Reporting Requirements for U.S. Providers of International Telecommunications Services, 42567-42573 [2011-18156]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 76, Number 138 (Tuesday, July 19, 2011)]
[Rules and Regulations]
[Pages 42567-42573]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18156]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 43 and 63

[IB Docket No. 04-112; FCC 11-76]


Reporting Requirements for U.S. Providers of International 
Telecommunications Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) concludes that it should eliminate outdated and 
unnecessary reporting requirements related to international 
telecommunications traffic for which the burdens on U.S. international 
service providers outweigh the benefits. Specifically, the Commission 
finds four information collections are no longer necessary and removes 
them from its rules: The division of telegraph tolls report; the 
quarterly large carrier traffic report; the quarterly foreign-
affiliated switched resale carrier report; and the circuit-addition 
report. The Commission also finds that the annual traffic and revenue 
reports and annual circuit status reports can be simplified by removing 
the requirement to separately report for off-shore U.S. points.

DATES: Effective July 19, 2011.

FOR FURTHER INFORMATION CONTACT: John Copes or David Krech, Policy 
Division, International Bureau, FCC, (202) 418-1460 or via the Internet 
at John.Copes@fcc.gov and David.Krech@fcc.gov

SUPPLEMENTARY INFORMATION: This is a summary of the First Report and 
Order portion of the Commission's First Report and Order and Further 
Notice of Proposed Rulemaking, IB Docket No. 04-112, FCC 11-76, adopted 
May 12, 2011, and released May 13, 2011. The full text of the First 
Report and Order and Further Notice of Proposed Rulemaking is available 
for inspection and copying during normal business hours in the FCC 
Reference Center, 445 12th Street, SW., Washington, DC 20554. The 
document also is available for download over the Internet at https://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0513/FCC-11-76A1.pdf. The complete text also may be purchased from the Commission's 
copy contractor, Best Copy and Printing, Inc. (BCPI), located in Room 
CY-B402, 445 12th Street, SW., Washington, DC 20554. Customers may 
contact BCPI at its Web site: https://www.bcpiweb.com or call 1-800-378-
3160.

Summary of First Report and Order

    1. In the First Report and Order and Further Notice of Proposed 
Rulemaking, the Federal Communications Commission (Commission) 
continues its comprehensive review of the international reporting 
requirements for U.S. providers of international telecommunications 
services. In the First Report and Order portion of the document, the 
Commission finds that there are several reporting requirements that it 
can eliminate at this time. The

[[Page 42568]]

