IP-Enabled Services, Telephone Number Portability, Numbering Resource Optimization, 9463-9481 [E8-3130]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 73, Number 35 (Thursday, February 21, 2008)]
[Rules and Regulations]
[Pages 9463-9481]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-3130]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 52

[WC Docket No. 04-36, CC Docket Nos. 95-116, 99-200; FCC 07-188]


IP-Enabled Services, Telephone Number Portability, Numbering 
Resource Optimization

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission adopted rules extending local number 
portability obligations and numbering administration support 
obligations to interconnected VoIP services and responded to the 
District of Columbia Circuit Court of Appeals stay of the Commission's 
Intermodal Number Portability Order.

DATES: Effective March 24, 2008.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Melissa Kirkel, Wireline Competition 
Bureau, (202) 418-1580.

SUPPLEMENTARY INFORMATION: In this Order, the Commission undertakes 
several steps to help ensure that consumers and competition benefit 
from local number portability (LNP) as intended by the Communications 
Act of 1934, as amended (the Act) and Commission precedent. First, the 
Commission extends LNP obligations and numbering administration support 
obligations to encompass interconnected VoIP services. Second, the 
Commission issues a Final Regulatory Flexibility Analysis (FRFA) in 
response to the D.C. Circuit's stay of the Commission's Intermodal 
Number Portability Order. The Commission finds that wireline carriers 
qualifying as small entities under the Regulatory Flexibility Act (RFA) 
should be required to port to wireless carriers where the requesting 
wireless carrier's ``coverage area'' overlaps the geographic location 
in which the customer's wireline number is provisioned, provided that 
the porting-in carrier maintains the number's original rate center 
designation following the port.
    The Commission will send a copy of this Report and Order and Order 
on Remand in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).

[[Page 9464]]

Final Paperwork Reduction Act of 1995 Analysis

    This document does not contain new or modified 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).

Synopsis of Report and Order

    1. On March 10, 2004, the Commission initiated a proceeding to 
examine issues relating to Internet Protocol (IP)-enabled services--
services and applications making use of IP, including, but not limited 
to, VoIP services. In the IP-Enabled Services Notice (69 FR 16193, Mar. 
29, 2004), the Commission sought comment on, among other things, 
whether to extend the obligation to provide LNP to any class of IP-
enabled service provider. The Commission also sought comment on whether 
the Commission should take any action to facilitate the growth of IP-
enabled services, while at the same time maximizing the use and life of 
the North American Numbering Plan (NANP) numbering resources.
    2. The Commission finds that the customers of interconnected VoIP 
services should receive the benefits of LNP. Such action is 
fundamentally important for the protection of consumers and is 
consistent with the authority granted to the Commission under section 
251(e) and sections 1 and 2 of the Act. Moreover, as described below, 
by requiring interconnected VoIP providers and their numbering partners 
to ensure that users of interconnected VoIP services have the ability 
to port their telephone numbers when changing service providers to or 
from an interconnected VoIP provider, the Commission benefits not only 
customers but the interconnected VoIP providers themselves. (By 
``numbering partner,'' the Commission means the carrier from which an 
interconnected VoIP provider obtains numbering resources.) 
Specifically, the ability of end users to retain their NANP telephone 
numbers when changing service providers gives customers flexibility in 
the quality, price, and variety of services they can choose to 
purchase. Allowing customers to respond to price and service changes 
without changing their telephone numbers will enhance competition, a 
fundamental goal of section 251 of the Act, while helping to fulfill 
the Act's goal of facilitating ``a rapid, efficient, Nation-wide, and 
world-wide wire and radio communication service.'' Additionally, the 
Commisison extends to interconnected VoIP providers the obligation to 
contribute to shared numbering administration costs. The Commission 
believes that the steps the Commission takes today to ensure regulatory 
parity among providers of similar services will minimize marketplace 
distortions arising from regulatory advantage.

