Schools and Libraries Universal Service Support Mechanism, 10199-10203 [2010-4688]
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Federal Register / Vol. 75, No. 43 / Friday, March 5, 2010 / Proposed Rules
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 54
[CC Docket No. 02–6; FCC 10–33]
Schools and Libraries Universal
Service Support Mechanism
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AGENCY: Federal Communications
Commission.
ACTION: Notice of proposed rulemaking.
SUMMARY: In the companion order that
accompanied a Notice of Proposed
Rulemaking (NPRM), the Commission
enabled schools that receive funding
from the E-rate program (more formally,
the schools and libraries universal
service support program) to allow
members of the general public to use the
schools’ Internet access during nonoperating hours. The Commission
waived, on its own motion, through
funding year 2010 (which ends June 30,
2011), rules that currently discourage
public use of resources funded under
the E-rate program. In the NPRM, the
Commission seeks comment on revising
its rules to make this change permanent.
This change will leverage universal
service funding to serve a larger
population at no increased cost to the Erate program. The general public will be
able to use the Internet access already
present in schools, at the schools’
discretion, for purposes such as job
searches and applications, digital
literacy programs, and online access to
governmental services and resources.
DATES: Comments on the proposed rules
are due on or before April 5, 2010 and
reply comments are due on or before
April 19, 2010. Written comments on
the Paperwork Reduction Act proposed
information collection requirements
should be submitted on or before May
4, 2010. If you anticipate that you will
be submitting comments, but find it
difficult to do so within the period of
time allowed by this notice, you should
advise the contact listed below as soon
as possible.
ADDRESSES: You may submit comments,
identified by CC Docket No. 02–6, by
any of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Federal Communications
Commission’s Web site: https://
fjallfoss.fcc.gov/ecfs2/. Follow the
instructions for submitting comments.
• People with Disabilities: Contact the
FCC to request reasonable
accommodations (accessible format
documents, sign language interpreters,
CART, etc.) by e-mail: FCC504@fcc.gov
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or phone: (202) 418–0530 or TTY: (202)
418–0432.
• In addition to filing comments with
the Secretary, a copy of any comments
on the Paperwork Reduction Act
information collection requirements
contained herein should be submitted to
the Federal Communications
Commission via e-mail to PRA@fcc.gov
and to Nicholas A. Fraser, Office of
Management and Budget, via e-mail to
Nicholas_A._Fraser@omb.eop.gov or via
fax at 202–395–5167.
For detailed instructions for submitting
comments and additional information
on the rulemaking process, see the
SUPPLEMENTARY INFORMATION section of
this document.
FOR FURTHER INFORMATION CONTACT:
Regina Brown, Wireline Competition
Bureau, Telecommunications Access
Policy Division, (202) 418–7400 or TTY:
(202) 418–0484.
SUPPLEMENTARY INFORMATION: This is a
synopsis of the Commission’s Notice of
Proposed Rulemaking in CC Docket No.
02–6, FCC 10–33, adopted February 18,
2010, and released February 19, 2010.
The complete text of this document is
available for inspection and copying
during normal business hours in the
FCC Reference Information Center,
Portals II, 445 12th Street, SW., Room
CY–A257, Washington, DC 20554. The
document may also be purchased from
the Commission’s duplicating
contractor, Best Copy and Printing, Inc.,
445 12th Street, SW., Room CY–B402,
Washington, DC 20554, telephone (800)
378–3160 or (202) 863–2893, facsimile
(202) 863–2898, or via the Internet at
https://www.bcpiweb.com. It is also
available on the Commission’s Web site
at https://www.fcc.gov.
Pursuant to sections 1.415 and 1.419
of the Commission’s rules, 47 CFR
1.415, 1.419, interested parties may file
comments and reply comments on or
before the dates indicated on the first
page of this document. Comments may
be filed using: (1) The Commission’s
Electronic Comment Filing System
(ECFS), (2) the Federal Government’s
eRulemaking Portal, or (3) by filing
paper copies. See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
• Electronic Filers: Comments may be
filed electronically using the Internet by
accessing the ECFS: https://www.fcc.gov/
cgb/ecfs/ or the Federal eRulemaking
Portal: https://www.regulations.gov.
Filers should follow the instructions
provided on the Web site for submitting
comments.
• Paper Filers: Parties who choose to
file by paper must file an original and
four copies of each filing. If more than
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one docket or rulemaking number
appears in the caption of this
proceeding, filers must submit two
additional copies for each additional
docket or rulemaking number.
Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail
(although we continue to experience
delays in receiving U.S. Postal Service
mail). All filings must be addressed to
the Commission’s Secretary, Office of
the Secretary, Federal Communications
Commission.
Æ All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th St., SW., Room TW–A325,
Washington, DC 20554. The filing hours
are 8 a.m. to 7 p.m. All hand deliveries
must be held together with rubber bands
or fasteners. Any envelopes must be
disposed of before entering the building.
Æ Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9300
East Hampton Drive, Capitol Heights,
MD 20743.
Æ U.S. Postal Service first-class,
Express, and Priority mail should be
addressed to 445 12th Street, SW.,
Washington, DC 20554.
In addition, one copy of each
pleading must be sent to each of the
following:
Æ The Commission’s duplicating
contractor, Best Copy and Printing, Inc.,
445 12th Street, SW., Room CY–B402,
Washington, DC 20554; Web site:
www.bcpiweb.com; phone: 1–800–378–
3160;
Æ Regina Brown,
Telecommunications,
Telecommunications Access Policy
Division, Wireline Competition Bureau,
445 12th Street, SW., Room 5–A5360,
Washington, DC 20554; e-mail:
Regina.Brown@fcc.gov; and
Æ Charles Tyler, Telecommunications
Access Policy Division, Wireline
Competition Bureau, 445 12th Street,
SW., Room 5–A452, Washington, DC
20554; e-mail: Charles.Tyler@fcc.gov.
People with Disabilities: To request
materials in accessible formats for
people with disabilities (Braille, large
print, electronic files, audio format),
send an e-mail to fcc504@fcc.gov or call
the Consumer & Governmental Affairs
Bureau at (202) 418–0530 (voice) or
(202) 418–0432 (TTY). Contact the FCC
to request reasonable accommodations
for filing comments (accessible format
documents, sign language interpreters,
CART, etc.) by e-mail: fcc504@fcc.gov;
phone: (202) 418–0530 or (202) 418–
0432 (TTY).