Commission concludes that it no longer needs quarterly traffic and 
revenue filings or quarterly circuit addition reports. The Commission 
also finds carriers no longer need to file separately for off-shore 
U.S. points. In addition, the Commission finds that the toll division 
reports are out-dated and no longer need to be filed. The Commission 
concludes, however, that carriers should continue to file annual 
international traffic and revenue data and international circuit data 
in order to protect the interests of U.S. consumers and U.S. 
international service providers, and to facilitate the transition to 
competition in international markets. This includes certain route-
specific data from facilities-based carriers, because the Commission 
needs route-by-route traffic and revenue information to implement and 
enforce pro-competitive international policies. The Commission also 
needs international resale traffic and revenue data on a world-wide 
basis since most international calls are initiated with a resale 
carrier. In the Further Notice of Proposed Rulemaking (FNPRM), which is 
published elsewhere in this issue, the Commission proposes a number of 
ways to modernize the information that it collects and to make the 
reporting requirements more tailored to the Commission's needs.
    2. Elimination of the Quarterly Large-Carrier Reports (47 CFR 
43.61(b)). The Commission's rules currently require facilities-based 
and facilities-resale carriers to file a quarterly traffic and revenue 
report for any quarter in which such carrier's traffic exceeds one of 
four thresholds specified in 47 CFR 43.61(b). The Commission adopted 
this reporting requirement as a way to detect ``one-way bypass'' that 
might result from international simple resale arrangements. In the 
Notice of Proposed Rulemaking (NPRM), 69 FR 29676, May 25, 2004, the 
Commission sought comment on whether the application of the Quarterly 
Large-Carrier Reports continues to be necessary. All those filing 
comments in response to the NPRM support elimination of the reports. 
The Commission agrees that the Quarterly Large-Carrier Reports are no 
longer needed to detect market distortions. The Commission notes that 
in practice, sudden changes in international traffic flows are not 
necessarily related to one-way bypass or other anti-competitive causes. 
Moreover, the Commission found that the quarterly traffic information 
filed by the carriers has often been subject to substantial revision 
and thus has been unreliable as an indicator of changes in traffic 
ratios. The Commission therefore concludes that requiring carriers to 
continue to file quarterly traffic reports will serve no useful 
purpose. Instead, the Commission finds that it will be sufficient to 
rely on annual traffic and revenue data regarding settlement payments 
and minutes, as well as on complaints by U.S. carriers, to detect and 
remedy anti-competitive activity by foreign carriers, including one-way 
bypass.
    3. Elimination of the Quarterly Foreign-Affiliated Switched Resale 
Carrier Reports (47 CFR 43.61(c)). U.S.-authorized providers of 
international message telephone service (IMTS) resale that are 
affiliated with a foreign carrier are required to file quarterly 
traffic and revenue reports on their affiliated routes if they: (1) 
Have sufficient market power at the foreign end of an international 
route to affect competition adversely in the U.S. market, and (2) 
collect settlement payments from U.S. carriers for traffic affiliated 
in its home market. 47 CFR 43.61(c). The quarterly traffic and revenue 
report arose out of carrier concerns that overseas incumbent or 
monopoly telecommunications providers might use their market power to 
favor their affiliates that operate as carriers in the U.S. market. The 
report was intended to provide the Commission an early warning of 
attempts by incumbent carriers to engage in ``price squeeze'' behavior. 
In the NPRM, the Commission sought comment whether the continued 
application of the Quarterly Foreign-Affiliated Switched Resale Carrier 
Reports is necessary at this time. The commenters disagreed on the 
continued need for this reporting requirement. The Commission, however, 
has not received any complaints from U.S. carriers alleging such 
predatory behavior; nor have the reports revealed any such behavior. 
Furthermore, the 47 CFR 43.61(c) quarterly report is not the only way 
the Commission can address concerns that the settlement rates on a 
particular route remain above cost. The Commission finds that annual 
traffic and revenue filings provide sufficient information and thus the 
filing of the Quarterly Foreign-Affiliated Switched Resale Carrier 
Reports is no longer necessary.
    4. Elimination of the Circuit-Addition Report (47 CFR 63.23(e)). 
Carriers that have been certified as resellers of private lines are 
required to report, by March 31 of the following year, the number of 
circuits they added during the year and to identify the services for 
which the circuits were used. 47 CFR 63.23(e). In the NPRM, the 
Commission proposed to eliminate the circuit-addition report. The only 
commenter to address this issue supports elimination of the report. 
Because the facilities-based carriers from which private line resellers 
purchase international circuits report those circuits on their circuit-
status report, the Commission has a record that the circuits are being 
used. As a result, the Commission finds that the information from the 
annual circuit-addition reports does not justify the continuing burden 
of the reporting requirement.
    5. Elimination of the Division of Telegraph Tolls Report (47 CFR 
43.53). Telegraph carriers are required file copies of all their 
agreements with foreign carriers governing the division of tolls for 
international telegraph traffic. 47 CFR 43.53. In the NPRM, the 
Commission proposed to eliminate this filing requirement. The 
Commission agrees with the commenters that the decline in the telegraph 
industry has made these reports unnecessary. The volume of telegraph 
traffic has declined sharply over the years as telegraph service has 
largely been replaced by other means of communication, and this 
reporting requirement no longer serves a useful purpose.
    6. Annual Traffic and Revenue Reports. The Commission shall 
continue to require carriers to file the annual traffic and revenue 
reports, albeit on a streamlined basis. The Commission finds that 
route-specific traffic and revenue data from the annual reports 
provides it with information that it needs to develop and implement 
policies to facilitate the continuing transition to competition in 
international markets, to monitor compliance with rules and policies, 
to gauge the effect of its decisions on competition in the 
international market, and for policy discussions in bilateral meetings 
and multilateral forums and for Commission participation in 
international organizations. The collection of aggregate world-total 
data would not be an adequate substitute for route-specific data, as it 
will not provide the specific data that the Commission needs to perform 
its functions. The Commission also finds that it cannot fully 
understand the IMTS market without information about IMTS resale. The 
Commission concludes that it needs to obtain international traffic and 
revenue data information directly from the international service 
providers because there are no other reliable sources of information on 
international traffic and revenue that will give it the full range of 
information that the Commission needs. Therefore the Commission shall 
retain the annual international traffic and revenue reporting 
requirements. Facilities-based

[[Page 42569]]

