Special Access for Price Cap Local Exchange Carriers; AT&T Corporation Petition for Rulemaking To Reform Regulation of Incumbent Local Exchange Carrier Rates for Interstate Special Access Services, 2571-2599 [2013-00278]
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Vol. 78
Friday,
No. 8
January 11, 2013
Part IV
Federal Communications Commission
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47 CFR Part 69
Special Access for Price Cap Local Exchange Carriers; AT&T Corporation
Petition for Rulemaking To Reform Regulation of Incumbent Local
Exchange Carrier Rates for Interstate Special Access Services; Final Rule
and Proposed Rule
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Federal Register / Vol. 78, No. 8 / Friday, January 11, 2013 / Rules and Regulations
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 69
[WC Docket No. 05–25; RM–10593; FCC 12–
153]
Special Access for Price Cap Local
Exchange Carriers; AT&T Corporation
Petition for Rulemaking To Reform
Regulation of Incumbent Local
Exchange Carrier Rates for Interstate
Special Access Services
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
In this document, the
Commission continues the process of
reviewing its special access rules to
ensure that they reflect the state of
competition today and promote
competition, investment, and access to
dedicated communications services
businesses across the country rely on
every day to deliver their products and
services to American consumers. The
Report and Order initiates a
comprehensive data collection and
specifies the nature of the data to be
collected and the scope of respondents.
An initial version of the data collection
is attached to the Report and Order as
an appendix; the Report and Order
delegates authority to the Commission’s
Wireline Competition Bureau to review
and modify the collection to implement
the requirements of the Report and
Order.
SUMMARY:
Effective March 12, 2013. The
information collection and
recordkeeping requirements contained
in section III and appendix A of the
document are not effective until they are
approved by the Office of Management
and Budget.
FOR FURTHER INFORMATION CONTACT:
Jamie Susskind, Wireline Competition
Bureau, Pricing Policy Division, (202)
418–1520 or (202) 418–0484 (TTY), or
via email at Jamie.Susskind@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Report
and Order in WC Docket No. 05–25,
RM–10593, FCC 12–153, adopted on
December 11, 2012, and released on
December 18, 2012. This summary
should be read with its companion
document, the Further Notice of
Proposed Rulemaking (FNPRM)
summary published elsewhere in this
issue of the Federal Register. The
summary is based on the public
redacted version of the document, the
full text of which is available
electronically via the Electronic
Comment Filing System at https://
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DATES:
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fjallfoss.fcc.gov/ecfs/ or may be
downloaded at https://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-12153A1.pdf. The full text of this
document is also available for public
inspection during regular business
hours in the Commission’s Reference
Center, 445 12th Street SW., Room CY–
A257, Washington, DC 20554. The
complete text may be purchased from
Best Copy and Printing, Inc., 445 12th
Street SW., Room CY–B402,
Washington, DC 20554. To request
alternate formats for persons with
disabilities (e.g. Braille, large print,
electronic files, audio format, etc.) or
reasonable accommodations for filing
comments (e.g. accessible format
documents, sign language interpreters,
CARTS, etc.), send an email to
fcc504@fcc.gov or call the Commission’s
Consumer and Governmental Affairs
Bureau at (202) 418–0530 (voice) or
(202) 418–0432 (TTY).
I. Introduction
1. In the Report and Order and
Further Notice of Proposed Rulemaking,
we continue the process of reviewing
our special access rules to ensure that
they reflect the state of competition
today and promote competition,
investment, and access to dedicated
communications services businesses
across the country rely on every day to
deliver their products and services to
American consumers. Specifically, we
initiate a comprehensive data collection
and seek comment on a proposal to use
the data to evaluate competition in the
market for special access services.
II. Background
A. Price Cap Regulation
2. In 1991, the Commission
implemented a system of price cap
regulation by which the largest
incumbent LECs (often referred to today
as price cap LECs) establish their
interstate access charges. Price cap
regulation is a form of incentive
regulation that seeks to ‘‘harness the
profit-making incentives common to all
businesses to produce a set of outcomes
that advance the public interest goals of
just, reasonable, and nondiscriminatory
rates, as well as a communications
system that offers innovative, high
quality services.’’ In contrast to rate-ofreturn regulation, which preceded price
cap regulation and focuses on an
incumbent LEC’s costs and fixes the
profits an incumbent LEC may earn
based on those costs, price cap
regulation focuses primarily on the
prices that an incumbent LEC may
charge. The access charges of price cap
LECs originally were set at levels based
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on the rates that existed at the time the
LECs entered the price cap regime.
Increases in their rates have, however,
been limited over the course of price
cap regulation by the Price Cap Index
(PCI) that is adjusted annually pursuant
to formulae set forth in Part 61 of our
rules.
3. The PCI is designed to limit the
prices LECs charge for service. The PCI
has three basic components: (1) A
measure of inflation, i.e., the Gross
Domestic Product (chain weighted)
Price Index (GDP–PI); (2) a productivity
factor or ‘‘X-Factor,’’ which represents
the amount by which LECs can be
expected to outperform economy-wide
productivity gains; and (3) adjustments
to account for ‘‘exogenous’’ cost changes
that are outside the LEC’s control and
not otherwise reflected in the PCI. The
Commission’s price cap formula
permitted special access PCIs to
increase by a measure of inflation,
minus a productivity offset (the Xfactor). The X-factor represented the
amount by which LECs were expected
to outperform economy-wide
productivity gains.
B. Pricing Flexibility
4. Pursuant to the pro-competitive,
deregulatory mandates of the 1996 Act,
the Commission adopted the Pricing
Flexibility Order in 1999 to ensure that
the Commission’s regulations did not
unduly interfere with the operation of
interstate access markets as competition
developed. In that Order, the
Commission developed competitive
showing rules (also referred to as
‘‘triggers’’) intended to measure whether
market conditions in a given
Metropolitan Statistical Area would
warrant various levels of regulatory
relief. To make a competitive showing,
the Commission held that price cap
LECs would need to demonstrate
either that (1) competitors unaffiliated with
the incumbent LEC have established
operational collocation arrangements in a
certain percentage of the incumbent LEC’s
wire centers in an MSA, or (2) unaffiliated
competitors have established operational
collocation arrangements in wire centers
accounting for a certain percentage of the
incumbent LEC’s revenues from the services
in question in that MSA. In both cases, the
incumbent also must show, with respect to
each wire center, that at least one collocator
is relying on transport facilities provided by
a transport provider other than the
incumbent LEC.
5. Under the rules, the Commission
granted relief in two phases. Phase I
relief, which required lower levels of
collocation, gave price cap LECs the
ability to lower their rates through
contract tariffs and volume and term
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discounts, but required that they
maintain their generally available price
cap-constrained tariff rates to ‘‘protect[
] those customers that lack competitive
alternatives.’’ Phase II relief, which
required higher levels of collocation,
permitted price cap LECs to raise or
lower their rates throughout an area,
unconstrained by price cap regulations
included in the Commission’s part 61
and part 69 rules.
C. The CALLS Order
6. In 2000, the Commission adopted
the CALLS plan, a five-year interim,
industry-proposed regime designed to
move towards a more market-based
approach to rate setting. The CALLS
plan separated special access services
into their own basket and applied a
separate X-factor to that basket. The Xfactor under the CALLS plan, unlike
under prior price cap regimes, is not a
productivity factor but ‘‘a transitional
mechanism * * * to lower rates for a
specified time period for special
access.’’ The CALLS X-factor for special
access was 3.0 percent in 2000, and
increased to 6.5 percent for 2001, 2002,
and 2003. For the final year of the
CALLS plan (July 1, 2004–June 30,
2005), the special access X-factor was
set equal to inflation. As the
Commission has yet to replace the
interim CALLS plan X-factor, price cap
LECs’ special access rates have
remained frozen at 2003 levels
(excluding any necessary exogenous
cost adjustments).
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D. AT&T’s Petition for Rulemaking and
2005 Special Access NPRM
7. On October 15, 2002, AT&T Corp.
filed a petition for rulemaking
requesting that the Commission revoke
the pricing flexibility rules and revisit
the CALLS plan as it applies to special
access services. AT&T contended both
that the predictive judgment at the core
of the Pricing Flexibility Order had not
been confirmed by marketplace
developments, and that BOC special
access rates exceeded competitive levels
and hence were unjust and
unreasonable in violation of § 201 of the
Communications Act. Because the
predictive judgment had proven wrong,
AT&T asserted, the Commission was
compelled to revisit its pricing
flexibility rules in a rulemaking
proceeding. Price cap LECs countered
that, among other things, their special
access rates were reasonable and
therefore lawful, that there was robust
competition for special access services,
that the collocation-based competitive
showings were an accurate metric for
competition, and that data relied upon
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by AT&T were unreliable in the context
used by AT&T.
8. On January 31, 2005, the
Commission released the Special Access
NPRM, which initiated a broad
examination of what regulatory
framework to apply to price cap LECs’
interstate special access services
following the expiration of the CALLS
plan, including whether to maintain or
modify the Commission’s pricing
flexibility rules. Moreover, the NPRM
sought to examine whether the available
marketplace data supported
maintaining, modifying, or repealing
these rules. It also responded to AT&T’s
request for interim relief.
E. Recent Actions in the Proceeding
1. Competitive and Regulatory
Developments
9. Numerous regulatory and
competitive developments affected the
special access market in the years
following the release of the Special
Access NPRM. In July 2007, the
Commission sought comment in the
record in light of subsequent industry
consolidation, a Government
Accountability Office (GAO) report on
special access competition, and other
competitive developments. Moreover, as
a result of a series of forbearance
proceedings, the scope of services
affected by the Special Access NPRM
narrowed considerably.
2. Analytical Framework
10. In November 2009, the
Commission’s Wireline Competition
Bureau (Bureau) sought comment on the
appropriate analytical framework for
examining the issues that the Special
Access NPRM raised. In July 2010, the
Bureau held a staff workshop on the
economics of special access to gather
further input on the analytical
framework issue.
3. Voluntary Data Requests
11. In October 2010, the Bureau
issued a public notice inviting the
public to submit data on the presence of
competitive special access facilities to
assist the Commission in evaluating the
issues that the Special Access NPRM
raised. In September 2011, the Bureau
issued a second public notice requesting
the submission of competition and
pricing data.
4. Pricing Flexibility Suspension Order
12. On August 22, 2012, the
Commission adopted an order that
concluded that the special access
pricing flexibility rules discussed above
were not working as predicted and
suspended the 90-day deadline for
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granting a petition for pricing flexibility
based on those flawed rules.
III. Report and Order
13. In the Report and Order, we
require providers and purchasers of
special access service and certain other
services to submit data, information and
documents to allow the Commission to
conduct a comprehensive evaluation of
competition in the special access
market.
A. Scope
14. In this section, we identify the
scope of the data collection, the entities
that must respond to the data collection,
and the geographic areas and time
periods for which they must respond.
15. A preliminary note on
terminology: For purposes of the Report
and Order and consistent with
Commission precedent, we do not
include mass market Internet access
services (e.g., DSL or cable modem
service) in our definition of special
access. We use the term ‘‘location’’ to
mean a building, other man-made
structure, a cell site on a building, a
free-standing cell site, or a cell site on
some other man-made structure where
the end user is connected, but is not a
‘‘node.’’ We use the term ‘‘node’’ to
mean an aggregation point, a branch
point, or a point of interconnection on
a provider’s network, including a point
of interconnection to other provider
networks. ‘‘End user’’ means a business,
institutional, or government entity that
purchases dedicated service for its own
purposes and does not resell such
service. We use the term ‘‘connection’’
to mean a wired ‘‘line’’ or wireless
‘‘channel’’ that provides a dedicated
communication path between an end
user’s location and the first node on a
provider’s network. Examples include
LEC central offices, remote terminal
locations, splice points (including, for
example, at manholes), controlled
environmental vaults, cable system
headends, cable modem termination
system (CMTS) locations, and facility
hubs. We use the terms ‘‘bandwidth’’
and ‘‘capacity’’ interchangeably.
16. Services Covered. Traditionally,
federal antitrust agencies have begun
competitive analyses in a variety of
contexts by defining relevant product
and geographic markets. As noted in the
Further Notice, however, these agencies
have more recently noted that ‘‘analysis
need not start with market definition
* * * although evaluation of
competitive alternatives available to
customers is always necessary at some
point in the analysis.’’ In particular,
‘‘[e]vidence of competitive effects can
inform market definition, just as market
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definition can be informative regarding
competitive effects.’’
17. Taking these considerations into
account, we collect information on the
full array of traditional special access
services, including DS1s and DS3s, and
packet-based dedicated services such as
Ethernet. Further, although there is little
disagreement in the record as to the
definition of special access services, and
that as traditionally defined they do not
include mass market Internet access
services, there is some question as to
whether the relevant product market
should encompass not only special
access services but other high-capacity
data services targeted at enterprise
customers. Some commenters have
argued that best efforts broadband
Internet access services—even when
marketed to small- to medium-sized
business customers—are not part of the
relevant product market. These
commenters note, among other things,
that prices for best efforts services differ
substantially from special access
services for comparable bandwidth.
Others have argued that best efforts
services are often marketed with express
comparisons to special access services,
and therefore the Commission should
collect data on both.
18. We need not resolve the marketdefinition issue here—for purposes of
this data collection, we conclude it is
best to simply take a broad approach. To
ensure that we collect data on services
that enterprise customers may view as
substitutable, we define the scope of our
data collection to include best efforts
business broadband Internet access
services, which we define as best efforts
Internet access data services with a
capacity equal to or greater than a DS1
connection that are marketed to
enterprise customers (including small,
medium, and large businesses, as well
as existing special access customers). As
described below, we structure the
collection somewhat differently for best
efforts and special access services to
minimize the burden on submitters
consistent with our data requirements
and taking into consideration data that
the Commission already has available to
it.
19. We also note that we intend to
collect data on intrastate special access
services and special access services
offered via a state-level tariff or stateapproved contract. Doing so is necessary
to ensure that we have a clear picture of
all competition in the marketplace.
20. Providers and purchasers that
must respond. In order to conduct a
comprehensive analysis of the special
access market, we will collect data from
all providers and purchasers of special
access services as well as some entities
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that provide best efforts business
broadband Internet access services. By
‘‘providers,’’ we mean any entity subject
to the Commission’s jurisdiction under
the Communications Act, as amended,
that provides special access services or
provides a connection that is capable of
providing special access services. By
‘‘purchasers,’’ we mean any entity
subject to the Commission’s jurisdiction
under the Communications Act, as
amended, that purchases special access
services.
21. To clarify our terminology, we
note that some providers are
‘‘competitive providers,’’ by which we
mean a competitive local exchange
carrier (CLEC), interexchange carrier,
cable operator, wireless provider or any
other provider that is not an incumbent
LEC operating within its incumbent
service territory. We also note that a
rate-of-return carrier, which is not
subject to our pricing flexibility rules,
shall not be considered a ‘‘provider’’ to
the extent it provides special access
within its rate-of-return service area.
This exemption does not apply to
services not regulated on a rate-of-return
basis or provided outside a rate-ofreturn carrier’s service area by itself or
an affiliate.
22. We note concerns regarding the
burden that this data collection will
impose on small companies, and are
mindful of the importance of seeking to
reduce information collection burdens
for small business concerns, and in
particular those ‘‘with fewer than 25
employees.’’ Any effort to lessen the
burdens of this information collection
on small companies must be balanced
against our goal of obtaining the most
accurate and useful data possible.
Competition in the provision of special
access appears to occur at a very
granular level—perhaps as low as the
building/tower. A provider that owns 50
of its own channel terminations to end
users may not be competitively
significant within an area as large as an
MSA, but could be a significant
competitor within smaller areas, such as
zip code areas. Therefore, we believe it
necessary to obtain data from special
access providers and purchasers of all
sizes, but we shall not require entities
with fewer than 15,000 customers and
fewer than 1,500 business broadband
customers to provide data regarding
their best efforts business broadband
Internet access services. As some
commenters have urged us to do, this
approach will incorporate data and
information from nascent technologies,
such as WISPs.
23. Geographic scope. With some
exceptions, we will collect data on a
nationwide basis to ensure the most
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comprehensive and accurate assessment
of competition in markets for special
access services subject to our pricing
flexibility rules. Because the focus of
this proceeding is on the regulation of
special access services in price-cap
territories, we will not require data from
any provider with regard to its
operations in any geographic area in
which a rate-of-return carrier is the
incumbent, as such carriers are not
subject to the pricing flexibility rules.
Moreover, we will not require a
purchaser to produce data based on
purchases it makes in those areas in
which a rate-of-return carrier is the
incumbent. If, however, a provider or
purchaser prefers to provide data for all
areas without distinguishing between
areas served by price cap LECs and rateof-return LECs, it may do so.
24. We considered whether we could
reduce the burden of this data collection
by collecting all of our data from a
sample of locations (e.g., business
locations and wireless towers) and/or
larger geographic areas. However, we
decline to adopt a sampling approach
because we believe that the process of
identifying and collecting a
representative sample would be
unlikely to substantially reduce
provider burdens, and could
significantly lengthen the data
collection process. With respect to a
sample of geographic regions, it is very
difficult to design a representative
sample without coming close to
covering the entire country—a fact that
minimizes the likelihood that a
geographic sample would actually
reduce the burden on respondents.
Further, respondents likely would be
required to search multiple databases
and compare the results of those
searches to determine which of their
customer locations were in the selected
geographies, resulting in substantial
setup costs. Finally, even where a
respondent need only consult a single
database, it typically would have to
engage in essentially the same, or
greater (to account for the geographic
sample), amount of coding to ‘‘pull’’ a
sample of records as it would if it pulled
all records.
25. A methodology based on sampling
specific locations suffers from the same
database and coding issues as
geographic sampling, and further would
likely lengthen the data collection
process by a significant margin.
