rules
                                                    38. The NPRM proposes and seeks                                                                              a copy of the NPRM, including the
                                                 comment on a rule change that will                          43. This proceeding shall be treated as             IRFA, to the Chief Counsel for Advocacy
                                                 affect reporting, recordkeeping, and                     a ‘‘permit-but-disclose’’ proceeding in                of the Small Business Administration.
                                                 other compliance requirements. We                        accordance with the Commission’s ex
                                                 expect the rule revision proposed in the                 parte rules. Persons making ex parte                   C. Paperwork Reduction Act
                                                 NPRM to reduce reporting,                                presentations must file a copy of any                     45. This document contains proposed
                                                 recordkeeping, and other compliance                      written presentation or a memorandum                   new and modified information
                                                 requirements. The rule revision should                   summarizing any oral presentation                      collection requirements. The
                                                 have a beneficial reporting,                             within two business days after the                     Commission, as part of its continuing
                                                 recordkeeping, or compliance impact on                   presentation (unless a different deadline              effort to reduce paperwork burdens,
                                                 small entities because all carriers will be              applicable to the Sunshine period                      invites the general public and the Office
                                                 subject to fewer such burdens. This                      applies). Persons making oral ex parte                 of Management and Budget to comment
                                                 change is described below.                               presentations are reminded that                        on the information collection
                                                    39. The NPRM proposes to eliminate                    memoranda summarizing the                              requirements contained in this
                                                 section 64.1320(f) of the Commission’s                   presentation must (1) list all persons                 document, as required by the Paperwork
                                                 rules and, thus, the annual payphone                     attending or otherwise participating in                Reduction Act of 1995, Public Law 104–
                                                 call tracking system audit and                           the meeting at which the ex parte                      13. In addition, pursuant to the Small
                                                 associated reporting requirement.                        presentation was made, and (2)                         Business Paperwork Relief Act of 2002,
                                                 Should the Commission adopt this                         summarize all data presented and                       Public Law 107–198, see 44 U.S.C.
                                                 proposal, such action would result in                    arguments made during the                              3506(c)(4), we seek specific comment on
                                                 reduced reporting, recordkeeping, or                     presentation. If the presentation                      how we might further reduce the
                                                 other compliance requirements for                        consisted in whole or in part of the                   information collection burden for small
                                                 Completing Carriers, as that term is                     presentation of data or arguments                      business concerns with fewer than 25
                                                 defined in section 64.1300(a) of the                     already reflected in the presenter’s                   employees.
                                                 Commission’s rules.                                      written comments, memoranda or other
                                                                                                          filings in the proceeding, the presenter               D. Filing of Comments and Reply
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                                                 E. Steps Taken To Minimize Significant                   may provide citations to such data or                  Comments
                                                 Economic Impact on Small Entities, and                   arguments in his or her prior comments,                  46. Pursuant to sections 1.415 and
                                                 Significant Alternatives Considered                      memoranda, or other filings (specifying                1.419 of the Commission’s rules, 47 CFR
                                                    40. The RFA requires an agency to                     the relevant page and/or paragraph                     1.415, 1.419, interested parties may file
                                                 describe any significant alternatives that               numbers where such data or arguments                   comments and reply comments on or
                                                 it has considered in reaching its                        can be found) in lieu of summarizing                   before the dates indicated on the first
                                                 proposed approach, which may include                     them in the memorandum. Documents                      page of this document. Comments may
                                                 the following four alternatives (among                   shown or given to Commission staff                     be filed using the Commission’s


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                                                                           Federal Register / Vol. 82, No. 130 / Monday, July 10, 2017 / Proposed Rules                                                 31749

