Presubscribed Interexchange Carrier Charges, 12601-12605 [05-5058]
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12601
Federal Register / Vol. 70, No. 49 / Tuesday, March 15, 2005 / Rules and Regulations
59 et seq. Accordingly, the communities
will be suspended on the effective date
in the third column. As of that date,
flood insurance will no longer be
available in the community. However,
some of these communities may adopt
and submit the required documentation
of legally enforceable floodplain
management measures after this rule is
published but prior to the actual
suspension date. These communities
will not be suspended and will continue
their eligibility for the sale of insurance.
A notice withdrawing the suspension of
the communities will be published in
the Federal Register.
In addition, the Federal Emergency
Management Agency has identified the
special flood hazard areas in these
communities by publishing a Flood
Insurance Rate Map (FIRM). The date of
the FIRM if one has been published, is
indicated in the fourth column of the
table. No direct Federal financial
assistance (except assistance pursuant to
the Robert T. Stafford Disaster Relief
and Emergency Assistance Act not in
connection with a flood) may legally be
provided for construction or acquisition
of buildings in the identified special
flood hazard area of communities not
participating in the NFIP and identified
for more than a year, on the Federal
Emergency Management Agency’s
initial flood insurance map of the
community as having flood-prone areas
(section 202(a) of the Flood Disaster
Protection Act of 1973, 42 U.S.C.
4106(a), as amended). This prohibition
against certain types of Federal
assistance becomes effective for the
communities listed on the date shown
in the last column. The Administrator
finds that notice and public comment
under 5 U.S.C. 553(b) are impracticable
and unnecessary because communities
listed in this final rule have been
adequately notified.
Each community receives a 6-month,
90-day, and 30-day notification letter
addressed to the Chief Executive Officer
that the community will be suspended
unless the required floodplain
management measures are met prior to
the effective suspension date. Since
these notifications have been made, this
final rule may take effect within less
than 30 days.
National Environmental Policy Act.
This rule is categorically excluded from
the requirements of 44 CFR part 10,
Environmental Considerations. No
environmental impact assessment has
been prepared.
Regulatory Flexibility Act. The
Administrator has determined that this
rule is exempt from the requirements of
the Regulatory Flexibility Act because
the National Flood Insurance Act of
1968, as amended, 42 U.S.C. 4022,
prohibits flood insurance coverage
unless an appropriate public body
adopts adequate floodplain management
measures with effective enforcement
measures. The communities listed no
longer comply with the statutory
requirements, and after the effective
date, flood insurance will no longer be
available in the communities unless
they take remedial action.
Community
No.
State and location
Region IV
Kentucky:
Magoffin County, Unicorporated Areas
210158
Salyersville, City of, Magoffin County ...
210159
Regulatory Classification. This final
rule is not a significant regulatory action
under the criteria of section 3(f) of
Executive Order 12866 of September 30,
1993, Regulatory Planning and Review,
58 FR 51735.
Paperwork Reduction Act. This rule
does not involve any collection of
information for purposes of the
Paperwork Reduction Act, 44 U.S.C.
3501 et seq.
Executive Order 12612, Federalism.
This rule involves no policies that have
federalism implications under Executive
Order 12612, Federalism, October 26,
1987, 3 CFR, 1987 Comp.; p. 252.
Executive Order 12778, Civil Justice
Reform. This rule meets the applicable
standards of section 2(b)(2) of Executive
Order 12778, October 25, 1991, 56 FR
55195, 3 CFR, 1991 Comp.; p. 309.
List of Subjects in 44 CFR Part 64
Flood insurance, Floodplains.
Accordingly, 44 CFR part 64 is
amended as follows:
I
PART 64—[AMENDED]
1. The authority citation for part 64
continues to read as follows:
I
Authority: 42 U.S.C. 4001 et seq.;
Reorganization Plan No. 3 of 1978, 3 CFR,
1978 Comp.; p. 329; E.O. 12127, 44 FR 19367,
3 CFR, 1979 Comp.; p. 376.
§ 64.6
[Amended]
2. The tables published under the
authority of § 64.6 are amended as
follows:
I
Effective date authorization/cancellation of
sale of flood insurance in community
Current effective
map date
Date certain
Federal assist
ance no longer
available in special flood hazard
areas
December 18, 1978, Emerg; March 4,
1986, Reg; March 16, 2005, Susp.
July 8, 1975, Emerg; October 15, 1985,
Reg; March 16, 2005, Susp.
March 16, 2005
March 16, 2005.
......do* ..............
Do.*
*-do-=Ditto.
Code for reading third column: Emerg.-Emergency; Reg.-Regular; Susp.-Suspension.
David I. Maurstad,
Acting Mitigation Division Director,
Emergency Preparedness and Response
Directorate.
[FR Doc. 05–5052 Filed 3–14–05; 8:45 am]
FEDERAL COMMUNICATIONS
COMMISSION
BILLING CODE 9110–12–P
[CC Docket No. 02–53, FCC 05–32]
47 CFR Chapter I
Presubscribed Interexchange Carrier
Charges
Federal Communications
Commission.
AGENCY:
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ACTION:
Final rule.
SUMMARY: This document revises the
Commission’s presubscribed
interexchange carrier (PIC)-change
charge policies. PIC-change charges are
federally-tariffed charges imposed by
incumbent local exchange carriers on
end-user subscribers when these
subscribers change their long distance
carriers. The report and order requires
incumbent local exchange carriers to
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create separate PIC-change charges
based on the method used to process the
request. Based on cost information
submitted in the record of the
proceeding, the report and order adopts
safe harbors below which PIC change
charges will be considered reasonable.
These safe harbors are $1.25 for
electronically-processed PIC changes
and $5.50 for manually-processed PIC
changes.
DATES: Effective April 14, 2005.
FOR FURTHER INFORMATION CONTACT:
Jennifer McKee, Wireline Competition
Bureau, Pricing Policy Division, (202)
418–1530, jennifer.mckee@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Report
and Order in CC Docket No. 02–53
released on February 17, 2005. The full
text of this document is available on the
Commission’s Electronic Comment
Filing System Web site and for public
inspection during regular business
hours in the FCC Reference Center,
Room CY–A257, 445 Twelfth Street,
SW., Washington, DC 20554.
Paperwork Reduction Act Analysis
This document does not contain new
or modified information collection
requirements subject to the Paperwork
Reduction Act of 1995 (PRA), Public
Law 104–13. In addition, therefore, it
does not contain any new or modified
‘‘information collection burden for
small business concerns with fewer than
25 employees,’’ pursuant to the Small
Business Paperwork Relief Act of 2002,
Public Law 107–198. 44 U.S.C.
