IP-Enabled Services; Implementation of Sections 255 and 251(a)(2) of the Communications Act of 1934, as Enacted by the Telecommunications Act of 1996: Access to Telecommunications Service, Telecommunications Equipment and Customer Premises Equipment by Persons With Disabilities; Telecommunications Relay Services and Speech-to-Speech Services for Individuals With Hearing and Speech Disabilities, 43546-43560 [E7-15086]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 72, Number 150 (Monday, August 6, 2007)]
[Rules and Regulations]
[Pages 43546-43560]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15086]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 6 and 64

[WC Docket No. 04-36, CG Docket No. 03-123, WT Docket No. 96-198 and CC 
Docket No. 92-105; FCC 07-110]


IP-Enabled Services; Implementation of Sections 255 and 251(a)(2) 
of the Communications Act of 1934, as Enacted by the Telecommunications 
Act of 1996: Access to Telecommunications Service, Telecommunications 
Equipment and Customer Premises Equipment by Persons With Disabilities; 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals With Hearing and Speech Disabilities

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission extends the disability access 
requirements that currently apply to telecommunications service 
providers and equipment manufacturers under section 255 of the 
Communications Act of 1934, as amended (the Act), to providers of 
``interconnected voice over Internet Protocol (VoIP) services,'' as 
defined by the Commission, and to manufacturers of specially designed

[[Page 43547]]

equipment used to provide those services. In addition, the Commission 
extends the Telecommunications Relay Services (TRS) requirements 
contained in its regulations to interconnected VoIP providers.

DATES: Effective October 5, 2007 except for the amendments to 47 CFR 
6.11(a) and (b), 6.18(b), 6.19, 64.604(a)(5), 64.604(c)(1) through 
(c)(3), 64.604(c)(5)(iii)(C), 64.604(c)(5)(iii)(E), 
64.604(c)(5)(iii)(G), 64.604(c)(6)(v)(A)(3), 64.604(c)(6)(v)(G), 
64.604(c)(7), and 64.606(b), which contains information collection 
requirements that have not been approved by the Office of Management 
and Budget (OMB), and on which the Commission must seek comment 
pursuant to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. Written comments on the new or modified information collection 
requirements must be submitted on or before October 5, 2007. The 
Commission will publish a document in the Federal Register announcing 
the effective date of those rules and requirements.

ADDRESSES: You may submit PRA comments identified by FCC number 07-110 
and CG Docket No. 03-123, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web Site: https://
www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     E-mail: Parties who choose to file by e-mail should submit 
their PRA comments to PRA@fcc.gov and to Jasmeet Seehra, at Jasmeet--
K.--Seehra@omb.eop.gov. Please include FCC number 07-110 and CG Docket 
No. CG 03-123 in the subject line of the message.
     Mail/Fax: Parties who choose to file by paper should 
submit their PRA comments to Cathy Williams, Federal Communications 
Commission, Room 1-C823, 445 12th Street, SW., Washington, DC 20554, 
and to Jasmeet Seehra, OMB Desk Officer, Room 10236 NEOB, 725 17th 
Street, NW., Washington, DC 20503 or via fax (202) 395-5167.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, etc.) by e-mail: FCC504@fcc.gov, phone (202) 418-0539 or 
TTY: (202) 418-0432.

FOR FURTHER INFORMATION CONTACT: Lisa Elster Boehley, Consumer & 
Governmental Affairs Bureau at (202) 418-7395 (voice), or e-mail 
Lisa.Boehley@fcc.gov. For additional information concerning the PRA 
information collection requirements contained in this document, send an 
e-mail to PRA@fcc.gov or contact Cathy Williams at (202) 418-2918.