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Filings and comments are also
available for public inspection and
copying during regular business hours
at the FCC Reference Information
Center, Portals II, 445 12th Street, SW.,
Room CY–A257, Washington, DC 20554.
Copies may also be purchased from the
Commission’s duplicating contractor,
BCPI, 445 12th Street, SW., Room CY–
B402, Washington, DC 20554.
Customers may contact BCPI through its
Web site: https://www.bcpiweb.com, by
e-mail at fcc@bcpiweb.com, by
telephone at (202) 488–5300 or (800)
378–3160 (voice), (202) 488–5562
(TTY), or by facsimile at (202) 488–
5563.
I. Synopsis of the Notice of Proposed
Rulemaking
1. Currently, the Commission’s rules
require schools to certify that they will
use E-rate funded services solely for
‘‘educational purposes,’’ defined as
activities that are integral, immediate,
and proximate to the education of
students. In the NPRM, the Commission
specifically seeks comment on whether
it should revise sections 54.504(b)(2)(v)
and 54.504(c)(1)(vii) of its rules to allow
schools to use underutilized services
and equipment funded under the E-rate
program for other, secondary purposes,
instead of solely for ‘‘educational
purposes’’ as is now required under its
rules. Specifically, the Commission
proposes to revise sections
54.504(b)(2)(v) and 54.504(c)(1)(vii) of
its rules to require applicants to certify
that ‘‘[t]he services the applicant
purchases at discounts will be used
primarily for educational purposes
* * *.’’ It tentatively concludes that, if
it revise sections 54.504(b)(2)(v) and
54.504(c)(1)(vii) of its rules to allow
schools to use underutilized services
and equipment funded under the E-rate
program for other, secondary purposes,
consistent with the Communications
Act, E-rate funds must, in the first
instance, be used for educational
purposes and students shall always get
first priority in use of the schools’
resources. Any additional use of the
services purchased under the E-rate
program thus must be incidental to the
primary purpose of the E-rate funds.
2. In the companion order, in granting
a waiver of these rules, the Commission
set forth certain conditions regarding
other uses of school facilities that
choose to allow the community to use
their E-rate funded services: (1) Schools
participating in the E-rate program are
not permitted to request more services
than are necessary for ‘‘educational
purposes’’; (2) any community use of Erate funded services at a school facility
is limited to non-operating hours, such
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as after school hours or during times
when the students are out of school; and
(3) consistent with the Communications
Act, schools’ discounted services or
network capacity may not be ‘‘sold,
resold, or transferred by such user in
consideration for money or any other
thing of value.’’ In the NPRM, the
Commission, if it revises its rules,
tentatively concludes that it would
continue to impose these conditions and
seeks comment on that conclusion. It
also seeks comment on whether there
are any additional conditions to guard
against waste, fraud, and abuse that it
should impose on schools that allow
community use of their E-rate funded
services and equipment. Further, the
Commission seeks comment on any
practical or operational implications
such a change in its rules would have
on schools and the community at large.
Lastly, the Commission invites
comment on whether it should modify
our definition of educational purposes.
Commenters should address whether
modification of that definition would
accomplish the objectives of
maximizing the use of facilities and
services supported by E-rate funding
and reducing the likelihood of waste,
fraud, and abuse.
3. The Commission proposes these
rule revisions for a number of reasons.
First, the Commission believes that
changing these rules will leverage E-rate
funds to serve a larger population at no
increased cost to the E-rate program.
Currently, services and facilities
purchased using E-rate funding remain
unused during evenings, weekends,
school holidays, and summer breaks.
Second, many people lack access or
have limited access to affordable
Internet services for educational and job
training opportunities, particularly, for
example, in rural, minority, and Tribal
communities. Thus, by opening up
these facilities to members of the public
to use during non-operating hours, the
Commission will maximize the use of
facilities and services supported by Erate funding and increase community
access to the Internet. Third, the
Commission finds that these rule
changes are consistent with the goals of
universal service by making Internet
access available to more members of the
general public. Fourth, the Commission
believes these rule changes are
consistent with the use of E-rate funding
by libraries. Libraries currently provide
access to the Internet to members of the
general public as part of their mission.
Allowing schools to do the same, at
their discretion, would simply provide
more opportunities for public access to
Internet services. Finally, these rule
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changes would further the
Commission’s directive from Congress
to encourage access to advanced
telecommunications and information
services.
II. Procedural Matters
A. Initial Paperwork Reduction Act
Analysis
4. This document does not contain
proposed information collection(s)
subject to the Paperwork Reduction Act
of 1995, 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).
B. Initial Regulatory Flexibility Analysis
5. As required by the Regulatory
Flexibility Act of 1980, see 5 U.S.C. 603,
as amended, the Commission has
prepared this present Initial Regulatory
Flexibility Analysis (IRFA) of the
possible significant economic impact on
small entities by the policies and rules
proposed in the NPRM. Written public
comments are requested on this IRFA.
Comments must be identified as
responses to the IRFA and must be filed
by the deadlines for comments on the
NPRM. The Commission will send a
copy of this NPRM, including this IRFA,
to the Chief Counsel for Advocacy of the
Small Business Administration (SBA),
see 5 U.S.C. 603(a). In addition, the
NPRM and IRFA (or summaries thereof)
will be published in the Federal
Register.
(1) Need for, and Objectives of, the
Proposed Rules
6. In the NPRM, we specifically seek
comment on whether we should revise
sections 54.504(b)(2)(v) and
54.504(c)(1)(vii) of our rules to allow
schools to use underutilized services
and equipment funded under the E-rate
program for other, secondary purposes,
instead of solely for ‘‘educational
purposes’’ as is now required under our
rules. Specifically, we propose to revise
sections 54.504(b)(2)(v) and
54.504(c)(1)(vii) of our rules to require
applicants to certify that ‘‘[t]he services
the applicant purchases at discounts
will be used primarily for educational
purposes * * *.’’
7. We propose these rule revisions for
several reasons. As we noted above in
our order granting a waiver of our rules
requiring that services and facilities
supported by E-rate be used solely for
educational purposes through the end of
funding year 2010, we believe changing
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small organization is generally ‘‘any notfor-profit enterprise which is
independently owned and operated and
is not dominant in its field.’’
Nationwide, there are a total of
approximately 29.6 million small
businesses, according to the SBA. A
‘‘small organization’’ is generally ‘‘any
not-for-profit enterprise which is
independently owned and operated and
is not dominant in its field.’’
Nationwide, as of 2002, there were
approximately 1.6 million small
organizations. 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. We estimate that, of this
total, 84,377 entities were ‘‘small
governmental jurisdictions.’’ Thus, we
estimate that most governmental
jurisdictions are small.