Although the most recent data we have
are several years old, they suggest that
competitive providers may serve a
relatively small proportion of all
locations that have special access. As a
result, a random sample from all
locations would need to be very large—
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perhaps approaching a census—to
obtain sufficient data on competitive
providers. Alternatively, we could
require all respondents to identify all
the relevant locations so that a smaller
sample could be drawn from that census
in a scientific way. That approach likely
would lengthen the data collection
process because it would require two
collections to be conducted
sequentially: First a census of served
locations from which a sample could be
drawn, and then a subsequent issuing of
questions about locations in the sample.
It would also fail to significantly reduce
the overall burden for several reasons.
First, the burden of producing the
census would be similar to, though
perhaps lower than, the burden of
producing the information identified
above. Second, because of the need to
tie sampled locations to the relevant
databases, the effort to respond to
questions about a sample of locations
would, for many respondents, raise, or
at least not reduce, their burden. Third,
while the costs in burden saved through
sampling are likely to be relatively
small, the statistical error of any
conclusions based on a sample could be
significantly higher than conclusions
based on a census.
26. We do choose to sample for the
narrower purpose of seeking to
understand the evolution of competitive
provider buildout of a connection to a
specific end user’s location. Such an
analysis requires facilities deployment
data over a long period of time, which
would be burdensome for many
providers to produce for their entire
networks. By collecting this data in a
representative sample of geographic
areas, it is possible to minimize the
burden on providers while providing
accurate and useful data on this narrow
aspect of providers’ behavior. The
decision to sample for this narrow
purpose does not suffer from the same
issues discussed above. First, the
sample can be significantly smaller than
would be necessary for a more general
analysis. Second, the sample will be
drawn from the universe of locations
identified in the course of the larger
data collection; this sequential
collection is unlikely to materially
impact our ability to undertake the
proposed analysis. Finally, the
information to be produced from the
sample is limited to facilities
deployment data.
27. Temporal scope. We will collect
the majority of the data for calendar
years 2010 and 2012. We find that
collecting data on these issues for two
calendar years appropriately balances
the need for time series data with the
burden of producing data for multiple
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years. We choose calendar year 2012
because it is the most recent calendar
year for which data will be available
once Paperwork Reduction Act approval
is obtained for the information
collection adopted in this order. And by
collecting 2012 data, the Commission
will obtain the most up-to-date data
available while still providing
respondents a reasonable time to gather
and submit their data. We choose
calendar year 2010 because, while we
recognize that it likely is more
burdensome to produce 2010 data than
2011 data, a two year period between
observations is more likely to include
changes in the relevant variables than a
one year period. We also recognize that
our second voluntary data request
sought data for 2010, which will mean
those providers who responded to that
request will be able to rely on their past
efforts in responding to some elements
of this collection.
28. We will collect two years’ worth
of data for market structure, price, and
demand (i.e., observed sales and
purchases). This allows for an analysis
that controls for factors that may vary
widely across geographic areas, but not
within a given geographic area (e.g.,
entry factors such as building codes or
soil quality). For example, if we observe
differences in deployment between
different geographies, these may be due
to differences in factors such as building
codes, climate, or soil quality.
Controlling for these can be challenging.
However, these kinds of variables do not
typically change significantly over a few
years. In contrast, observing differences
in deployment that emerge over a few
years within the same geographic region
permits an analysis that controls for
such factors. Conversely, if we have
only one year’s worth of data, we will
be less able to associate particular
factors with levels of deployment.
29. Most importantly, collecting a
time series of data will help us assess
potential competition. One way to
assess potential competition is by
obtaining structural, pricing, and
demand data over a two-year period to
observe and better understand how and
why competition has evolved over time
and, therefore, where potential
competition exists. Our proposal to
collect historical data, which could be
used to predict potential competition, is
consistent with Commission precedent,
as well as that of the U.S. antitrust
agencies.
B. Nature of Data To Be Collected
30. The data, information, and
documents required to conduct a robust
analysis of special access competition
fall into five general categories: Market
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structure, pricing, demand (i.e.,
observed sales and purchases), terms
and conditions, and competition and
pricing decisions. In this section, we
describe the nature of the data to be
collected. Further, we include in
Appendix C an initial version of the
data collection that incorporates the
data, information, and documents we
describe below. We direct the Bureau to
review and modify this collection,
consistent with the authority delegated
in section III.D below, to implement the
requirements of this Report and Order.
31. Market structure data. We intend
to assess the market structure for special
access market(s). By this, we mean that
we intend to examine comprehensive
data on the situs and type of facilities
capable of providing special access, by
sold and potential capacity and
ownership, and the proximity of such
facilities to sources of demand.
Specifically, we require each provider to
submit data and information for
connections that are owned by the
provider, leased under an indefeasible
right of use (IRU), or, for competitive
providers, obtained from an incumbent
LEC as an unbundled network element
(UNE) to provide a dedicated service,
including, but not limited to:
• Locations to which the provider has
sold a connection to an end user or a
provider;
• Information on the nature of the
location and the nature of the
connection serving that location,
including:
Æ The situs of the location and
whether the location is a building, other
free-standing site, cell site on a building,
or free-standing cell site;
Æ Whether the connection is fiber,
wireless (and if wireless, the
provisioned bandwidth of the channel),
or some other medium; and
Æ The provisioned bandwidth of each
type of connection.
32. We require incumbent LEC
providers to submit data concerning the
number, nature, and situs of UNEs sold.
33. We require competitive providers
to submit detailed information related to
non-price factors that may impact where
special access providers build facilities
or expand their network via UNEs. For
example, providers may choose to
expand their facilities in areas where
they have already made significant
facilities investments, like near their
headquarters or a point of
interconnection, to take advantage of
cost efficiencies. We therefore require
respondents to provide detailed
information about such non-price
factors. In addition, we require
competitive providers to provide us
with any business rules they use to
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determine whether to build a
connection to a location.
34. In addition, we require
competitive providers to submit the
history of their facilities deployment in
a sample of locations served by a
competitive provider. Each competitive
provider will report the date on which
it provided a connection to each of its
locations within the sample and
locations proximate to the locations in
the sample, including when and where
it relied upon UNEs to establish a
connection. The locations selected will
include areas in which no pricing
flexibility has been granted, as well as
Phase I and/or Phase II pricing
flexibility areas. These detailed data on
the evolution of competitive provider
networks will help us understand how
competitive facilities are deployed over
time and whether the presence of
competitive facilities in fact provides a
threat of competitive entry in nearby or
adjacent areas.
35. We require competitive providers
to provide detailed collocation situs
information. We also require
competitive providers to submit maps of
the routes followed by fiber that they
own or lease subject to an IRU, of nodes
that interconnect with third party
networks, and of connections from their
networks to locations. These maps will
indicate where competitive providers
can provide, or could potentially
provide, special access services. Among
other things, such maps will identify
points of interconnection between
competitive providers of special access
services and incumbent LEC facilities.
36. Price data. We require price data
to characterize competition in the
market for special access services. Such
data will allow comparisons of different
providers’ prices, after controlling,
where necessary, for differences in costcausing factors, and can allow the
consideration of the effect of market
structure on price. Price data include,
but are not limited to:
• The quantities sold and prices
charged for special access services, by
circuit element;
Æ As reflected in billing data;
Æ Including, where applicable and
necessary, but not limited to, identifiers
for the nature of the service, such as:
D Universal Service Order Code
(USOC) or comparable code;
D Circuit and/or mileage end-points;
D Quantities relevant for billing (such
as bandwidth and mileage);
D Term, volume, or revenue
commitments relevant to billing; and
D Adjustments, rebates, or true-ups
provided or received over time.
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The Bureau collected similar data on a
voluntary basis in the Special Access
Facilities Data Public Notice.
37. To understand this pricing
information, we must also take into
account the regulatory environment. For
competitive providers, we already know
the regulatory environment—they are
unregulated with respect to price at the
federal level. In contrast, the
Commission regulates the prices
incumbent LECs charge through a
variety of methods: rate-of-return
regulation, price-cap regulation, and
Phases I and II of pricing flexibility. We
therefore require incumbent LECs to list
the form of price regulation that applies
to their interstate special access services
on a wire-center-by-wire-center basis.
38. Demand data (i.e., observed sales
and purchases). Demand data are a key
input into any statistical analysis of how
price varies with competition.
Competitors generally are attracted to
areas of high demand density because
such areas provide opportunities to
enjoy economies of scale and scope.
Consequently, an understanding of the
relationship between prices for observed
sales and purchases and competitive
entry will facilitate an assessment of
market power. In addition, the record
indicates that competition in the
provision of special access appears to
occur at a very granular level—perhaps
as low as the building/tower or a floor
of a building. We therefore need to
understand observed sales or purchases
of special access at the most granular
level possible, because, among other
things, sold or purchased volumes and
volume density are a key driver of
special access costs and an important
determinant of the likelihood of
potential entry. We therefore will
collect, including but not limited to,
data that identify:
• The bandwidth of the special access
services sold or purchased;
• The location(s) being served;
• The nature of the demand (e.g.,
provider, end user, other);
• The locations of mobile wireless
providers’ cell sites and connections to
those cell sites;
• Total expenditures on special
access services by purchasers; and
• Revenues earned from the sales of
special access.
39. Terms and conditions data and
information. The record reflects
questions about whether the terms and
conditions associated with the sale of
special access services may inhibit a
buyer’s ability to switch to other
providers, which in turn may inhibit
facilities-based entry into special access
markets. We therefore will collect, from
providers and purchasers of special
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access services, data and information
that includes but is not limited to:
• Generally available plans for
tariffed special access services that offer
discounts, circuit portability, or other
competitively relevant benefits;
• The business rationale for those
plans;
• The extent of special access sales
and purchases made that are and are not
subject to discounts, circuit portability,
or other benefits;
• How such plans work with each
other, and in conjunction with contractbased tariffs and other forms of
contracts that govern the sale and
pricing of special access services;
• Customer information associated
with such plans and contract-based
tariffs (e.g., the number of customers
subscribed to an individual plan or
contract-based tariff);
• How discounts, circuit portability,
and other competitively relevant
benefits for sales of special access
services by competitive providers differ
from those of the incumbent LEC
providers;
• Contract-based tariffs;
• Provider policies and internal
procedures governing deployment,
disconnection, upgrades, and switching
providers;
• The impact certain terms and
conditions may have on a purchaser’s
ability to reduce purchases from its
existing provider, switch providers, or
purchase unregulated services;
• Generally available tariffs, contractbased tariffs, and other forms of
contracts that govern the sale and
pricing of special access services and
services that are sold (or priced) in
connection with special access services;
and
• A description of the customers
targeted by providers (e.g., size,
geographic scope, type) and the
promotional and advertising strategies
for winning or retaining such customers.
40. Competition and pricing decision
data, information and documents. We
require providers of special access to
submit data, information and/or
documents related to competition and
pricing decisions for special access
services, including selected competitive
provider responses to Requests for
Proposals (RFPs).
41. Specifically, we require each
competitive provider to identify the five
most recent RFPs for which it was
selected as the winning bidder to
provide each of the following: (i) Best
effort business broadband Internet
access services, (ii) special access
services, and, to the extent different
from (i) or (ii), and (iii) some other form
of high-capacity data services to
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business customers. We also require
each competitive provider to identify
the five largest (by number of
connections) RFPs for which it
submitted an unsuccessful competitive
bid between 2010 and 2012 for each of
(i) best effort business broadband
Internet access services, (ii) special
access services, and, to the extent
different from (i) or (ii), and (iii) some
other form of high-capacity data services
to business customers. For each RFP
identified, the competitive provider
shall provide a description of the RFP,
the area covered, the price offered, as
well as other competitively relevant
information regarding RFPs specified by
the Bureau.
42. Parties contend that advertising
and marketing relating to special access,
regardless of whether a competitive
provider has actually built out facilities
to a particular location, may impact
pricing and deployment decisions.
Accordingly, we require competitive
providers of special access to submit
data, maps, information, marketing
materials, and/or documents identifying
those geographic areas where they
advertised or marketed special access
services over existing facilities, via
leased facilities, or by building out new
facilities as of December 31, 2010 and
December 31, 2012, or planned to
advertise or market such services within
twenty four months following those
dates.
43. Another useful category of
information may be documents showing
the internal analyses undertaken by
providers in 2010 or thereafter to
evaluate, inter alia, competitive market
shares, changes in competition, changes
in the costs of supplying services,
whether to respond to RFPs, and
identified rate increases and decreases.
We decline at this time to require all
providers to submit that information
given the burden of identifying and
producing such documents. Instead, we
shall take a two-stage approach with
these internal documents. Specifically,
we delegate authority to the Bureau to
require a provider to submit such
documents if the Bureau finds in an
order that (a) a provider’s responses to
the business-rules questions are
incomplete or insufficient for analysis,
(b) a competitive provider’s responses to
the history-of-deployment questions are
incomplete or insufficient for analysis,
or (c) the data collected for a particular
geographic area are incomplete or
insufficient for analysis.
44. Best Efforts Business Broadband
Internet Access Services. As noted
above, we define the scope of our data
collection to include best efforts
business broadband Internet access
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services. Because the record indicates
that entities that provide best efforts
business broadband Internet access
services generally deliver those services
throughout their footprint over the same
network facilities they use to deliver
mass market broadband Internet access,
we need not collect this data at the same
level of granularity as location and
facilities data for special access. Data
showing whether an entity is providing
best efforts business broadband Internet
access service at, for example, the
census block level would not diminish
the rigor of our analysis, but would
significantly reduce the burden of
producing the necessary data. Indeed,
many entities already submit data in
connection with the State Broadband
Initiative (SBI) Grant Program as to
where they offer best efforts broadband
Internet access services at the census
block level.
45. Further, we already have
information on enterprise subscriptions
to broadband Internet access services
through our Form 477 collection. In
their biannual Form 477 filings,
facilities-based providers of fixedlocation Internet access connections
(which include providers equipping
UNEs, special access lines, or other
leased facilities) submit information, by
census tract (areas roughly the size of
zip codes), on all Internet access
connections (greater than 200 kbps) to
end users, including businesses. They
also identify the percentage of
connections within each census tract
that is residential.
46. We therefore require, subject to
the exception set forth in paragraph 22
above, entities that submitted data in
connection with the SBI Grant Program
and offer best efforts business
broadband Internet access services to
identify, on a granular but not locationby-location basis (ideally, at the census
block level), the geographic areas in
which they offer those services. The
Bureau may accept such entities’
certification that the data they have
submitted in connection with the SBI
Grant Program accurately and
completely identify the areas in which
they offer best efforts business
broadband Internet access services and
exclude those areas where they do not
offer such services. We further require
such entities to submit a price list for
the best efforts business broadband
Internet access services that they offered
within their footprint. Such price list
should identify the list prices for the
best efforts business broadband Internet
access services they offered, whether
there was any price variation within
their service footprint, and, if so, the
nature of such variation. This
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information, taken together with the
Form 477 data and the data we will
collect on UNEs that could be used to
provide these services, will allow us to
analyze of the availability of, demand
for, and pricing of best efforts business
broadband Internet access services.
47. Additional Data Not Collected. We
recognize that the collection we adopt
today does not include every type of
data that is available. Commenters
suggest we ask for a broad array of
competition data and information.
Others have recommended obtaining
information about providers’ past lateral
construction projects, future upgrade or
expansion plans and additional
information on competitive bidding. We
agree that some such information may
be qualitatively useful, and, for
example, have required the production
of data on competitive provider RFP
responses and future plans to inform
our analysis. We must, however,
balance the administrative burdens with
the potential benefits of a broader
collection, and believe that this Report
and Order will allow us to collect data
and information sufficient for our
purposes while minimizing, to the
extent possible, the burden we impose
on industry.
48. Further, we agree with
commenters who argue that to
understand the impact of competition in
special access, it is important to grasp
the effects of potential, as well as actual,
competition. To this end we are
requiring the production of information
that will illuminate those factors that
affect providers’ decisions to expand
existing networks, e.g., the non-price
factors that may impact where special
access providers build new facilities,
business rules for deployment, a sample
of historical deployment, points of
collocation, fiber network maps,
availability and use of UNEs, internal
analysis of pricing decisions, a selected
set of responses to RFPs, and internal
competitive analysis.
C. Statutory Authority
49. Several provisions of the
Communications Act and the
Telecommunications Act give the
Commission authority to adopt this data
collection. Under section 218 of the
Communications Act, we may ‘‘obtain
from [common] carriers and from
persons directly or indirectly
controlling or controlled by, or under
direct or indirect common control with,
such carriers full and complete
information necessary to enable the
Commission to perform the duties and
carry out the objects for which it was
created.’’ As such, section 218
empowers us to collect data from
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incumbent LECs, competitive LECs,
CMRS providers, and other common
carriers whether they provide or
purchase special access service or other
relevant services.
50. Section 201 requires that interstate
special access service rates, terms, and
conditions be just and reasonable,
section 202 prohibits unjust or
unreasonable discrimination in the
provision of interstate special access
services, and section 706 of the
Telecommunications Act requires that
we ‘‘encourage the deployment of
advanced telecommunications
capability * * * by utilizing, in a
manner consistent with the public
interest, convenience, and necessity,
price cap regulation, regulatory
forbearance, measures that promote
competition in the local
telecommunications market, or other
regulating methods that remove barriers
to infrastructure investment.’’ The
Communications Act in turn provides
us authority to carry out these duties—
all of which will be aided by today’s
data collection—in section 4(i), which
empowers the Commission to ‘‘perform
any and all acts * * * and issue such
orders * * * as may be necessary in the
execution of [our] functions,’’ and
section 201(b), which authorizes the
Commission to ‘‘prescribe such rules
and regulations as may be necessary in
the public interest to carry out the
provisions’’ of the Communications Act.
These authorities, along with our
subject matter jurisdiction over
‘‘interstate and foreign commerce in
communication by wire and radio,’’
allow us to extend the data collection
beyond common carriers to include
other market participants that provide
interstate communication by wire or
radio. We note that there is widespread
accord in the record on the
Commission’s authority to require the
collection of the data and information it
needs to inform our future actions.