A. Scope

    3. Consistent with the Commission's previous decisions in the IP-
Enabled Services proceeding, the Commission limits its decision to 
interconnected VoIP providers, in part because, unlike certain other 
IP-enabled services, the Commission continues to believe that 
interconnected VoIP service ``is increasingly used to replace analog 
voice service,'' including, in some cases, local exchange service. 
Indeed, as interconnected VoIP service improves and proliferates, 
consumers' expectations for these services trend toward their 
expectations for other telephone services. Thus, consumers reasonably 
expect interconnected VoIP services to include regulatory protections 
such as emergency 911 service and LNP.
    4. These characteristics of interconnected VoIP service support a 
finding that it is appropriate to extend LNP obligations to include 
such services, in light of the statute and Commission precedent. 
Congress expressly directed the Commission to prescribe requirements 
that all local exchange carriers (LECs) must meet to satisfy their 
statutory LNP obligations. In doing so, the Commission has required 
service providers that have not been found to be LECs but that are 
expected to compete against LECs to comply with the LNP obligations set 
forth in section 251(b)(2). In extending LNP rules to such providers, 
the Commission concluded, among other things, that imposing such 
obligations would ``promote competition between providers of local 
telephone services and thereby promote competition between providers of 
interstate access services.'' Specifically, the Commission found that 
the availability of LNP would ``eliminat[e] one major disincentive to 
switch carriers,'' and thus would facilitate ``the successful entrance 
of new service providers'' covered by the LNP rules. Indeed, the 
Commission determined that LNP not only would facilitate competition 
between such new service providers and wireline telecommunications 
carriers, but also would facilitate competition among the new service 
providers themselves. The Commission anticipated that the enhanced 
competition resulting from LNP would ``stimulate the development of new 
services and technologies, and create incentives for carriers to lower 
prices and costs.'' The Commission further concluded that 
implementation of long-term LNP by these providers would help ensure 
``efficient use and uniform administration'' of numbering resources. 
For these same policy reasons, the Commission extends the LNP 
obligations to interconnected VoIP providers.
    5. To effectuate this policy, the Commission must address both the 
obligations of interconnected VoIP providers as well as the obligations 
of telecommunications carriers that serve interconnected VoIP providers 
as their numbering partners. Thus, the Commission takes this 
opportunity to reaffirm that only carriers, absent a Commission waiver, 
may access numbering resources directly from the North American 
Numbering Plan Administrator (NANPA) or the Pooling Administrator (PA). 
Section 52.15(g)(2) of the Commission's rules limits access to the NANP 
numbering resources to those applicants that are: (1) ``authorized to 
provide service in the area for which the numbering resources are being 
requested''; and (2) ``[are] or will be capable of providing service 
within sixty (60) days of the numbering resources activation date.'' It 
is well established that the Commission's rules allow only carriers 
direct access to NANP numbering resources to ensure that the numbers 
are used efficiently and to avoid number exhaust. Thus, many 
interconnected VoIP providers may not obtain numbering resources 
directly from the NANPA because they will not have obtained a license 
or a certificate of public convenience and necessity from the relevant 
states. Interconnected VoIP providers that have not obtained a license 
or certificate of public convenience and necessity from the relevant 
states or otherwise are not eligible to receive numbers directly from 
the administrators may make numbers available to their customers 
through commercial arrangements with carriers (i.e., numbering 
partners). The Commission emphasizes that ensuring compliance with the 
Commission's numbering rules, including LNP requirements, in such cases 
remains the responsibility of the carrier that obtains the numbering 
resource from the numbering administrator as well as the responsibility 
of the interconnected VoIP provider. Additionally, with this

[[Page 9465]]

Order, the Commission clarifies that LECs and CMRS providers have an 
obligation to port numbers to interconnected VoIP providers and their 
numbering partners subject to a valid port request.

