High-Cost Universal Service Support and Federal-State Joint Board on Universal Service, 4827-4832 [2011-1166]
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Federal Register / Vol. 76, No. 18 / Thursday, January 27, 2011 / Rules and Regulations
TABLE 1—WASTES EXCLUDED FROM NON-SPECIFIC SOURCES—Continued
Facility
Address
Waste description
5. Reopener Language—(A) If, anytime after disposal of the delisted waste, OGAI
possesses or is otherwise made aware of any data (including but not limited to
leachate data or groundwater monitoring data) relevant to the delisted waste indicating that any constituent is at a concentration in the leachate higher than
the specified delisting concentration, or is in the groundwater at a concentration
higher than the maximum allowable groundwater concentration in paragraph (1),
then OGAI must report such data, in writing, to the Regional Administrator within 10 days of first possessing or being made aware of that data. (B) Based on
the information described in paragraph (A) and any other information received
from any source, the Regional Administrator will make a preliminary determination as to whether the reported information requires Agency action to protect
human health or the environment. Further action may include suspending, or revoking the exclusion, or other appropriate response necessary to protect human
health and the environment. (C) If the Regional Administrator determines that
the reported information does require Agency action, the Regional Administrator
will notify OGAI in writing of the actions the Regional Administrator believes are
necessary to protect human health and the environment. The notice shall include a statement of the proposed action and a statement providing OGAI with
an opportunity to present information as to why the proposed Agency action is
not necessary or to suggest an alternative action. OGAI shall have 30 days
from the date of the Regional Administrator’s notice to present the information.
(D) If after 30 days OGAI presents no further information or after a review of
any submitted information, the Regional Administrator will issue a final written
determination describing the Agency actions that are necessary to protect
human health or the environment. Any required action described in the Regional
Administrator’s determination shall become effective immediately, unless the
Regional Administrator provides otherwise.
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[FR Doc. 2011–1768 Filed 1–26–11; 8:45 am]
BILLING CODE 6560–50–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 54
[WC Docket No. 05–337, CC Docket No. 96–
45; FCC 10–205]
High-Cost Universal Service Support
and Federal-State Joint Board on
Universal Service
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
In this document, the Federal
Communications Commission takes
action to reclaim high-cost universal
service support surrendered by a
competitive eligible
telecommunications carrier (ETC) when
it relinquishes ETC status in a particular
state. This change would reduce the
overall cap on competitive ETC support
in a state when a competitive ETC
relinquishes its designation in the state,
rather than redistributing the excess
funding to other competitive ETCs in
the state.
DATES: Effective January 27, 2011.
FOR FURTHER INFORMATION CONTACT:
Kenneth Burnley, Wireline Competition
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SUMMARY:
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Bureau, Telecommunications Access
Policy Division, (202) 418–7400 or TTY:
(202) 418–0484.
SUPPLEMENTARY INFORMATION: This is a
synopsis of the Commission’s Order in
WC Docket No. 05–337, CC Docket No.
96–45, FCC 10–205, adopted December
30, 2010, and released December 30,
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.
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 and Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (tty).
I. Introduction
1. In this Order, we take action to
reclaim high-cost universal service
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support surrendered by a competitive
eligible telecommunications carrier
(ETC) when it relinquishes ETC status
in a particular state.
II. Discussion
2. We adopt the proposal to amend
the interim cap rule (WC Docket No. 05–
337, CC Docket No. 96–45, 23 FCC Rcd
8834 (2008)) so that a state’s interim cap
amount will be adjusted if a competitive
ETC serving the state relinquishes its
ETC status. As discussed in the
September 2010 NPRM, 75 FR 56494,
September 16, 2010, the goal of the
Interim Cap Order, 73 FR 37882, July 2,
2008, is to rein in high-cost universal
service disbursements for potentially
duplicative voice services. We find that
the proposal is consistent with that goal.
It would reduce the overall cap on
competitive ETC support in a state
when a competitive ETC relinquishes its
designation in the state, rather than
redistributing the excess funding to
other competitive ETCs in the state.
Providing the excess support to other
competitive ETCs in a state would not
necessarily result in future deployment
of expanded voice service, much less
broadband service. It could simply
subsidize duplicative voice service. On
the other hand, reducing the pool of
support in a state could enable excess
funds from the legacy high-cost program
to be used more effectively to advance
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universal service broadband initiatives,
as recommended by the National
Broadband Plan. We conclude, on
balance, that the public interest would
be better served by taking this interim
step to reclaim such support rather than
redistributing it, particularly as we
proceed with broader reforms to
transition to a universal service system
that promotes broadband deployment
more directly.
3. Accordingly, if a competitive ETC
relinquishes its ETC status in a state, the
cap amount for that state will be
reduced by the amount of capped
support that the competitive ETC was
eligible to receive in its final month of
eligibility, annualized. When a carrier
relinquishes its ETC designation, USAC
shall calculate the new annual interim
cap amount for the state in which the
carrier had been a competitive ETC. The
cap shall be reduced by the amount of
support that the ETC was eligible to
receive for the last full month during
which the ETC retained its designation,
annualized. The new cap will be
effective beginning the first full month
following the effective date of the
relinquishment. When a carrier
relinquishes its ETC designation in the
middle of a funding year, the new cap
will be applied only to the remainder of
the year on a pro rata basis. We
recognize that the ultimate amount that
a carrier is eligible to receive during a
particular month may not be finalized
immediately due to the effect of trueups on certain high-cost support
mechanisms. We instruct USAC to
implement the revised interim cap
provisionally as of the effective date of
the relinquishment and to revise the
support amounts for the remaining
competitive ETCs as necessary, subject
to true-up.
4. We further conclude that there is
good cause for this rule change to be
effective upon release. The primary
purpose of the 30-day effectiveness
rule—to allow affected parties sufficient
time to take action to comply—does not
come into play in this case since ETCs
do not have to act to comply with the
new rule. Sprint has notified us that it
plans to relinquish its ETC designations
in a number of states effective December
31, 2010. If the change to the interim
cap rule is not effective before then, the
high-cost support that Sprint would
have been eligible to receive—
approximately $5.4 million—will be
redistributed to other competitive ETCs,
frustrating the very purpose of this rule
change.