providers of IMTS and private line services will continue to file 
traffic and revenue data for each international route on which they 
provide service. Carriers providing IMTS resale services will continue 
to file traffic and revenue data on a world total basis. The 
Commission, however, has sought comment on proposals to streamline 
these filing requirements in the FNPRM portion of the document, which 
is discussed in a separate Federal Register summary.
    7. Annual Circuit-Status Reports. The Commission shall continue to 
require carriers to file the annual circuit-status reports, albeit on a 
streamlined basis. The Commission finds that information on 
international circuits continues to be essential for it to fulfill its 
mission and that there is no other source for this information. The 
Commission uses this data to monitor the continuing transition of 
international routes to competition, to monitor compliance with 
Commission rules and policies, to gauge the effect of Commission 
decisions on competition in the international market and to develop 
policy positions for bilateral and multilateral negotiations and for 
Commission participation in international organizations. The Commission 
also uses circuit-status information to ensure that carriers with 
market power do not use their access to circuit capacity to engage in 
any anti-competitive behavior, to analyze merger applications, to 
determine whether a proposed merger might result in an anti-competitive 
concentration of market power in the international transport market, 
and to help monitor compliance with the international bearer circuit 
regulatory fees established in section 9 of the Communications Act, 47 
U.S.C. 159. Therefore, the Commission retains the requirement for 
facilities-based carriers to file international circuit data for each 
international route on which they provide service. The Commission, 
however, has sought comment on proposals to streamline these filing 
requirements in the FNPRM portion of the document, published elsewhere 
in this issue.
    8. Elimination of the Requirement to Report Separately Traffic for 
Off-Shore U.S. Points. The Commission eliminates the requirement to 
report separately for off-shore U.S. points for the annual traffic and 
revenue reports and circuit-status reports. In the NPRM, the Commission 
proposed to eliminate the requirement that carriers file data for 
traffic or circuits between a U.S. domestic point and an off-shore U.S. 
point or between off-shore U.S. points. Several commenters support the 
proposal, and two commenters argue that the Commission should go 
further and eliminate disaggregate reports by U.S. points entirely. 
Because the Commission has not found disaggregate reporting by U.S. 
points to be of substantial benefit, it cannot justify the additional 
burden that disaggregate reporting requirements impose on filing 
carriers. It therefore eliminates all distinctions between domestic and 
off-shore U.S. points and requires carriers to file a single traffic 
and revenue report aggregating traffic and revenue data for all U.S. 
points and a single circuit-status report aggregating circuit data for 
all for U.S. points. The Commission will therefore no longer require 
separate reporting for off-shore U.S. points. Carriers should combine 
the traffic and revenue data and circuit data for the off-shore U.S. 
points with the data for domestic U.S. points when filing. Carriers 
thus will only report traffic and revenue data and circuits status for 
calls and circuits between the ``United States'' and foreign points. 
The ``United States'' shall be defined as the ``several States and 
Territories, the District of Columbia, and the possessions of the 
United States, but does not include the Canal Zone''--the definition in 
the Communications Act, 47 U.S.C. 153(58).

Paperwork Reduction Act of 1995 Analysis

    9. This First Report and Order adopts new or revised information 
collection requirements, subject to the Paperwork Reduction Act of 1995 
(PRA). These information collection requirements will be submitted to 
the Office of Management and Budget (OMB) for review under section 
3507(d) of the PRA. The Commission will publish a separate document in 
the Federal Register inviting comment on the new or revised information 
collection requirements adopted in this document. The requirements will 
not go into effect until OMB has approved them and the Commission has 
published a notice announcing the effective date of the information 
collection requirements. In addition, we note that pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), we previously sought specific comment on how the 
Commission might ``further reduce the information collection burden for 
small business concerns with fewer than 25 employees.''

Final Regulatory Flexibility Analysis

    10. As required by the Regulatory Flexibility Act, as amended 
(RFA), the Federal Communications Commission (Commission) included an 
Initial Regulatory Flexibility Analysis (IRFA) concerning the possible 
significant economic impact on a substantial number of small entities 
of the policies and rules proposed in the Notice of Proposed Rulemaking 
(NPRM) in this proceeding. The Commission sought written public comment 
on the proposals in the NPRM, including comment on the IRFA. This Final 
Regulatory Flexibility Analysis (FRFA) addresses the policies and rules 
that the Commission adopted in the First Report and Order portion of 
the decision in this proceeding. This First Report and Order retains 
the annual traffic and revenue report and the annual circuit-status 
report. The First Report and Order adopts some measures, as described 
below, to simplify compliance with the reporting requirements but 
generally does not alter either report. The Commission will consider a 
number of proposals to streamline the reports and to improve the 
information that carriers will provide in the Further Notice of 
Proposed Rulemaking portion of this proceeding. This FRFA conforms to 
the RFA.

A. Need for, and Objectives of, the First Report and Order

    11. The Commission initiated this comprehensive review of the 
reporting requirements imposed on U.S. carriers providing international 
telecommunications services under 47 CFR 43.51, 43.61, 43.82, and 
63.23(e) of the Commission's rules, to modernize and simplify those 
requirements. The Commission believes that the policies and rules 
adopted in the First Report and Order will improve the data filing 
entities report while making it easier for carriers, both small and 
large, to provide the information required by the rules.
    12. In the First Report and Order, the Commission concluded that it 
continues to need the traffic and revenue information the carriers now 
file under 47 CFR 43.61(a) of the rules and the circuit information the 
carriers file under 47 CFR 43.82. The Commission further concluded in 
the First Report and Order that it no longer needs the information 
provided by the large carrier quarterly reports required by 47 CFR 
43.61(b), the foreign carrier affiliate quarterly report required by 47 
CFR 43.61(c), the circuit-addition report required in 47 CFR 63.23(e), 
or the telegraph division-of-tolls report required by 47 CFR 43.53.
    13. Currently, 47 CFR 43.61 requires that all international 
telecommunications carriers file an annual report of their traffic and 
revenues. Under 47 CFR 43.82, facilities-based common carriers