51. We note that parties have had
extensive notice and opportunity to
comment on the need for and scope of
this data collection. In the 2005 Special
Access NPRM, the Commission sought
comment regarding evidence of
marketplace competitiveness and
pricing for special access services,
including the data and information to
perform those analyses. In a subsequent
Public Notice, the Commission sought
additional data and to otherwise refresh
the record of the Special Access NPRM
in light of subsequent developments,
including the release of a GAO report
that, among other things, contended that
the Commission needed additional data
to evaluate the special access
marketplace. In the resulting record of
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the proceeding, various parties
advocated that the Commission
undertake a data collection to obtain the
data necessary to appropriately perform
these analyses. Citing such filings, the
Bureau sought comment on an
analytical framework necessary to
resolve the issues raised in the Special
Access NPRM, including whether the
record contained sufficient information
to perform such analyses and, if not,
what additional data the Commission
should collect, and from whom. Most
recently, in the Special Access Pricing
Flexibility Suspension Order, the
Commission stated that a data collection
order would be forthcoming. In short,
we have provided notice regarding this
comprehensive data collection that has
given ample opportunity for public
participation and met any requirements
of the Administrative Procedure Act.
D. Role of the Wireline Competition
Bureau
52. The data collection we adopt
today is set forth in Appendix A of the
Report and Order. Given the
complexities associated with ensuring
that the specific questions asked meet
the Commission’s needs as expressed in
this Report and Order, navigating the
Paperwork Reduction Act process, and
actually collecting, cleaning, and
analyzing the data, we delegate limited
authority to the Bureau to: (a) Draft
instructions to the data collection and
modify the data collection based on
public feedback; (b) amend the data
collection based on feedback received
through the PRA process; (c) make
corrections to the data collection to
ensure it reflects the Commission’s
needs as expressed in this Report and
Order; and (d) issue Bureau-level orders
and Public Notices specifying the
production of specific types of data,
specifying a collection mechanism
(including necessary forms or formats),
and setting deadlines for response to
ensure that data collections are
complied with in a timely manner, and
(e) take other such actions as are
necessary to implement this Report and
Order. All such actions must be
consistent with the terms of the Report
and Order.
53. Our goal is to ensure a
comprehensive and detailed data
collection. Accordingly, we direct the
Bureau to engage in outreach with the
provider and purchaser communities to
ensure that all providers and purchasers
are aware of this comprehensive data
collection and the penalties for nonresponse. We encourage the Bureau to
reach out to trade associations that
represent small providers to inform
them of their obligations to participate
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in the data collection effort and to
ensure that we have maximum
participation. In addition, to reduce the
burden of this data collection, we direct
the Bureau to facilitate whenever
possible the conversion of street
addresses to geocoded coordinates for
small providers and purchasers.
E. Data Retention
54. Respondents are required to retain
any data, documents, documentation, or
other information prepared for, or in
connection with, their responses to
these data reporting requirements for a
period of three years or until the
Commission issues a notice relieving
respondents of this retention
requirement upon the exhaustion of any
appeals of a final order adopted in this
proceeding.
F. Penalties for False Statements and
Non-Response
55. Respondents are required to
certify that all statements of fact, data
and information submitted to the
Commission are true and correct to the
best of their knowledge. False
statements or misrepresentations to the
Commission may be punishable by fine
or imprisonment under Title 18 of the
U.S. Code. Respondents are reminded
that failure to comply with these data
reporting requirements may subject
them to monetary forfeitures of up to
$150,000 for each violation or each day
of a continuing violation, up to a
maximum of $1,500,000 for any single
act or failure to act that is a continuing
violation.
IV. Procedural Matters
A. Paperwork Reduction Act Analysis
56. This document contains a new
information collection requirement
subject to the Paperwork Reduction Act
of 1995 (PRA), Public Law 104–13. It
will be submitted to the Office of
Management and Budget (OMB) for
review under section 3507 of the PRA,
44 U.S.C. 3507. Prior to submission to
OMB, the Commission will publish a
notice in the Federal Register seeking
public comment on the information
collection requirement. In addition, that
notice will also seek comment on how
the Commission might ‘‘further reduce
the information collection burden for
small business concerns with fewer than
25 employees’’ pursuant to the Small
Business Paperwork Relief Act of 2002,
Public Law 107–198, see 44 U.S.C.
3506(c)(4). The information collection
contained in this Report and Order will
not go into effect until OMB approves
the collection and the Commission has
published a notice in the Federal
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Register announcing the effective date
of the information collection.
B. Congressional Review Act
57. The Commission will send a copy
of this Report and Order and Further
Notice of Proposed Rulemaking to
Congress and the Government
Accountability Office pursuant to the
Congressional Review Act. See 5 U.S.C.
801(a)(1)(A).
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C. Final Regulatory Flexibility Analysis
58. The Regulatory Flexibility Act
(RFA) requires that an agency prepare a
regulatory flexibility analysis for notice
and comment rulemakings, unless the
agency certifies that ‘‘the rule will not,
if promulgated, have a significant
economic impact on a substantial
number of small entities.’’ Accordingly,
we have prepared a Final Regulatory
Flexibility Analysis concerning the
possible impact of the Report and Order
on small entities.
59. As required by the Regulatory
Flexibility Act of 1980 (RFA), as
amended, Initial Regulatory Flexibility
analyses (IRFAs) were incorporated in
the Special Access NPRM for this
proceeding. The Commission sought
written public comment on the
proposals in the Special Access NPRM,
including comment on the IRFA.
Comments received are discussed
below. This present Final Regulatory
Flexibility Analysis (FRFA) conforms to
the RFA.
1. Need for, and Objectives of, the Order
60. In 2005, the Commission initiated
this proceeding as a broad examination
of what regulatory framework to apply
to price cap local exchange carriers’
(LECs) interstate special access services
following the expiration of the CALLS
plan, including whether to maintain or
modify the Commission’s pricing
flexibility rules. Moreover, the NPRM
sought to examine whether the available
marketplace data supported
maintaining, modifying, or repealing
these rules. In the Report and Order, the
Commission continues the process of
reviewing our special access rules to
ensure that they reflect the state of
competition today and promote
competition, investment, and access to
dedicated communications services
businesses across the country rely on
every day to deliver their products and
services to American consumers.
Specifically, the Commission initiates a
comprehensive data collection and seek
comment on a proposal to use the data
to evaluate competition in the market
for special access services.
61. In the Report and Order, we
require providers and purchasers of
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special access service and certain other
services—including best efforts business
broadband Internet access services— as
well as entities that provide certain
other services, to submit data,
information and documents to allow the
Commission to conduct a
comprehensive evaluation of
competition in the special access
market. The data, information, and
documents required fall into five
general categories: market structure;
pricing; demand (i.e., observed sales
and purchases), terms and conditions;
and competition and pricing decisions.
We will collect the majority of the data
for calendar years 2010 and 2012.
2. Summary of Significant Issues Raised
by Public Comments in Response to the
IRFA
62. The Office of Advocacy of the U.S.
Small Business Administration (SBA)
filed reply comments to the Notice of
Proposed Rulemaking and the Initial
Regulatory Flexibility Act Analysis
(IRFA). The SBA asserts that the
Commission’s IRFA did not consider the
effect of new special access rules on
small competitive carriers and urged the
Commission to do so. SBA contended
that because the Commission’s 2005
Triennial Review Remand Order (TRRO)
required both large and small
competitive carriers to purchase special
access services instead of UNEs in many
metropolitan markets, the Commission
should consider the impact that changes
in special access prices would have on
small competitive carriers. SBA
suggested a number of potential
alternatives to special access pricing
regulation that it asserted might
minimize the impact on small
competitive carriers. No other
comments were filed in response to the
IRFA.
3. Description and Estimate of the
Number of Small Entities to Which the
Proposed Rules Will Apply
63. The RFA directs agencies to
provide a description of, and where
feasible, an estimate of the number of
small entities that may be affected by
the proposed rules, if adopted. The RFA
generally defines the term ‘‘small
entity’’ as having the same meaning as
the terms ‘‘small business,’’ ‘‘small
organization,’’ and ‘‘small governmental
jurisdiction.’’ In addition, the term
‘‘small business’’ has the same meaning
as the term ‘‘small-business concern’’
under the Small Business Act. A ‘‘smallbusiness 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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64. Small Businesses. Nationwide,
there are a total of approximately 27.5
million small businesses, according to
the SBA.
65. Wired Telecommunications
Carriers. The SBA has developed a
small business size standard for Wired
Telecommunications Carriers, which
consists of all such companies having
1,500 or fewer employees. According to
Census Bureau data for 2007, there were
3,188 firms in this category, total, that
operated for the entire year. Of this
total, 3,144 firms had employment of
999 or fewer employees, and 44 firms
had employment of 1,000 employees or
more. Thus, under this size standard,
the majority of firms can be considered
small.
66. Local Exchange Carriers (LECs).
Neither the Commission nor the SBA
has developed a size standard for small
businesses specifically applicable to
local exchange services. The closest
applicable size standard under SBA
rules is for Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 1,307 carriers
reported that they were incumbent local
exchange service providers. Of these
1,307 carriers, an estimated 1,006 have
1,500 or fewer employees and 301 have
more than 1,500 employees.
Consequently, the Commission
estimates that most providers of local
exchange service are small entities that
may be affected by the rules and
policies proposed in the Order.
67. Incumbent Local Exchange
Carriers (incumbent LECs). Neither the
Commission nor the SBA has developed
a size standard for small businesses
specifically applicable to incumbent
local exchange services. The closest
applicable size standard under SBA
rules is for Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 1,307 carriers
reported that they were incumbent local
exchange service providers. Of these
1,307 carriers, an estimated 1,006 have
1,500 or fewer employees and 301 have
more than 1,500 employees.
Consequently, the Commission
estimates that most providers of
incumbent local exchange service are
small businesses that may be affected by
rules adopted pursuant to the Order.
68. We have included small
incumbent LECs in this present RFA
analysis. As noted above, a ‘‘small
business’’ under the RFA is one that,
inter alia, meets the pertinent small
business size standard (e.g., a telephone
communications business having 1,500
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or fewer employees), and ‘‘is not
dominant in its field of operation.’’ The
SBA’s Office of Advocacy contends that,
for RFA purposes, small incumbent
LECs are not dominant in their field of
operation because any such dominance
is not ‘‘national’’ in scope. We have
therefore included small incumbent
LECs in this RFA analysis, although we
emphasize that this RFA action has no
effect on Commission analyses and
determinations in other, non-RFA
contexts.
69. Competitive Local Exchange
Carriers (competitive LECs), Competitive
Access Providers (CAPs), Shared-Tenant
Service Providers, and Other Local
Service Providers. Neither the
Commission nor the SBA has developed
a small business size standard
specifically for these service providers.
The appropriate size standard under
SBA rules is for the category Wired
Telecommunications Carriers. Under
that size standard, such a business is
small if it has 1,500 or fewer employees.
According to Commission data, 1,442
carriers reported that they were engaged
in the provision of either competitive
local exchange services or competitive
access provider services. Of these 1,442
carriers, an estimated 1,256 have 1,500
or fewer employees and 186 have more
than 1,500 employees. In addition, 17
carriers have reported that they are
Shared-Tenant Service Providers, and
all 17 are estimated to have 1,500 or
fewer employees. In addition, 72
carriers have reported that they are
Other Local Service Providers. Of the
72, seventy have 1,500 or fewer
employees and two have more than
1,500 employees. Consequently, the
Commission estimates that most
providers of competitive local exchange
service, competitive access providers,
Shared-Tenant Service Providers, and
Other Local Service Providers are small
entities that may be affected by rules
adopted pursuant to the Order.
70. Interexchange Carriers (IXCs).
Neither the Commission nor the SBA
has developed a size standard for small
businesses specifically applicable to
interexchange services. The closest
applicable size standard under SBA
rules is for Wired Telecommunications
Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 359 companies
reported that their primary
telecommunications service activity was
the provision of interexchange services.
Of these 359 companies, an estimated
317 have 1,500 or fewer employees and
42 have more than 1,500 employees.
Consequently, the Commission
estimates that the majority of
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interexchange service providers are
small entities that may be affected by
rules adopted pursuant to the Order.
71. Prepaid Calling Card Providers.
Neither the Commission nor the SBA
has developed a small business size
standard specifically for prepaid calling
card providers. The appropriate size
standard under SBA rules is for the
category Telecommunications Resellers.
Under that size standard, such a
business is small if it has 1,500 or fewer
employees. According to Commission
data, 193 carriers have reported that
they are engaged in the provision of
prepaid calling cards. Of these, an
estimated all 193 have 1,500 or fewer
employees and none have more than
1,500 employees. Consequently, the
Commission estimates that the majority
of prepaid calling card providers are
small entities that may be affected by
rules adopted pursuant to the Order.
72. Local Resellers. The SBA has
developed a small business size
standard for the category of
Telecommunications Resellers. Under
that size standard, such a business is
small if it has 1,500 or fewer employees.
According to Commission data, 213
carriers have reported that they are
engaged in the provision of local resale
services. Of these, an estimated 211
have 1,500 or fewer employees and two
have more than 1,500 employees.
Consequently, the Commission
estimates that the majority of local
resellers are small entities that may be
affected by rules adopted pursuant to
the Order.
73. Toll Resellers. The SBA has
developed a small business size
standard for the category of
Telecommunications Resellers. Under
that size standard, such a business is
small if it has 1,500 or fewer employees.
According to Commission data, 881
carriers have reported that they are
engaged in the provision of toll resale
services. Of these, an estimated 857
have 1,500 or fewer employees and 24
have more than 1,500 employees.
Consequently, the Commission
estimates that the majority of toll
resellers are small entities that may be
affected by rules adopted pursuant to
the Order.
74. Other Toll Carriers. Neither the
Commission nor the SBA has developed
a size standard for small businesses
specifically applicable to Other Toll
Carriers. This category includes toll
carriers that do not fall within the
categories of interexchange carriers,
operator service providers, prepaid
calling card providers, satellite service
carriers, or toll resellers. The closest
applicable size standard under SBA
rules is for Wired Telecommunications
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Carriers. Under that size standard, such
a business is small if it has 1,500 or
fewer employees. According to
Commission data, 284 companies
reported that their primary
telecommunications service activity was
the provision of other toll carriage. Of
these, an estimated 279 have 1,500 or
fewer employees and five have more
than 1,500 employees. Consequently,
the Commission estimates that most
Other Toll Carriers are small entities
that may be affected by the rules and
policies adopted pursuant to the Order.
75. 800 and 800-Like Service
Subscribers. Neither the Commission
nor the SBA has developed a small
business size standard specifically for
800 and 800-like service (toll free)
subscribers. The appropriate size
standard under SBA rules is for the
category Telecommunications Resellers.
Under that size standard, such a
business is small if it has 1,500 or fewer
employees. The most reliable source of
information regarding the number of
these service subscribers appears to be
data the Commission collects on the
800, 888, 877, and 866 numbers in use.
According to our data, as of September
2009, the number of 800 numbers
assigned was 7,860,000; the number of
888 numbers assigned was 5,588,687;
the number of 877 numbers assigned
was 4,721,866; and the number of 866
numbers assigned was 7,867,736. We do
not have data specifying the number of
these subscribers that are not
independently owned and operated or
have more than 1,500 employees, and
thus are unable at this time to estimate
with greater precision the number of toll
free subscribers that would qualify as
small businesses under the SBA size
standard. Consequently, we estimate
that there are 7,860,000 or fewer small
entity 800 subscribers; 5,588,687 or
fewer small entity 888 subscribers;
4,721,866 or fewer small entity 877
subscribers; and 7,867,736 or fewer
small entity 866 subscribers.
76. Wireless Telecommunications
Carriers (except Satellite). Since 2007,
the SBA has recognized 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. For this category, census
data for 2007 show that there were 1,383
firms that operated for the entire year.
Of this total, 1,368 firms had
employment of 999 or fewer employees
and 15 had employment of 1,000
employees or more. Similarly, according
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to Commission data, 413 carriers
reported that they were engaged in the
provision of wireless telephony,
including cellular service, Personal
Communications Service (PCS), and
Specialized Mobile Radio (SMR)
Telephony services. Of these, an
estimated 261 have 1,500 or fewer
employees and 152 have more than
1,500 employees. 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.
77. Broadband Personal
Communications Service. The
broadband personal communications
service (PCS) spectrum is divided into
six frequency blocks designated A
through F, and the Commission has held
auctions for each block. The
Commission defined ‘‘small entity’’ for
Blocks C and F as an entity that has
average gross revenues of $40 million or
less in the three previous calendar
years. For Block F, an additional
classification for ‘‘very small business’’
was added and is defined as an entity
that, together with its affiliates, has
average gross revenues of not more than
$15 million for the preceding three
calendar years. These standards
defining ‘‘small entity’’ in the context of
broadband PCS auctions have been
approved by the SBA. No small
businesses, within the SBA-approved
small business size standards bid
successfully for licenses in Blocks A
and B. There were 90 winning bidders
that qualified as small entities in the
Block C auctions. A total of 93 small
and very small business bidders won
approximately 40 percent of the 1,479
licenses for Blocks D, E, and F. In 1999,
the Commission re-auctioned 347 C, E,
and F Block licenses. There were 48
small business winning bidders. 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
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.
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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.
78. Advanced Wireless Services. In
2008, the Commission conducted the
auction of Advanced Wireless Services
(‘‘AWS’’) licenses. This auction, which
as 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.
79. Narrowband Personal
Communications Services. In 1994, the
Commission conducted an auction for
Narrowband PCS licenses. A second
auction was also conducted later in
1994. For purposes of the first two
Narrowband PCS auctions, ‘‘small
businesses’’ were entities with average
gross revenues for the prior three
calendar years of $40 million or less.