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III. Procedural Matters
A. Paperwork Reduction Act
5. This order does not contain new,
modified, or proposed information
collections subject to the Paperwork
Reduction Act of 1995. In addition,
therefore, it does not contain any new,
modified, or proposed ‘‘information
collection burden for small business
concerns with fewer than 25 employees’’
pursuant to the Small Business
Paperwork Relief Act of 2002.
B. Final Regulatory Flexibility Analysis
6. As required by the Regulatory
Flexibility Act (RFA), an Initial
Regulatory Flexibility Analysis (IRFA)
was incorporated in the Order and
Notice of Proposed Rulemaking in WC
Docket No. 05–337. The Commission
sought comment on the possible
significant economic impact on small
entities by the policies and rules
proposed in the Order and Notice of
Proposed Rulemaking (NPRM),
including comment on the IRFA. We
received IRFA-specific comments from
MTPCS, LLC d/b/a Cellular One and its
affiliates (MTPCS), and reply comments
from Verizon and Verizon Wireless
(Verizon). These comments are
discussed below. This present Final
Regulatory Flexibility Analysis (FRFA)
conforms to the RFA.
I. Need for, and Objectives of, the Order
7. In this Order, the Commission
amends its rule to reclaim high-cost
universal service support surrendered
by a competitive eligible
telecommunications carrier (ETC) when
it relinquishes ETC status in a particular
state.
8. We note that the rule would reduce
the overall cap on competitive ETC
support in a state when a competitive
ETC relinquishes its designation in the
state, rather than redistributing the
excess funding to other competitive
ETCs in the state. Providing the excess
support to other competitive ETCs in a
state would not necessarily result in
future deployment of expanded voice
service. It could simply subsidize
duplicative voice service. On the other
hand, reducing the pool of support in a
state could enable excess funds from the
legacy high-cost program to be used
more effectively to advance universal
service broadband initiatives. We
conclude, on balance, that the public
interest would be better served by taking
this interim step to reclaim such
support rather than redistributing it,
particularly as we proceed with broader
reforms to transition to a universal
service system that promotes broadband
deployment more directly.
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II. Summary of Significant Issues
Raised by Public Comments in
Response to the IRFA
9. In the IRFA, we stated that, under
certain circumstances, our proposed
action, if adopted, may have a
significant economic impact on other
competitive ETCs that are small entities.
For example, as described in footnote 31
of the NPRM, the reduction in size of a
state interim cap amount could
negatively affect a competitive ETC that
is a small entity if another competitive
ETC is later designated and receives a
share of the smaller interim cap amount.
While the designation of another
competitive ETC would have an impact
on the support received by the small
entity even without the adoption of the
proposed rule, the proposed rule could
magnify that impact. We sought
comment on our proposal, in part to
consider its necessity and any
alternatives. In its comments, MTPCS
contends that, in accordance to the
Small Business Act, the Commission
should not harm the interests of small
business concerns and the customers
who seek their services. MTPCS
contends the reduction in competitive
ETC support under the cap has limited
the effectiveness of companies in their
efforts to meet the goals of the universal
service provisions, and the proposed
changes would exacerbate this situation.
MTPCS further contends that, in
violation of the Small Business Act, the
Commission failed to consider
significant alternatives to the proposals
which might minimize the significant
economic impact of the rule on small
entities. Verizon disagrees. As set forth
more fully below in Section V, we
believe that our actions in the Order are
consistent with the RFA.
III. Description and Estimate of the
Number of Small Entities to Which the
Rules Will Apply
10. 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 and policies, 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
which: (1) Is independently owned and
operated; (2) is not dominant in its field
of operation; and (3) satisfies any
additional criteria established by the
SBA.
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11. Small Businesses. Nationwide,
there are a total of approximately 29.6
million small businesses, according to
the SBA.
12. Small Organizations. Nationwide,
as of 2002, there are approximately 1.6
million small organizations. A ‘‘small
organization’’ is generally ‘‘any not-forprofit enterprise which is independently
owned and operated and is not
dominant in its field.’’
13. Small Governmental Jurisdictions.
The term ‘‘small governmental
jurisdiction’’ is defined generally as
‘‘governments of cities, towns,
townships, villages, school districts, or
special districts, with a population of
less than fifty thousand.’’ Census Bureau
data for 2002 indicate that there were
87,525 local governmental jurisdictions
in the United States. We estimate that,
of this total, 84,377 entities were ‘‘small
governmental jurisdictions.’’ Thus, we
estimate that most governmental
jurisdictions are small.
14. We have included small
incumbent local exchange carriers in
this present RFA analysis. As noted
above, a ‘‘small business’’ under the RFA
is one that, inter alia, meets the
pertinent small business size standard
(e.g., a telephone communications
business having 1,500 or fewer
employees), and ‘‘is not dominant in its
field of operation.’’ The SBA’s Office of
Advocacy contends that, for RFA
purposes, small incumbent local
exchange carriers are not dominant in
their field of operation because any such
dominance is not ‘‘national’’ in scope.
We have therefore included small
incumbent local exchange carriers in
this RFA analysis, although we
emphasize that this RFA action has no
effect on Commission analyses and
determinations in other, non-RFA
contexts.
15. 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, 1005
carriers have reported that they are
engaged in the provision of either
competitive access provider services or
competitive local exchange carrier
services. Of these 1005 carriers, an
estimated 918 have 1,500 or fewer
employees and 87 have more than 1,500
employees. In addition, 16 carriers have
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reported that they are ‘‘Shared-Tenant
Service Providers,’’ and all 16 are
estimated to have 1,500 or fewer
employees. In addition, 89 carriers have
reported that they are ‘‘Other Local
Service Providers.’’ Of the 89, all have
1,500 or fewer employees.
Consequently, the Commission
estimates that most providers of
competitive local exchange service,
competitive access providers, ‘‘SharedTenant Service Providers,’’ and ‘‘Other
Local Service Providers’’ are small
entities that may be affected by our
action.
16. Wireless Telecommunications
Carriers (except Satellite). Since 2007,
the Census Bureau has placed wireless
firms within this new, broad, economic
census category. Prior to that time, such
firms were within the now-superseded
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, we will estimate small
business prevalence using the prior
categories and associated data. For the
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 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, we estimate
that the majority of wireless firms are
small.