3506(c)(4).
Background
In this Report and Order, adopted
February 10, 2005 and released
February 17, 2005 in CC Docket No. 02–
53, FCC 05–32, the Commission revises
its policies regarding the charge
incumbent local exchange carriers
(LECs) impose on customers when the
customers change their long distance
service provider. For incumbent LECs,
these charges currently are subject to a
$5 safe harbor within which a PIC
change charge is considered reasonable.
Significant industry and market changes
have occurred since the implementation
of the $5 safe harbor in 1984; therefore,
the Commission initiated this
proceeding to reexamine the existing
safe harbor for incumbent LEC PIC
change charges. Based on the record in
this proceeding, the Commission
requires incumbent LECs to adopt
separate PIC change charges for changes
that are processed electronically and
manually. The Commission adopts a
safe harbor of $1.25 for electronically
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processed PIC changes, and a safe
harbor of $5.50 for manually processed
PIC changes.
Discussion
As a threshold matter, we consider
whether regulation of incumbent LEC
PIC change charges is necessary at the
current time. As discussed above,
incumbent LECs assess PIC change
charges on their end user customers that
switch long distance service providers.
Under the Commission’s existing
domestic common carrier regulations,
incumbent LECs generally are treated as
dominant carriers because the
Commission has found that these
carriers possess and are likely to be able
to exercise market power. While we do
believe that residential competition is
growing, competition is not yet so
ubiquitous to serve as a reliable
constraint on PIC change charge rates.
Thus, we find that, at this time, market
forces cannot be relied upon to limit
incumbent LEC PIC change charge rates.
PIC Change Charge Safe Harbors
We do not require incumbent LECs to
tariff PIC change charges based on
individual incumbent LEC actual costs.
Such a requirement would be unduly
burdensome, both to the incumbent
LECs that would now be required to
compile and submit detailed cost
information related to PIC changes, and
to the Commission, which would have
to expend scarce resources evaluating
the multiple cost submissions. Instead,
we find that adopting a safe harbor for
the incumbent LEC PIC change charge
has been a reasonable method of
regulating the charge in the past, and
use of this method continues to be a
reasonable practice going forward.
Under the safe harbor approach,
incumbent LECs may tariff PIC change
charge rates that are equal to or less than
the safe harbor without having to
provide detailed cost filings in support
of the rates. Incumbent LECs are free,
however, to submit cost showings if
their costs exceed the safe harbor limit.
We find that adoption of a safe harbor
in this instance provides a reasonable
proxy for incumbent LECs’ PIC change
costs, while allowing carriers the option
of foregoing the submission of cost
support if their rates are within the safe
harbor limits.
An examination of PIC change costs
reveals a substantial difference between
the costs of electronically processed PIC
changes and PIC changes that require
manual processing. The record in this
proceeding further confirms that the
costs of an electronically processed PIC
change are substantially lower than the
costs of PIC changes that must be
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processed manually. By allowing
carriers to impose a single, blended PIC
change charge, customers whose PIC
changes are processed through the less
costly electronic system are realizing no
benefit from the use of these more
efficient systems. They will be assessed
the same charge as a customer whose
PIC change is more complicated and
requires costly manual processing. With
no distinction in the rates between
electronically processed and manually
processed changes, long distance
carriers lack an incentive to invest in
the more efficient electronic systems, as
there is no competitive benefit to doing
so. Instead, we believe that both
customers and long distance providers
should reap the benefit of the long
distance providers’ investments in more
efficient electronic processing
capabilities. We therefore adopt separate
safe harbors for incumbent LEC PIC
changes that are processed manually
and electronically. Adopting a twotiered approach will provide an
incentive for long distance providers to
invest in electronic processing
capabilities to gain the competitive
advantage of lower incumbent LEC PIC
change charges for customers switching
to these long distance providers’
services.
We find that small and rural
incumbent LECs should be subject to
the same safe harbors for electronic and
manual processing applicable to larger
incumbent LECs. There is no evidence
on the record that the costs for
processing electronically submitted PIC
changes are greater for small and rural
incumbent LECs than for larger and
non-rural incumbent LECs. Therefore
we have no basis on which to establish
a separate electronic PIC change safe
harbor rate for these carriers. One carrier
submitted cursory cost information
regarding its costs to process manually
submitted PIC changes, but this
information from a single carrier was
not sufficient evidence on which to base
a separate small and rural incumbent
LEC manual PIC change charge safe
harbor. In any event, we note that, as
discussed below, we are raising the
current manual safe harbor rate for all
incumbent LECs, including small and
rural carriers. Finally, we note that prior
to our decision in this report and order
small and rural incumbent LECs have
been subject to the same $5.00 safe
harbor applicable to all other incumbent
LECs. No small or rural carrier has
submitted cost information seeking to
increase this $5.00 charge. As has been
the case since 1984, all carriers remain
free to submit cost studies to justify a
higher rate to the extent these
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companies’ costs exceed the safe
harbors.
We find that incumbent LECs without
electronic PIC change capabilities may
rely solely on a manual rate, subject to
the manual safe harbor. We do not
require any small or rural carrier to
implement electronic PIC change
processing systems if doing so would
not be economically rational. To the
extent small and rural incumbent LECs
have electronic PIC change processing
systems in place, we find that the
separate electronic PIC change rate will
provide an incentive for long distance
providers to use this less costly manner
of PIC change submission. Customers
selecting long distance providers that
employ electronic PIC change
processing will be charged the
incumbent LECs’ tariffed lower
electronic PIC change charge rates.
Costs Recovered in the PIC Change
Charge
We find that incumbent LECs should
not recover PIC freeze or third-party
verification (TPV) costs through the PIC
change charge. PIC freeze services are
optional services offered by LECs to
their customers. If LECs choose to offer
a PIC freeze service, they should recover
the costs from those customers
requesting and using the service. If LECs
are allowed to recover the costs of PIC
freezes through the PIC change charge,
customers that pay the PIC change
charge are paying for the PIC freeze
service for other customers. Customers
that do not subscribe to the PIC freeze
service are more likely to change their
long distance providers and to pay the
PIC change charge. It is unreasonable to
require these customers to pay the costs
of a PIC freeze service utilized by other
customers. Therefore, we find that the
costs associated with administering PIC
freeze services cannot be recovered
through the PIC change charge.
