Consumer Protection in the Broadband Era, 60259-60271 [05-20831]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 70, Number 199 (Monday, October 17, 2005)]
[Proposed Rules]
[Pages 60259-60271]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-20831]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 63 and 64

[WC Docket No. 05-271; FCC 05-150]


Consumer Protection in the Broadband Era

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Communications Commission (Commission) initiates 
this rulemaking to explore whether regulations we would adopt pursuant 
to the Commission's ancillary jurisdiction under Title I of the 
Communications Act (Act) should apply to broadband Internet access 
service, regardless of the underlying technology providers use to offer 
the service. The rulemaking seeks comment on whether the imposition of 
regulations in the areas of consumer privacy, unauthorized changes to 
service, truth-in-billing, network outage reporting, discontinuance of 
service, rate averaging requirements, and the corresponding ability of 
consumers to take advantage of Commission avenues for resolution of 
these consumer protection issues, is desirable and necessary as a 
matter of public policy, or whether we should rely on market forces to 
address some or all of the areas listed. The rulemaking also explores 
whether there are other areas of consumer protection not listed above 
for which the Commission should impose regulations. Overall, this 
rulemaking will determine whether any non-economic regulatory 
requirements are necessary to ensure that consumer protection needs are 
met by all providers of broadband Internet access service.

DATES: Comments are due on or before January 17, 2006, and reply 
comments are due on or before March 1, 2006.

ADDRESSES: You may submit comments, identified by WC Docket No. 05-271, 
by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: https://www.fcc.gov. Follow the 
instructions for submitting comments on https://www.fcc.gov/cgb/ecfs/.
     E-mail: ecfs@fcc.gov, and include the following words in 
the body of the message, ``get form.'' A sample form and directions 
will be sent in response.
     Mail: Federal Communications Commission, 445 12th Street, 
SW., Washington. DC 20554.
     Hand Delivery/Courier: 236 Massachusetts Avenue, NE., 
Suite 110, Washington, DC 20002.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to https://www.fcc.gov/cgb/ecfs/, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.fcc.gov/cgb/ecfs/.

FOR FURTHER INFORMATION CONTACT: William Kehoe, Senior Attorney-
Advisor, Competition Policy Division, Wireline Competition Bureau, at 
(202) 418-1580.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking in WC Docket No. 05-271, FCC 05-150, adopted 
August 5, 2005, and released September 23, 2005. The complete text of 
this NPRM is available for inspection and copying during normal 
business hours in the FCC Reference Information Center, Portals II, 445 
12th Street, SW., Room CY-A257, Washington, DC 20554. This document may 
also be purchased from the Commission's duplicating contractor, Best 
Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554, telephone (800) 378-3160 or (202) 863-2893, 
facsimile (202) 863-2898, or via e-mail at www.bcpiweb.com. It is also 
available on the Commission's Web site at https://www.fcc.gov.

Public Participation

    Comments may be filed using: (1) The Commission's Electronic 
Comment Filing System (ECFS), (2) the Federal Government's eRulemaking 
Portal, or (3) by filing paper copies. See Electronic Filing of 
Documents in Rulemaking Proceedings, 63 FR 24121 (May 1, 1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking Portal: https://www.regulations.gov. Filers 
should follow the instructions provided on the Web site for submitting 
comments.
     For ECFS filers, filers must transmit one electronic copy 
of the comments for the docket number referenced in the caption. In 
completing the transmittal screen, filers should include their full

[[Page 60260]]

name, U.S. Postal Service mailing address, and the applicable docket or 
rulemaking number. Parties may also submit an electronic comment by 
Internet e-mail. To get filing instructions, filers should send an e-
mail to ecfs@fcc.gov, and include the following words in the body of 
the message, ``get form.'' A sample form and directions will be sent in 
response.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail (although we continue to experience delays in receiving U.S. 
Postal Service mail). All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
    All filings must be addressed to the Commission's Secretary, 
Marlene H. Dortch, Office of the Secretary, Federal Communications 
Commission, 445 12th Street, SW., Washington, DC 20554. Parties should 
also send a copy of their filings to Janice Myles, Competition Policy 
Division, Wireline Competition Bureau, Federal Communications 
Commission, Room 5-C140, 445 12th Street, SW., Washington, DC 20554, or 
by e-mail to janice.myles@fcc.gov. Parties shall also serve one copy 
with the Commission's copy contractor, Best Copy and Printing, Inc. 
(BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 
20554, (202) 488-5300, or via e-mail to fcc@bcpiweb.com.