SUPPLEMENTARY INFORMATION: This document contains new or modified 
information collection requirements subject to the PRA. These will be 
submitted to OMB for review under Sec.  3507 of the PRA. OMB, the 
general public, and other Federal agencies are invited to comment on 
the new or modified information collections contained in this 
proceeding.
    On September 29, 1999, the Commission issued an order (Section 255 
Order) implementing the disability access provisions in sections 255 
and 251(a)(2) of the Act (FCC 99-181), published at 64 FR 63235, 
November 19, 1999. The Section 255 Order included a Further Notice of 
Inquiry (NOI), published at 64 FR 63277, November 19, 1999, which 
sought comment on applying accessibility requirements to Internet 
Protocol telephony and computer-based equipment that replicates 
telecommunications functionality. The NOI sought comment on the extent 
to which Internet telephony was impairing access to communications 
services among people with disabilities, the efforts manufacturers were 
taking to render new technologies accessible, and the degree to which 
these technologies should be subjected to the same disability access 
requirements as traditional telephony facilities.
    On March 10, 2004, the Commission released a Notice of Proposed 
Rulemaking (FCC 04-28), published at 69 FR 16193, March 29, 2004, 
seeking comment on issues relating to services and applications 
utilizing Internet Protocol. On June 15, 2007, the Commission released 
this Order (FCC 07-110) extending the disability access requirements 
that currently apply to telecommunications service providers and 
equipment manufacturers under section 255 of the Act to providers of 
``interconnected voice over Internet Protocol (VoIP) services,'' as 
defined by the Commission, and to manufacturers of specially designed 
equipment used to provide those services, and extending the TRS 
requirements contained in 47 CFR 64.601 et seq. of the Commission's 
rules to interconnected VoIP providers. Copies of document FCC 07-110 
and any subsequently filed documents in this matter will be available 
for public inspection and copying during regular business hours at the 
FCC Reference Information Center, Portals II, 445 12th Street, SW., 
Room CY-A257, Washington, DC 20554. Document FCC 07-110 and any 
subsequently filed documents in this matter may also be purchased from 
the Commission's duplicating contractor at Portals II, 445 12th Street, 
SW., Room CY-B402, Washington, DC 20554. Customers may contact the 
Commission's duplicating contractor at their Web site: https://
www.bcpiweb.com or call 1-800-378-3160. To request materials in 
accessible formats for people with disabilities (Braille, large print, 
electronic files, audio format), send an e-mail to fcc504@fcc.gov or 
call the Consumer & Governmental Affairs Bureau at (202) 418-0530 
(voice) or (202) 418-0432 (TTY). Document FCC 07-110 can also be 
downloaded in Word and Portable Document Format (PDF) at: https://
www.fcc.gov/cgb/dro/trs.html#orders under TRS Headlines (June 15, 
2007).

Paperwork Reduction Act of 1995 Analysis

    Document FCC 07-110 contains new or modified information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and OMB to comment 
on the information collection requirements contained in document FCC 
07-110, as required by the PRA. Public and agency comments are due 
October 5, 2007. Comments should address: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
burden estimates; (c) ways to enhance the quality, utility, and clarity 
of the information collected; and (d) ways to minimize the burden of 
the collection of information on the respondents, including the use of 
automated collection techniques or other forms of information 
technology. In addition, pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the 
Commission seeks specific comment on how it might ``further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees.''
    The Commission assessed the effects of imposing disability access 
requirements on interconnected VoIP providers and manufacturers, and of 
imposing TRS requirements on interconnected VoIP providers, and finds 
that there may be an increased administrative burden on businesses with 
fewer than 25 employees.
    The Commission has taken steps to minimize the information 
collection burden for small business concerns, including those with 
fewer than 25

[[Page 43548]]

employees. For example, although the Commission requires covered 
entities to maintain records of their accessibility efforts that can be 
presented to the Commission to demonstrate compliance, the Commission 
does not delineate specific documentation or certification requirements 
for ``readily achievable'' analyses. In addition, by adopting general 
performance criteria, as opposed to accessibility standards or 
performance measurements specifying exactly how access must be 
achieved, the Commission's rules provide small entities flexibility in 
determining how best to manage their compliance with these rules. 
Moreover, by adopting the ``readily achievable'' standard that 
currently applies to telecommunications service providers and 
manufacturers, covered interconnected VoIP providers and manufacturers 
are required to render their services or products accessible only if 
doing so is ``easily accomplishable and able to be carried out without 
much difficulty or expense.'' Finally, because the information 
interconnected VoIP providers currently provide on the 
Telecommunications Reporting Worksheet (FCC Form 499-A) for purposes of 
the USF reporting requirements also will be used to determine these 
entities' TRS contribution, there will be no increased reporting burden 
on small businesses. These measures should substantially alleviate any 
burdens on businesses with fewer than 25 employees.

Synopsis

    Section 255 of the Act requires manufacturers of 
``telecommunications equipment or customer premises equipment'' to 
ensure that such equipment is accessible to and usable by individuals 
with disabilities, if readily achievable, and requires providers of a 
``telecommunications service'' to ensure that the service is accessible 
to and usable by individuals with disabilities, if readily achievable. 
In this Order, the Commission extends those disability access 
requirements that currently apply to telecommunications service 
providers and equipment manufacturers under section 255 of the Act and 
47 CFR part 6, to providers of ``interconnected voice over Internet 
Protocol (VoIP) services,'' as defined by the Commission, and to 
manufacturers of specially designed equipment used to provide those 
services. The Commission adopts this measure under its Title I 
ancillary jurisdiction in order to give full effect to the 
accessibility policies embodied in section 255 of the Act, and to 
further the Commission's statutory mandate to make available a 
nationwide communications system that promotes the safety and welfare 
of all Americans. In addition, the Commission extends the TRS 
requirements contained in the Commission's regulations, 47 CFR 64.601 
et seq. (subpart F), to providers of interconnected VoIP services, 
pursuant to section 225(b)(1) of the Act and the Commission's Title I 
ancillary jurisdiction. Among the TRS requirements extended to 
interconnected VoIP providers, the Commission requires such providers 
to contribute to the Interstate TRS Fund (Fund) under the Commission's 
existing contribution rules, and to offer 711 abbreviated dialing for 
access to relay services. Together, these measures will ensure that, as 
more consumers migrate from traditional phone service to interconnected 
VoIP services, the disability access provisions mandated by Congress 
under sections 255 and 225 of the Act will apply to, and benefit users 
of, interconnected VoIP services and equipment.