[[Page 42570]]

providing international telecommunications services must file an annual 
report on the status of their circuits. The information derived from 
the international revenue and traffic report and circuit-status report 
is critical in understanding the international telecommunications 
market. These reports are the only source of publicly available 
information of this nature.
    14. The information obtained from the traffic and revenue and 
circuit-status reports is used extensively by the Commission, the 
industry, other government agencies, and the public. The Commission 
uses the information to evaluate applications for international 
facilities, track market developments and the competitiveness of each 
service and geographical market to formulate rules and policies 
consistent with the public interest, monitor compliance with those 
rules and policies, and guard the competitive effect of its decisions 
on the market. Carriers use the information to track the balance of 
payments in international communications services and for market 
analysis purposes. Carriers and potential entrants use the information 
for, among other things, assessment of market opportunities and to 
monitor competition in markets. The Commission, along with other 
government agencies such as the Department of Justice and the United 
States Trade Representative, use the information in merger analyses and 
negotiations with foreign countries, respectively. In addition, the 
information contained in the circuit-status report allows the 
Commission to comply with the statutory requirements of the Omnibus 
Budget Reconciliation Act of 1993.

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

    15. No comments specifically addressed the IRFA.

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

    16. The RFA directs agencies to provide a description of, and, 
where feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein.\1\ The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' \2\ In addition, the term ``small business'' has the 
same meaning as the term ``small business concern'' under the Small 
Business Act.\3\ 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 
Small Business Administration (SBA).\4\
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    \1\ 5 U.S.C. 603(b)(3).
    \2\ 5 U.S.C. 601(6).
    \3\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small-business concern'' in the Small Business Act, 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with 
the Office of Advocacy of the Small Business Administration and 
after opportunity for public comment, establishes one or more 
definitions of such term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal 
Register.''
    \4\ 15 U.S.C. 632.
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    17. The policies adopted in the FR&O apply to entities providing 
international common carrier services pursuant to section 214 of the 
Communications Act; entities providing international wireless common 
carrier services under section 309 of the Act; entities providing 
common carrier satellite services under section 309 of the Act; and 
entities licensed to construct and operate submarine cables under the 
Cable Landing License Act. The Commission has not developed a small 
business size standard directed specifically toward these entities. As 
described below, such entities fit within larger categories for which 
the SBA has developed size standards.
1. Traffic and Revenue Report
    18. The First Report and Order retains the annual traffic and 
revenue report, which common carriers providing international 
telecommunications services are now required to file. Such entities 
include entities providing international common carrier services 
pursuant to section 214 of the Communications Act and entities 
providing domestic or international wireless common carrier services 
under section 309 of the Act. The carriers that the First Report and 
Order will require to continue to file the traffic and revenue report 
are a mixture of both large and small entities. The Commission has not 
developed a small business size standard directed specifically toward 
these entities. However, as described below, these entities fit into 
larger categories for which the SBA has developed size standards that 
provide these facilities or services.
    19. Facilities-based Carriers. Facilities-based providers of 
international telecommunications services would fall into the larger 
category of interexchange carriers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for providers 
of interexchange services. Under SBA rules, providers of interexchange 
services fall within the size standard category for Wired 
Telecommunications Carriers. Under that size standard, a Wired 
Telecommunications Carrier is considered a small entity if it has 1,500 
or fewer employees.\5\ Census Bureau data for 2007 show that there were 
3,188 firms in this category that operated for the entire year. Of this 
total, 3,144 had employment of 999 or fewer, and 44 firms had had 
employment of 1,000 employees or more. Thus under this category and the 
associated small business size standard, the majority of these 
interexchange carriers can be considered small entities.\6\ Similarly, 
according to Commission data, 359 companies reported that their primary 
telecommunications service activity was the provision of interexchange 
services.\7\ Of these 359 companies, an estimated 317 have 1,500 or 
fewer employees and 42 have more than 1,500 employees.\8\ Consequently, 
the Commission estimates that the majority of interexchange service 
providers are small entities that may be affected by rules adopted 
pursuant to the First Report and Order.
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    \5\ 13 CFR 121.201, NAICS code 517110.
    \6\ U.S. Census Bureau, American FactFinder, 2007 Economic 
Census, https://factfinder.census.gov, (find ``Economic Census'' and 
choose ``get data.'' Then, under ``Economic Census data sets by 
sector * * *,'' choose ``Information.'' Under ``Subject Series,'' 
choose ``EC0751SSSZ5: Employment Size of Firms for the US: 2007.'' 
Click ``Next'' and find data related to NAICS code 517110 in the 
left column for ``Wired telecommunications carriers'') (last visited 
March 2, 2011).
    \6\ See Trends in Telephone Service at Table 5.3.
    \9\ See id.
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    20. In the 2009 annual traffic and revenue report, 38 facilities-
based and facilities-resale carriers reported approximately $5.8 
billion in revenues from international message telephone service 
(IMTS). Of these, three reported IMTS revenues of more than $1 billion, 
eight reported IMTS revenues of more than $100 million, 10 reported 
IMTS revenues of more than $50 million, 20 reported IMTS revenues of 
more than $10 million, 25 reported IMTS revenues of more than $5 
million, and 30 reported IMTS revenues of more than $1 million. Based 
solely on their IMTS revenues, the majority of these carriers would be 
considered non-small entities under the SBA definition.\9\
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    \9\ See 13 CFR 121.201, NAICS Code at Subsector 517--
Telecommunications.
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    21. The 2009 traffic and revenue report also shows that 45 
facilities-based and facilities-resale carriers (including 14 who also 
reported IMTS revenues) reported $683 million for international