Synopsis of the Further Notice of Proposed Rulemaking

    1. In this Notice of Proposed Rulemaking (NPRM), we seek comment on 
the need for any non-economic regulatory requirements necessary to 
ensure consumer protection needs are met by all providers of broadband 
Internet access service, regardless of underlying technology. This 
includes, but is not limited to, facilities-based providers of wireline 
broadband Internet access service. We conclude, in the Report and Order 
accompanying the NPRM, that wireline broadband Internet access service 
is an information service under the Act.
    2. Consumers' privacy needs are no less important when consumers 
communicate over and use broadband Internet access than when they rely 
on telecommunications services. For example, a consumer may have 
questions about whether a broadband Internet access service provider 
will treat his or her account and usage information as confidential, or 
whether the provider reserves the right to use account information for 
marketing and other purposes. Section 222 of the Act establishes the 
regulatory framework governing telecommunications carriers' use and 
disclosure of CPNI and other customer information obtained by those 
carriers in their ``provision of a telecommunications service.'' That 
section requires, in general, that telecommunications carriers use or 
disclose CPNI only in the provision of the telecommunications service 
from which the CPNI is derived, or in the provision of services 
necessary to, or used in, the provision of such telecommunications 
services.
    3.We seek comment on whether we should extend privacy requirements 
similar to the Act's CPNI requirements to providers of broadband 
Internet access services. For example, should we adopt rules under our 
Title I authority that forbid broadband Internet access providers from 
disclosing, without their customers' approval, information about their 
customers that they learn through the provision of their broadband 
Internet access service? We seek comment on what sort of customer 
proprietary information broadband Internet access providers possess, 
e.g., information about consumers' service plans, installed equipment, 
or patterns of Internet access use. We note that long before Congress 
enacted section 222 of the Act, the Commission had recognized the need 
for privacy requirements associated with the provision of enhanced 
services and had adopted CPNI-related requirements in conjunction with 
other Computer Inquiry obligations.
    4. Section 258 of the Act prohibits telecommunications carriers 
from submitting or executing an unauthorized change in a subscriber's 
selection of a provider of telephone exchange service or telephone toll 
service, a practice commonly known as ``slamming.'' In a series of 
orders, the Commission adopted various rules to implement section 258, 
and concluded that state authorities should have primary responsibility 
for administering the rules. By providing for state administration of 
slamming rules, the Commission recognized that state authorities are 
particularly well-equipped to handle such complaints because states are 
close to consumers and are familiar with trends in their regions. The 
Commission also recognized, however, that all states may not have the 
resources available to handle slamming complaints. Accordingly, the 
Commission's rules allow consumers in states that do not ``opt-in'' to 
administer the slamming rules to file slamming complaints with the 
Commission.
    5. We seek comment on whether we should exercise our Title I 
authority to impose similar requirements on providers of broadband 
Internet access service. Commenters should explain in what 
circumstances subscribers to broadband Internet access could get 
``slammed.'' Is the provisioning process for broadband Internet access 
service such that an unauthorized change in provider is more likely in 
situations where the provider relies on third-party broadband 
transmission facilities?
    6. The Commission has adopted truth-in-billing rules to ensure that 
consumers receive accurate, meaningful information on their 
telecommunications bills that will allow consumers to better understand 
their bills, compare service offerings, and thereby promote a more 
efficient, competitive marketplace. In general, the Commission's rules 
require that a telecommunication carrier's bill must: (1) Be 
accompanied by a brief, clear, non-misleading, plain language 
description of the service or services rendered; (2) identify the 
service provider associated with each charge; (3) clearly and 
conspicuously identify any change in service provider; (4) identify 
those charges for which failure to pay will not result in disconnection 
of basic local service; and (5) provide a toll-free number for 
consumers to inquire or dispute any charges. The Commission's rules on 
truth-in-billing are designed to reduce slamming, cramming (which is 
the practice of

[[Page 60261]]

placing unauthorized, misleading, or deceptive charges on a 
telecommunications bill and is most likely to occur when a carrier does 
not clearly or accurately describe all of the relevant charges on the 
consumer's bill), and other telecommunications fraud by setting 
standards for accuracy on bills for telecommunications service.
    7. We seek comment on whether we should exercise our Title I 
authority to impose requirements on broadband Internet access service 
providers that are similar to our truth-in-billing requirements or are 
otherwise geared toward reducing slamming, cramming, or other types of 
telecommunications-related fraud. For example, during 2005, the 
Commission's Consumer and Governmental Affairs Bureau has received 
complaints about the billing practices of broadband Internet access 
services providers, including complaints related to double billing, 
billing for unexplained charges, and billing for cancelled services. 
Overall, parties should explain what problems customers of broadband 
Internet access service are likely to have with their bills and whether 
we should address these problems through truth-in-billing-type 
requirements.
    8. Section 63.100(a) through (e) of the Commission's rules, 47 CFR 
63.100(a)-(e), requires certain communications providers to notify the 
Commission of outages of thirty or more minutes that affect a 
substantial number of customers or involve major airports, major 
military installations, key government facilities, nuclear power 
plants, or 911 facilities. We seek comment on whether we should 
exercise our Title I authority to impose any similar requirements on 
broadband Internet access service providers. Do the purposes of our 
network outage reporting requirements apply to outages of broadband 
Internet access service? Should we adopt requirements that differ 
depending on the nature of the facility or the type of customer served?
    9. Section 214 of the Act limits a telecommunications carrier's 
ability to discontinue unilaterally its service to customers. Section 
63.71 of the Commission's implementing rules, 47 CFR 63.71 generally 
requires that domestic carriers wishing to ``discontinue, reduce, or 
impair'' services must first request authority to do so from the 
Commission and must notify affected customers and others of their 
plans.
    10. We seek comment on whether we should exercise our Title I 
authority to impose discontinuance-type requirements on providers of 
broadband Internet access service. As customers grow more dependent on 
broadband Internet access services, does the need for notice to 
customers grow stronger? Or do the multiplicity and availability of 
broadband Internet access providers mitigate the need for such notice?
    11. Finally, we seek to ensure that our actions today do not 
jeopardize the policies of section 254(g). That section required the 
Commission to adopt rules ``to require that the rates charged by 
providers of interexchange telecommunications services to subscribers 
in rural and high cost areas * * * be no higher than the rates charged 
by each such provider to its subscribers in urban areas.'' The 
provision further required that the rules ``require that a provider of 
interstate interexchange telecommunications services * * * provide such 
services to its subscribers in each State at rates no higher than the 
rates charged to its subscribers in any other State.'' The Commission 
has forborne from the requirements of section 254(g) with regard to 
private line services, of which DSL is one. Because the policies 
underlying section 254(g) remain important, however, we ask whether we 
should exercise our Title I authority to impose any similar 
requirements on providers of broadband Internet access services, 
particularly as consumers substitute broadband services and 
applications for narrowband services that were covered by section 
254(g).
    12. We recognize that the states play an important role in ensuring 
that public safety and consumer protection goals are met. The 
Commission has recently announced the creation of a federal-state task 
force on VoIP E911 enforcement, and we believe that this NPRM may give 
rise to additional areas in which cooperation between this Commission 
and the states can achieve the best results. We note in this regard 
that NARUC has recently advocated for a ``functional'' approach to 
questions of federal and state jurisdiction, particularly with respect 
to consumer protection issues. For example, with respect to CPNI, NARUC 
recommends that the Commission be primarily responsible for 
establishing rules, while state or local authorities assume 
responsibility for enforcing those rules. To the extent that the 
Commission finds it necessary to impose consumer protection and related 
regulations on broadband Internet access service providers, we seek 
comment on how best to harmonize federal regulations with the states' 
efforts and expertise in these areas. Do commenters support NARUC's 
functional approach? In what other ways can the federal and state 
governments cooperate in order to ensure the best results for 
consumers?
    13. We note that consumers have various methods of pursuing 
complaints with the Commission against entities subject to our 
jurisdiction. In particular, the Commission's informal complaint 
process permits consumers to submit complaints to the Commission by any 
reasonable means, including by telephone, facsimile, postal mail, e-
mail and an Internet complaint form. Consumer Center representatives, 
known as Consumer Advocacy and Mediation Specialists or CAMSs, are 
available to assist consumers in filing complaints if needed. CAMSs 
staff review complaints for subject matter content and determine 
appropriate handling of the complaints.