17. 2.3 GHz Wireless Communications
Services. This service can be used for
fixed, mobile, radiolocation, and digital
audio broadcasting satellite uses. The
Commission defined ‘‘small business’’
for the wireless communications
services (‘‘WCS’’) auction as an entity
with average gross revenues of $40
million for each of the three preceding
years, and a ‘‘very small business’’ as an
entity with average gross revenues of
$15 million for each of the three
preceding years. The SBA has approved
these definitions. The Commission
auctioned geographic area licenses in
the WCS service. In the auction, which
was conducted in 1997, there were
seven bidders that won 31 licenses that
qualified as very small business entities,
and one bidder that won one license
that qualified as a small business entity.
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18. 1670–1675 MHz Services. An
auction for one license in the 1670–1675
MHz band was conducted in 2003. One
license was awarded. The winning
bidder was not a small entity.
19. Wireless Telephony. Wireless
telephony includes cellular, personal
communications services, and
specialized mobile radio telephony
carriers. As noted, the SBA has
developed a small business size
standard for Wireless
Telecommunications Carriers (except
Satellite). Under the SBA small business
size standard, a business is small if it
has 1,500 or fewer employees.
According to Trends in Telephone
Service data, 434 carriers reported that
they were engaged in wireless
telephony. Of these, an estimated 222
have 1,500 or fewer employees and 212
have more than 1,500 employees. We
have estimated that 222 of these are
small under the SBA small business size
standard.
20. Broadband Personal
Communications Service. The
broadband personal communications
services (‘‘PCS’’) spectrum is divided
into six frequency blocks designated A
through F, and the Commission has held
auctions for each block. The
Commission has created a small
business size standard for Blocks C and
F as an entity that has average gross
revenues of less than $40 million in the
three previous calendar years. For Block
F, an additional small business size
standard 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 small business size
standards, 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. In 1999, the Commission reauctioned
155 C, D, E, and F Block licenses; there
were 113 small business winning
bidders.
21. In 2001, the Commission
completed the auction of 422 C and F
Broadband PCS licenses in Auction 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. In
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2005, the Commission completed an
auction of 188 C block licenses and 21
F block licenses in Auction 58. There
were 24 winning bidders for 217
licenses. Of the 24 winning bidders, 16
claimed small business status and won
156 licenses. In 2007, the Commission
completed an auction of 33 licenses in
the A, C, and F Blocks in Auction 71.
Of the 14 winning bidders, six were
designated entities. In 2008, the
Commission completed an auction of 20
Broadband PCS licenses in the C, D, E
and F block licenses in Auction 78.
22. Advanced Wireless Services. In
2008, the Commission conducted the
auction of Advanced Wireless Services
(‘‘AWS’’) licenses. This auction, which
was designated as Auction 78, offered
35 licenses in the AWS 1710–1755 MHz
and 2110–2155 MHz bands (‘‘AWS–1’’).
The AWS–1 licenses were licenses for
which there were no winning bids in
Auction 66. That same year, the
Commission completed Auction 78. A
bidder with attributed average annual
gross revenues that exceeded $15
million and did not exceed $40 million
for the preceding three years (‘‘small
business’’) received a 15 percent
discount on its winning bid. A bidder
with attributed average annual gross
revenues that did not exceed $15
million for the preceding three years
(‘‘very small business’’) received a 25
percent discount on its winning bid. A
bidder that had combined total assets of
less than $500 million and combined
gross revenues of less than $125 million
in each of the last two years qualified
for entrepreneur status. Four winning
bidders that identified themselves as
very small businesses won 17 licenses.
Three of the winning bidders that
identified themselves as a small
business won five licenses.
Additionally, one other winning bidder
that qualified for entrepreneur status
won 2 licenses.
23. 700 MHz Band Licenses. The
Commission previously adopted criteria
for defining three groups of small
businesses for purposes of determining
their eligibility for special provisions
such as bidding credits. The
Commission defined a ‘‘small business’’
as an entity that, together with its
affiliates and controlling principals, has
average gross revenues not exceeding
$40 million for the preceding three
years. A ‘‘very small business’’ is defined
as an entity that, together with its
affiliates and controlling principals, has
average gross revenues that are not more
than $15 million for the preceding three
years. Additionally, the lower 700 MHz
Service had a third category of small
business status for Metropolitan/Rural
Service Area (‘‘MSA/RSA’’) licenses. The
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third category is ‘‘entrepreneur,’’ which
is defined as 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
approved these small size standards.
The Commission conducted an auction
in 2002 of 740 licenses (one license in
each of the 734 MSAs/RSAs and one
license in each of the six Economic Area
Groupings (EAGs)). Of the 740 licenses
available for auction, 484 licenses were
sold to 102 winning bidders. Seventytwo of the winning bidders claimed
small business, very small business or
entrepreneur status and won a total of
329 licenses. The Commission
conducted a second auction in 2003 that
included 256 licenses: 5 EAG licenses
and 476 Cellular Market Area licenses.
Seventeen winning bidders claimed
small or very small business status and
won 60 licenses, and nine winning
bidders claimed entrepreneur status and
won 154 licenses. In 2005, the
Commission completed an auction of 5
licenses in the lower 700 MHz band
(Auction 60). There were three winning
bidders for five licenses. All three
winning bidders claimed small business
status.
24. In 2007, the Commission adopted
the 700 MHz Second Report and Order,
72 FR 48814, August 24, 2007. The
Order revised the band plan for the
commercial (including Guard Band) and
public safety spectrum, adopted services
rules, including stringent build-out
requirements, an open platform
requirement on the C Block, and a
requirement on the D Block licensee to
construct and operate a nationwide,
interoperable wireless broadband
network for public safety users. In 2008,
the Commission commenced Auction 73
which offered all available, commercial
700 MHz Band licenses (1,099 licenses)
for bidding using the Commission’s
standard simultaneous multiple-round
(‘‘SMR’’) auction format for the A, B, D,
and E block licenses and an SMR
auction design with hierarchical
package bidding (‘‘HPB’’) for the C Block
licenses. Later in 2008, the Commission
concluded Auction 73. A bidder with
attributed average annual gross revenues
that did not exceed $15 million for the
preceding three years (very small
business) qualified for a 25 percent
discount on its winning bids. A bidder
with attributed average annual gross
revenues that exceeded $15 million, but
did not exceed $40 million for the
preceding three years, qualified for a 15
percent discount on its winning bids.
