Federal Register Vol. 83, No.96,

Comments Invited

We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.

We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.

We issued AD 2017-14-03, Amendment 39-18947 (82 FR 34838, July 27, 2017), for Sikorsky Model S-92A helicopters. AD 2017-14-03 was prompted by Sikorsky's updated fatigue analysis of the nose and main landing gear, which revealed that certain components require a reduced service life. Therefore, AD 2017-14-03 requires reducing the retirement lives of main landing gear (MLG) wheel axle part number (P/N) 2392-2334-001, MLG and nose landing gear (NLG) threaded hinge pin P/N 2392-2311-003, NLG cylinder P/N 2392-4006-005, NLG hinge pin P/N 2392-4312-003, and landing gear actuator rod end P/N 2392-0876-901. AD 2017-14-03 also requires a one-time visual and ultrasonic inspection of NLG airframe fitting assembly P/N 92209-01101-041 once it has accumulated 31,600 landing cycles. Those actions are intended to detect and prevent cracks or failure of any landing gear component, which could result in damage and loss of control of the helicopter.

When we issued AD 2017-14-03, we determined it would be an interim action. Because Sikorsky's updated airworthiness limitations schedule included a repetitive inspection of the NLG airframe fitting assemblies P/N 92209-01101-041 every 1,989 landing cycles, we determined that the planned compliance time for these inspections would allow enough time to provide notice and opportunity for prior public comment on the merits of the repetitive inspection. Also, the reduced retirement lives for MLG cylinder P/N 2392-2006-005, MLG pin outboard P/N 2392-2312-003, MLG bulkhead left-hand side (LHS) P/N 92201-08111-105, -107, and -109, and MLG bulkhead right-hand side (RHS) P/N 92201-08111-106, -108, and -110 were not included in AD 2017-14-03. We determined the age of the existing Model S-92A fleet would also allow enough time to provide notice and opportunity for public comment on the merits of the reduced life limits. This proposed AD would require these inspections and reduced life limits.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

We reviewed Ultrasonic Inspection Technique No. UT 5077, Revision 0, dated July 25, 2014 (UT 5077). UT 5077 contains the inspection method, equipment and materials, calibration, and inspection procedure for performing an ultrasonic inspection of nose gear actuator fitting P/N 92209-01101-101.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We also reviewed Sikorsky S-92 Helicopter Alert Service Bulletin 92-32-004, Basic Issue, dated January 30, 2015 (ASB). The ASB describes procedures for conducting a visual inspection of the NLG airframe fitting assembly and an ultrasonic inspection by following the procedures in UT 5077.

This proposed AD would require removing the following components from service:

• Any MLG wheel axle P/N 2392-2334-001 that has 22,300 or more landing cycles.

• Any MLG or NLG threaded hinge pin P/N 2392-2311-003 that has 26,100 or more landing cycles.

• Any NLG cylinder P/N 2392-4006-005 that has 26,300 or more landing cycles.

• Any NLG hinge pin P/N 2392-4312-003 that has 26,700 or more landing cycles.

• Any landing gear actuator rod end P/N 2392-0876-901 that has 41,700 or more landing cycles.

• Any MLG cylinder P/N 2392-2006-005 that has 76,300 or more landing cycles.

• Any MLG pin outboard P/N 2392-2312-003 that has 50,300 or more landing cycles.

• Any MLG bulkhead LHS P/N 92201-08111-105, -107, and -109 that has 58,400 or more landing cycles.

• Any MLG bulkhead RHS P/N 92201-08111-106, -108, and -110 that has 58,400 or more landing cycles.

For helicopters that have 31,600 or more landing cycles and an NLG airframe fitting assembly P/N 92209-01101-041 installed, this proposed AD would also require, before further flight and thereafter at intervals not exceeding 1,989 landing cycles:

• Using a 10X or higher power magnifying glass, inspecting each bushing and all visible surfaces of mating lug fittings adjacent to each bushing for fretting, corrosion, wear, and scratches.

• Replacing the NLG airframe fitting assembly before further flight if there is fretting, corrosion, wear, or a scratch more than 0.0005 inch deep.

• Ultrasonic inspecting the NLG actuator fitting and replacing the NLG actuator fitting before further flight if there are any anomalies.

We estimate that this AD will affect 80 helicopters of U.S. Registry.

We estimate that operators may incur the following costs in order to comply with this AD. At an average labor rate of $85 per hour:

• Replacing a wheel axle P/N 2392-2334-001 would require 2 work-hours and required parts cost $22,000, for a cost per helicopter of $22,170.

• Replacing a MLG or NLG threaded hinge pin P/N 2392-2311-003 would require 1 work-hour and required parts cost $3,800, for a cost per helicopter of $3,885.

• Replacing a NLG cylinder P/N 2392-4006-005 would require 1 work-hour and required parts cost $27,200, for a cost per helicopter of $27,285.

• Replacing a NLG hinge pin P/N 2392-4312-003 would require 1 work-hour and required parts cost $4,400, for a cost per helicopter of $4,485.

• Replacing a landing gear actuator rod end P/N 2392-0876-901 would require 1 work-hour and required parts cost $900, for a cost per helicopter of $985.

• Replacing a MLG cylinder P/N 2392-2006-005 would require 2 work-hours and required parts cost $33,100, for a cost per helicopter of $33,270.

• Replacing a MLG pin outboard P/N 2392-2312-003 would require 1 work-hour and required parts cost $4,300, for a cost per helicopter of $4,385.

• Replacing a MLG bulkhead LHS P/N 92201-08111-105, -107, and -109 would require 70 work-hours and required parts would cost $12,550, for a cost per helicopter of $18,500.

• Replacing a MLG bulkhead RHS P/N 92201-08111-106, -108, and -110 would require 70 work-hours and required parts would cost $12,550, for a cost per helicopter of $18,500.

• Inspecting the NLG airframe fitting assembly P/N 92209-01101-041 would require 8 work-hours, and required parts cost is minimal, for a cost of $680 per helicopter and $54,400 for the U.S. fleet, per inspection cycle.

• If required, replacing a NLG actuator fitting P/N 92209-01101-101 would require 70 work-hours, and required parts cost $10,000, for a cost per helicopter of $15,950.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

Comments Invited

We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.

We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.

EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD No. 2017-0159, dated August 25, 2017, to correct an unsafe condition for Airbus Helicopters Model AS355E, AS355F, AS355F1, AS355F2, and AS355N helicopters. EASA advises of two occurrences on AS355 military helicopters in which the main gearbox (MGB) oil cooler fan bearing (bearing) installed on the TR drive shaft experienced significant degradation. EASA states that while investigation has not determined the cause of the failures, this condition may also occur on other AS355 helicopters due to design commonality. According to EASA, this condition, if not detected and corrected, could result in loss of MGB and engine oil cooling function, loss of the rear transmission, and subsequent loss of control of the helicopter. To address this unsafe condition and as an interim measure, the EASA AD requires two vibration level measurements of the forward portion of the tail rotor drive line, one before and one after cleaning the MGB oil cooler fan, and replacing the bearings if excessive level or level trends are detected. The EASA AD also specifies that after the effective date of the AD, only those MGB oil cooler fan assembly bearings that are new or that have passed the vibration level measurements may be installed.

These helicopters have been approved by the aviation authority of France and are approved for operation in the United States. Pursuant to our bilateral agreement with France, EASA, its technical representative, has notified us of the unsafe condition described in its AD. We are proposing this AD because we evaluated all known relevant information and determined that an unsafe condition is likely to exist or develop on other products of the same type design.

We reviewed Airbus Helicopters Alert Service Bulletin No. AS355-05.00.77, Revision 0, dated July 3, 2017, which contains procedures for checking the condition of the fan assembly bearings by measuring the vibration levels of the first section of the T/R drive.

This proposed AD would require, within 165 hours time-in-service, measuring the T/R drive vibration level without balancing, cleaning the fan, and repeating the vibration level measurement. If the difference between the two amplitude values is greater than 0.75 inch per second (ips), the proposed AD would require, before further flight, replacing each T/R fan bearing.

We consider this proposed AD to be an interim action. The manufacturer is currently developing a terminating action for the unsafe condition described in this proposed AD. If a terminating action is identified, we may consider further rulemaking then.

We estimate that this proposed AD would affect 104 helicopters of U.S. Registry.

We estimate that operators may incur the following costs in order to comply with this AD. At an average labor rate of $85 per work-hour, measuring the vibration levels would require about 5 work-hours, for a cost of $425 per helicopter and $44,200 for the U.S. operator fleet. If required, replacing both fan assembly bearings would require about 8 work-hours, and required parts would cost $1,064, for a cost per helicopter of $1,744.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This proposed rulemaking is promulgated under the authority described in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace at McVille Airport, Freeport, PA, to support IFR operations in standard instrument approach procedures at this airport.

Interested persons are invited to comment on this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA-2017-0426 and Airspace Docket No. 17-AEA-8) and be submitted in triplicate to the address listed above. You may also submit comments through the internet at http://www.regulations.gov.

Persons wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2017-0426; Airspace Docket No. 17-AEA-8.” The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded from and comments submitted through http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined between 8:00 a.m. and 4:30 p.m., Monday through Friday, except federal holidays at the office of the Eastern Service Center, Federal Aviation Administration, Room 350, 1701 Columbia Avenue, College Park, Georgia 30337.

This document proposes to amend FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is considering an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to establish Class E airspace at Freeport, PA, providing the controlled airspace required to support the new RNAV (GPS) standard instrument approach procedures for McVille Airport. Controlled airspace extending upward from 700 feet above the surface within a 7.6-mile radius of the airport would be established for IFR operations.

Class E airspace designations are published in Paragraph 6005 of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal would be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would remove Class D airspace, Class E airspace designated as a surface area, and Class E airspace designated as an extension to a Class D and Class E airspace at Henry Post AAF, Fort Sill, OK; amend Class D airspace and Class E airspace designated as a surface area at Lawton-Fort Sill Regional Airport, Lawton, OK; and amend Class E airspace extending upward from 700 feet above the surface at Lawton-Fort Sill Regional Airport and Henry Post AAF to support instrument flight rule operations at these airports.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2018-0246/Airspace Docket No. 18-ASW-6.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page athttp://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Federal Aviation Administration, Air Traffic Organization, Central Service Center, Operations Support Group, 10101 Hillwood Parkway, Fort Worth, TX 76177.

This document proposes to amend FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 by:

Removing Class D airspace at Henry Post AAF, Fort Sill, OK;

Amending Class D airspace at Lawton-Fort Sill Regional Airport (formerly Lawton Municipal Airport), Lawton, OK, by adding an extension 1.1 miles each side of the 167° radial of the Lawton VOR/DME extending from the 4.3-mile radius to 5.3 miles south of the airport; amending the exclusionary language from “that airspace north of a line between lat. 34°36′18″ N, long. 98°20′33″ W and lat. 34°37′16″ N, long. 98°28′29″ W; to “that airspace within a 2.0-mile radius of Henry Post AAF”; updating the name of the airport to coincide with the FAA's aeronautical database; and replacing the outdated term “Airport/Facility Directory” with “Chart Supplement”;

Removing Class E airspace designated as a surface area at Henry Post AAF;

Amending Class E airspace designated as a surface area at Lawton-Fort Sill Regional Airport by adding an extension 1.1 miles each side of the 167° radial of the Lawton VOR/DME extending from the 4.3-mile radius to 5.3 miles south of the airport; removing that area within a 4-mile radius of Henry Post AAF from the airspace legal description; amending the exclusionary language from “within Restricted Areas R5601A and R-5601B when these restricted areas are activated” to “that airspace within a 2.0-mile radius of Henry Post AAF”; updating the name of the Lawton-Fort Sill Airport (formerly Lawton Municipal Airport), and the geographic coordinates of Henry Post AAF to coincide with the FAA's aeronautical database; removing the city name associated with Henry Post AAF to comply with FAA Order 7400.2L, Procedures for Handling Airspace Matters; and replacing the outdated term “Airport/Facility Directory” with “Chart Supplement”;

Removing Class E airspace designated as an extension of Class D and Class E airspace at Henry Post AAF; and

Amending Class E airspace extending upward from 700 feet above the surface at Lawton-Fort Sill Regional Airport and Henry Post AAF by amending the extension to the south of Lawton-Fort Sill Regional Airport from the 167° (previously 178°) radial from the Lawton VOR/DME extending from the 6.8-mile radius to 13.1 (decreased from 20.6) miles south of the Lawton-Fort Sill Regional Airport; removing the extension from the 358° radial from Lawton VOR/DME; removing the extension to the north of Henry Post AAF referencing the 003° radial from the Lawton VOR/DME; adding an extension 4.0 miles each side of the 360° bearing from the Henry Post AAF from the 6.5-mile radius of Henry Post AAF to 10.9 miles north of Henry Post AAF; amending the exclusionary language pertaining to restricted areas from “R-5601A and R-5601B when these restricted areas are activated” to “R-5601A, R-5601B and R-5601H when active”; removing the exclusionary language “and excluding that airspace within the Wichita Falls, TX, Class E airspace area” from the airspace legal description; and updating the name of Lawton-Fort Sill Regional (formerly Lawton Municipal Airport) and the geographic coordinates of Henry Post AAF to coincide with the FAA's aeronautical database.

This action is being proposed due to the closure of the ATCT at Henry Post AAF and to remove the associated airspace.

Class D and E airspace designations are published in paragraph 5000, 6002, 6004, and 6005, respectively, of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies the route structure as necessary to support the flow of air traffic within the National Airspace System.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2018-0232; Airspace Docket No. 17-ANM-33) and be submitted in triplicate to the Docket Management Facility (see ADDRESSES section for address and phone number). You may also submit comments through the internet at http://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2018-0232; Airspace Docket No. 17-ANM-33.” The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified comment closing date will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Western Service Center, Operations Support Group, Federal Aviation Administration, 2200 South 216th St., Des Moines, WA 98198.

This document proposes to amend FAA Order 7400.11B, airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The Denver, Salt Lake City, and Minneapolis Air Route Traffic Control Centers (ARTCCs) requested the FAA to amend six existing and establish one new RNAV Q-Routes. These routes would support new SIDs and STARs that are being developed for Denver International Airport and surrounding airports. Moreover, the current routes are being amended to connect the midwest and east coast airports with west coast airports. Additional waypoints are being strategically added to existing routes over the Rocky Mountains to provide more flexibility in route planning to avoid mountain wave effect (severe turbulence, strong vertical currents, and icing) and to provide flexibility in flight planning for oxygen escape routes (oxygen escape routes are used in the event of cabin depressurization during a flight).

Furthermore, amending the six existing routes and adding the one new route will facilitate the implementation of traffic management initiatives such as adjacent ARTCC metering (ACM) and time based flow management.

The FAA is proposing an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to modify United States RNAV routes Q-88, Q-90, Q-114, Q-126, Q-136, Q-150; and establish United States RNAV route Q-92. The proposed route changes are outlined below.

Q-88: Q-88 currently extends from waypoint HAKMN, NV to waypoint CHESZ, UT. The amended route would connect airports in the northeastern United States (U.S.) and Canada with Los Angeles and Las Vegas. As well as, provide Denver International Airport departures to the north a routing to Minneapolis.

Q-90: Q-90 currently extends from waypoint DNERO, CA to waypoint JASSE, AZ. The amended route would add connection to Chicago O'Hare Airport. Additionally, the route would provide an alternate south departure route from Denver International airport to the Los Angeles, CA, basin satellite airports.

Q-92: Would be established to support departures from Denver International Airport bound for airports in the midwest and east coast.

Q-114: Q-114 currently extends from waypoint NATEE, NV to waypoint BUGGG, UT. The amended route would connect Chicago area airports to the Los Angeles basin airports. Additionally, the amended route would support Denver International Airport west departures to the Los Angeles, CA, basin satellite airports.

Q-126: Q-126 currently extends from waypoint TIPRE, CA to VOR/DME Meeker, CO, (EKR). The amended route would link airports on the U.S. west coast to airports in the midwest. Q-126 would add utility by supporting Denver International Airport arrival traffic from the west. Additional waypoints were added to the airway to provide for oxygen escape routes.

Q-136: Q-136 currently extends from VORTAC Coaldale, NV (OAL) to FIX VOAXA, CO. The amended route would link airports on the U.S. west coast to airports in the midwest. Q-136 would support Denver International Airport west departures to the San Francisco Bay area and departures to the midwest and east coast airports. Additional waypoints were added to the airway to provide for oxygen escape routes.

Q-150: Q-150 currently extends from waypoint STEVS, WA to waypoint OPPEE, WY. The amended route would support overflight traffic between Seattle area airports and Dallas/Ft. Worth, Houston, as well as Calgary and Edmonton airports in Canada. Q-150 would support Denver departures enroute to Boise, ID; Portland, OR; and Seattle, WA.

United States Area Navigation Routes are published in paragraph 2006 of FAA Order 7400.11B dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The United States Area Navigation Routes listed in this document will be subsequently published in the Order.

The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking §  Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

On 1 March 2018, the Delaware River Waterfront Corporation notified the Coast Guard that it will be conducting a fireworks display from 9:30 to 11:30 p.m. on June 30, 2018. The fireworks will be launched from a barge in the Delaware River off Penn's Landing in Philadelphia. Hazards from fireworks displays include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. The Captain of the Port Delaware Bay (COTP) has determined that potential hazards associated with the fireworks to be used in this display would be a safety concern.

The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters before, during, and after the scheduled event. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

The COTP Delaware Bay proposes to establish a safety zone on a portion of the Delaware River, Philadelphia, PA to ensure the safety of persons, vessels and the public during the event. The proposed safety zone includes navigable all waters of the Delaware River, adjacent to Penn's Landing, Philadelphia, PA, bounded from shoreline to shoreline, bounded on the south by a line running east to west from points along the shoreline commencing at latitude 39°56′31.2″ N, longitude 075°08′28.1″ W; thence westward to latitude 39°56′29.1″ N, longitude 075°07′56.5′ W, and bounded on the north by the Benjamin Franklin Bridge where it crosses the Delaware River. The safety zone would be effective and enforced from 9:30 p.m. to 11:30 p.m. on June 30, 2018. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The regulatory text we are proposing appears at the end of this document.

We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

This regulatory action determination is based on the size, location, and duration of the safety zone. Vessel traffic will be unable to transit the safety zone for the duration of the fireworks event however; this safety zone will impact a small designated area of the Delaware River, in Philadelphia, PA, for a two hour period during the fireworks event. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 regarding the safety zone; under the regulation vessel operators may request permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV.A above, this rule will not have a significant economic impact on any vessel owner or operator.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this proposed rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone lasting for two hours that would prohibit entry on portions of the Delaware River to promote public and maritime safety during a fireworks display. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. We seek any comments or information that may lead to the

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places, or vessels.

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

We encourage you to submit comments through the Federal eRulemaking Portal at http://www.regulations.gov. If your material cannot be submitted using http://www.regulations.gov, contact the person in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions.

We accept anonymous comments. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided. For more about privacy and the docket, visit http://www.regulations.gov/privacyNotice.

Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at http://www.regulations.gov and can be viewed by following that website's instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted or a final rule is published.

For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:

I. Background

When Congress enacted the Copyright Act of 1976 (the “Act”), it authorized the Register of Copyrights (the “Register”) to specify by regulation the administrative classes of works for the purpose of seeking a registration, and the nature of the deposits required for each such class. See 17 U.S.C.408(c). In addition, Congress granted the Register the discretion to allow groups of related works to be registered with one application and one filing fee, a procedure known as “group registration.” See 17 U.S.C. 408(c)(1). Congress recognized that requiring applicants to submit separate applications for certain types of works may be so burdensome and expensive that authors and copyright owners may forgo registration altogether, since copyright registration is not a prerequisite to copyright protection. H.R. Rep. No. 94-1476, at 154 (1976); reprinted in 1976 U.S.C.C.A.N. 5659, 5770; S. Rep. No. 94-473, at 136 (1975). Pursuant to the authority granted from Congress, the Register has issued regulations permitting the U.S. Copyright Office (the “Office”) to issue a group registration for limited categories of works, provided that certain conditions have been met. See generally 37 CFR 202.3(b)(5),(6), (9), 202.4(e), (g)-(i), (k).

In 1991, the Office began offering a group registration option for serials.1 55 FR 50556 (Dec. 7, 1990). A “serial” is defined as a “work issued or intended to be issued in successive parts bearing numerical or chronological designations and intended to be continued indefinitely,” such as periodicals, magazines, and journals. 37 CFR 202.3(b)(1)(v).

The current group registration option for serials has a number of requirements, which are listed in different areas of the Code of Federal Regulations and in various Office publications. Specifically, applicants may use the group option (i) if the serial is “published at intervals of a week or longer”; (ii) if the issues are “published in the same calendar year”; (iii) if the “application covers no more than the issues published in a given three month period”; and (iv) if the issues are “created no more than one year prior to publication.” 37 CFR 202.3(b)(6)(i), (i)(B), (i)(G). The applicant must include a “minimum [of] 2 issues” in each submission, id. § 201.3(c)(6), and may register the works using the online application designated for groups of serial issues, or submit a paper application on Form SE/Group, id. § 202.3(b)(6)(v). In addition, “[t]he claim to copyright for which registration is sought” must be “in the collective work”; the collective work must be a work made for hire; “[t]he collective work authorship” must be “essentially new material that is being published for the first time”; and “[t]he author(s) and claimant(s) of the collective work” must be “the same person(s) or organization(s).” Id. § 202.3(b)(6)(i)(C)-(F). The applicant must also submit a deposit consisting of one complete copy of the best edition of each issue included in the group registration.2 Id. § 202.3(b)(6)(v)(A)(3), B(3).