Initial Paperwork Reduction Act of 1995 Analysis

    14. This document does not contain proposed information 
collection(s) 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, see 44 U.S.C. 
3506(c)(4).

Initial Regulatory Flexibility Analysis

    15. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared the present Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on small entities that might result from this NPRM. 
Written public comments are requested on this IRFA. Comments must be 
identified as responses to the IRFA and must be filed by the deadlines 
for comments on the NPRM provided above. The Commission will send a 
copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. In addition, the NPRM 
and IRFA (or summaries thereof) will be published in the Federal 
Register.

Need for, and Objectives of, the Proposed Rules

    16. The broadband marketplace before us today is an emerging and 
rapidly changing one. Nevertheless, consumer protection remains a 
priority for the Commission. We initiate this rulemaking to ensure that 
consumer protection objectives in the Act are met as the industry 
shifts from narrowband to broadband services. Through this NPRM, the 
Commission's objective is to

[[Page 60262]]

develop a framework for consumer protection in the broadband age--a 
framework that ensures that consumer protection needs are met by all 
providers of broadband Internet access service, regardless of the 
underlying technology. The NPRM seeks comment on whether the Commission 
should impose, for example, privacy requirements similar to the Act's 
CPNI requirements, slamming, truth-in-billing, network outage 
reporting, Sec.  214 discontinuance, or Sec.  254(g) rate averaging 
requirements on providers of broadband Internet access service. We also 
seek comment on how best to harmonize federal regulations with the 
states' efforts and expertise in consumer protection issues.

Legal Basis

    17. The legal basis for any action that may be taken pursuant to 
the NPRM is contained in sections 1-4, 201-205, 251, 252, 254, 256, 
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151-
154, 201-205, 251, 252, 254, 256, 303(r), and section 706 of the 
Telecommunications Act of 1996, 47 U.S.C. 157 nt.

Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules May Apply

    18. 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. 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 Small Business 
Administration (SBA).
    19. Small Businesses. Nationwide, there are a total of 
approximately 22.4 million small businesses, according to SBA data.
    20. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.
    21. Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined as ``governments of cities, towns, townships, 
villages, school districts, or special districts, with a population of 
less than fifty thousand.'' As of 1997, there were approximately 87,453 
governmental jurisdictions in the United States. This number includes 
39,044 county governments, municipalities, and townships, of which 
37,546 (approximately 96.2%) have populations of fewer than 50,000, and 
of which 1,498 have populations of 50,000 or more. Thus, we estimate 
the number of small governmental jurisdictions overall to be 84,098 or 
fewer.
    22. We note that the list of potentially affected entities below is 
perhaps more expansive than is necessary. We have, for instance, 
included services that are apparently currently not a part of the 
Internet industry, as well as manufacturers.

Telecommunications Service Entities

    23. Wireline Carriers and Service Providers. We have included small 
incumbent local exchange carriers 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 local 
exchange carriers are not dominant in their field of operation because 
any such dominance is not ``national'' in scope. We have therefore 
included small incumbent local exchange carriers in this RFA analysis, 
although we emphasize that this RFA action has no effect on Commission 
analyses and determinations in other, non-RFA contexts.
    24. Incumbent Local Exchange Carriers (LECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. According to Commission 
data, 1,303 carriers have reported that they are engaged in the 
provision of incumbent local exchange services. Of these 1,303 
carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of incumbent local exchange service are small businesses 
that may be affected by our action. In addition, limited preliminary 
census data for 2002 indicate that the total number of wired 
communications carriers increased approximately 34 percent from 1997 to 
2002.
    25. Competitive Local Exchange Carriers, Competitive Access 
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other 
Local Service Providers.'' Neither the Commission nor the SBA has 
developed a small business size standard specifically for these service 
providers. The appropriate size standard under SBA rules is for the 
category Wired Telecommunications Carriers. Under that size standard, 
such a business is small if it has 1,500 or fewer employees. According 
to Commission data, 769 carriers have reported that they are engaged in 
the provision of either competitive access provider services or 
competitive local exchange carrier services. Of these 769 carriers, an 
estimated 676 have 1,500 or fewer employees and 93 have more than 1,500 
employees. In addition, 12 carriers have reported that they are 
``Shared-Tenant Service Providers,'' and all 12 are estimated to have 
1,500 or fewer employees. In addition, 39 carriers have reported that 
they are ``Other Local Service Providers.'' Of the 39, an estimated 38 
have 1,500 or fewer employees and one has more than 1,500 employees. 
Consequently, the Commission estimates that most providers of 
competitive local exchange service, competitive access providers, 
``Shared-Tenant Service Providers,'' and ``Other Local Service 
Providers'' are small entities that may be affected by our action. In 
addition, limited preliminary census data for 2002 indicate that the 
total number of wired communications carriers increased approximately 
34 percent from 1997 to 2002.
    26. Local Resellers. 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. According to Commission data, 143 carriers have reported 
that they are engaged in the provision of local resale services. Of 
these, an estimated 141 have 1,500 or fewer employees and two have more 
than 1,500 employees. Consequently, the Commission estimates that the 
majority of local resellers are small entities that may be affected by 
our action.
    27. Toll Resellers. 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. According to Commission data, 770 carriers have reported 
that they are engaged in the provision of toll resale services. Of 
these, an estimated 747 have 1,500 or fewer employees and 23 have more 
than 1,500 employees. Consequently, the Commission