We also find that the costs of TPV
cannot be recovered through the PIC
change charge. LECs are not required to
conduct TPV under our rules unless a
customer is switching to the service of
the LECs’ long distance affiliates (or
from a competitive LEC to the LECs
themselves for local service). To the
extent TPV is used to verify a change to
a LEC-affiliated carrier, LECs should not
be allowed to recover these costs from
customers switching to competing long
distance providers. Instead, these costs
should be recovered by the LEC from its
affiliate. Similarly, LECs should not be
allowed to increase the costs of PIC
changes by including the costs of TPV
processes that are voluntarily
undertaken by the LECs. For example, a
cost study submitted by Verizon in the
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record of this proceeding demonstrates
that TPV costs represent approximately
12 percent of its manual processing
costs. Allowing LECs to inflate the PIC
change charge by recovering these
voluntarily incurred costs may reduce
customers’ willingness to switch long
distance providers, thereby hindering
competition. Therefore, we find that
incumbent LECs may not recover
voluntarily-incurred TPV costs through
the PIC change charge, and may recover
mandatorily-incurred TPV costs only
from customers that switch to the
incumbent LECs’ long distance
affiliates.
Some commenters also argue that
costs related to ‘‘slamming,’’ which is an
unauthorized change in a customer’s
long distance provider, should not be
recovered through the PIC change
charge. They contend that incumbent
LECs have no legitimate role in
investigating slamming complaints so
there are no costs to be recovered. These
commenters overlook the fact that
customers may not be aware of the
Commission’s slamming complaint
procedures and may contact the LECs
for information about the process.
Under the Commission’s rules, if a
customer notifies its LEC of an
unauthorized change of its long distance
provider, the LEC must notify both the
authorized and the unauthorized long
distance provider, and must also refer
the customer to the appropriate
regulatory authority for resolution of the
complaint. Incumbent LECs do incur
some small costs in carrying out these
duties. In Verizon’s cost study, for
example, slamming inquiry costs
represented only approximately $0.09
per PIC change, or approximately two
percent of the total costs included in
Verizon’s PIC change costs. Because
these costs are incurred legitimately by
the LECs as part of implementation of
customers’ PIC selections; because, as
represented by Verizon’s cost study,
these costs are slight; and because all
customers benefit directly or indirectly
from the LECs’ diligence in investigating
slamming complaints, we will allow
incumbent LECs to spread these costs
over all PIC change requests and recover
them through the PIC change charge.
We also find that incumbent LECs
may recover a reasonable percentage of
their common costs through the PIC
change charge. SBC and Verizon argue
that common costs, such as legal,
executive, marketing, and other costs,
are not incurred in relation to any
specific service, but are required for
LECs to provide all of the services they
offer, including the PIC change service.
Commenters have offered no
justification for treating the PIC change
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12603
service differently from other incumbent
LEC services with respect to the
inclusion of reasonable common costs.
Establishing Safe Harbor Rates
To set the incumbent LEC electronic
and manual PIC change charge safe
harbors, we look to the cost information
submitted in the record of this
proceeding. There are three cost studies
in the record: one filed by BellSouth in
support of a change to its tariffed PIC
change charge rate in November 2003;
one filed by Verizon on June 15, 2004,
in response to the Further Notice of
Proposed Rulemaking in this
proceeding; and one filed by SBC more
than four months after the record
closed, on November 4, 2004.
BellSouth’s cost information was not
promulgated in response to the issues
raised in this proceeding, and it does
not provide as much detail in certain
areas, such as PIC freeze costs, as does
Verizon’s cost study. Verizon’s cost
study provides the most detailed
analysis of the costs it includes in its
PIC change charge, including costs
associated with PIC freezes and the TPV
process. Commenters objecting to
Verizon’s cost study focus on costs that
should be excluded from the PIC change
charge and do not contest the actual
amounts of the costs. SBC’s cost study
was submitted after the record closed
and parties have not had an opportunity
to comment on it. Furthermore, SBC’s
cost study does not provide a detailed
analysis of the costs attributable to
electronically processed PIC changes.
We therefore rely on Verizon’s cost
study as the best record evidence to
establish revised safe harbor rates.
After removing costs that Verizon
identifies as associated with PIC freezes
and TPV, we adopt a safe harbor rate of
$1.25 for electronically processed PIC
changes and a safe harbor rate of $5.50
for manually processed PIC changes.
Verizon’s cost study on which we base
these safe harbor rates includes in its
electronically processed PIC change
costs the costs associated with
electronically submitted change
requests that ‘‘fall out’’ of the electronic
system and require some manual
handling. We therefore clarify that all
PIC change requests that are submitted
electronically by the long distance
carrier will result in the incumbent LEC
charging the end user the electronic PIC
change charge rate, regardless of
whether some manual processing is
required.
Incumbent LECs that process PIC
change requests through electronic and
manual methods must amend their
tariffs to reflect separate rates for
electronic and manual processing of PIC
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changes. If an incumbent LEC’s rates are
at or below these safe harbors, the
incumbent LEC is not required to file
cost support for the rates. If an
incumbent LEC wishes to demonstrate
costs in excess of the safe harbor rates,
it must file detailed cost support for its
proposed rates. If at the time it filed its
currently tariffed PIC change charge rate
an incumbent LEC relied on cost data
demonstrating that its costs are lower
than the new safe harbor rates, the
incumbent LEC may not increase its PIC
change charge rates unless it files new
cost support justifying the higher rates.
Multiple PIC Change Charges for
Simultaneous Changes in Services
Some commenters in the proceeding
argue that LECs should not be able to
assess multiple PIC change charges
when customers change both their PIC
and their intraLATA primary
interexchange carrier (LPIC) at the same
time. Two incumbent LEC commenters
confirm that, when the changes are
requested simultaneously, the costs are
equal to the costs of a single change.
Generally, incumbent LECs’ PIC change
charges are contained in their federal
tariffs and LPIC change charges are
contained in state tariffs. For purposes
of the federally-tariffed PIC change
charge, when customers change their
PICs in conjunction with changing their
LPICs, incumbent LECs should assess
half of the applicable federally-tariffed
PIC change charge. Carriers may recover
their remaining costs through the statetariffed LPIC change charges. We require
incumbent LECs to amend their federal
tariffs to include a rate that is 50 percent
of the manual PIC change charge rate,
and another rate that is 50 percent of the
electronic PIC change charge rate, and
the respective 50 percent rate will apply
when a customer requests a PIC change
simultaneously with an LPIC change.