I. Background

When Congress enacted the Copyright Act of 1976 (the “Act”), it authorized the Register of Copyrights (the “Register”) to specify by regulation the administrative classes of works for the purpose of seeking a registration and the nature of the deposits required for each such class. See 17 U.S.C. 408(c). In addition, Congress granted the Register the discretion to allow groups of related works to be registered with one application and one filing fee, a procedure known as “group registration.” See 17 U.S.C. 408(c)(1). Congress recognized that requiring applicants to submit separate applications for certain types of works may be so burdensome and expensive that authors and copyright owners may forgo registration altogether, since copyright registration is not a prerequisite to copyright protection. H.R. Rep. No. 94-1476, at 154 (1976); reprinted in 1976 U.S.C.C.A.N. 5659, 5770; S. Rep. No. 94-473, at 136 (1975). Pursuant to the authority granted by Congress, the Register has issued regulations permitting the U.S. Copyright Office (the “Office”) to issue a group registration for limited categories of works, provided that certain conditions have been met. See generally 37 CFR 202.3(b)(5), (6), (9), 202.4.

In 1995, the Office promulgated a rule offering a group registration option for newsletter publishers, concluding that it would further Congress's desire to promote registration of works that may be too burdensome and expensive to be registered separately.1 Under that rule, a “newsletter” is defined as a “a serial published and distributed by mail or electronic media (online or telefacsimile), or in any medium,” with publication occurring “at least two days each week” and “contain[ing] news or information of interest chiefly to a special group (for example, trade and professional associations, corporate in-house groups, schools, colleges, or churches).” 37 CFR 202.3(b)(9)(i). In contrast, the option for group registration of serials is limited to less-frequently published serials—i.e., those published at intervals of one week or longer. Id. § 202.3(b)(6)(i).

The current group registration option for newsletters has a number of requirements. Specifically, the applicant must complete and submit a paper application using Form G/DN, include at least two newsletter issues in each group, and “designate the first and last day that [the] issues in the group were published.” 37 CFR 202.3(b)(9), (b)(9)(viii). In addition, the newsletter issues must be “essentially all-new collective works or all-new issues that have not been published before,” “bear issue dates within a single calendar month under the same continuing title,” be works made for hire, and have the same person or organization as the author and claimant for all issues in the group. Id. § 202.3(b)(9)(ii)-(v). Form G/DN also indicates that newsletters are customarily sold by subscription as opposed to on newsstands, although this requirement is not mentioned in the regulation itself. See 60 FR at 15875.

To satisfy the registration deposit requirements for this group option, the applicant must submit one complete copy of each issue that is included in the group. 37 CFR 202.3(b)(9)(vi)(A). The current regulation also states that if the newsletter is one that has been selected for the Library's collections, the claimant is required to provide either “as many as two complimentary subscriptions of the newsletter in the edition most suitable to the Library's needs,” or “a single positive, 35 mm silver halide microfilm meeting the Library's best edition criteria that includes all issues published as final editions in the designated calendar month,” whichever the Library prefers. Id. § 202.3(b)(9)(vi)(B). This provision has been in effect for more than fifteen years, but relatively few newsletters have been selected for the Library's collection.

Finally, the current regulation states that registration must be “sought within three months after the publication date of the last issue included in the group.” Id. § 202.3(b)(9)(vii). The deadline is intended to ensure that the Library receives these types of works in a timely manner. 64 FR 19522, 29523 (Jun. 1, 1999). If the claimant is unable to provide subscription copies or microfilm, or is unable to do so within three months after publication, the regulation states that each issue may be registered on an individual basis by submitting a paper application on Form SE or Short Form SE. 37 CFR 202.3(b)(9)(vi)(C).

Section 407 of the Copyright Act states that if a work is published in the United States, the owner of copyright or the owner of the exclusive right of publication must affirmatively deposit two copies of the “best edition” of that work with the Library within three months after publication. 17 U.S.C. 407(a)-(b). This is known as the “mandatory deposit” requirement. As a general rule, publishers may satisfy this requirement by registering their works with the Office, or by sending copies to the Copyright Office's Copyright Acquisitions Division without seeking a registration. If a publisher fails to comply with the mandatory deposit requirement, the Office may issue a written demand for those works, and if the required copies are not received within three months thereafter, the copyright owner or owner of the exclusive right of publication in that work may be subject to fines or other monetary liability. Id. 407(d). The Office has the authority to establish regulations governing mandatory deposit, including regulations to exempt any categories of material from these requirements. See id. 407(c), 702.

Newsletters published in a physical format (including works published both in physical and electronic formats) are subject to these affirmative mandatory deposit requirements. 37 CFR 202.19(c)(5). Electronic-only newsletters are subject to a separate mandatory deposit regime. Specifically, in 2010, the Office adopted an interim rule that established a different process for serials published solely in electronic form. (Newsletters, as a type of serial, are subject to these rules.) That interim rule established a general exemption for most “[e]lectronic works published in the United States and available only online,” except for serials published solely in electronic formats (i.e., “online-only” serials). Id. For online-only serials, there is no affirmative obligation to deposit works with the Copyright Office. Instead, if the Library desires a particular serial title for its collections, the Office will issue a written demand requiring the publisher to deposit copies of that serial. Id. 202.24.

The existing regulations governing group registration of newsletters require updating, both to better account for current practice, and to allow the Office to streamline and modernize its registration procedures. Accordingly, the Office is proposing to amend the regulation governing the group option for newsletters to modify the eligibility requirements for this group option in several respects.

To summarize, the proposed rule would do the following things:

(1) The rule would clarify and expand the category of works eligible for the group registration option, including by eliminating the work-for-hire requirement, by making clear that newsletters need not be collective works, and by eliminating the three-month deadline for filing the registration application.

(2) The rule would memorialize the Office's longstanding position regarding the scope of a registration for a group of newsletter issues—i.e., a registration for a group of newsletter issues covers each issue in the group, and if each issue constitutes a collective work, the articles, photographs, illustrations, or other contributions appearing within those issues—if they are fully owned by the copyright claimant and if they were first published in those issues.

(3) The rule would require applicants to register their newsletters through the Office's electronic registration system, and would discontinue the existing paper application.

(4) The rule would require applicants to upload their newsletters in digital form through the electronic registration system; the Office would no longer accept physical copies, such as a photocopy of each issue in the group, or digital copies that have been saved onto a flash drive, disc, or other physical storage medium that is delivered to the Office.

(5) Newsletter publishers would no longer be required to provide either subscriptions or microfilm copies for the Library's collections as a condition for using the group registration option. But the rule would also make clear that electronic deposits submitted to the Office through the registration system would not satisfy the mandatory deposit requirements in section 407, and would amend the mandatory deposit regulations to provide guidance on fulfilling those requirements. Specifically, if a newsletter is published in the United States in a physical format, the publisher must provide the Library with two complimentary subscriptions to the newsletter, unless it is informed that the newsletter is not needed for the Library's collections. Newsletters published only in electronic form will continue to be subject to the existing on-demand mandatory deposit regime.

The next sections discuss changes warranting more discussion.

The proposed rule clarifies that newsletter issues can be, but do not have to be, collective works to qualify for the group registration option. Thus, for example, a newsletter that contains a single article and a single photograph would not be considered a collective work, because it does not contain a sufficient number of contributions—but nevertheless it would still be eligible for registration as part of the group, if the rest of the eligibility requirements have been met.2 In this respect, the proposed rule differs from the corresponding group registration options for serials and newspapers. To register a group of serials or newspapers, each issue in the group must be a collective work. See 37 CFR 202.3(b)(6)(i)(C)-(E), 202.4(e)(2). By contrast, under the proposed rule, publishers may register a group of newsletters whether or not each issue satisfies the statutory definition for a collective work.

The rule also clarifies that each newsletter issue in the group must be fixed and distributed as a discrete, self-contained work.3 An applicant may satisfy this requirement if the newsletter as a whole is fixed in a tangible medium of expression, and the content of each issue does not change once it has been distributed. For example, a publisher that mails a newsletter to its subscribers would satisfy this requirement, because the newsletter is clearly fixed and distributed in a physical format. A publisher that emails an electronic newsletter to its subscribers may satisfy this requirement if each issue contains a fixed selection of content, such as a PDF version of a physical publication. Similarly, a publisher that allows its subscribers to download a newsletter from its website may satisfy this requirement if each issue is distributed as a self-contained work and the content of each issue does not change once it has been downloaded.

The current regulation states that newsletter publishers must submit their claims within three months after the publication of the most recent issue in the group. 37 CFR 202.3(b)(9)(vii). The proposed rule eliminates this requirement, as it existed as a means of encouraging publishers to provide subscriptions or copies to the Library as early as possible. Since the proposed rule eliminates that requirement, the timeliness requirement can be eliminated as well, especially because the Copyright Act itself already contains a number of incentives for early registration.

The proposed rule continues the existing requirement that the works be “all new” collective works or “all new” issues that have not been published before.4 In other words, the issues included in the group cannot be derivative versions of a previously published issue or a newsletter that is frequently modified, updated, or adapted.

The proposed rule clarifies the scope of the group registration option in various respects, including by eliminating the existing reference to “daily newsletters,” 37 CFR 202.3(b)(9), which is inaccurate, and by clarifying that a group of newsletters must “usually” be published at least two days a week, to account for occasional situations where the newsletter suspends publication (e.g., for a holiday).

The proposed rule clarifies that a registration for a group of newsletters covers each issue in the group, and each issue would be registered as a separate work. In other words, the group registration is treated as the legal equivalent of a separate registration for each newsletter issue.

If the newsletters qualify and are claimed as collective works, then those issues would be registered as separate collective works. As a general rule, a registration for a collective work covers the individual contributions contained within that work if they are fully owned by the copyright claimant and if they were first published in that work.5 A registration for a group of newsletter issues constituting collective works is effectively treated as a separate collective work registration for each issue in the group. Thus, in such cases, the group registration also covers the articles, photographs, illustrations, or other contributions appearing within those issues—if they are fully owned by the copyright claimant at the time the application was filed, and if they were first published in those issues. By contrast, if an issue constituting a collective work contains contributions that are not fully owned by the copyright claimant, and/or contributions that were previously published, the registration will not extend to those works. See Morris v. Business Concepts, Inc., 259 F.3d 65, 71 (2d Cir. 2001) (“Unless the copyright owner of a collective work also owns all the rights in a constituent part, a collective work registration will not extend to the constituent part.”), abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 160 (2010).

With respect to the information collected as part of a group registration and examination practices, the Office must balance the public interest in creating a meaningful record (i.e., collecting information regarding each individual contribution within a newsletter issue) with the relative burden on applicants wishing to participate in the registration system. When an applicant submits multiple issues, it is difficult to collect granular information concerning the individual articles, photographs, and other component works within each issue. Requiring applicants to identify the author and title of each individual contribution would impose a significant burden both on applicants and the Office alike. This would discourage registration, which in turn, would diminish the value of the Office's public record. Imposing these burdens would also be contrary to the Congressional purpose of providing the Office with the authority to create group registration options: To ease the registration of certain works.

Accordingly, the Office's application to register a group of newsletter issues does not contain spaces where the applicant can provide titles, authors, or other identifying information for each contribution, or identify component works created by a third party and transferred to the claimant by written agreement. But the Office foresees the future possibility of applicants submitting metadata for the component works appearing within each issue, and the possibility of the Office incorporating this information into the registration record. If this becomes feasible once the Office implements its next-generation registration system, it may require this type of information as a condition for using this group registration option.

If each issue appears to be a collective work, the examiner will examine the issue as a whole to determine if it contains sufficient compilation authorship to warrant registration as a collective work. And the examiner will review the issue to determine whether it contains “a number of contributions” constituting “separate and independent works in themselves” 17 U.S.C. 101 (definition of “collective work”). When the Office issues a group registration, the certificate will identify the title, author, and claimant for each newsletter issue in the group, but it will not identify the titles, authors, or claimants for the individual contributions appearing within those issues.

The scope of protection for a group registration issued under the proposed rule will have several consequences in infringement actions. First, a group registration may be used to satisfy the statutory requirements for instituting an infringement action involving any of the newsletter issues that were included within the group.6 17 U.S.C. 411(a). Likewise, a group registration may be used to enforce the copyright in any of the individual contributions appearing within issues constituting collective works—provided that the claimant fully owned those contributions at the time the application for registration is submitted, and provided that the contributions were first published in one of those issues.

Second, the proposed rule clarifies that the group as a whole is not considered a compilation, a collective work, or a derivative work. Instead, the group is merely an administrative classification created solely for the purpose of registering multiple works with one application and one filing fee. The chronological selection, coordination, and arrangement of the issues within the group is entirely dictated by the regulatory requirements for this option. Likewise, when a group of newsletter issues are combined for the purpose of facilitating registration, those works are not “recast, transformed, or adapted” in any way, and the group as a whole is not “a work based upon one or more preexisting works” because there is no copyrightable authorship in simply collecting a month of issues and arranging them in chronological order. 17 U.S.C. 101 (definition of “derivative work”).

On December 14, 2012, the Office made some modifications to its electronic registration system to allow newsletter publishers to submit their claims with the online application. Under the proposed rule, applicants would be required to use the electronic application designated for a group of newsletter issues as a condition for seeking a group registration. The Office would no longer accept groups of newsletter issues submitted for registration on paper using Form G/DN.7 If, after the effective date of this rule, such paper applications are received, the Office will refuse registration. The Office invites comment on this proposal, including whether the Office should eliminate the paper application for newsletter issues, phase it out after a specified period of time, or continue to offer Form G/DN for applicants who prefer to use the paper-based system.

The Office's decision to offer a group option is entirely discretionary, and Congress gave the Office broad authority to establish the requirements for these types of claims. 17 U.S.C. 408(c)(1). Currently, the vast majority of the claims submitted on Form G/DN require correspondence or other action from the Office, which increases overall pendency and contributes to the Office's backlog of pending claims. Applicants routinely file claims that are not eligible for this group option, fail to provide information expressly requested on the form, or add extraneous information that is not requested. In each case, however, the Office must first scan these paper applications into the registration system and input the relevant information by hand before an examiner can reject the application as having been improperly filed. This is a cumbersome, labor-intensive process, and if it is done incorrectly, the information must be re-entered into the system. In many cases, the Office must contact the applicant to request additional information or permission to correct the application.

Addressing these issues imposes significant burdens on the Office's limited resources, and has had an adverse effect on the examination of other types of works within the Literary Division of the Registration Program. Eliminating the paper application should mitigate many of these problems. Among other improvements, the online application contains automated validations that prevent applicants from submitting applications that fail to comply with the eligibility requirements for this group option, such as including too many issues in the group (i.e., more than one calendar month of issues).

For these reasons, the Office believes that requiring applicants to submit online applications is necessary to improve the overall efficiency of the group registration process. Nonetheless, the Office invites comment on this aspect of the proposed rule.

As noted above, to register a group of newsletters under the proposed rule, applicants will be required to submit a complete digital copy of each issue in the group, regardless of whether the newsletter is published in a physical or electronic form and regardless of whether the newsletter is published in the United States or abroad. Requiring applicants to upload digital copies to the electronic system will increase the efficiency of the group registration process. The Office does not need physical copies to examine a newsletter for copyrightable authorship, or to determine whether the applicant satisfied the formal and legal requirements for this group option. See 17 U.S.C. 410(a) (providing that the Register of Copyrights must determine whether “material deposited [for registration] constitutes copyrightable subject matter”). Electronic submissions also take less time to process, and are easier to track and handle than physical copies. A registration specialist can examine a digital copy as soon as it has been uploaded to the electronic registration system. By contrast, when an applicant submits an online application and mails a physical deposit to the Office, it may take weeks to connect the application with the correct deposit. In addition, each copy must be moved multiple times during the examination process.

Requiring digital uploads may also provide newsletter publishers with certain legal benefits. When the Office registers a group of newsletters and issues a certificate of registration, the effective date of registration is the date on which the Office received the application, filing fee, and deposit in proper form. When an applicant uploads a digital copy of the deposit to the electronic system, the Office typically receives the application, filing fee, and deposit on the same date. By contrast, when an applicant sends physical copies to the Office, the deposit may arrive long after the date that the application and filing fee were received—thereby establishing a later effective date of registration.8

Although the proposed rule eliminates the requirement to provide subscriptions or microfilm as a condition of using the group registration option, newsletter publishers would still generally be subject to the mandatory deposit requirement under section 407.

To assist publishers with complying with these mandatory deposit requirements, the proposed rule amends the Office's mandatory deposit regulations, 37 CFR 202.19, to provide specific rules for all serials (a definition that includes newsletters) that are published in the United States in a physical format or in both a physical and electronic format.9 Newsletter publishers will be expected to provide two complimentary subscriptions to such newsletters, unless they have been informed by CAD that the serial title is not needed for the Library's collections. If subscription copies are not received within three months after publication of each issue, the Copyright Acquisitions Division (“CAD”) may issue a written demand for ongoing subscriptions to that publication. The failure to provide subscription copies when demanded by the Office would subject the owner to penalties under section 407.

No change is being made to the mandatory deposit scheme for electronic-only serials; such serials will continue to be subject to the existing, demand-based mandatory deposit scheme.10

The proposed rule, if adopted, will encourage broader participation in the registration system, and increase the efficiency of the process for both the Office and copyright owners alike, while providing the Library with a means for adding newsletters to its collections. The Office invites public comment on all these proposed changes.

For the reasons set forth in the preamble, the Copyright Office proposes amending 37 CFR parts 201 and 202 as follows:

In 1995, Congress enacted the Digital Performance in Sound Recordings Act, Public Law 104-39, which created an exclusive right, subject to certain limitations, for copyright owners of sound recordings to perform publicly those sound recordings by means of certain digital audio transmissions. Among the limitations on the performance right was the creation of a statutory license for nonexempt, noninteractive digital subscription transmissions. 17 U.S.C. 114(d).

The scope of the section 114 statutory license was expanded in 1998 upon the passage of the Digital Millennium Copyright Act of 1998 (DMCA), Public Law 105-34, which allows public performance of a sound recording when made in accordance with the terms and rates of the statutory license, by a preexisting satellite digital audio radio service or as part of an eligible nonsubscription transmission. 17 U.S.C. 114(d).

The DMCA also created a statutory license for the making of an “ephemeral recording” of a sound recording by certain transmitting organizations. 17 U.S.C. 112(e). This license, among other things, allows entities that transmit performances of sound recordings to business establishments to make an ephemeral recording of a sound recording for later transmission, pursuant to the limitations set forth in section 114(d)(1)(C)(iv).

Chapter 8 of the Copyright Act requires the Copyright Royalty Judges (Judges) to conduct proceedings every five years to determine the royalty rates and terms for “the activities described in section 112(e)(1) relating to the limitation on exclusive rights specified by section 114(d)(1)(C)(iv).” 17 U.S.C. 801(b)(1), 804(b)(2). Accordingly, the Judges published a notice commencing the current proceeding and requesting that interested parties submit petitions to participate. 82 FR 143 (Jan. 3, 2017).

The Judges received Petitions to Participate from Mood Media Corporation, Music Choice, David Powell, David Rahn, Rockbot, Inc., Sirius XM Radio Inc., and SoundExchange, Inc. The Judges initiated the three-month negotiation period and directed the participants to submit written direct statements no later than May 14, 2018. See 17 U.S.C. 803(b)(3).

On May 4, 2018, the Judges received a Motion to Adopt Settlement stating that all participants 1 had reached a settlement obviating the need for written direct statements or a hearing.

Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to adopt royalty rates and terms negotiated by “some or all of the participants in a proceeding at any time during the proceeding” provided they are submitted to the Judges for approval. The Judges must provide “an opportunity to comment on the agreement” to both participants and non-participants in the rate proceeding who “would be bound by the terms, rates, or other determination set by any agreement . . .” 17 U.S.C. 801(b)(7)(A)(i). Participants in the proceeding may also “object to [the agreement's] adoption as a basis for statutory terms and rates.” Id.

The Judges “may decline to adopt the agreement as a basis for statutory terms and rates for participants that are not parties to the agreement,” only “ if any participant [to the proceeding] objects to the agreement and the [Judges] conclude, based on the record before them if one exists, that the agreement does not provide a reasonable basis for setting statutory terms or rates.” 17 U.S.C. 801(b)(7)(A)(ii).

Royalty rates and terms adopted pursuant to section 801(b)(7)(A) are binding on all copyright owners of sound recordings and all business establishment services making an ephemeral recording of a sound recording for the period January 1, 2019, through December 31, 2023.

The public may comment and object to any or all of the proposed regulations contained in this notice. Comments and objections must be submitted no later than June 18, 2018.