[[Page 60263]]

estimates that the majority of toll resellers are small entities that 
may be affected by our action.
    28. Payphone Service Providers (PSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
payphone services 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, 654 carriers have reported 
that they are engaged in the provision of payphone services. Of these, 
an estimated 652 have 1,500 or fewer employees and two have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of payphone service providers are small entities that may be 
affected by our action. In addition, limited preliminary census data 
for 2002 indicate that the total number of wired communications 
carriers increased approximately 34 percent from 1997 to 2002.
    29. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
providers of interexchange services. The appropriate size standard 
under SBA rules is for the category Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 316 carriers have 
reported that they are engaged in the provision of interexchange 
service. Of these, an estimated 292 have 1,500 or fewer employees and 
24 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of IXCs are small entities that may be 
affected by our action. In addition, limited preliminary census data 
for 2002 indicate that the total number of wired communications 
carriers increased approximately 34 percent from 1997 to 2002.
    30. 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, 23 carriers have reported that 
they are engaged in the provision of operator services. Of these, an 
estimated 20 have 1,500 or fewer employees and three have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of OSPs are small entities that may be affected by our action. 
In addition, limited preliminary census data for 2002 indicate that the 
total number of wired communications carriers increased approximately 
34 percent from 1997 to 2002.
    31. Prepaid Calling Card Providers. Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
prepaid calling card providers. The appropriate size standard under SBA 
rules is for the category Telecommunications Resellers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 89 carriers have reported that they are 
engaged in the provision of prepaid calling cards. Of these, 88 are 
estimated to have 1,500 or fewer employees and one has more than 1,500 
employees. Consequently, the Commission estimates that all or the 
majority of prepaid calling card providers are small entities that may 
be affected by our action.
    32. 800 and 800-Like Service Subscribers. Neither the Commission 
nor the SBA has developed a small business size standard specifically 
for 800 and 800-like service (``toll free'') subscribers. The 
appropriate size standard under SBA rules is for the category 
Telecommunications Resellers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. The most reliable source 
of information regarding the number of these service subscribers 
appears to be data the Commission collects on the 800, 888, and 877 
numbers in use. According to our data, at the end of January, 1999, the 
number of 800 numbers assigned was 7,692,955; the number of 888 numbers 
assigned was 7,706,393; and the number of 877 numbers assigned was 
1,946,538. We do not have data specifying the number of these 
subscribers that are not independently owned and operated or have more 
than 1,500 employees, and thus are unable at this time to estimate with 
greater precision the number of toll free subscribers that would 
qualify as small businesses under the SBA size standard. Consequently, 
we estimate that there are 7,692,955 or fewer small entity 800 
subscribers; 7,706,393 or fewer small entity 888 subscribers; and 
1,946,538 or fewer small entity 877 subscribers.
    33. International Service Providers. The Commission has not 
developed a small business size standard specifically for providers of 
international service. The appropriate size standards under SBA rules 
are for the two broad categories of Satellite Telecommunications and 
Other Telecommunications. Under both categories, such a business is 
small if it has $12.5 million or less in average annual receipts. For 
the first category of Satellite Telecommunications, Census Bureau data 
for 1997 show that there were a total of 324 firms that operated for 
the entire year. Of this total, 273 firms had annual receipts of under 
$10 million, and an additional 24 firms had receipts of $10 million to 
$24,999,999. Thus, the majority of Satellite Telecommunications firms 
can be considered small.
    34. The second category--Other Telecommunications--includes 
``establishments primarily engaged in * * * providing satellite 
terminal stations and associated facilities operationally connected 
with one or more terrestrial communications systems and capable of 
transmitting telecommunications to or receiving telecommunications from 
satellite systems.'' According to Census Bureau data for 1997, there 
were 439 firms in this category that operated for the entire year. Of 
this total, 424 firms had annual receipts of $5 million to $9,999,999 
and an additional six firms had annual receipts of $10 million to 
$24,999,990. Thus, under this second size standard, the majority of 
firms can be considered small.
    35. Wireless Telecommunications Service Providers. Below, for those 
services subject to auctions, we note that, as a general matter, the 
number of winning bidders that qualify as small businesses at the close 
of an auction does not necessarily represent the number of small 
businesses currently in service. Also, the Commission does not 
generally track subsequent business size unless, in the context of 
assignments or transfers, unjust enrichment issues are implicated.
    36. Wireless Service Providers. The SBA has developed a small 
business size standard for wireless firms within the two broad economic 
census categories of ``Paging'' and ``Cellular and Other Wireless 
Telecommunications.'' Under both SBA categories, a wireless business is 
small if it has 1,500 or fewer employees. For the census category of 
Paging, Census Bureau data for 1997 show that there were 1,320 firms in 
this category, total, that operated for the entire year. Of this total, 
1,303 firms had employment of 999 or fewer employees, and an additional 
17 firms had employment of 1,000 employees or more. Thus, under this 
category and associated small business size standard, the majority of 
firms can be considered small. For the census category Cellular and 
Other Wireless