B. Authority

    6. In this Order, the Commission concludes that the Commission has 
ample authority to extend LNP obligations and numbering administration 
support obligations to interconnected VoIP providers. Specifically, the 
Commission concludes that it has authority to extend LNP obligations 
and numbering administration support obligations to interconnected VoIP 
providers and their numbering partners under the Commission's plenary 
numbering authority pursuant to section 251(e) of the Act. The 
Commission further finds authority in section 251(b)(2) of the Act for 
the obligations it extends to numbering partners that serve 
interconnected VoIP providers. Separately, the Commission analyzes the 
extension of the Commission's rules to interconnected VoIP providers 
under the Commission's Title I ancillary jurisdiction.
    7. Plenary Numbering Authority. Consistent with Commission 
precedent, the Commission finds that the plenary numbering authority 
that Congress granted this Commission under section 251(e)(1) provides 
ample authority to extend the LNP requirements set out in this Order to 
interconnected VoIP providers and their numbering partners. 
Specifically, in section 251(e)(1) of the Act, Congress expressly 
assigned to the Commission exclusive jurisdiction over that portion of 
the NANP that pertains to the United States. The Commission retained 
its ``authority to set policy with respect to all facets of numbering 
administration in the United States.'' To the extent that an 
interconnected VoIP provider provides services that offer its customers 
NANP telephone numbers, both the interconnected VoIP provider and the 
telecommunications carrier that secures the numbering resource from the 
numbering administrator subject themselves to the Commission's plenary 
authority under section 251(e)(1) with respect to those numbers.
    8. Section 251(b)(2) Authority over Telecommunications Carriers. 
The Commission finds that section 251(b)(2) provides an additional 
source of authority to impose LNP obligations on the LEC numbering 
partners of interconnected VoIP providers. Section 251(b)(2) states 
that all LECs have a ``duty to provide, to the extent technically 
feasible, number portability in accordance with the requirements 
prescribed by the Commission.'' The Commission has long held that it 
has ``authority to require that number portability be implemented `to 
the extent technically feasible' and that the Commission's authority 
under section 251(b)(2) encompasses all forms of number portability.'' 
The Commission's application of this authority is informed by the Act's 
focus on protecting consumers through number portability. Section 3 of 
the Act defines ``number portability'' as ``the ability of users of 
telecommunications services to retain, at the same location, existing 
telecommunications numbers without impairment of quality, reliability, 
or convenience when switching from one telecommunications carrier to 
another.'' (emphasis added) In this Order, the Commission prescribes 
requirements that expand number portability to include ports to and 
from interconnected VoIP providers, and therefore find that section 
251(b)(2) grants the Commission authority to impose obligations on the 
interconnected VoIP providers' LEC numbering partners to effectuate 
those requirements. By holding the LEC numbering partner responsible 
for ensuring a porting request is honored to the extent technically 
feasible, the Commission thus abides by this statutory mandate. The 
Commission interprets section 251(b)(2) to include a number porting 
obligation even when the switching of ``carriers'' occurs at the 
wholesale rather than retail level. Given Congress's imposition of the 
number portability obligations on all such carriers and the broad terms 
of the obligation itself, the Commission believes that its 
interpretation is a reasonable interpretation of the statute. To find 
otherwise would permit carriers to avoid numbering obligations simply 
by creating an interconnected VoIP provider affiliate and assigning the 
number to such affiliate. Further, to ensure that consumers retain this 
benefit as technology evolves, the Commission continues to believe that 
Congress's intent is that number portability be a ``dynamic concept'' 
that accommodates such changes. The Commission previously has found 
that it has the authority to alter the scope of porting obligations due 
to technological changes in how numbers are ported. Similarly, the Act 
provides ample authority for the logical extension of porting 
obligations due to technological changes in how telephone service is 
provided to end-user customers. The Commission exercises its authority 
under the Act to ensure that consumers' interests in their existing 
telephone numbers are adequately protected whether the customer is 
using a telephone number obtained from a LEC directly or indirectly via 
an interconnected VoIP provider. In either case, the LEC or LEC 
numbering partner must comply with the Commission's LNP rules.
    9. Ancillary Jurisdiction over Interconnected VoIP Services. The 
Commission further concludes that the Commission has a separate 
additional source of authority under Title I of the Act to impose LNP 
obligations and numbering administration support obligations on 
interconnected VoIP providers. Ancillary jurisdiction may be employed, 
in the Commission's discretion, when Title I of the Act gives the 
Commission subject matter jurisdiction over the service to be regulated 
and the assertion of jurisdiction is ``reasonably ancillary to the 
effective performance of [its] various responsibilities.'' Both 
predicates for ancillary jurisdiction are satisfied here.
    10. First, as the Commission concluded in previous orders, 
interconnected VoIP services fall within the subject matter 
jurisdiction granted to the Commission in the Act. Section 1 of the 
Act, moreover, charges the Commission with responsibility for making 
available ``a rapid, efficient, Nation-wide, and world-wide wire and 
radio communication service.'' Thus, section 1, in conjunction with 
section 251, creates a significant federal interest in the efficient 
use of numbering resources. Second, the Commission finds that requiring 
interconnected VoIP providers to comply with LNP rules and cost 
recovery mechanisms is reasonably ancillary to the effective 
performance of the Commission's fundamental responsibilities. As noted 
above, section 251(b)(2) of the Act requires LECs to provide number 
portability in accordance with the requirements prescribed by the 
Commission to the extent technically feasible. Further, section 
251(e)(2) requires all carriers to bear the costs of numbering 
administration and number portability on a competitively neutral basis 
as defined by the Commission, and thereby seeks to prevent those costs 
from undermining competition. The Commission has interpreted section 
251(e)(2) broadly to extend to all carriers that utilize NANP telephone 
numbers and benefit from number portability. In addition, as discussed 
above, section 1 of the Act charges the Commission with responsibility 
for making available ``a rapid, efficient, Nation-wide, and world-wide 
wire and radio communication service.'' Because

[[Page 9466]]