Final Regulatory Flexibility Certification (FRFA)

    Pursuant to the Regulatory Flexibility Act of 1980, as amended, 5 
U.S.C. 601 et seq. (RFA), the Commission has prepared a Final 
Regulatory Flexibility Analysis (FRFA) of the possible significant 
economic impact on small entities of the policies and rules addressed 
in this document. The Commission sought written public comment on the 
proposals in the notice, including comment on the Initial Regulatory 
Flexibility Analysis (IRFA). See IP-Enabled Services NPRM, 19 FCC Rcd 
at 4917, paragraph 91 and Appendix A. The Commission received three 
comments on the IRFA, which are discussed below. This FRFA conforms to 
the RFA. See 5 U.S.C. 604.

Need for, and Objectives of, the Rules

    FCC 07-110 strengthens the Commission's disability access rules. 
Section 255 of the Act requires telecommunications service providers 
and equipment manufacturers to render their services or equipment 
accessible to persons with disabilities, if readily achievable. The 
Order extends the disability access requirements, that currently apply 
to telecommunications service providers and equipment manufacturers 
under section 255 of the Act, to providers of interconnected VoIP 
services and to manufacturers of specially designed equipment used to 
provide those services. In addition, the Order extends the TRS 
requirements contained in the Commission's regulations, 47 CFR 64.601 
et seq. (subpart F), to providers of interconnected VoIP services. 
Among the TRS requirements extended to interconnected VoIP providers, 
the Commission requires such providers to contribute to the Interstate 
TRS Fund under the Commission's existing contribution rules, see 47 CFR 
64.604(c)(5)(iii)(A), (B), and to offer 711 abbreviated dialing for 
access to relay services, see 47 CFR 64.603. Together, these measures 
will ensure that, as more consumers migrate from traditional phone 
service to interconnected VoIP services, the disability access 
provisions mandated by Congress under sections 255 and 225 of the Act 
will apply to, and benefit users of, interconnected VoIP services and 
equipment.

Summary of Significant Issues Raised by Public Comments in Response to 
the IRFA

    Comments Received in Response to the IP-Enabled Services NPRM. In 
this section, we respond to comments filed in response to the IRFA. To 
the extent comments raised general small business concerns during this 
proceeding, those comments have been addressed in the Order. The 
Commission disagrees with SBA and Menard that the Commission should 
postpone acting in this proceeding--thereby postponing extension of the 
application of the disability access and TRS contribution rules to 
interconnected VoIP providers--and instead should reevaluate the 
economic impact and the compliance burdens on small entities and issue 
a further notice of proposed rulemaking in conjunction with a 
supplemental IRFA identifying and analyzing the economic impacts on 
small entities, and less burdensome alternatives. See Comments of SBA 
at 2, 4, 6 (May 28, 2004); Comments of Menard at 2-5 (May 28, 2004); 
Reply of Menard at 4 (July 15, 2004).
    The additional steps suggested by SBA and Menard are unnecessary, 
because small entities already had sufficient notice of the issues 
addressed in the Order, through comment sought by the IP-Enabled 
Services NPRM and the Section 255 NOI. Indeed, the Commission notes 
that a number of small entities submitted comments in this proceeding. 
The Commission has considered the economic impact on small entities as 
well as ways to minimize the burdens imposed on those entities, and, to 
the extent feasible, has implemented those less burdensome 
alternatives. See Order, FCC 07-110, section E of Appendix A.

[[Page 43549]]

Description and Estimate of the Number of Small Entities to Which 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 the rules adopted herein. The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' 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 terms which are appropriate to the activities of the agency and 
publishes such definitions(s) in the Federal Register.'' 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).
    Small Businesses. Nationwide, there are a total of approximately 
22.4 million small businesses, according to SBA data.
    Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.
    Small Governmental Jurisdictions. The term ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand.'' Census Bureau data for 2002 
indicate that there were 87,525 local governmental jurisdictions in the 
United States. The Commission estimates that, of this total, 84,377 
entities were ``small governmental jurisdictions.'' Thus, the 
Commission estimates that most governmental jurisdictions are small.