10. Small entities potentially affected
by the proposals herein include eligible
schools and libraries and the eligible
service providers offering them
discounted services, including
telecommunications service providers,
Internet Service Providers (ISPs), and
vendors of the services and equipment
used for internal connections.
(2) Legal Basis
8. The legal basis for the NPRM is
contained in sections 1–4 and 254 of the
Communications Act of 1934, as
amended, 47 U.S.C. 151–154 and 254,
and sections 0.91, 0.291, and 1.3 of the
Commission’s rules, 47 CFR 0.91, 0.291,
and 1.3.
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these rules will leverage E-rate funds to
serve a larger population at no increased
cost to the E-rate program. Currently,
services and facilities purchased using
E-rate funding remain unused during
evenings, weekends, school holidays,
and summer breaks. Moreover, many
people lack access or have limited
access to affordable Internet services for
educational and job training
opportunities, particularly, for example,
in rural, minority, and Tribal
communities. Thus, by opening up
these facilities to members of the public
to use during non-operating hours, we
will maximize the use of facilities and
services supported by E-rate funding
and increase community access to the
Internet. Further, we find that these rule
changes are consistent with the goals of
universal service by making Internet
access available to more members of the
general public. We also believe these
rule changes are consistent with the use
of E-rate funding by libraries. Libraries
currently provide access to the Internet
to members of the general public as part
of their mission. Allowing schools to do
the same, at their discretion, would
simply provide more opportunities for
public access to Internet services.
Finally, these rule changes would
further the Commission’s directive from
Congress to encourage access to
advanced telecommunications and
information services.
(a) Schools
11. As noted, ‘‘small entity’’ includes
non-profit and small governmental
entities. Under the schools and libraries
universal service support mechanism,
which provides support for elementary
and secondary schools, an elementary
school is generally ‘‘a non-profit
institutional day or residential school
that provides elementary education, as
determined under state law.’’ A
secondary school is generally defined as
‘‘a non-profit institutional day or
residential school that provides
secondary education, as determined
under state law,’’ and not offering
education beyond grade 12. For-profit
schools, and schools and libraries with
endowments in excess of $50,000,000,
are not eligible to receive discounts
under the program. Certain other
statutory definitions apply as well. The
SBA has also defined for-profit,
elementary and secondary schools
having $7 million or less in annual
receipts as small entities. In funding
year 2007, approximately 105,500
schools received funding under the
schools and libraries universal service
mechanism. Although we are unable to
estimate with precision the number of
these additional entities that would
(3) Description and Estimate of the
Number of Small Entities to Which
Rules Will Apply
9. The RFA directs agencies to
provide a description of and, where
feasible, an estimate of the number of
small entities that may be affected by
the proposed rules, if adopted. 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 that: (1) Is independently owned
and operated; (2) is not dominant in its
field of operation; and (3) satisfies any
additional criteria established by the
SBA. Nationwide, there are a total of
approximately 22.4 million small
businesses, according to SBA data. A
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qualify as small entities under SBA’s
size standard, we estimate that fewer
than 105,500 such schools might be
affected annually by our action, under
current operation of the program.
(b) Telecommunications Service
Providers
12. Incumbent Local Exchange
Carriers (LECs). Neither the Commission
nor the SBA has developed a size
standard for small incumbent local
exchange services. The closest 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, 1,311
incumbent carriers reported that they
were engaged in the provision of local
exchange services. Of these 1,311
carriers, an estimated 1,024 have 1,500
or fewer employees and 287 have more
than 1,500 employees. Thus, under this
category and associated small business
size standard, we estimate that the
majority of entities are small.
13. We have included small
incumbent local exchange carriers in
this RFA analysis. A ‘‘small business’’
under the RFA is one that, inter alia,
meets the pertinent small business size
standard (e.g., a telephone
communications business having 1,500
or fewer employees), and ‘‘is not
dominant in its field of operation.’’ The
SBA’s Office of Advocacy contends that,
for RFA purposes, small incumbent
local exchange carriers are not dominant
in their field of operation because any
such dominance is not ‘‘national’’ in
scope. We have therefore included small
incumbent carriers in this RFA analysis,
although we emphasize that this RFA
action has no effect on the
Commission’s analyses and
determinations in other, non-RFA
contexts.
14. Interexchange Carriers. Neither
the Commission nor the SBA has
developed a definition of small entities
specifically applicable to providers of
interexchange services (IXCs). The
closest applicable definition under the
SBA rules is for wired
telecommunications carriers. This
provides that a wired
telecommunications carrier is a small
entity if it employs no more than 1,500
employees. According to the
Commission’s 2008 Trends Report, 300
companies reported that they were
engaged in the provision of
interexchange services. Of these 300
IXCs, an estimated 268 have 1,500 or
fewer employees and 32 have more than
1,500 employees. Consequently, the
Commission estimates that most
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providers of interexchange services are
small businesses.
15. Competitive Access Providers.
Neither the Commission nor the SBA
has developed a definition of small
entities specifically applicable to
competitive access services providers
(CAPs). The closest applicable
definition under the SBA rules is for
wired telecommunications carriers. This
provides that a wired
telecommunications carrier is a small
entity if it employs no more than 1,500
employees. According to the 2008
Trends Report, 1,005 CAPs and
competitive local exchange carriers
(competitive LECs) reported that they
were engaged in the provision of
competitive local exchange services. Of
these 1,005 CAPs and competitive LECs,
an estimated 918 have 1,500 or fewer
employees and 87 have more than 1,500
employees. Consequently, the
Commission estimates that most
providers of competitive exchange
services are small businesses.
16. Wireless Telecommunications.
Neither the Commission nor the SBA
has developed a definition of small
entities specifically for wireless
telephony. The closest definition is the
SBA definition for Wireless
Telecommunications Carriers (except
Satellite). Under this definition, a
cellular licensee is a small entity if it
employs no more than 1,500 employees.
According to the 2008 Trends Report,
434 providers classified themselves as
providers of wireless telephony,
including cellular telecommunications,
Personal Communications Service, and
Specialized Mobile Radio (SMR)
Telephony Carriers. Of these 434
wireless telephony providers, an
estimated 222 have 1,500 or fewer
employees and 212 have more than
1,500 employees. Consequently, the
Commission estimates that more than
half of the providers of wireless
telephony services are small businesses.