interconnected VoIP service operates through the use of NANP telephone 
numbers and benefits from NANP administration and because this service 
is ``increasingly used to replace analog voice service''--a trend that 
the Commission expects to continue--it is important that the Commission 
take steps to ensure that interconnected VoIP service use of NANP 
numbers does not disrupt national policies adopted pursuant to section 
251. As the Commission previously has stated, the Commission 
``believe[s] it is important that [the Commission] adopt uniform 
national rules regarding number portability implementation and 
deployment to ensure efficient and consistent use of number portability 
methods and numbering resources on a nationwide basis. Implementation 
of number portability, and its effect on numbering resources, will have 
an impact on interstate, as well as local, telecommunications 
services.'' Additionally, the Commission has found that those providers 
that benefit from number resources should also bear the costs.
    11. Extending LNP obligations to interconnected VoIP providers is 
``reasonably ancillary'' to the performance of the Commission's 
obligations under section 251 and section 1 of the Act. If the 
Commission failed to do so, American consumers might not benefit from 
new technologies because they would be unable to transfer their NANP 
telephone numbers between service providers and thus would be less 
likely to want to use a new provider. As a result, the purposes and 
effectiveness of section 251, as well as section 1, would be greatly 
undermined. The ability of end users to retain their NANP telephone 
numbers when changing service providers gives customers flexibility in 
the quality, price, and variety of services they can choose to 
purchase. Allowing customers to respond to price and service changes 
without changing their telephone numbers will enhance competition, a 
fundamental goal of section 251 of the Act, while helping to fulfill 
the Act's goal of facilitating ``a rapid, efficient, Nation-wide, and 
world-wide wire and radio communication service.''
    12. Further, if the Commission failed to exercise its ancillary 
jurisdiction, interconnected VoIP providers would sustain a competitive 
advantage against telecommunications carriers through the use and 
porting of NANP telephone numbers without bearing their share of the 
costs of LNP and NANP administration, thus defeating the critical 
requirement under section 251(e) that carriers bear such costs on a 
competitively neutral basis. Additionally, the Commission extends the 
LNP obligations to interconnected VoIP providers because doing so will 
have a positive impact on the efficient use of the Commission's limited 
numbering resources. The Commission avoids number waste by preventing 
an interconnected VoIP provider from porting-in a number from a carrier 
(often through its numbering partner) and then later refusing to port-
out at the customer's request by arguing that no such porting 
obligation exists. Failure to extend LNP obligations to interconnected 
VoIP providers and their numbering partners would thwart the effective 
and efficient administration of the Commission's numbering 
administration responsibilities under section 251 of the Act. 
Therefore, extending the LNP and numbering administration support 
obligations to interconnected VoIP providers is ``reasonably ancillary 
to the effective performance of the Commission's * * * 
responsibilities'' under sections 251 and 1 of the Act and ``will 
`further the achievement of long-established regulatory goals'' ' to 
make available an efficient and competitive communication service.
    13. The Commission believes that the language in section 251(e)(2), 
which phrases the obligation to contribute to the costs of numbering 
administration as applicable to ``all telecommunications carriers,'' 
reflects Congress's intent to ensure that no telecommunications 
carriers were omitted from the contribution obligation, and does not 
preclude the Commission from exercising its ancillary authority to 
require other providers of comparable services to make such 
contributions. Thus, the language does not circumscribe the class of 
carriers that may be required to support numbering administration. The 
legislative history of the Telecommunications Act of 1996 (1996 Act) 
supports this view and indicates that Congress desired that such costs 
be borne by ``all providers.'' Because interconnected VoIP services are 
increasingly being used as a substitute for traditional telephone 
service, the Commission finds that its exercise of ancillary authority 
to require contributions from interconnected VoIP providers is 
consistent with this statutory language and Congressional intent. The 
statutory construction maxim of expressio unius est exclusio alterius--
the mention of one thing implies the exclusion of another--does not 
require a different result. This maxim is non-binding and ``is often 
misused.'' ``The maxim's force in particular situations depends 
entirely on context, whether or not the draftsmen's mention of one 
thing, like a grant of authority, does really necessarily, or at least 
reasonably, imply the preclusion of alternatives.'' Here, the 
Commission believes that the relevant language in section 251(e)(2) was 
designed to ensure that no telecommunications carriers were omitted 
from the contribution obligation, and not to preclude the Commission 
from exercising its ancillary authority to require others to make such 
contributions. Absent any affirmative evidence that Congress intended 
to limit the Commission's judicially recognized ancillary jurisdiction 
in this area, the Commission finds that the expressio unius maxim ``is 
simply too thin a reed to support the conclusion that Congress has 
clearly resolved [the] issue.''
    14. The Commission also notes that its actions here are consistent 
with other provisions of the Act. For example, the Commission is guided 
by section 706 of the 1996 Act, which, among other things, directs the 
Commission to encourage the deployment of advanced telecommunications 
capability to all Americans by using measures that ``promote 
competition in the local telecommunications market.'' The extension of 
the LNP obligations to interconnected VoIP providers may spur consumer 
demand for their service, in turn driving demand for broadband 
connections, and consequently encouraging more broadband investment and 
deployment consistent with the goals of section 706.

C. Local Number Portability Obligations

    15. As the Commission discusses in detail above, imposing LNP and 
numbering administration support requirements on interconnected VoIP 
providers and their numbering partners is consistent with both the 
language of the Act and the Commission's policies implementing the LNP 
obligations. To ensure that consumers enjoy the full benefits of LNP 
and to maintain competitively neutral funding of numbering 
administration, the Commission imposes specific requirements to 
effectuate this policy.
    16. Porting Obligations of an Interconnected VoIP Provider and its 
Numbering Partner. As discussed above, section 3 of the Act defines 
local ``number portability'' as ``the ability of users of 
telecommunications services to retain, at the same location, existing 
telecommunications numbers without impairment of quality, reliability, 
or convenience when switching from one

[[Page 9467]]