Telecommunications Service Entities

    Wireless Carriers and Service Providers. The Commission has 
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. The 
Small Business Act contains a definition of ``small-business concern,'' 
which the RFA incorporates into its own definition of ``small 
business.'' SBA regulations interpret ``small business concern'' to 
include the concept of dominance on a national basis. The Commission 
therefore has included small incumbent local exchange carriers in this 
RFA analysis, although the Commission emphasizes that this RFA action 
has no effect on Commission analyses and determinations in other, non-
RFA contexts.
    Wired Telecommunications Carriers. The SBA has developed a small 
business size standard for wireline firms within the broad economic 
census category, ``Wired Telecommunications Carriers.'' Under this 
category, the SBA deems a wireline business to be small if it has 1,500 
or fewer employees. Census Bureau data for 2002 show that there were 
2,432 firms in this category that operated for the entire year. Of this 
total, 2,395 firms had employment of 999 or fewer employees, and 37 
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.
    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 which a business is small if it has 1,500 or fewer employees. 
According to Commission data, 1,307 carriers have reported that they 
are engaged in the provision of incumbent local exchange services. Of 
these 1,307 carriers, an estimated 1,019 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 the Commission's action.
    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 which a business is small if it has 
1,500 or fewer employees. According to Commission data, 859 carriers 
have reported that they are engaged in the provision of either 
competitive access provider services or competitive local exchange 
carrier services. Of these 859 carriers, an estimated 741 have 1,500 or 
fewer employees and 118 have more than 1,500 employees. In addition, 16 
carriers have reported that they are ``Shared-Tenant Service 
Providers,'' and all 16 are estimated to have 1,500 or fewer employees. 
In addition, 44 carriers have reported that they are ``Other Local 
Service Providers.'' Of the 44, an estimated 43 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 the Commission's action.
    Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers, under which 
a business is small if it has 1,500 or fewer employees. According to 
Commission data, 184 carriers have reported that they are engaged in 
the provision of local resale services. Of these, an estimated 181 have 
1,500 or fewer employees and three have more than 1,500 employees. 
Consequently, the Commission estimates that the majority of local 
resellers are small entities that may be affected by the Commission's 
action.
    Toll Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers, under which 
a business is small if it has 1,500 or fewer employees. According to 
Commission data, 881 carriers have reported that they are engaged in 
the provision of toll resale services. Of these, an estimated 853 have 
1,500 or fewer employees and 28 have more than 1,500 employees. 
Consequently, the Commission estimates that the majority of toll 
resellers are small entities that may be affected by the Commission's 
action.
    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 
which a business is small if it has 1,500 or fewer employees. According 
to Commission data, 657 carriers have reported that they are engaged in 
the provision of payphone

[[Page 43550]]

services. Of these, an estimated 653 have 1,500 or fewer employees and 
four 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 the Commission's action.
    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 
which a business is small if it has 1,500 or fewer employees. According 
to Commission data, 330 carriers have reported that they are engaged in 
the provision of interexchange service. Of these, an estimated 309 have 
1,500 or fewer employees and 21 have more than 1,500 employees. 
Consequently, the Commission estimates that the majority of IXCs are 
small entities that may be affected by the Commission's action.
    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 
which 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 22 have 
1,500 or fewer employees and one has more than 1,500 employees. 
Consequently, the Commission estimates that the majority of OSPs are 
small entities that may be affected by the Commission's action.
    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 which a 
business is small if it has 1,500 or fewer employees. According to 
Commission data, 104 carriers have reported that they are engaged in 
the provision of prepaid calling cards. Of these, 102 are estimated to 
have 1,500 or fewer employees and two have 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 the Commission's action.
    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 which 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 this source, as 
of the end of June 2006, the number of 800 numbers assigned was 
7,647,941, the number of 888 numbers assigned was 5,318,667, the number 
of 877 numbers assigned was 4,431,162, and the number of 866 numbers 
assigned was 6,008,976. 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 approximately 7,647,941 small entity 800 
subscribers, approximately 5,318,667 small entity 888 subscribers, 
approximately 4,431,162 small entity 877 subscribers, and approximately 
6,008,976 small entity 866 subscribers.