Conclusion
As discussed above, we require all
incumbent LECs that process PIC
change requests through electronic and
manual methods to revise their tariffs to
include one rate for PIC changes that are
processed electronically and a separate
rate for PIC changes that are processed
manually. Rates that are within the safe
harbors of $1.25 for electronically
processed PIC changes and $5.50 for
manually processed PIC changes may be
filed without separate cost support.
Rates in excess of these safe harbors
must include appropriately detailed cost
support justifying the rates. Incumbent
LECs must also revise their tariffs to
reflect a rate that is equal to 50 percent
of the full PIC change charge rate when
a customer requests a PIC change in
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conjunction with an LPIC change. These
tariff revisions are to be filed on or
before April 14, 2005.
Procedural Matters
Final Regulatory Flexibility Analysis
As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA), 5 U.S.C. 603, an Initial
Regulatory Flexibility Analysis (IRFA)
was incorporated in the Notice of
Proposed Rulemaking, 67 FR 34665,
May 15, 2002, and the Further Notice of
Proposed Rulemaking, 69 FR 29913,
May 26, 2004. The Commission sought
written public comment on the
proposals in the Notice of Proposed
Rulemaking and Further Notice of
Proposed Rulemaking, including
comment on the IRFA. This present
Final Regulatory Flexibility Analysis
(FRFA) conforms to the RFA. 5 U.S.C.
604.
Need for, and Objectives of, the Report
and Order
PIC change charges are federally
tariffed charges imposed by LECs on
end user subscribers when these
subscribers change their presubscribed
long distance providers. The
Commission in 1984 established a safe
harbor of $5 for PIC change charges of
incumbent LECs, allowing carriers to set
rates at or below the $5 safe harbor
without the need for filing detailed cost
support for the rates. Significant
industry and market changes have
occurred since the implementation of
the $5 safe harbor in 1984; therefore, the
Commission initiated this proceeding to
reexamine the existing safe harbor for
incumbent LEC PIC change charges. As
discussed in paragraphs 0–0 of the
report and order, incumbent LECs are
required to adopt separate PIC change
charges for changes that are processed
electronically and manually. We adopt
a safe harbor of $1.25 for electronically
processed PIC changes, and a safe
harbor of $5.50 for manually processed
PIC changes. Also as discussed in
paragraph 0, incumbent LECs must
include in their federal tariffs a rate
equal to 50 percent of the full PIC
change charge rate when a customer
requests a PIC change in conjunction
with a change in its intraLATA
presubscribed interexchange carrier
(LPIC).
Summary of Significant Issues Raised by
Public Comments in Response to the
IRFA
There were no comments filed that
specifically addressed the rules and
policies proposed in the IRFA.
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Description and Estimate of the Number
of Small Entities to Which the Proposed
Rules Will Apply
The RFA directs agencies to provide
a description of, and, where feasible, an
estimate of the number of small entities
that may be affected by rules adopted
herein. 5 U.S.C. 604(a)(3). The RFA
generally defines the term ‘‘small
entity’’ as having the same meaning as
the terms ‘‘small business,’’ ‘‘small
organization,’’ and ‘‘small governmental
jurisdiction.’’ 5 U.S.C. 601(6). In
addition, the term ‘‘small business’’ has
the same meaning as the term ‘‘small
business concern’’ under the Small
Business Act. 5 U.S.C. 601(3)
(incorporating by reference the
definition of ‘‘small business concern’’
in the Small Business Act, 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the
statutory definition of a small business
applies ‘‘unless an agency, after
consultation with the Office of
Advocacy of the Small Business
Administration and after opportunity
for public comment, establishes one or
more definitions of such term which are
appropriate to the activities of the
agency and publishes such definition(s)
in the Federal Register.’’ A ‘‘small
business concern’’ is one that: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the Small Business
Administration (SBA). 15 U.S.C. 632.
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.’’ 15 U.S.C. 632. 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. Letter from
Jere W. Glover, Chief Counsel for
Advocacy, SBA, to William E. Kennard,
Chairman, FCC (May 27, 1999). The
Small Business Act contains a definition
of ‘‘small business concern,’’ which the
RFA incorporates into its own definition
of ‘‘small business.’’ See 15 U.S.C.
632(a); 5 U.S.C. 601(3). SBA regulations
interpret ‘‘small business concern’’ to
include the concept of dominance on a
national basis. 13 CFR 121.102(b). 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.
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Wired Telecommunications Carriers.
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. 13 CFR
121.201, NAICS code 517110.
According to Census Bureau data for
1997, there were 2,225 firms in this
category, total, that operated for the
entire year. Of this total, 2,201 firms had
employment of 999 or fewer employees,
and an additional 24 firms had
employment of 1,000 employees or
more. Thus, under this size standard,
the majority of firms can be considered
small.
Incumbent Local Exchange Carriers.
Neither the Commission nor the SBA
has developed a size standard for small
businesses specifically applicable to
incumbent local exchange carriers. The
closest applicable size standard under
SBA rules is for Wired
Telecommunications Carriers. Under
that size standard, such a business is
small if it has 1,500 or fewer employees.
13 CFR 121.201, NAICS code 517110.
According to Commission data, 1,310
carriers reported that they were
incumbent local exchange service
providers. Of these 1,310 carriers, an
estimated 1,025 have 1,500 or fewer
employees and 285 have more than
1,500 employees. Consequently, the
Commission estimates that most
incumbent local exchange carriers are
small entities that may be affected by
the rules and policies adopted herein.
Description of Projected Reporting,
Recordkeeping and Other Compliance
Requirements for Small Entities
All incumbent LECs, including those
that are small entities, are now required
to make revisions to their federal tariffs
to implement our revised PIC change
charge policies. To the extent their
federal tariffs do not already reflect this,
all incumbent LECs must file rates equal
to 50 percent of the full PIC change
charge rate when an end user customer
requests a PIC change in conjunction
with an LPIC change. Also, all
incumbent LEC that are able to process
PIC changes electronically must file
separate rates for PIC changes that are
processed manually and electronically.
If the rates are within the safe harbor
rates of $5.50 for manually processed
changes and $1.25 for electronically
processed changes, no cost support is
required. For rates in excess of the safe
harbor rates, incumbent LECs must file
detailed cost information justifying the
higher rates.