telecommunications carrier to another.'' The Commission finds that the 
``user'' in this context is the end-user customer that subscribes to 
the interconnected VoIP service and not the interconnected VoIP 
provider. To find otherwise would contravene the LNP goals of 
``allowing customers to respond to price and service changes without 
changing their telephone numbers.'' Thus, it is the end-user customer 
that retains the right to port-in the number to an interconnected VoIP 
service or to port-out the number from an interconnected VoIP service.
    17. As discussed above, both an interconnected VoIP provider and 
its numbering partner must facilitate a customer's porting request to 
or from an interconnected VoIP provider. By ``facilitate,'' the 
Commission means that the interconnected VoIP provider has an 
affirmative legal obligation to take all steps necessary to initiate or 
allow a port-in or port-out itself or through its numbering partner on 
behalf of the interconnected VoIP customer (i.e., the ``user''), 
subject to a valid port request, without unreasonable delay or 
unreasonable procedures that have the effect of delaying or denying 
porting of the number. The Commission recognizes that when an 
interconnected VoIP provider obtains NANP telephone numbers and LNP 
capability through a numbering partner, the interconnected VoIP 
provider does not itself execute the port of the number from a 
technical perspective. In such situations, the interconnected VoIP 
provider must take any steps necessary to facilitate its numbering 
partner's technical execution of the port.
    18. The Commission also finds that interconnected VoIP providers 
and their numbering partners may not enter into agreements that would 
prohibit or unreasonably delay an interconnected VoIP service end user 
from porting between interconnected VoIP providers, or to or from a 
wireline carrier or a covered CMRS provider. Because LNP promotes 
competition and consumer choice, the Commission finds that any 
agreement by interconnected VoIP providers or their numbering partners 
that prohibits or unreasonably delays porting could undermine the 
benefits of LNP to consumers. Additionally, because the Commission 
determines that the carrier that obtains the number from the NANPA is 
also responsible for ensuring compliance with these obligations, such 
porting-related restrictions would contravene that carrier's section 
251(b)(2) obligation. To the extent that carriers with direct access to 
numbers do not have an LNP obligation, that exemption from LNP only 
extends to the exempt service and not to that carrier's activities as a 
numbering partner for an interconnected VoIP provider. If an 
interconnected VoIP provider or its numbering partner attempts to 
thwart an end user's valid porting request, that provider or carrier 
will be subject to Commission enforcement action for a violation of the 
Act and the Commission's LNP rules. Further, no interconnected VoIP 
provider may contract with its customer to prevent or hinder the rights 
of that customer to port its number because doing so would violate the 
LNP obligations placed on interconnected VoIP providers in this Order. 
To the extent that interconnected VoIP providers have existing 
contractual provisions that have the effect of unreasonably delaying or 
denying porting, such provisions do not supersede or otherwise affect 
the porting obligations established in this Order.
    19. Scope of Porting Obligations. The Commission's porting 
obligations vary depending on whether a service is provided by a 
wireline carrier or a covered CMRS provider. As described above, 
interconnected VoIP providers generally obtain NANP telephone numbers 
through commercial arrangements with one or more traditional 
telecommunications carriers. As a result, the porting obligations to or 
from an interconnected VoIP service stem from the status of the 
interconnected VoIP provider's numbering partner and the status of the 
provider to or from which the NANP telephone number is ported. For 
example, subject to a valid port request on behalf of the user, an 
interconnected VoIP provider that partners with a wireline carrier for 
numbering resources must, in conjunction with its numbering partner, 
port-out a NANP telephone number to: (1) A wireless carrier whose 
coverage area overlaps with the geographic location of the porting-out 
numbering partner's rate center; (2) a wireline carrier with facilities 
or numbering resources in the same rate center; or (3) another 
interconnected VoIP provider whose numbering partner meets the 
requirements of (1) or (2). Similarly, subject to a valid port request 
on behalf of the user, an interconnected VoIP provider that partners 
with a covered CMRS provider for numbering resources must, in 
conjunction with its numbering partner, port-out a NANP telephone 
number to: (1) Another wireless carrier; (2) a wireline carrier within 
the telephone number's originating rate center; or (3) another 
interconnected VoIP provider whose numbering partner meets the 
requirements of (1) or (2).
    20. The Commission notes that because interconnected VoIP providers 
offer telephone numbers not necessarily based on the geographic 
location of their customers--many times at their customers' requests--
there may be limits to number porting between providers. The Act only 
provides for service provider portability and does not address service 
or location portability. See First Number Portability Order, 11 FCC Rcd 
at 8447, para. 181. Thus, for example, if an interconnected VoIP 
service customer selects a number outside his current rate center, or 
if the interconnected VoIP service customer selects a number within his 
geographic rate center and moves out of that rate center, and then 
requests porting to a wireline carrier in his new rate center, the 
customer would not be able to port the number. See 47 CFR 52.26(a). The 
Commission expects interconnected VoIP providers to fully inform their 
customers about these limitations, particularly limitations that result 
from the portable nature of, and use of non-geographic numbers by, 
certain interconnected VoIP services.
    21. The Commission also clarifies that carriers have an obligation 
under the Commission's rules to port-out NANP telephone numbers, upon 
valid request, for a user that is porting that number for use with an 
interconnected VoIP service. For example, subject to a valid port 
request on behalf of the user, a wireline carrier must port-out a NANP 
telephone number to: (1) An interconnected VoIP provider that partners 
with a wireless carrier for numbering resources, where the partnering 
wireless carrier's coverage area overlaps with the geographic location 
of the porting-out wireline carrier's rate center; or (2) an 
interconnected VoIP provider that partners with a wireline carrier for 
numbering resources, where the partnering wireline carrier has 
facilities or numbering resources in the same rate center as the 
porting-out wireline carrier. Similarly, subject to a valid port 
request on behalf of the user, a wireless carrier must port-out a NANP 
telephone number to: (1) An interconnected VoIP provider that partners 
with a wireless carrier; or (2) an interconnected VoIP provider that 
partners with a wireline carrier for numbering resources, where the 
partnering wireline carrier is within the number's originating rate 
center. The Commission clarifies that carriers must port-out NANP 
telephone numbers upon valid requests from an interconnected VoIP 
provider (or from its associated numbering partner). To