For the reasons set forth in the preamble, the Copyright Royalty Judges propose to amend part 384 of chapter III of title 37 of the Code of Federal Regulations as follows:

Throughout this document, “we,” “us” and “our” refer to the EPA.

On June 19, 2014, the SJVUAPCD adopted the “2014 Reasonably Available Control Technology (RACT) Demonstration for the 8-Hour Ozone State Implementation Plan (SIP)” (“2014 RACT SIP”), and on July 18, 2014, the California Air Resources Board (CARB) submitted it to the EPA for approval as a revision to the California SIP. On January 18, 2015, the submittal of the 2014 RACT SIP was deemed complete by operation of law.

On May 4, 2018, CARB transmitted the District's public draft version of relevant permit conditions in a permit to operate for J.R. Simplot's Nitric Acid plant in Helm, CA and negative declarations for several CTG source categories, along with a request for parallel processing.1 The District plans to adopt negative declarations for CTGs covering magnetic wire; synthesized pharmaceutical products; pneumatic rubber tires; leaks from synthetic organic chemical polymer manufacturing industry (SOCMI) equipment; high-density polyethylene, polypropylene and polyester resins; air oxidation processes in SOCMI; reactor processes and distillation operations in SOCMI; and surface coating operations at shipbuilding and ship repair facilities.2 As noted in footnote 1 of this document, under our parallel processing procedure, the EPA proposes action on a public draft version of a SIP revision but will take final action only after the final version is adopted and submitted to the EPA for approval. In this instance, we are proposing action based on the public draft version of the “Supplement to the 2014 Reasonably Available Control Technology (RACT) State Implementation Plan (SIP) for the 2008 8-hour Ozone Standard” (“Supplement to the 2014 RACT SIP”) submitted by CARB on May 4, 2018, and will not take final action until the final version of the Supplement to the 2014 RACT SIP is adopted and submitted to the EPA. CARB's May 4, 2018 letter indicates that the District Board is scheduled to consider approval of the Supplement to the 2014 RACT SIP on June 21, 2018, and if it is approved, CARB will submit the final package to the EPA.

Also included with the District's 2014 RACT SIP submittal package was a copy of its RACT demonstration for the 1997 8-hour ozone standard “2009 RACT SIP.”

On June 16, 2016, the SJVUAPCD adopted the “2016 Ozone Plan for the 2008 8-Hour Ozone Standard” (“2016 Ozone Plan”), and on August 24, 2016, CARB submitted it to the EPA for approval as a revision to the California SIP. Chapter 3.4 of the 2016 Ozone Plan states that “the District updated the RACT evaluation and included VOC sources in the evaluation in Appendix C.” Appendix C of the 2016 Ozone Plan, which is titled, “Stationary and Area Source Control Strategy Evaluations,” includes evaluations of individual rules for RACT. On February 24, 2017, the submittal of the 2016 Ozone Plan was deemed complete by operation of law.3

There are no previous versions of the documents described above in the SJVUAPCD portion of the California SIP for the 2008 8-hour ozone NAAQS.

Volatile organic compounds (VOCs) and oxides of nitrogen (NOX) together produce ground-level ozone, smog, and particulate matter, which harm human health and the environment. Section 110(a) of the CAA requires states to submit regulations that control VOC and NOX emissions. Sections 182(b)(2) and (f) require that SIPs for ozone nonattainment areas classified as Moderate or above implement RACT for any source covered by a CTG document and for any major source of VOCs or NOX. The SJVUAPCD is subject to this requirement because it regulates an ozone nonattainment area classified as an Extreme ozone nonattainment area for the 2008 8-hour ozone NAAQS.4 Therefore, the SJVUAPCD must, at a minimum, adopt RACT-level controls for all sources covered by a CTG document and for all major non-CTG sources of VOCs or NOX within the nonattainment area that it regulates. Any stationary source that emits or has the potential to emit at least 10 tons per year (tpy) of VOCs or NOX is a major stationary source in an Extreme ozone nonattainment area (CAA section 182(e), (f), and 302(j)).

Section III.D of the preamble to the EPA's final rule to implement the 2008 8-hour ozone NAAQS (80 FR 12264, March 6, 2015) discusses RACT requirements. It states in part that RACT SIPs must contain adopted RACT regulations, certifications where appropriate that existing provisions are RACT, and/or negative declarations that no sources in the nonattainment area are covered by a specific CTG source category, and that states must submit appropriate supporting information for their RACT submissions as described in the EPA's implementation rule for the 1997 ozone NAAQS. See 80 FR 12264, at 12278 (March 5, 2015) and 70 FR 71612, at 71652 (November 29, 2005).

SJVUAPCD's 2014 RACT SIP contains the District's demonstration that its NOX rules implement RACT and contains a review of major stationary sources of NOX that emit or have the potential to emit at least 10 tpy of NOX. 5 The 2016 Ozone Plan contains the District's review of its NOX and VOC rules for RACT and states: “The District adopted its 2014 RACT SIP on June 19, 2014 to satisfy requirements for the 2008 8-hour ozone standard pursuant to the [EPA's] proposed 2015 Implementation Rule guidance document. The 2014 RACT SIP analysis demonstrates that the District meets or exceeds RACT for all applicable NOX source categories. In addition, in developing this attainment plan, the District updated the RACT evaluation and included VOC sources in the evaluation in Appendix C (Stationary and Area Source Control Strategy Evaluations).” 6 The Supplement to the 2014 RACT SIP contains relevant permit conditions to implement RACT for a major NOX source, J.R. Simplot's Nitric Acid plant in Helm, CA. The Supplement to the 2014 RACT SIP also contains negative declarations for several CTG source categories for which the District states it does not have stationary sources or emitting facilities in the Valley related to the CTGs.

The submitted documents and supplemental clarifying information provide SJVUAPCD's analyses of its compliance with the CAA section 182 RACT requirements for the 2008 8-hour ozone NAAQS. The EPA's technical support document (TSD) has more information about the District's submissions and the EPA's evaluations thereof.

SIP rules must require RACT for each category of sources covered by a CTG document as well as each major source of VOCs or NOX in ozone nonattainment areas classified as Moderate or above (see CAA section 182(b)(2)). The SJVUAPCD regulates an Extreme ozone nonattainment area (see 40 CFR 81.305) so the District's rules must implement RACT.

States should also submit for SIP approval negative declarations for those source categories for which they have not adopted CTG-based regulations (because they have no sources above the CTG recommended applicability threshold) regardless of whether such negative declarations were made for an earlier SIP.7 To do so, the submittal should provide reasonable assurance that no sources subject to the CTG requirements currently exist in the SJVUAPCD.

The District's analysis must demonstrate that each major source of NOX or VOCs in the nonattainment area is covered by a RACT-level rule. In addition, for each CTG source category, the District must either demonstrate that a RACT-level rule is in place, or submit a negative declaration. Guidance and policy documents that we use to evaluate CAA section 182 RACT requirements include the following:

1. “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” 57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992).

2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook, revised January 11, 1990).

3. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

4. “State Implementation Plans; Nitrogen Oxides Supplement to the General Preamble; Clean Air Act Amendments of 1990 Implementation of Title I; Proposed Rule,” (the NOX Supplement), 57 FR 55620, November 25, 1992.

5. Memorandum from William T. Harnett to Regional Air Division Directors, (May 18, 2006), “RACT Qs & As—Reasonably Available Control Technology (RACT) Questions and Answers.”

6. “Final Rule to Implement the 8-hour Ozone National Ambient Air Quality Standard—Phase 2” (70 FR 71612; November 29, 2005); and

7. “Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements” (80 FR 12264; March 6, 2015).

The 2014 RACT SIP and Supplement to the 2014 RACT SIP build on the District's previous RACT SIP demonstration for the 1997 8-hour ozone NAAQS, 2009 RACT SIP, 8 and cites to its ozone plan for the 2008 8-hour ozone NAAQS (“2016 Ozone Plan”). The 2014 RACT SIP includes a demonstration that major NOX sources in the Valley are covered by RACT rules, a demonstration that the District's NOX prohibitory rules satisfy RACT levels of stringency, and a statement that the District's 2016 Ozone Plan will contain additional evaluations. The 2014 RACT SIP did not contain an updated list of major VOC sources, and a demonstration that the District's VOC prohibitory rules satisfy RACT levels of stringency.9

Chapter 3.4 of the 2016 Ozone Plan states that in developing its attainment plan, the District updated its RACT evaluation and included VOC sources in the evaluation in Appendix C of the 2016 Ozone Plan. Accordingly, we evaluated these submissions together to determine whether the District has in place RACT-level rules or negative declarations for each required category.

For NOX sources, SJVUAPCD states in its 2014 RACT SIP that it reviewed its database of current Permits to Operate (PTO) to identify facilities that have the potential to emit at least 10 tons per year of NOx. Table 4 of the 2014 RACT SIP lists the facility name, the type of operation or processes occurring at the facility, and the SIP rule(s) that apply to operations at the facility.

For VOC sources, although the 2014 RACT SIP did not contain an updated list of major VOC sources, the District's submittal included a copy of the 2009 RACT SIP, which contained a list of major VOC sources as of 2009. SJVUAPCD subsequently provided a list of additional major stationary sources of VOC since its 2009 RACT SIP. 10

For major stationary sources of NOX, we reviewed CARB's 2014 emissions inventory database and determined that there were four stationary sources with NOX emissions greater than 10 tpy that were not included in Table 4 of the District's 2014 RACT SIP. To determine if these sources were subject to RACT rules, we searched our internal database and reviewed the facilities' PTOs to identify what equipment was generating NOX emissions and whether there was an associated SIP rule. We concluded that each of the facilities' major stationary source NOX producing operations were subject to RACT rules with the exception of J.R. Simplot's Nitric Acid plant in Helm, CA. The SJVUAPCD is submitting, in its parallel processing request, as Attachment A to the Supplement to the 2014 RACT SIP, the relevant permit conditions for J.R. Simplot's PTO to correct this problem. We reviewed the proposed permit conditions, including the NOX limits, continuous emissions monitoring and data quality requirements, and recordkeeping and reporting requirements and conclude they implement NOX RACT.

For major non-CTG stationary sources of VOC, we reviewed the District's list of major VOC sources in its 2009 RACT SIP, and the two additional major sources of VOC subsequently identified by the District. Based on our review, we conclude that these major VOC sources are covered by rules that implement RACT. We also reviewed CARB's 2014 emissions inventory database and determined that there were several stationary sources with VOC emissions greater than 10 tpy that were not listed in the District's 2009 RACT SIP and therefore appear to be “new” major sources since the District's 2009 RACT SIP. Based on a review of the facilities' description as found through an internet search and/or their Standard Industrial Classification (SIC) code, many of these new major sources appear to be related to composting, wineries, or petroleum production, and one source is a commercial printer. We determined that all these sources are already covered by SIP rules that implement RACT. Additional information regarding the EPA's evaluation can be found in the TSD.

For NOX sources, Chapter 4 of the 2014 RACT SIP states that the District conducted “a literature review and evaluation of the District's stationary and area source regulations that control NOX emissions to ensure that all District NOX prohibitory rules satisfy RACT requirements.” It also states that the District compared “. . . each District rule against federal rules, state regulations, and comparable rules from California's most technologically progressive air districts. The applicability, stringency, and enforceability of every District NOX rule was reviewed to ensure all rules meet or exceed federal RACT requirements.” 11

For VOC sources, Chapter 2.2 of the 2014 RACT SIP states that “[a]lthough the District's VOC rules will not be evaluated as part of the 2014 RACT SIP, each regulation was evaluated in depth for the 2009 RACT SIP.” As stated earlier, the District subsequently submitted an updated RACT analysis of its VOC rules in Appendix C of its 2016 Ozone Plan.

The District must submit a RACT certification or a negative declaration for each CTG source category, and must demonstrate that each major stationary source of NOX or VOC in the District is covered by a rule that implements RACT-level controls. The fact that the EPA found that a rule met RACT in a past RACT SIP evaluation is not, by itself, sufficient to establish that the rule still meets RACT, because what is reasonably available changes over time. However, our approval of the 2009 RACT SIP indicates that RACT rules were in place for the required sources as of 2009, and in concert with the District's updated RACT analysis in the 2014 RACT SIP and Appendix C of its 2016 Ozone Plan, we agree with the District's conclusion that rules that met RACT in 2009 continued to meet RACT in 2014.

The 2014 RACT SIP conducts a RACT analysis and concludes that the District's rules for all major sources meet RACT. We agree with this conclusion based on our review of the District's analysis of relevant rules in the 2014 RACT SIP, 2016 Ozone Plan, a comparison of specific rules against rules in other air districts, and a comparison against federal regulations and guidance documents, where appropriate. The details of our evaluation are provided in the TSD, including a more focused evaluation of Rule 4103—Open Burning, Rule 4311—Flares, and Rule 4702—Internal Combustion Engines.

The 2016 Ozone Plan, Appendix C, concludes that the District's rules meet RACT for all applicable rules. We agree with this conclusion based on our review of the District's analysis of relevant rules in the 2016 Ozone Plan, Appendix C, the 2013 Plan for the Revoked 1-hour ozone standard, the 2009 RACT SIP, and additional explanatory materials provided by the District and found in the docket for this action. The details of our evaluation are provided in the TSD, including a more focused evaluation of Rule 4402—Crude Oil Production Sumps, Rule 4566—Organic Material Composting Operations, Rule 4624—Transfer of Organic Liquid, Rule 4653—Adhesives and Sealants, Rule 4409—Components at Light Crude Oil Production Facilities, Natural Gas Production Facilities, and Natural Gas Processing Facilities, Rule 4605—Aerospace Assembly and Component Coating Operations, and Rule 4621—Gasoline Transfer into Stationary Storage Containers, Delivery Vessels, and Bulk Plants.

In lieu of adopting RACT rules, Districts can adopt negative declarations for CTG source categories if there are no sources in the District covered by the CTG.

The District's parallel processing request states that it “previously adopted Negative Declarations for CTGs . . . for Shipbuilding and Ship Repair Operations, Control of Volatile Organic Emissions from Manufacture of Synthesized Pharmaceutical Products, and Control of Volatile Organic Emissions from Manufacture of Pneumatic Rubber Tires . . . and is confirming that the Negative Declarations adopted previously are still valid.” The District's parallel processing request also proposes to adopt the following negative declarations because the District concludes, based on a review of its permitted sources, SIC codes, and internet searches that there are no stationary sources or emitting facilities related to the CTG source categories listed in Table 1. The EPA searched CARB's emissions inventory database and verified that there do not appear to be facilities in the SJVUAPCD that are subject to these CTGs. We believe that these five new negative declarations, and three reaffirmed negative declarations are consistent with the relevant policy and guidance regarding RACT.

Our TSD has more information on our evaluation of the submitted 2014 RACT SIP, Supplement to the 2014 RACT SIP (J.R. Simplot permit to operate and negative declarations), and 2016 Ozone Plan—Chapter 3.4 and Appendix C.

As authorized in section 110(k)(3) of the Act, the EPA proposes to fully approve the 2014 RACT SIP, Supplement to the 2014 RACT SIP (relevant permit conditions for the J.R. Simplot Nitric Acid plant in Helm, CA and negative declarations), and 2016 Ozone Plan Chapter 3.4 and Appendix C, because we believe they collectively fulfill the RACT SIP requirements under CAA sections 182(b) and (f) and 40 CFR 51.1112 for the 2008 ozone NAAQS. As noted above, our proposed action also relies upon our evaluation of the public draft version of the relevant permit conditions for the J.R. Simplot Nitric Acid plant in Helm, CA and on the negative declarations planned for adoption by the SJVUAPCD in June 2018, which we will not take final action on until they are adopted and submitted to us as a revision to the California SIP. If the Supplement to the 2014 RACT SIP that we have evaluated were to be revised significantly prior to adoption and submittal, we would need to reconsider our proposed action accordingly.

We will accept comments from the public on this proposal until June 18, 2018. If we take final action to approve the submitted documents, our final action will incorporate them into the federally enforceable SIP.

In this rule the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference certain permit conditions for the J.R. Simplot Nitric Acid plant in Helm, CA as described above in the preamble. The EPA has made, and will continue to make, these materials available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed action merely proposes to approve state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• does not provide the EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate, and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

This rulemaking proposes to approve a SIP submission from MPCA dated October 4, 2016, which addresses infrastructure requirements relating to PSD for the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

The requirement for states to make infrastructure SIP submissions arises out of CAA section 110(a)(1). Pursuant to CAA section 110(a)(1), states must make SIP submissions “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such NAAQS. The statute directly imposes on states the duty to make these SIP submissions, and the requirement to make the submissions is not conditioned upon EPA's taking any action other than promulgating a new or revised NAAQS. CAA section 110(a)(2) includes a list of specific elements that “[e]ach such plan” submission must address.

EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of CAA section 110(a)(1) and (2) as “infrastructure SIP” submissions. Although the term “infrastructure SIP” does not appear in the CAA, EPA uses the term to distinguish this particular type of SIP submission from submissions that are intended to satisfy other SIP requirements under the CAA. This specific rulemaking is only taking action on the infrastructure SIP elements relating to PSD, provided at CAA sections 110(a)(2)(C), 110(a)(2)(D)(i)(II), 110(a)(2)(D)(ii), and 110(a)(2)(J).

In previous rulemakings, EPA addressed Minnesota's infrastructure obligations under the various NAAQS. On July 13, 2011 (76 FR 41075), EPA approved most elements of Minnesota's infrastructure SIP submittal for the 1997 ozone and 1997 PM2.5 NAAQS. On October 29, 2012 (77 FR 65478), EPA approved most elements of Minnesota's infrastructure SIP submittal for the 2006 PM2.5 NAAQS. On July 16, 2014 (79 FR 41439), EPA approved most elements of Minnesota's infrastructure SIP submittal for the 2008 Pb NAAQS. Finally, on October 20, 2015 (80 FR 63436), EPA approved most elements of Minnesota's infrastructure SIP submittal for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS. However, because Minnesota did not have an approved PSD program at the time of these rulemakings, EPA generally disapproved infrastructure SIP elements relating to PSD in the rulemakings.1

MPCA's submission dated October 4, 2016, requested that EPA approve into its SIP Minnesota Rule 7007.3000, which incorporates by reference the Federal PSD rules at 40 CFR 52.21. On July 10, 2017 (82 FR 31741), EPA proposed to approve this request, and on September 26, 2017 (82 FR 44734), EPA finalized approval; the change became effective on October 26, 2017. Therefore, Minnesota is now implementing its own SIP-approved PSD program.

In this rulemaking, as requested by Minnesota, EPA is proposing to find that Minnesota has satisfied all infrastructure SIP elements relating to PSD, at CAA sections 110(a)(2)(C), 110(a)(2)(D)(i)(II), 110(a)(2)(D)(ii), and 110(a)(2)(J), for the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

EPA's guidance relating to infrastructure SIP submissions can be found in a guidance document entitled “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 1997 8-hour Ozone and PM2.5 2 National Ambient Air Quality Standards” (2007 Guidance).3 Further guidance is provided in a September 13, 2013, document entitled “Guidance on Infrastructure State Implementation Plan (SIP) Elements under CAA Sections 110(a)(1) and (2)” (2013 Guidance).4

Pursuant to CAA section 110(a), states must provide reasonable notice and opportunity for public hearing for all infrastructure SIP submissions. MPCA commenced a public comment period on June 20, 2016, and closed the public comment period on July 20, 2016. Minnesota received three comments, and provided a response to comments in its submittal.

Minnesota provided a synopsis of how its SIP meets each of the applicable requirements in CAA sections 110(a)(2)(C), 110(a)(2)(D)(i)(II), 110(a)(2)(D)(ii), and 110(a)(2)(J) for the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS, as applicable. The following review evaluates the state's submission.

States are required to include a program providing for enforcement of all SIP measures and the regulation of construction of new or modified stationary sources to meet new source review (NSR) requirements under PSD and nonattainment NSR (NNSR) programs. Part C of the CAA (sections 160-169B) addresses PSD, while part D of the CAA (sections 171-193) addresses NNSR requirements.

The evaluation of the state's submission addressing the infrastructure SIP requirements of CAA section 110(a)(2)(C) covers: (i) Enforcement of SIP measures; (ii) PSD provisions that explicitly identify oxides of nitrogen (NOX) as a precursor to ozone in the PSD program; (iii) identification of precursors to PM2.5 and the identification of PM2.5 and PM10 5 condensables in the PSD program; (iv) PM2.5 increments in the PSD program; and, (v) greenhouse gas (GHG) permitting and the “Tailoring Rule.” 6

States are required to include a program providing for enforcement of all SIP measures and the regulation of construction of new or modified stationary sources to meet NSR requirements under PSD and NNSR programs.