VerDate jul<14>2003
13:39 Mar 14, 2005
Jkt 205001
Steps Taken To Minimize Significant
Economic Impact on Small Entities, and
Significant Alternatives Considered
The RFA requires an agency to
describe any significant alternatives that
it has considered in developing its
approach, which may include the
following four alternatives (among
others): ‘‘(1) The establishment of
differing compliance or reporting
requirements or timetables that take into
account the resources available to small
entities; (2) the clarification,
consolidation, or simplification of
compliance or reporting requirements
under the rule for small entities; (3) the
use of performance rather than design
standards; and (4) an exemption from
coverage of the rule, or any part thereof,
for small entities.’’ 5 U.S.C. 603(c)(1)–
(c)(4).
Some commenters in this proceeding
argue that incumbent LECs should be
required to base their PIC change
charges on their individual costs. As
discussed in paragraph 10 of the report
and order, we reject this approach as
unduly burdensome on incumbent
LECs, including any that may be small
entities. Instead, adopting safe harbors
for PIC change charges allows
incumbent LECs to file rates without the
burden of filing detailed cost support.
Incumbent LECs still have the option of
filing cost support if their PIC change
costs exceed the safe harbor rates. As
discussed in paragraphs 9–10 of the
report and order, we decline to adopt a
separate safe harbor rate for small and
rural incumbent LECs. We note that
prior to our decision in this order small
and rural carriers have been subject to
the same $5.00 safe harbor applicable to
all other carriers. No small or rural
carrier has submitted cost information
seeking to increase this $5.00 charge. As
has been the case since 1984, all carriers
remain free to submit cost studies to
justify a higher rate to the extent these
companies’ costs exceed the safe
harbors. As discussed in paragraph 0,
we do not require any small or rural
carrier to implement electronic PIC
change processing systems if doing so
would not be economically rational.
Report to Congress
The Commission will send a copy of
this Report and Order, including this
FRFA, in a report to be sent to Congress
and the General Accounting Office
pursuant to the Congressional Review
Act. 5 U.S.C. 801(a)(1)(A). In addition,
the Commission will send a copy of the
Report and Order, including the FRFA,
to the Chief Counsel for Advocacy of the
SBA. A copy of the Report and Order
and FRFA (or summaries thereof) will
PO 00000
Frm 00023
Fmt 4700
Sfmt 4700
12605
also be published in the Federal
Register. 5 U.S.C. 604(b).
Ordering Clauses
Accordingly, it is ordered that,
pursuant to 4(i), 4(j), 201(b), 203(a), 205,
and 403 of the Communications Act of
1934, as amended, 47 U.S.C. 154(i),
154(j), 201(b), 203(a), 205, and 403, all
incumbent LECs that process PIC
change requests through electronic and
manual methods shall file revised rates,
to include one rate for PIC changes that
are processed electronically and a
separate rate for PIC changes that are
processed manually, and all incumbent
LECs shall file revised rates equal to 50
percent of the full PIC change charge
rate when a customer requests a PIC
change in conjunction with an LPIC
change, no later than April 14, 2005.
These rates shall be effective on fifteen
(15) days’ notice.
It is further ordered that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
this Report and Order, including the
Final Regulatory Flexibility Analysis, to
the Chief Counsel for Advocacy of the
Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05–5058 Filed 3–14–05; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 64
[CC Docket No. 94–129, CC Docket No. 00–
257; FCC 04–153]
2000 Biennial Review—Review of
Policies and Rules Concerning
Unauthorized Changes of Consumers’
Long Distance Carriers
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
SUMMARY: In this document, the
Commission addresses issues raised in
petitions for reconsideration filed
pursuant to the First Report and Order
and Fourth Report and Order, and
certain ancillary slamming issues
relating to switchless resellers that were
raised in CC Docket No. 94–129 and CC
Docket No. 00–257 that have not yet
been resolved.
DATES: Effective March 15, 2005.
ADDRESSES: Federal Communications
Commission, 445 12th Street, SW.,
Washington, DC 20554.
E:\FR\FM\15MRR1.SGM
15MRR1
Agencies
[Federal Register Volume 70, Number 49 (Tuesday, March 15, 2005)]
[Rules and Regulations]
[Pages 12601-12605]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-5058]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Chapter I
[CC Docket No. 02-53, FCC 05-32]
Presubscribed Interexchange Carrier Charges
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document revises the Commission's presubscribed
interexchange carrier (PIC)-change charge policies. PIC-change charges
are federally-tariffed charges imposed by incumbent local exchange
carriers on end-user subscribers when these subscribers change their
long distance carriers. The report and order requires incumbent local
exchange carriers to
[[Page 12602]]
create separate PIC-change charges based on the method used to process
the request. Based on cost information submitted in the record of the
proceeding, the report and order adopts safe harbors below which PIC
change charges will be considered reasonable. These safe harbors are
$1.25 for electronically-processed PIC changes and $5.50 for manually-
processed PIC changes.
DATES: Effective April 14, 2005.
FOR FURTHER INFORMATION CONTACT: Jennifer McKee, Wireline Competition
Bureau, Pricing Policy Division, (202) 418-1530,
jennifer.mckee@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order in CC Docket No. 02-53 released on February 17, 2005. The
full text of this document is available on the Commission's Electronic
Comment Filing System Web site and for public inspection during regular
business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth
Street, SW., Washington, DC 20554.
Paperwork Reduction Act Analysis
This document does not contain new or modified information
collection requirements subject to the Paperwork Reduction Act of 1995
(PRA), Public Law 104-13. In addition, therefore, it does not contain
any new or modified ``information collection burden for small business
concerns with fewer than 25 employees,'' pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198. 44 U.S.C. 3506(c)(4).
Background
In this Report and Order, adopted February 10, 2005 and released
February 17, 2005 in CC Docket No. 02-53, FCC 05-32, the Commission
revises its policies regarding the charge incumbent local exchange
carriers (LECs) impose on customers when the customers change their
long distance service provider. For incumbent LECs, these charges
currently are subject to a $5 safe harbor within which a PIC change
charge is considered reasonable. Significant industry and market
changes have occurred since the implementation of the $5 safe harbor in
1984; therefore, the Commission initiated this proceeding to reexamine
the existing safe harbor for incumbent LEC PIC change charges. Based on
the record in this proceeding, the Commission requires incumbent LECs
to adopt separate PIC change charges for changes that are processed
electronically and manually. The Commission adopts a safe harbor of
$1.25 for electronically processed PIC changes, and a safe harbor of
$5.50 for manually processed PIC changes.