[[Page 60264]]

Telecommunications, Census Bureau data for 1997 show that there were 
977 firms in this category, total, that operated for the entire year. 
Of this total, 965 firms had employment of 999 or fewer employees, and 
an additional 12 firms had employment of 1,000 employees or more. Thus, 
under this second category and size standard, the majority of firms 
can, again, be considered small. In addition, limited preliminary 
census data for 2002 indicate that the total number of paging providers 
decreased approximately 51 percent from 1997 to 2002. In addition, 
limited preliminary census data for 2002 indicate that the total number 
of cellular and other wireless telecommunications carriers increased 
approximately 321 percent from 1997 to 2002.
    37. Cellular Licensees. The SBA has developed a small business size 
standard for wireless firms within the broad economic census category 
``Cellular and Other Wireless Telecommunications.'' Under this SBA 
category, a wireless business is small if it has 1,500 or fewer 
employees. For the census category Cellular and Other Wireless 
Telecommunications firms, Census Bureau data for 1997 show that there 
were 977 firms in this category, total, that operated for the entire 
year. Of this total, 965 firms had employment of 999 or fewer 
employees, and an additional 12 firms had employment of 1,000 employees 
or more. Thus, under this category and size standard, the great 
majority of firms can be considered small. Also, according to 
Commission data, 437 carriers reported that they were engaged in the 
provision of cellular service, Personal Communications Service (PCS), 
or Specialized Mobile Radio (SMR) Telephony services, which are placed 
together in the data. We have estimated that 260 of these are small, 
under the SBA small business size standard.
    38. Common Carrier Paging. The SBA has developed a small business 
size standard for wireless firms within the broad economic census 
category, ``Cellular and Other Wireless Telecommunications.'' Under 
this SBA category, a wireless business is small if it has 1,500 or 
fewer employees. For the census category of Paging, Census Bureau data 
for 1997 show that there were 1,320 firms in this category, total, that 
operated for the entire year. Of this total, 1,303 firms had employment 
of 999 or fewer employees, and an additional 17 firms had employment of 
1,000 employees or more. Thus, under this category and associated small 
business size standard, the majority of firms can be considered small. 
In the Paging Third Report and Order, we developed a small business 
size standard for ``small businesses'' and ``very small businesses'' 
for purposes of determining their eligibility for special provisions 
such as bidding credits and installment payments. A ``small business'' 
is an entity that, together with its affiliates and controlling 
principals, has average gross revenues not exceeding $15 million for 
the preceding three years. Additionally, a ``very small business'' is 
an entity that, together with its affiliates and controlling 
principals, has average gross revenues that are not more than $3 
million for the preceding three years. The SBA has approved these small 
business size standards. An auction of Metropolitan Economic Area 
licenses commenced on February 24, 2000, and closed on March 2, 2000. 
Of the 985 licenses auctioned, 440 were sold. Fifty-seven companies 
claiming small business status won. Also, according to Commission data, 
375 carriers reported that they were engaged in the provision of paging 
and messaging services. Of those, we estimate that 370 are small, under 
the SBA-approved small business size standard.
    39. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission established small business size standards for the 
wireless communications services (WCS) auction. A ``small business'' is 
an entity with average gross revenues of $40 million for each of the 
three preceding years, and a ``very small business'' is an entity with 
average gross revenues of $15 million for each of the three preceding 
years. The SBA has approved these small business size standards. The 
Commission auctioned geographic area licenses in the WCS service. In 
the auction, there were seven winning bidders that qualified as ``very 
small business'' entities, and one that qualified as a ``small 
business'' entity.
    40. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services (PCS), and specialized mobile radio 
(SMR) telephony carriers. As noted earlier, the SBA has developed a 
small business size standard for ``Cellular and Other Wireless 
Telecommunications'' services. Under that SBA small business size 
standard, a business is small if it has 1,500 or fewer employees. 
According to Commission data, 445 carriers reported that they were 
engaged in the provision of wireless telephony. We have estimated that 
245 of these are small under the SBA small business size standard.
    41. Broadband Personal Communications Service. The broadband 
Personal Communications Service (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission defined ``small entity'' for 
Blocks C and F as an entity that has average gross revenues of $40 
million or less in the three previous calendar years. For Block F, an 
additional classification for ``very small business'' was added and is 
defined as an entity that, together with its affiliates, has average 
gross revenues of not more than $15 million for the preceding three 
calendar years.'' These standards defining ``small entity'' in the 
context of broadband PCS auctions have been approved by the SBA. No 
small businesses, within the SBA-approved small business size standards 
bid successfully for licenses in Blocks A and B. There were 90 winning 
bidders that qualified as small entities in the Block C auctions. A 
total of 93 small and very small business bidders won approximately 40 
percent of the 1,479 licenses for Blocks D, E, and F. On March 23, 
1999, the Commission re-auctioned 347 C, D, E, and F Block licenses. 
There were 48 small business winning bidders. On January 26, 2001, the 
Commission completed the auction of 422 C and F Broadband PCS licenses 
in Auction No. 35. Of the 35 winning bidders in this auction, 29 
qualified as ``small'' or `` small'' businesses. Subsequent events, 
concerning Auction 35, including judicial and agency determinations, 
resulted in a total of 163 C and F Block licenses being available for 
grant.
    42. Narrowband Personal Communications Services. To date, two 
auctions of narrowband personal communications services (PCS) licenses 
have been conducted. For purposes of the two auctions that have already 
been held, ``small businesses'' were entities with average gross 
revenues for the prior three calendar years of $40 million or less. 
Through these auctions, the Commission has awarded a total of 41 
licenses, out of which 11 were obtained by small businesses. To ensure 
meaningful participation of small business entities in future auctions, 
the Commission has adopted a two-tiered small business size standard in 
the Narrowband PCS Second Report and Order. A ``small business'' is an 
entity that, together with affiliates and controlling interests, has 
average gross revenues for the three preceding years of not more than 
$40 million. A ``very small business'' is an entity that,