There were 36 winning bidders (who
won 330 of the 1,090 licenses won) that
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identified themselves as very small
businesses. There were 20 winning
bidders that identified themselves as a
small business that won 49 of the 1,090
licenses won. The provisionally
winning bids for the A, B, C, and E
Block licenses exceeded the aggregate
reserve prices for those blocks.
However, the provisionally winning bid
for the D Block license did not meet the
applicable reserve price and thus did
not become a winning bid.
25. 700 MHz Guard Band Licenses. In
the 700 MHz Guard Band Order, the
Commission adopted size standards 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 in this
service is an entity that, together with
its affiliates and controlling principals,
has average gross revenues not
exceeding $40 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 $15 million for the preceding
three years. SBA approval of these
definitions is not required. In 2000, the
Commission conducted an auction of 52
Major Economic Area (‘‘MEA’’) licenses.
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 and closed in
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.
26. Specialized Mobile Radio. The
Commission awards ‘‘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. The Commission awards ‘‘very
small entity’’ bidding credits to firms
that had revenues of no more than $3
million in each of the three previous
calendar years. The SBA has approved
these small business size standards for
the 900 MHz Service. The Commission
has held auctions for geographic area
licenses in the 800 MHz and 900 MHz
bands. The 900 MHz SMR auction was
completed in 1996. Sixty bidders
claiming that they qualified as small
businesses under the $15 million size
standard won 263 geographic area
licenses in the 900 MHz SMR band. The
800 MHz SMR auction for the upper 200
channels was conducted in 1997. Ten
bidders claiming that they qualified as
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small businesses under the $15 million
size standard won 38 geographic area
licenses for the upper 200 channels in
the 800 MHz SMR band. A second
auction for the 800 MHz band was
conducted in 2002 and included 23 BEA
licenses. One bidder claiming small
business status won five licenses.
27. The auction of the 1,053 800 MHz
SMR geographic area licenses for the
General Category channels was
conducted in 2000. Eleven bidders won
108 geographic area licenses for the
General Category channels in the 800
MHz SMR band qualified as small
businesses under the $15 million size
standard. In an auction completed in
2000, a total of 2,800 Economic Area
licenses in the lower 80 channels of the
800 MHz SMR service were awarded. Of
the 22 winning bidders, 19 claimed
small business status and won 129
licenses. Thus, combining all three
auctions, 40 winning bidders for
geographic licenses in the 800 MHz
SMR band claimed status as small
business.
28. In addition, there are numerous
incumbent site-by-site SMR licensees
and licensees with extended
implementation authorizations in the
800 and 900 MHz bands. We do not
know how many firms provide 800 MHz
or 900 MHz geographic area SMR
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. In
addition, we do not know how many of
these firms have 1,500 or fewer
employees. We assume, for purposes of
this analysis, that all of the remaining
existing extended implementation
authorizations are held by small
entities, as that small business size
standard is approved by the SBA.
29. Cellular Radiotelephone Service.
Auction 77 was held to resolve one
group of mutually exclusive
applications for Cellular Radiotelephone
Service licenses for unserved areas in
New Mexico. Bidding credits for
designated entities were not available in
Auction 77. In 2008, the Commission
completed the closed auction of one
unserved service area in the Cellular
Radiotelephone Service, designated as
Auction 77. Auction 77 concluded with
one provisionally winning bid for the
unserved area totaling $25,002.
30. Private Land Mobile Radio
(‘‘PLMR’’). PLMR systems serve an
essential role in a range of industrial,
business, land transportation, and
public safety activities. These radios are
used by companies of all sizes operating
in all U.S. business categories, and are
often used in support of the licensee’s
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primary (non-telecommunications)
business operations. For the purpose of
determining whether a licensee of a
PLMR system is a small business as
defined by the SBA, we use the broad
census category, Wireless
Telecommunications Carriers (except
Satellite). This definition provides that
a small entity is any such entity
employing no more than 1,500 persons.
The Commission does not require PLMR
licensees to disclose information about
number of employees, so the
Commission does not have information
that could be used to determine how
many PLMR licensees constitute small
entities under this definition. We note
that PLMR licensees generally use the
licensed facilities in support of other
business activities, and therefore, it
would also be helpful to assess PLMR
licensees under the standards applied to
the particular industry subsector to
which the licensee belongs.
31. As of March 2010, there were
424,162 PLMR licensees operating
921,909 transmitters in the PLMR bands
below 512 MHz. We note that any entity
engaged in a commercial activity is
eligible to hold a PLMR license, and that
any revised rules in this context could
therefore potentially impact small
entities covering a great variety of
industries.
32. 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’’). In the present context, we
will use the SBA’s small business size
standard applicable to Wireless
Telecommunications Carriers (except
Satellite), 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 proposed herein.
33. 1.4 GHz Band Licensees. The
Commission conducted an auction of 64
1.4 GHz band licenses in 2007. In that
auction, the Commission defined ‘‘small
business’’ as an entity that, together with
its affiliates and controlling interests,
had average gross revenues that exceed
$15 million but do not exceed $40
million for the preceding three years,
and a ‘‘very small business’’ as an entity
that, together with its affiliates and
controlling interests, has had average
annual gross revenues not exceeding
$15 million for the preceding three
years. Neither of the two winning
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4831
bidders sought such designated entity
status.
IV. Description of Projected Reporting,
Recordkeeping and Other Compliance
Requirements
34. The Order does not propose any
reporting, recordkeeping, or other
compliance requirements.
V. Steps Taken To Minimize Significant
Economic Impact on Small Entities, and
Significant Alternatives Considered
35. The RFA requires an agency to
describe any significant alternatives that
it has considered in reaching its
approach, which may include the
following four alternatives, among
others: (1) The establishment of
differing compliance or 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 any part thereof,
for small entities.
36. In this Order, we amend our rule
to reclaim high-cost universal service
support surrendered by a competitive
ETC when it relinquishes ETC status in
a particular state. We note that the rule
would reduce the overall cap on
competitive ETC support in a state
when a competitive ETC relinquishes its
designation in the state, rather than
redistributing the excess funding to
other competitive ETCs in the state.