17. Other Wireless Services. Neither
the Commission nor the SBA has
developed a definition of small entities
specifically applicable to wireless
services other than wireless telephony.
The closest applicable definition under
the SBA rules is again that of Wireless
Telecommunications (except Satellite),
under which a service provider is a
small entity if it employs no more than
1,500 employees. According to the 2008
Trends Report, 69 providers classified
themselves as wireless data carriers or
other mobile service providers. Of these
69 providers, an estimated 65 have
1,500 or fewer employees and 4 have
more than 1,500 employees.
Consequently, the Commission
estimates that most providers of
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wireless services other than wireless
telephony are small businesses.
18. Paging and Messaging Service
Providers. In the Paging Third Report
and Order, we developed a small
business size standard for ‘‘small
businesses’’ and ‘‘very small businesses’’
for purposes of determining their
eligibility for special provisions such as
bidding credits and installment
payments. A ‘‘small business’’ is an
entity that, together with its affiliates
and controlling principals, has average
gross revenues not exceeding $15
million for the preceding three years.
Additionally, a ‘‘very small business’’ is
an entity that, together with its affiliates
and controlling principals, has average
gross revenues that are not more than $3
million for the preceding three years.
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. In addition,
at present, there are approximately
24,000 Private-Paging site-specific
licenses and 74,000 Common Carrier
Paging licenses. Finally, according to
Commission data, 281 carriers reported
that they were engaged in the provision
of paging services, messaging services,
or other mobile services. Of those, the
Commission estimates that 279 are
small, under the SBA-approved small
business size standard.
(c) Internet Service Providers
19. The 2007 Economic Census places
these firms, whose services might
include voice over Internet protocol
(VoIP), in either of two categories,
depending on whether the service is
provided over the provider’s own
telecommunications facilities (e.g., cable
and DSL ISPs), or over client-supplied
telecommunications connections (e.g.,
dial-up ISPs). The former are within the
category of Wired Telecommunications
Carriers, which has an SBA small
business size standard of 1,500 or fewer
employees. The latter are within the
category of All Other
Telecommunications, which has a size
standard of annual receipts of $25
million or less. The most current Census
Bureau data for all such firms, however,
are the 2002 data for the previous
census category called Internet Service
Providers. That category had a small
business size standard of $21 million or
less in annual receipts, which was
revised in late 2005 to $23 million. The
2002 data show that there were 2,529
such firms that operated for the entire
year. Of those, 2,437 firms had annual
receipts of under $10 million, and an
additional 47 firms had receipts of
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between $10 million and $24,999,999.
Consequently, we estimate that the
majority of ISP firms are small entities.
(d) Vendors of Internal Connections
20. Telephone Apparatus
Manufacturing. The Census Bureau
defines this category as follows: ‘‘This
industry comprises establishments
primarily engaged in manufacturing
wire telephone and data
communications equipment. These
products may be standalone or boardlevel components of a larger system.
Examples of products made by these
establishments are central office
switching equipment, cordless
telephones (except cellular), PBX
equipment, telephones, telephone
answering machines, LAN modems,
multi-user modems, and other data
communications equipment, such as
bridges, routers, and gateways.’’ The
SBA has developed a small business
size standard for Telephone Apparatus
Manufacturing, which is: All such firms
having 1,000 or fewer employees.
According to Census Bureau data for
2002, there were a total of 518
establishments in this category that
operated for the entire year. Of this
total, 511 had employment of under
1,000, and an additional 7 had
employment of 1,000 to 2,499. Thus,
under this size standard, the majority of
firms can be considered small.
21. Radio and Television
Broadcasting and Wireless
Communications Equipment
Manufacturing. The Census Bureau
defines this category as follows: ‘‘This
industry comprises establishments
primarily engaged in manufacturing
radio and television broadcast and
wireless communications equipment.
Examples of products made by these
establishments are: transmitting and
receiving antennas, cable television
equipment, GPS equipment, pagers,
cellular phones, mobile
communications equipment, and radio
and television studio and broadcasting
equipment.’’ The SBA has developed a
small business size standard for Radio
and Television Broadcasting and
Wireless Communications Equipment
Manufacturing, which is: all such firms
having 750 or fewer employees.
According to Census Bureau data for
2002, there were a total of 1,041
establishments in this category that
operated for the entire year. Of this
total, 1,010 had employment of under
500, and an additional 13 had
employment of 500 to 999. Thus, under
this size standard, the majority of firms
can be considered small.
22. Other Communications
Equipment Manufacturing. The Census
E:\FR\FM\05MRP1.SGM
05MRP1
Federal Register / Vol. 75, No. 43 / Friday, March 5, 2010 / Proposed Rules
Bureau defines this category as follows:
‘‘This industry comprises establishments
primarily engaged in manufacturing
communications equipment (except
telephone apparatus, and radio and
television broadcast, and wireless
communications equipment).’’ The SBA
has developed a small business size
standard for Other Communications
Equipment Manufacturing, which is: all
such firms having 750 or fewer
employees. According to Census Bureau
data for 2002, there were a total of 503
establishments in this category that
operated for the entire year. Of this
total, 493 had employment of under
500, and an additional 7 had
employment of 500 to 999. Thus, under
this size standard, the majority of firms
can be considered small.
(4) Description of Projected Reporting,
Recordkeeping, and Other Compliance
Requirements
23. The schools’ voluntary offering of
Internet resources, as proposed in the
NPRM, would not result in additional
compliance requirements for small
businesses.
erowe on DSK5CLS3C1PROD with PROPOSALS-1
(5) Steps Taken To Minimize Significant
Economic Impact on Small Entities, and
Significant Alternatives Considered
24. The RFA requires an agency to
describe any significant alternatives that
it has considered in reaching its
proposed approach, which may include
the following four alternatives (among
others): (1) The establishment of
differing compliance and reporting
requirements or timetables that take into
account the resources available to small
entities; (2) the clarification,
consolidation, or simplification of
compliance or reporting requirements
under the rule for small entities; (3) the
use of performance, rather than design,
standards; and (4) an exemption from
coverage of the rule, or part thereof, for
small entities.
25. In the NPRM, we seek comment
on whether we should revise sections
VerDate Nov<24>2008
14:26 Mar 04, 2010
Jkt 220001
54.504(b)(2)(v) and 54.504(c)(1)(vii) of
our rules to allow schools to use
underutilized services and equipment
funded under the E-rate program for
other, secondary purposes, instead of
solely for ‘‘educational purposes’’ as is
now required under our rules.