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together with affiliates and controlling interests, has average gross 
revenues for the three preceding years of not more than $15 million. 
The SBA has approved these small business size standards. In the 
future, the Commission will auction 459 licenses to serve Metropolitan 
Trading Areas (MTAs) and 408 response channel licenses. There is also 
one megahertz of narrowband PCS spectrum that has been held in reserve 
and that the Commission has not yet decided to release for licensing. 
The Commission cannot predict accurately the number of licenses that 
will be awarded to small entities in future auctions. However, four of 
the 16 winning bidders in the two previous narrowband PCS auctions were 
small businesses, as that term was defined. The Commission assumes, for 
purposes of this analysis that a large portion of the remaining 
narrowband PCS licenses will be awarded to small entities. The 
Commission also assumes that at least some small businesses will 
acquire narrowband PCS licenses by means of the Commission's 
partitioning and disaggregation rules.
    43. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. Phase I licensing was conducted 
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized 
to operate in the 220 MHz band. The Commission has not developed a 
small business size standard for small entities specifically applicable 
to such incumbent 220 MHz Phase I licensees. To estimate the number of 
such licensees that are small businesses, we apply the small business 
size standard under the SBA rules applicable to ``Cellular and Other 
Wireless Telecommunications'' companies. This category provides that a 
small business is a wireless company employing no more than 1,500 
persons. For the census category Cellular and Other Wireless 
Telecommunications, Census Bureau data for 1997 show that there were 
977 firms in this category, total, that operated for the entire year. 
Of this total, 965 firms had employment of 999 or fewer employees, and 
an additional 12 firms had employment of 1,000 employees or more. Thus, 
under this second category and size standard, the majority of firms 
can, again, be considered small. Assuming this general ratio continues 
in the context of Phase I 220 MHz licensees, the Commission estimates 
that nearly all such licensees are small businesses under the SBA's 
small business size standard. In addition, limited preliminary census 
data for 2002 indicate that the total number of cellular and other 
wireless telecommunications carriers increased approximately 321 
percent from 1997 to 2002.
    44. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. The Phase II 220 MHz service is 
a new service, and is subject to spectrum auctions. In the 220 MHz 
Third Report and Order, we adopted a small business size standard for 
``small'' and ``very small'' businesses for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments. This small business size standard indicates that 
a ``small business'' is an entity that, together with its affiliates 
and controlling principals, has average gross revenues not exceeding 
$15 million for the preceding three years. A ``very small business'' is 
an entity that, together with its affiliates and controlling 
principals, has average gross revenues that do not exceed $3 million 
for the preceding three years. The SBA has approved these small 
business size standards. Auctions of Phase II licenses commenced on 
September 15, 1998, and closed on October 22, 1998. In the first 
auction, 908 licenses were auctioned in three different-sized 
geographic areas: Three nationwide licenses, 30 Regional Economic Area 
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 
licenses auctioned, 693 were sold. Thirty-nine small businesses won 
licenses in the first 220 MHz auction. The second auction included 225 
licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies 
claiming small business status won 158 licenses.
    45. 800 MHz and 900 MHz Specialized Mobile Radio Licenses. The 
Commission awards ``small entity'' and ``very small entity'' bidding 
credits in auctions for Specialized Mobile Radio (SMR) geographic area 
licenses in the 800 MHz and 900 MHz bands to firms that had revenues of 
no more than $15 million in each of the three previous calendar years, 
or that had revenues of no more than $3 million in each of the previous 
calendar years, respectively. These bidding credits apply to SMR 
providers in the 800 MHz and 900 MHz bands that either hold geographic 
area licenses or have obtained extended implementation authorizations. 
The Commission does not know how many firms provide 800 MHz or 900 MHz 
geographic area SMR service pursuant to extended implementation 
authorizations, nor how many of these providers have annual revenues of 
no more than $15 million. One firm has over $15 million in revenues. 
The Commission assumes, for purposes here, that all of the remaining 
existing extended implementation authorizations are held by small 
entities, as that term is defined by the SBA. The Commission has held 
auctions for geographic area licenses in the 800 MHz and 900 MHz SMR 
bands. There were 60 winning bidders that qualified as small or very 
small entities in the 900 MHz SMR auctions. Of the 1,020 licenses won 
in the 900 MHz auction, bidders qualifying as small or very small 
entities won 263 licenses. In the 800 MHz auction, 38 of the 524 
licenses won were won by small and very small entities.
    46. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order, 
we adopted a small business size standard for ``small businesses'' and 
``very small businesses'' for purposes of determining their eligibility 
for special provisions such as bidding credits and installment 
payments. A ``small business'' as an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $15 million for the preceding three years. Additionally, a 
``very small business'' is an entity that, together with its affiliates 
and controlling principals, has average gross revenues that are not 
more than $3 million for the preceding three years. An auction of 52 
Major Economic Area (MEA) licenses commenced on September 6, 2000, and 
closed on September 21, 2000. Of the 104 licenses auctioned, 96 
licenses were sold to nine bidders. Five of these bidders were small 
businesses that won a total of 26 licenses. A second auction of 700 MHz 
Guard Band licenses commenced on February 13, 2001 and closed on 
February 21, 2001. All eight of the licenses auctioned were sold to 
three bidders. One of these bidders was a small business that won a 
total of two licenses.
    47. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio System (BETRS). The Commission uses 
the SBA's small business size standard applicable to ``Cellular and 
Other Wireless Telecommunications,'' i.e., an entity employing no more 
than 1,500 persons. There are approximately 1,000 licensees in the 
Rural Radiotelephone Service, and the Commission estimates that there 
are 1,000 or fewer small entity licensees in the Rural Radiotelephone 
Service that may be affected by the rules and policies adopted herein.