Discussion
As a threshold matter, we consider whether regulation of incumbent
LEC PIC change charges is necessary at the current time. As discussed
above, incumbent LECs assess PIC change charges on their end user
customers that switch long distance service providers. Under the
Commission's existing domestic common carrier regulations, incumbent
LECs generally are treated as dominant carriers because the Commission
has found that these carriers possess and are likely to be able to
exercise market power. While we do believe that residential competition
is growing, competition is not yet so ubiquitous to serve as a reliable
constraint on PIC change charge rates. Thus, we find that, at this
time, market forces cannot be relied upon to limit incumbent LEC PIC
change charge rates.
PIC Change Charge Safe Harbors
We do not require incumbent LECs to tariff PIC change charges based
on individual incumbent LEC actual costs. Such a requirement would be
unduly burdensome, both to the incumbent LECs that would now be
required to compile and submit detailed cost information related to PIC
changes, and to the Commission, which would have to expend scarce
resources evaluating the multiple cost submissions. Instead, we find
that adopting a safe harbor for the incumbent LEC PIC change charge has
been a reasonable method of regulating the charge in the past, and use
of this method continues to be a reasonable practice going forward.
Under the safe harbor approach, incumbent LECs may tariff PIC change
charge rates that are equal to or less than the safe harbor without
having to provide detailed cost filings in support of the rates.
Incumbent LECs are free, however, to submit cost showings if their
costs exceed the safe harbor limit. We find that adoption of a safe
harbor in this instance provides a reasonable proxy for incumbent LECs'
PIC change costs, while allowing carriers the option of foregoing the
submission of cost support if their rates are within the safe harbor
limits.
An examination of PIC change costs reveals a substantial difference
between the costs of electronically processed PIC changes and PIC
changes that require manual processing. The record in this proceeding
further confirms that the costs of an electronically processed PIC
change are substantially lower than the costs of PIC changes that must
be processed manually. By allowing carriers to impose a single, blended
PIC change charge, customers whose PIC changes are processed through
the less costly electronic system are realizing no benefit from the use
of these more efficient systems. They will be assessed the same charge
as a customer whose PIC change is more complicated and requires costly
manual processing. With no distinction in the rates between
electronically processed and manually processed changes, long distance
carriers lack an incentive to invest in the more efficient electronic
systems, as there is no competitive benefit to doing so. Instead, we
believe that both customers and long distance providers should reap the
benefit of the long distance providers' investments in more efficient
electronic processing capabilities. We therefore adopt separate safe
harbors for incumbent LEC PIC changes that are processed manually and
electronically. Adopting a two-tiered approach will provide an
incentive for long distance providers to invest in electronic
processing capabilities to gain the competitive advantage of lower
incumbent LEC PIC change charges for customers switching to these long
distance providers' services.
We find that small and rural incumbent LECs should be subject to
the same safe harbors for electronic and manual processing applicable
to larger incumbent LECs. There is no evidence on the record that the
costs for processing electronically submitted PIC changes are greater
for small and rural incumbent LECs than for larger and non-rural
incumbent LECs. Therefore we have no basis on which to establish a
separate electronic PIC change safe harbor rate for these carriers. One
carrier submitted cursory cost information regarding its costs to
process manually submitted PIC changes, but this information from a
single carrier was not sufficient evidence on which to base a separate
small and rural incumbent LEC manual PIC change charge safe harbor. In
any event, we note that, as discussed below, we are raising the current
manual safe harbor rate for all incumbent LECs, including small and
rural carriers. Finally, we note that prior to our decision in this
report and order small and rural incumbent LECs have been subject to
the same $5.00 safe harbor applicable to all other incumbent LECs. No
small or rural carrier has submitted cost information seeking to
increase this $5.00 charge. As has been the case since 1984, all
carriers remain free to submit cost studies to justify a higher rate to
the extent these
[[Page 12603]]
companies' costs exceed the safe harbors.
We find that incumbent LECs without electronic PIC change
capabilities may rely solely on a manual rate, subject to the manual
safe harbor. We do not require any small or rural carrier to implement
electronic PIC change processing systems if doing so would not be
economically rational. To the extent small and rural incumbent LECs
have electronic PIC change processing systems in place, we find that
the separate electronic PIC change rate will provide an incentive for
long distance providers to use this less costly manner of PIC change
submission. Customers selecting long distance providers that employ
electronic PIC change processing will be charged the incumbent LECs'
tariffed lower electronic PIC change charge rates.
Costs Recovered in the PIC Change Charge
We find that incumbent LECs should not recover PIC freeze or third-
party verification (TPV) costs through the PIC change charge. PIC
freeze services are optional services offered by LECs to their
customers. If LECs choose to offer a PIC freeze service, they should
recover the costs from those customers requesting and using the
service. If LECs are allowed to recover the costs of PIC freezes
through the PIC change charge, customers that pay the PIC change charge
are paying for the PIC freeze service for other customers. Customers
that do not subscribe to the PIC freeze service are more likely to
change their long distance providers and to pay the PIC change charge.
It is unreasonable to require these customers to pay the costs of a PIC
freeze service utilized by other customers. Therefore, we find that the
costs associated with administering PIC freeze services cannot be
recovered through the PIC change charge.
We also find that the costs of TPV cannot be recovered through the
PIC change charge. LECs are not required to conduct TPV under our rules
unless a customer is switching to the service of the LECs' long
distance affiliates (or from a competitive LEC to the LECs themselves
for local service). To the extent TPV is used to verify a change to a
LEC-affiliated carrier, LECs should not be allowed to recover these
costs from customers switching to competing long distance providers.
Instead, these costs should be recovered by the LEC from its affiliate.
Similarly, LECs should not be allowed to increase the costs of PIC
changes by including the costs of TPV processes that are voluntarily
undertaken by the LECs. For example, a cost study submitted by Verizon
in the record of this proceeding demonstrates that TPV costs represent
approximately 12 percent of its manual processing costs. Allowing LECs
to inflate the PIC change charge by recovering these voluntarily
incurred costs may reduce customers' willingness to switch long
distance providers, thereby hindering competition. Therefore, we find
that incumbent LECs may not recover voluntarily-incurred TPV costs
through the PIC change charge, and may recover mandatorily-incurred TPV
costs only from customers that switch to the incumbent LECs' long
distance affiliates.