In our previous rulemakings at 76 FR 41075, 77 FR 65478, 79 FR 41439, and 80 FR 634536, EPA determined that Minnesota has met the enforcement of SIP measures requirements of CAA section 110(a)(2)(C) with respect to the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

EPA's “Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality Standard—Phase 2; Final Rule to Implement Certain Aspects of the 1990 Amendments Relating to New Source Review and Prevention of Significant Deterioration as They Apply in Carbon Monoxide, Particulate Matter, and Ozone NAAQS; Final Rule for Reformulated Gasoline” (Phase 2 Rule) was published on November 29, 2005 (70 FR 71612). Among other requirements, the Phase 2 Rule obligated states to revise their PSD programs to explicitly identify NOx as a precursor to ozone (see 70 FR 71612 at 71679, 71699-71704). This requirement was codified at 40 CFR 51.166 and 40 CFR 52.21.

The Phase 2 Rule required that states submit SIP revisions incorporating the requirements of the rule, including the provisions specific to NOX as a precursor to ozone, by June 15, 2007 (see 70 FR 71612 at 71683).

On September 26, 2017 (82 FR 44734), EPA approved into the Minnesota SIP Minn. R. 7007.3000, which incorporates by reference “as amended” the Federal PSD rules at 40 CFR 52.21. These Federal PSD rules fully satisfy the requirements of CAA section 110(a)(2)(C) regarding NOX as a precursor to ozone. EPA therefore proposes that Minnesota has met this set of infrastructure SIP requirements of CAA section 110(a)(2)(C) with respect to the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

On May 16, 2008 (73 FR 28321), EPA issued the Final Rule on the “Implementation of the New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.5)” (2008 NSR Rule). The 2008 NSR Rule finalized several new requirements for SIPs to address sources that emit direct PM2.5 and other pollutants that contribute to secondary PM2.5 formation. One of these requirements is for NSR permits to address pollutants responsible for the secondary formation of PM2.5, otherwise known as precursors. In this rule, EPA identified precursors to PM2.5 for the PSD program to be SO2 and NOX (unless the state demonstrates to the Administrator's satisfaction or EPA demonstrates that NOX emissions in an area are not a significant contributor to that area's ambient PM2.5 concentrations). The 2008 NSR Rule also specifies that volatile organic compounds (VOCs) are not considered to be precursors to PM2.5 in the PSD program unless the state demonstrates to the Administrator's satisfaction or EPA demonstrates that emissions of VOCs in an area are significant contributors to that area's ambient PM2.5 concentrations.

The explicit references to SO2, NOX, and VOCs as they pertain to secondary PM2.5 formation are codified at 40 CFR 51.166(b)(49)(i)(b) and 40 CFR 52.21(b)(50)(i)(b). As part of identifying pollutants that are precursors to PM2.5, the 2008 NSR Rule also required states to revise the definition of “significant” as it relates to a net emissions increase or the potential of a source to emit pollutants. Specifically, 40 CFR 51.166(b)(23)(i) and 40 CFR 52.21(b)(23)(i) define “significant” for PM2.5 to mean the following emissions rates: 10 tons per year (tpy) of direct PM2.5; 40 tpy of SO2; and 40 tpy of NOX (unless the state demonstrates to the Administrator's satisfaction or EPA demonstrates that NOX emissions in an area are not a significant contributor to that area's ambient PM2.5 concentrations). The deadline for states to submit SIP revisions to their PSD programs incorporating these changes was May 16, 2011 (see 73 FR 28321 at 28341).7

The 2008 NSR Rule did not require states to immediately account for gases that could condense to form particulate matter, known as condensables, in PM2.5 and PM10 emission limits in NSR permits. Instead, EPA determined that states had to account for PM2.5 and PM10 condensables for applicability determinations and in establishing emissions limitations for PM2.5 and PM10 in PSD permits beginning on or after January 1, 2011. This requirement is codified in 40 CFR 51.166(b)(49)(i)(a) and 40 CFR 52.21(b)(50)(i)(a). Revisions to states' PSD programs incorporating the inclusion of condensables were required to be submitted to EPA by May 16, 2011 (see 73 FR 28321 at 28341).

On September 26, 2017 (82 FR 44734), EPA approved into the Minnesota SIP Minn. R. 7007.3000, which incorporates by reference “as amended” the Federal PSD rules at 40 CFR 52.21. These Federal PSD rules fully satisfy the requirements of CAA section 110(a)(2)(C) regarding identification of precursors to PM2.5 and the identification of PM2.5 and PM10 condensables. EPA therefore proposes that Minnesota has met this set of infrastructure SIP requirements of CAA section 110(a)(2)(C) with respect to the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

On October 20, 2010 (75 FR 64864), EPA issued the final rule on the “Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)—Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)” (2010 NSR Rule). This rule established several components for making PSD permitting determinations for PM2.5, including a system of “increments” which is the mechanism used to estimate significant deterioration of ambient air quality for a pollutant. These increments are codified in 40 CFR 51.166(c) and 40 CFR 52.21(c), and are included in the table below.

The 2010 NSR Rule also established a new “major source baseline date” for PM2.5 as October 20, 2010, and a new trigger date for PM2.5 as October 20, 2011. These revisions are codified in 40 CFR 51.166(b)(14)(i)(c) and (b)(14)(ii)(c), and 40 CFR 52.21(b)(14)(i)(c) and (b)(14)(ii)(c). Lastly, the 2010 NSR Rule revised the definition of “baseline area” to include a level of significance of 0.3 micrograms per cubic meter, annual average, for PM2.5. This change is codified in 40 CFR 51.166(b)(15)(i) and 40 CFR 52.21(b)(15)(i).

On September 26, 2017 (82 FR 44734), EPA approved into the Minnesota SIP Minn. R. 7007.3000, which incorporates by reference “as amended” the Federal PSD rules at 40 CFR 52.21. These Federal PSD rules fully satisfy the requirements of CAA section 110(a)(2)(C) regarding PM2.5 increments. EPA therefore proposes that Minnesota has met this set of infrastructure SIP requirements of CAA section 110(a)(2)(C) with respect to the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

With respect to CAA sections 110(a)(2)(C) and 110(a)(2)(J), EPA interprets the CAA to require each state to make an infrastructure SIP submission for a new or revised NAAQS that demonstrates that the air agency has a complete PSD permitting program meeting the current requirements for all regulated NSR pollutants. The requirements of CAA section 110(a)(2)(D)(i)(II) may also be satisfied by demonstrating the air agency has a complete PSD permitting program correctly addressing all regulated NSR pollutants. Minnesota has shown that it currently has a PSD program in place that covers all regulated NSR pollutants, including GHGs.

On June 23, 2014, the United States Supreme Court issued a decision addressing the application of PSD permitting requirements to GHG emissions. Utility Air Regulatory Group v. Environmental Protection Agency, 134 S.Ct. 2427. The Supreme Court said that the EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source required to obtain a PSD permit. The Court also said that the EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limitations on GHG emissions based on the application of Best Available Control Technology (BACT).

In accordance with the Supreme Court decision, on April 10, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) issued an amended judgment vacating the regulations that implemented Step 2 of the EPA's PSD and Title V Greenhouse Gas Tailoring Rule, but not the regulations that implement Step 1 of that rule. Coalition for Responsible Regulation, Inc. v. EPA, Nos. 09-1322,10-073,10-1092, and 10-1167 (D.C. Cir., April 10, 2015) (Amended Judgement). Step 1 of the Tailoring Rule covers sources that are required to obtain a PSD permit based on emissions of pollutants other than GHGs. Step 2 applied to sources that emitted only GHGs above the thresholds triggering the requirement to obtain a PSD permit. The amended judgment preserves, without the need for additional rulemaking by the EPA, the application of the BACT requirement to GHG emissions from Step 1 or “anyway” sources. With respect to Step 2 sources, the D.C. Circuit's amended judgment vacated the regulations at issue in the litigation, including 40 CFR 51.166(b)(48)(v) and 52.21(b)(49)(v), “to the extent they require a stationary source to obtain a PSD permit if greenhouse gases are the only pollutant (i) that the source emits or has the potential to emit above the applicable major source thresholds, or (ii) for which there is a significant emission increase from a modification . . . .” Id.

In light of the Supreme Court opinion and subsequent D.C. Circuit judgement, EPA took steps to revise Federal PSD rules to be consistent with these court decisions. On May 7, 2015 (80 FR 26183), EPA issued a final rule that narrowly amended the permit rescission provisions in the Federal PSD regulations, and on August 19, 2015 (80 FR 50199), EPA issued a final rule that removed several provisions of the PSD and title V permitting regulations that were originally promulgated as part of the 2010 Tailoring Rule and that were vacated by the D.C. Circuit in its April 10, 2015 judgment.

On September 26, 2017 (82 FR 44734), EPA approved into the Minnesota SIP Minn. R. 7007.3000, which incorporates by reference “as amended” the Federal PSD rules at 40 CFR 52.21. Because EPA's May 7, 2015, and August 19, 2015, amendments to 40 CFR 52.21 included updates to bring the Federal rules into alignment with the Supreme Court opinion and the D.C. Circuit's amended judgement, Minnesota is currently operating a PSD program that is consistent with both court decisions.

EPA is proposing that Minnesota's SIP is sufficient to satisfy CAA sections 110(a)(2)(C), 110(a)(2)(D)(i)(II), and 110(a)(2)(J) with respect to GHGs. This is because the PSD permitting program approved by EPA into the SIP on September 26, 2017, continues to require that PSD permits issued to “anyway sources” contain limitations on GHG emissions based on the application of BACT.

For the purposes of infrastructure SIPs, EPA reiterates that NSR reform regulations are not within the scope of these actions. Therefore, we are not taking action on existing NSR reform regulations for Minnesota.

Certain requirements of CAA section 110(a)(2)(C) overlap with requirements of CAA sections 110(a)(2)(D)(i)(II) and 110(a)(2)(J). These links will be discussed in the appropriate areas below.

CAA section 110(a)(2)(D)(i)(II) requires SIPs to include provisions prohibiting any source or other type of emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality or to protect visibility in another state.

EPA notes that Minnesota's satisfaction of the applicable infrastructure SIP PSD requirements has been detailed in the discussion of CAA section 110(a)(2)(C). EPA further notes that the proposed actions in that discussion related to PSD are consistent with the proposed actions related to PSD for CAA section 110(a)(2)(D)(i)(II), and are reiterated below.

EPA previously approved revisions to Minnesota's SIP to meet certain requirements obligated by the Phase 2 Rule and the 2008 NSR Rule. These revisions included provisions that: Explicitly identify NOX as a precursor to ozone; explicitly identify SO2 and NOX as precursors to PM2.5; regulate condensable PM2.5 and PM10 in applicability determinations; and, establish emissions limits. EPA also previously approved revisions to Minnesota's SIP that incorporate the PM2.5 increments and the associated implementation regulations, including the major source baseline date, trigger date, and level of significance for PM2.5, as required by the 2010 NSR Rule. Therefore, EPA is proposing that Minnesota's SIP contains provisions that adequately address the infrastructure requirements for the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

States also have an obligation to ensure that sources located in nonattainment areas do not interfere with a neighboring state's PSD program. This requirement can be satisfied through an NNSR program consistent with the CAA that addresses any pollutants for which there is a designated nonattainment area within the state.

Minnesota's EPA-approved NNSR regulations are contained in Minn. R. 7007, and are consistent with 40 CFR 51.165 (60 FR 27411, May 24, 1995). Therefore, EPA proposes that Minnesota has met all of the applicable PSD requirements for the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS related to CAA section 110(a)(2)(D)(i)(II).

CAA section 110(a)(2)(D)(ii) requires that each SIP contain adequate provisions requiring compliance with the applicable requirements of CAA sections 126 and 115 (relating to interstate and international pollution abatement, respectively).

CAA section 126(a) requires new or modified sources to notify neighboring states of potential impacts from the source. The statute does not specify the method by which the source should provide the notification. States with SIP-approved PSD programs must have a provision requiring such notification by new or modified sources. A lack of such a requirement in state rules would be grounds for disapproval of this element. Minnesota has provisions in its EPA-approved PSD program in Minn. R. 7007.3000 requiring new or modified sources to notify neighboring states of potential negative air quality impacts, and has referenced this program as having adequate provisions to meet the requirements of CAA section 126(a). EPA is proposing that Minnesota has met the infrastructure SIP requirements of CAA section 126(a) with respect to the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS. Minnesota does not have any obligations under any other subsection of CAA section 126, nor does it have any pending obligations under CAA section 115. EPA, therefore, is proposing that Minnesota has met all applicable infrastructure SIP requirements of CAA section 110(a)(2)(D)(ii).

The evaluation of Minnesota's submission addressing the infrastructure SIP requirements of CAA section 110(a)(2)(J) covers: (i) Consultation with government officials; (ii) public notification; (iii) PSD; and, (iv) visibility protection.

States must provide a process for consultation with local governments and Federal Land Managers (FLMs) carrying out NAAQS implementation requirements.

In our previous rulemakings at 76 FR 41075, 77 FR 65478, 79 FR 41442, and 80 FR 63450, EPA determined that Minnesota has met the consultation with government officials requirements of CAA section 110(a)(2)(J) with respect to the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

CAA section 110(a)(2)(J) also requires states to notify the public if NAAQS are exceeded in an area and to enhance public awareness of measures that can be taken to prevent exceedances.

In our previous rulemakings at 76 FR 41075, 77 FR 65478, 79 FR 41442, and 80 FR 63450, EPA determined that Minnesota has met the public notification requirements of CAA section 110(a)(2)(J) with respect to the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

States must meet applicable requirements of CAA section 110(a)(2)(C) related to PSD. Minnesota's PSD program in the context of infrastructure SIPs has already been discussed above in the paragraphs addressing CAA sections 110(a)(2)(C) and 110(a)(2)(D)(i)(II), and EPA notes that the proposed actions for those CAA sections are consistent with the proposed actions for this portion of CAA section 110(a)(2)(J).

Therefore, EPA proposes that Minnesota has met all of the infrastructure SIP requirements for PSD associated with CAA section 110(a)(2)(D)(J) for the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

With regard to the applicable requirements for visibility protection, states are subject to visibility and regional haze program requirements under part C of the CAA (which includes CAA sections 169A and 169B). In the event of the establishment of a new NAAQS, however, the visibility and regional haze program requirements under part C do not change. Therefore, no new visibility obligation is “triggered” under CAA section 110(a)(2)(J) when a new NAAQS becomes effective. In other words, the visibility protection requirements of CAA section 110(a)(2)(J) are not germane to infrastructure SIPs.

EPA is proposing to approve a submission from Minnesota certifying that its current SIP is sufficient to meet the infrastructure SIP requirements relating to PSD, at CAA sections 110(a)(2)(C), 110(a)(2)(D)(i)(II), 110(a)(2)(D)(ii), and 110(a)(2)(J), for the 1997 ozone, 1997 PM2.5, 2006 PM2.5, 2008 Pb, 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

Table of Contents I. Background A. What are CERCLA and SARA? B. What is the NCP? C. What is the National Priorities List (NPL)? D. How are sites listed on the NPL? E. What happens to sites on the NPL? F. Does the NPL define the boundaries of sites? G. How are sites removed from the NPL? H. May the EPA delete portions of sites from the NPL as they are cleaned up? I. What is the Construction Completion List (CCL)? J. What is the Sitewide Ready for Anticipated Use measure? K. What is state/tribal correspondence concerning NPL listing? II. Public Review/Public Comment A. May I review the documents relevant to this proposed rule? B. How do I access the documents? C. What documents are available for public review at the EPA Headquarters docket? D. What documents are available for public review at the EPA regional dockets? E. How do I submit my comments? F. What happens to my comments? G. What should I consider when preparing my comments? H. May I submit comments after the public comment period is over? I. May I view public comments submitted by others? J. May I submit comments regarding sites not currently proposed to the NPL? III. Contents of This Proposed Rule A. Proposed additions to the NPL IV. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Executive Order 13771: Reducing Regulation and Controlling Regulatory Costs C. Paperwork Reduction Act (PRA) D. Regulatory Flexibility Act (RFA) E. Unfunded Mandates Reform Act (UMRA) F. Executive Order 13132: Federalism G. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments H. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks I. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use J. National Technology Transfer and Advancement Act (NTTAA) K. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations I. Background A. What are CERCLA and SARA?

In 1980, Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601-9675 (“CERCLA” or “the Act”), in response to the dangers of uncontrolled releases or threatened releases of hazardous substances, and releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. CERCLA was amended on October 17, 1986, by the Superfund Amendments and Reauthorization Act (“SARA”), Public Law 99-499, 100 Stat. 1613 et seq.

To implement CERCLA, the EPA promulgated the revised National Oil and Hazardous Substances Pollution Contingency Plan (“NCP”), 40 CFR part 300, on July 16, 1982 (47 FR 31180), pursuant to CERCLA section 105 and Executive Order 12316 (46 FR 42237, August 20, 1981). The NCP sets guidelines and procedures for responding to releases and threatened releases of hazardous substances or releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. The EPA has revised the NCP on several occasions. The most recent comprehensive revision was on March 8, 1990 (55 FR 8666).

As required under section 105(a)(8)(A) of CERCLA, the NCP also includes “criteria for determining priorities among releases or threatened releases throughout the United States for the purpose of taking remedial action and, to the extent practicable taking into account the potential urgency of such action, for the purpose of taking removal action.” “Removal” actions are defined broadly and include a wide range of actions taken to study, clean up, prevent or otherwise address releases and threatened releases of hazardous substances, pollutants or contaminants (42 U.S.C. 9601(23)).

The NPL is a list of national priorities among the known or threatened releases of hazardous substances, pollutants or contaminants throughout the United States. The list, which is appendix B of the NCP (40 CFR part 300), was required under section 105(a)(8)(B) of CERCLA, as amended. Section 105(a)(8)(B) defines the NPL as a list of “releases” and the highest priority “facilities” and requires that the NPL be revised at least annually. The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation to assess the nature and extent of public health and environmental risks associated with a release of hazardous substances, pollutants or contaminants. The NPL is only of limited significance, however, as it does not assign liability to any party or to the owner of any specific property. Also, placing a site on the NPL does not mean that any remedial or removal action necessarily need be taken.

For purposes of listing, the NPL includes two sections, one of sites that are generally evaluated and cleaned up by the EPA (the “General Superfund section”), and one of sites that are owned or operated by other federal agencies (the “Federal Facilities section”). With respect to sites in the Federal Facilities section, these sites are generally being addressed by other federal agencies. Under Executive Order 12580 (52 FR 2923, January 29, 1987) and CERCLA section 120, each federal agency is responsible for carrying out most response actions at facilities under its own jurisdiction, custody or control, although the EPA is responsible for preparing a Hazard Ranking System (“HRS”) score and determining whether the facility is placed on the NPL.

There are three mechanisms for placing sites on the NPL for possible remedial action (see 40 CFR 300.425(c) of the NCP): (1) A site may be included on the NPL if it scores sufficiently high on the HRS, which the EPA promulgated as appendix A of the NCP (40 CFR part 300). The HRS serves as a screening tool to evaluate the relative potential of uncontrolled hazardous substances, pollutants or contaminants to pose a threat to human health or the environment. On December 14, 1990 (55 FR 51532), the EPA promulgated revisions to the HRS partly in response to CERCLA section 105(c), added by SARA. On January 9, 2017 (82 FR 2760), a subsurface intrusion component was added to the HRS to enable the EPA to consider human exposure to hazardous substances or pollutants and contaminants that enter regularly occupied structures through subsurface intrusion when evaluating sites for the NPL. The current HRS evaluates four pathways: Ground water, surface water, soil exposure and subsurface intrusion, and air. As a matter of agency policy, those sites that score 28.50 or greater on the HRS are eligible for the NPL. (2) Pursuant to 42 U.S.C. 9605(a)(8)(B), each state may designate a single site as its top priority to be listed on the NPL, without any HRS score. This provision of CERCLA requires that, to the extent practicable, the NPL include one facility designated by each state as the greatest danger to public health, welfare or the environment among known facilities in the state. This mechanism for listing is set out in the NCP at 40 CFR 300.425(c)(2). (3) The third mechanism for listing, included in the NCP at 40 CFR 300.425(c)(3), allows certain sites to be listed without any HRS score, if all of the following conditions are met:

• The Agency for Toxic Substances and Disease Registry (ATSDR) of the U.S. Public Health Service has issued a health advisory that recommends dissociation of individuals from the release.

• The EPA determines that the release poses a significant threat to public health.

• The EPA anticipates that it will be more cost-effective to use its remedial authority than to use its removal authority to respond to the release.

The EPA promulgated an original NPL of 406 sites on September 8, 1983 (48 FR 40658) and generally has updated it at least annually.

A site may undergo remedial action financed by the Trust Fund established under CERCLA (commonly referred to as the “Superfund”) only after it is placed on the NPL, as provided in the NCP at 40 CFR 300.425(b)(1). (“Remedial actions” are those “consistent with permanent remedy, taken instead of or in addition to removal actions. * * * ” 42 U.S.C. 9601(24).) However, under 40 CFR 300.425(b)(2) placing a site on the NPL “does not imply that monies will be expended.” The EPA may pursue other appropriate authorities to respond to the releases, including enforcement action under CERCLA and other laws.

The NPL does not describe releases in precise geographical terms; it would be neither feasible nor consistent with the limited purpose of the NPL (to identify releases that are priorities for further evaluation), for it to do so. Indeed, the precise nature and extent of the site are typically not known at the time of listing.