[[Page 60266]]

    48. Air-Ground Radiotelephone Service. The Commission has not 
adopted a small business size standard specific to the Air-Ground 
Radiotelephone Service. We will use SBA's small business size standard 
applicable to ``Cellular and Other Wireless Telecommunications,'' i.e., 
an entity employing no more than 1,500 persons. There are approximately 
100 licensees in the Air-Ground Radiotelephone Service, and we estimate 
that almost all of them qualify as small under the SBA small business 
size standard.
    49. Aviation and Marine Radio Services. Small businesses in the 
aviation and marine radio services use a very high frequency (VHF) 
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator 
transmitter. The Commission has not developed a small business size 
standard specifically applicable to these small businesses. For 
purposes of this analysis, the Commission uses the SBA small business 
size standard for the category ``Cellular and Other 
Telecommunications,'' which is 1,500 or fewer employees. Most 
applicants for recreational licenses are individuals. Approximately 
581,000 ship station licensees and 131,000 aircraft station licensees 
operate domestically and are not subject to the radio carriage 
requirements of any statute or treaty. For purposes of our evaluations 
in this analysis, we estimate that there are up to approximately 
712,000 licensees that are small businesses (or individuals) under the 
SBA standard. In addition, between December 3, 1998 and December 14, 
1998, the Commission held an auction of 42 VHF Public Coast licenses in 
the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz 
(coast transmit) bands. For purposes of the auction, the Commission 
defined a ``small'' business as an entity that, together with 
controlling interests and affiliates, has average gross revenues for 
the preceding three years not to exceed $15 million dollars. In 
addition, a ``very small'' business is one that, together with 
controlling interests and affiliates, has average gross revenues for 
the preceding three years not to exceed $3 million dollars. There are 
approximately 10,672 licensees in the Marine Coast Service, and the 
Commission estimates that almost all of them qualify as ``small'' 
businesses under the above special small business size standards.
    50. Fixed Microwave Services. Fixed microwave services include 
common carrier, private operational-fixed, and broadcast auxiliary 
radio services. At present, there are approximately 22,015 common 
carrier fixed licensees and 61,670 private operational-fixed licensees 
and broadcast auxiliary radio licensees in the microwave services. The 
Commission has not created a size standard for a small business 
specifically with respect to fixed microwave services. For purposes of 
this analysis, the Commission uses the SBA small business size standard 
for the category ``Cellular and Other Telecommunications,'' which is 
1,500 or fewer employees. The Commission does not have data specifying 
the number of these licensees that have more than 1,500 employees, and 
thus is unable at this time to estimate with greater precision the 
number of fixed microwave service licensees that would qualify as small 
business concerns under the SBA's small business size standard. 
Consequently, the Commission estimates that there are up to 22,015 
common carrier fixed licensees and up to 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in the 
microwave services that may be small and may be affected by the rules 
and policies adopted herein. We noted, however, that the common carrier 
microwave fixed licensee category includes some large entities.
    51. Offshore Radiotelephone Service. This service operates on 
several UHF television broadcast channels that are not used for 
television broadcasting in the coastal areas of states bordering the 
Gulf of Mexico. There are presently approximately 55 licensees in this 
service. We are unable to estimate at this time the number of licensees 
that would qualify as small under the SBA's small business size 
standard for ``Cellular and Other Wireless Telecommunications'' 
services. Under that SBA small business size standard, a business is 
small if it has 1,500 or fewer employees.
    52. 39 GHz Service. The Commission created a special small business 
size standard for 39 GHz licenses--an entity that has average gross 
revenues of $40 million or less in the three previous calendar years. 
An additional size standard for ``very small business'' is: an entity 
that, together with affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. The SBA has 
approved these small business size standards. The auction of the 2,173 
39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The 
18 bidders who claimed small business status won 849 licenses. 
Consequently, the Commission estimates that 18 or fewer 39 GHz 
licensees are small entities that may be affected by the rules and 
polices adopted herein.
    53. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service comprises Multichannel Multipoint Distribution 
Service (MMDS) systems and Multipoint Distribution Service (MDS). MMDS 
systems, often referred to as ``wireless cable,'' transmit video 
programming to subscribers using the microwave frequencies of MDS and 
Educational Broadband Service (formerly known as Instructional 
Television Fixed Service). In connection with the 1996 MDS auction, the 
Commission established a small business size standard as an entity that 
had annual average gross revenues of less than $40 million in the 
previous three calendar years. The MDS auctions resulted in 67 
successful bidders obtaining licensing opportunities for 493 Basic 
Trading Areas (BTAs). Of the 67 auction winners, 61 met the definition 
of a small business. MDS also includes licensees of stations authorized 
prior to the auction. In addition, the SBA has developed a small 
business size standard for Cable and Other Program Distribution, which 
includes all such companies generating $12.5 million or less in annual 
receipts. According to Census Bureau data for 1997, there were a total 
of 1,311 firms in this category, total, that had operated for the 
entire year. Of this total, 1,180 firms had annual receipts of under 
$10 million and an additional 52 firms had receipts of $10 million or 
more but less than $25 million. Consequently, we estimate that the 
majority of providers in the Broadband Radio Service category are small 
businesses that may be affected by the rules and policies adopted 
herein. This SBA small business size standard also appears applicable 
to Educational Broadband Service. There are presently 2,032 Educational 
Broadband Service licensees. All but 100 of these licenses are held by 
educational institutions. Educational institutions are included in this 
analysis as small entities. Thus, we tentatively conclude that at least 
1,932 licensees are small businesses.
    54. Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (LMDS) is a fixed broadband point-to-multipoint 
microwave service that provides for two-way video telecommunications. 
The auction of the 1,030 Local Multipoint Distribution Service (LMDS) 
licenses began on February 18, 1998 and closed on March 25, 1998. The 
Commission established a small business size standard for LMDS licenses 
as an entity that has average gross revenues of less than $40 million