Through these auctions, the
Commission awarded a total of 41
licenses, 11 of which were obtained by
four small businesses. To ensure
meaningful participation by small
business entities in future auctions, the
Commission adopted a two-tiered small
business size standard in the
Narrowband PCS Second Report and
Order. A ‘‘small business’’ is an entity
that, together with affiliates and
controlling interests, has average gross
revenues for the three preceding years of
not more than $40 million. A ‘‘very
small business’’ is an entity that,
together with affiliates and controlling
interests, has average gross revenues for
the three preceding years of not more
than $15 million. The SBA has
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approved these small business size
standards. A third auction was
conducted in 2001. Here, five bidders
won 317 (Metropolitan Trading Areas
and nationwide) licenses. Three of these
claimed status as a small or very small
entity and won 311 licenses.
80. Paging (Private and Common
Carrier). In the Paging Third Report and
Order, we developed a small business
size standard for ‘‘small businesses’’ and
‘‘very small businesses’’ for purposes of
determining their eligibility for special
provisions such as bidding credits and
installment payments. A ‘‘small
business’’ is an entity that, together with
its affiliates and controlling principals,
has average gross revenues not
exceeding $15 million for the preceding
three years. Additionally, a ‘‘very small
business’’ is an entity that, together with
its affiliates and controlling principals,
has average gross revenues that are not
more than $3 million for the preceding
three years. The SBA has approved
these small business size standards.
According to Commission data, 291
carriers have reported that they are
engaged in Paging or Messaging Service.
Of these, an estimated 289 have 1,500 or
fewer employees, and two have more
than 1,500 employees. Consequently,
the Commission estimates that the
majority of paging providers are small
entities that may be affected by our
action. An auction of Metropolitan
Economic Area licenses commenced on
February 24, 2000, and closed on March
2, 2000. Of the 2,499 licenses auctioned,
985 were sold. Fifty-seven companies
claiming small business status won 440
licenses. A subsequent auction of MEA
and Economic Area (‘‘EA’’) licenses was
held in the year 2001. Of the 15,514
licenses auctioned, 5,323 were sold.
One hundred thirty-two companies
claiming small business status
purchased 3,724 licenses. A third
auction, consisting of 8,874 licenses in
each of 175 EAs and 1,328 licenses in
all but three of the 51 MEAs, was held
in 2003. Seventy-seven bidders claiming
small or very small business status won
2,093 licenses. A fourth auction,
consisting of 9,603 lower and upper
paging band licenses was held in the
year 2010. Twenty-nine bidders
claiming small or very small business
status won 3,016 licenses.
81. 220 MHz Radio Service—Phase I
Licensees. The 220 MHz service has
both Phase I and Phase II licenses. Phase
I licensing was conducted by lotteries in
1992 and 1993. There are approximately
1,515 such non-nationwide licensees
and four nationwide licensees currently
authorized to operate in the 220 MHz
band. The Commission has not
developed a small business size
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standard for small entities specifically
applicable to such incumbent 220 MHz
Phase I licensees. To estimate the
number of such licensees that are small
businesses, we apply the small business
size standard under the SBA rules
applicable to Wireless
Telecommunications Carriers (except
Satellite). Under this category, the SBA
deems a wireless business to be small if
it has 1,500 or fewer employees. The
Commission estimates that nearly all
such licensees are small businesses
under the SBA’s small business size
standard that may be affected by rules
adopted pursuant to the Order.
82. 220 MHz Radio Service—Phase II
Licensees. The 220 MHz service has
both Phase I and Phase II licenses. The
Phase II 220 MHz service is subject to
spectrum auctions. In the 220 MHz
Third Report and Order, we adopted a
small business size standard for ‘‘small’’
and ‘‘very small’’ businesses for
purposes of determining their eligibility
for special provisions such as bidding
credits and installment payments. This
small business size standard indicates
that a ‘‘small business’’ is an entity that,
together with its affiliates and
controlling principals, has average gross
revenues not exceeding $15 million for
the preceding three years. A ‘‘very small
business’’ is an entity that, together with
its affiliates and controlling principals,
has average gross revenues that do not
exceed $3 million for the preceding
three years. The SBA has approved
these small business size standards.
Auctions of Phase II licenses
commenced on September 15, 1998, and
closed on October 22, 1998. In the first
auction, 908 licenses were auctioned in
three different-sized geographic areas:
Three nationwide licenses, 30 Regional
Economic Area Group (EAG) Licenses,
and 875 Economic Area (EA) Licenses.
Of the 908 licenses auctioned, 693 were
sold. Thirty-nine small businesses won
licenses in the first 220 MHz auction.
The second auction included 225
licenses: 216 EA licenses and 9 EAG
licenses. Fourteen companies claiming
small business status won 158 licenses.
83. Specialized Mobile Radio. The
Commission awards small business
bidding credits in auctions for
Specialized Mobile Radio (‘‘SMR’’)
geographic area licenses in the 800 MHz
and 900 MHz bands to entities that had
revenues of no more than $15 million in
each of the three previous calendar
years. The Commission awards very
small business bidding credits to
entities 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 800 MHz and 900 MHz
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SMR Services. 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
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.
84. 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.
85. 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.
86. Broadband Radio Service and
Educational Broadband Service.
Broadband Radio Service systems,
previously referred to as Multipoint
Distribution Service (‘‘MDS’’) and
Multichannel Multipoint Distribution
Service (‘‘MMDS’’) systems, and
‘‘wireless cable,’’ transmit video
programming to subscribers and provide
two-way high speed data operations
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using the microwave frequencies of the
Broadband Radio Service (‘‘BRS’’) and
Educational Broadband Service (‘‘EBS’’)
(previously referred to as the
Instructional Television Fixed Service
(‘‘ITFS’’)). In connection with the 1996
BRS auction, the Commission
established a small business size
standard as an entity that had annual
average gross revenues of no more than
$40 million in the previous three
calendar years. The BRS auctions
resulted in 67 successful bidders
obtaining licensing opportunities for
493 Basic Trading Areas (‘‘BTAs’’). Of
the 67 auction winners, 61 met the
definition of a small business. BRS also
includes licensees of stations authorized
prior to the auction. At this time, we
estimate that of the 61 small business
BRS auction winners, 48 remain small
business licensees. In addition to the 48
small businesses that hold BTA
authorizations, there are approximately
392 incumbent BRS licensees that are
considered small entities. After adding
the number of small business auction
licensees to the number of incumbent
licensees not already counted, we find
that there are currently approximately
440 BRS licensees that are defined as
small businesses under either the SBA
or the Commission’s rules. The
Commission has adopted three levels of
bidding credits for BRS: (i) A bidder
with attributed average annual gross
revenues that exceed $15 million and do
not exceed $40 million for the preceding
three years (small business) is eligible to
receive a 15 percent discount on its
winning bid; (ii) a bidder with
attributed average annual gross revenues
that exceed $3 million and do not
exceed $15 million for the preceding
three years (very small business) is
eligible to receive a 25 percent discount
on its winning bid; and (iii) a bidder
with attributed average annual gross
revenues that do not exceed $3 million
for the preceding three years
(entrepreneur) is eligible to receive a 35
percent discount on its winning bid. In
2009, the Commission conducted
Auction 86, which offered 78 BRS
licenses. Auction 86 concluded with ten
bidders winning 61 licenses. Of the ten,
two bidders claimed small business
status and won 4 licenses; one bidder
claimed very small business status and
won three licenses; and two bidders
claimed entrepreneur status and won
six licenses.
87. In addition, the SBA’s Cable
Television Distribution Services small
business size standard is applicable to
EBS. There are presently 2,032 EBS
licensees. All but 100 of these licenses
are held by educational institutions.
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Educational institutions are included in
this analysis as small entities. Thus, we
estimate that at least 1,932 licensees are
small businesses. Since 2007, Cable
Television Distribution Services have
been defined within the broad economic
census category of Wired
Telecommunications Carriers; that
category is defined as follows: ‘‘This
industry comprises establishments
primarily engaged in operating and/or
providing access to transmission
facilities and infrastructure that they
own and/or lease for the transmission of
voice, data, text, sound, and video using
wired telecommunications networks.
Transmission facilities may be based on
a single technology or a combination of
technologies.’’ The SBA defines a small
business size standard for this category
as any such firms having 1,500 or fewer
employees. The SBA has developed a
small business size standard for this
category, which is: all such firms having
1,500 or fewer employees. According to
Census Bureau data for 2007, there were
a total of 955 firms in this previous
category that operated for the entire
year. Of this total, 939 firms had
employment of 999 or fewer employees,
and 16 firms had employment of 1000
employees or more. Thus, under this
size standard, the majority of firms can
be considered small and may be affected
by rules adopted pursuant to the Order.
88. Lower 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 Band had a third category of small
business status for Metropolitan/Rural
Service Area (‘‘MSA/RSA’’) licenses,
identified as ‘‘entrepreneur’’ and
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
Lower 700 MHz Band 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,
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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 Lower
700 MHz Band 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,
designated Auction 60. There were three
winning bidders for five licenses. All
three winning bidders claimed small
business status.
89. In 2007, the Commission
reexamined its rules governing the 700
MHz band in the 700 MHz Second
Report and Order. The 700 MHz Second
Report and 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. An auction of A, B and E block
licenses in the Lower 700 MHz band
was held in 2008. Twenty winning
bidders claimed small business status
(those with attributable average annual
gross revenues that exceed $15 million
and do not exceed $40 million for the
preceding three years). Thirty three
winning bidders claimed very small
business status (those with attributable
average annual gross revenues that do
not exceed $15 million for the preceding
three years). In 2011, the Commission
conducted Auction 92, which offered 16
Lower 700 MHz band licenses that had
been made available in Auction 73 but
either remained unsold or were licenses
on which a winning bidder defaulted.
Two of the seven winning bidders in
Auction 92 claimed very small business
status, winning a total of four licenses.
90. Upper 700 MHz Band Licenses. In
the 700 MHz Second Report and Order,
the Commission revised its rules
regarding Upper 700 MHz band
licenses. In 2008, the Commission
conducted Auction 73 in which C and
D block licenses in the Upper 700 MHz
band were available. Three winning
bidders claimed very small business
status (those with attributable average
annual gross revenues that do not
exceed $15 million for the preceding
three years).
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91. 700 MHz Guard Band Licensees.
In the 700 MHz Guard Band Order, we
adopted a small business size standard
for ‘‘small businesses’’ and ‘‘very small
businesses’’ for purposes of determining
their eligibility for special provisions
such as bidding credits and installment
payments. A ‘‘small business’’ 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. An auction of 52 Major Economic
Area (MEA) licenses commenced on
September 6, 2000, and closed on
September 21, 2000. Of the 104 licenses
auctioned, 96 licenses were sold to nine
bidders. Five of these bidders were
small businesses that won a total of 26
licenses. A second auction of 700 MHz
Guard Band licenses commenced on
February 13, 2001 and closed on
February 21, 2001. All eight of the
licenses auctioned were sold to three
bidders. One of these bidders was a
small business that won a total of two
licenses.
92. 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.
93. 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
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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.
94. 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.
95. 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.
96. Air-Ground Radiotelephone
Service. The Commission has not
adopted a small business size standard
specific to the Air-Ground
Radiotelephone Service. We will use
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 100 licensees in the AirGround Radiotelephone Service, and we
estimate that almost all of them qualify
as small under the SBA small business
size standard and may be affected by
rules adopted pursuant to the Order.
97. Aviation and Marine Radio
Services. Small businesses in the
aviation and marine radio services use
a very high frequency (VHF) marine or
aircraft radio and, as appropriate, an
emergency position-indicating radio
beacon (and/or radar) or an emergency
locator transmitter. The Commission has
not developed a small business size
standard specifically applicable to these
small businesses. For purposes of this
analysis, the Commission uses the SBA
small business size standard for the
category Wireless Telecommunications
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Carriers (except Satellite), which is
1,500 or fewer employees. Census data
for 2007, which supersede data
contained in the 2002 Census, show that
there were 1,383 firms that operated that
year. Of those 1,383, 1,368 had fewer
than 100 employees, and 15 firms had
more than 100 employees. Most
applicants for recreational licenses are
individuals. Approximately 581,000
ship station licensees and 131,000
aircraft station licensees operate
domestically and are not subject to the
radio carriage requirements of any
statute or treaty. For purposes of our
evaluations in this analysis, we estimate
that there are up to approximately
712,000 licensees that are small
businesses (or individuals) under the
SBA standard. In addition, between
December 3, 1998 and December 14,
1998, the Commission held an auction
of 42 VHF Public Coast licenses in the
157.1875–157.4500 MHz (ship transmit)
and 161.775–162.0125 MHz (coast
transmit) bands. For purposes of the
auction, the Commission defined a
‘‘small’’ business as an entity that,
together with controlling interests and
affiliates, has average gross revenues for
the preceding three years not to exceed
$15 million dollars. In addition, a ‘‘very
small’’ business is one that, together
with controlling interests and affiliates,
has average gross revenues for the
preceding three years not to exceed $3
million dollars. There are approximately
10,672 licensees in the Marine Coast
Service, and the Commission estimates
that almost all of them qualify as
‘‘small’’ businesses under the above
special small business size standards
and may be affected by rules adopted
pursuant to the Order.
98. Fixed Microwave Services. Fixed
microwave services include common
carrier, private operational-fixed, and
broadcast auxiliary radio services. At
present, there are approximately 22,015
common carrier fixed licensees and
61,670 private operational-fixed
licensees and broadcast auxiliary radio
licensees in the microwave services.
The Commission has not created a size
standard for a small business
specifically with respect to fixed
microwave services. For purposes of
this analysis, the Commission uses the
SBA small business size standard for
Wireless Telecommunications Carriers
(except Satellite), which is 1,500 or
fewer employees. The Commission does
not have data specifying the number of
these licensees that have more than
1,500 employees, and thus is unable at
this time to estimate with greater
precision the number of fixed
microwave service licensees that would
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qualify as small business concerns
under the SBA’s small business size
standard. Consequently, the
Commission estimates that there are up
to 22,015 common carrier fixed
licensees and up to 61,670 private
operational-fixed licensees and
broadcast auxiliary radio licensees in
the microwave services that may be
small and may be affected by the rules
and policies adopted herein. We note,
however, that the common carrier
microwave fixed licensee category
includes some large entities.
99. Offshore Radiotelephone Service.
This service operates on several UHF
television broadcast channels that are
not used for television broadcasting in
the coastal areas of states bordering the
Gulf of Mexico. There are presently
approximately 55 licensees in this
service. The Commission is unable to
estimate at this time the number of
licensees that would qualify as small
under the SBA’s small business size
standard for the category of Wireless
Telecommunications Carriers (except
Satellite). Under that SBA small
business size standard, a business is
small if it has 1,500 or fewer employees.
Census data for 2007, which supersede
data contained in the 2002 Census,
show that there were 1,383 firms that
operated that year. 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.
100. 39 GHz Service. The Commission
created a special small business size
standard for 39 GHz licenses—an entity
that has average gross revenues of $40
million or less in the three previous
calendar years. An additional size
standard for ‘‘very small business’’ is:
An entity that, together with affiliates,
has average gross revenues of not more
than $15 million for the preceding three
calendar years. The SBA has approved
these small business size standards. The
auction of the 2,173 39 GHz licenses
began on April 12, 2000 and closed on
May 8, 2000. The 18 bidders who
claimed small business status won 849
licenses. Consequently, the Commission
estimates that 18 or fewer 39 GHz
licensees are small entities that may be
affected by rules adopted pursuant to
the Report and Order.
101. Local Multipoint Distribution
Service. Local Multipoint Distribution
Service (‘‘LMDS’’) is a fixed broadband
point-to-multipoint microwave service
that provides for two-way video
telecommunications. The auction of the
986 LMDS licenses began and closed in
1998. The Commission established a
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small business size standard for LMDS
licenses as an entity that has average
gross revenues of less than $40 million
in the three previous calendar years. An
additional small business size standard
for ‘‘very small business’’ was added as
an entity that, together with its affiliates,
has average gross revenues of not more
than $15 million for the preceding three
calendar years. The SBA has approved
these small business size standards in
the context of LMDS auctions. There
were 93 winning bidders that qualified
as small entities in the LMDS auctions.
A total of 93 small and very small
business bidders won approximately
277 A Block licenses and 387 B Block
licenses. In 1999, the Commission reauctioned 161 licenses; there were 32
small and very small businesses
winning that won 119 licenses.
102. 218–219 MHz Service. The first
auction of 218–219 MHz spectrum
resulted in 170 entities winning licenses
for 594 Metropolitan Statistical Area
(MSA) licenses. Of the 594 licenses, 557
were won by entities qualifying as a
small business. For that auction, the
small business size standard was an
entity that, together with its affiliates,
has no more than a $6 million net worth
and, after federal income taxes
(excluding any carry over losses), has no
more than $2 million in annual profits
each year for the previous two years. In
the 218–219 MHz Report and Order and
Memorandum Opinion and Order, we
established a small business size
standard for a ‘‘small business’’ as an
entity that, together with its affiliates
and persons or entities that hold
interests in such an entity and their
affiliates, has average annual gross
revenues not to exceed $15 million for
the preceding three years. A ‘‘very small
business’’ is defined as an entity that,
together with its affiliates and persons
or entities, that hold interests in such an
entity and its affiliates, has average
annual gross revenues not to exceed $3
million for the preceding three years.
These size standards will be used in
future auctions of 218–219 MHz
spectrum.
103. 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
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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.
104. 1670–1675 MHz Band. An
auction for one license in the 1670–1675
MHz band was conducted in 2003. The
Commission defined a ‘‘small business’’
as an entity with attributable average
annual gross revenues of not more than
$40 million for the preceding three
years and thus would be eligible for a
15 percent discount on its winning bid
for the 1670–1675 MHz band license.
Further, the Commission defined a
‘‘very small business’’ as an entity with
attributable average annual gross
revenues of not more than $15 million
for the preceding three years and thus
would be eligible to receive a 25 percent
discount on its winning bid for the
1670–1675 MHz band license. One
license was awarded. The winning
bidder was not a small entity.