Although a CERCLA “facility” is broadly defined to include any area where a hazardous substance has “come to be located” (CERCLA section 101(9)), the listing process itself is not intended to define or reflect the boundaries of such facilities or releases. Of course, HRS data (if the HRS is used to list a site) upon which the NPL placement was based will, to some extent, describe the release(s) at issue. That is, the NPL site would include all releases evaluated as part of that HRS analysis.

When a site is listed, the approach generally used to describe the relevant release(s) is to delineate a geographical area (usually the area within an installation or plant boundaries) and identify the site by reference to that area. However, the NPL site is not necessarily coextensive with the boundaries of the installation or plant, and the boundaries of the installation or plant are not necessarily the “boundaries” of the site. Rather, the site consists of all contaminated areas within the area used to identify the site, as well as any other location where that contamination has come to be located, or from where that contamination came.

In other words, while geographic terms are often used to designate the site (e.g., the “Jones Co. Plant site”) in terms of the property owned by a particular party, the site, properly understood, is not limited to that property (e.g., it may extend beyond the property due to contaminant migration), and conversely may not occupy the full extent of the property (e.g., where there are uncontaminated parts of the identified property, they may not be, strictly speaking, part of the “site”). The “site” is thus neither equal to, nor confined by, the boundaries of any specific property that may give the site its name, and the name itself should not be read to imply that this site is coextensive with the entire area within the property boundary of the installation or plant. In addition, the site name is merely used to help identify the geographic location of the contamination, and is not meant to constitute any determination of liability at a site. For example, the name “Jones Co. Plant site,” does not imply that the Jones Company is responsible for the contamination located on the plant site.

The EPA regulations provide that the remedial investigation (“RI”) “is a process undertaken . . . to determine the nature and extent of the problem presented by the release” as more information is developed on site contamination, and which is generally performed in an interactive fashion with the feasibility Study (“FS”) (40 CFR 300.5). During the RI/FS process, the release may be found to be larger or smaller than was originally thought, as more is learned about the source(s) and the migration of the contamination. However, the HRS inquiry focuses on an evaluation of the threat posed and therefore the boundaries of the release need not be exactly defined. Moreover, it generally is impossible to discover the full extent of where the contamination “has come to be located” before all necessary studies and remedial work are completed at a site. Indeed, the known boundaries of the contamination can be expected to change over time. Thus, in most cases, it may be impossible to describe the boundaries of a release with absolute certainty.

Further, as noted previously, NPL listing does not assign liability to any party or to the owner of any specific property. Thus, if a party does not believe it is liable for releases on discrete parcels of property, it can submit supporting information to the agency at any time after it receives notice it is a potentially responsible party.

For these reasons, the NPL need not be amended as further research reveals more information about the location of the contamination or release.

The EPA may delete sites from the NPL where no further response is appropriate under Superfund, as explained in the NCP at 40 CFR 300.425(e). This section also provides that the EPA shall consult with states on proposed deletions and shall consider whether any of the following criteria have been met:

(i) Responsible parties or other persons have implemented all appropriate response actions required;

(ii) All appropriate Superfund-financed response has been implemented and no further response action is required; or

(iii) The remedial investigation has shown the release poses no significant threat to public health or the environment, and taking of remedial measures is not appropriate.

In November 1995, the EPA initiated a policy to delete portions of NPL sites where cleanup is complete (60 FR 55465, November 1, 1995). Total site cleanup may take many years, while portions of the site may have been cleaned up and made available for productive use.

The EPA also has developed an NPL construction completion list (“CCL”) to simplify its system of categorizing sites and to better communicate the successful completion of cleanup activities (58 FR 12142, March 2, 1993). Inclusion of a site on the CCL has no legal significance.

Sites qualify for the CCL when: (1)Any necessary physical construction is complete, whether or not final cleanup levels or other requirements have been achieved; (2) the EPA has determined that the response action should be limited to measures that do not involve construction (e.g., institutional controls); or (3) the site qualifies for deletion from the NPL. For more information on the CCL, see the EPA's internet site at https://www.epa.gov/superfund/construction-completions-national-priorities-list-npl-sites-number.

The Sitewide Ready for Anticipated Use measure (formerly called Sitewide Ready-for-Reuse) represents important Superfund accomplishments and the measure reflects the high priority the EPA places on considering anticipated future land use as part of the remedy selection process. See Guidance for Implementing the Sitewide Ready-for-Reuse Measure, May 24, 2006, OSWER 9365.0-36. This measure applies to final and deleted sites where construction is complete, all cleanup goals have been achieved, and all institutional or other controls are in place. The EPA has been successful on many occasions in carrying out remedial actions that ensure protectiveness of human health and the environment for current and future land uses, in a manner that allows contaminated properties to be restored to environmental and economic vitality. For further information, please go to https://www.epa.gov/superfund/about-superfund-cleanup-process#tab-9.

In order to maintain close coordination with states and tribes in the NPL listing decision process, the EPA's policy is to determine the position of the states and tribes regarding sites that the EPA is considering for listing. This consultation process is outlined in two memoranda that can be found at the following website: https://www.epa.gov/superfund/statetribal-correspondence-concerning-npl-site-listing.

The EPA is improving the transparency of the process by which state and tribal input is solicited. The EPA is using the Web and where appropriate more structured state and tribal correspondence that (1) explains the concerns at the site and the EPA's rationale for proceeding; (2) requests an explanation of how the state intends to address the site if placement on the NPL is not favored; and 3) emphasizes the transparent nature of the process by informing states that information on their responses will be publicly available.

A model letter and correspondence from this point forward between the EPA and states and tribes where applicable, is available on the EPA's website at https://www.epa.gov/superfund/statetribal-correspondence-concerning-npl-site-listing.

Yes, documents that form the basis for the EPA's evaluation and scoring of the sites in this proposed rule are contained in public dockets located both at the EPA Headquarters in Washington, DC, and in the regional offices. These documents are also available by electronic access at https://www.regulations.gov (see instructions in the Addresses section above).

You may view the documents, by appointment only, in the Headquarters or the regional dockets after the publication of this proposed rule. The hours of operation for the Headquarters docket are from 8:30 a.m. to 4:30 p.m., Monday through Friday excluding federal holidays. Please contact the regional dockets for hours.

The following is the contact information for the EPA Headquarters Docket: Docket Coordinator, Headquarters, U.S. Environmental Protection Agency, CERCLA Docket Office, 1301 Constitution Avenue NW, William Jefferson Clinton Building West, Room 3334, Washington, DC 20004; 202/566-0276. (Please note this is a visiting address only. Mail comments to the EPA Headquarters as detailed at the beginning of this preamble.)

The contact information for the regional dockets is as follows:

• Holly Inglis, Region 1 (CT, ME, MA, NH, RI, VT), U.S. EPA, Superfund Records and Information Center, 5 Post Office Square, Suite 100, Boston, MA 02109-3912; 617/918-1413.

• Ildefonso Acosta, Region 2 (NJ, NY, PR, VI), U.S. EPA, 290 Broadway, New York, NY 10007-1866; 212/637-4344.

• Lorie Baker (ASRC), Region 3 (DE, DC, MD, PA, VA, WV), U.S. EPA, Library, 1650 Arch Street, Mailcode 3HS12, Philadelphia, PA 19103; 215/814-3355.

• Cathy Amoroso, Region 4 (AL, FL, GA, KY, MS, NC, SC, TN), U.S. EPA, 61 Forsyth Street SW, Mailcode 9T25, Atlanta, GA 30303; 404/562-8637.

• Todd Quesada, Region 5 (IL, IN, MI, MN, OH, WI), U.S. EPA Superfund Division Librarian/SFD Records Manager SRC-7J, Metcalfe Federal Building, 77 West Jackson Boulevard, Chicago, IL 60604; 312/886-4465.

• Brenda Cook, Region 6 (AR, LA, NM, OK, TX), U.S. EPA, 1445 Ross Avenue, Suite 1200, Mailcode 6SFTS, Dallas, TX 75202-2733; 214/665-7436.

• Kumud Pyakuryal, Region 7 (IA, KS, MO, NE), U.S. EPA, 11201 Renner Blvd., Mailcode SUPRSTAR, Lenexa, KS 66219; 913/551-7956.

• Victor Ketellapper, Region 8 (CO, MT, ND, SD, UT, WY), U.S. EPA, 1595 Wynkoop Street, Mailcode 8EPR-B, Denver, CO 80202-1129; 303/312-6578.

• Sharon Murray, Region 9 (AZ, CA, HI, NV, AS, GU, MP), U.S. EPA, 75 Hawthorne Street, Mailcode SFD 6-1, San Francisco, CA 94105; 415/947-4250.

• Ken Marcy, Region 10 (AK, ID, OR, WA), U.S. EPA, 1200 6th Avenue, Mailcode ECL-112, Seattle, WA 98101; 206/463-1349.

You may also request copies from the EPA Headquarters or the regional dockets. An informal request, rather than a formal written request under the Freedom of Information Act, should be the ordinary procedure for obtaining copies of any of these documents. Please note that due to the difficulty of reproducing oversized maps, oversized maps may be viewed only in-person; since the EPA dockets are not equipped to both copy and mail out such maps or scan them and send them out electronically.

You may use the docket at https://www.regulations.gov to access documents in the Headquarters docket (see instructions included in the Addresses section). Please note that there are differences between the Headquarters docket and the regional dockets and those differences are outlined in this preamble, Sections II.C and D.

The Headquarters docket for this proposed rule contains the following for the sites proposed in this rule: HRS score sheets; documentation records describing the information used to compute the score; information for any sites affected by particular statutory requirements or the EPA listing policies; and a list of documents referenced in the documentation record.

The regional dockets for this proposed rule contain all of the information in the Headquarters docket plus the actual reference documents containing the data principally relied upon and cited by the EPA in calculating or evaluating the HRS score for the sites. These reference documents are available only in the regional dockets.

Comments must be submitted to the EPA Headquarters as detailed at the beginning of this preamble in the Addresses section. Please note that the mailing addresses differ according to method of delivery. There are two different addresses that depend on whether comments are sent by express mail or by postal mail.

The EPA considers all comments received during the comment period. Significant comments are typically addressed in a support document that the EPA will publish concurrently with the Federal Register document if, and when, the site is listed on the NPL.

Comments that include complex or voluminous reports, or materials prepared for purposes other than HRS scoring, should point out the specific information that the EPA should consider and how it affects individual HRS factor values or other listing criteria (Northside Sanitary Landfill v. Thomas, 849 F.2d 1516 (DC Cir. 1988)). The EPA will not address voluminous comments that are not referenced to the HRS or other listing criteria. The EPA will not address comments unless they indicate which component of the HRS documentation record or what particular point in the EPA's stated eligibility criteria is at issue.

Generally, the EPA will not respond to late comments. The EPA can guarantee only that it will consider those comments postmarked by the close of the formal comment period. The EPA has a policy of generally not delaying a final listing decision solely to accommodate consideration of late comments.

During the comment period, comments are placed in the Headquarters docket and are available to the public on an “as received” basis. A complete set of comments will be available for viewing in the regional dockets approximately one week after the formal comment period closes.

All public comments, whether submitted electronically or in paper form, will be made available for public viewing in the electronic public docket at https://www.regulations.gov as the EPA receives them and without change, unless the comment contains copyrighted material, confidential business information (CBI) or other information whose disclosure is restricted by statute. Once in the public dockets system, select “search,” then key in the appropriate docket ID number.

In certain instances, interested parties have written to the EPA concerning sites that were not at that time proposed to the NPL. If those sites are later proposed to the NPL, parties should review their earlier concerns and, if still appropriate, resubmit those concerns for consideration during the formal comment period. Site-specific correspondence received prior to the period of formal proposal and comment will not generally be included in the docket.

In this proposed rule, the EPA is proposing to add three sites to the NPL, all to the General Superfund section. All of the sites in this proposed rulemaking are being proposed based on HRS scores of 28.50 or above.

The sites are presented in the table below.

General Superfund section:

Additional information about these statutes and Executive Orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This action is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.

This action does not impose an information collection burden under the PRA. This rule does not contain any information collection requirements that require approval of the OMB.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. This rule listing sites on the NPL does not impose any obligations on any group, including small entities. This rule also does not establish standards or requirements that any small entity must meet, and imposes no direct costs on any small entity. Whether an entity, small or otherwise, is liable for response costs for a release of hazardous substances depends on whether that entity is liable under CERCLA 107(a). Any such liability exists regardless of whether the site is listed on the NPL through this rulemaking.

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action imposes no enforceable duty on any state, local or tribal governments or the private sector. Listing a site on the NPL does not itself impose any costs. Listing does not mean that the EPA necessarily will undertake remedial action. Nor does listing require any action by a private party, state, local or tribal governments or determine liability for response costs. Costs that arise out of site responses result from future site-specific decisions regarding what actions to take, not directly from the act of placing a site on the NPL

This rule does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. Listing a site on the NPL does not impose any costs on a tribe or require a tribe to take remedial action. Thus, Executive Order 13175 does not apply to this action.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because this action itself is procedural in nature (adds sites to a list) and does not, in and of itself, provide protection from environmental health and safety risks. Separate future regulatory actions are required for mitigation of environmental health and safety risks.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

This rulemaking does not involve technical standards.

The EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations because it does not affect the level of protection provided to human health or the environment. As discussed in Section I.C. of the preamble to this action, the NPL is a list of national priorities. The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation to assess the nature and extent of public health and environmental risks associated with a release of hazardous substances, pollutants or contaminants. The NPL is of only limited significance as it does not assign liability to any party. Also, placing a site on the NPL does not mean that any remedial or removal action necessarily need be taken.

This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM), WC Docket No. 17-144; FCC 18-46, adopted on April 17, 2018 and released on April 18, 2018. The full-text of this document may be found at the following internet address: https://apps.fcc.gov/edocs_public/attachmatch/FCC-18-46A1.doc.

Pursuant to §§ 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 in Dockets WC 17-144. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS).

• Electronic Filers: Comments may be filed electronically using the internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.

• 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 9050 Junction Drive, Annapolis Junction, MD 20701.

• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW, Washington, DC 20554.

People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

1. The Commission has long recognized that, because it promotes efficiency and reduces regulatory burdens, incentive regulation is preferable to rate-of-return regulation. Therefore, in a series of steps over the last three decades, the Commission provided incentives to encourage incumbent local exchange carriers (LECs) to move from rate-of-return regulation to incentive regulation. In this NPRM, we take more steps along that path by proposing to allow rate-of-return carriers that receive universal service support under the Alternative Connect America Cost Model (A-CAM) to voluntarily migrate their lower speed business data services (BDS) offerings to incentive regulation. Because A-CAM carriers that elect to move away from rate-of-return regulation for their BDS offerings (electing A-CAM carriers) will no longer need to provide cost-based justification for their rates, we propose to relieve them of burdensome cost-based pricing regulation, including the obligation to conduct cost studies for purposes of ratemaking. At the same time, because we recognize that ex ante pricing regulation is of limited use—and often harmful—in a dynamic and increasingly competitive market, we seek comment on identifying areas served by electing A-CAM carriers that are sufficiently competitive that their lower speed BDS offerings should be relieved of ex ante pricing regulation, and we seek comment on whether to relieve electing A-CAM carriers' higher speed BDS offerings from ex ante pricing regulation. And, because there are other rate-of-return carriers that receive model-based or fixed support, and would benefit from less burdensome regulation, we propose to provide the same relief to those carriers as we propose to provide to A-CAM carriers. Taken together we expect these actions will spur entry, innovation, and competition in the affected BDS markets.

2. We start from the premise that incentive regulation encourages carriers to be efficient by granting them at least a share of profits obtained from cost reductions and allowing them to more aggressively serve consumers (including by reducing prices) in the face of competitive pressures. By contrast, rate-of-return regulation provides incentives for firms to “pad” their rate base and to make inefficiently high use of capital inputs. Additionally, rate-of-return regulation requires carriers to account for the costs they incur in providing service to justify their rates and universal service support and thus unavoidably involves substantial regulatory burdens.

3. In 1990, the Commission began the process of shifting away from cost-based regulation by adopting price cap rules that govern how the largest incumbent LECs establish their interstate access charges. Price cap regulation was intended to avoid the counterproductive incentives of rate-of-return regulation in part by divorcing the annual rate adjustments from the actual costs of each individual LEC, and in part by adjusting the cap based on actual industry productivity experience. In more recent years, a number of midsize carriers have voluntarily converted from rate-of-return to price cap regulation.

4. In 2011, as part of comprehensive reform and modernization of the universal service and intercarrier compensation systems, the Commission adopted rate caps for switched access services for rate-of-return carriers, thereby removing switched access services from rate-of-return regulation. In 2016, the Commission gave rate-of-return carriers the option of receiving forward looking model-based support from the high-cost universal service support program, the A-CAM, designed to estimate the cost of operating and maintaining an efficient modern network. More than 200 carriers opted to receive A-CAM support which eliminated the need for those carriers to conduct cost studies to quantify the amount of high-cost support they receive. The Commission observed that “the election of model-based support places those carriers in a different regulatory paradigm” and that “[e]ffectively, the carriers that choose to take the voluntary path to the model are electing incentive regulation for common line offerings.” As a result, rate-of-return carriers that elected the A-CAM support option are currently subject to rate-of-return regulation and the attendant requirement to conduct cost studies only for their BDS offerings.

5. In 2017, ITTA and USTelecom (together, Petitioners) filed a joint petition requesting that the Commission allow A-CAM carriers and other rate-of-return carriers that receive model-based support to opt into the regulatory framework for BDS that the Commission recently adopted for price cap carriers. The Petition explains that for such carriers, “continued compliance with rate-o[f]-return-based rate regulation . . . entails significant costs.” It further explains that because carriers that receive universal service support based on a cost model no longer have cost-based switched access charges, “the need to perform annual cost studies now applies only with respect to BDS.” It also claims that rate-of-return regulation deters investment in networks and harms competition. The Wireline Competition Bureau (Bureau) sought and received comment on the Petition. A number of commenters support the Petition, arguing that cost savings and lighter touch pricing regulation of model-based carriers' BDS would spur competition, incentivize investment, benefit consumers, and eliminate unnecessary administrative burdens. Other commenters expressed concerns, including whether sufficient competition exists in A-CAM study areas to justify reduced regulation.

6. In addition to facilitating rate-of-return carriers' move to incentive regulation, the Commission has taken major steps to reduce regulation for carriers that face competition. Given the inherent inefficiencies of regulation, the Commission relies on competition to the extent possible to ensure carriers' rates and practices are just and reasonable. In 1999, the Commission granted pricing flexibility to price cap carriers that provided service in areas where carriers could demonstrate threshold levels of deployment by competitive providers. The Pricing Flexibility Order adopted competitive triggers designed to measure the extent to which competitors had made irreversible, sunk investment in collocation and transport facilities. The Commission gave price cap carriers that satisfied those triggers the flexibility to offer BDS at unregulated rates through generally available and individually negotiated tariffs. In addition, starting in 2007, upon finding that competitive providers for BDS services existed in the relevant price cap areas, the Commission granted a number of price cap incumbent LECs forbearance from dominant carrier regulation, including tariffing and price cap regulation, for their newer packet-based broadband services. These forbearance orders concluded that a number of competing providers exist for broadband BDS. They also concluded that forbearance from burdensome regulations when competition exists increases the amount of competition in the marketplace, ensuring that rates and practices for services are just, reasonable, and not unreasonably discriminatory.

7. The BDS Order the Commission adopted last year took another step toward reducing regulation in response to the growth of competition. In that order, the Commission found that reducing government intervention and allowing market forces to continue working would further spur entry, innovation, and competition in BDS markets served by price cap carriers. The Commission applied ex ante rate regulation “only where competition is expected to materially fail to ensure just and reasonable rates” and stated its preference to rely “on competition rather than regulation, wherever purchasers can realistically turn to a supplier beyond the incumbent LEC.” Based on the record before it, the Commission found that, on balance, competition was sufficient to ensure just and reasonable rates for packet-based business data services, TDM transport services, and higher bandwidth (i.e. above DS3) TDM services (including OCn services) in areas served by price cap carriers. It also adopted a competitive market test for TDM end user channel terminations in price cap areas and refrained from ex ante pricing regulation of those services in areas deemed competitive by that test.

8. We seek comment on a regulatory framework that would provide electing A-CAM carriers a path to allow a move from rate-of-return regulation to a more efficient system of incentive regulation for their TDM transport and end user channel terminations at speeds at or below a DS3. In so doing, we propose to require that each A-CAM carrier's decision about whether to move their BDS offerings out of rate-of-return regulation be made on an all-or-nothing basis for all of an A-CAM carrier's study areas that receive A-CAM support. We also invite comment on what would be an appropriate market analysis for these lower speed services and on a competitive market test that would allow us to distinguish between markets that are sufficiently competitive so as not to warrant the burdens of ex ante pricing regulation from those that are not. Although the sections below focus on A-CAM carriers, because we are proposing to allow other rate-of-return carriers that receive model-based or other types of fixed support the opportunity to elect the same or similar lighter-touch BDS regulation that we propose for A-CAM carriers, we also seek comment on providing a path forward for regulating such carriers' BDS offerings. As commenters respond to the requests for comment below, we encourage discussion of how such a path forward could work for other such rate-of-return carriers.