Some commenters also argue that costs related to ``slamming,''
which is an unauthorized change in a customer's long distance provider,
should not be recovered through the PIC change charge. They contend
that incumbent LECs have no legitimate role in investigating slamming
complaints so there are no costs to be recovered. These commenters
overlook the fact that customers may not be aware of the Commission's
slamming complaint procedures and may contact the LECs for information
about the process. Under the Commission's rules, if a customer notifies
its LEC of an unauthorized change of its long distance provider, the
LEC must notify both the authorized and the unauthorized long distance
provider, and must also refer the customer to the appropriate
regulatory authority for resolution of the complaint. Incumbent LECs do
incur some small costs in carrying out these duties. In Verizon's cost
study, for example, slamming inquiry costs represented only
approximately $0.09 per PIC change, or approximately two percent of the
total costs included in Verizon's PIC change costs. Because these costs
are incurred legitimately by the LECs as part of implementation of
customers' PIC selections; because, as represented by Verizon's cost
study, these costs are slight; and because all customers benefit
directly or indirectly from the LECs' diligence in investigating
slamming complaints, we will allow incumbent LECs to spread these costs
over all PIC change requests and recover them through the PIC change
charge.
We also find that incumbent LECs may recover a reasonable
percentage of their common costs through the PIC change charge. SBC and
Verizon argue that common costs, such as legal, executive, marketing,
and other costs, are not incurred in relation to any specific service,
but are required for LECs to provide all of the services they offer,
including the PIC change service. Commenters have offered no
justification for treating the PIC change service differently from
other incumbent LEC services with respect to the inclusion of
reasonable common costs.
Establishing Safe Harbor Rates
To set the incumbent LEC electronic and manual PIC change charge
safe harbors, we look to the cost information submitted in the record
of this proceeding. There are three cost studies in the record: one
filed by BellSouth in support of a change to its tariffed PIC change
charge rate in November 2003; one filed by Verizon on June 15, 2004, in
response to the Further Notice of Proposed Rulemaking in this
proceeding; and one filed by SBC more than four months after the record
closed, on November 4, 2004. BellSouth's cost information was not
promulgated in response to the issues raised in this proceeding, and it
does not provide as much detail in certain areas, such as PIC freeze
costs, as does Verizon's cost study. Verizon's cost study provides the
most detailed analysis of the costs it includes in its PIC change
charge, including costs associated with PIC freezes and the TPV
process. Commenters objecting to Verizon's cost study focus on costs
that should be excluded from the PIC change charge and do not contest
the actual amounts of the costs. SBC's cost study was submitted after
the record closed and parties have not had an opportunity to comment on
it. Furthermore, SBC's cost study does not provide a detailed analysis
of the costs attributable to electronically processed PIC changes. We
therefore rely on Verizon's cost study as the best record evidence to
establish revised safe harbor rates.
After removing costs that Verizon identifies as associated with PIC
freezes and TPV, we adopt a safe harbor rate of $1.25 for
electronically processed PIC changes and a safe harbor rate of $5.50
for manually processed PIC changes. Verizon's cost study on which we
base these safe harbor rates includes in its electronically processed
PIC change costs the costs associated with electronically submitted
change requests that ``fall out'' of the electronic system and require
some manual handling. We therefore clarify that all PIC change requests
that are submitted electronically by the long distance carrier will
result in the incumbent LEC charging the end user the electronic PIC
change charge rate, regardless of whether some manual processing is
required.
Incumbent LECs that process PIC change requests through electronic
and manual methods must amend their tariffs to reflect separate rates
for electronic and manual processing of PIC
[[Page 12604]]
changes. If an incumbent LEC's rates are at or below these safe
harbors, the incumbent LEC is not required to file cost support for the
rates. If an incumbent LEC wishes to demonstrate costs in excess of the
safe harbor rates, it must file detailed cost support for its proposed
rates. If at the time it filed its currently tariffed PIC change charge
rate an incumbent LEC relied on cost data demonstrating that its costs
are lower than the new safe harbor rates, the incumbent LEC may not
increase its PIC change charge rates unless it files new cost support
justifying the higher rates.
Multiple PIC Change Charges for Simultaneous Changes in Services
Some commenters in the proceeding argue that LECs should not be
able to assess multiple PIC change charges when customers change both
their PIC and their intraLATA primary interexchange carrier (LPIC) at
the same time. Two incumbent LEC commenters confirm that, when the
changes are requested simultaneously, the costs are equal to the costs
of a single change. Generally, incumbent LECs' PIC change charges are
contained in their federal tariffs and LPIC change charges are
contained in state tariffs. For purposes of the federally-tariffed PIC
change charge, when customers change their PICs in conjunction with
changing their LPICs, incumbent LECs should assess half of the
applicable federally-tariffed PIC change charge. Carriers may recover
their remaining costs through the state-tariffed LPIC change charges.
We require incumbent LECs to amend their federal tariffs to include a
rate that is 50 percent of the manual PIC change charge rate, and
another rate that is 50 percent of the electronic PIC change charge
rate, and the respective 50 percent rate will apply when a customer
requests a PIC change simultaneously with an LPIC change.
Conclusion
As discussed above, we require all incumbent LECs that process PIC
change requests through electronic and manual methods to revise their
tariffs to include one rate for PIC changes that are processed
electronically and a separate rate for PIC changes that are processed
manually. Rates that are within the safe harbors of $1.25 for
electronically processed PIC changes and $5.50 for manually processed
PIC changes may be filed without separate cost support. Rates in excess
of these safe harbors must include appropriately detailed cost support
justifying the rates. Incumbent LECs must also revise their tariffs to
reflect a rate that is equal to 50 percent of the full PIC change
charge rate when a customer requests a PIC change in conjunction with
an LPIC change. These tariff revisions are to be filed on or before
April 14, 2005.
Procedural Matters
Final Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act of 1980, as amended
(RFA), 5 U.S.C. 603, an Initial Regulatory Flexibility Analysis (IRFA)
was incorporated in the Notice of Proposed Rulemaking, 67 FR 34665, May
15, 2002, and the Further Notice of Proposed Rulemaking, 69 FR 29913,
May 26, 2004. The Commission sought written public comment on the
proposals in the Notice of Proposed Rulemaking and Further Notice of
Proposed Rulemaking, including comment on the IRFA. This present Final
Regulatory Flexibility Analysis (FRFA) conforms to the RFA. 5 U.S.C.
604.
Need for, and Objectives of, the Report and Order
PIC change charges are federally tariffed charges imposed by LECs
on end user subscribers when these subscribers change their
presubscribed long distance providers. The Commission in 1984
established a safe harbor of $5 for PIC change charges of incumbent
LECs, allowing carriers to set rates at or below the $5 safe harbor
without the need for filing detailed cost support for the rates.