[[Page 42571]]

private line services. Of these, four reported private line revenues of 
more than $50 million, 12 reported private line revenues of more than 
$10 million, 30 reported revenues of more than $1 million, 34 reported 
private line revenues of more than $500,000, 41 reported revenues of 
more than $100,000, while 2 reported revenues of less than $10,000.
    22. The 2009 traffic and revenue report also shows that seven 
carriers (including one that reported both IMTS and private line 
revenues, one that reported IMTS revenues and three that reported 
private line revenues) reported $51 million for international 
miscellaneous services, of which two reported miscellaneous services 
revenues of more than $1 million, one reported revenues of more than 
$500,000, two reported revenues of more than $200,000, one reported 
revenues of more than $50,000, while one reported revenues of less than 
$20,000. Based on its miscellaneous services revenue, only the carrier 
with revenues of less than $20,000 would be considered a small business 
under the SBA definition. Based on their private line revenues, most of 
these entities would be considered non-small entities under the SBA 
definition.
    23. IMTS Resale Carriers. Providers of IMTS resale services are 
common carriers that purchase IMTS from other carriers and resell it to 
their own customers. The SBA has developed a small business size 
standard for the category of ``Telecommunications Resellers.'' Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees.\10\ Census data for 2007 show that 1,523 firms provided 
resale services during that year. Of that number, 1,522 operated with 
fewer than 1,000 employees and one operated with more than 1,000.\11\ 
Thus under this category and the associated small business size 
standard, the majority of these resellers can be considered small 
entities. Similarly, in the 2009 traffic and revenue report, 1,232 
carriers reported that they provided IMTS on a pure resale basis.\12\ 
Based on their IMTS resale revenues, Commission data reveals that IMTS 
resale service is primarily provided by carriers that would be 
considered small businesses under the SBA definition. For example, of 
the 1,232 IMTS resale carriers, 644 carriers reported revenues of less 
than $10,000; 1,025 had revenues less than $500,000; and 1,068 had 
revenues less than $1 million.\13\ Consequently, the Commission 
estimates that the majority of IMTS resellers are small entities that 
may be affected by our action.
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    \10\ 13 CFR 121.201, NAICS code 517911.
    \11\ U.S. Census Bureau, American FactFinder, 2007 Economic 
Census, https://factfinder.census.gov, (find ``Economic Census'' and 
choose ``get data.'' Then, under ``Economic Census data sets by 
sector * * *'' choose ``Information.'' Under ``Subject Series,'' 
choose ``EC0751SSSZ5: Employment Size of Firms for the US: 2007.'' 
Click ``Next'' and find data related to NAICS code 517911 in the 
left column for ``Telecommunications Resellers'') (last visited 
March 2, 2011).
    \12\ See FCC, International Bureau, Strategic Analysis and 
Negotiations Division, ``2009 International Telecommunications 
Data'' at page 1-2, Statistical Findings, and Table D at page 22 
(April 2011). FCC website location https://www.fcc.gov/ib/sand/mniab/traffic/.
    \13\ Id.
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    24. Wireless Carriers and Service Providers. Included among the 
providers of IMTS resale are a number of wireless carriers that also 
provide wireless telephony services domestically. The Commission 
classifies these entities as providers of Commercial Mobile Radio 
Services (CMRS). At present, most, if not all, providers of CMRS that 
offer IMTS provide such service by purchasing IMTS from other carriers 
to resell it to their customers. The Commission has not developed a 
size standard specifically for CMRS providers that offer resale IMTS. 
Such entities would fall within the larger category of wireless 
carriers and service providers. Below, for those services subject to 
auctions, the Commission notes that, as a general matter, the number of 
winning bidders that qualify as small businesses at the close of an 
auction does not necessarily represent the number of small businesses 
currently in service. Also, the Commission does not generally track 
subsequent business size unless, in the context of assignments or 
transfers, unjust enrichment issues are implicated.
    25. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the Census Bureau has placed wireless firms within this new, 
broad, economic census category.\14\ Prior to that time, such firms 
were within the now-superseded categories of Paging and Cellular and 
Other Wireless Telecommunications.\15\ Under the present and prior 
categories, the SBA has deemed a wireless business to be small if it 
has 1,500 or fewer employees.\16\ For the category of Wireless 
Telecommunications Carriers (except Satellite), Census data for 2007 
show that there were 1,383 firms that operated that year.\17\ Of those 
1,383, 1,368 had fewer than 100 employees, and 15 firms had more than 
100 employees. Thus under this category and the associated small 
business size standard, the majority of firms can be considered small. 
Similarly, according to Commission data, 413 carriers reported that 
they were engaged in the provision of wireless telephony, including 
cellular service, Personal Communications Service, and Specialized 
Mobile Radio Telephony services.\18\ Of these, an estimated 261 have 
1,500 or fewer employees and 152 have more than 1,500 employees.\19\ 
Consequently, the Commission estimates that approximately half or more 
of these firms can be considered small. Thus, using available data, we 
estimate that the majority of wireless firms can be considered small.
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    \14\ U.S. Census Bureau, 2007 NAICS Definitions: Wireless 
Telecommunications Categories (except Satellite), https://www.census.gov/naics/2007/def/ND517210.HTM (last visited March 2, 
2011).
    \15\ U.S. Census Bureau, 2002 NAICS Definitions: Paging, https://www.census.gov/epcd/naics02/def/NDEF517.HTM (last visited March 2, 
2011); U.S. Census Bureau, 2002 NAICS Definitions: Other Wireless 
Telecommunications, https://www.census.gov/epcd/naics02/def/NDEF517.HTM (last visited March 2, 2011).
    \16\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 
517211 and 517212 (referring to the 2002 NAICS).
    \17\ U.S. Census Bureau, American FactFinder, 2007 Economic 
Census, https://factfinder.census.gov, (find ``Economic Census'' and 
choose ``get data.'' Then, under ``Economic Census data sets by 
sector * * *,'' choose ``Information.'' Under ``Subject Series,'' 
choose ``EC0751SSSZ5: Employment Size of Firms for the US: 2007.'' 
Click ``Next'' and find data related to NAICS code 517210 in the 
left column for ``Wireless Telecommunications Carriers (except 
Satellite)'') (last visited March 2, 2011).
    \18\ See Trends in Telephone Service at Table 5.3.
    \19\ See id.
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    26. 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.\20\ The SBA has approved 
these definitions.\21\ The Commission auctioned geographic area 
licenses in the WCS service. In the auction, which commenced on April 
15, 1997 and closed on April 25, 1997, seven bidders won 31 licenses 
that qualified as very small business entities,