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 census 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. The first category of Satellite 
Telecommunications ``comprises establishments primarily engaged in 
providing point-to-point telecommunications services to other 
establishments in the telecommunications and broadcasting industries by 
forwarding and receiving communications signals via a system of 
satellites or reselling satellite telecommunications.'' For this 
category, Census Bureau data for 2002 show that there were a total of 
371 firms that operated for the entire year. Of this total, 307 firms 
had annual receipts of under $10 million, and 26 firms had receipts of 
$10 million to $24,999,999. Consequently, we estimate that the majority 
of Satellite Telecommunications firms are small entities that might be 
affected by the Commission's action.
    The second category of Other Telecommunications ``comprises 
establishments primarily engaged in (1) providing specialized 
telecommunications applications, such as satellite tracking, 
communications telemetry, and radar station operations; or (2) 
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.'' For this category, Census 
Bureau data for 2002 show that there were a total of 332 firms that 
operated for the entire year.
    Of this total, 259 firms had annual receipts of under $10 million 
and 15 firms had annual receipts of $10 million to $24,999,999. 
Consequently, we estimate that the majority of Other Telecommunications 
firms are small entities that might be affected by the Commission's 
action.

Wireless Telecommunications Service Providers

    Below, for those services subject to auctions, the Commission notes 
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. The 
Commission does not generally track subsequent business size unless, in 
the context of assignments or transfers, unjust enrichment issues are 
implicated.
    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 2002 show that there were 807 firms in 
this category that operated for the entire year. Of this total, 804 
firms had employment of 999 or fewer employees, and three 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 of Cellular and Other 
Wireless Telecommunications, Census Bureau data for 2002 show that 
there were 1,397 firms in this category that operated for the entire 
year. Of this total, 1,378 firms had employment of 999 or fewer 
employees, and 19 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.

[[Page 43551]]

    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 which a 
wireless business is small if it has 1,500 or fewer employees. For the 
census category of Cellular and Other Wireless Telecommunications, 
Census Bureau data for 2002 show that there were 1,397 firms in this 
category that operated for the entire year. Of this total, 1,378 firms 
had employment of 999 or fewer employees, and 19 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, 432 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. The Commission has estimated 
that 221 of these are small, under the SBA small business size 
standard.
    Common Carrier Paging. The SBA has developed a small business size 
standard for wireless firms within the broad economic census category, 
``Cellular and Other Wireless Telecommunications,'' under which a 
wireless business is small if it has 1,500 or fewer employees. For the 
census category of Paging, Census Bureau data for 2002 show that there 
were 807 firms in this category that operated for the entire year. Of 
this total, 804 firms had employment of 999 or fewer employees, and 
three 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, 
the Commission developed a small business size standard for ``small 
businesses'' and ``very small businesses.'' See Amendment of Part 90 of 
the Commission's Rules to Provide for the Use of the 220-222 MHz Band 
by the Private Land Mobile Radio Service, PR Docket No. 89-552, Third 
Report and Order and Fifth Notice of Proposed Rulemaking, 12 FCC Rcd 
10943, 11068-70, paragraphs 291-295, 62 FR 16004 (April 3, 1997) (220 
MHz Third Report and Order).
    A ``small business'' and a ``very small business'' are entities 
that, together with their affiliates and controlling principals, have 
average gross revenues not exceeding $15 million for $3 million, 
respectively, 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, the Commission estimates that 370 are 
small, under the SBA-approved small business size standard.
    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'' 
and a ``very small business'' are entities with average gross revenues 
of $40 million or $15 million, respectively, 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.
    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 which a business is small if it 
has 1,500 or fewer employees. According to Commission data, 432 
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. 
The Commission has estimated that 221 of these are small, under the SBA 
small business size standard.
    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. See Amendment of Parts 20 and 24 of 
the Commission's Rules--Broadband PCS Competitive Bidding and the 
Commercial Mobile Radio Service Spectrum Cap, WT Docket No. 96-59, 
Report and Order, 11 FCC Rcd 7824, 61 FR 33859 (July 1, 1996) (PCS 
Order). 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.'' See PCS Order. These 
standards defining ``small entity'' in the context of broadband PCS 
auctions have been approved by the SBA. See, e.g., Implementation of 
Section 309(j) of the Communications Act--Competitive Bidding, PP 
Docket No. 93-253, Fifth Report and Order, 9 FCC Rcd 5332, 59 FR 37566 
(July 22, 1994). 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 ``very small'' 
businesses. Subsequent events, concerning Auction 35, including 
judicial and agency determinations, resulted in a total of 163 C and F 
Block licenses being available for grant.
    Narrowband Personal Communications Services. 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. A ``small business'' and 
a ``very small business'' are entities that, together with affiliates 
and controlling interests, have average gross revenues of not more than 
$40 million or $15 million, respectively, for the three preceding 
years. 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

[[Page 43552]]