105. 3650–3700 MHz band. In March
2005, the Commission released a Report
and Order and Memorandum Opinion
and Order that provides for nationwide,
non-exclusive licensing of terrestrial
operations, utilizing contention-based
technologies, in the 3650 MHz band
(i.e., 3650–3700 MHz). As of April 2010,
more than 1270 licenses have been
granted and more than 7433 sites have
been registered. The Commission has
not developed a definition of small
entities applicable to 3650–3700 MHz
band nationwide, non-exclusive
licensees. However, we estimate that the
majority of these licensees are Internet
Access Service Providers (ISPs) and that
most of those licensees are small
businesses.
106. 24 GHz—Incumbent Licensees.
This analysis may affect incumbent
licensees who were relocated to the 24
GHz band from the 18 GHz band, and
applicants who wish to provide services
in the 24 GHz band. For this service, the
Commission uses the SBA small
business size standard for the category
‘‘Wireless Telecommunications Carriers
(except satellite),’’ which is 1,500 or
fewer employees. To gauge small
business prevalence for these cable
services we must, however, use the most
current census data. Census data for
2007, which supersede data contained
in the 2002 Census, show that there
were 1,383 firms that operated that year.
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. The
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Commission notes that the Census’ use
of the classifications ‘‘firms’’ does not
track the number of ‘‘licenses.’’ The
Commission believes that there are only
two licensees in the 24 GHz band that
were relocated from the 18 GHz band,
Teligent and TRW, Inc. It is our
understanding that Teligent and its
related companies have less than 1,500
employees, though this may change in
the future. TRW is not a small entity.
Thus, only one incumbent licensee in
the 24 GHz band is a small business
entity.
107. 24 GHz—Future Licensees. With
respect to new applicants in the 24 GHz
band, the size standard for ‘‘small
business’’ is an entity that, together with
controlling interests and affiliates, has
average annual gross revenues for the
three preceding years not in excess of
$15 million. ‘‘Very small business’’ in
the 24 GHz band is an entity that,
together with controlling interests and
affiliates, has average gross revenues not
exceeding $3 million for the preceding
three years. The SBA has approved
these small business size standards.
These size standards will apply to a
future 24 GHz license auction, if held.
108. Satellite Telecommunications.
Since 2007, the SBA has recognized
satellite firms within this revised
category, with a small business size
standard of $15 million. The most
current Census Bureau data are from the
economic census of 2007, and we will
use those figures to gauge the
prevalence of small businesses in this
category. Those size standards are for
the two census categories of ‘‘Satellite
Telecommunications’’ and ‘‘Other
Telecommunications.’’ Under the
‘‘Satellite Telecommunications’’
category, a business is considered small
if it had $15 million or less in average
annual receipts. Under the ‘‘Other
Telecommunications’’ category, a
business is considered small if it had
$25 million or less in average annual
receipts.
109. The first category of Satellite
Telecommunications ‘‘comprises
establishments primarily engaged in
providing point-to-point
telecommunications services to other
establishments in the
telecommunications and broadcasting
industries by forwarding and receiving
communications signals via a system of
satellites or reselling satellite
telecommunications.’’ For this category,
Census Bureau data for 2007 show that
there were a total of 512 firms that
operated for the entire year. Of this
total, 464 firms had annual receipts of
under $10 million, and 18 firms had
receipts of $10 million to $24,999,999.
Consequently, we estimate that the
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majority of Satellite
Telecommunications firms are small
entities that might be affected by rules
adopted pursuant to the Order.
110. The second category of Other
Telecommunications ‘‘primarily
engaged in providing specialized
telecommunications services, such as
satellite tracking, communications
telemetry, and radar station operation.
This industry also includes
establishments primarily engaged in
providing satellite terminal stations and
associated facilities connected with one
or more terrestrial systems and capable
of transmitting telecommunications to,
and receiving telecommunications from,
satellite systems. Establishments
providing Internet services or voice over
Internet protocol (VoIP) services via
client-supplied telecommunications
connections are also included in this
industry.’’ For this category, Census
Bureau data for 2007 show that there
were a total of 2,383 firms that operated
for the entire year. Of this total, 2,346
firms had annual receipts of under $25
million. Consequently, we estimate that
the majority of Other
Telecommunications firms are small
entities that might be affected by our
action.
111. Cable and Other Program
Distribution. Since 2007, these services
have been defined within the broad
economic census category of Wired
Telecommunications Carriers; that
category is defined as follows: ‘‘This
industry comprises establishments
primarily engaged in operating and/or
providing access to transmission
facilities and infrastructure that they
own and/or lease for the transmission of
voice, data, text, sound, and video using
wired telecommunications networks.
Transmission facilities may be based on
a single technology or a combination of
technologies.’’ The SBA has developed
a small business size standard for this
category, which is: All such firms
having 1,500 or fewer employees.
According to Census Bureau data for
2007, there were a total of 955 firms in
this previous category that operated for
the entire year. Of this total, 939 firms
had employment of 999 or fewer
employees, and 16 firms had
employment of 1000 employees or
more. Thus, under this size standard,
the majority of firms can be considered
small and may be affected by rules
adopted pursuant to the Order.
112. Cable Companies and Systems.
The Commission has developed its own
small business size standards, for the
purpose of cable rate regulation. Under
the Commission’s rules, a ‘‘small cable
company’’ is one serving 400,000 or
fewer subscribers, nationwide. Industry
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data indicate that, of 1,076 cable
operators nationwide, all but eleven are
small under this size standard. In
addition, under the Commission’s rules,
a ‘‘small system’’ is a cable system
serving 15,000 or fewer subscribers.
Industry data indicate that, of 7,208
systems nationwide, 6,139 systems have
fewer than 10,000 subscribers, and an
additional 379 systems have 10,000–
19,999 subscribers. Thus, under this
second size standard, most cable
systems are small and may be affected
by rules adopted pursuant to the Order.
113. Cable System Operators. The Act
also contains a size standard for small
cable system operators, which is ‘‘a
cable operator that, directly or through
an affiliate, serves in the aggregate less
than 1 percent of all subscribers in the
United States and is not affiliated with
any entity or entities whose gross
annual revenues in the aggregate exceed
$250,000,000.’’ The Commission has
determined that an operator serving
fewer than 677,000 subscribers shall be
deemed a small operator, if its annual
revenues, when combined with the total
annual revenues of all its affiliates, do
not exceed $250 million in the
aggregate. Industry data indicate that, of
1,076 cable operators nationwide, all
but ten are small under this size
standard. We note that the Commission
neither requests nor collects information
on whether cable system operators are
affiliated with entities whose gross
annual revenues exceed $250 million,
and therefore we are unable to estimate
more accurately the number of cable
system operators that would qualify as
small under this size standard.
114. Open Video Services. The open
video system (‘‘OVS’’) framework was
established in 1996, and is one of four
statutorily recognized options for the
provision of video programming
services by local exchange carriers. The
OVS framework provides opportunities
for the distribution of video
programming other than through cable
systems. Because OVS operators provide
subscription services, OVS falls within
the SBA small business size standard
covering cable services, which is
‘‘Wired Telecommunications Carriers.’’
The SBA has developed a small
business size standard for this category,
which is: All such firms having 1,500 or
fewer employees. According to Census
Bureau data for 2007, there were a total
of 955 firms in this previous category
that operated for the entire year. Of this
total, 939 firms had employment of 999
or fewer employees, and 16 firms had
employment of 1000 employees or
more. Thus, under this second size
standard, most cable systems are small
and may be affected by rules adopted
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pursuant to the Order. In addition, we
note that the Commission has certified
some OVS operators, with some now
providing service. Broadband service
providers (‘‘BSPs’’) are currently the
only significant holders of OVS
certifications or local OVS franchises.
The Commission does not have
financial or employment information
regarding the entities authorized to
provide OVS, some of which may not
yet be operational. Thus, again, at least
some of the OVS operators may qualify
as small entities.
115. Internet Service Providers. Since
2007, these services have been defined
within the broad economic census
category of Wired Telecommunications
Carriers; that category is defined as
follows: ‘‘This industry comprises
establishments primarily engaged in
operating and/or providing access to
transmission facilities and infrastructure
that they own and/or lease for the
transmission of voice, data, text, sound,
and video using wired
telecommunications networks.
Transmission facilities may be based on
a single technology or a combination of
technologies.’’ The SBA has developed
a small business size standard for this
category, which is: All such firms
having 1,500 or fewer employees.
According to Census Bureau data for
2007, there were 3,188 firms in this
category, total, that operated for the
entire year. Of this total, 3144 firms had
employment of 999 or fewer employees,
and 44 firms had employment of 1000
employees or more. Thus, under this
size standard, the majority of firms can
be considered small. In addition,
according to Census Bureau data for
2007, there were a total of 396 firms in
the category Internet Service Providers
(broadband) that operated for the entire
year. Of this total, 394 firms had
employment of 999 or fewer employees,
and two firms had employment of 1000
employees or more. Consequently, we
estimate that the majority of these firms
are small entities that may be affected
by rules adopted pursuant to the Order.
116. Internet Publishing and
Broadcasting and Web Search Portals.
Our action may pertain to
interconnected VoIP services, which
could be provided by entities that
provide other services such as email,
online gaming, web browsing, video
conferencing, instant messaging, and
other, similar IP-enabled services. The
Commission has not adopted a size
standard for entities that create or
provide these types of services or
applications. However, the Census
Bureau has identified firms that
‘‘primarily engaged in (1) publishing
and/or broadcasting content on the
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Internet exclusively or (2) operating
Web sites that use a search engine to
generate and maintain extensive
databases of Internet addresses and
content in an easily searchable format
(and known as Web search portals).’’
The SBA has developed a small
business size standard for this category,
which is: All such firms having 500 or
fewer employees. According to Census
Bureau data for 2007, there were 2,705
firms in this category that operated for
the entire year. Of this total, 2,682 firms
had employment of 499 or fewer
employees, and 23 firms had
employment of 500 employees or more.
Consequently, we estimate that the
majority of these firms are small entities
that may be affected by rules adopted
pursuant to the Order.
117. Data Processing, Hosting, and
Related Services. Entities in this
category ‘‘primarily * * * provid[e]
infrastructure for hosting or data
processing services.’’ The SBA has
developed a small business size
standard for this category; that size
standard is $25 million or less in
average annual receipts. According to
Census Bureau data for 2007, there were
8,060 firms in this category that
operated for the entire year. Of these,
7,744 had annual receipts of under
$24,999,999. Consequently, we estimate
that the majority of these firms are small
entities that may be affected by rules
adopted pursuant to the Order.
118. All Other Information Services.
The Census Bureau defines this industry
as including ‘‘establishments primarily
engaged in providing other information
services (except news syndicates,
libraries, archives, Internet publishing
and broadcasting, and Web search
portals).’’ Our action pertains to
interconnected VoIP services, which
could be provided by entities that
provide other services such as email,
online gaming, web browsing, video
conferencing, instant messaging, and
other, similar IP-enabled services. The
SBA has developed a small business
size standard for this category; that size
standard is $7.0 million or less in
average annual receipts. According to
Census Bureau data for 2007, there were
367 firms in this category that operated
for the entire year. Of these, 334 had
annual receipts of under $5.0 million,
and an additional 11 firms had receipts
of between $5 million and $9,999,999.
Consequently, we estimate that the
majority of these firms are small entities
that may be affected by our action.
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4. Description of Projected Reporting,
Recordkeeping, and Other Compliance
Requirements
119. The data, information and
document collection required by this
Report and Order falls into five general
categories: market structure, pricing,
demand (i.e., observed sales and
purchases), terms and conditions, and
competition and pricing decisions.
120. Market structure data consists of,
among other things, the situs and type
of facilities owned by a provider (or
leased subject to an indefeasible right of
use) capable of providing special access,
by sold and potential capacity and
ownership, and the proximity of such
facilities to sources of demand. We also
require incumbent LEC providers to
submit data concerning the number,
nature, and situs of UNEs sold. In
addition, we also require additional
market structure data from competitive
providers, such as detailed information
related to non-price factors that may
impact where special access providers
build facilities or expand their network
via UNEs and the history of their facility
deployments in a sample of locations
they serve.
121. Pricing data includes the
quantities sold and prices charged for
special access services, by circuit
element, and information regarding the
regulatory environment for incumbent
LECs.
122. Demand data includes, among
other things, data that identify the
bandwidth of the special access services
sold or purchased, the locations being
served, and other material facts, such as
where those purchases occur (e.g.,
buildings, cell towers) and the nature of
the purchaser (e.g., provider or end
user).
123. Terms and conditions data and
information include, but are not limited
to, information regarding contracts or
generally available plans for special
access services that offer discounts,
circuit portability, or other
competitively relevant benefits, and
whether the terms and conditions
associated with those offerings may
inhibit a buyer’s ability to switch to
other providers, which in turn may
inhibit facilities-based entry into special
access markets.
124. Competition and pricing data,
information and documents include, but
are not limited to, those materials
related to requests for proposals,
advertising and marketing materials,
and in very limited circumstances,
pricing decision documents.
125. Best efforts business broadband
Internet access services include, but are
not limited to, data showing where a
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provider or entity provides such
services, as well as price lists.
126. Questions related to terms and
conditions, competition and pricing
decisions will span a variety of
timeframes specific to the issue
addressed. The majority of the market
structure, pricing and demand data will
be collected for a two-year period. This
period of time allows the analysis to
control for factors that may vary
substantially across geographic areas,
but not within a given geographic area.
5. Steps Taken To Minimize Significant
Economic Impact on Small Entities, and
Significant Alternatives Considered
127. 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.
128. Entities required to respond to
this data request include all providers
and purchasers of special access
services as well as some entities that
provide best efforts business broadband
Internet access services. By ‘‘providers,’’
we mean any entity subject to the
Commission’s jurisdiction under the
Communications Act, as amended, that
provides special access services or
provides a connection that is capable of
providing special access services. By
‘‘purchasers,’’ we mean any entity
subject to the Commission’s jurisdiction
under the Communications Act, as
amended, that purchases special access
services. Providers and purchasers may
include price cap regulated incumbent
LECs, competitive LECs, interexchange
carriers, cable operators, and companies
that provide fixed wireless
communications services. Some entities
that fall under the Commission’s
jurisdiction and provide best efforts
broadband Internet access services, but
fall outside our definitions of
‘‘provider’’ and ‘‘purchaser,’’ are also
required to respond.
129. Because the focus of this
proceeding is on the regulation of
special access services in price-cap
territories, a rate-of-return carrier, which
is not subject to our pricing flexibility
rules, shall not be considered a
‘‘provider’’ to the extent it provides
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special access within its rate-of-return
service area. Likewise, we will not
require data from any provider with
regard to its operations in any
geographic area in which a rate-ofreturn carrier is the incumbent.
Moreover, we will not require a
purchaser to produce data based on
purchases it makes in those areas in
which a rate-of-return carrier is the
incumbent. If, however, a provider or
purchaser prefers to provide data for all
areas without distinguishing between
areas served by price cap LECs and rateof-return LECs, it may do so.
130. Small business concerns were
considered when determining the
nature of the data to be collected, and
identified data, information, and
document requirements were modified
to reduce burdens on small businesses
where possible. The Wireline
Competition Bureau previously issued
two voluntary data requests in this
proceeding. These voluntary requests
allowed each potential respondent to
make its own determination concerning
participation. The responses to the
voluntary data requests provided the
Commission the means and opportunity
to assess which data elements are most
important to its ability to assess the
special access market, and to eliminate
or revise those questions that otherwise
yield less valuable information. The
voluntary data requests also allowed the
Commission to carefully assess the need
to obtain data from all providers and
purchasers of special access services
and certain other services—including
small businesses—to conduct a
comprehensive analysis of the special
access market.
131. In order to conduct a
comprehensive analysis of the special
access market, the Commission will
collect data from all providers and
purchasers of special access services as
well as some entities that provide best
efforts business broadband Internet
access services. The Commission notes
concerns regarding the burden that this
data collection will impose on small
companies, and is mindful of the
importance of seeking to reduce
information collection burdens for small
business concerns, and in particular
those ‘‘with fewer than 25 employees.’’
Competition in the provision of special
access, however, appears to occur at a
very granular level—perhaps as low as
the building/tower. Accordingly, the
Commission finds it necessary to obtain
data from special access providers and
purchasers of all sizes.
132. We structured the collection
somewhat differently for best efforts and
special access services to minimize the
burden on submitters consistent with
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our data requirements and taking into
consideration data that the Commission
already has available to it. Because the
record indicates that entities that
provide best efforts business broadband
Internet access services generally
deliver those services throughout their
footprint over the same network
facilities they use to deliver mass
market broadband Internet access, we
need not collect this data at the same
level of granularity as location and
facilities data for special access. We also
do not require entities with fewer than
15,000 customers and fewer than 1,500
business broadband customers to
provide data regarding their best efforts
business broadband Internet access
services. Commenters assert that those
entities incur the greatest burden when
producing data for the State Broadband
Initiative broadband mapping effort.
133. Other modifications made by the
Commission include: allowing a
provider or purchaser to provide data
for all areas without distinguishing
between areas served by price cap LECs
and rate-of-return LECs; applying
sampling methods where possible;
limiting the market structure, pricing
and demand data collection to a twoyear period; and tailoring the
timeframes for the terms and conditions,
competition and pricing questions to the
specific issue addressed. In addition,
the Commission chose to limit the
production of documents showing the
internal analyses undertaken by
providers in 2010 or thereafter to
evaluate, inter alia, competitive market
shares, changes in competition, changes
in the costs of supplying services,
whether to respond to RFPs, and
identified rate increases and decreases
to circumstances where the Wireline
Competition Bureau determines the
initial data collection was incomplete or
insufficient for analysis.
134. We note that this Report and
Order does not change special access
pricing regulation. We therefore do not
consider the potential alternatives to
special access pricing regulation that
SBA asserted might minimize the
impact on small competitive carriers.
thereof) will also be published in the
Federal Register.