[[Page 42572]]

and one bidder won one license that qualified as a small business 
entity.
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    \20\ Amendment of the Commission's Rules to Establish Part 27, 
the Wireless Communications Service, GN Docket No. 96-228, Report 
and Order, 12 FCC Rcd 10785, 10879, para. 194 (1997).
    \21\ See Letter from Aida Alvarez, Administrator, SBA, to Amy 
Zoslov, Chief, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau, FCC (filed Dec. 2, 1998).
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2. Circuit-Status Report
    27. The First Report and Order continues to require common carriers 
that provide international telecommunications services on a facilities 
basis to file the annual circuit-status report. The Commission has not 
developed size standards specifically addressed to such carriers, but 
they fall within larger categories for which the SBA has developed size 
standards.
    28. Facilities-based Carriers. Facilities-based providers of 
international telecommunications services fall into the larger category 
of interexchange carriers. Neither the Commission nor the SBA has 
developed a small business size standard specifically for providers of 
interexchange services. The appropriate size standard under SBA rules 
is for the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer 
employees.\22\ Census Bureau data for 2007 show that there were 3,188 
firms in this category that operated for the entire year. Of this 
total, 3,144 had employment of 999 or fewer, and 44 firms had had 
employment of 1,000 employees or more. Thus under this category and the 
associated small business size standard, the majority of these 
interexchange carriers can be considered small entities.\23\ According 
to Commission data, 359 companies reported that their primary 
telecommunications service activity was the provision of interexchange 
services.\24\ Of these 359 companies, an estimated 317 have 1,500 or 
fewer employees and 42 have more than 1,500 employees.\25\ 
Consequently, the Commission estimates that the majority of 
interexchange service providers are small entities that may be affected 
by rules adopted in the First Report and Order.
---------------------------------------------------------------------------