Significant industry and market changes have occurred since the
implementation of the $5 safe harbor in 1984; therefore, the Commission
initiated this proceeding to reexamine the existing safe harbor for
incumbent LEC PIC change charges. As discussed in paragraphs 0-0 of the
report and order, incumbent LECs are required to adopt separate PIC
change charges for changes that are processed electronically and
manually. We adopt a safe harbor of $1.25 for electronically processed
PIC changes, and a safe harbor of $5.50 for manually processed PIC
changes. Also as discussed in paragraph 0, incumbent LECs must include
in their federal tariffs a rate equal to 50 percent of the full PIC
change charge rate when a customer requests a PIC change in conjunction
with a change in its intraLATA presubscribed interexchange carrier
(LPIC).
Summary of Significant Issues Raised by Public Comments in Response to
the IRFA
There were no comments filed that specifically addressed the rules
and policies proposed in the IRFA.
Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply
The RFA directs agencies to provide a description of, and, where
feasible, an estimate of the number of small entities that may be
affected by rules adopted herein. 5 U.S.C. 604(a)(3). The RFA generally
defines the term ``small entity'' as having the same meaning as the
terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' 5 U.S.C. 601(6). In addition, the term
``small business'' has the same meaning as the term ``small business
concern'' under the Small Business Act. 5 U.S.C. 601(3) (incorporating
by reference the definition of ``small business concern'' in the Small
Business Act, 15 U.S.C. 632). Pursuant to 5 U.S.C. 601(3), the
statutory definition of a small business applies ``unless an agency,
after consultation with the Office of Advocacy of the Small Business
Administration and after opportunity for public comment, establishes
one or more definitions of such term which are appropriate to the
activities of the agency and publishes such definition(s) in the
Federal Register.'' A ``small business concern'' is one that: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
Small Business Administration (SBA). 15 U.S.C. 632.
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.'' 15 U.S.C. 632. 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. Letter from Jere W. Glover,
Chief Counsel for Advocacy, SBA, to William E. Kennard, Chairman, FCC
(May 27, 1999). The Small Business Act contains a definition of ``small
business concern,'' which the RFA incorporates into its own definition
of ``small business.'' See 15 U.S.C. 632(a); 5 U.S.C. 601(3). SBA
regulations interpret ``small business concern'' to include the concept
of dominance on a national basis. 13 CFR 121.102(b). 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.
[[Page 12605]]
Wired Telecommunications Carriers. 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. 13 CFR
121.201, NAICS code 517110. According to Census Bureau data for 1997,
there were 2,225 firms in this category, total, that operated for the
entire year. Of this total, 2,201 firms had employment of 999 or fewer
employees, and an additional 24 firms had employment of 1,000 employees
or more. Thus, under this size standard, the majority of firms can be
considered small.
Incumbent Local Exchange Carriers. Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to incumbent local exchange carriers. The closest applicable
size standard under SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees. 13 CFR 121.201, NAICS code 517110. According to
Commission data, 1,310 carriers reported that they were incumbent local
exchange service providers. Of these 1,310 carriers, an estimated 1,025
have 1,500 or fewer employees and 285 have more than 1,500 employees.
Consequently, the Commission estimates that most incumbent local
exchange carriers are small entities that may be affected by the rules
and policies adopted herein.
Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements for Small Entities
All incumbent LECs, including those that are small entities, are
now required to make revisions to their federal tariffs to implement
our revised PIC change charge policies. To the extent their federal
tariffs do not already reflect this, all incumbent LECs must file rates
equal to 50 percent of the full PIC change charge rate when an end user
customer requests a PIC change in conjunction with an LPIC change.
Also, all incumbent LEC that are able to process PIC changes
electronically must file separate rates for PIC changes that are
processed manually and electronically. If the rates are within the safe
harbor rates of $5.50 for manually processed changes and $1.25 for
electronically processed changes, no cost support is required. For
rates in excess of the safe harbor rates, incumbent LECs must file
detailed cost information justifying the higher rates.
Steps Taken To Minimize Significant Economic Impact on Small Entities,
and Significant Alternatives Considered
The RFA requires an agency to describe any significant alternatives
that it has considered in developing its approach, which may include
the following four alternatives (among others): ``(1) The establishment
of differing compliance or reporting requirements or timetables that
take into account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use
of performance rather than design standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities.'' 5
U.S.C. 603(c)(1)-(c)(4).
Some commenters in this proceeding argue that incumbent LECs should
be required to base their PIC change charges on their individual costs.
As discussed in paragraph 10 of the report and order, we reject this
approach as unduly burdensome on incumbent LECs, including any that may
be small entities. Instead, adopting safe harbors for PIC change
charges allows incumbent LECs to file rates without the burden of
filing detailed cost support. Incumbent LECs still have the option of
filing cost support if their PIC change costs exceed the safe harbor
rates. As discussed in paragraphs 9-10 of the report and order, we
decline to adopt a separate safe harbor rate for small and rural
incumbent LECs. We note that prior to our decision in this order small
and rural carriers have been subject to the same $5.00 safe harbor
applicable to all other carriers. No small or rural carrier has
submitted cost information seeking to increase this $5.00 charge. As
has been the case since 1984, all carriers remain free to submit cost
studies to justify a higher rate to the extent these companies' costs
exceed the safe harbors. As discussed in paragraph 0, we do not require
any small or rural carrier to implement electronic PIC change
processing systems if doing so would not be economically rational.
Report to Congress
The Commission will send a copy of this Report and Order, including
this FRFA, in a report to be sent to Congress and the General
Accounting Office pursuant to the Congressional Review Act. 5 U.S.C.
801(a)(1)(A). In addition, the Commission will send a copy of the
Report and Order, including the FRFA, to the Chief Counsel for Advocacy
of the SBA. A copy of the Report and Order and FRFA (or summaries
thereof) will also be published in the Federal Register. 5 U.S.C.
604(b).
Ordering Clauses
Accordingly, it is ordered that, pursuant to 4(i), 4(j), 201(b),
203(a), 205, and 403 of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), 154(j), 201(b), 203(a), 205, and 403, all incumbent LECs
that process PIC change requests through electronic and manual methods
shall file revised rates, to include one rate for PIC changes that are
processed electronically and a separate rate for PIC changes that are
processed manually, and all incumbent LECs shall file revised rates
equal to 50 percent of the full PIC change charge rate when a customer
requests a PIC change in conjunction with an LPIC change, no later than
April 14, 2005. These rates shall be effective on fifteen (15) days'
notice.
It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05-5058 Filed 3-14-05; 8:45 am]
BILLING CODE 6712-01-P