Specifically, we tentatively conclude
that, if we revise sections 54.504(b)(2)(v)
and 54.504(c)(1)(vii) of our rules to
allow schools to use underutilized
services and equipment funded under
the E-rate program for other purposes,
consistent with the Act, E-rate funds
must, in the first instance, be used for
educational purposes and students shall
always get first priority in use of the
schools’ resources. Any additional use
of the services purchased under the Erate program must therefore be
incidental to the primary purpose of the
E-rate funds. Under this proposed rule,
applicants will now be able to use their
E-rate eligible facilities and services for
other, secondary purposes, such as adult
education, job training, and digital
literacy programs, to benefit the
community. We also invite comment on
whether we should modify our
definition of educational purposes to
accomplish the same objective. We thus
believe that these rule changes will not
have an economic impact on small
entities under the E-rate program since
we are simply opening school facilities
and services, already funded under the
E-rate program, for community use
during non-operating school hours. In
fact, it will benefit participants by
giving them the option to maximize the
use of their facilities and services
supported by E-rate funding. We
welcome, however, comments from
parties that have opinions different from
those reached in this analysis.
(6) Federal Rules That May Duplicate,
Overlap, or Conflict With the Proposed
Rules
26. None.
PO 00000
Frm 00010
List of Subjects in 47 CFR Part 54
Communications common carriers,
Health facilities, Infants and children,
Libraries, Reporting and recordkeeping
requirements, Schools,
Telecommunications, Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Proposed Rules
For the reasons discussed in the
preamble, the Federal Communications
Commission proposes to amend 47 CFR
part 54 as follows:
PART 54—UNIVERSAL SERVICE
1. The authority citation continues to
read as follows:
Authority: 47 U.S.C. 1, 4(i), 201, 205, 214,
and 254 unless otherwise noted.
2. Section 54.504 is amended by
revising paragraphs (b)(2)(v) and
(c)(1)(vii) to read as follows:
§ 54.504
Requests for services.
*
*
*
*
*
(b) * * *
(2) * * *
(v) The services the applicant
purchases at discounts will be used
primarily for educational purposes and
will not be sold, resold, or transferred in
consideration for money or any other
thing of value.
*
*
*
*
*
(c) * * *
(1) * * *
(vii) The services the applicant
purchases at discounts will be used
primarily for educational purposes and
will not be sold, resold, or transferred in
consideration for money or any other
thing of value.
*
*
*
*
*
[FR Doc. 2010–4688 Filed 3–4–10; 8:45 am]
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Agencies
[Federal Register Volume 75, Number 43 (Friday, March 5, 2010)]
[Proposed Rules]
[Pages 10199-10203]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-4688]
[[Page 10199]]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[CC Docket No. 02-6; FCC 10-33]
Schools and Libraries Universal Service Support Mechanism
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In the companion order that accompanied a Notice of Proposed
Rulemaking (NPRM), the Commission enabled schools that receive funding
from the E-rate program (more formally, the schools and libraries
universal service support program) to allow members of the general
public to use the schools' Internet access during non-operating hours.
The Commission waived, on its own motion, through funding year 2010
(which ends June 30, 2011), rules that currently discourage public use
of resources funded under the E-rate program. In the NPRM, the
Commission seeks comment on revising its rules to make this change
permanent. This change will leverage universal service funding to serve
a larger population at no increased cost to the E-rate program. The
general public will be able to use the Internet access already present
in schools, at the schools' discretion, for purposes such as job
searches and applications, digital literacy programs, and online access
to governmental services and resources.
DATES: Comments on the proposed rules are due on or before April 5,
2010 and reply comments are due on or before April 19, 2010. Written
comments on the Paperwork Reduction Act proposed information collection
requirements should be submitted on or before May 4, 2010. If you
anticipate that you will be submitting comments, but find it difficult
to do so within the period of time allowed by this notice, you should
advise the contact listed below as soon as possible.
ADDRESSES: You may submit comments, identified by CC Docket No. 02-6,
by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: (202)
418-0530 or TTY: (202) 418-0432.
In addition to filing comments with the Secretary, a copy
of any comments on the Paperwork Reduction Act information collection
requirements contained herein should be submitted to the Federal
Communications Commission via e-mail to PRA@fcc.gov and to Nicholas A.
Fraser, Office of Management and Budget, via e-mail to Nicholas_A._Fraser@omb.eop.gov or via fax at 202-395-5167.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Regina Brown, Wireline Competition
Bureau, Telecommunications Access Policy Division, (202) 418-7400 or
TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Proposed Rulemaking in CC Docket No. 02-6, FCC 10-33, adopted
February 18, 2010, and released February 19, 2010. The complete text of
this document is available for inspection and copying during normal
business hours in the FCC Reference Information Center, Portals II, 445
12th Street, SW., Room CY-A257, Washington, DC 20554. The document may
also be purchased from the Commission's duplicating contractor, Best
Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402,
Washington, DC 20554, telephone (800) 378-3160 or (202) 863-2893,
facsimile (202) 863-2898, or via the Internet at https://www.bcpiweb.com. It is also available on the Commission's Web site at
https://www.fcc.gov.
Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47
CFR 1.415, 1.419, interested parties may file comments and reply
comments on or before the dates indicated on the first page of this
document. Comments may be filed using: (1) The Commission's Electronic
Comment Filing System (ECFS), (2) the Federal Government's eRulemaking
Portal, or (3) by filing paper copies. See Electronic Filing of
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: https://www.fcc.gov/cgb/ecfs/
or the Federal eRulemaking Portal: https://www.regulations.gov. Filers
should follow the instructions provided on the Web site for submitting
comments.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail (although we continue to experience delays in receiving U.S.
Postal Service mail). All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
[cir] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th St., SW., Room TW-A325, Washington, DC 20554. The filing hours are
8 a.m. to 7 p.m. All hand deliveries must be held together with rubber
bands or fasteners. Any envelopes must be disposed of before entering
the building.
[cir] Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
[cir] U.S. Postal Service first-class, Express, and Priority mail
should be addressed to 445 12th Street, SW., Washington, DC 20554.
In addition, one copy of each pleading must be sent to each of the
following:
[cir] The Commission's duplicating contractor, Best Copy and
Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC
20554; Web site: www.bcpiweb.com; phone: 1-800-378-3160;
[cir] Regina Brown, Telecommunications, Telecommunications Access
Policy Division, Wireline Competition Bureau, 445 12th Street, SW.,
Room 5-A5360, Washington, DC 20554; e-mail: Regina.Brown@fcc.gov; and
[cir] Charles Tyler, Telecommunications Access Policy Division,
Wireline Competition Bureau, 445 12th Street, SW., Room 5-A452,
Washington, DC 20554; e-mail: Charles.Tyler@fcc.gov.