    \22\ 13 CFR 121.201, NAICS code 517110.
    \23\ U.S. Census Bureau, American FactFinder, 2007 Economic 
Census, https://factfinder.census.gov, (find ``Economic Census'' and 
choose ``get data.'' Then, under ``Economic Census data sets by 
sector * * *,'' choose ``Information.'' Under ``Subject Series,'' 
choose ``EC0751SSSZ5: Employment Size of Firms for the US: 2007.'' 
Click ``Next'' and find data related to NAICS code 517110 in the 
left column for ``Wired telecommunications carriers'') (last visited 
March 2, 2011).
    \24\ See Trends in Telephone Service at Table 5.3.
    \25\ See id.
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    29. According to the 2009 circuit-status report, 75 U.S. 
international facility-based carriers filed information pursuant to 47 
CFR 43.82.\26\ The report does not report employee or revenue 
statistics, so it is impossible for us to determine how many carriers 
could be considered small entities. Each of the 75 carriers, however, 
reported a small amount of capacity. Although it is possible that a 
carrier could report a small amount of capacity and have significant 
revenues, we will consider those 75 carriers to be small entities at 
this time. In addition, of the 79 carriers that filed an annual 
circuit-status report for 2009, there were at least four carriers that 
reported no circuits owned or in use at the end of 2009.\27\
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    \26\ See International Bureau Releases 2009 Year-End Circuit 
Status Report for U.S. Facilities-Based International Carriers; 
Capacity Use Shows Modest Growth, rel. Dec. 21, 2010. The report is 
available on the FCC website at https://www.fcc.gov/ib/pd/pf/csmanual.html.
    \27\ Id.
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D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    30. The First Report and Order retains the annual traffic and 
revenue report and the annual circuit-status report because the 
collection and public reporting of this information continues to be 
necessary and in the public interest. Because carriers currently are 
required to file the 47 CFR 43.61 annual traffic and revenue report and 
the 47 CFR 43.82 annual circuit-status report, the decision to retain 
those reports will not impose an additional significant economic burden 
on small carriers. Similarly, the decision to retain the reporting of 
IMTS and international private lines on a route-by-route basis 
continues the requirement found in 47 CFR 43.61, and therefore will not 
impose any significant additional burden on small carriers.
    31. The decision in the First Report and Order to no longer require 
carriers to report separately their traffic and revenues for traffic 
between the conterminous 48 states and off-shore U.S. points will 
reduce the burden on carriers large and small. The First Report and 
Order recognizes that the Commission has integrated rates for off-shore 
U.S. points into the domestic rate structure. As a result, such traffic 
is no longer considered to be international and, thus, need not be 
reported in an international traffic and revenue report. Similarly, the 
First Report and Order no longer requires carriers to separately report 
their international traffic to or from such off-shore points from or to 
foreign points. Rather, the Commission concluded that such traffic 
should be combined with the carriers'' traffic and revenues to and from 
the conterminous 48 states. As a result, this decision will also not 
impose any significant additional burden on small carriers.
    32. The Commission's decision to eliminate the current Large-
Carrier Quarterly Report in 47 CFR 43.61(b) will reduce the burden on 
those large carriers that are now required to file the report. Because 
the quarterly reporting requirement was limited to large, dominant 
facilities-based and facilities-resale international carriers, the 
elimination of the report has no impact on small carriers. Similarly, 
the decision in the FR&O to eliminate the Foreign-Affiliated Carrier 
Quarterly Report in 47 CFR 43.61(c) will reduce the burden on the 
mostly, if not exclusively, large, dominant U.S. carriers that are now 
required to file the report. The current reporting requirement applies 
to U.S.-authorized providers of IMTS resale that are affiliated with a 
foreign telecommunications provider that (1) has sufficient market 
power in its home market that it could distort competition in the U.S. 
market and (2) collects money from U.S. carriers for traffic between 
the United States and its home market.
    33. The Commission's decision to eliminate the circuit-addition 
report under 47 CFR 63.23(e) and the telegraph division of tolls report 
under 47 CFR 43.51 will reduce the burden on large and small carriers. 
As such, it will not impose any significant additional burdens on small 
businesses.

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    34. The RFA requires an agency to describe any significant, 
specifically small business, 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 or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage or the rule, or any part thereof, for small entities.'' 
\28\
---------------------------------------------------------------------------

    \28\ 5 U.S.C. 603(c)(1)-(c)(4).
---------------------------------------------------------------------------

    35. The First Report and Order retains the 47 CFR 43.61(a) traffic 
and revenue and the 47 CFR 43.82 annual circuit-status reports. That 
decision does not increase the burden of the reporting requirement on 
either small or large carriers. Further, the Commission's decision to 
eliminate the requirement that carriers report separately their traffic 
between the conterminous 48