6. Report to Congress
The Commission will send a copy of
the Report and Order, including this
FRFA, in a report to be sent to Congress
and the Government Accountability
Office pursuant to the Small Business
Regulatory Enforcement Fairness Act of
1996. In addition, the Commission will
send a copy of the Order, including the
FRFA, to the Chief Counsel for
Advocacy of the Small Business
Administration. A copy of the Report
and Order and FRFA (or summaries
V. Mandatory Data Collection
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D. Ex Parte Presentations
135. The proceeding shall be treated
as a ‘‘permit-but-disclose’’ proceeding in
accordance with the Commission’s ex
parte rules. Persons making ex parte
presentations must file a copy of any
written presentation or a memorandum
summarizing any oral presentation
within two business days after the
presentation (unless a different deadline
applicable to the Sunshine period
applies). Persons making oral ex parte
presentations are reminded that
memoranda summarizing the
presentation must (1) list all persons
attending or otherwise participating in
the meeting at which the ex parte
presentation was made, and (2)
summarize all data presented and
arguments made during the
presentation. If the presentation
consisted in whole or in part of the
presentation of data or arguments
already reflected in the presenter’s
written comments, memoranda or other
filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying
the relevant page and/or paragraph
numbers where such data or arguments
can be found) in lieu of summarizing
them in the memorandum. Documents
shown or given to Commission staff
during ex parte meetings are deemed to
be written ex parte presentations and
must be filed consistent with
§ 1.1206(b). In proceedings governed by
§ 1.49(f) or for which the Commission
has made available a method of
electronic filing, written ex parte
presentations and memoranda
summarizing oral ex parte
presentations, and all attachments
thereto, must be filed through the
electronic comment filing system
available for that proceeding, and must
be filed in their native format (e.g., .doc,
.xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize
themselves with the Commission’s ex
parte rules.
I. Definitions
The following definitions apply for
purposes of this collection only. They
are not intended to set or modify
precedent outside the context of this
collection.
Affiliated Company means a
company, partnership, corporation,
limited liability company, or other
business entity that is affiliated with a
Provider. An entity and a Provider are
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affiliated if one of them, or an entity that
controls one of them, directly or
indirectly holds a greater than 25
percent ownership interest in, or
controls, the other one.
Best Efforts Business Broadband
Internet Access Service means a best
efforts Internet access data service with
a capacity equal to or greater than a DS1
connection that is marketed to
enterprise customers (including small,
medium, and large businesses). For
purposes of this data collection, Best
Efforts Business Broadband Internet
Access Services do not include mobile
wireless services, as that term is used in
the 15th Annual Mobile Wireless
Competition Report.
Circuit-Based Dedicated Service
(CBDS) means a Dedicated Service that
is circuit-based. Examples of CBDS
include DS1 and DS3 services and
Synchronous Optical Networking
(SONET)/Optical Carrier N (OCN)
services, including point-to-point and
ring services.
Collocation is an offering by an ILEC
whereby a requesting Competitive
Provider’s transmission equipment is
located, for a tariffed charge, at the
ILEC’s central office. It refers to the term
as used pursuant to 47 CFR 69.701 et
seq. of the Commission’s rules for
purposes of applying for a grant of
Phase I or Phase II Pricing Flexibility
from the Commission. The definition of
Collocation excludes Competitive
Providers that collocate in carrier hotels.
Competitive Provider means a
competitive local exchange carrier
(CLEC), interexchange carrier, cable
operator, wireless provider or any other
entity that is subject to the
Commission’s jurisdiction under the
Communications Act of 1934, as
amended, and either provides a
Dedicated Service or provides a
Connection over which a Dedicated
Service could be provided. A
Competitive Provider does not include
an ILEC operating within its incumbent
service territory.
Connection means a wired ‘‘line’’ or
wireless ‘‘channel’’ that provides a
dedicated communication path between
an End User’s Location and the first
Node on a Provider’s network. Multiple
dedicated communication paths serving
one or more End Users at the same
Location should be counted as a single
Connection. A Connection may be a
UNE, including an Unbundled Copper
Loop. A Connection must have the
capability of being used to provide one
or more Dedicated Services; however, a
Connection can be used to provide other
services as well. For example, a
dedicated communication path that is
currently being used to provide a mass
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market broadband service but has the
capability to provide a Dedicated
Service is considered a Connection for
the purpose of this data collection.
Contract-Based Tariff means a Tariff,
other than a Tariff Plan, that is based on
a service contract entered into between
a customer and an ILEC which has
obtained permission to offer contractbased tariff services pursuant to 47 CFR
69.701 et seq. of the Commission’s
pricing flexibility rules or a comparable
tariffed intrastate service contract
between a customer and an ILEC.
Dedicated Service transports data
between two or more designated points,
e.g., between an End User’s premises
and a point-of-presence, between the
central office of a local exchange carrier
(LEC) and a point-of-presence, or
between two End User premises, at a
rate of at least 1.5 megabytes per second
(Mbps) with prescribed performance
requirements that include bandwidth-,
latency-, or error-rate guarantees or
other parameters that define delivery
under a Tariff or in a service-level
agreement. Dedicated Service includes,
but is not limited to, CBDS and PBDS.
For the purpose of this data collection,
Dedicated Service does not include
‘‘best effort’’ services, e.g., mass market
broadband services such as DSL and
cable modem broadband access.
Disconnection means the process by
which a Provider, per a customer
request, terminates billing on one or
more of a customer’s Dedicated Service
circuits.
DS1 and DS3, except where specified,
refer to DS1s and DS3s that are not
UNEs. DS1s and DS3s are Dedicated
Services.
End User means a business,
institutional, or government entity that
purchases Dedicated Service for its own
purposes and does not resell such
service. A mobile wireless service
provider is considered an End User
when it purchases Dedicated Service to
make connections within its own
network, e.g., backhaul to a cell site.
End User Channel Termination
means, as defined in 47 CFR
69.703(a)(2), a dedicated channel
connecting a LEC end office and a
customer premises, offered for purposes
of carrying special access traffic.
Incumbent Local Exchange Carrier
(ILEC) means, for the purpose of this
data collection, a LEC that provides a
Dedicated Service in study areas where
it is subject to price cap regulation
under sections 61.41–61.49 of the
Commission’s rules, 47 CFR 64.41–
61.49.
Indefeasible Right of Use (IRU) means
an indefeasible long-term leasehold
interest that gives the grantee the right
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to exclusively use specified strands of
fiber or allocated bandwidth to provide
a service as determined by the grantee.
An IRU confers on the grantee
substantially all of the risks and rewards
of ownership for the estimated
economic life of the asset. IRUs
typically include the following
elements: (i) Payment of a substantial
fee up front to enter into the IRU
contract; (ii) a minimum total duration
of 10 years; (iii) conveyance of tax
obligations commensurate with the risks
and rewards of ownership to the grantee
(e.g. as opposed to the lesser tax
burdens associated with other forms of
leases); (iv) terms for payment to the
grantor for ancillary services, such as
maintenance fees; (v) all additional
rights and interests necessary to enable
the IRU to be used by the grantee in the
manner agreed to; and (vi) no
unreasonable limit on the right of the
grantee to use the asset as it wishes (e.g.,
the grantee shall be permitted to splice
into the IRU fiber, though such splice
points must be mutually agreed upon by
grantor and the grantee of the IRU).
Location means a building, other
man-made structure, a cell site on a
building, a free-standing cell site, or a
cell site on some other man-made
structure where the End User is
connected. A Node is not a Location.
For the purposes of this data collection,
cell sites are to be treated as Locations
and not as Nodes.
Metropolitan Statistical Area (MSA) is
a geographic area as defined by 47 CFR
22.909(a), 69.703(b).
Node is an aggregation point, a branch
point, or a point of interconnection on
a Provider’s network, including a point
of interconnection to other Provider
networks. Examples include LEC central
offices, remote terminal locations, splice
points (including, for example, at
manholes), controlled environmental
vaults, cable system headends, cable
modem termination system (CMTS)
locations, and facility hubs.
Non-MSA is the portion of an ILEC’s
study area that falls outside the
boundaries of an MSA.
Non-Rate Benefit means a benefit to
the customer other than a discount on
the One Month Term Only Rate, e.g., a
credit towards penalties or nonrecurring charges or the ability to move
circuits without incurring a penalty.
One Month Term Only Rate means,
for purposes of this data collection, the
non-discounted monthly recurring
tariffed rate for DS1, DS3 and/or PBDS
services.
Packet-Based Dedicated Service
(PBDS) means a Dedicated Service that
is packet-based. Examples of PBDS
include Multi-Protocol Label Switched
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(MPLS) services; permanent virtual
circuits, virtual private lines and similar
services provided using ATM, Frame
Relay and other packet technologies;
(Gigabit) Ethernet Services and Metro
Ethernet Virtual Connections; and
Virtual Private Networks (VPN).
Phase I Pricing Flexibility means
regulatory relief for the pricing of End
User Channel Terminations pursuant to
47 CFR 69.711(b), 69.727(a) of the
Commission’s rules.
Phase II Pricing Flexibility means
regulatory relief for the pricing of End
User Channel Terminations pursuant to
47 CFR 69.711(c), 69.727(b) of the
Commission’s rules.
Prior Purchase-Based Commitment
means a type of Volume Commitment
where the commitment is based on
either:
(i) a certain percentage or number of
the customer’s purchased in-service
circuits or lines as measured at the time
of making the Volume Commitment or
measured during a period of time prior
to making the Volume Commitment,
e.g., based on the customer’s billing
records for the current month or prior
month(s); or
(ii) a certain percentage of Revenues
generated by the customer’s purchases
as measured at the time of making the
Volume Commitment or during a period
of time prior to making the Volume
Commitment.
Providers collectively refers to both
ILECs and Competitive Providers.
Purchasers means Competitive
Providers and End Users that are subject
to the Commission’s jurisdiction under
the Communications Act of 1934, as
amended, and purchase Dedicated
Service.
Revenues means intrastate and
interstate billed amounts without any
allowance for uncollectibles,
commissions or settlements. Revenues
do not include billed amounts that are
subsequently discounted by the
Provider, e.g., customer rebates.
Tariff means an intrastate or interstate
schedule of rates and regulations filed
by common carriers.
Tariff Plan means a Tariff, other than
a Contract-Based Tariff, that provides a
customer with either a discount from
any One Month Term Only Rate for the
purchase of DS1 and/or DS3 services or
a Non-Rate Benefit that could be applied
to these services.
Term Commitment means a
commitment to purchase a Dedicated
Service for a period of time, greater than
a month, in exchange for a circuitspecific discount and/or a Non-Rate
Benefit.
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Transport Service means dedicated
transport and includes the services set
forth in 47 CFR 69.709(a)(1)–(3).
Transport Provider means a Provider
that supplies Transport Service.
Unbundled Copper Loop means a
copper wire local loop provided by
ILECs to requesting telecommunications
carriers on a non-discriminatory basis
pursuant to 47 CFR 51.319(a)(1) that can
be used by a Competitive Provider to
provide a Dedicated Service, e.g.,
Ethernet over Copper. An Unbundled
Copper Loop is typically a 2- or 4-wire
loop that the ILEC has conditioned to
remove intervening equipment such as
bridge taps, load coils, repeaters, low
pass filters, range extenders, etc.
between the End User’s Location and
the serving wire center to allow for the
provision of advanced digital services
by a Competitive Provider. These loops
are commonly referred to as dry copper,
bare copper, or xDSL-compatible loops.
An Unbundled Copper Loop is a type of
UNE.
Unbundled Network Element (UNE)
means a local loop provided by an ILEC
to a requesting telecommunications
carrier on a non-discriminatory basis
pursuant to 47 CFR 51.319(a).
Upgrade means that a customer
transitions one or more circuits to a
higher capacity circuit.
Volume Commitment means a
commitment to purchase a specified
volume, e.g., a certain number of
circuits or Revenues, to receive a
discount on Dedicated Services and/or a
Non-Rate Benefit.
II. Mandatory Data Collection Questions
A. Competitive Providers must
respond to the following questions:
1. Are you an Affiliated Company?
b Yes
b No
a. If so, identify the Provider(s) with
whom you have an affiliation (name/
FRN).
2. Do you (i) own a Connection; (ii)
lease a Connection from another entity
under an IRU agreement; or (iii) obtain
a Connection as a UNE from an ILEC to
provide a Dedicated Service?
b Yes
b No
a. If yes, are any of these Connections
to a Location within an area subject to
price cap regulation or within an area
where the Commission has granted
Phase I or Phase II Pricing Flexibility?
b Yes
b No
If you answered ‘‘no’’ to question
II.A.2 or II.A.2.a, then you are not
required to respond to the remaining
questions in II.A or the questions in II.D.
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Facilities Information
3. Provide the number of Locations to
which you provided a Connection as of
December 31, 2010 and as of December
31, 2012 where your company:
a. Owns the Connection;
b. Leases the Connection from another
entity under an IRU agreement; or
c. Obtains the Connection as a UNE
from an ILEC to provide a Dedicated
Service:
i. In total;
ii. In the form of DS1s;
iii. As a DS3; or
iv. As an Unbundled Copper Loop.
4. Provide the information requested
below for each Location as of December
31, 2010 and as of December 31, 2012
to which your company provided a
Connection that you: (i) own; (ii) lease
from another entity under an IRU
agreement; or (iii) obtained as a UNE
from an ILEC to provide a Dedicated
Service.
a. A unique ID for the Location;
b. The actual situs address for the
Location (i.e., land where the building
or cell site is located);
c. The geocode for the Location (i.e.,
latitude and longitude);
d. The Location type (e.g., building,
other man-made structure, cell site in or
on a building, free-standing cell site, or
a cell site on some other man-made
structure like a water tower, billboard,
etc.);
e. Whether the Connection provided
to the location uses facilities leased
from another entity under an IRU or
obtained as a DS1/DS3 UNE or
Unbundled Copper Loop, and in each
case, the name of the lessor of the
majority of the fiber strands and/or
copper loop;
f. Whether any of the Connections to
the location are provided using fiber;
g. The total sold bandwidth of all
Connections provided by you to the
Location in Mbps;
h. The total bandwidth to the
Location sold directly by you to an End
User;
i. The total sold fixed wireless
bandwidth provided by you to the
Location; and
j. The total bandwidth sold by you to
any cell sites at the Location.
5. Provide a map of the routes that
constitute your network that are
followed by fiber that you (a) own or (b)
lease pursuant to an IRU agreement,
excluding routes followed by fiber that
you own or lease pursuant to an IRU
agreement connecting your network to
End User Locations. The map must
include the locations of all Nodes on
your network used to interconnect with
third party networks, and the year that
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each Node went live. Also, provide a
separate map of the routes followed by
fiber that you (a) own or (b) lease
pursuant to an IRU agreement that
connect your network to End User
Locations.
6. We will provide you with a
selected list of the Locations you
reported in response to question II.A.4.
For each identified Location, state the
month and year that you first provided
a Connection to that Location, whether
you originally supplied the Location
over a UNE, and if so, when (if at all)
you switched to using a Connection that
you own or lease as an IRU. If the
Location was first served by your
Connection on or before January 2008,
and the date the Location was first
served is unknown, then enter 00/0000.
7. For each ILEC wire center where
your company is collocated, provide the
actual situs address, the geocode, and
the CLLI code.
8. Explain your business rule(s) used
to determine whether to build a
Connection to a particular Location.
Provide underlying assumptions.
a. List those geographic areas in
which you have built the most
Connections to End Users and explain
why, in your view, your business rule
has been most successful in those areas.
b. Explain how, if at all, business
density is incorporated into your
business rule, and if so, how you
measure business density.
9. Provide the following information:
a. The current situs address of your
U.S. headquarters (i.e., the address of
the land where the headquarters is
located);
b. The year that this site became your
headquarters;
c. Year established and situs address
for any prior U.S. headquarters’ location
for your company, going as far back as
1995, if different from the headquarters’
location listed in response to question
II.A.9.a;
d. The name of any Affiliated
Company that owned, or leased under
an IRU agreement, Connections to five
or more Locations in any MSA at the
time you became affiliated with the
Affiliated Company, going as far back as
1995.
e. For each Affiliated Company listed
in response to question II.A.9.d,
provide:
i. The situs address for each Affiliated
Company’s U.S. headquarters at the
time of affiliation;
ii. The year that the Affiliated
Company established the situs address
listed in response to question II.A.9.e.i
for its U.S. headquarters; and
iii. The year established and situs
address for any prior U.S. headquarters’
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location designated by the Affiliated
Company, going as far back as 1995, if
different from the headquarters’ location
listed in response to question II.A.9.e.i.
10. Provide data, maps, information,
marketing materials, and/or documents
identifying those geographic areas
where you, or an Affiliated Company,
advertised or marketed Dedicated
Service over existing facilities, via
leased facilities, or by building out new
facilities as of December 31, 2010 and as
of December 31, 2012, or planned to
advertise or market such services within
twenty-four months of those dates.
11. Identify the five most recent
Requests for Proposals (RFPs) for which
you were selected as the winning bidder
to provide each of the following: (a)
Dedicated Services; (b) Best Efforts
Business Broadband Internet Access
Services; and, to the extent different
from (a) or (b), (c) some other form of
high-capacity data services to business
customers. In addition, identify the five
largest RFPs (by number of connections)
for which you submitted an
unsuccessful competitive bid between
2010 and 2012 for each of (a) Dedicated
Services; (b) Best Efforts Business
Broadband Internet Access Services;
and, to the extent different from (a) or
(b), (c) some other form of high-capacity
data services to business customers. For
each RFP identified, provide a
description of the RFP, the area covered,
the price offered, and other
competitively relevant information.
Lastly, identify the business rules you
rely upon to determine whether to
submit a bid in response to an RFP.