People with Disabilities: To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an e-mail to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice) or
(202) 418-0432 (TTY). Contact the FCC to request reasonable
accommodations for filing comments (accessible format documents, sign
language interpreters, CART, etc.) by e-mail: fcc504@fcc.gov; phone:
(202) 418-0530 or (202) 418-0432 (TTY).
[[Page 10200]]
Filings and comments are also available for public inspection and
copying during regular business hours at the FCC Reference Information
Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC
20554. Copies may also be purchased from the Commission's duplicating
contractor, BCPI, 445 12th Street, SW., Room CY-B402, Washington, DC
20554. Customers may contact BCPI through its Web site: https://www.bcpiweb.com, by e-mail at fcc@bcpiweb.com, by telephone at (202)
488-5300 or (800) 378-3160 (voice), (202) 488-5562 (TTY), or by
facsimile at (202) 488-5563.
I. Synopsis of the Notice of Proposed Rulemaking
1. Currently, the Commission's rules require schools to certify
that they will use E-rate funded services solely for ``educational
purposes,'' defined as activities that are integral, immediate, and
proximate to the education of students. In the NPRM, the Commission
specifically seeks comment on whether it should revise sections
54.504(b)(2)(v) and 54.504(c)(1)(vii) of its rules to allow schools to
use underutilized services and equipment funded under the E-rate
program for other, secondary purposes, instead of solely for
``educational purposes'' as is now required under its rules.
Specifically, the Commission proposes to revise sections
54.504(b)(2)(v) and 54.504(c)(1)(vii) of its rules to require
applicants to certify that ``[t]he services the applicant purchases at
discounts will be used primarily for educational purposes * * *.'' It
tentatively concludes that, if it revise sections 54.504(b)(2)(v) and
54.504(c)(1)(vii) of its rules to allow schools to use underutilized
services and equipment funded under the E-rate program for other,
secondary purposes, consistent with the Communications Act, E-rate
funds must, in the first instance, be used for educational purposes and
students shall always get first priority in use of the schools'
resources. Any additional use of the services purchased under the E-
rate program thus must be incidental to the primary purpose of the E-
rate funds.
2. In the companion order, in granting a waiver of these rules, the
Commission set forth certain conditions regarding other uses of school
facilities that choose to allow the community to use their E-rate
funded services: (1) Schools participating in the E-rate program are
not permitted to request more services than are necessary for
``educational purposes''; (2) any community use of E-rate funded
services at a school facility is limited to non-operating hours, such
as after school hours or during times when the students are out of
school; and (3) consistent with the Communications Act, schools'
discounted services or network capacity may not be ``sold, resold, or
transferred by such user in consideration for money or any other thing
of value.'' In the NPRM, the Commission, if it revises its rules,
tentatively concludes that it would continue to impose these conditions
and seeks comment on that conclusion. It also seeks comment on whether
there are any additional conditions to guard against waste, fraud, and
abuse that it should impose on schools that allow community use of
their E-rate funded services and equipment. Further, the Commission
seeks comment on any practical or operational implications such a
change in its rules would have on schools and the community at large.
Lastly, the Commission invites comment on whether it should modify our
definition of educational purposes. Commenters should address whether
modification of that definition would accomplish the objectives of
maximizing the use of facilities and services supported by E-rate
funding and reducing the likelihood of waste, fraud, and abuse.
3. The Commission proposes these rule revisions for a number of
reasons. First, the Commission believes that changing these rules will
leverage E-rate funds to serve a larger population at no increased cost
to the E-rate program. Currently, services and facilities purchased
using E-rate funding remain unused during evenings, weekends, school
holidays, and summer breaks. Second, many people lack access or have
limited access to affordable Internet services for educational and job
training opportunities, particularly, for example, in rural, minority,
and Tribal communities. Thus, by opening up these facilities to members
of the public to use during non-operating hours, the Commission will
maximize the use of facilities and services supported by E-rate funding
and increase community access to the Internet. Third, the Commission
finds that these rule changes are consistent with the goals of
universal service by making Internet access available to more members
of the general public. Fourth, the Commission believes these rule
changes are consistent with the use of E-rate funding by libraries.
Libraries currently provide access to the Internet to members of the
general public as part of their mission. Allowing schools to do the
same, at their discretion, would simply provide more opportunities for
public access to Internet services. Finally, these rule changes would
further the Commission's directive from Congress to encourage access to
advanced telecommunications and information services.
II. Procedural Matters
A. Initial Paperwork Reduction Act Analysis
4. This document does not contain proposed information
collection(s) subject to the Paperwork Reduction Act of 1995, 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).
B. Initial Regulatory Flexibility Analysis
5. As required by the Regulatory Flexibility Act of 1980, see 5
U.S.C. 603, as amended, the Commission has prepared this present
Initial Regulatory Flexibility Analysis (IRFA) of the possible
significant economic impact on small entities by the policies and rules
proposed in the NPRM. Written public comments are requested on this
IRFA. Comments must be identified as responses to the IRFA and must be
filed by the deadlines for comments on the NPRM. The Commission will
send a copy of this NPRM, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA), see 5 U.S.C.
603(a). In addition, the NPRM and IRFA (or summaries thereof) will be
published in the Federal Register.
(1) Need for, and Objectives of, the Proposed Rules
6. In the NPRM, we specifically seek comment on whether we should
revise sections 54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules to
allow schools to use underutilized services and equipment funded under
the E-rate program for other, secondary purposes, instead of solely for
``educational purposes'' as is now required under our rules.
Specifically, we propose to revise sections 54.504(b)(2)(v) and
54.504(c)(1)(vii) of our rules to require applicants to certify that
``[t]he services the applicant purchases at discounts will be used
primarily for educational purposes * * *.''