[[Page 42573]]

states and U.S. off-shore points or report separately the traffic 
between U.S. off-shore points and foreign points will reduce the burden 
of the annual traffic and revenue report and the circuit-status reports 
for both large and small carriers. Further, the decision to eliminate 
the large-carrier report under 47 CFR 43.61(b), the foreign-affiliated-
carrier quarterly reports under 47 CFR 43.61(c), the circuit-addition 
report under 47 CFR 63.23(e), and the telegraph division-of-tolls 
report under 47 CFR 43.51 will also reduce the burden of the 
international reporting requirements on both large and small carriers. 
As such, we believe that the policies adopted in the First Report and 
Order will not significantly increase any burdens on small carriers. 
Because this First Report and Order does not adopt additional 
regulations for service providers, the Commission does not need to 
consider any alternative approaches that would minimize the economic 
impact of the reporting requirements on small businesses.

Report to Congress

    36. The Commission will send a copy of this First Report and Order 
and Further Notice of Proposed Rulemaking, including this FRFA, in a 
report to be sent to Congress and the Government Accountability Office 
pursuant to the Congressional review Act.\29\ In addition, the 
Commission will send a copy of the First Report and Order and Further 
Notice of Proposed Rulemaking, including a copy of this FRFA, to the 
Chief Counsel for Advocacy of the SBA. A copy of the First Report and 
Order and Further Notice of Proposed Rulemaking and FRFA (or summaries 
thereof) will also be published in the Federal Register.\30\
---------------------------------------------------------------------------

    \29\ See 5 U.S.C. 801(a)(1)(A).
    \30\ See 5 U.S.C. 604(b).
---------------------------------------------------------------------------

Ordering Clauses

    37. Accordingly, it is ordered that, pursuant to sections 1, 4(i)-
4(j), 11, 201-205, 211, 214, 219, 220, 303(r), 309 and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i)-154(j), 
161, 201-205, 211, 214, 219-220, 303(r), 309, 403, the policies, rules 
and requirements discussed in this Report and Order are adopted and 
Parts 43 and 63 of the Commission's rules, 47 CFR parts 43 and 63 are 
amended as set forth below.
    38. It is further ordered that the Motion for Leave to File Reply 
Comments One Day Late filed by Kelley Drye & Warren LLP is granted.
    39. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration in accordance with section 603(a) of the 
Regulatory Flexibility Act, 5 U.S.C. 601 et seq.
    40. It is further ordered that the Commission shall send a copy of 
this First Report and Order in a report to be sent to Congress and the 
General Accounting Office pursuant to the Congressional Review Act, see 
5 U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Part 43 and 63

    Communications common carriers, Reporting and recordkeeping 
requirements, Telegraph, Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 43 and 63 as follows:

PART 43--REPORTS OF COMMUNICATION COMMON CARRIERS, PROVIDERS OF 
INTERNATIONAL INTERCONNECTED VOICE OVER INTERNET PROTOCOL SERVICES 
AND CERTAIN AFFILIATES

0
1. The authority citation for part 43 continues to read as follows:

    Authority: 47 U.S.C. 154; Telecommunications Act of 1996, Pub. 
L. 104-104, sec. 402(b)(2)(B), (c), 110 Stat. 56 (1996) as amended 
unless otherwise noted. 47 U.S.C. 211, 219, 220 as amended.


Sec.  43.53  [Removed]

0
2. Remove Sec.  43.53.

0
3. Section 43.61 is amended by revising paragraph (a) introductory 
text, removing and reserving paragraph (b), and removing paragraph (c).
    The revision reads as follows:


Sec.  43.61  Reports of international telecommunications traffic.

    (a) Each common carrier engaged in providing international 
telecommunications service between the United States (as defined in the 
Communications Act, as amended, 47 U.S.C. 153) and any country or point 
outside that area shall file a report with the Commission not later 
than July 31 of each year for service actually provided in the 
preceding calendar year.
* * * * *

0
4. Sec.  43.82 is amended by revising paragraph (a) to read as follows:


Sec.  43.82  International circuit status reports.

    (a) Each facilities-based common carrier engaged in providing 
international telecommunications service between the United States (as 
defined in the Communications Act, as amended, 47 U.S.C. 153) and any 
country or point outside that area shall file a circuit-status report 
with the Chief, International Bureau, not later than March 31 each year 
showing the status of its circuits used to provide international 
services as of December 31 of the preceding calendar year.
* * * * *

PART 63--EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE, 
REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND 
GRANTS OF RECOGNIZED PRIVATE OPERATING AGENCY STATUS

0
5. The authority citation for part 63 continues to read as follows:

    Authority: Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218, 
403 and 651 of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless 
otherwise noted.


Sec.  63.23  [Amended]

0
6. Section 63.23 is amended by removing paragraph (e) and redesignating 
paragraph (f) as paragraph (e).

 [FR Doc. 2011-18156 Filed 7-18-11; 8:45 am]
BILLING CODE 6712-01-P