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.
    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, under which a small business 
is a wireless company employing no more than 1,500 persons. For the 
census category of Cellular and Other Wireless Telecommunications, 
Census Bureau data for 2002 show that there were 1,397 firms in this 
category that operated for the entire year. Of this total, 1,378 firms 
had employment of 999 or fewer employees, and 19 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.
    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, the Commission adopted a small business size standard 
for ``small'' and ``very small'' businesses for entities that, together 
with affiliates and controlling interests, have average gross revenues 
not exceeding $15 million or $3 million, respectively, for the three 
preceding years. See 220 MHz Third Report and Order, 12 FCC Rcd at 
11068-70, paragraphs 291-295. 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.
    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. 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 that 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.
    700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order, the 
Commission adopted a small business size standard for ``small 
businesses'' and ``very small businesses'' for entities that, together 
with affiliates and controlling interests, have average gross revenues 
not exceeding $15 million or $3 million, respectively, for the three 
preceding years. See Service Rules for the 746-764 MHz Bands, and 
Revisions to Part 27 of the Commission's Rules, WT Docket No. 99-168, 
Second Report and Order, 65 FR 17599 (Apr. 4, 2000). 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.
    Rural Radiotelephone Service. The Commission has not adopted a size 
standard for small businesses specific to the Rural Radiotelephone 
Service. The service is defined in section 22.99 of the Commission's 
Rules, 47 CFR 22.99. A significant subset of the Rural Radiotelephone 
Service is the Basic Exchange Telephone Radio System (BETRS). BETRS is 
defined in sections 22.757 and 22.759 of the Commission's Rules, 47 CFR 
22.757 and 22.759. 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.
    Air-Ground Radiotelephone Service. The Commission has not adopted a 
small business size standard specific to the Air-Ground Radiotelephone 
Service. The service is defined in section 22.99 of the Commission's 
Rules, 47 CFR 22.99. The Commission 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.
    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

[[Page 43553]]

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 the Commission's 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 
``small'' businesses and ``very small'' businesses as entities that, 
together with affiliates and controlling interests, have average gross 
revenues not exceeding $15 million or $3 million, respectively, for the 
three preceding years. 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.
    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. 
The Commission is 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.
    39 GHz Service. The Commission created special ``small business'' 
and ``very small business'' size standards for 39 GHz licenses--
entities that have average gross revenues of up to $40 million or $15 
million, respectively, in the three previous 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.
    Wireless Cable Systems. Wireless cable systems use 2 GHz band 
frequencies of the Broadband Radio Service (``BRS'') (formerly 
Multipoint Distribution Service (``MDS'')) and the Educational 
Broadband Service (``EBS'') (formerly Instructional Television Fixed 
Service (``ITFS'')), to transmit video programming and provide 
broadband services to residential subscribers. These services were 
originally designed for the delivery of multichannel video programming, 
similar to that of traditional cable systems, but over the past several 
years licensees have focused their operations instead on providing two-
way high-speed Internet access services. Local Multipoint Distribution 
Service (``LMDS'') is a fixed broadband point-to-multipoint microwave 
service that provides for two-way video telecommunications. As 
described below, the SBA small business size standard for the broad 
census category of Cable and Other Program Distribution, which consists 
of such entities generating $13.5 million or less in annual receipts, 
appears applicable to BRS, EBS and LMDS. Other standards also apply, as 
described.
    The Commission has defined small MDS (now BRS) and LMDS entities in 
the context of Commission license auctions. In the 1996 MDS auction, 
the Commission defined a ``small business'' as an entity that had 
annual average gross revenues of less than $40 million in the previous 
three calendar years. This definition has been approved by the SBA in 
the context of MDS auctions. In the MDS auction, 67 bidders won 493 
licenses. Of the 67 auction winners, 61 claimed status as a small 
business. At this time, the Commission estimates that of the 61 small 
business MDS auction winners, 48 remain small business licensees. In 
addition to the 48 small businesses that hold BTA authorizations, there 
are approximately 392 incumbent MDS licensees that have gross revenues 
that are not more than $40 million and are thus considered small 
entities. Hundreds of stations were licensed to incumbent MDS licensees 
prior to implementation of Section 309(j) of the Act, 47 U.S.C. 309(j). 
For these pre-auction licenses, the applicable standard is SBA's small 
business size standards for ``other telecommunications'' (annual 
receipts of $13.5 million or less). MDS licensees and wireless cable 
operators that did not receive their licenses as a result of the MDS 
auction fall under the SBA small business size standard for Cable and 
Other Program Distribution. Information available to the Commission 
indicates that there are approximately 850 of these licensees and 
operators that do not generate revenue in excess of $13.5 million 
annually. Therefore, the Commission estimates that there are 
approximately 850 small entity BRS providers, as defined by the SBA and 
the Commission's auction rules. Educational institutions are included 
in this analysis as small entities; however, the Commission has not 
created a specific small business size standard for ITFS (now EBS). The 
Commission estimates that there are currently 2,032 ITFS (or EBS) 
licensees, and all but 100 of the licenses are held by educational 
institutions. Thus, the Commission estimates that at least 1,932 ITFS 
licensees are small entities.
    Local Multipoint Distribution Service. LMDS is a fixed broadband, 
point-to-multipoint, microwave service that provides for two-way video 
telecommunications. The Commission established ``small business'' and 
``very small business'' size standards for LMDS licenses as entities 
that have average gross revenues not exceeding $40 million or $15 
million, respectively, for the three preceeding years. The SBA has 
approved these small business size standards in the context of LMDS 
auctions. A total of 93 small and very small business bidders won 
approximately 277 A Block licenses and 387 B Block licenses in LMDS 
auctions. On March 27, 1999, the Commission re-auctioned 161 licenses; 
there were 40 winning bidders. Based on this information, the 
Commission concludes that the maximum number of small LMDS licensees 
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.
    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, 64 FR 
59656, the Commission established standards for a ``small business'' 
and a ``very small business'' as entities that, together with 
affiliates and controlling interests, have average annual gross 
revenues not exceeding $15 million or $3 million, respectively, for the 
three preceding years. These special small business size standards will 
be used, as appropriate, in future auctions of 218-219 MHz spectrum.
    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