[[Page 9468]]

the extent that an interconnected VoIP provider is certificated or 
licensed as a carrier, then the Title II LNP obligations to port-in or 
port-out to the carrier are already determined by existing law. See, 
e.g., 47 CFR 52.26(a).
    22. The Commission declines to adopt new porting intervals that 
apply specifically to ports between interconnected VoIP providers and 
other providers through a numbering partner. The intervals that would 
be applicable to ports between the numbering partner and the other 
provider, if the port were not related to an interconnected VoIP 
service, will apply to the port of the NANP telephone number between 
the numbering partner and the other provider (or the other provider's 
numbering partner) when the end user with porting rights is a customer 
of the interconnected VoIP provider.
    23. The Commission takes seriously its responsibilities to 
safeguard the Commission's scarce numbering resources and to implement 
LNP obligations for the benefit of consumers. Consumers, carriers, or 
interconnected VoIP providers may file complaints with the Commission 
if they experience unreasonable delay or denial of number porting to or 
from an interconnected VoIP provider in violation of the Commission's 
LNP rules. The Commission will not hesitate to enforce its LNP rules to 
ensure that consumers are free to choose among service providers, 
subject to its LNP rules, without fear of losing their telephone 
numbers.
    24. Allocation of LNP Costs. Section 251(e)(2) provides that 
``[t]he cost of establishing telecommunications numbering 
administration arrangements and number portability shall be borne by 
all telecommunications carriers on a competitively neutral basis as 
determined by the Commission.'' Because interconnected VoIP providers 
benefit from LNP, the Commission finds that they should contribute to 
meet the shared LNP costs. Further, similar to the Commission's finding 
in its Cost Recovery Reconsideration Order, the Commission also 
believes that interconnected VoIP providers may find it costly and 
administratively burdensome to develop region-specific attribution 
systems for all of their end-user services, and thus the Commission 
allows these providers to use a proxy based on the percentage of 
subscribers a provider serves in a particular region for reaching an 
estimate for allocating their end-user revenues to the appropriate 
regional LNPA. Providers that submit an attestation certifying that 
they are unable to divide their traffic and resulting end-user revenue 
among the seven LNPA regions precisely will be allowed to divide their 
end-user revenue among these regions based on the percentage of 
subscribers served in each region. Providers may use their billing 
databases to identify subscriber location.

D. Numbering Administration Cost Requirements

    25. Although interconnected VoIP providers do not have any specific 
numbering administration requirements (e.g., pooling requirements), 
they do require the use of NANP numbering resources to provide an 
interconnected VoIP service, and thereby benefit from and impose costs 
related to numbering administration. Thus, the Commission requires 
interconnected VoIP providers to contribute to meet the shared 
numbering administration costs on a competitively neutral basis.

E. Implementation

    26. The LNP obligations adopted in this Order for interconnected 
VoIP providers and their numbering partners become effective 30 days 
after Federal Register publication. The reporting requirements for 
determining interconnected VoIP providers' contribution to the shared 
costs of numbering administration and LNP require interconnected VoIP 
providers to file an annual FCC Form 499-A. To ensure that 
interconnected VoIP providers' contributions for numbering 
administration and LNP are allocated properly, interconnected VoIP 
providers should include in their annual FCC Form 499-A filing 
historical revenue information for the relevant year, including all 
information necessary to allocate revenues across the seven LNPA 
regions (e.g., January 2007 through December 2007 revenue information 
for the April 2008 filing). The Commission will revise FCC Form 499-A 
at a later date, consistent with the rules and policies outlined in 
this Order. Interconnected VoIP providers, however, should familiarize 
themselves with the FCC Form 499-A and the accompanying instructions in 
preparation for this filing. Based on these filings, the appropriate 
administrators will calculate the funding base and individual 
contributions for each support mechanism, and provide an invoice to 
each interconnected VoIP provider for its contribution to the shared 
costs of the respective support mechanism. The Commission finds that 
USAC should be prepared to collect this information with the next 
annual filing, and that the LNPA and the NANP billing and collection 
agent should be prepared to include interconnected VoIP provider 
revenues in their calculations for the 2008 funding year based on the 
next annual FCC Form 499-A filings.