7. We propose these rule revisions for several reasons. As we noted
above in our order granting a waiver of our rules requiring that
services and facilities supported by E-rate be used solely for
educational purposes through the end of funding year 2010, we believe
changing
[[Page 10201]]
these rules will leverage E-rate funds to serve a larger population at
no increased cost to the E-rate program. Currently, services and
facilities purchased using E-rate funding remain unused during
evenings, weekends, school holidays, and summer breaks. Moreover, many
people lack access or have limited access to affordable Internet
services for educational and job training opportunities, particularly,
for example, in rural, minority, and Tribal communities. Thus, by
opening up these facilities to members of the public to use during non-
operating hours, we will maximize the use of facilities and services
supported by E-rate funding and increase community access to the
Internet. Further, we find that these rule changes are consistent with
the goals of universal service by making Internet access available to
more members of the general public. We also believe these rule changes
are consistent with the use of E-rate funding by libraries. Libraries
currently provide access to the Internet to members of the general
public as part of their mission. Allowing schools to do the same, at
their discretion, would simply provide more opportunities for public
access to Internet services. Finally, these rule changes would further
the Commission's directive from Congress to encourage access to
advanced telecommunications and information services.
(2) Legal Basis
8. The legal basis for the NPRM is contained in sections 1-4 and
254 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154
and 254, and sections 0.91, 0.291, and 1.3 of the Commission's rules,
47 CFR 0.91, 0.291, and 1.3.
(3) Description and Estimate of the Number of Small Entities to Which
Rules Will Apply
9. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. 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 that: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the SBA. Nationwide,
there are a total of approximately 22.4 million small businesses,
according to SBA data. A small organization is generally ``any not-for-
profit enterprise which is independently owned and operated and is not
dominant in its field.'' Nationwide, there are a total of approximately
29.6 million small businesses, according to the SBA. A ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
Nationwide, as of 2002, there were approximately 1.6 million small
organizations. 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. We
estimate that, of this total, 84,377 entities were ``small governmental
jurisdictions.'' Thus, we estimate that most governmental jurisdictions
are small.
10. Small entities potentially affected by the proposals herein
include eligible schools and libraries and the eligible service
providers offering them discounted services, including
telecommunications service providers, Internet Service Providers
(ISPs), and vendors of the services and equipment used for internal
connections.
(a) Schools
11. As noted, ``small entity'' includes non-profit and small
governmental entities. Under the schools and libraries universal
service support mechanism, which provides support for elementary and
secondary schools, an elementary school is generally ``a non-profit
institutional day or residential school that provides elementary
education, as determined under state law.'' A secondary school is
generally defined as ``a non-profit institutional day or residential
school that provides secondary education, as determined under state
law,'' and not offering education beyond grade 12. For-profit schools,
and schools and libraries with endowments in excess of $50,000,000, are
not eligible to receive discounts under the program. Certain other
statutory definitions apply as well. The SBA has also defined for-
profit, elementary and secondary schools having $7 million or less in
annual receipts as small entities. In funding year 2007, approximately
105,500 schools received funding under the schools and libraries
universal service mechanism. Although we are unable to estimate with
precision the number of these additional entities that would qualify as
small entities under SBA's size standard, we estimate that fewer than
105,500 such schools might be affected annually by our action, under
current operation of the program.
(b) Telecommunications Service Providers
12. Incumbent Local Exchange Carriers (LECs). Neither the
Commission nor the SBA has developed a size standard for small
incumbent local exchange services. The closest 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, 1,311 incumbent carriers reported that
they were engaged in the provision of local exchange services. Of these
1,311 carriers, an estimated 1,024 have 1,500 or fewer employees and
287 have more than 1,500 employees. Thus, under this category and
associated small business size standard, we estimate that the majority
of entities are small.
13. We have included small incumbent local exchange carriers in
this RFA analysis. A ``small business'' under the RFA is one that,
inter alia, meets the pertinent small business size standard (e.g., a
telephone communications business having 1,500 or fewer employees), and
``is not dominant in its field of operation.'' The SBA's Office of
Advocacy contends that, for RFA purposes, small incumbent local
exchange carriers are not dominant in their field of operation because
any such dominance is not ``national'' in scope. We have therefore
included small incumbent carriers in this RFA analysis, although we
emphasize that this RFA action has no effect on the Commission's
analyses and determinations in other, non-RFA contexts.
14. Interexchange Carriers. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
providers of interexchange services (IXCs). The closest applicable
definition under the SBA rules is for wired telecommunications
carriers. This provides that a wired telecommunications carrier is a
small entity if it employs no more than 1,500 employees. According to
the Commission's 2008 Trends Report, 300 companies reported that they
were engaged in the provision of interexchange services. Of these 300
IXCs, an estimated 268 have 1,500 or fewer employees and 32 have more
than 1,500 employees. Consequently, the Commission estimates that most
[[Page 10202]]
providers of interexchange services are small businesses.
15. Competitive Access Providers. Neither the Commission nor the
SBA has developed a definition of small entities specifically
applicable to competitive access services providers (CAPs). The closest
applicable definition under the SBA rules is for wired
telecommunications carriers. This provides that a wired
telecommunications carrier is a small entity if it employs no more than
1,500 employees. According to the 2008 Trends Report, 1,005 CAPs and
competitive local exchange carriers (competitive LECs) reported that
they were engaged in the provision of competitive local exchange
services. Of these 1,005 CAPs and competitive LECs, an estimated 918
have 1,500 or fewer employees and 87 have more than 1,500 employees.
Consequently, the Commission estimates that most providers of
competitive exchange services are small businesses.
16. Wireless Telecommunications. Neither the Commission nor the SBA
has developed a definition of small entities specifically for wireless
telephony. The closest definition is the SBA definition for Wireless
Telecommunications Carriers (except Satellite). Under this definition,
a cellular licensee is a small entity if it employs no more than 1,500
employees. According to the 2008 Trends Report, 434 providers
classified themselves as providers of wireless telephony, including
cellular telecommunications, Personal Communications Service, and
Specialized Mobile Radio (SMR) Telephony Carriers. Of these 434
wireless telephony providers, an estimated 222 have 1,500 or fewer
employees and 212 have more than 1,500 employees. Consequently, the
Commission estimates that more than half of the providers of wireless
telephony services are small businesses.
17. Other Wireless Services. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
wireless services other than wireless telephony. The closest applicable
definition under the SBA rules is again that of Wireless
Telecommunications (except Satellite), under which a service provider
is a small entity if it employs no more than 1,500 employees. According
to the 2008 Trends Report, 69 providers classified themselves as
wireless data carriers or other mobile service providers. Of these 69
providers, an estimated 65 have 1,500 or fewer employees and 4 have
more than 1,500 employees. Consequently, the Commission estimates that
most providers of wireless services other than wireless telephony are
small businesses.