[[Page 60267]]

in the three previous calendar years. An additional small business size 
standard for ``very small business'' was added as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. The SBA has 
approved these small business size standards in the context of LMDS 
auctions. There were 93 winning bidders that qualified as small 
entities in the LMDS auctions. A total of 93 small and very small 
business bidders won approximately 277 A Block licenses and 387 B Block 
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; 
there were 40 winning bidders. Based on this information, we conclude 
that the number of small LMDS licenses consists of the 93 winning 
bidders in the first auction and the 40 winning bidders in the re-
auction, for a total of 133 small entity LMDS providers.
    55. 218-219 MHz Service. The first auction of 218-219 MHz spectrum 
resulted in 170 entities winning licenses for 594 Metropolitan 
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by 
entities qualifying as a small business. For that auction, the small 
business size standard was an entity that, together with its 
affiliates, has no more than a $6 million net worth and, after federal 
income taxes (excluding any carry over losses), has no more than $2 
million in annual profits each year for the previous two years. In the 
218-219 MHz Report and Order and Memorandum Opinion and Order, we 
established a small business size standard for a ``small business'' as 
an entity that, together with its affiliates and persons or entities 
that hold interests in such an entity and their affiliates, has average 
annual gross revenues not to exceed $15 million for the preceding three 
years. A ``very small business'' is defined as an entity that, together 
with its affiliates and persons or entities that hold interests in such 
an entity and its affiliates, has average annual gross revenues not to 
exceed $3 million for the preceding three years. We cannot estimate, 
however, the number of licenses that will be won by entities qualifying 
as small or very small businesses under our rules in future auctions of 
218-219 MHz spectrum.
    56. 24 GHz--Incumbent Licensees. This analysis may affect incumbent 
licensees who were relocated to the 24 GHz band from the 18 GHz band, 
and applicants who wish to provide services in the 24 GHz band. The 
applicable SBA small business size standard is that of ``Cellular and 
Other Wireless Telecommunications'' companies. This category provides 
that such a company is small if it employs no more than 1,500 persons. 
According to Census Bureau data for 1997, there were 977 firms in this 
category, total, that operated for the entire year. Of this total, 965 
firms had employment of 999 or fewer employees, and an additional 12 
firms had employment of 1,000 employees or more. Thus, under this size 
standard, the great majority of firms can be considered small. These 
broader census data notwithstanding, we believe that there are only two 
licensees in the 24 GHz band that were relocated from the 18 GHz band, 
Teligent and TRW, Inc. It is our understanding that Teligent and its 
related companies have less than 1,500 employees, though this may 
change in the future. TRW is not a small entity. Thus, only one 
incumbent licensee in the 24 GHz band is a small business entity.
    57. 24 GHz--Future Licensees. With respect to new applicants in the 
24 GHz band, the small business size standard for ``small business'' is 
an entity that, together with controlling interests and affiliates, has 
average annual gross revenues for the three preceding years not in 
excess of $15 million. ``Very small business'' in the 24 GHz band is an 
entity that, together with controlling interests and affiliates, has 
average gross revenues not exceeding $3 million for the preceding three 
years. The SBA has approved these small business size standards. These 
size standards will apply to the future auction, if held.
    58. Cable and OVS Operators: Cable and Other Program Distribution. 
This category includes cable systems operators, closed circuit 
television services, direct broadcast satellite services, multipoint 
distribution systems, satellite master antenna systems, and 
subscription television services. The SBA has developed small business 
size standard for this census category, which includes all such 
companies generating $12.5 million or less in revenue annually. 
According to Census Bureau data for 1997, there were a total of 1,311 
firms in this category, total, that had operated for the entire year. 
Of this total, 1,180 firms had annual receipts of under $10 million and 
an additional 52 firms had receipts of $10 million or more but less 
than $25 million. Consequently, the Commission estimates that the 
majority of providers in this service category are small businesses 
that may be affected by the rules and policies adopted herein.
    59. Cable System Operators (Rate Regulation Standard). The 
Commission has developed its own small business size standard for cable 
system operators, for purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide. The most recent estimates indicate that 
there were 1,439 cable operators who qualified as small cable system 
operators at the end of 1995. Since then, some of those companies may 
have grown to serve over 400,000 subscribers, and others may have been 
involved in transactions that caused them to be combined with other 
cable operators. Consequently, the Commission estimates that there are 
now fewer than 1,439 small entity cable system operators that may be 
affected by the rules and policies adopted herein.
    60. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, 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.'' The Commission has determined that 
there are 67,700,000 subscribers in the United States. Therefore, an 
operator serving fewer than 677,000 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, the Commission estimates that the 
number of cable operators serving 677,000 subscribers or fewer, totals 
1,450. The Commission neither requests nor collects information on 
whether cable system operators are affiliated with entities whose gross 
annual revenues exceed $250 million, and therefore are unable, at this 
time, to estimate more accur