9. We propose to allow electing A-CAM carriers to convert their lower capacity TDM BDS offerings to an incentive regulatory approach modelled on the rules the Commission adopted for price cap carriers' lower speed BDS in noncompetitive areas, while still allowing such carriers to be subject to the switched access rate transition and the Eligible Recovery rules applicable to rate-of-return carriers. We propose to allow conversion to incentive regulation for TDM transport and end user channel termination services offered at speeds at or below a DS3, as well as other generally lower speed non-packet-based services that are commonly considered special access services. Are there other special access offerings by rate-of-return carriers that we should include in the incentive regulation option for A-CAM carriers? For example, are there any telecommunications service components associated with either residential digital subscriber line services or dedicated internet access services that would qualify as special access services that we should also allow to migrate to incentive regulation? We anticipate that this approach will encourage competition for BDS in areas served by electing A-CAM carriers and reduce unnecessary regulatory burdens on electing A-CAM carriers. We seek comments on this proposal, including on the benefits and costs of this approach.

10. The Commission has consistently acknowledged that incentive regulation can foster appropriate incentives for carriers to be efficient and to innovate. Under price cap regulation, as opposed to cost-based regulation, carriers have the incentive to become more efficient, to reduce costs, and to innovate as a means of increasing their profits. Moreover, an appropriate X-factor and periodic review by the Commission can ensure that carriers share some or all of these efficiencies with their customers. We invite parties to identify with specificity any short-comings in the proposal and to suggest alternatives that could achieve the objectives more efficiently. Given the well-recognized benefits of incentive regulation, we also seek comment on whether we should make this election mandatory for all A-CAM carriers.

11. We propose to relieve electing A-CAM carriers of a variety of regulatory obligations that pertain to rate-of-return regulation, including the obligation to perform cost studies. Rate-of-return carriers are required by our rules to perform relatively burdensome cost studies to support their rate development. Petitioners and other commenters identify elimination of cost studies as a primary benefit of allowing A-CAM carriers to elect incentive regulation. We invite parties to quantify the burdens of preparing cost studies (including costs and/or hours of labor) and comment on whether cost studies impose any special burdens on smaller carriers. We also seek comment on whether data from A-CAM carriers' cost studies are necessary in the performance of any Commission regulatory function. If so, will the benefits of the data collected from electing A-CAM carriers' cost studies outweigh the burden of requiring them to continue to provide that data when they are no longer offering cost-based services? Are there other, less burdensome ways of collecting the relevant data from electing A-CAM carriers that we should explore? Are there other issues we need to address before relieving A-CAM carriers of the burden of cost studies? If so, how shall we address them?

12. We also propose to allow electing A-CAM carriers pricing flexibility for their lower capacity TDM services similar to that granted by the Commission in the BDS Order to price cap carriers in their provision of lower capacity TDM services in counties deemed noncompetitive by the competitive market test we adopted for price cap carriers. We propose to allow electing A-CAM carriers to offer term and volume discounts and contract-based services for their TDM transport and end user channel termination services offered at speeds at or below a DS3. Electing A-CAM carriers would be required to maintain generally available tariffed rates subject to incentive regulation for these lower speed TDM transport and end user channel terminations, and other special access services included in their tariffs. We seek comment on these proposals.

13. We also propose to allow electing A-CAM carriers to remain in the NECA traffic-sensitive tariff for switched access services, and to continue to be subject to the switched access rate cap provisions of section 51.909 and the Eligible Recovery rules in section 51.917 of the Commission's rules. We propose to require electing A-CAM carriers to remove their special access services from the NECA traffic-sensitive tariff. We seek comment on these proposals.

14. We recognize that our proposed approach for electing A-CAM carriers treats TDM transport differently than the BDS Order does for price cap carriers. While the Commission found TDM transport to be competitive in price cap areas generally, here we propose to allow electing A-CAM carriers to convert lower speed TDM transport services to incentive regulation but not to immediately eliminate ex ante pricing regulation for them. We propose this different approach given that competition for such services may not be as robust in the less dense, more rural areas that A-CAM carriers typically serve. We seek comment on this aspect of our proposal, and on what data exist to confirm or invalidate our assumption. The Commission observed in the BDS Order that competitive transport services are typically deployed at locations where sufficient demand is aggregated to enable a competitor to justify investment. To what extent is there sufficient aggregated demand in A-CAM areas to justify the deployment of competitive transport? Are there instances where demand for TDM transport services may be increasing, creating the precondition for competitive entry in the future? Alternatively, has the overall decline in demand for TDM services also affected the demand for lower speed TDM transport services in A-CAM areas? Finally, we seek comment on allowing additional regulatory relief for A-CAM carriers' TDM transport offered at speeds at or below a DS3 in areas deemed competitive by a competitive market test we seek comment on below.

15. We do not propose to transition electing A-CAM carriers to incentive regulation for switched access services. The transition provisions for switched access rates and Eligible Recovery rules for rate-of-return carriers adopted by the USF/ICC Transformation Order are well established, have been upheld on appeal, and have been partially implemented; disrupting these transitions would likely impose additional costs and increase uncertainty, deterring investment and deployment. We also seek comment on the benefits and costs of our proposed approach. The Petition sought an “exception” to § 61.41 of the Commission's rules (the so-called “all or nothing” rule), which requires all of a price cap carrier's study areas and rates, including those of affiliates and carriers it purchases or merges with, to be subject to price cap regulation. We propose to amend § 61.41 to create an exception for the alternative regulatory structure we propose in this NPRM, and we seek comment on this proposal. Are there any other rules we should consider waiving or amending in the context of this proceeding?

16. In this section, we make specific proposals regarding the terms of the incentive regulation we propose to adopt for electing A-CAM carriers and seek comment on these proposals.

17. We propose to require carriers that elect to move off rate-of-return regulation for their BDS services to move to incentive regulation at the holding company level for study areas in all states that elected to receive A-CAM support rather than electing on an individual carrier or study area basis, as proposed by Petitioners. Requiring election at the holding company level will ensure cost savings from the elimination of annual cost studies to be realized by all affiliated carriers electing A-CAM support. Carriers have already had the opportunity to elect between A-CAM and cost-based support at a state-wide level. Allowing A-CAM carriers to elect regulatory treatment at a more disaggregated level would appear to be inconsistent with the underlying premise of price caps, which assumed a broad representation of carrier operations to provide a basis for establishing an industry-wide productivity factor. Currently, there are 262 A-CAM companies when calculated at the state level and 207 when calculated at the holding company level. We invite parties to comment on the proposed level of election. Parties believing the proposed holding company level is too high should explain why a more disaggregated level would be in the public interest. Any explanation should include concrete examples of why the proposed level would preclude a significant number of A-CAM carriers from electing incentive regulation. Parties should address whether other aspects of the proposal could be modified to make the proposed level of election more acceptable.

18. We propose to make incentive regulation for electing A-CAM carriers effective on the July 1st following adoption of an order in this proceeding, which is the deadline for the annual access tariff filing. Using July 1st will simplify the tariffing process for implementing any change and is consistent with the price cap rules' use of the prior calendar-year demand data for their price cap calculations. We invite parties to comment on this proposal, and to suggest other timing options that may work, identifying the benefits and drawbacks of such proposals. The proposals should address the periods for determining cost and demand for electing A-CAM carriers. We also invite parties to comment on whether we should allow a one-time opportunity to elect, or whether additional election opportunities should be allowed. If more than one opportunity to elect is offered, what should the timing be for any additional election opportunities?

19. We have recently proposed making a second A-CAM offer. In the event that additional rate-of-return carriers become A-CAM carriers, we propose that they may elect to adopt incentive regulation at the next annual tariff filing date that follows their election. We also propose to allow the new electing A-CAM carriers to adopt the other lighter touch regulatory options that are available to electing A-CAM carriers at that time. We invite parties to comment on these proposals.

20. We propose to allow electing A-CAM carriers that currently file their own tariffed rates for BDS offerings to use their existing rates to set their initial BDS rates under incentive regulation. The Commission used this method when allowing rate-of-return carriers filing their own rates to convert to price cap regulation. The demand to be used for the incentive regulation calculations would be that of the previous calendar year. The carrier would then apply the prescribed X-factor and the inflation factor, two variables in the Commission's existing formula for the price cap index (PCI), which would result in the proposed rates in the first year of incentive regulation, and each year thereafter. We invite parties to comment on this proposal. We ask that any party disagreeing with this approach submit a detailed proposal for setting initial rates, including an explanation of why its preferred approach would be equal to or better than the approach we propose.

21. Establishing initial BDS rates for electing A-CAM carriers participating in the NECA traffic-sensitive pool is more complicated because they are charging a pooled rate, which does not reflect the actual costs of the pooling carrier. The NECA pool BDS rates are therefore not the proper rates to use as initial BDS rates. We therefore propose that each electing A-CAM carrier in the pool establish its initial BDS rates by multiplying the NECA pool rate the carrier has been charging by a net contribution/recipient factor. Thus, an A-CAM carrier with more BDS revenues than the BDS settlements it receives from the pool would have its pool rate reduced commensurately. The opposite would occur for an electing A-CAM carrier that received more BDS settlements than the BDS revenues it produced. The carrier would then apply the prescribed X-factor and the inflation factor, which would result in the proposed rates in the first year of incentive regulation, and each year thereafter. This approach avoids the necessity of doing new cost studies for each study area of the electing A-CAM carriers. We invite parties to comment on this approach. Alternatively, commenters may suggest other approaches, such as doing cost studies for the preceding calendar year, or other twelve-month period. Parties making such alternative proposals should address the manner in which the alternative time period data would be incorporated into the incentive regulation calculations.

22. Are there other approaches we should take in determining how electing A-CAM carriers should establish initial BDS rates? Are there other adjustments that we should make to our proposed initial rate setting process? For example, should the initial rates be lower than current rates because of the cost savings electing carriers will realize by moving to incentive regulation? If so, how much should be shared with consumers and how should such amount be determined? In a 2012 waiver petition seeking to move from rate-of-return to price cap status, FairPoint Communications, Inc., proposed reducing its special access rates by a percentage of the anticipated cost savings. We invite parties to comment on these issues and to suggest how such amounts should be determined, especially if another cost study is to be avoided.

23. Consistent with the BDS Order, we propose to retain the special access basket, categories and subcategories, and the attendant rules governing the allowed annual adjustments. We propose to require each electing A-CAM carrier to initialize its PCI for the special access basket and associated service band indices (SBIs) at 100 and to use the rate adjustment rules for price cap carriers contained in sections 61.45-48 of our rules, as appropriate, to reflect the prescribed productivity factor, the inflation factor, and any required exogenous cost adjustment in the PCI, to ensure that the Actual Price Index (API) does not exceed the PCI, and that the SBIs for each category or subcategory do not exceed their upper limits. The category and sub-category requirements are designed to limit the degree to which a carrier can raise rates in any given year in an effort to avoid anti-competitive pricing. We invite parties to comment on this proposal. Are there other approaches we should take? Are there other categories or sub-categories needed for A-CAM carriers that were not necessary for price cap carriers? We request that parties recommending that we modify the categories or sub-categories explain why such a change would improve the functioning of the incentive regulation plan and/or the BDS market and produce benefits for consumers.

24. Consistent with the BDS Order, we also propose to adopt an X-factor of two percent to reflect the productivity growth that electing A-CAM carriers are likely to experience in the provision of these services relative to productivity growth in the overall economy in the foreseeable future and to use Gross Domestic Product-Price Index (GDP-PI) as the measure of inflation that electing A-CAM carriers will use in their PCI calculations. We do not propose to incorporate a consumer productivity dividend (CPD) adjustment into this X-factor. Based on the industry-wide analysis provided in the BDS Order and Petitioners' proposal that we use a two percent X-Factor, we believe an X-factor of two percent will ensure just and reasonable rates for BDS offered by electing A-CAM carriers, and that use of the GDP-PI is appropriate. We seek comment on this proposal.

25. Are there reasons we should use a different productivity factor for electing A-CAM providers than we use for price cap carriers? We request that any party proposing a different productivity factor or measure of inflation factor describe with specificity how their proposed X-Factor is derived and why it would be a better forecast of the expected pattern of growth than what we propose herein.

26. We also seek comment on the extent to which the voluntary nature of the election interacts with the appropriate level of the X-Factor. For example, are there relationships between different factors that could warrant that the Commission increase or decrease the X-Factor? Should the level of the X-Factor be affected by whether the carrier election is for all A-CAM study areas, or made on a more disaggregated level?

27. We seek comment on the treatment that should be accorded exogenous costs if we allow A-CAM carriers to elect to move to incentive regulation. Exogenous costs are those costs that are beyond the control of the carrier, as determined by the Commission. Section 61.45(d) of our rules provides for an exogenous cost adjustment for price cap carriers to be apportioned on a cost-causative basis between price cap services as a group, and excluded services as a group. Exogenous cost changes attributed to price cap services are recovered from services other than those used to calculate the average traffic-sensitive charge. A-CAM carriers have been removed from rate-of-return regulation for universal service purposes and for interstate access services other than BDS. We invite parties to address how the principle of cost causation should be applied in determining the amount of any exogenous costs to be assigned to the BDS basket for electing A-CAM carriers. We propose that exogenous costs be allocated based on a ratio of BDS revenues to total revenues from all regulated services and A-CAM universal service support payments. We invite parties to address whether some other basis would be preferable, including the rationale for the alternative approach.

28. Consistent with the BDS Order, we propose to adopt a low-end adjustment mechanism to provide an appropriate backstop to ensure that electing A-CAM carriers are not subject to protracted periods of low earnings. Failure to include any adjustment for such circumstances could harm customers as well as shareholders of such a carrier as a below-normal rate-of-return over a prolonged period could threaten the carrier's ability to raise the capital necessary to provide modern, efficient services to customers. The low-end adjustment mechanism would permit a one-time adjustment to a single year's BDS rates to avoid back-to-back annual earnings below a set benchmark. If an electing A-CAM carrier's BDS earnings fall below the low-end adjustment mark in a base year period, it would be entitled to adjust its rates upward to target earnings to the benchmark. We propose that, consistent with past practice, the low-end adjustment benchmark should be set 100 basis points below the authorized rate of return for rate-of-return carriers. We propose that electing A-CAM carriers that exercise downward pricing flexibility (for example, by entering into a contract tariff with a customer), or elect the option to use generally accepted accounting practices (GAAP) rather than the Part 32 Uniform System of Accounts as set forth in our recent Part 32 Accounting Order, will be ineligible for a low-end adjustment.

29. We invite interested parties to comment on the proposal to adopt a low-end adjustment mechanism. We ask parties to comment on whether this measure will ensure that electing A-CAM carriers have the opportunity to attract sufficient capital. We note that an A-CAM carrier would have to present cost data to support a claim for a low-end adjustment. Because eliminating the need for cost studies is one of the driving objectives behind Petitioners' proposal, we ask parties to comment on whether there are alternative ways to make the required determinations short of performing a full cost study. Parties offering suggestions should explain the proposed mechanism in sufficient detail that a comparison to the results of a cost study can be made. We also seek comment on the appropriateness of setting the benchmark for the low-end adjustment at 100 basis points below the authorized rate of return for rate-of-return carriers. We note that this proposal would allow the benchmark to track the gradual reduction in the authorized rate-of-return as it transitions down.

30. Pursuant to section 10 of the Act, and to implement our new incentive regulation for those A-CAM carriers that elect incentive regulation, we propose to forbear from application of our cost assignment rules, including jurisdictional separations requirements. Consistent with our previous forbearance orders for price cap carriers, we propose to define cost assignment rules to include the rules governing the assignment of costs and revenues by carriers. We seek comment on our proposed definition.

31. In providing similar forbearance to price cap carriers, the Commission observed that such rules “were developed when the ILECs' interstate rates and many of their intrastate rates were set under rate-based, cost-of-service regulation. The Commission has explained that `because price cap regulation severs the direct link between regulated costs and prices, a carrier is not able automatically to recoup misallocated non-regulated costs by raising basic service rates,' thus reducing incentives to shift non-regulated costs to regulated services.” Does the same reasoning for forbearance apply to A-CAM carriers electing incentive regulation? Will the operation of the incentive regulation rules we propose make enforcement of the cost assignment and separations rules unnecessary to ensure just, reasonable and not unjustly or unreasonably discriminatory charges, practices, classifications, and regulations, or make enforcement of those rules unnecessary to protect consumers from unjust, unreasonable, and unjustly or unreasonably discriminatory rates, practices, classifications, and regulations? Is enforcement of such regulations unnecessary to protect consumers? Would forbearance be consistent with the public interest and would the reduction of regulatory burdens improve market competitiveness?

32. We further propose to condition any grant of forbearance from application of the cost assignment and jurisdictional separations rules for an electing A-CAM carrier that froze their separations category relationships on its conducting a cost study for the preceding calendar year. The A-CAM carrier would then adjust the initialized BDS rates determined pursuant to the procedures described above by the results of the cost study. We invite parties to comment on this proposal and to identify any constraints that should be placed on application of the cost study results to the development of revised access charges, including BDS rates. For example, should a carrier be limited in the extent it may adjust the relative price relationships between business data services that may be established?

33. Above, we propose procedures for electing A-CAM carriers to use in establishing initial BDS rates under incentive regulation that assume other factors remained unchanged. Forbearing from cost allocation and jurisdictional separations requirements for A-CAM carriers electing incentive regulation, however, would change one of the controlled factors. We invite comment on what adjustments, if any, we should allow an A-CAM carrier that elects to freeze its category relationships to make to its rates to ensure that its BDS rates are just and reasonable pursuant to section 201 of the Act.

34. We propose to allow electing A-CAM carriers to use GAAP for keeping their accounts, should they choose to do so. The Commission recently revised the Part 32 rules to allow price cap LECs to elect to use GAAP in recording and reporting their financial data, subject to two targeted accounting requirements. Electing carriers may either (a) calculate an Implementation Rate Difference between the attachment rates calculated by the price cap carrier under the Uniform System of Accounts (USOA) and under GAAP as of the last full year preceding the carrier's initial opting-out of Part 32 USOA accounting requirements; or (b) comply with GAAP accounting for all purposes other than those associated with setting pole attachment rates while continuing to use the Part 32 accounts and procedures necessary to establish and evaluate pole attachment rates. Electing carriers must adjust their annually computed GAAP-based rates by the Implementation Rate Difference for a period of 12 years after the election. This frees price cap carriers from having to maintain two sets of books: One for financial reporting purposes consistent with GAAP and one for regulatory reporting purposes consistent with the accounting requirements of Part 32. For the same reasons, we propose to allow electing A-CAM carriers to have the option to use GAAP. We propose to require electing A-CAM carriers that choose to use GAAP accounting to be subject to the same data provisioning requirements as price cap carriers, including the requirements relating to the calculation of pole attachment rates. As a result, such carriers will have to determine an Implementation Rate Difference to apply in calculating their pole attachment rates. We seek comment on this proposal. Are there other issues with allowing electing A-CAM carriers to use GAAP accounting that we should consider?

35. We seek comment on whether we should adopt a competitive market test (CMT) to assess the availability of actual and likely competitive options in the provision of transport and last-mile services in areas served by electing A-CAM carriers and to remove from ex ante pricing regulation DS1 and DS3 end user channel terminations, TDM transport at speeds at or below a DS3, and other generally lower speed BDS provided (or some subset of these services) by electing A-CAM carriers in areas that the CMT finds competitive. If so, what should be the elements of such a test and what are the costs and benefits of adopting such a test? We also seek comment on whether we should use different metrics and/or different tests to measure the competitiveness of lower speed end user channel terminations as compared to lower speed TDM transport services.

36. If we adopt a CMT for electing A-CAM carriers, should we use the CMT the Commission adopted in the BDS Order for price cap carriers (the existing CMT) as a starting point? The existing CMT features two prongs, based on data from price cap study areas. The first measures whether 50 percent of the locations with BDS demand in a county are within a half-mile of a location that was served by a competitive provider, based on the 2015 Collection. The second uses Form 477 data to measure whether a cable operator offers a minimum of 10/1 Mbps broadband service in 75 percent of the census blocks in the county. If either prong is satisfied, that county is deemed competitive for price cap carriers' BDS. Below, we seek comment on several options for a CMT for electing A-CAM carriers, some of which include the use of the existing CMT. Beside the options we offer below, are there other options we should consider if we choose to adopt a CMT? What are the costs and benefits of each?

37. First, we seek comment on adopting a CMT that uses only a version of the second prong of the existing CMT using data from areas served by A-CAM carriers. Under this approach, we would rerun the second prong of the existing CMT using FCC Form 477 data only from electing A-CAM carriers' study areas. We would then deem competitive, for purposes of relieving electing A-CAM carriers' lower speed TDM BDS services from ex ante pricing regulation, any county where a cable operator or other competitive provider offers a minimum of 10/1 Mbps broadband service in 75 percent of the census blocks in the portion of the county served by an electing A-CAM carrier. This approach has the benefit of simplicity. It would allow us to use FCC Form 477 data that we regularly collect and would identify areas served by electing A-CAM carriers that competitors or potential competitors already serve. Because we would not be using the first prong of the existing CMT, there would be no need to conduct a BDS data collection for A-CAM carriers akin to the 2015 Collection. For a variety of reasons, we are not inclined to adopt an approach that would require another such large-scale data collection. The burdens associated with such a data collection would be substantial for A-CAM carriers and other providers of data, and could significantly delay Commission action without corresponding benefits. However, we invite comment on this issue. Because of the lack of cable service in many rate-of-return study areas, we recognize that this test will likely result in very few A-CAM counties being deemed competitive. Does that suggest this test is accurate in identifying competition in A-CAM areas? Are there other costs and benefits to this approach that we should consider?