Billing Information
12. For all Dedicated Services
provided using transmission paths that
you (i) own; (ii) lease from another
entity under an IRU agreement; or (iii)
obtain as a UNE from an ILEC to provide
a Dedicated Service, submit the
following information by rate element
by circuit billed for each month from
January 1 to December 31 for the years
2010 and 2012.
a. The closing date of the monthly
billing cycle in dd/mm/yyyy format;
b. The six-digit 499–A Filer ID of the
customer, where applicable, or other
unique ID if customer does not have a
499–A Filer ID;
c. The Location ID from question
II.A.4.a that can be used to link the
circuit rate elements to the terminating
Location of the circuit (where
applicable);
d. The circuit ID common to all
elements purchased in common for a
particular circuit;
e. The type of circuit (PBDS, or DS1
or DS3, etc.) and its bandwidth;
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f. A unique billing code for the rate
element (see question II.A.14);
g. The number of units billed for this
rate element (note that the bandwidth of
the circuit must not be entered here);
h. The dollar amount of non-recurring
charges billed for the first unit of this
rate element;
i. The dollar amount of non-recurring
charges billed for additional units of
this rate element (if different from the
amount billed for the initial unit);
j. The monthly recurring dollar charge
for the first unit of the rate element
billed;
k. The monthly recurring dollar
charge for additional units (if different
from the amount billed for the initial
unit);
l. The total monthly dollar amount
billed for the rate element billed in the
month;
m. The Term Commitment associated
with this circuit in months;
n. Indicate whether this rate element
is associated with a circuit that
contributes to a Volume Commitment;
o. Indicate whether the circuit
element is owned by you or leased by
you as an IRU but not as a UNE; and
p. The adjustment ID (or multiple
adjustment IDs) linking this rate
element to the unique out-of-cycle
billing adjustments in question II.A.13.a
(below) if applicable.
13. For each adjustment, rebate, or
true-up for billed Dedicated Services,
provide the information requested
below.
a. A unique ID number for the billing
adjustment, rebate, or true-up (see
question II.A.12.p above);
b. The beginning date of the time
period covered by the adjustment or
true-up;
c. The ending date of the time period
covered by the adjustment or true-up;
d. The scope of the billing adjustment,
i.e., whether the adjustment applies to a
single rate element on a single circuit,
more than one rate element on a single
circuit, more than one rate element
across multiple circuits, or an overall
adjustment that applies to every rate
element on every circuit purchased by
the customer;
e. The dollar amount of the
adjustment or true-up; and
f. A brief description of the billing
adjustment, rebate or true-up, e.g., term
discount, revenue target rebate, etc.
14. For each unique billing code,
please provide the following
information below.
a. The billing code for the rate
element;
b. Select the phrase that best describes
the rate element from the list. Names of
some common rate elements are shown
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on the generalized circuit diagram
below:
Revenues, Terms and Conditions
15. What were your Revenues from
the sale of CBDS in 2010 and 2012? For
each year, report Revenues in total,
separately by DS1, DS3, and other CBDS
sales, and separately by customer
category, i.e., sales to Providers and End
Users.
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16. What were your Revenues from
the sale of PBDS in 2010 and 2012? For
each year, report Revenues in total,
separately by customer category, i.e.,
sales to Providers and End Users, and
separately by bandwidth for the
following categories:
a. less than or equal to 1.5 Mbps;
b. greater than 1.5, but less than or
equal to 50 Mbps;
c. greater than 50, but less than or
equal to 100 Mbps;
d. greater than 100, but less than or
equal to 1 Gbps; and
e. greater than 1 Gbps.
17. What percentage of your Revenues
from the sale of DS1, DS3, and PBDS
services in 2012 were generated from an
agreement or Tariff that contains a Prior
Purchase-Based Commitment?
18. If you offer Dedicated Services
pursuant to an agreement or Tariff that
contains either a Prior Purchase-Based
Commitment or a Non-Rate Benefit,
then explain how, if at all, those sales
are distinguishable from similarly
structured ILEC sales of DS1s, DS3s,
and/or PBDS.
19. Provide the business justification
for the Term or Volume Commitments
associated with any Tariff or agreement
you offer for the sale of Dedicated
Services.
B. ILECs must respond to the
following questions:
1. Are you an Affiliated Company?
b Yes
b No
a. If so, identify the Provider(s) with
whom you have an affiliation (name/
FRN).
Facilities Information
i. in total;
ii. in the form of DS1s;
iii. as a DS3; or
iv. as an Unbundled Copper Loop.
3. Provide the information requested
below for each Location to which your
company provided, as of December 31,
2010 and as of December 31, 2012, a
Connection that you (i) own or (ii) you
lease from another entity under an IRU
agreement:
a. A unique ID for the Location;
b. The actual situs address for the
Location (i.e., land where the building
or cell site is located);
c. The geocode for the Location (i.e.,
latitude and longitude);
d. The Location type (e.g., building,
other man-made structure, cell site in or
on a building, free-standing cell site, or
a cell site on some other man-made
structure like a water tower, billboard,
etc.);
e. Whether any of the Connections to
the Location are provided using fiber;
f. The total sold bandwidth of all
Connections provided by you to the
Location in Mbps (exclude connections
sold without a specified bandwidth,
e.g., Unbundled Copper Loops);
g. The total number of Unbundled
Copper Loops sold by you to the
Location;
h. The total bandwidth to the
Location sold by you as UNEs in the
form of DS1s and/or DS3s;
i. The total bandwidth to the Location
sold directly by you to an End User;
j. The total sold fixed wireless
bandwidth provided by you to the
Location; and
k. The total bandwidth sold by you to
any cell sites at the Location.
2. Provide the number of Locations to
which you provided a Connection in
your company study areas as of
December 31, 2010 and as of December
31, 2012 where your company:
a. owns the Connection;
b. leases the Connection from another
entity under an IRU agreement; or
c. sells the Connection as a UNE:
Billing Information
4. For all Dedicated Services provided
using transmission paths that you (i)
own or (ii) lease from another entity
under an IRU agreement and for
Unbundled Copper Loops that you own
and provision, submit the following
information by rate element by circuit
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tkelley on DSK3SPTVN1PROD with
i. Channel mileage facility, channel
mileage, interoffice channel mileage,
special transport (a transmission path
between two serving wire centers
associated with customer designated
locations; a serving wire center and an
international or service area boundary
point; a serving wire center and a hub,
or similar type of connection);
ii. Channel mileage termination,
special transport termination (the
termination of channel mileage facility
or similar transmission path);
iii. Channel termination, local
distribution channel, special access line,
customer port connection (Ethernet) (a
transmission path between a customer
designated location and the associated
wire center);
iv. Clear channel capability (not
shown) (an arrangement which allows a
customer to transport, for example,
1.536 Mbps of information on a 1.544
Mbps line rate with no constraint on the
quantity or sequence of one and zero
bits);
v. Cross-connection (not shown)
(semi-permanent switching between
facilities, sometimes combined with
multiplexing/demultiplexing);
vi. Multiplexing (not shown)
(channelizing a facility into individual
services requiring a Lower capacity or
bandwidth); and
vii. Class of service and/or committed
information rate (not shown) (for
Ethernet, the performance
characteristics of the network and
bandwidth available for a customer port
connection).
c. If none of the possible entries
describes the rate element, enter a short
description.
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2593
o. The number of units billed for this
rate element (note that the bandwidth of
the circuit must not be entered here);
p. The dollar amount of non-recurring
charges billed for the first unit of this
rate element;
q. The dollar amount of non-recurring
charges billed for additional units of
this rate element (if different from the
amount billed for the initial unit);
r. The monthly recurring dollar charge
for the first unit of the rate element
billed;
s. The monthly recurring dollar
charge for additional units (if different
from the amount billed for the initial
unit);
t. The total monthly dollar amount
billed for the rate element;
u. The Term Commitment associated
with this circuit in months;
v. Indicate whether this rate element
is associated with a circuit that
contributes to a Volume Commitment;
w. Indicate whether this rate element
is associated with a circuit that
contributes to a revenue commitment in
a Tariff Plan;
x. Indicate whether this rate element
was purchased pursuant to a ContractBased Tariff;
y. Indicate whether the circuit
element is owned by you or leased by
you as an IRU;
z. The adjustment ID (or multiple
adjustment IDs) linking this rate
element to the unique out-of-cycle
billing adjustments in question II.B.5.a
(below) if applicable; and
aa. If the rate element is sold under a
Tariff, list the Tariff name.
5. For each adjustment, rebate, or
true-up for billed Dedicated Services,
provide the information requested
below.
a. A unique ID for the billing
adjustment or true-up (see question
II.B.4.z above);
b. A unique ID number for the
contract or Tariff from which the
adjustment originates;
c. The beginning date of the time
period covered by the adjustment or
true-up;
d. The ending date of the time period
covered by the adjustment or true-up;
e. The scope of the billing adjustment,
i.e., whether the adjustment applies to a
single rate element on a single circuit,
more than one rate element on a single
circuit, more than one rate element
across multiple circuits, or an overall
adjustment that applies to every rate
element on every circuit purchased by
the customer;
f. The dollar amount of the
adjustment or true-up;
g. Whether the adjustment is
associated with a Term Commitment,
and if so, the length of the term
specified in the contract necessary to
achieve the rebate;
h. Whether the adjustment is
associated with a Volume Commitment,
and if so, the number of circuits and/or
dollar amount specified in the contract
necessary to achieve the rebate; and
i. If the adjustment is for some other
reason, a brief description of the reason
for the adjustment.
6. For each unique billing code,
please provide the following
information below.
a. The billing code for the rate
element;
b. The phrase that best describes the
rate element from the list. Names of
some common rate elements are shown
on the generalized circuit diagram
below:
i. Channel mileage facility, channel
mileage, interoffice channel mileage,
special transport (a transmission path
between two serving wire centers
associated with customer designated
locations; a serving wire center and an
international or service area boundary
point; a serving wire center and a hub,
or similar type of connection);
ii. Channel mileage termination,
special transport termination (the
termination of channel mileage facility
or similar transmission path);
iii. Channel termination, local
distribution channel, special access line,
customer port connection (Ethernet) (a
transmission path between a customer
designated location and the associated
wire center);
iv. Clear channel capability (not
shown) (an arrangement which allows a
customer to transport, for example,
1.536 Mbps of information on a 1.544
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tkelley on DSK3SPTVN1PROD with
billed for each month from January 1 to
December 31 for the years 2010 and
2012.
a. The closing date of the monthly
billing cycle in dd/mm/yyyy format;
b. The six-digit 499A Filer ID of the
customer, where applicable, or other
unique ID if customer does not have a
499A Filer ID;
c. The Location ID from question
II.B.3.a that can be used to link the
circuit rate elements to the terminating
Location of the circuit (where
applicable);
d. The circuit ID common to all
elements purchased in common for a
particular circuit;
e. The type of circuit, (DS1 sold as a
UNE, DS3 sold as a UNE, Unbundled
Copper Loop, PBDS, non-UNE DS1s or
DS3s, etc.) and the bandwidth of the
circuit;
f. The serving wire center/mileage
rating point Common Language
Location Identification (CLLI) of one
end of the circuit (MRP1);
g. The serving wire center/mileage
rating point CLLI of the other end of the
circuit (MRP2);
h. The latitude of MRP1 to 5 decimal
places;
i. The longitude of MRP1 to 5 decimal
places;
j. The latitude of MRP2 to 5 decimal
places;
k. The longitude of MRP2 to 5
decimal places;
l. End of the circuit (1-MRP1 or 2MRP2) associated with this rate
element;
m. The billing code for the rate
element (see question II.B.6);
n. The density pricing zone for the
rate element;
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tkelley on DSK3SPTVN1PROD with
Mbps line rate with no constraint on the
quantity or sequence of one and zero
bits);
v. Cross-connection (not shown)
(semi-permanent switching between
facilities, sometimes combined with
multiplexing/demultiplexing);
vi. Multiplexing (not shown)
(channelizing a facility into individual
services requiring a Lower capacity or
bandwidth); and
vii. Class of service and/or committed
information rate (not shown) (for
Ethernet, the performance
characteristics of the network and
bandwidth available for a customer port
connection).
c. If none of the possible entries
describes the rate element, enter a short
description.
7. List the CLLI code for each one of
your wire centers that was subject to
price cap regulation as of December 31,
2010 and as of December 31, 2012, i.e.,
those wire centers in your incumbent
territory where the Commission had not
granted you pricing flexibility. For those
MSAs and Non-MSAs where the
Commission granted you Phase I or
Phase II Pricing Flexibility as of
December 31, 2010 and as of December
31, 2012, list the CLLI codes for the wire
centers associated with each MSA and
Non-MSA for each year, the name of the
relevant MSA and Non-MSA for each
year, and the level of pricing flexibility
granted for the MSA and Non-MSA, i.e.,
Phase I and/or Phase II Pricing
Flexibility.
Revenues, Terms and Conditions
Information
8. What were your Revenues from the
sale of CBDS services in 2010 and 2012?
For each year, report Revenues in total,
separately by DS1, DS3, and other CBDS
sales, and separately by customer
category, i.e., sales to Competitive
Providers and End Users.
9. What were your Revenues from the
sale of PBDS services in 2010 and 2012?
For each year, report Revenues in total,
separately by customer category, i.e.,
sales to Competitive Providers and End
Users, and separately by bandwidth for
the following categories:
a. Less than or equal to 1.5 Mbps;
b. Greater than 1.5, but less than or
equal to 50 Mbps;
c. Greater than 50, but less than or
equal to 100 Mbps;
d. Greater than 100, but less than or
equal to 1 gigabyte per second (Gbps);
and
e. Greater than 1 Gbps.
10. What were your Revenues from
the One Month Term Only Rate charged
for DS1, DS3, and/or PBDS services in
2010 and 2012? For each year, report
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Revenues in total, separately by DS1,
DS3, and PBDS sales as applicable, and
separately by customer category, i.e.,
sales to Competitive Providers and End
Users.
11. How many customers were
purchasing DS1, DS3, and/or PBDS
services pursuant to your One Month
Term Only Rates as of December 31,
2012? Report customer numbers in total,
separately for DS1, DS3, and PBDS
services as applicable, and separately by
customer category, i.e., the number of
DS1, DS3, and PBDS service customers
that were Competitive Providers and
End Users.
12. Separately list all available Tariff
Plans and Contract-Based Tariffs that
can be applied to the purchase of DS1,
DS3 and/or PBDS services and provide
the information requested below for
each plan.
a. This plan is a:
b Tariff Plan
b Contract-Based Tariff (select one)
b. Plan name:
c. Tariff and Section Number(s):
d. This plan contains:
b Term Commitment(s)
b Volume Commitment(s)
b Non-Rate Benefit option(s) (select
all that apply)
e. If the plan contains options for
Non-Rate Benefits, explain of the
available Non-Rate Benefits.
f. This plan can be applied to the
purchase of:
b DS1 services
b DS3 services
b PBDS
b Other (select all that apply)
g. In what geographic areas is this
plan available, e.g., nationwide, a
particular region of the country, certain
states, certain MSAs, a particular study
area?
h. To receive a discount or Non-Rate
Benefit under this plan, must the
customer make a Prior Purchase-Based
Commitment?
b Yes
b No
i. Do purchases of DS1 or DS3
services in areas outside of your price
cap study area(s) (e.g., purchases from
an Affiliated Company that is a CLEC)
count towards meeting any Volume
Commitment to receive a discount or
Non-Rate Benefit under this plan?
b Yes
b No
b N/A (no Volume Commitment)
j. Do DS1 or DS3 purchases in areas
where you are subject to price cap
regulation and where pricing flexibility
has not been granted count towards
meeting any Volume Commitment to
receive a discount or Non-Rate Benefit
under this plan?
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b Yes
b No
b N/A (no Volume Commitment)
k. Do non-tariffed PBDS purchases by
the customer count towards meeting any
Volume Commitment to receive a
discount or Non-Rate Benefit under this
plan?
b Yes
b
No b N/A (no Volume Commitment)
l. Do purchases by the customer for
services other than DS1s, DS3s, and
PBDS count towards meeting any
Volume Commitment to receive a
discount or Non-Rate Benefit under this
plan?
b Yes
b No
b N/A (no Volume Commitment)
m. Is the discount or Non-Rate Benefit
available under this plan conditioned
on the customer limiting its purchase of
UNEs, e.g., customer must keep its
purchase of UNEs below a certain
percentage of the customer’s total
spend?
b Yes
b No
n. What were your Revenues from the
provision of DS1, DS3, and/or PBDS
services under this plan in 2010 and in
2012? For each year, report Revenues in
total, separately by DS1, DS3, and PBDS
sales as applicable, and separately by
customer category, i.e., sales to
Competitive Providers and End Users.
o. What percentage of the Revenues
reported above in response to question
II.B.12.n for 2010 and 2012 were
generated and also reported as Revenues
under a separately identified Tariff Plan
or Contract-Based Tariff?
p. What percentage of the Revenues
generated by this plan in 2012 resulted
from a Term Commitment of five or
more years?
q. What is the business justification
for any Term or Volume Commitments
associated with this plan?
r. How many customers were
subscribed to this plan as of December
31, 2012? Report customer numbers in
total, separately for DS1, DS3, and PBDS
services as applicable, and separately by
customer category, i.e., the number of
DS1, DS3, and/or PBDS customers that
were Competitive Providers and End
Users.
s. Of those customers subscribed as of
December 31, 2012, how many in 2012
failed to meet any Volume Commitment
or Term Commitment required to retain
a discount or Non-Rate Benefit they
originally agreed to when entering into
this plan?
13. Do you have any non-tariffed
agreement with an End User or
Competitive Provider that, directly or
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tkelley on DSK3SPTVN1PROD with
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indirectly, provides a discount or a NonRate Benefit on the purchase of tariffed
DS1s, DS3s, and/or PBDS, restricts the
ability of the End User or Competitive
Provider to obtain UNEs, or negatively
affects the ability of the End User or
Competitive Provider to purchase
Dedicated Services?
b Yes
b No
a. If so, identify each agreement
below, including the parties to the
agreements, the effective date, and a
summary of the relevant provisions.