Providing the excess support to other
competitive ETCs in a state would not
necessarily result in future deployment
of expanded voice service but it may
subsidize duplicative voice service.
Reducing the pool of support in a state
would enable excess funds from the
legacy high-cost program to be used
more effectively to advance universal
service broadband initiatives. We
believe, on balance, that the public
interest would be better served by taking
this interim step to reclaim such
support rather than redistributing it,
particularly as we proceed with broader
reforms to transition to a universal
service system that more directly
promotes broadband deployment.
37. MTPCS contends that the
Commission is adopting the proposed
rule without considering any significant
alternative to minimize its effect on
small entities. In addition, MTPCS
contends that reining in high-cost
disbursements need not be
accomplished at the expense of
competitive ETCs. Verizon disagrees.
Verizon argues that adjusting a state’s
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erowe on DSK5CLS3C1PROD with RULES
existing competitive ETC cap when a
carrier relinquishes its ETC status does
not in any way impact the amount of
existing support paid to other
competitive ETCs, small businesses or
otherwise, in the state. Verizon explains
that, in such circumstances, the
relinquished support is simply returned
to the USF. Verizon indicates that the
Commission is merely required by the
Regulatory Flexibility Act to describe
any significant alternatives that it
considered. Verizon reasons that, as a
practical matter, there is no alternative
that the Commission need consider. The
proposal does not reduce existing
VerDate Mar<15>2010
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funding to any competitive ETC.
Verizon argues that, even if it did, the
universal service program was never
intended to fund competition anyway.
We conclude that, because the purpose
of the adopted rule is to reduce the
amount of high-cost universal service
support received by competitive ETCs,
no significant alternative could be
chosen that would minimize the effect
of the adopted rule.
VI. Report to Congress
38. The Commission will send a copy
of the Order, including this FRFA, in a
report to be sent to Congress and the
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Frm 00032
Fmt 4700
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Government Accountability Office,
pursuant to the Congressional Review
Act. In addition, the Commission will
send a copy of the Order, including this
FRFA, to the Chief Counsel for
Advocacy of the SBA. A copy of the
Order and FRFA (or summaries thereof)
will also be published in the Federal
Register.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2011–1166 Filed 1–26–11; 8:45 am]
BILLING CODE 6712–01–P
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Agencies
[Federal Register Volume 76, Number 18 (Thursday, January 27, 2011)]
[Rules and Regulations]
[Pages 4827-4832]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-1166]
=======================================================================
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket No. 05-337, CC Docket No. 96-45; FCC 10-205]
High-Cost Universal Service Support and Federal-State Joint Board
on Universal Service
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission takes
action to reclaim high-cost universal service support surrendered by a
competitive eligible telecommunications carrier (ETC) when it
relinquishes ETC status in a particular state. This change would reduce
the overall cap on competitive ETC support in a state when a
competitive ETC relinquishes its designation in the state, rather than
redistributing the excess funding to other competitive ETCs in the
state.
DATES: Effective January 27, 2011.
FOR FURTHER INFORMATION CONTACT: Kenneth Burnley, 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 Order
in WC Docket No. 05-337, CC Docket No. 96-45, FCC 10-205, adopted
December 30, 2010, and released December 30, 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.
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 and Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
I. Introduction
1. In this Order, we take action to reclaim high-cost universal
service support surrendered by a competitive eligible
telecommunications carrier (ETC) when it relinquishes ETC status in a
particular state.
II. Discussion
2. We adopt the proposal to amend the interim cap rule (WC Docket
No. 05-337, CC Docket No. 96-45, 23 FCC Rcd 8834 (2008)) so that a
state's interim cap amount will be adjusted if a competitive ETC
serving the state relinquishes its ETC status. As discussed in the
September 2010 NPRM, 75 FR 56494, September 16, 2010, the goal of the
Interim Cap Order, 73 FR 37882, July 2, 2008, is to rein in high-cost
universal service disbursements for potentially duplicative voice
services. We find that the proposal is consistent with that goal. It
would reduce the overall cap on competitive ETC support in a state when
a competitive ETC relinquishes its designation in the state, rather
than redistributing the excess funding to other competitive ETCs in the
state. Providing the excess support to other competitive ETCs in a
state would not necessarily result in future deployment of expanded
voice service, much less broadband service. It could simply subsidize
duplicative voice service. On the other hand, reducing the pool of
support in a state could enable excess funds from the legacy high-cost
program to be used more effectively to advance
[[Page 4828]]
universal service broadband initiatives, as recommended by the National
Broadband Plan. We conclude, on balance, that the public interest would
be better served by taking this interim step to reclaim such support
rather than redistributing it, particularly as we proceed with broader
reforms to transition to a universal service system that promotes
broadband deployment more directly.
3. Accordingly, if a competitive ETC relinquishes its ETC status in
a state, the cap amount for that state will be reduced by the amount of
capped support that the competitive ETC was eligible to receive in its
final month of eligibility, annualized. When a carrier relinquishes its
ETC designation, USAC shall calculate the new annual interim cap amount
for the state in which the carrier had been a competitive ETC. The cap
shall be reduced by the amount of support that the ETC was eligible to
receive for the last full month during which the ETC retained its
designation, annualized. The new cap will be effective beginning the
first full month following the effective date of the relinquishment.
When a carrier relinquishes its ETC designation in the middle of a
funding year, the new cap will be applied only to the remainder of the
year on a pro rata basis. We recognize that the ultimate amount that a
carrier is eligible to receive during a particular month may not be
finalized immediately due to the effect of true-ups on certain high-
cost support mechanisms. We instruct USAC to implement the revised
interim cap provisionally as of the effective date of the
relinquishment and to revise the support amounts for the remaining
competitive ETCs as necessary, subject to true-up.
4. We further conclude that there is good cause for this rule
change to be effective upon release. The primary purpose of the 30-day
effectiveness rule--to allow affected parties sufficient time to take
action to comply--does not come into play in this case since ETCs do
not have to act to comply with the new rule. Sprint has notified us
that it plans to relinquish its ETC designations in a number of states
effective December 31, 2010. If the change to the interim cap rule is
not effective before then, the high-cost support that Sprint would have
been eligible to receive--approximately $5.4 million--will be
redistributed to other competitive ETCs, frustrating the very purpose
of this rule change.