38. Petitioners propose that we apply the existing CMT to electing A-CAM carriers' BDS offerings. Under this proposal, an electing A-CAM carrier's lower speed TDM BDS offerings would be relieved of ex ante pricing regulation in those counties that have already been deemed competitive by the existing CMT. Petitioners recognize that there are 78 purely rate-of-return counties that were not analyzed by the existing CMT. They propose to use the second prong of the existing CMT to determine whether those counties should be considered competitive. Petitioners argue that this approach would involve minimal administrative and compliance burdens and would avoid the need for revising and re-running the CMT for electing A-CAM carriers or analyzing any additional data.

39. We seek comment on Petitioners' proposed approach. The existing CMT was developed for price cap carriers' service areas and involved analysis of competition only in price cap areas. The Commission did not consider competition in A-CAM markets. Is an analysis of existing or potential competition in price cap areas of a county an appropriate way to determine whether competition or potential competition exists in areas of that county served by an electing A-CAM carrier? Is it likely to result in deregulating lower speed TDM-based BDS services offered by electing A-CAM carriers in counties where such carriers will not face competitive pressure in pricing those services? Are there other benefits or drawbacks to this approach that we should consider?

40. Another option would be to adopt a CMT for electing A-CAM carriers using prongs similar to those of the existing CMT, but using data specific to areas served by electing A-CAM carriers. We seek comment on this approach. We recognize that for purposes of the first prong of the new CMT, this approach would require a data collection sufficient to allow us to identify for each county served by an electing A-CAM carrier whether 50 percent of the locations with BDS demand in that part of the county are within a half-mile of a location that was served by a competitive provider. Such a collection could be limited to electing A-CAM carriers and their competitors. Nonetheless, we have reservations about the relative costs and benefits of conducting such a data collection. And, the current record is split on whether we should consider a new data collection. We seek comment on how to most efficiently collect relevant data and on whether the burdens of such a data collection outweigh the benefits. We also seek comment on other benefits and drawbacks to this option.

41. A fourth option is to create a whole new CMT based on a competitive market analysis specific to BDS services in areas served by electing A-CAM carriers. Petitioners argue that the BDS market analysis conducted in the BDS Order with respect to price cap areas applies equally to rate-of-return areas served by A-CAM carriers. We seek comment on Petitioners' argument.

42. In the BDS Order, the Commission conducted a broad, data-driven, multi-faceted market analysis based on a comprehensive data collection to evaluate the extent of competition for BDS in price cap areas. The Commission's market analysis was informed by, but not limited to, traditional antitrust principles, such as the market power analysis performed by U.S. antitrust agencies. The Commission analyzed the product market, geographic market, barriers to entry, and other characteristics of price cap BDS markets.

43. If we conduct a new market analysis, should it be similar to the market analysis conducted by the Commission in the BDS Order as a precondition to determining whether competition is sufficient to warrant lighter touch regulation in certain BDS markets? If we do conduct a new market analysis, we propose to consider product and geographic markets, competitive entry, and other market attributes to ascertain the extent to which nearby potential BDS competitors are likely to temper price, resulting in reasonably competitive prices over the short- to medium-term (i.e., up to three to five years). Would this be the right approach to assessing the level of competition for BDS in A-CAM areas? What other approaches should we consider taking? How should we analyze transport under our market analysis? Would a competitive market analysis give us sufficient basis to go beyond the incremental deregulation of lower speed transport that we propose above? We ask commenters to support their positions with data that would help us determine whether markets are sufficiently competitive to warrant deregulatory treatment.

44. Data for a Market Analysis. If we conduct a market analysis, what relevant data are available and what are the potential utility and limitations of the available data? Should we review FCC Form 477 data on mass market broadband service to determine the extent to which they serve as evidence of the presence of network facilities capable of delivering reasonably competitive BDS over the short- to medium-term (three to five years) in A-CAM areas? We seek comment on the data, methodologies, and modeling used to develop the A-CAM study area boundaries, including state-level location density data, the A-CAM model, and geocoded location data submitted to USAC and the extent they can assist us in analyzing the BDS market in A-CAM areas.

45. To the extent the Commission's existing data sources are insufficient, we seek data from commenters on facilities-based BDS providers serving A-CAM areas that would help us to ascertain markets with reasonably competitive conditions to justify lighter touch regulatory treatment. Are there existing data similar to data collected as part of the 2015 Collection that would help us better understand or estimate the location of BDS demand in A-CAM areas, including consumers and business locations served (or readily served) by BDS, as well as data on market structure, demand, pricing, and competitive pressures in those areas? Does similar data exist that could identify BDS demand for transport in A-CAM areas? If we have to collect new data, what data should we collect and what is the most efficient way to collect it? Does the cost of conducting and analyzing such a data collection outweigh the benefits of conducting an A-CAM specific market analysis?

46. Product Market. If we conduct a new market analysis, should we use the same analysis to define the product market for lower speed TDM end user channel terminations and transport in A-CAM areas as we used to define the product market for BDS in price cap areas in the BDS Order? We anticipate that the product market for BDS in A-CAM areas will closely resemble the BDS product market delineated in the BDS Order for price cap areas and seek comment on this belief and on potential differences that may exist between the two types of markets. Despite these similarities, we recognize that there may be differences between price cap areas and A-CAM areas that may affect the BDS product markets in these areas. Are there products that were marketed or supplied to BDS customers in price cap areas that are not in demand, marketed, or otherwise supplied in A-CAM areas as a BDS substitute, and to what extent do products that are not in the same BDS product market nonetheless exert competitive pressure on prices for BDS in A-CAM areas?

47. Geographic Market. In the BDS Order, the Commission defined the geographic market in terms of “the area to which consumers can `practically turn for alternative sources,' and within which providers can reasonably compete.” Consistent with the BDS Order, should we define the geographic market as an area where customers have medium-term competitive choices for BDS based on customer locations within a half mile of a location served over the facilities of at least one non-incumbent competitive provider? We encourage commenters to provide data and analysis to support their positions.

48. Competitive Entry. As part of our analysis, and consistent with the BDS Order, should we consider how varying market characteristics impact entry by non-incumbent competing BDS providers in A-CAM areas, along with evidence of entry barriers being overcome by traditional and non-traditional competing providers? We seek comment on identifiable market features in A-CAM areas, including carrier market share, number and size distribution of competing firms, the nature of competitors' barriers to entry, the availability of reasonably substitutable services, the level of demand elasticity, and whether a firm controls bottleneck facilities to help us identify where competition is sufficient to make imposing the burdens of ex ante pricing regulation unnecessary and counterproductive.

49. We seek comment on the number, type, size, concentration, and market share of nearby BDS competitors (i.e., within a half-mile) that operate in A-CAM study areas, in the form of facilities-based wired communications network providers, that temper prices to reasonably competitive levels in the short- to medium-term.

50. Consistent with the BDS Order, should we consider as part of our market analysis the extent to which providers and potential providers face barriers to enter the BDS marketplace in A-CAM areas? We seek comment on the timeliness, likelihood, and sufficiency of a competitor's entry into the BDS market in A-CAM areas. We seek comment on the barriers facing carriers for both lower speed TDM end user channel terminations and transport. How are the markets different? For example, in the BDS Order, the Commission found lower entry barriers for deploying TDM transport services than for end user channel termination services. Is this accurate for A-CAM carrier study areas as well? Would buildout and entry by an entrant be rapid enough to render incumbent LECs' attempts to set prices above competitive levels unprofitable? Would such entry occur over a longer timeframe, such as three to five years, and, if so, would that justify taking the same light touch regulatory approach here as taken in the BDS Order? To what extent is market entry profitable (and thus likely) based on projected expenditures and revenues from customers and potential customers? Is the presence of a second provider in the relevant geographic market, whether a non-incumbent LEC or a cable operator, sufficient to constrain prices to competitive levels? To what extent does the half-mile test that was derived from the market analysis of price cap areas relate to demand densities in those areas that may not be present in A-CAM areas? Finally, we seek comment on the extent incumbents and non-incumbent entrants, particularly cable companies, are upgrading or building out their networks to sources of BDS demand in A-CAM study areas.

51. The BDS Order directed the Bureau to review the existing price cap CMT every three years using the second prong of the test based on Form 477 data. If we adopt a CMT for electing A-CAM carriers, we seek comment on whether we should conduct similar periodic reviews of any CMT we adopt for such carriers. For administrative ease, should we target the timing of our initial review of the results of a CMT for electing A-CAM carriers to coincide with our initial review of price cap served areas? Under the BDS Order, counties that were determined to be competitive were no longer subject to review of their status in subsequent updates of the CMT. Should we treat A-CAM areas similarly? If not, we seek comment on alternatives to grandfathering those A-CAM areas.

52. If we adopt a CMT for areas served by electing A-CAM carriers, consistent with the BDS Order, we propose to refrain from ex ante pricing regulation for lower speed transport and TDM end-user channel terminations in areas deemed competitive. We also seek comment on whether forbearing from section 203 tariffing requirements for these services in these areas would meet the statutory criteria of section 10 of the Act. As we did in the BDS Order, we recognize the continuing applicability and importance of sections 201, 202, and 208 of the Act to ensure that consumers will remain protected from unjust and unreasonable rates in areas deemed competitive. We seek comment on this proposal.

53. We also seek comment on whether we should eliminate ex ante pricing regulation of packet-based and TDM-based business data services providing bandwidth in excess of a DS3 offered by those carriers that elect to move their lower speed BDS offerings from rate-of-return regulation to incentive regulation. If so, should we provide 36 months for such a transition? If we transition these high-speed services, consistent with the BDS Order, we would continue to recognize the applicability and importance of sections 201, 202, and 208 of the Act in protecting consumers from unjust and unreasonable practices.

54. With respect to price cap areas, the Commission's market analysis did “not show compelling evidence of market power” in incumbent LECs' provision of packet-based services and higher capacity TDM-based business data services (in excess of the bandwidth of a DS3), particularly for higher bandwidth services. We seek comment on whether these observations offer any insights on the nature and extent of competition in A-CAM areas. Are markets for higher capacity TDM-based BDS offerings (above the bandwidth of a DS3) and packet-based services likely to be sufficiently competitive in A-CAM areas over the next three to five years such that the harms of price regulation in these markets, most notably in terms of discouraging the extension of competition, are likely to be greater than any harms that may occur were we not to regulate? Are these markets sufficiently competitive to outweigh any benefits of ex ante pricing regulation? Parties are encouraged to provide evidence to support their arguments. We seek comment on the extent to which Commission or other data could facilitate our evaluation of competition in these areas, including Form 477 mass market broadband data, A-CAM study area boundary data, A-CAM modeling data, and geocoded location data submitted to USAC. We invite commenters to identify specific data sources that could be useful to our inquiry and to explain their utility.

55. The Commission also found that sales of TDM-based BDS by price cap carriers were declining due to product substitution, including customer loss to cable operators and other competitive providers. To what extent are purchasers substituting packet-based services for TDM-based services in A-CAM areas? Are TDM-based services declining in A-CAM areas at a rate similar to the decline in price cap areas? The Commission found declining prices for packet-based BDS across all bandwidths in price cap areas to be evidence of competitive conditions. Have prices for packet-based BDS in A-CAM areas also declined across all bandwidths? Are lower bandwidth packet-based services (at or below the level of a DS3) experiencing price changes in A-CAM areas as in price cap areas?

56. We recognize that price cap carriers' provision of these services was generally relieved of ex ante pricing regulation prior to the BDS Order in a series of forbearance decisions. In contrast, A-CAM carriers provide these services subject to rate-of-return regulation. Would removing ex ante pricing regulation for these services for electing A-CAM carriers encourage competitive entry and network investment and provide an incentive for the transition to packet-based technologies as we found to be the case for price cap carriers? In the foregoing, we seek comment on the parameters of this potential transition. Are there other issues we should consider as we evaluate whether to remove ex ante pricing regulation for all packet-based and TDM-based services providing bandwidth in excess of a DS3 offered by electing A-CAM carriers?

57. We seek comment on granting forbearance from section 203 tariffing requirements for A-CAM carriers' provision of certain BDS after they elect incentive regulation. In the BDS Order, the Commission granted forbearance from the application of section 203 to each price cap LEC in its provision of any packet-based BDS and of circuit-based BDS above the DS3 bandwidth level. The Commission also granted forbearance from the application of section 203 to price cap incumbent LECs in their provision of BDS that comprise transport pursuant to section 69.709(a)(4) of the Commission's rules, and to DS1 and DS3 end user channel termination services and any other special access services currently tariffed in competitive counties or in non-competitive counties previously subject to Phase II pricing flexibility. The Commission concluded that “[w]here a price cap LEC provides these services in competitive markets, application of section 203, including its tariffing requirement, is not necessary to ensure that the LEC's charges, practices, classifications, or regulations are just, reasonable, and not unjustly or unreasonably discriminatory. Nor is application of section 203 necessary to protect consumers.”

58. While the Petition does not expressly request forbearance from tariffing requirements, we seek comment on whether to de-tariff certain electing A-CAM BDS offerings by granting forbearance from section 203 tariffing obligations. We seek comment on whether we should remove ex ante pricing regulation of packet-based BDS and higher capacity TDM-based services providing bandwidth in excess of a DS3 for A-CAM carriers that elect incentive regulation. Would forbearing from the tariffing requirement for these services meet the statutory criteria set by section 10 of the Act? Would de-tariffing these services promote competitive market conditions? Would de-tariffing reduce compliance costs, increase regulatory flexibility, increase incentives to invest in innovative products and services and thereby facilitate the technology transitions, or otherwise be in the public interest as the Petition asserts? If the Commission decides to forbear from section 203, should it mandate or simply allow de-tariffing? Would mandatory de-tariffing further promote competition and drive down prices by requiring electing carriers to negotiate agreements to provide the de-tariffed services that they offer?

59. We seek comment on how to transition electing A-CAM carriers and the areas they serve if the Commission adopts a new lighter touch regulatory framework for their provision of BDS. The BDS Order provided certain mechanisms to facilitate the transition to the new regulatory framework that it established for price cap carriers. These mechanisms included a thirty-six month transition period in which de-tariffing is permitted but not mandated, a six month freeze of tariffed rates for end-user channel terminations in newly deregulated counties, and a grandfathering of existing contractual or other long-term BDS arrangements. We seek comment on the appropriateness of these and other mechanisms to aid in the transition of electing A-CAM areas to any new regulatory framework we establish for them. Are there other transition issues and mechanisms that may be unique to A-CAM carriers and the areas they serve that would help ensure an orderly transition? For example, should the Commission consider any additional mechanisms that would facilitate transitions for electing A-CAM carriers that participate in NECA pooling arrangements?

60. We propose to offer the opportunity to elect the same type of regulatory relief that we propose to provide to electing A-CAM carriers to other rate-of-return carriers that currently receive fixed universal service support, rather than receiving support based on their costs. Such carriers include traditional rate-of-return carriers that are affiliated with price cap carriers and are therefore receiving support based on the Connect America Cost Model (CACM); rate-of-return carriers participating in the Commission's “Alaska Plan”; and carriers that accept further offers of A-CAM support.

61. Like A-CAM carriers, the members of each of these three groups of rate-of-return carriers all receive non-cost-based universal service support and therefore are routinely required to prepare cost studies only for their BDS. What are the costs and benefits of relieving them of existing pricing regulations and allowing them to elect the type of incentive pricing regulation we propose? Should we modify our proposed incentive regulation in any way to reflect differences in any of these types of carriers' circumstances? Are there any other types of carriers that should be eligible for our incentive regulation proposal and, if so, based on what rationale?

62. Throughout this NPRM, we seek comment on various aspects of the Petition for rulemaking filed by ITTA and USTelecom. However, the Petition differs in some ways from what we propose in this NPRM. Most fundamentally, it proposes that subject to certain conditions we simply allow model-based carriers to elect the same regulatory framework that the BDS Order provided for price cap carriers. It also proposes providing electing A-CAM carriers an opportunity for a one-time unfreezing of category relationships for purposes of jurisdictional separations. To the extent we have not already done so, we invite comment on the Petition and each of the proposals made therein.

63. We seek comment on the proposed rule changes that can be found in Appendix A. Those rule changes largely track the proposals made in this NPRM. They also include some corrections to what appear to be inaccuracies in our current rules. These proposed changes include changing (1) the cross reference to § 61.3(aa) in § 51.903(g) to § 61.3(bb), (2) the cross reference to § 61.3(ee) in § 61.41(d) to § 61.3(ff), (3) the cross reference to § 61.3(x) in § 69.114 to § 61.3(ff), and (4) the cross reference to § 69.801(g) in § 69.805(a) to § 69.801(h). These cross references have been rendered inaccurate because of changes in the definitions contained in § 61.3 that occurred in other rulemaking proceedings or because they were incorrectly stated when added to our rules.

64. 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.

65. 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 Notice of Proposed Rulemaking. The text of the IRFA is set forth in Appendix B. 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 comment on the Notice of Proposed Rulemaking. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, will send a copy of this Notice of Proposed Rulemaking, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).

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

67. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in this Notice of Proposed Rulemaking (NPRM). The Commission requests written public comments 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 the NPRM. The Commission will send a copy of the 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.

68. In this NPRM, we propose changes to, and seek comment on, our rate-of-return and business data services rules as they are applied to rate-of-return carriers that receive universal service support based on the Alternative-Connect America Cost Model (A-CAM), or under the Commission's universal service support mechanism for Alaska-based carriers (Alaska Plan), or is an affiliate of a price cap local exchange carrier operating pursuant to a waiver of § 61.41 of our rules. In the NPRM, the Commission proposes to adopt a form of incentive regulation for A-CAM carriers' provision of business data services (BDS), conduct a market analysis to evaluate the characteristics of BDS markets served by A-CAM carriers, and adopt a new lighter touch regulatory framework for A-CAM carriers' BDS that in most respects parallels the framework recently adopted for price cap carriers in the BDS Order.

69. The legal basis for any action that may be taken pursuant to this NPRM is contained in sections 1, 4(i), 10, and 201(b) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 160, and 201(b).

70. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and 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.

71. 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 broad groups of small entities 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.

72. 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 August 2016, there were approximately 356,494 small organizations based on registration and tax data filed by nonprofits with the Internal Revenue Service (IRS).

73. 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 from the 2012 Census of Governments indicates that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 37,132 general purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,184 special purpose governments (independent school districts and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category shows that the majority of these governments have populations of less than 50,000. Based on these data we estimate that at least 49,316 local government jurisdictions fall in the category of “small governmental jurisdictions.”

74. Internet Service Providers (Broadband). Broadband internet service providers include wired (e.g., cable, DSL) and VoIP service providers using their own operated wired telecommunications infrastructure fall in the category of Wired Telecommunication Carriers. Wired Telecommunications Carriers are comprised of 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 telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies. The SBA size standard for this category classifies a business as small if it has 1,500 or fewer employees. U.S. 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. Consequently, under this size standard the majority of firms in this industry can be considered small.

75. 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.

76. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent LEC services. The closest applicable size standard under SBA rules is for the category 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. A total of 1,307 firms reported that they were incumbent local exchange service providers. Of this total, an estimated 1,006 have 1,500 or fewer employees.

77. 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.

78. 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.

79. 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 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.

80. Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, all operated with fewer than 1,000 employees. Thus, under this category and the associated small business size standard, the majority of these prepaid calling card providers can be considered small entities.

81. Toll Resellers. The Commission has not developed a definition for Toll Resellers. The closest NAICS Code Category is Telecommunications Resellers. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees. Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services. Of this total, an estimated 857 have 1,500 or fewer employees. Consequently, the Commission estimates that the majority of toll resellers are small entities.

82. 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 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 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 Second Further Notice of Proposed Rulemaking.

83. 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.

84. 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.

85. 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.

86. 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.

87. 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.

88. 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.

89. Satellite Telecommunications Providers. This category comprises firms “primarily engaged in providing telecommunications services to other establishments in the telecommunications and broadcasting industries by forwarding and receiving communications signals via a system of satellites or reselling satellite telecommunications.” Satellite telecommunications service providers include satellite and earth station operators. The category has a small business size standard of $32.5 million or less in average annual receipts, under SBA rules. For this category, U.S. Census Bureau data for 2012 show that there were a total of 333 firms that operated for the entire year. Of this total, 299 firms had annual receipts of less than $25 million. Consequently, we estimate that the majority of satellite telecommunications providers are small entities.

90. Because section 706 requires us to monitor the deployment of broadband using any technology, we anticipate that some broadband service providers may not provide telephone service. Accordingly, we describe below other types of firms that may provide broadband services, including cable companies, MDS providers, and utilities, among others.