Synopsis of Order on Remand

    27. In its 2003 Intermodal Number Portability Order (68 FR 68831, 
Dec. 10, 2003), the Commission clarified that porting from a wireline 
carrier to a wireless carrier is required where the requesting wireless 
carrier's coverage area overlaps the geographic location in which the 
wireline number is provisioned, provided that the porting-in carrier 
maintains the number's original rate center designation following the 
port. On March 11, 2005, the United States Court of Appeals for the 
District of Columbia Circuit remanded the Intermodal Number Portability 
Order to the Commission. The court determined that the Intermodal 
Number Portability Order resulted in a legislative rule, and that the 
Commission had failed to prepare a FRFA regarding the impact of that 
rule on small entities, as required by the RFA. The court accordingly 
directed the Commission to prepare the required FRFA, and stayed future 
enforcement of the Intermodal Number Portability Order ``as applied to 
carriers that qualify as small entities under the RFA'' until the 
agency prepared and published that analysis. On April 22, 2005, the 
Commission issued a Public Notice seeking comment on an IRFA of the 
Intermodal Number Portability Order (70 FR 41655, July 20, 2005).
    28. In accordance with the requirements of the RFA, the Commission 
has considered the potential economic impact of the intermodal porting 
rules on small entities and concludes that wireline carriers qualifying 
as small entities under the RFA will be required to provide wireline-
to-wireless intermodal porting where the requesting wireless carrier's 
``coverage area'' overlaps the geographic location in which the 
customer's wireline number is provisioned, provided that the porting-in 
carrier maintains the number's original rate center designation 
following the port. The Commission has prepared a FRFA as directed by 
the court, which is the second of two FRFAs set forth below.

Final Regulatory Flexibility Analysis, WC Docket No. 04-36 
(Interconnected VoIP Services)

    1. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the

[[Page 9469]]

IP-Enabled Services Notice in WC Docket No. 04-36 (69 FR 16193, Mar. 
29, 2004). The Commission sought written public comment on the 
proposals in the notice, including comment on the IRFA. The Commission 
received comments specifically directed toward the IRFA from three 
commenters in WC Docket No. 04-36. These comments are discussed below. 
This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

A. Need for, and Objectives of, the Rules

    2. This Report and Order extends LNP obligations to interconnected 
voice over Internet Protocol (VoIP) providers to ensure that customers 
of such VoIP providers may port their North American Numbering Plan 
(NANP) telephone numbers when changing providers. Consumers will now be 
able to take advantage of new telephone services without losing their 
telephone numbers, which should in turn facilitate greater competition 
among telephony providers by allowing customers to respond to price and 
service changes. Additionally, this Report and Order extends to 
interconnected VoIP providers the obligation to contribute to shared 
numbering administration and number portability costs. The Commission 
believes these steps it takes to ensure regulatory parity among 
providers of similar services will minimize marketplace distortions 
arising from regulatory advantage.

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

    3. In this section, the Commission responds to comments filed in 
response to the IRFA. To the extent the Commission received comments 
raising general small business concerns during this proceeding, those 
comments are discussed throughout the Report and Order.
    4. The Small Business Administration (SBA) comments that the 
Commission's Notice does not contain concrete proposals and is more 
akin to an advance notice of proposed rulemaking or a notice of 
inquiry. The Commission disagrees with the SBA and Menard that the 
Commission should postpone acting in this proceeding--thereby 
postponing extending the application of the LNP and numbering 
administration support obligations to interconnected VoIP services--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. The Commission believes these additional steps suggested 
by SBA and Menard are unnecessary because small entities already have 
received sufficient notice of the issues addressed in today's Report 
and Order, and because the Commission has considered the economic 
impact on small entities and what ways are feasible to minimize the 
burdens imposed on those entities, and, to the extent feasible, has 
implemented those less burdensome alternatives. The IP-Enabled Services 
Notice specifically sought comment on whether numbering obligations are 
appropriate in the context of IP-enabled services and whether action 
relating to numbering resources is desirable to facilitate the growth 
of IP-enabled services, while at the same time continuing to maximize 
the use and life of numbering resources in the North American Numbering 
Plan. The Commission published a summary of that notice in the Federal 
Register. See Regulatory Requirements for IP-Enabled Services, WC 
Docket No. 04-36, Notice of Proposed Rulemaking, 69 FR 16193 (Mar. 29, 
2004). The Commission notes that a number of small entities submitted 
comments in this proceeding.

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

    5. 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.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) Is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the SBA.
    6. Small Businesses. Nationwide, there are a total of approximately 
22.4 million small businesses according to SBA data.
    7. Small Organizations. Nationwide, there are approximately 1.6 
million small organizations.
    8. 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.
 1. Telecommunications Service Entities
a. Wireline Carriers and Service Providers
    9. The Commission has included small incumbent local exchange 
carriers (LECs) in this present RFA analysis. As noted above, a ``small 
business'' under the RFA is one that, inter alia, meets the pertinent 
small business size standard (e.g., a telephone communications business 
having 1,500 or fewer employees) and ``is not dominant in its field of 
operation.'' The SBA's Office of Advocacy contends that, for RFA 
purposes, small incumbent LECs are not dominant in their field of 
operation because any such dominance is not ``national'' in scope. The 
Commission has therefore included small incumbent LECs 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.
    10. Incumbent LECs. Neither the Commission nor the SBA has 
developed a small business size standard specifically for incumbent 
LECs. 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 the Commission's action.
    11. Competitive LECs, Competitive Access Providers (CAPs), 
``Shared-Tenant Service Providers,'' and ``Other Local Service 
Providers.'' Neither the Commission nor the SBA has developed a small 
business size standard specifically for these service providers. The 
appropriate 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, 859 carriers have reported that they are engaged in the provision 
of either competitive access provider services or