III. Procedural Matters
A. Paperwork Reduction Act
5. This order does not contain new, modified, or proposed
information collections subject to the Paperwork Reduction Act of 1995.
In addition, therefore, it does not contain any new, modified, or
proposed ``information collection burden for small business concerns
with fewer than 25 employees'' pursuant to the Small Business Paperwork
Relief Act of 2002.
B. Final Regulatory Flexibility Analysis
6. As required by the Regulatory Flexibility Act (RFA), an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the Order
and Notice of Proposed Rulemaking in WC Docket No. 05-337. The
Commission sought comment on the possible significant economic impact
on small entities by the policies and rules proposed in the Order and
Notice of Proposed Rulemaking (NPRM), including comment on the IRFA. We
received IRFA-specific comments from MTPCS, LLC d/b/a Cellular One and
its affiliates (MTPCS), and reply comments from Verizon and Verizon
Wireless (Verizon). These comments are discussed below. This present
Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
I. Need for, and Objectives of, the Order
7. In this Order, the Commission amends its rule to reclaim high-
cost universal service support surrendered by a competitive eligible
telecommunications carrier (ETC) when it relinquishes ETC status in a
particular state.
8. We note that the rule would reduce the overall cap on
competitive ETC support in a state when a competitive ETC relinquishes
its designation in the state, rather than redistributing the excess
funding to other competitive ETCs in the state. Providing the excess
support to other competitive ETCs in a state would not necessarily
result in future deployment of expanded voice service. It could simply
subsidize duplicative voice service. On the other hand, reducing the
pool of support in a state could enable excess funds from the legacy
high-cost program to be used more effectively to advance universal
service broadband initiatives. We conclude, on balance, that the public
interest would be better served by taking this interim step to reclaim
such support rather than redistributing it, particularly as we proceed
with broader reforms to transition to a universal service system that
promotes broadband deployment more directly.
II. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
9. In the IRFA, we stated that, under certain circumstances, our
proposed action, if adopted, may have a significant economic impact on
other competitive ETCs that are small entities. For example, as
described in footnote 31 of the NPRM, the reduction in size of a state
interim cap amount could negatively affect a competitive ETC that is a
small entity if another competitive ETC is later designated and
receives a share of the smaller interim cap amount. While the
designation of another competitive ETC would have an impact on the
support received by the small entity even without the adoption of the
proposed rule, the proposed rule could magnify that impact. We sought
comment on our proposal, in part to consider its necessity and any
alternatives. In its comments, MTPCS contends that, in accordance to
the Small Business Act, the Commission should not harm the interests of
small business concerns and the customers who seek their services.
MTPCS contends the reduction in competitive ETC support under the cap
has limited the effectiveness of companies in their efforts to meet the
goals of the universal service provisions, and the proposed changes
would exacerbate this situation. MTPCS further contends that, in
violation of the Small Business Act, the Commission failed to consider
significant alternatives to the proposals which might minimize the
significant economic impact of the rule on small entities. Verizon
disagrees. As set forth more fully below in Section V, we believe that
our actions in the Order are consistent with the RFA.
III. Description and Estimate of the Number of Small Entities to Which
the Rules Will Apply
10. 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 and policies, 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 which: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
SBA.
[[Page 4829]]
11. Small Businesses. Nationwide, there are a total of
approximately 29.6 million small businesses, according to the SBA.
12. Small Organizations. Nationwide, as of 2002, there are
approximately 1.6 million small organizations. A ``small organization''
is generally ``any not-for-profit enterprise which is independently
owned and operated and is not dominant in its field.''
13. Small Governmental Jurisdictions. The term ``small governmental
jurisdiction'' is defined generally as ``governments of cities, towns,
townships, villages, school districts, or special districts, with a
population of less than fifty thousand.'' Census Bureau data for 2002
indicate that there were 87,525 local governmental jurisdictions in the
United States. We estimate that, of this total, 84,377 entities were
``small governmental jurisdictions.'' Thus, we estimate that most
governmental jurisdictions are small.
14. We have included small incumbent local exchange carriers in
this present RFA analysis. As noted above, a ``small business'' under
the RFA is one that, inter alia, meets the pertinent small business
size standard (e.g., a telephone communications business having 1,500
or fewer employees), and ``is not dominant in its field of operation.''
The SBA's Office of Advocacy contends that, for RFA purposes, small
incumbent local exchange carriers are not dominant in their field of
operation because any such dominance is not ``national'' in scope. We
have therefore included small incumbent local exchange carriers in this
RFA analysis, although we emphasize that this RFA action has no effect
on Commission analyses and determinations in other, non-RFA contexts.
15. 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, 1005 carriers have reported that they are
engaged in the provision of either competitive access provider services
or competitive local exchange carrier services. Of these 1005 carriers,
an estimated 918 have 1,500 or fewer employees and 87 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, 89 carriers have reported that
they are ``Other Local Service Providers.'' Of the 89, all have 1,500
or fewer employees. Consequently, the Commission estimates that most
providers of competitive local exchange service, competitive access
providers, ``Shared-Tenant Service Providers,'' and ``Other Local
Service Providers'' are small entities that may be affected by our
action.
16. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Prior to that time, such firms were
within the now-superseded 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, we will estimate small business
prevalence using the prior categories and associated data. For the
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 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, we estimate that the majority of wireless
firms are small.
17. 2.3 GHz Wireless Communications Services. This service can be
used for fixed, mobile, radiolocation, and digital audio broadcasting
satellite uses. The Commission defined ``small business'' for the
wireless communications services (``WCS'') auction as an entity with
average gross revenues of $40 million for each of the three preceding
years, and a ``very small business'' as an entity with average gross
revenues of $15 million for each of the three preceding years. The SBA
has approved these definitions. The Commission auctioned geographic
area licenses in the WCS service. In the auction, which was conducted
in 1997, there were seven bidders that won 31 licenses that qualified
as very small business entities, and one bidder that won one license
that qualified as a small business entity.
18. 1670-1675 MHz Services. An auction for one license in the 1670-
1675 MHz band was conducted in 2003. One license was awarded. The
winning bidder was not a small entity.
19. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As noted, the SBA has developed a small business
size standard for Wireless Telecommunications Carriers (except
Satellite). Under the SBA small business size standard, a business is
small if it has 1,500 or fewer employees. According to Trends in
Telephone Service data, 434 carriers reported that they were engaged in
wireless telephony. Of these, an estimated 222 have 1,500 or fewer
employees and 212 have more than 1,500 employees. We have estimated
that 222 of these are small under the SBA small business size standard.
20. Broadband Personal Communications Service. The broadband
personal communications services (``PCS'') spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission has created a small business
size standard for Blocks C and F as an entity that has average gross
revenues of less than $40 million in the three previous calendar years.
For Block F, an additional small business size standard 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 small business
size standards, 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. In 1999, the Commission reauctioned 155 C, D, E,
and F Block licenses; there were 113 small business winning bidders.
21. In 2001, the Commission completed the auction of 422 C and F
Broadband PCS licenses in Auction 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. In
[[Page 4830]]
2005, the Commission completed an auction of 188 C block licenses and
21 F block licenses in Auction 58. There were 24 winning bidders for
217 licenses. Of the 24 winning bidders, 16 claimed small business
status and won 156 licenses. In 2007, the Commission completed an
auction of 33 licenses in the A, C, and F Blocks in Auction 71. Of the
14 winning bidders, six were designated entities. In 2008, the
Commission completed an auction of 20 Broadband PCS licenses in the C,
D, E and F block licenses in Auction 78.
22. Advanced Wireless Services. In 2008, the Commission conducted
the auction of Advanced Wireless Services (``AWS'') licenses. This
auction, which was designated as Auction 78, offered 35 licenses in the
AWS 1710-1755 MHz and 2110-2155 MHz bands (``AWS-1''). The AWS-1
licenses were licenses for which there were no winning bids in Auction
66. That same year, the Commission completed Auction 78. A bidder with
attributed average annual gross revenues that exceeded $15 million and
did not exceed $40 million for the preceding three years (``small
business'') received a 15 percent discount on its winning bid. A bidder
with attributed average annual gross revenues that did not exceed $15
million for the preceding three years (``very small business'')
received a 25 percent discount on its winning bid. A bidder that had
combined total assets of less than $500 million and combined gross
revenues of less than $125 million in each of the last two years
qualified for entrepreneur status. Four winning bidders that identified
themselves as very small businesses won 17 licenses. Three of the
winning bidders that identified themselves as a small business won five
licenses. Additionally, one other winning bidder that qualified for
entrepreneur status won 2 licenses.
23. 700 MHz Band Licenses. The Commission previously adopted
criteria for defining three groups of small businesses for purposes of
determining their eligibility for special provisions such as bidding
credits. The Commission defined a ``small business'' as an entity that,
together with its affiliates and controlling principals, has average
gross revenues not exceeding $40 million for the preceding three years.
A ``very small business'' is defined as an entity that, together with
its affiliates and controlling principals, has average gross revenues
that are not more than $15 million for the preceding three years.
Additionally, the lower 700 MHz Service had a third category of small
business status for Metropolitan/Rural Service Area (``MSA/RSA'')
licenses. The third category is ``entrepreneur,'' which is defined as
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 approved these small
size standards. The Commission conducted an auction in 2002 of 740
licenses (one license in each of the 734 MSAs/RSAs and one license in
each of the six Economic Area Groupings (EAGs)). Of the 740 licenses
available for auction, 484 licenses were sold to 102 winning bidders.
Seventy-two of the winning bidders claimed small business, very small
business or entrepreneur status and won a total of 329 licenses. The
Commission conducted a second auction in 2003 that included 256
licenses: 5 EAG licenses and 476 Cellular Market Area licenses.
Seventeen winning bidders claimed small or very small business status
and won 60 licenses, and nine winning bidders claimed entrepreneur
status and won 154 licenses. In 2005, the Commission completed an
auction of 5 licenses in the lower 700 MHz band (Auction 60). There
were three winning bidders for five licenses. All three winning bidders
claimed small business status.
24. In 2007, the Commission adopted the 700 MHz Second Report and
Order, 72 FR 48814, August 24, 2007. The Order revised the band plan
for the commercial (including Guard Band) and public safety spectrum,
adopted services rules, including stringent build-out requirements, an
open platform requirement on the C Block, and a requirement on the D
Block licensee to construct and operate a nationwide, interoperable
wireless broadband network for public safety users. In 2008, the
Commission commenced Auction 73 which offered all available, commercial
700 MHz Band licenses (1,099 licenses) for bidding using the
Commission's standard simultaneous multiple-round (``SMR'') auction
format for the A, B, D, and E block licenses and an SMR auction design
with hierarchical package bidding (``HPB'') for the C Block licenses.
Later in 2008, the Commission concluded Auction 73. A bidder with
attributed average annual gross revenues that did not exceed $15
million for the preceding three years (very small business) qualified
for a 25 percent discount on its winning bids. A bidder with attributed
average annual gross revenues that exceeded $15 million, but did not
exceed $40 million for the preceding three years, qualified for a 15
percent discount on its winning bids. There were 36 winning bidders
(who won 330 of the 1,090 licenses won) that identified themselves as
very small businesses. There were 20 winning bidders that identified
themselves as a small business that won 49 of the 1,090 licenses won.
The provisionally winning bids for the A, B, C, and E Block licenses
exceeded the aggregate reserve prices for those blocks. However, the
provisionally winning bid for the D Block license did not meet the
applicable reserve price and thus did not become a winning bid.
25. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order,
the Commission adopted size standards 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 in this service is an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $40 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 $15 million for the preceding three years. SBA
approval of these definitions is not required. In 2000, the Commission
conducted an auction of 52 Major Economic Area (``MEA'') licenses. 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 and closed in
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.
26. Specialized Mobile Radio. The Commission awards ``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. The Commission awards ``very small entity'' bidding
credits to firms that had revenues of no more than $3 million in each
of the three previous calendar years. The SBA has approved these small
business size standards for the 900 MHz Service. The Commission has
held auctions for geographic area licenses in the 800 MHz and 900 MHz
bands. The 900 MHz SMR auction was completed in 1996. Sixty bidders
claiming that they qualified as small businesses under the $15 million
size standard won 263 geographic area licenses in the 900 MHz SMR band.