                                                 Electronic Comment Filing System                         and Priority Mail) must be sent to 9300               this Notice of Proposed Rulemaking,
                                                 (ECFS). See Electronic Filing of                         East Hampton Drive, Capitol Heights,                  including the Initial Regulatory
                                                 Documents in Rulemaking Proceedings,                     MD 20743.                                             Flexibility Analysis, to the Chief
                                                 63 FR 24121 (1998).                                        D U.S. Postal Service first-class,                  Counsel for Advocacy of the Small
                                                    D Electronic Filers: Comments may be                  Express, and Priority mail must be                    Business Administration.
                                                 filed electronically using the Internet by               addressed to 445 12th Street SW.,
                                                                                                                                                                List of Subjects in 47 CFR Part 64
                                                 accessing the ECFS: https://                             Washington, DC 20554.
                                                 www.fcc.gov/ecfs/.                                         D People with Disabilities: To request                Common Carriers, Communications,
                                                    D Paper Filers: Parties who choose to                 materials in accessible formats for                   Telecommunications, Telephone.
                                                 file by paper must file an original and                  people with disabilities (braille, large
                                                 one copy of each filing. If more than one                print, electronic files, audio format),               Federal Communications Commission.
                                                 docket or rulemaking number appears in                   send an email to fcc504@fcc.gov or call               Marlene H. Dortch,
                                                 the caption of this proceeding, filers                   the Consumer & Governmental Affairs                   Secretary.
                                                 must submit two additional copies for                    Bureau at 202–418–0530 (voice), 202–                  Proposed Rules
                                                 each additional docket or rulemaking                     418–0432 (tty).
                                                 number.                                                                                                          For the reasons set forth in the
                                                    Filings can be sent by hand or                        E. Contact Person                                     preamble, the Federal Communications
                                                 messenger delivery, by commercial                          47. For further information about this              Commission proposes to amend CFR
                                                 overnight courier, or by first-class or                  proceeding, please contact Michele                    part 64 as follows:
                                                 overnight U.S. Postal Service mail. All                  Berlove, FCC Wireline Competition
                                                 filings must be addressed to the                         Bureau, Competition Policy Division,                  PART 64—MISCELLANEOUS RULES
                                                 Commission’s Secretary, Office of the                    Room 5–C313, 445 12th Street SW.,                     RELATING TO COMMON CARRIERS
                                                 Secretary, Federal Communications                        Washington, DC 20554 (202) 418–1477,
                                                 Commission.                                              Michele.Berlove@fcc.gov.                              ■ 1. The authority citation for part 64
                                                    D All hand-delivered or messenger-                                                                          continues to read as follows:
                                                 delivered paper filings for the                          VI. Ordering Clauses
                                                                                                                                                                  Authority: 47 U.S.C. 154, 225, 254(k);
                                                 Commission’s Secretary must be                             48. Accordingly, it is ordered that,                403(b)(2)(B), (c), 715, Pub.L. 104–104, 110
                                                 delivered to FCC Headquarters at 445                     pursuant to the authority contained in                Stat. 56. Interpret or apply 47 U.S.C. 201,
                                                 12th St. SW., Room TW–A325,                              sections 1–4, 11, and 276 of the                      218, 222, 225, 226, 227, 228, 254(k), 616, 620,
                                                 Washington, DC 20554. The filing hours                   Communications Act of 1934, as                        and the Middle Class Tax Relief and Job
                                                                                                          amended, 47 U.S.C. 151–154, 161, 276,                 Creation Act of 2012, Pub.L. 112–96, unless
                                                 are 8:00 a.m. to 7:00 p.m. All hand
                                                                                                                                                                otherwise noted.
                                                 deliveries must be held together with                    this Notice of Proposed Rulemaking is
                                                 rubber bands or fasteners. Any                           adopted.                                              § 64.1320    [Amended]
                                                 envelopes and boxes must be disposed                       49. It is further ordered that the
                                                 of before entering the building.                         Commission’s Consumer &                               ■   2. In § 64.1320, remove paragraph (f).
                                                    D Commercial overnight mail (other                    Governmental Affairs Bureau, Reference                [FR Doc. 2017–14256 Filed 7–7–17; 8:45 am]
                                                 than U.S. Postal Service Express Mail                    Information Center, shall send a copy of              BILLING CODE 6712–01–P
nlaroche on DSK30NT082PROD with PROPOSALS




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Document Created: 2017-07-08 00:55:30
Document Modified: 2017-07-08 00:55:30
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesComments are due on or before August 9, 2017, and reply comments are due on or before September 8, 2017. Written comments on the Paperwork Reduction Act proposed information collection requirements must be submitted by the public, Office of Management and Budget (OMB), and other interested parties on or before September 8, 2017.
ContactWireline Competition Bureau, Competition Policy Division, Michele Berlove, at (202) 418-1477, [email protected] For additional information concerning the Paperwork Reduction Act information collection requirements contained in this document, send an email to [email protected] or contact Nicole Ongele at (202) 418-2991.
FR Citation82 FR 31743 
CFR AssociatedCommon Carriers; Communications; Telecommunications and Telephone

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