[[Page 9470]]

competitive LEC 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.
    12. 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, 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.
    13. 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, 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.
    14. 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, 657 carriers have reported 
that they are engaged in the provision of payphone 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.
    15. 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, 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.
    16. 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 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.
    17. 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, 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.
    18. 800 and 800-Like Service Subscribers. These toll-free services 
fall within the broad economic census category of Telecommunications 
Resellers. This category ``comprises establishments engaged in 
purchasing access and network capacity from owners and operators of 
telecommunications networks and reselling wired and wireless 
telecommunications services (except satellite) to businesses and 
households. Establishments in this industry resell telecommunications; 
they do not operate transmission facilities and infrastructure.'' The 
SBA has developed a small business size standard for this category, 
which is: all such firms having 1,500 or fewer employees. Census Bureau 
data for 2002 show that there were 1,646 firms in this category that 
operated for the entire year. Of this total, 1,642 firms had employment 
of 999 or fewer employees, and four firms had employment of 1,000 
employees or more. Thus, the majority of these firms can be considered 
small. Additionally, it may be helpful to know the total numbers of 
telephone numbers assigned in these services. Commission data show 
that, as of June 2006, the total number of 800 numbers assigned was 
7,647,941, the total number of 888 numbers assigned was 5,318,667, the 
total number of 877 numbers assigned was 4,431,162, and the total 
number of 866 numbers assigned was 6,008,976.
b. International Service Providers
    19. 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 $13.5 million 
or less in average annual receipts.
    20. 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, the Commission estimates that the 
majority of Satellite Telecommunications firms are small entities that 
might be affected by the Commission's action.
    21. The second category of Other Telecommunications ``comprises 
establishments primarily engaged in (1) providing specialized 
telecommunications applications, such as satellite tracking, 
communications

[[Page 9471]]

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, the Commission estimates that the majority of Other 
Telecommunications firms are small entities that might be affected by 
the Commission's action.
c. Wireless Telecommunications Service Providers
    22. 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. Also, the Commission does not generally track subsequent 
business size unless, in the context of assignments or transfers, 
unjust enrichment issues are implicated.
    23. 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.
    24. 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 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 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. The 
Commission has estimated that 260 of these are small under the SBA 
small business size standard.
    25. Paging. The SBA has developed a small business size standard 
for the broad economic census category of ``Paging.'' Under this 
category, the SBA deems a wireless business to be small if it has 1,500 
or fewer employees. 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. In addition, according 
to Commission data, 365 carriers have reported that they are engaged in 
the provision of ``Paging and Messaging Service.'' Of this total, the 
Commission estimates that 360 have 1,500 or fewer employees, and five 
have more than 1,500 employees. Thus, in this category the majority of 
firms can be considered small.
    26. The Commission also notes that, in the Paging Second Report and 
Order (62 FR 11616, Mar. 12, 1997), the Commission adopted a size 
standard for ``small businesses'' for purposes of determining their 
eligibility for special provisions such as bidding credits and 
installment payments. In this context, 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. The SBA has approved this definition. An auction of 
Metropolitan Economic Area (MEA) licenses commenced on February 24, 
2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned, 985 
were sold. Fifty-seven companies claiming small business status won 440 
licenses. An auction of MEA and Economic Area (EA) licenses commenced 
on October 30, 2001, and closed on December 5, 2001. Of the 15,514 
licenses auctioned, 5,323 were sold. One hundred thirty-two companies 
claiming small business status purchased 3,724 licenses. A third 
auction, consisting of 8,874 licenses in each of 175 EAs and 1,328 
licenses in all but three of the 51 MEAs commenced on May 13, 2003, and 
closed on May 28, 2003. Seventy-seven bidders claiming small or very 
small business status won 2,093 licenses. The Commission also notes 
that, currently, there are approximately 74,000 Common Carrier Paging 
licenses.
    27. 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 or less for each 
of the three preceding years, and a ``very small business'' is an 
entity with average gross revenues of $15 million or less 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.
    28. 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, 432 carriers reported that they were 
engaged in the provision of wireless telephony. The Commission has 
estimated that 221 of these are small under the SBA small business size 
standard.
    29. 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

[[Page 9472]]

$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 ``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.
    30. Narrowband Personal Communications Services. The Commission 
held an auction for Narrowband PCS licenses that commenced on July 25, 
1994, and closed on July 29, 1994. A second auction commenced on 
October 26, 1994 and closed on November 8, 1994. For purposes of the 
first two Narrowband PCS auctions, ``small businesses'' were entities 
with average gross revenues for the prior three calendar years of $40 
million or less. Through these auctions, the Commission awarded a total 
of 41 licenses, 11 of which were obtained by four small businesses. To 
ensure meaningful participation by small business entities in future 
auctions, the Commission adopted a two-tiered small business size 
standard in the Narrowband PCS Second Report and Order (65 FR 35875, 
Jun. 6, 2000). 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, 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. A third auction commenced on October 3, 2001 and closed 
on October 16, 2001. Here, five bidders won 317 (Metropolitan Trading 
Areas and nationwide) licenses. Three of these claimed status as a 
small or very small entity and won 311 licenses.
    31. 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 develope