[[Page 43554]]

``Cellular and Other Wireless Telecommunications'' companies. This 
category provides that such a company is small if it employs no more 
than 1,500 persons. For the census category of Cellular and Other 
Wireless Telecommunications, Census Bureau data for 2002 show that 
there were 1,397 firms in this category that operated for the entire 
year. Of this total, 1,378 firms had employment of 999 or fewer 
employees, and 19 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. These broader census data 
notwithstanding, the Commission believes 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 the Commission's 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.
    24 GHz--Future Licensees. With respect to new applicants in the 24 
GHz band, the SBA approved small business size standards for a ``small 
business'' and ``very small business,'' which are entities that, 
together with affiliates and controlling interests, have average annual 
gross revenues not exceeding $15 million or $3 million, respectively, 
for the three preceding years. These size standards will apply to the 
future auction, if held.

Cable and OVS Operators

    Cable and Other Program Distribution. The Census Bureau defines 
this category as follows: ``This industry comprises establishments 
primarily engaged as third-party distribution systems for broadcast 
programming. The establishments of this industry deliver visual, aural, 
or textual programming received from cable networks, local television 
stations, or radio networks to consumers via cable or direct-to-home 
satellite systems on a subscription or fee basis. These establishments 
do not generally originate programming material.'' The SBA has 
developed a small business size standard for Cable and Other Program 
Distribution, which is: all such firms having $13.5 million or less in 
annual receipts. According to Census Bureau data for 2002, there were a 
total of 1,191 firms in this category that operated for the entire 
year. Of this total, 1,087 firms had annual receipts of under $10 
million, and 43 firms had receipts of $10 million or more but less than 
$25 million. Thus, under this size standard, the majority of firms can 
be considered small.
    Cable Companies and Systems. The Commission has also developed its 
own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide. Industry data 
indicate that, of 1,076 cable operators nationwide, all but eleven are 
small under this size standard. In addition, under the Commission's 
rules, a ``small system'' is a cable system serving 15,000 or fewer 
subscribers. Industry data indicate that, of 7,208 systems nationwide, 
6,139 systems have under 10,000 subscribers, and an additional 379 
systems have 10,000-19,999 subscribers. Thus, under this second size 
standard, most cable systems are small.
    Cable System Operators. The Act also contains a size standard for 
small cable system operators, which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 1 
percent of all subscribers in the United States and is not affiliated 
with any entity or entities whose gross annual revenues in the 
aggregate exceed $250,000,000.'' The Commission has determined that 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. Industry data indicate that, of 1,076 cable operators 
nationwide, all but ten are small under this size standard. The 
Commission notes that it neither requests nor collects information on 
whether cable system operators are affiliated with entities whose gross 
annual revenues exceed $250 million, and therefore it cannot provide a 
more accurate estimate of the number of cable system operators that 
would qualify as small under this size standard.
    Open Video Services. Open Video Service (OVS) systems provide 
subscription services. The SBA has created a small business size 
standard for Cable and Other Program Distribution. This standard 
provides that a small entity is one with $13.5 million or less in 
annual receipts. The Commission has certified approximately 25 OVS 
operators to serve 75 areas, some of which are currently providing 
service. Affiliates of Residential Communications Network, Inc. (RCN) 
received approval to operate OVS systems in New York City, Boston, 
Washington, DC, and other areas. RCN has sufficient revenues to assure 
that they do not qualify as a small business entity. Little financial 
information is available for the other entities that are authorized to 
provide OVS and are not yet operational. Since some entities authorized 
to provide OVS service have not yet begun to generate revenues, the 
Commission concludes that up to all 24 of the OVS operators other than 
RCN might qualify as small businesses that may be affected by the rules 
and policies adopted herein.