18. Paging and Messaging Service Providers. In the Paging Third
Report and Order, we developed a small business size standard for
``small businesses'' and ``very small businesses'' for purposes of
determining their eligibility for special provisions such as bidding
credits and installment payments. A ``small business'' is an entity
that, together with its affiliates and controlling principals, has
average gross revenues not exceeding $15 million for the preceding
three years. Additionally, a ``very small business'' is an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than $3 million for the preceding
three years. 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. In addition, at present, there are approximately
24,000 Private-Paging site-specific licenses and 74,000 Common Carrier
Paging licenses. Finally, according to Commission data, 281 carriers
reported that they were engaged in the provision of paging services,
messaging services, or other mobile services. Of those, the Commission
estimates that 279 are small, under the SBA-approved small business
size standard.
(c) Internet Service Providers
19. The 2007 Economic Census places these firms, whose services
might include voice over Internet protocol (VoIP), in either of two
categories, depending on whether the service is provided over the
provider's own telecommunications facilities (e.g., cable and DSL
ISPs), or over client-supplied telecommunications connections (e.g.,
dial-up ISPs). The former are within the category of Wired
Telecommunications Carriers, which has an SBA small business size
standard of 1,500 or fewer employees. The latter are within the
category of All Other Telecommunications, which has a size standard of
annual receipts of $25 million or less. The most current Census Bureau
data for all such firms, however, are the 2002 data for the previous
census category called Internet Service Providers. That category had a
small business size standard of $21 million or less in annual receipts,
which was revised in late 2005 to $23 million. The 2002 data show that
there were 2,529 such firms that operated for the entire year. Of
those, 2,437 firms had annual receipts of under $10 million, and an
additional 47 firms had receipts of between $10 million and
$24,999,999. Consequently, we estimate that the majority of ISP firms
are small entities.
(d) Vendors of Internal Connections
20. Telephone Apparatus Manufacturing. The Census Bureau defines
this category as follows: ``This industry comprises establishments
primarily engaged in manufacturing wire telephone and data
communications equipment. These products may be standalone or board-
level components of a larger system. Examples of products made by these
establishments are central office switching equipment, cordless
telephones (except cellular), PBX equipment, telephones, telephone
answering machines, LAN modems, multi-user modems, and other data
communications equipment, such as bridges, routers, and gateways.'' The
SBA has developed a small business size standard for Telephone
Apparatus Manufacturing, which is: All such firms having 1,000 or fewer
employees. According to Census Bureau data for 2002, there were a total
of 518 establishments in this category that operated for the entire
year. Of this total, 511 had employment of under 1,000, and an
additional 7 had employment of 1,000 to 2,499. Thus, under this size
standard, the majority of firms can be considered small.
21. Radio and Television Broadcasting and Wireless Communications
Equipment Manufacturing. The Census Bureau defines this category as
follows: ``This industry comprises establishments primarily engaged in
manufacturing radio and television broadcast and wireless
communications equipment. Examples of products made by these
establishments are: transmitting and receiving antennas, cable
television equipment, GPS equipment, pagers, cellular phones, mobile
communications equipment, and radio and television studio and
broadcasting equipment.'' The SBA has developed a small business size
standard for Radio and Television Broadcasting and Wireless
Communications Equipment Manufacturing, which is: all such firms having
750 or fewer employees. According to Census Bureau data for 2002, there
were a total of 1,041 establishments in this category that operated for
the entire year. Of this total, 1,010 had employment of under 500, and
an additional 13 had employment of 500 to 999. Thus, under this size
standard, the majority of firms can be considered small.
22. Other Communications Equipment Manufacturing. The Census
[[Page 10203]]
Bureau defines this category as follows: ``This industry comprises
establishments primarily engaged in manufacturing communications
equipment (except telephone apparatus, and radio and television
broadcast, and wireless communications equipment).'' The SBA has
developed a small business size standard for Other Communications
Equipment Manufacturing, which is: all such firms having 750 or fewer
employees. According to Census Bureau data for 2002, there were a total
of 503 establishments in this category that operated for the entire
year. Of this total, 493 had employment of under 500, and an additional
7 had employment of 500 to 999. Thus, under this size standard, the
majority of firms can be considered small.
(4) Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
23. The schools' voluntary offering of Internet resources, as
proposed in the NPRM, would not result in additional compliance
requirements for small businesses.
(5) Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
24. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance and reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or part thereof, for small
entities.
25. In the NPRM, we seek comment on whether we should revise
sections 54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules to allow
schools to use underutilized services and equipment funded under the E-
rate program for other, secondary purposes, instead of solely for
``educational purposes'' as is now required under our rules.
Specifically, we tentatively conclude that, if we revise sections
54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules to allow schools to
use underutilized services and equipment funded under the E-rate
program for other purposes, consistent with the Act, E-rate funds must,
in the first instance, be used for educational purposes and students
shall always get first priority in use of the schools' resources. Any
additional use of the services purchased under the E-rate program must
therefore be incidental to the primary purpose of the E-rate funds.
Under this proposed rule, applicants will now be able to use their E-
rate eligible facilities and services for other, secondary purposes,
such as adult education, job training, and digital literacy programs,
to benefit the community. We also invite comment on whether we should
modify our definition of educational purposes to accomplish the same
objective. We thus believe that these rule changes will not have an
economic impact on small entities under the E-rate program since we are
simply opening school facilities and services, already funded under the
E-rate program, for community use during non-operating school hours. In
fact, it will benefit participants by giving them the option to
maximize the use of their facilities and services supported by E-rate
funding. We welcome, however, comments from parties that have opinions
different from those reached in this analysis.
(6) Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
26. None.
List of Subjects in 47 CFR Part 54
Communications common carriers, Health facilities, Infants and
children, Libraries, Reporting and recordkeeping requirements, Schools,
Telecommunications, Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Proposed Rules
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR part 54 as follows:
PART 54--UNIVERSAL SERVICE
1. The authority citation continues to read as follows:
Authority: 47 U.S.C. 1, 4(i), 201, 205, 214, and 254 unless
otherwise noted.
2. Section 54.504 is amended by revising paragraphs (b)(2)(v) and
(c)(1)(vii) to read as follows:
Sec. 54.504 Requests for services.
* * * * *
(b) * * *
(2) * * *
(v) The services the applicant purchases at discounts will be used
primarily for educational purposes and will not be sold, resold, or
transferred in consideration for money or any other thing of value.
* * * * *
(c) * * *
(1) * * *
(vii) The services the applicant purchases at discounts will be
used primarily for educational purposes and will not be sold, resold,
or transferred in consideration for money or any other thing of value.
* * * * *
[FR Doc. 2010-4688 Filed 3-4-10; 8:45 am]
BILLING CODE 6712-01-P