The 800 MHz SMR auction for the upper 200 channels was conducted in
1997. Ten bidders claiming that they qualified as
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small businesses under the $15 million size standard won 38 geographic
area licenses for the upper 200 channels in the 800 MHz SMR band. A
second auction for the 800 MHz band was conducted in 2002 and included
23 BEA licenses. One bidder claiming small business status won five
licenses.
27. The auction of the 1,053 800 MHz SMR geographic area licenses
for the General Category channels was conducted in 2000. Eleven bidders
won 108 geographic area licenses for the General Category channels in
the 800 MHz SMR band qualified as small businesses under the $15
million size standard. In an auction completed in 2000, a total of
2,800 Economic Area licenses in the lower 80 channels of the 800 MHz
SMR service were awarded. Of the 22 winning bidders, 19 claimed small
business status and won 129 licenses. Thus, combining all three
auctions, 40 winning bidders for geographic licenses in the 800 MHz SMR
band claimed status as small business.
28. In addition, there are numerous incumbent site-by-site SMR
licensees and licensees with extended implementation authorizations in
the 800 and 900 MHz bands. We do not know how many firms provide 800
MHz or 900 MHz geographic area SMR 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. In
addition, we do not know how many of these firms have 1,500 or fewer
employees. We assume, for purposes of this analysis, that all of the
remaining existing extended implementation authorizations are held by
small entities, as that small business size standard is approved by the
SBA.
29. Cellular Radiotelephone Service. Auction 77 was held to resolve
one group of mutually exclusive applications for Cellular
Radiotelephone Service licenses for unserved areas in New Mexico.
Bidding credits for designated entities were not available in Auction
77. In 2008, the Commission completed the closed auction of one
unserved service area in the Cellular Radiotelephone Service,
designated as Auction 77. Auction 77 concluded with one provisionally
winning bid for the unserved area totaling $25,002.
30. Private Land Mobile Radio (``PLMR''). PLMR systems serve an
essential role in a range of industrial, business, land transportation,
and public safety activities. These radios are used by companies of all
sizes operating in all U.S. business categories, and are often used in
support of the licensee's primary (non-telecommunications) business
operations. For the purpose of determining whether a licensee of a PLMR
system is a small business as defined by the SBA, we use the broad
census category, Wireless Telecommunications Carriers (except
Satellite). This definition provides that a small entity is any such
entity employing no more than 1,500 persons. The Commission does not
require PLMR licensees to disclose information about number of
employees, so the Commission does not have information that could be
used to determine how many PLMR licensees constitute small entities
under this definition. We note that PLMR licensees generally use the
licensed facilities in support of other business activities, and
therefore, it would also be helpful to assess PLMR licensees under the
standards applied to the particular industry subsector to which the
licensee belongs.
31. As of March 2010, there were 424,162 PLMR licensees operating
921,909 transmitters in the PLMR bands below 512 MHz. We note that any
entity engaged in a commercial activity is eligible to hold a PLMR
license, and that any revised rules in this context could therefore
potentially impact small entities covering a great variety of
industries.
32. 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''). In the present
context, we will use the SBA's small business size standard applicable
to Wireless Telecommunications Carriers (except Satellite), 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 proposed herein.
33. 1.4 GHz Band Licensees. The Commission conducted an auction of
64 1.4 GHz band licenses in 2007. In that auction, the Commission
defined ``small business'' as an entity that, together with its
affiliates and controlling interests, had average gross revenues that
exceed $15 million but do not exceed $40 million for the preceding
three years, and a ``very small business'' as an entity that, together
with its affiliates and controlling interests, has had average annual
gross revenues not exceeding $15 million for the preceding three years.
Neither of the two winning bidders sought such designated entity
status.
IV. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
34. The Order does not propose any reporting, recordkeeping, or
other compliance requirements.
V. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
35. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its approach, which may
include the following four alternatives, among others: (1) The
establishment of differing compliance or 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 any part thereof, for small
entities.
36. In this Order, we amend our rule to reclaim high-cost universal
service support surrendered by a competitive ETC when it relinquishes
ETC status in a particular state. We note that the rule would reduce
the overall cap on competitive ETC support in a state when a
competitive ETC relinquishes its designation in the state, rather than
redistributing the excess funding to other competitive ETCs in the
state. Providing the excess support to other competitive ETCs in a
state would not necessarily result in future deployment of expanded
voice service but it may subsidize duplicative voice service. Reducing
the pool of support in a state would enable excess funds from the
legacy high-cost program to be used more effectively to advance
universal service broadband initiatives. We believe, on balance, that
the public interest would be better served by taking this interim step
to reclaim such support rather than redistributing it, particularly as
we proceed with broader reforms to transition to a universal service
system that more directly promotes broadband deployment.
37. MTPCS contends that the Commission is adopting the proposed
rule without considering any significant alternative to minimize its
effect on small entities. In addition, MTPCS contends that reining in
high-cost disbursements need not be accomplished at the expense of
competitive ETCs. Verizon disagrees. Verizon argues that adjusting a
state's
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existing competitive ETC cap when a carrier relinquishes its ETC status
does not in any way impact the amount of existing support paid to other
competitive ETCs, small businesses or otherwise, in the state. Verizon
explains that, in such circumstances, the relinquished support is
simply returned to the USF. Verizon indicates that the Commission is
merely required by the Regulatory Flexibility Act to describe any
significant alternatives that it considered. Verizon reasons that, as a
practical matter, there is no alternative that the Commission need
consider. The proposal does not reduce existing funding to any
competitive ETC. Verizon argues that, even if it did, the universal
service program was never intended to fund competition anyway. We
conclude that, because the purpose of the adopted rule is to reduce the
amount of high-cost universal service support received by competitive
ETCs, no significant alternative could be chosen that would minimize
the effect of the adopted rule.
VI. Report to Congress
38. The Commission will send a copy of the Order, including this
FRFA, in a report to be sent to Congress and the Government
Accountability Office, pursuant to the Congressional Review Act. In
addition, the Commission will send a copy of the Order, including this
FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Order
and FRFA (or summaries thereof) will also be published in the Federal
Register.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2011-1166 Filed 1-26-11; 8:45 am]
BILLING CODE 6712-01-P