91. Cable and Other Subscription Programming. This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature (e.g. limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers. The SBA has established a size standard for this industry stating that a business in this industry is small if it has 1,500 or fewer employees. The 2012 Economic Census indicates that 367 firms were operational for that entire year. Of this total, 357 operated with less than 1,000 employees. Accordingly we conclude that a substantial majority of firms in this industry are small under the applicable SBA size standard.

92. Cable Companies and Systems (Rate Regulation). The Commission has developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. Industry data indicate that there are currently 4,600 active cable systems in the United States. Of this total, all but eleven cable operators nationwide are small under the 400,000-subscriber size standard. In addition, under the Commission's rate regulation rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Current Commission records show 4,600 cable systems nationwide. Of this total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 systems have 15,000 or more subscribers, based on the same records. Thus, under this standard as well, we estimate that most cable systems are small entities.

93. Cable System Operators (Telecom Act Standard). The Communications Act also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” There are approximately 52,403,705 cable video subscribers in the United States today. Accordingly, an operator serving fewer than 524,037 subscribers shall be deemed a small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that all but nine incumbent cable operators are small entities under this size standard. The Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250 million, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

94. All Other Telecommunications. “All Other Telecommunications” is defined as follows: This U.S. industry is comprised of establishments that are primarily engaged in providing 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.

95. Electric Power Generators, Transmitters, and Distributors. This U.S. industry is comprised of establishments that are primarily engaged in providing 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 closest applicable SBA category is “All Other Telecommunications”. The SBA's small business size standard for “All Other Telecommunications,” consists of all such firms with gross annual receipts of $32.5 million or less. For this category, U.S. 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 under this category and the associated size standard the majority of these firms can be considered small entities.

96. This NPRM proposes changes to, and seeks comment on, the Commission's rate-of-return and business data services rules. The objective of the proposed modifications is to reduce the unnecessary regulatory burdens and inflexibility of rate-of-return regulation for BDS services for A-CAM carriers, which are for the most part small businesses. These rule modifications would provide additional incentives for competitive entry, network investment and the migration to IP-based network technologies and services. The NPRM seeks comment on proposed rules that would generally reduce compliance requirements for A-CAM carriers that choose to opt into the new incentive regulation and regulatory framework for the provision of BDS.

97. Under the Commission's rate-of-return rules, rates for business data services are based on costs derived from carrier-specific cost studies which represent a significant compliance burden for A-CAM carriers relative to their overall revenues. The NPRM proposes to transition these carriers to a form of incentive regulation that will enable these LECs to significantly reduce these compliance costs. The NPRM also proposes a new regulatory framework for A-CAM carriers' BDS that would in many cases eliminate ex ante pricing regulation and tariffing requirements for carriers electing incentive regulation.

98. 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 and reporting requirements under the rules for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.

99. The rule changes proposed by the NPRM would reduce the economic impact of the Commission's rules on A-CAM carriers that elect incentive regulation in the following ways. Electing A-CAM carriers would no longer be required to prepare annual cost studies to justify their BDS rates. Such carriers would also be freed of ex ante pricing regulation for many of their BDS offerings, including packet-based BDS, circuit-based BDS above a DS3 bandwidth (about 45 Mbps) such as OCn services, and circuit-based end user channel terminations (e.g. DS1 and DS3) in geographic areas deemed to be competitive by a competitive market test. These proposed rule changes represent alternatives to the Commission's current rules that would significantly minimize the economic impact of those rules on electing A-CAM LECs. Finally, we seek comment as to any additional economic burden incurred by small entities that may result from the rule changes proposed in the NPRM.

100. None.

101. Accordingly, it is ordered, pursuant to sections 1, 4(i), 10, and 201(b) of the Communication Act of 1934, as amended, 47 U.S.C. 151, 154(i), 160, and 201(b) that the Petition for Rulemaking filed by ITTA and USTelecom in this proceeding is granted to the extent described herein.

102. It is further ordered, pursuant to sections 1, 4(i), 10, and 201(b) of the Communication Act of 1934, as amended, 47 U.S.C. 151, 154(i), 160, and 201(b) that this Notice of Proposed Rulemaking is adopted.

103. It is further ordered, Pursuant to Section 220(i) of the Communications Act, 47 U.S.C. 220(i), that notice be given to each state commission of the above rulemaking proceeding, and that the Secretary shall serve a copy of this NPRM on each state commission.

104. It is further ordered that the Commission's Consumer and 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.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR parts 1, 32, 51, 61 and 69 as follows:

The snapper-grouper fishery in the South Atlantic region is managed under the FMP and includes red snapper, along with other snapper-grouper species. The FMP was prepared by the Council and is implemented by NMFS through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

Harvest of red snapper from South Atlantic Federal waters was prohibited in 2010 through a temporary interim rule and then through Amendment 17A to the FMP when the stock was determined to be overfished and undergoing overfishing (Southeast Data, Assessment, and Review (SEDAR) 15, 2009)(74 FR 63673, December 4, 2009; 75 FR 76874, December 9, 2010). Amendment 17A also implemented a 35-year red snapper rebuilding plan that began in 2010, and set the red snapper stock ACL at zero. In 2013, Amendment 28 to the FMP established a process that allowed red snapper harvest (ACL greater than zero) if total removals (landings plus dead discards) were less than the acceptable biological catch (ABC) in the previous fishing year (78 FR 44461, July 24, 2013). Using the process established through Amendment 28, limited harvest of red snapper was allowed in 2012, 2013, and 2014. However, because the estimated total removals of red snapper exceeded the ABC in 2014, 2015, and 2016, due to estimates of red snapper discards that were incidentally harvested as bycatch while targeting other species, there was no allowable harvest in 2015 and 2016. In 2017, as a result of new scientific information regarding the red snapper stock, NMFS allowed limited commercial and recreational harvest of red snapper by a temporary rule through emergency action pursuant to the Magnuson-Stevens Act (82 FR 50839, November 2, 2017).

The most recent stock assessment for South Atlantic red snapper, SEDAR 41 (2017), was completed in 2016 and subsequently revised in 2017. SEDAR 41 (2017) evaluated data through 2014 and determined the red snapper stock was overfished and that overfishing was occurring. The stock assessment indicated that overfishing was occurring because the estimated fishing mortality based on the average over the last three years of the assessment represented in the model (2012-2014) exceeded the maximum fishing mortality threshold. Though limited red snapper harvest was allowed in 2012-2014, a large majority of the estimated fishing mortality was attributed to very large and uncertain dead discard estimates when fishermen were targeting red snapper and species that co-occur with red snapper, such as vermilion snapper, gag, red grouper, black sea bass, gray triggerfish, greater amberjack, and scamp. The Council's Scientific and Statistical Committee (SSC) reviewed the SEDAR 41 (2017) stock assessment and indicated the estimate of recreational discards was the greatest source of uncertainty in the stock assessment. It was acknowledged in the assessment that discarding of red snapper has increased over time due to changes in minimum landing size to 20 inches (51 cm) in 1992, increases in abundance of young fish from above-average year classes in some recent years, the introduction of the moratorium in 2010 and 2011, and the small commercial catch limits and recreational bag limits in the mini-seasons for 2012 onwards. Because most of the catch is now discarded, the number of discards is dependent upon fisher recalls, and these estimates are expanded based on small sample size; thus, the quality of total fishery removals estimates is poor and uncertain, which will impact estimation of stock size and fishing mortality.

In May 2016, the Council's Scientific and Statistical Committee (SSC) reviewed SEDAR 41 (2017) and had an extensive discussion of the uncertainties associated with the assessment. The SSC stated that the assessment was based on the best scientific information available, but noted the assessment findings were highly uncertain regarding to what extent overfishing was occurring (i.e., the actual numerical value of the current fishing mortality estimate), and regarding the measures of discards. The SSC indicated that the most significant sources of uncertainty in the assessment include: The stock-recruitment relationship, natural mortality at age, the age structure of the unfished population, the composition and magnitude of recreational discards (where dead discards greatly outnumbered the landings during the years 2012 through 2014), and potential changes in catch per unit effort (CPUE). The SSC developed its ABC recommendations based on SEDAR 41, and the total ABC recommendation for 2018, is 53,000 red snapper.

The projections of yield streams used in SEDAR 41 (2017) included both landings and dead discards, which were added to obtain an estimate of the total removals. The SSC divided its 53,000 fish ABC recommendation into landed fish (18,000) and discarded fish (35,000). Because of the recent closures in 2015 and 2016 in the fishery, in January 2017 the Council requested that the NMFS Southeast Fishery Science Center (SEFSC) provide red snapper projections under the assumption that all fish caught are subsequently discarded, believing that such projections would be more informative for management. The SEFSC advised the Council in February 2017 that the requested projections were not appropriate for management use because uncertainty in the assessment was already large, and the uncertainty would increase with a more complete evaluation of the effect of the upcoming changes to Marine Recreational Information Program (MRIP). Recreational catch and effort data, including discards, are monitored through MRIP, which is transitioning from the current telephone survey design to a new mail survey design for estimating marine recreational private angler fishing effort.

Additionally, in their February 2017 response, the SEFSC advised the Council that the uncertainty in the stock assessment inhibits the ability to set an ABC that can be effectively monitored. The SEFSC further stated in an April 2017 letter to the Council, that the use of an ABC based primarily on fishery discards for monitoring the effectiveness of management action is likely ineffective due to the high level of uncertainty in measures of discards and the change in the effort estimation methodology that will be implemented in the MRIP survey. NMFS has determined that, given the extreme uncertainty associated with the red snapper recreational discard estimates, it is not appropriate to rely on those discard estimates for the management of red snapper, and the division of the SSC's ABC recommendation of 53,000 fish into landed fish and discarded fish is unwarranted.

The results of SEDAR 41 (2017) using data through 2014, indicated that the red snapper stock was still overfished, but was rebuilding in accordance with the rebuilding plan. NMFS sent the Council a letter on March 3, 2017, noting these results and the SEFSC's concerns regarding the substantial uncertainty in the assessment, and advising the Council that sufficient steps had been taken to address overfishing of red snapper while continuing to rebuild the stock through harvest prohibitions in 2015 and 2016.

This determination is supported by a significant increase in stock biomass since 2010 to levels not seen since the 1970's, and the increasing abundance of older age classes (SEDAR 41 2017). Additional support for the determination comes from fishery-independent information collected through the Southeast Reef Fish Survey (SERFS) program, and the East Coast Fisheries Independent Monitoring information conducted by the Florida Fish and Wildlife Conservation Commission (FWCC). According to the SERFS, the relative abundance (CPUE) of red snapper has increased since 2009, reaching the highest level observed in the entire time series (1990-2016) in 2016. In addition, the SERFS program notified the Council at the December 2017 meeting that red snapper relative abundance, as measured through fishery-independent monitoring, increased 18 percent from 2016 to 2017. According to the results of FWCC's study, CPUE for red snapper for hook gear (surveyed in 2012, 2014, 2016, and 2017) and the standardized index of abundance (surveyed from 2014-2017) was highest in 2017. The FWCC data also showed a greater number of large red snapper and a broader range of ages in recent years, which suggests rebuilding progress of the red snapper stock. Additionally, the increase in relative abundance of red snapper indicated by the fishery-independent CPUE indices has taken place despite landings during the limited seasons in 2012-2014 and despite the large number of estimated red snapper dead discards during the harvest restrictions implemented for red snapper since 2010.

As a result of the new scientific information regarding the red snapper stock, NMFS allowed limited harvest of red snapper beginning November 2, 2017, by a final temporary rule through emergency action (82 FR 50839, November 2, 2017). The amount of harvest allowed in the temporary rule was equivalent to the amount of observed landings in the 2014 fishing season, and this proposed rule would allow the same amount of harvest annually beginning in 2018. NMFS determined that allowing the same amount of harvest as occurred in 2014 was unlikely to result in overfishing or change the red snapper rebuilding time period. NMFS has determined that Amendment 43 is based on the best scientific information available. Additionally, the ACL proposed in Amendment 43 is less than the ABC provided by the SSC from SEDAR 41, in accordance with the Magnuson-Stevens Act and the National Standard 1 Guidelines. See 16 U.S.C. 1852(h)(6), 50 CFR 600.310(f)(4)(i).

Based on the actions in Amendment 28, the FMP currently contains total ABCs that are then divided, with one component for landings and another for discards. By changing the process for determining the ACL for red snapper established in Amendment 28, this proposed rule would implement management measures concerning the commercial and recreational harvest, beginning in 2018. Limited commercial and recreational harvest of red snapper would be allowed by implementing a total ACL of 42,510 fish, based on the landings observed during the limited red snapper season in 2014. This ACL is less than the SSC's most recent total ABC recommendation of 53,000 red snapper, and is less than the 79,000 fish landings component of the 135,000 fish total ABC projection for 2018 in Amendment 28. Based on the current sector allocation ratio developed by the Council for red snapper of 28.07 percent commercial and 71.93 percent recreational, the total ACL is divided into a commercial ACL of 124,815 lb (56,615 kg), round weight, and a recreational ACL of 29,656 fish. The commercial sector's ACL is set in pounds of fish because the commercial sector reports landings in weight. Therefore, weight is a more accurate representation of commercial landings. In this proposed rule, for the commercial sector, one red snapper is equivalent to 9.71 lb (4.40 kg), round weight. ACLs for the recreational sector are specified in numbers of fish, because the Council determined that numbers of fish are a more reliable estimate for that sector than specifying the ACL in weight of fish. Because surveys that estimate recreational landings collect information on numbers of fish and convert those numbers to weights using biological samples that are sometimes limited, the Council believes that there can be uncertainty in estimates of recreational landings by weight.

To implement the limits on red snapper harvest described in Amendment 43, this proposed rule not only would amend the existing regulations to make the changes to the ACLs described above, but also would make other minor modifications to the existing regulations. Thus, the regulatory text of this proposed rule would implement several management measures in Amendment 43 that function as accountability measures (AMs) to constrain red snapper harvest to these ACLs. Specifically, new language in the regulatory text would set limits on commercial and recreational red snapper seasons by providing that recreational harvest begins on the second Friday in July, and that the recreational season consists of weekends only (Friday, Saturday, Sunday). Under Amendment 43 and the proposed rule's regulatory text, the length of the recreational fishing season would serve as the AM for the recreational sector. The length of the recreational red snapper season would be projected based on catch rate estimates from previous years, and the projected fishing season end-date would be announced in the Federal Register before the start of the season.

Under Amendment 43 and the proposed rule's regulatory text, the commercial season would begin each year on the second Monday in July. If commercial landings reach or are projected to reach the commercial ACL, then the commercial AM would close the sector for the remainder of that current fishing year. NMFS would monitor commercial landings in-season, and if commercial landings reach or are projected to reach the commercial ACL, then NMFS would file a notification with the Office of the Federal Register to close the commercial sector for red snapper for the remainder of the fishing year. In 2018, if the recreational and commercial fishing seasons do not open exactly on these dates in July as described, the respective seasons would open as close to these dates as possible.

In addition to setting sector ACLs and AMs for commercial and recreational harvest, this proposed rule would revise the temporal application of the current commercial trip limit of 75 lb (34 kg), gutted weight, and the recreational bag limit of 1 fish per person per day. In an effort to decrease regulatory discards (fish returned to the water because they are below the minimum size limit), no size limits would be implemented for either sector through this proposed rule.

NMFS notes that current regulations contain a severe weather provision with respect to modifying the commercial and recreational sector season dates (50 CFR 622.183(b)(5)(ii)). The Regional Administrator (RA) has the authority to modify the season opening and closing dates if severe weather conditions exist. The RA would determine when severe weather conditions exist, the duration of the severe weather conditions, and which geographic areas are deemed affected by severe weather conditions. If severe weather conditions exist or if NMFS determines the commercial or recreational ACLs were not harvested and a reopening of either or both sectors in the current fishing year would be possible, the RA would file a notification to that effect with the Office of the Federal Register, and include in that notification an announcement of any change in the red snapper commercial and recreational fishing seasons. The regulatory text of this proposed rule does not alter this existing authority.

The Council is currently developing additional amendments to the FMP that would consider other changes to red snapper management in the South Atlantic.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with Amendment 43, the FMP, the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866. NMFS expects this rule would have economic benefits because it would allow for commercial and recreational harvest of red snapper that would not otherwise be expected to occur in the absence of this action.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration (SBA) that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The factual basis for this determination follows.

A description of this proposed rule, why it is being considered, and the objectives of this proposed rule are contained in the preamble. The Magnuson-Stevens Act provides the statutory basis for this proposed rule.

This proposed rule would apply to all federally-permitted commercial vessels and recreational anglers that fish for or harvest red snapper in Federal waters of the South Atlantic. Although the proposed rule would apply to recreational anglers, including those that fish from charter vessels and headboats (for-hire vessels), it would not directly affect the business operations of for-hire vessels. For-hire vessels sell fishing services to recreational anglers. The proposed changes to red snapper management measures would not directly alter the services sold by these for-hire vessels. Any change in anglers' demand for these fishing services (and associated economic effects) as a result of the proposed rule would be secondary to any direct effect on anglers and, therefore, would be an indirect effect of the proposed rule. Because the effects on for-hire vessels would be indirect, they fall outside the scope of the RFA. Furthermore, for-hire captains and crew are allowed to retain red snapper under the recreational bag limit; however, they cannot sell these fish. As such, for-hire captains and crew would be directly affected only as recreational anglers. Recreational anglers who would be directly affected by this proposed rule are not considered small entities under the RFA, and are, therefore, outside the scope of this analysis. 5 U.S.C. 603. Small entities include “small businesses,” “small organizations,” and “small governmental jurisdictions.” 5 U.S.C. 601(6) and 601(3)-(5). Recreational anglers are not businesses, organizations, or governmental jurisdictions. In summary, only the impacts on commercial vessels will be discussed.

As of July 10, 2017, there were 544 valid or renewable Federal South Atlantic snapper-grouper unlimited permits and 114 valid or renewable 225-lb trip-limited permits. Each of these commercial permits is associated with an individual vessel. Data from the years of 2012 through 2016 were used for the analysis in Amendment 43, and these data provided the basis for the Council's decisions. On average, from 2012 through 2016, there were only 85 federally-permitted commercial vessels with reported landings of red snapper. Their average annual vessel-level revenue from all species for 2012 through 2016 was approximately $88,000 (2016 dollars). Because the Federal commercial red snapper seasons were very short or did not occur during 2012 through 2016, this proposed action would likely affect more vessels than just those that reported red snapper landings during that time. On average, 582 vessels reported landings of any snapper-grouper species from 2012 through 2016, and their average annual vessel-level revenue from all species was approximately $44,000 (2016 dollars). The maximum annual revenue from all species reported by a single one of these vessels from 2012 through 2016 was approximately $1.38 million (2016 dollars).

For RFA purposes only, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily engaged in commercial fishing (NAICS code 11411) is classified as a small business if independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $11 million for all its affiliated operations worldwide. All of the commercial vessels directly regulated by this proposed rule are believed to be small entities based on the NMFS size standard. No other small entities that would be directly affected by this action have been identified.

Under the current regulations, because combined total commercial and recreational landings and dead discards exceeded the ABC in 2017, there would be no commercial red snapper harvest allowed in 2018. Assuming commercial and recreational red snapper dead discard rates in 2018 and subsequent years remain stable or increase (which is likely as the stock rebuilds), under the current regulations these full-year commercial red snapper harvest closures would be expected to continue for the foreseeable future.

Amendment 43 would, however, allow for the commercial harvest of red snapper. It specifies a constant total ACL for red snapper equal to 42,510 fish. The proposed rule would set the commercial red snapper ACL at 124,815 lb (56,615 kg), round weight and the recreational ACL would be set at 29,656 fish. The proposed rule would be expected to increase total ex-vessel revenue by a range of $545,981 (2016 dollars) to $572,901 per year relative to the status quo (i.e., no commercial harvest). Dividing the total ex-vessel revenue per year by the total number of Federal commercial snapper-grouper permit holders, results in an average annual increase in ex-vessel revenue of $830 to $871 per vessel. Dividing the total ex-vessel revenue per year by the average number of commercial vessels that reported landings of any snapper-grouper species from 2012 through 2016, results in an increase in ex-vessel revenue of $938 to $984 per vessel. This would be a 2 percent increase in average annual vessel-level revenue. The annual commercial red snapper season would be expected to increase from 0 days to a range of 105 to 176 days, which would allow commercial vessels to supplement their harvests with red snapper for a substantial part of the fishing year. The economic benefits to each vessel would be expected to vary based on individual fishing practices; however, such distributional effects cannot be quantified with available data.

The information provided above supports a determination that this proposed rule would not have a significant adverse economic impact on a substantial number of small entities. Because this rule, if implemented, is not expected to have a significant adverse economic impact on any small entities, an initial regulatory flexibility analysis is not required and none has been prepared.

No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting, record-keeping, or other compliance requirements are introduced by this proposed rule. Accordingly, the Paperwork Reduction Act does not apply to this proposed rule.

For the reasons set out in the preamble, 50 CFR part 622 is proposed to be amended as follows: