Development of Nationwide Broadband Data To Evaluate Reasonable and Timely Deployment of Advanced Services to All Americans, Improvement of Wireless Broadband Subscribership Data, and Development of Data on Interconnected Voice Over Internet Protocol (VoIP) Subscribership, 37869-37882 [E8-14873]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 73, Number 128 (Wednesday, July 2, 2008)]
[Rules and Regulations]
[Pages 37869-37882]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-14873]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 43

[WC Docket No. 07-38; FCC 08-89]


Development of Nationwide Broadband Data To Evaluate Reasonable 
and Timely Deployment of Advanced Services to All Americans, 
Improvement of Wireless Broadband Subscribership Data, and Development 
of Data on Interconnected Voice Over Internet Protocol (VoIP) 
Subscribership

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In the Report and Order (Order), the Federal Communications 
Commission (Commission) amends the FCC Form 477 data collection in 
several respects to collect additional data on broadband service 
subscriptions. The Commission modifies Form 477 to require broadband 
providers to report the number of broadband connections in service in 
individual Census Tracts. The Commission adopts a voluntary household 
self-reporting system, and

[[Page 37870]]

will recommend to the Census Bureau that the American Community Survey 
questionnaire be modified to gather information about broadband 
availability and subscription in households.
    The Commission adopts three additional changes to FCC Form 477. 
First, the Commission requires providers to report broadband service 
speed data in conjunction with subscriber counts according to new 
categories for download and upload speeds. These new speed tiers will 
better identify services that support advanced applications. Second, 
the Commission amends reporting requirements for mobile wireless 
broadband providers to require them to report the number of subscribers 
whose data plans allow them to browse the Internet and access the 
Internet content of their choice. Finally, the Commission requires 
providers of interconnected Voice over Internet Protocol 
(interconnected VoIP) service to report subscribership information on 
Form 477.

DATES: The amendments to Sec. Sec.  1. 7001 and 43. 11 in this document 
contain information collection requirements that have not been approved 
by the Office of Management and Budget. The Federal Communications 
Commission will publish a document in the Federal Register announcing 
the effective date.

FOR FURTHER INFORMATION CONTACT: Alan Feldman, Wireline Competition 
Bureau, Industry Analysis and Technology Division, (202) 418-0940.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in WC Docket No. 07-38, adopted on March 19, 2008, and 
released on June 12, 2008. The complete text of this Report and Order 
is available for public inspection Monday through Thursday from 8 a.m. 
to 4:30 p.m. and Friday from 8 a.m. to 11:30 a.m. in the Commission's 
Consumer and Governmental Affairs Bureau, Reference Information Center, 
Room CY-A257, 445 12th Street, SW., Washington, DC 20554. The complete 
text is available also on the Commission's Internet site at 
www.fcc.gov. Alternative formats are available for persons with 
disabilities by contacting the Consumer and Governmental Affairs 
Bureau, at (202) 418-0531, TTY (202) 418-7365, or at fcc504@fcc.gov. 
The complete text of the decision may be purchased from the 
Commission's duplicating contractor, Best Copying and Printing, Inc., 
Room CY-B402, 445 12th Street, SW., Washington, DC 20554, telephone 
(202) 488-5300, facsimile (202) 488-5563, TTY (202) 488-5562, or e-mail 
at fcc@bcpiweb.com.

Synopsis of Report and Order

Reporting Broadband Connection Information by Census Tract

    1. Wired, Terrestrial Fixed Wireless, and Satellite Broadband--
Subscriber Counts. Currently Form 477 requires covered providers to 
report the number of broadband connections they provide at the state 
level. In addition, to measure general service availability, Form 477 
requires providers to report the 5-digit ZIP Codes in which they have 
at least one customer. The Commission agrees with those commenters who 
argue that collecting actual subscribership numbers in Census Tract 
areas will significantly improve the quality of the information 
collected, and that the value of these more detailed, informative 
reports outweighs the burdens of additional costs, if any, imposed on 
providers by this requirement.
    2. Certain commenters argue that changing the geographic unit of 
reporting subscribers to 9-digit ZIP Codes would increase the 
granularity of reported information significantly, enabling 
policymakers to pinpoint unserved or underserved areas. Commenters 
opposing 9-digit ZIP Codes argue that reporting broadband 
subscribership information at that level would be inappropriate, would 
result in confidentiality problems, or would simply be too expensive. 
Still other commenters propose the use of geocoded data or of census-
based data instead of 9-digit ZIP Codes.
    3. The Commission agrees with those commenters who argue that 
census-based units provide more useful information for the Commission's 
policy purposes, and will thus require providers to report numbers of 
subscribers on the Census Tract level. Census-based units are more 
stable and static than ZIP Codes and thus will enable the Commission to 
measure change over time more effectively. Additionally, census-based 
units correspond more consistently to actual locations, are less likely 
to reveal individual identifiable information about consumers, and can 
be correlated with valuable demographic data (including race, income, 
education, and tribal land status), giving policymakers additional 
tools with which to analyze broadband uptake. By contrast, because ZIP 
Codes are designed for a different purpose than census-based units, 
namely to deliver efficiently the nation's mail, ZIP Codes are less 
useful for the Commission's purposes. In addition, 9-digit ZIP Codes 
``do not correspond to any commonly recognized geographic boundaries, 
such as state or county lines, Congressional districts or service 
territories.''
    4. Although some commenters urge us to select the smaller Census 
Block as the geographic unit for reporting subscriber numbers, the 
Commission finds that the larger Census Tract is more appropriate for 
the Commission's purposes. Census Tract numbers provide the beneficial 
census characteristics listed above, and because a Census Tract is 
larger than a Census Block, requiring providers to report at the Census 
Tract level rather than the Census Block level will be less burdensome. 
For this reason, among others, the Commission therefore disagrees with 
commenters that reporting by census-based units is overly burdensome 
compared to the benefits of this reporting. The California Public 
Utilities Commission comments that the California legislature recently 
enacted a statute requiring statewide video franchise applicants to 
report subscribers on a census basis. Commenters argue that this 
statute has provided California with valuable information from three 
large providers with minimal burden on the providers.
    5. The Commission therefore requires facilities-based providers of 
wired, terrestrial fixed wireless, and satellite broadband connections 
to report the number of connections that they have in service to 
households and businesses in each of the Census Tracts in which they 
operate. The Commission requires these providers to report 
subscriptions in separate categories based on the speeds of the 
services. This information will provide us with a highly detailed and 
reliable account of broadband subscription and deployment nationwide, 
enabling us to make more informed policy determinations and to support 
more effectively the efforts of states and others seeking to promote 
broadband services. Because of the volume of information being 
reported, the Commission requires providers to supply, in a 
standardized database format, the number of subscribers in each Census 
Tract, broken down by technology type and upload and download speed.
    6. The Commission disagrees with commenters that reporting by 
census-based units is, in general, overly burdensome compared to the 
benefits of this reporting. Nevertheless, the Commission will permit 
reporting entities to report data in an alternative format under 
limited circumstances, recognizing that some entities might suffer 
undue hardship in reporting on a census level. Specifically, upon a

[[Page 37871]]

showing of significant hardship, entities will be permitted to report a 
list of service addresses or GIS coordinates of service, along with the 
speed and technology of the broadband connection in service at each 
address, in lieu of reporting subscriber counts by Census Tract.
    7. Terrestrial Mobile Wireless Broadband--Subscriber Counts. In the 
current Form 477 data collection process, mobile wireless broadband 
service providers report the number of connections they provide in 
particular states, and they report the 5-digit ZIP Codes that best 
represent their broadband service footprint. Because mobile service 
subscribers may move within and among broadband service areas, the 
Commission will continue to require them to report only the number of 
connections they provide in individual states. For the reasons set 
forth above, the Commission finds that the benefits of reporting 
service footprints at the Census Tract level outweighs the costs of the 
additional reporting. Therefore, the Commission requires mobile 
wireless broadband service providers to report the Census Tracts that 
best represent their broadband service footprint for each of the speed 
tiers in which they offer service. For purposes of Form 477, entities 
that use unlicensed devices to provide a commercial broadband Internet 
access service that can be received at any location within a service 
footprint, e.g., throughout a town, adjoining towns, or portion of a 
metropolitan area, will continue to report subscriber information in 
the ``terrestrial mobile wireless'' category. By contrast, entities 
that use unlicensed devices to provide broadband Internet access 
connections to dispersed, fixed end user premises locations are 
required to report information in the ``terrestrial fixed wireless'' 
category of Form 477.
    8. Collecting Additional Information on Broadband Deployment and 
Adoption. Comments in the record indicate strong support for creating a 
self-reporting system, at least as a supplement to other information 
collection methods. The Commission will design and implement a 
voluntary system that households may use to report availability and 
speed of broadband Internet access service at their premises. The 
voluntary registry will enable households to use the telephone, mail, 
email, or the Internet to report apparent unavailability of broadband 
service for their location and information about existing service, such 
as the type and actual speed of Internet access service they use. The 
information collected through the voluntary registry will be shared 
with public-private partnerships and with the Telecommunications 
Program of the United States Department of Agriculture (USDA) Rural 
Development Agency. Furthermore, in order to obtain data on broadband 
services at an even more granular level than the information collected 
by the changes that the Commission adopts in this Order, the Commission 
will recommend to the Census Bureau that the following question be 
added to the American Community Survey and the Puerto Rico Community 
Survey:
    ``What is the main method household members use to access the 
Internet from home?
    (1) No members of this household access the Internet from home.
    (2) A regular `dial-up' telephone line.
    (3) DSL (Digital Subscriber Line).
    (4) A cable modem.
    (5) A fiber optic line.
    (6) A wireless or satellite connection.
    (7) Some other means.''
New Broadband Connection Speed Categories
    9. Form 477 currently gathers information within ``speed tiers'' in 
which providers categorize the maximum speeds of connections offered to 
customers. These tiers includes connections with information transfer 
rates that exceed 200 kbps in both directions and are less than 2. 5 
mbps in the faster direction. The next tier includes connections with 
information transfer rates that exceed 200 kbps in both directions and 
are greater than or equal to 2. 5 mbps and less than 10.0 mbps in the 
faster direction. As many commenters noted, the range of information 
transfer capacities included in the current lowest tier of 200 kbps to 
2. 5 mbps captures a wide variety of services, ranging from services 
capable of transmitting real time video to simple always-on connections 
not suitable for more than basic email or web browsing activities. The 
Commission finds that requiring providers to report data in more 
detailed speed tiers will better identify services that support 
advanced applications, creating distinctions that reflect different 
capacities for transmitting high quality video and similar high 
bandwidth communications. The Commission also finds that, as 
technologies and services evolve, upload speeds are an increasingly 
significant aspect of broadband services, and increased granularity in 
reporting both download and upload speed data will assist us in 
understanding the broadband services market.
    10. Accordingly, in order to gather more detailed and therefore 
useful information about subscription to broadband services, the 
Commission revises Form 477 to establish an increased number of 
transfer speed categories, applicable to both download and upload 
service speeds. Specifically, the reporting tiers applicable to the 
reporting of both download and upload transfer rates under the new Form 
477 collection are: (1) Greater than 200 kbps but less than 768 kbps; 
(2) equal to or greater than 768 kbps but less than 1. 5 mbps; (3) 
equal to or greater than 1. 5 mbps but less than 3. 0 mbps; (4) equal 
to or greater than 3. 0 mbps but less than 6.0 mbps, (5) equal to or 
greater than 6.0 mbps but less than 10.0 mbps; (6) equal to or greater 
than 10.0 mbps but less than 25.0 mbps; (7) equal to or greater than 
25.0 mbps but less than 100.0 mbps; and (8) equal to or greater than 
100 mbps. The Commission finds it appropriate to continue to evaluate 
broadband deployment by monitoring the migration of customers and 
services to higher speed tiers by continuing to collect information 
beginning at the 200 kbps threshold that is appropriately considered 
``first generation.'' Additionally, the Commission will retain the 
requirement that providers report connections with download transfer 
rates above 200 kbps and upload speeds of less than or equal to 200 
kbps, because upload services in this category continue to be a 
prevalent offering in the broadband services market. Filers will report 
the number of subscribers for each type of technology of service they 
offer, in each combination of download and upload speed categories, 
within each Census Tract in which the providers have subscribers.
    11. The action the Commission takes in this Order will help ensure 
that the Commission gathers the data it requires in order to carry out 
its obligations. While these changes may increase reporting 
requirements for some service providers, and require new methods for 
comparison of new data to old data, the Commission agrees with 
commenters who note that such changes will improve the Commission's 
understanding of the market for broadband services. Through these 
adjustments, the Commission continues and extend the Commission's 
efforts to collect data to assess broadband deployment based on tiered 
speeds. It is the Commission's intention to revisit these speed 
thresholds every two years to assess whether advances in technology 
warrant further refinements.

[[Page 37872]]

Other Reporting Requirements for Mobile Wireless Broadband Providers
    12. Distinguishing Subscribers by Service Usage. The Commission 
notes that providers of mobile wireless broadband service are currently 
required to ``report the number of end users whose mobile device, such 
as wireless modem laptop cards, smartphones, or handsets, are capable 
of sending or receiving data at speeds in excess of 200 kbps.'' This 
information is valuable in that it represents, in the broadest sense, 
those mobile wireless users with the capacity to access broadband 
services. Commenters note that tracking those users with a month-to-
month or longer plan for broadband data transfer produces more accurate 
information about mobile broadband usage than simply tracking users who 
are capable of such use. The Commission agrees with these commenters 
and concludes that the benefits of gathering separate information about 
mobile broadband subscriptions that contain a data plan, including the 
increased ability of the Commission to understand the level of mobile 
wireless usage, outweigh any additional reporting costs. The Commission 
therefore revises Form 477 to add a second reporting category in which 
mobile service providers will report the number of subscribers whose 
device and subscription permit them to access the lawful Internet 
content of their choice. When counting such subscribers, the Commission 
directs providers to exclude subscribers whose choice of content is 
restricted to only customized-for-mobile content, and to exclude 
subscribers whose subscription does not include, either in a bundle or 
as a feature added to a voice subscription, a data plan providing the 
ability to transfer, on a monthly basis, either a specified or an 
unlimited amount of data to and from Internet sites of the subscriber's 
choice.
    13. Residential Subscribers. The Commission modifies the Form 477 
instructions for counting certain mobile wireless broadband subscribers 
as residential subscribers. Commenters note that many individuals who 
use a mobile device for business purposes also use it for personal 
purposes, and that employers variously underwrite employees' business-
related use of mobile wireless services. Commenters also note that 
mobile wireless providers may differ in their marketing strategies and 
how they distinguish market segments. Nevertheless, the Commission 
wishes to obtain greater Form 477 reporting consistency and accuracy. 
Therefore, the Commission directs mobile wireless broadband providers 
to report as residential subscriptions those subscriptions that are not 
billed to a corporate account, to a non-corporate business customer 
account, or to a government or institutional account.
Reporting Requirements for Interconnected VoIP Service Providers
    14. Only some providers of interconnected Voice over Internet 
Protocol (VoIP) services are required to report information on Form 
477. Interconnected VoIP service subscribers represent an important and 
rapidly growing part of the U.S. voice service market, and 
interconnected VoIP services are becoming increasingly competitive with 
other forms of local telephone service. Under the Commission's current 
reporting rules, end-user subscriptions to interconnected VoIP services 
are substantially underreported, which distorts the Commission's view 
of the extent of interconnected VoIP service deployment and uptake, and 
potentially distorts the Commission's picture of the U.S. voice service 
market. The Commission's predictive judgment is that, if the Commission 
did nothing to update its reporting rules, these distortions would 
continue to grow.
    15. The Commission concludes that the Commission has the authority 
under Title I of the Act to impose reporting obligations on providers 
of interconnected VoIP service, and are justified in exercising this 
authority. 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.
    16. First, as the Commission concluded in previous orders, 
interconnected VoIP services fall within the subject matter 
jurisdiction granted to the Commission in the Act. Second, the 
Commission's analysis requires us to evaluate whether imposing 
reporting obligations is reasonably ancillary to the effective 
performance of the Commission's various responsibilities. Based on the 
record in this matter, the Commission finds that requiring 
interconnected VoIP service providers to report the number of 
subscribers they serve (both end user and for resale), the percentage 
of these who are residential, and whether the interconnected VoIP 
service is provided over a broadband connection provided by the filer 
or by the filer's affiliate is reasonably ancillary to the effective 
performance of the Commission's various responsibilities under the Act. 
The Commission has a responsibility under section 706 of the 
Telecommunications Act of 1996 to encourage the deployment on a 
reasonable and timely basis of advanced telecommunications capability. 
Furthermore, the Act specifically authorizes the Commission to require 
annual reports from all carriers subject to the Act, as well as to 
require the production of other information necessary to enable the 
Commission to perform the duties and carry out the objects for which it 
was created.
    17. The Commission's primary goal underlying the reporting 
requirements is the identification of unserved and underserved areas 
with respect to advanced telecommunications capability. The 
Commission's ability to perform its functions related to this objective 
depends upon its having adequate information about deployment and 
uptake of advanced telecommunications capability. As explained above, 
the Commission does not believe it is possible to obtain an accurate 
view of the U.S. voice service market without gathering data about 
interconnected VoIP service subscribers. Thus, the Commission's 
continued ability to exercise its responsibilities--such as identifying 
unserved and underserved markets--depends in part on requiring 
interconnected VoIP providers to report the number of end-user and 
resale subscribers they serve, the percentage of these who are 
residential, and whether the interconnected VoIP service is used over a 
broadband connection provided by the filer or by the filer's affiliate. 
Thus, the Commission concludes that imposing these reporting 
obligations is reasonably ancillary to the effective performance of its 
responsibilities.
    18. Commenters noted that interconnected VoIP services are becoming 
increasingly competitive with local telephone service, and that it is 
appropriate to collect information on subscriptions, including the 
number of connections and the percentage of those connections that are 
residential, in order to determine the extent of competition posed by 
the services. The Commission concludes that gathering the number of 
end-user and resale subscribers to interconnected VoIP service and the 
percentage of those subscribers who are residential would provide 
valuable information that would enable the Commission to track 
deployment and adoption of interconnected VoIP service across the 
nation. Accordingly, the Commission modifies Form 477 to

[[Page 37873]]

require providers of interconnected VoIP service to report information 
about the number of end-user and resale subscribers they have in 
individual states, and the percentage of the subscribers who purchase 
the provider's residential grade service plan. Additionally, to collect 
useful information as set forth in the Data Gathering Notice, the 
Commission modifies Form 477 to require providers of interconnected 
VoIP service to report a list of 5-digit ZIP Codes within each state in 
which they have at least one subscriber. This requirement achieves 
regulatory parity across technologies that offer voice-grade equivalent 
lines or channels.
    19. The Commission also concludes that gathering information 
regarding the number of subscribers who receive broadband service in 
conjunction with interconnected VoIP service, and the share of 
interconnected VoIP service subscribers who can use the service over 
any broadband connection, would provide valuable information on the 
deployment of interconnected VoIP service. The Commission therefore 
requires interconnected VoIP providers to report information about the 
type(s) of broadband connections, if any, they or their affiliates 
provide in conjunction with interconnected VoIP service, and to report 
whether the interconnected VoIP service must be used over a single 
predetermined broadband connection or can be used over any broadband 
connection.
Other Matters
    20. Exemptions for Small and Medium-Size Operators. The changes to 
the Commission's Form 477 information collection will significantly 
increase the Commission's ability to carry out its statutory duties 
under section 706 of the Communications act to monitor broadband 
deployment. The new information gathered by Form 477 will enable the 
Commission, the industry, and other parties to realize many benefits, 
including forming a more detailed understanding of the scope of 
broadband adoption, connecting data on broadband services to 
demographic data collected by the Census Bureau, and pinpointing areas 
that are currently unserved or underserved. Some commenters suggest 
that small and medium sized carriers should be exempt from the modified 
reporting requirements that the Commission adopts in this Order. The 
Commission disagrees. Creating a blanket exemption for small and medium 
sized carriers would undercut the benefits of the Commission's revised 
information collection by depriving the Commission and other parties of 
adequate information on broadband deployment and adoption in rural, 
unserved, and underserved areas of the nation, the areas where 
additional information is most needed and would be likely to have the 
greatest impact. However, in order to ease the process of this 
transition in reporting methodology, upon a showing of significant 
hardship, reporting entities may report a list of service addresses or 
GIS coordinates of service, along with the speed and technology of 
service offered at each address, in lieu of producing and reporting 
subscribership counts by Census Tract.
Paperwork Reduction Act of 1995 Analysis
    21. This Report and Order contains proposed new and modified 
information collection requirements. The Commission, as part of its 
continuing effort to reduce paperwork burdens, invites the general 
public and the Office of Management and Budget to comment on the 
information collection requirements contained in this document, as 
required by the Paperwork Reduction Act of 1995, Public Law 104-13. In 
addition, pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, 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.''
Legal Basis
    22. The legal basis for any action that may be taken pursuant to 
the Further Notice is contained in sections 1 through 5, 10, 11, 201 
through 205, 215, 218 through 220, 251 through 271, 303(r), 332, 403, 
502, and 503 of the Communications Act of 1934, as amended, 47 U.S.C. 
151 through 155, 160, 161, 201 through 205, 215, 218 through 220, 251 
through 271, 303(r), 332, 403, 502, and 503, and section 706 of the 
Telecommunications Act of 1996, 47 U.S.C. 157 nt.
Final Regulatory Flexibility Analysis
    23. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the April 2007 Data Gathering Notice. The Commission 
sought written public comment on the proposals in the Data Gathering 
Notice, including comment on the IRFA. This present Final Regulatory 
Flexibility Analysis (FRFA) conforms to the RFA.
Need for, and Objectives of, the Order
    24. In today's Report and Order (Order), the Commission adopts 
certain changes to Form 477 to collect additional, improved data on 
broadband availability and use. The Commission amends the FCC Form 477 
data collection in several respects to collect additional data on 
broadband service subscriptions. These changes will greatly improve the 
ability of the Commission to understand the extent of broadband 
deployment, and will enable the Commission to continue to develop and 
maintain appropriate broadband policies, in particular to carry out its 
obligation under section 706 of the Telecommunications Act of 1996 to 
``determine whether advanced telecommunications capability is being 
deployed to all Americans in a reasonable and timely fashion.''
    25. These changes include requiring certain reporting entities to 
report broadband service subscribership counts within Census Tracts, 
and to report Census Tract information concerning the availability of 
their broadband services. The Order also changes the speed tiers under 
which broadband connections are reported, establishes new terminology 
for levels of broadband connection speed, and changes Form 477 to 
collect certain subscribership information from wireless and 
interconnected VoIP service providers. These new reporting requirements 
will facilitate the Commission's understanding of the extent of 
broadband deployment in the United States, particularly deployment in 
unserved and underserved areas
Summary of Significant Issues Raised by Public Comments in Response to 
the IRFA
    26. In this section, the Commission responds to comments filed in 
response to the IRFA. The Commission recognizes that many businesses, 
including small rural ILECs, will need to modify their practices to 
collect, maintain, and report additional data at the Census Tract 
level. The Commission is not persuaded by comments in the record 
arguing that the costs of complying with the increased reporting 
requirements in today's Order outweighs the benefits of collecting 
additional data, and the Commission is persuaded by comments indicating 
that it ought to collect information at a more granular level, and in 
particular at the level of Census Tracts. Nevertheless, in the Order, 
the Commission provides an express exception to this rule of which 
small businesses can avail themselves. Specifically, upon a showing of

[[Page 37874]]

significant hardship, reporting entities will be permitted to report a 
list of service addresses or GIS coordinates of service, along with the 
speed and technology of the broadband connection in service at each 
address, in lieu of reporting subscriber counts by technology, speed, 
and Census Tract. Comments in the record also contend that the Data 
Gathering Notice failed to include a complete estimate of the costs and 
burdens of compliance as a general matter. However, the record 
developed in this proceeding, in response to the Data Gathering Notice, 
demonstrates that the costs would not be burdensome. More importantly, 
other than conclusory assertions that the data collection as proposed 
in the Data Collection Order would be burdensome, the record includes 
no convincing evidence of any specific, actual burden, such as employee 
hours or monetary costs.
Description and Estimate of the Number of Small Entities To Which the 
Proposed Rules May Apply
    27. 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 Small Business 
Administration (SBA).
Wireline Carriers and Service Providers
    28. Incumbent Local Exchange Carriers (ILECs). Neither the 
Commission nor the SBA has developed a size standard for small 
businesses specifically applicable to incumbent local exchange 
services. The closest applicable size standard under SBA rules is for 
Wired Telecommunications Carriers. Under that size standard, such a 
business is small if it has 1,500 or fewer employees. According to 
Commission data, 1,307 carriers reported that they were engaged in the 
provision of local exchange services. Of these 1,307 carriers, an 
estimated 1,019 have 1,500 or fewer employees and 288 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 its action.
    29. Competitive Local Exchange Carriers (CLECs), 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 reported that they were engaged in the 
provision of either competitive local exchange carrier or competitive 
access provider 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 its action.
    30. 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 it emphasizes that this RFA action has no effect on 
Commission analyses and determinations in other, non-RFA contexts.
    31. 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 its action.
    32. 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 
its action.
    33. 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 its action.
    34. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to interexchange services. The closest applicable size 
standard under SBA rules is for Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 330 companies reported 
that their primary telecommunications service activity was the 
provision of interexchange services. Of these 330 companies, 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 
interexchange service providers are small entities that may be affected 
by its action.
    35. Operator Service Providers (OSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
operator

[[Page 37875]]

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 its action.
    36. 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, an 
estimated 102 have 1,500 or fewer employees and two have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of prepaid calling card providers are small entities that may 
be affected by its action.
    37. 800 and 800-Like Service Subscribers. Neither the Commission 
nor the SBA has developed a small business size standard specifically 
for 800 and 800-like service (``toll free'') subscribers. The 
appropriate size standard under SBA rules is for the category 
Telecommunications Resellers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. The most reliable source 
of information regarding the number of these service subscribers 
appears to be data the Commission collects on the 800, 888, 877, and 
866 numbers in use. According to the Commission's data, at the 
beginning of July 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. The Commission does 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, the Commission estimates that there are 
7,647,941 or fewer small entity 800 subscribers; 5,318,667 or fewer 
small entity 888 subscribers; 4,431,162 or fewer small entity 877 
subscribers; and 5,318,667 or fewer small entity 866 subscribers.
Wireless Carriers and Service Providers
    38. 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.
    39. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the SBA has recognized wireless firms within this new, broad, 
economic census category. Prior to that time, the SBA had developed a 
small business size standard for wireless firms within the now-
superseded census categories of ``Paging'' and ``Cellular and Other 
Wireless Telecommunications.'' Under the present and prior categories, 
the SBA has deemed a wireless business to be small if it has 1,500 or 
fewer employees. Because Census Bureau data are not yet available for 
the new category, the Commission will estimate small business 
prevalence using the prior categories and associated data. For the 
first category of Paging, data for 2002 show that there were 807 firms 
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. For the second category of Cellular and Other 
Wireless Telecommunications, data for 2002 show that there were 1,397 
firms 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, using the prior categories and the 
available data, the Commission estimates that the majority of wireless 
firms can be considered small. 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 estimates that 221 of these are small, under the SBA 
small business size standard. Thus, under this category and size 
standard, about half of firms can be considered small.
    40. Common Carrier Paging. The SBA has developed a small business 
size standard for Paging, under which a business is small if it has 
1,500 or fewer employees. According to Commission data, 365 carriers 
have reported that they are engaged in Paging or Messaging Service. Of 
these, an estimated 360 have 1,500 or fewer employees, and 5 have more 
than 1,500 employees. Consequently, the Commission estimates that the 
majority of paging providers are small entities that may be affected by 
its action. In addition, in the Paging Third Report and Order, the 
Commission developed a small business size standard for ``small 
businesses'' and ``very small businesses'' for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments. A ``small business'' is an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $15 million for the preceding three years. 
Additionally, a ``very small business'' is an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues that are not more than $3 million for the preceding three 
years. The SBA has approved these small business size standards. An 
auction of Metropolitan Economic Area licenses commenced on February 
24, 2000, and closed on March 2, 2000. Of the 985 licenses auctioned, 
440 were sold. Fifty-seven companies claiming small business status 
won.
    41. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission established small business size standards for the 
wireless communications services (WCS) auction. A ``small business'' is 
an entity with average gross revenues of $40 million for each of the 
three preceding years, and a ``very small business'' is an entity with 
average gross revenues of $15 million for each of the three preceding 
years. The SBA has approved these small business size standards. The 
Commission auctioned geographic area licenses in the WCS service. In 
the auction, held in April 1997, there were seven winning bidders that 
qualified as ``very small business'' entities, and one that qualified 
as a ``small business'' entity.
    42. 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

[[Page 37876]]

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.
    43. Broadband Personal Communications Service. The broadband 
Personal Communications Service (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission defined ``small entity'' for 
Blocks C and F as an entity that has average gross revenues of $40 
million or less in the three previous calendar years. For Block F, an 
additional classification for ``very small business'' was added and is 
defined as an entity that, together with its affiliates, has average 
gross revenues of not more than $15 million for the preceding three 
calendar years.'' These standards defining ``small entity'' in the 
context of broadband PCS auctions have been approved by the SBA. No 
small businesses, within the SBA-approved small business size standards 
bid successfully for licenses in Blocks A and B. There were 90 winning 
bidders that qualified as small entities in the Block C auctions. A 
total of 93 small and very small business bidders won approximately 40 
percent of the 1,479 licenses for Blocks D, E, and F. On March 23, 
1999, the Commission re-auctioned 347 C, D, E, and F Block licenses. 
There were 48 small business winning bidders. On January 26, 2001, the 
Commission completed the auction of 422 C and F Broadband PCS licenses 
in Auction No. 35. Of the 35 winning bidders in this auction, 29 
qualified as ``small'' or ``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.
    44. Narrowband Personal Communications Services. To date, two 
auctions of narrowband personal communications services (PCS) licenses 
have been conducted. For purposes of the two auctions that have already 
been held, ``small businesses'' were entities with average gross 
revenues for the prior three calendar years of $40 million or less. 
Through these auctions, the Commission has awarded a total of 41 
licenses, out of which 11 were obtained by small businesses. To ensure 
meaningful participation of small business entities in future auctions, 
the Commission has adopted a two-tiered small business size standard in 
the Narrowband PCS Second Report and Order. A ``small business'' is an 
entity that, together with affiliates and controlling interests, has 
average gross revenues for the three preceding years of not more than 
$40 million. A ``very small business'' is an entity that, together with 
affiliates and controlling interests, has average gross revenues for 
the three preceding years of not more than $15 million. The SBA has 
approved these small business size standards. In the future, the 
Commission will auction 459 licenses to serve Metropolitan Trading 
Areas (MTAs) and 408 response channel licenses. There is also one 
megahertz of narrowband PCS spectrum that has been held in reserve and 
that the Commission has not yet decided to release for licensing. The 
Commission cannot predict accurately the number of licenses that will 
be awarded to small entities in future actions. However, four of the 16 
winning bidders in the two previous narrowband PCS auctions were small 
businesses, as that term was defined under the Commission's Rules. 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.
    45. 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, the Commission applies the 
small business size standard under the SBA rules applicable to 
``Cellular and Other Wireless Telecommunications'' companies. Under 
this category, the SBA deems a wireless business to be small if it has 
1,500 or fewer employees. The Commission estimates that nearly all such 
licensees are small businesses under the SBA's small business size 
standard.
    46. 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 purposes of 
determining their eligibility for special provisions such as bidding 
credits and installment payments. This small business size standard 
indicates that a ``small business'' is an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
not exceeding $15 million for the preceding three years. A ``very small 
business'' is an entity that, together with its affiliates and 
controlling principals, has average gross revenues that do not exceed 
$3 million for the preceding three years. The SBA has approved these 
small business size standards. Auctions of Phase II licenses commenced 
on September 15, 1998, and closed on October 22, 1998. In the first 
auction, 908 licenses were auctioned in three different-sized 
geographic areas: three nationwide licenses, 30 Regional Economic Area 
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 
licenses auctioned, 693 were sold. Thirty-nine small businesses won 
licenses in the first 220 MHz auction. The second auction included 225 
licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies 
claiming small business status won 158 licenses.
    47. 800 MHz and 900 MHz Specialized Mobile Radio Licenses. The 
Commission awards ``small entity'' and ``very small entity'' bidding 
credits in auctions for Specialized Mobile Radio (SMR) geographic area 
licenses in the 800 MHz and 900 MHz bands to firms that had revenues of 
no more than $15 million in each of the three previous calendar years, 
or that had revenues of no more than $3 million in each of the previous 
calendar years, respectively. These bidding credits apply to SMR 
providers in the 800 MHz and 900 MHz bands that either hold geographic 
area licenses or have obtained extended implementation authorizations. 
The Commission does not know how many firms provide 800 MHz or 900 MHz 
geographic area SMR service pursuant to extended implementation 
authorizations, nor how many of these providers have annual revenues of 
no more than $15 million. One firm has over $15 million in revenues. 
The Commission assumes, for purposes here, that all of the remaining 
existing extended implementation authorizations are held by small 
entities, as that term is defined by the SBA. The Commission has held 
auctions for geographic area licenses in the 800 MHz and 900 MHz SMR 
bands. There were 60 winning bidders that qualified as small or very 
small entities in the 900 MHz SMR auctions. Of the 1,020 licenses won 
in the 900 MHz auction, bidders qualifying as small or

[[Page 37877]]

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.
    48. 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 purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments. A ``small business'' as an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $15 million for the preceding three years. 
Additionally, a ``very small business'' is an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues that are not more than $3 million for the preceding three 
years. An auction of 52 Major Economic Area (MEA) licenses commenced on 
September 6, 2000, and closed on September 21, 2000. Of the 104 
licenses auctioned, 96 licenses were sold to nine bidders. Five of 
these bidders were small businesses that won a total of 26 licenses. A 
second auction of 700 MHz Guard Band licenses commenced on February 13, 
2001 and closed on February 21, 2001. All eight of the licenses 
auctioned were sold to three bidders. One of these bidders was a small 
business that won a total of two licenses.
    49. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio System (BETRS). The Commission uses 
the SBA's small business size standard applicable to ``Cellular and 
Other Wireless Telecommunications,'' i.e., an entity employing no more 
than 1,500 persons. There are approximately 1,000 licensees in the 
Rural Radiotelephone Service, and the Commission estimates that there 
are 1,000 or fewer small entity licensees in the Rural Radiotelephone 
Service that may be affected by the rules and policies adopted herein.
    50. Air-Ground Radiotelephone Service. The Commission has not 
adopted a small business size standard specific to the Air-Ground 
Radiotelephone Service. 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 the Commission estimates that almost all of 
them qualify as small under the SBA small business size standard.
    51. Aviation and Marine Radio Services. Small businesses in the 
aviation and marine radio services use a very high frequency (VHF) 
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator 
transmitter. The Commission has not developed a small business size 
standard specifically applicable to these small businesses. For 
purposes of this analysis, the Commission uses the SBA small business 
size standard for the category ``Cellular and Other 
Telecommunications,'' which is 1,500 or fewer employees. Most 
applicants for recreational licenses are individuals. Approximately 
581,000 ship station licensees and 131,000 aircraft station licensees 
operate domestically and are not subject to the radio carriage 
requirements of any statute or treaty. For purposes of its evaluations 
in this analysis, the Commission estimates that there are up to 
approximately 712,000 licensees that are small businesses (or 
individuals) under the SBA standard. In addition, between December 3, 
1998 and December 14, 1998, the Commission held an auction of 42 VHF 
Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and 
161. 775-162. 0125 MHz (coast transmit) bands. For purposes of the 
auction, the Commission defined a ``small'' business as an entity that, 
together with controlling interests and affiliates, has average gross 
revenues for the preceding three years not to exceed $15 million 
dollars. In addition, a ``very small'' business is one that, together 
with controlling interests and affiliates, has average gross revenues 
for the preceding three years not to exceed $3 million dollars. There 
are approximately 10,672 licensees in the Marine Coast Service, and the 
Commission estimates that almost all of them qualify as ``small'' 
businesses under the above special small business size standards.
    52. Fixed Microwave Services. Fixed microwave services include 
common carrier, private operational-fixed, and broadcast auxiliary 
radio services. At present, there are approximately 22,015 common 
carrier fixed licensees and 61,670 private operational-fixed licensees 
and broadcast auxiliary radio licensees in the microwave services. The 
Commission has not created a size standard for a small business 
specifically with respect to fixed microwave services. For purposes of 
this analysis, the Commission uses the SBA small business size standard 
for the category ``Cellular and Other Telecommunications,'' which is 
1,500 or fewer employees. The Commission does not have data specifying 
the number of these licensees that have more than 1,500 employees, and 
thus are unable at this time to estimate with greater precision the 
number of fixed microwave service licensees that would qualify as small 
business concerns under the SBA's small business size standard. 
Consequently, the Commission estimates that there are up to 22,015 
common carrier fixed licensees and up to 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in the 
microwave services that may be small and may be affected by the rules 
and policies adopted herein. The Commission notes, however, that the 
common carrier microwave fixed licensee category includes some large 
entities.
    53. 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.
    54. 39 GHz Service. The Commission created a special small business 
size standard for 39 GHz licenses--an entity that has average gross 
revenues of $40 million or less in the three previous calendar years. 
An additional size standard for ``very small business'' is: an entity 
that, together with affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. The SBA has 
approved these small business size standards. The auction of the 2,173 
39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The 
18 bidders who claimed small business status won 849 licenses. 
Consequently, the Commission estimates that 18 or fewer 39 GHz 
licensees are small entities that may be affected by its action.
    55. 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.

[[Page 37878]]

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. The Commission estimates that the number of wireless cable 
subscribers is approximately 100,000, as of March 2005. 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 MDS, ITFS and LMDS. 
Other standards also apply, as described.
    56. 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 of a small entity in the context 
of MDS auctions has been approved by the SBA. 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. 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 MDS (or BRS) providers, as defined by 
the SBA and the Commission's auction rules.
    57. 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.
    58. In the 1998 and 1999 LMDS auctions, the Commission defined a 
small business as an entity that has annual average gross revenues of 
less than $40 million in the previous three calendar years. Moreover, 
the Commission added an additional classification for a ``very small 
business,'' which was defined as an entity that had annual average 
gross revenues of less than $15 million in the previous three calendar 
years. These definitions of ``small business'' and ``very small 
business'' in the context of the LMDS auctions have been approved by 
the SBA. In the first LMDS auction, 104 bidders won 864 licenses. Of 
the 104 auction winners, 93 claimed status as small or very small 
businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based 
on this information, the Commission believes that the number of small 
LMDS licenses will include 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 as defined by the SBA and the Commission's 
auction rules.
    59. 218-219 MHz Service. The first auction of 218-219 MHz spectrum 
resulted in 170 entities winning licenses for 594 Metropolitan 
Stat