Internet Service Providers

    Internet Service Providers. The SBA has developed a small business 
size standard for Internet Service Providers (ISPs). ISPs ``provide 
clients access to the Internet and generally provide related services 
such as web hosting, web page designing, and hardware or software 
consulting related to Internet connectivity.'' Under the SBA size 
standard, such a business is small if it has average annual receipts of 
$23 million or less. According to Census Bureau data for 2002, there 
were 2,529 firms in this category that operated for the entire year. Of 
these, 2,437 firms had annual receipts of under $10 million, and an 
additional 47 firms had receipts of between $10 million and 
$24,999,999. Consequently, the Commission estimates that the majority 
of these firms are small entities that may be affected by the 
Commission's action.

Other Internet-Related Entities

    Web Search Portals. The Commission's action pertains to VoIP 
services, which could be provided by entities that provide other 
services such as e-mail, online gaming, web browsing, video 
conferencing, instant messaging, and other, similar IP-enabled 
services. The Commission has not adopted a size standard for entities 
that create or provide these types of services or applications. 
However, the Census Bureau identified firms that ``operate web sites 
that use a search engine to generate and maintain extensive databases 
of Internet addresses and content in an easily searchable format. Web 
search portals often provide additional Internet services, such as e-
mail, connections to other web sites, auctions, news, and other limited 
content, and serve as a home base for Internet users.'' The SBA 
developed a small business size standard for this category of $6.5 
million or less in average annual receipts. According to Census Bureau 
data for 2002, 342 firms in this category operated for the entire year. 
Of these, 303 had annual receipts of under $5 million, and 15 firms had 
receipts of between $5 million and $9,999,999. The Commission estimates 
that the majority of these firms are small

[[Page 43555]]

entities that may be affected by the Commission's action.
    Data Processing, Hosting, and Related Services. Entities in this 
category ``primarily * * * provid[e] infrastructure for hosting or data 
processing services.'' The SBA developed a small business size standard 
for this category of $23 million or less in average annual receipts. 
According to Census Bureau data for 2002, 6,877 firms in this category 
operated for the entire year, 6,418 of which had annual receipts of 
under $10 million, and an additional 251 of which had receipts of 
between $10 million and $24,999,999. Consequently, the Commission 
estimates that the majority of these firms are small entities that may 
be affected by the Commission's action.
    All Other Information Services. ``This industry comprises 
establishments primarily engaged in providing other information 
services (except new syndicates and libraries and archives).'' The 
Commission's action pertains to VoIP services, which could be provided 
by entities that provide other services such as e-mail, online gaming, 
web browsing, video conferencing, instant messaging, and other, similar 
IP-enabled services. The SBA developed a small business size standard 
for this category of $6.5 million or less in average annual receipts. 
According to Census Bureau data for 2002, there were 155 firms in this 
category that operated for the entire year. Of these, 138 had annual 
receipts of under $5 million, and an additional four firms had receipts 
of between $5 million and $9,999,999. The Commission estimates that the 
majority of these firms are small entities that may be affected by the 
Commission's action.
    Internet Publishing and Broadcasting. ``This industry comprises 
establishments engaged in publishing and/or broadcasting content on the 
Internet exclusively. These establishments do not provide traditional 
(non-Internet) versions of the content that they publish or 
broadcast.'' The SBA developed a small business size standard for this 
census category of 500 or fewer employees. According to Census Bureau 
data for 2002, 1,362 firms in this category operated for the entire 
year. Of these, 1,351 employed 499 or fewer employees, and six firms 
employed between 500 and 999. Consequently, the Commission estimates 
that the majority of these firms are small entities that may be 
affected by the Commission's action.
    Software Publishers. These companies may design, develop or publish 
software and may provide other support services to software purchasers, 
such as providing documentation or assisting in installation. The 
companies may also design software to meet the needs of specific users. 
The SBA developed a small business size standard of $23 million or less 
in average annual receipts for all of the following pertinent 
categories: Software Publishers, Custom Computer Programming Services, 
and Other Computer Related Services. For Software Publishers, Census 
Bureau data for 2002 indicate that there were 6,155 firms in the 
category that operated for the entire year. Of these, 7,633 had annual 
receipts of under $10 million, and an additional 403 firms had receipts 
of between $10 million and $24,999,999. For providers of Custom 
Computer Progr