C. Entities that provide Best Efforts
Business Broadband Internet Access
Services must respond to the following
questions:
1. Do you have fewer than 15,000
customers and fewer than 1,500
business broadband customers?
b Yes
b No
2. If you answered ‘‘no’’ to question
II.C.1, then answer the following
questions:
a. Did you submit data in connection
with the State Broadband Initiative (SBI)
Grant Program for 2010?
b Yes
b No
b. Did you submit data in connection
with the SBI Grant Program for 2012?
b Yes
b No
If you answered ‘‘no’’ to questions
II.C.1.a and II.C.1.b, then you do not
need to answer any further questions in
this section.
c. Did the data you submitted in
connection with the SBI Grant Program
in 2010 accurately and completely
identify the areas in which you offered
Best Efforts Business Broadband
Internet Access Services and exclude
those areas where you did not offer such
services as of December 31, 2010?
b Yes
b No
i. If yes, then provide the list of prices
for those Best Efforts Business
Broadband Internet Access Services that
you were marketing in each census
block submitted in connection with the
SBI Grant Program as of December 31,
2010. If there is a price variation within
your service footprint, indicate which
prices are associated with which census
blocks.
ii. If no, then provide a list of all the
census blocks in which you were
providing Best Efforts Business
Broadband Internet Access Services as
of December 31, 2010, and a list of the
prices for those Best Efforts Business
Broadband Internet Access Services that
you were marketing in each census
block as of December 31, 2010. If there
is a price variation within your service
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19:57 Jan 10, 2013
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footprint, indicate which prices are
associated with which census blocks.
d. Did the data you submitted in
connection with the SBI Grant Program
in 2012 accurately and completely
identify the areas in which you offered
Best Efforts Business Broadband
Internet Access Services and exclude
those areas where you did not offer such
services as of December 31, 2012?
b Yes
b No
i. If yes, then provide the list of prices
for those Best Efforts Business
Broadband Internet Access Services that
you were marketing in each census
block submitted in connection with the
SBI Grant Program as of December 31,
2012. If there is a price variation within
your service footprint, indicate which
prices are associated with which census
blocks.
ii. If no, then provide a list of all the
census blocks in which you were
providing Best Efforts Business
Broadband Internet Access Services as
of December 31, 2012, and a list of the
prices for those Best Efforts Business
Broadband Internet Access Services that
you were marketing in each census
block as of December 31, 2012. If there
is a price variation within your service
footprint, indicate which prices are
associated with which census blocks.
D. All Providers must respond to the
following questions:
1. Describe your company’s short term
and long-range promotional and
advertising strategies and objectives for
winning new—or retaining current—
customers for Dedicated Services. In
your description, please describe the
size (e.g., companies with 500
employees or less, etc.), geographic
scope (e.g., national, southeast, Chicago,
etc.), and type of customers your
company targets or plans to target
through these strategies.
2. Identify where your company’s
policies are recorded on the following
Dedicated Service-related processes: (a)
Initiation of service; (b) service
Upgrades; and (c) service
Disconnections. For instance, identify
where your company records recurring
and non-recurring charges associated
with the processes listed above. If
recorded in a Tariff, provide the specific
Tariff section(s). If these policies are
recorded in documents other than
Tariffs, list those documents and state
whether they are publicly available. If
they are publicly available, explain how
to find them. For documents that are not
publicly available, state whether they
are conveyed to customers orally or in
writing.
3. Explain the procedures your
company follows when a customer
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2595
continues to purchase End-user Channel
Terminations from your company but
requests to change Transport Providers
from your company to another Provider.
In addition, answer the following
questions regarding your process:
a. Where are your procedures that
govern these changes recorded? Provide
the relevant Tariff number and
section(s), if applicable, or identify
which documents other than Tariffs
contain these procedures. For
documents that are not publicly
available, state whether they are
conveyed to customers orally or in
writing.
b. In 2012, what was the average
length of time that it took your company
to complete the process of connecting
End User Channel Terminations to a
new Transport Provider?
c. Can purchasers negotiate timelines
on a case-by-case basis?
d. Do any of your company’s policies,
whether contained in Tariffs or other
documents, limit the maximum number
of circuits that can be connected to a
new Transport Provider per day, per
week, or per month? If yes, what is that
number and what is the business
rationale for this requirement?
e. How does connecting to a new
Transport Provider impact the rate a
customer pays for the End User Channel
Terminations the customer continues to
purchase from your company?
f. While the change in Transport
Providers is pending completion and
before there is a Disconnection in the
Transport Service provided by your
company, are there instances where the
customer must pay a higher rate for the
Transport Service provided by your
company? If so, then detail those
circumstances and what rates would
apply before and after the request is
made. For example, if the customer’s
contract expires or is terminated while
a request to connect to a new Transport
Provider is pending, would the
customer pay a One Month Term Only
Rate until there is a Disconnection in
the Transport Service provided by your
company?
E. Purchasers that are mobile wireless
service providers must respond to the
following questions:
1. How many cell sites do you have
on your network?
2. Provide the information requested
below for each cell site on your network
as of December 31, 2010 and as of
December 31, 2012.
a. A unique ID for the cell site;
b. The actual situs address of the cell
site (i.e., land where the cell site is
located) if the cell site is located in or
on a building;
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c. The geocode for the cell site (i.e.,
latitude and longitude);
d. The CLLI code of the incumbent
LEC wire center that serves the cell site,
where applicable;
e. Whether the cell site is in or on a
building, is a free-standing cell site, or
is on some other type of man-made
structure, e.g., a water tower, billboard,
etc.;
f. If the cell site is served by a CBDS,
indicate the equivalent number of DS1s
used;
g. If the cell site is served by a PBDS,
indicate the bandwidth of the circuit in
Mbps;
h. If the cell site is served by a
wireless Connection, indicate the
bandwidth of the circuit in Mbps;
i. The name of the Provider(s) that
supplies your Connection to the cell
site; and
j. If you self-provide a Connection to
the cell site, the provisioned bandwidth
of that self-provided Connection.
F. All Purchasers must respond to the
following questions:
tkelley on DSK3SPTVN1PROD with
Expenditures Information
1. What is the principal nature of your
business, e.g., are you a CLEC, cable
system operator, fixed wireless service
provider, wireless Internet service
provider, terrestrial or satellite mobile
wireless service provider,
interconnected VoIP service provider,
etc.?
2. What were your expenditures, i.e.,
dollar volume of purchases, on
Dedicated Services for 2010 and 2012?
For each year, report expenditures in
total, separately for CBDS and PBDS
purchases, and separately for purchases
from ILECs and Competitive Providers.
3. Provide your company’s
expenditures, i.e., dollar volume of
purchases, for DS1s, DS3s, and/or PBDS
purchased from ILECs pursuant to a
Tariff in 2010 and in 2012. For each of
the following categories, report
expenditures for each year in total and
separately for DS1s, DS3s and PBDS:
a. All DS1s, DS3s, and PBDS;
b. DS1s, DS3s, and PBDS purchased at
One Month Term Only Rates;
c. DS1s, DS3s, and PBDS purchased
under Tariff Plans;
d. DS1s, DS3s, and PBDS purchased
under Contract-Based Tariffs;
e. DS1s, DS3s, and PBDS purchased
under Tariff Plans that contained a
Term Commitment but not a Volume
Commitment;
f. DS1s, DS3s, and PBDS purchased
under Tariff Plans that contained a Prior
Purchase-Based Commitment;
i. Of the total (and for the separate
DS1, DS3, and PBDS totals where
applicable), indicate the average
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19:57 Jan 10, 2013
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discount from the One Month Term
Only Rate incorporated in the
expenditures.
For purposes of calculating the
percentages described above, an
example would be a Tariff Plan that
requires a purchase of 20 DS1s and 10
DS3 and generates expenditures of
$2,000 for calendar-year 2012. If those
same circuits were purchased at One
Month Term Only Rates of $100 per DS1
and $200 per DS3, then total
expenditures would instead be $4,000.
Since the Tariff Plan under this scenario
generated 50% of the expenditures that
would be generated from One Month
Term Only Rates, the discount would be
50%.
g. DS1s, DS3s, and PBDS purchased
under Contract-Based Tariffs that
contained a Term Commitment but not
a Volume Commitment; and
h. DS1s, DS3s, and PBDS purchased
under Contract-Based Tariffs that
contained a Prior Purchased-Based
Commitment;
i. Of the total (and for the separate
DS1 and DS3 totals if available),
indicate the average discount from the
One Month Term Only Rate
incorporated in the expenditures.
An example of how to calculate this
percentage can be found at question
II.F.3.f.i.
4. What were your expenditures, i.e.,
dollar volume of purchases, on DS1s,
DS3, and/or PBDS purchased from
Competitive Providers pursuant to a
Tariff in 2010 and in 2012? Report
expenditures in total and separately for
DS1s, DS3s and PBDS, as applicable, for
the following categories for each year:
a. All DS1s, DS3s, and PBDS;
b. DS1s, DS3s, and PBDS purchased at
One Month Term Only Rates;
c. DS1s, DS3s, and PBDS purchased
under Tariffs that contained a Term
Commitment but not a Volume
Commitment;
d. DS1s, DS3s, and PBDS purchased
under Tariffs that contained a Prior
Purchase-Based Commitment;
i. Of the total (and for the separate
DS1, DS3, and PBDS totals where
applicable), indicate the average
discount from the One Month Term
Only Rate incorporated in the
expenditures.
An example of how to calculate this
percentage can be found at
questionII.F.3.f.i.
5. What were your expenditures, i.e.,
dollar volume of purchases, on DS1s,
DS3s, and/or PBDS purchased from
ILECs and Competitive Providers
pursuant to an agreement (not a Tariff)
in 2010 and in 2012? Report
expenditures in total, separately for
purchases from ILECs andCompetitive
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Providers, and separately for DS1s, DS3s
and PBDS, as applicable, for the
followingcategories for each year:
a. All DS1s, DS3s, and PBDS;
b. DS1s, DS3s, and PBDS purchased at
a non-discounted rate;
c. DS1s, DS3s, and PBDS purchased
under a non-tariffed agreement that
contained a Term Commitment but not
a Volume Commitment;
d. DS1s, DS3s, and PBDS purchased
under a non-tariffed agreement that
contained a Prior Purchase-Based
Commitment;
i. Of the total (and for the separate
DS1, DS3, and PBDS totals where
applicable), indicate the average
discount from the non-discounted rate
incorporated in the expenditures.
An example of how to calculate this
percentage can be found at question
II.F.3.f.i.
6. What were your expenditures, i.e.,
dollar volume of purchases, on PBDS
purchased under a Tariff in 2010 and in
2012?
a. Separately for purchases from ILECs
and Competitive Providers for the
following service bandwidth categories:
i. less than or equal to 1.5 Mbps;
ii. greater than 1.5, but less than or
equal to 50 Mbps;
iii. greater than 50, but less than or
equal to 100 Mbps;
iv. greater than 100, but less than or
equal to 1 Gbps; or
v. greater than 1 Gbps.
7. What were your expenditures, i.e.,
dollar volume of purchases, on nontariffed PBDS in 2010 and in 2012?
a. Separately for purchases from ILECs
and Competitive Providers for the
following service bandwidth categories:
i. less than or equal to 1.5 Mbps;
ii. greater than 1.5, but less than or
equal to 50 Mbps;
iii. greater than 50, but less than or
equal to 100 Mbps;
iv. greater than 100, but less than or
equal to 1 Gbps; or
v. greater than 1 Gbps.
Terms and Conditions Information
8. Explain whether the terms and
conditions of any contract to which you
are a party for the purchase of Dedicated
Services or the policies of any of your
Providers constrain your ability to:
a. Decrease your purchases from your
current Provider(s);
b. Purchase services from another
Provider currently operating in the
geographic areas in which you purchase
services;
c. Purchase non-tariffed services, such
as Ethernet services, from your current
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Provider of tariffed DS1, DS3, and/or
PBDS services or from other Providers
operating in the geographic areas in
which you purchase tariffed services;
d. Contract with companies that are
considering entering the geographic
areas in which you purchase tariffed
services;
e. Move circuits, for example, moving
your DS1 and/or DS3 End-User Channel
Terminations to connect to another
Transport Provider; or
f. Obtain Dedicated Services.
Relevant terms and conditions, among
others, may include: (a) Early
termination penalties; (b) shortfall
provisions; (c) overlapping/
supplemental discounts plans with
different termination dates; (d)
requirements to include all services,
including new facilities, under a Tariff
Plan or Contract-Based Tariff; or (e)
requiring purchases in multiple
geographic areas to obtain maximum
discounts.
In your answer, highlight contracts
with particularly onerous constraints by
comparison with more typical contract
provisions. Also, at a minimum, list: (a)
The Provider and indicate whether the
Provider is an ILEC or a Competitive
Provider; (b) a description of the term or
condition; (c) the geographic area in
which the tariffed services are provided;
(d) the name of the vendor providing the
tariffed service; and (e) the specific
Tariff number(s) and section(s), or if the
policy at issue is recorded in documents
other than Tariffs, list those documents
and how you obtained them.
If you allege that a term, condition, or
Provider’s policy negatively affects your
ability to obtain Dedicated Services,
state whether you have brought a
complaint to the Commission, a state
commission or court about this issue
and the outcome. If you have not
brought a complaint, explain why not.
9. Explain your experience with
changing Transport Providers between
January 1, 2010 and December 31, 2012,
describing whether and how it has
impacted your ability to purchase
Dedicated Services. Where appropriate,
identify the Provider(s) in your
responses below.
a. How many times did you change
Transport Providers while keeping your
End User Channel Terminations with an
ILEC or Competitive Provider? An
estimate of the number of circuits
moved to a new Transport Provider, or
the number of such changes requested
for each year, is sufficient.
b. What was the length of time, on
average, it took for the ILEC or
Competitive Provider to complete the
process of connecting your last-mile
End-user Channel Terminations to
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18:21 Jan 10, 2013
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another Transport Provider? An
estimate is sufficient.
c. Were you given the opportunity to
negotiate time lines on a case-by-case
basis?
d. How did connecting to a new
Transport Provider impact the rate you
paid for the End User Channel
Terminations you continued to
purchase from the ILEC or Competitive
Provider?
e. Did connecting to a new Transport
Provider typically impact the rate you
continued to pay for Transport Service
from the incumbent Provider while the
change in Transport Providers remained
pending? If so, what was the average
percentage change in rates? Did you
ever pay a One Month Term Only Rate
during that time?
10. Describe any circumstances since
January 1, 2010, in which you have
purchased circuits pursuant to a Tariff,
solely for the purpose of meeting a
Volume Commitment required for a
discount or Non-Rate Benefit from your
Provider (i.e., you did not utilize the
circuits). In your description, provide at
least one example, which at a minimum,
lists:
a. The geographic area (e.g., MSA or
Non-MSA) in which you purchased the
unnecessary circuits;
b. The name of the Provider providing
the circuits at issue;
c. A description of the Volume
Commitment;
d. The Tariff and section number(s), if
applicable, of the specific terms and
conditions described;
e. A comparison of the dollar amount
of the unnecessary circuit(s) purchased
versus the dollar amount of penalties
your company would have had to pay
had it not purchased and/or maintained
the circuit(s), and a description of how
that comparison was calculated.
11. For each year for the past five
years, state the number of times and in
what geographic area(s) you have
switched from one Provider of
Dedicated Services to another.
12. Explain the circumstances since
January 1, 2010 under which you have
paid One Month Term Only Rates for
DS1, DS3, and/or PBDS services and the
impact, if any, it had on your business
and your customers. In your response,
indicate any general rules you follow, if
any, concerning the maximum number
of circuits and maximum amount of
time you will pay at One Month Term
Only Rates, and your business rationale
for any such rules.
13. Separately list all available Tariffs
under which your company purchases
DS1s, DS3s, and/or PBDS and provide
the information requested below for
each plan.
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2597
a. This plan is a:
b Tariff Plan
b Contract-Based Tariff (select one)
b. Plan name:
c. Provider name:
d. Tariff and Section Number(s):
e. Tariff type:
b Interstate
b Intrastate
f. This plan contains:
b Term Commitment(s)
b Volume Commitment(s)
b Non-Rate Benefit option(s) (select
all that apply)
g. If the plan contains Non-Rate
Benefits, identify the Non-Rate Benefits
that were relevant to your decision to
purchase services under this plan.
h. This plan can be applied to the
purchase of:
b DS1 services
b DS3 services
b PBDS
b Other (select all that apply)
i. In what geographic areas do you
purchase DS1s, DS3s, and/or PBDS
under this plan, e.g., nationwide, a
particular region of the country, certain
states, certain MSAs, a particular study
area?
j. To receive a discount or Non-Rate
Benefit under this plan, does your
company make a Prior Purchase-Based
Commitment?
b Yes
b No
k. If this is an ILEC plan, do DS1 or
DS3 purchases your company makes
outside the study area(s) of the ILEC
(e.g., purchases from an Affiliated
Company of the ILEC that is providing
out-of-region service as a CLEC) count
towards meeting any Volume
Commitment to receive a discount or
Non-Rate Benefit under this plan?
b Yes
b No
b N/A (no Volume Commitment, not
an ILEC plan)
i. If you answered yes, in what
geographic areas outside the study
area(s) of the ILEC, do you purchase
these DS1s and/or DS3s?
ii. Of the geographic areas identified,
in which of those areas would your
company have purchased from a
different Provider, if at all, had it not
been for the discounts or Non-Rate
Benefits received under this plan? In
your response, indicate whether the
Provider that you would have purchased
from has Connections serving that
geographic area.
l. If this is an ILEC plan, do DS1 and/
or DS3 purchases your company makes
from the ILEC in price cap areas where
the Commission has not granted the
ILEC pricing flexibility count towards
meeting any Volume Commitment to
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receive a discount or Non-Rate Benefit
under this plan?
b Yes
b No
b N/A (no Volume Commitment, not
an ILEC plan)
i. If you answered yes, then identify
the price cap areas where you purchase
DS1s and/or DS3s that count towards
meeting any Volume Commitment to
receive a discount or Non-Rate Benefit
under this plan?
m. If this is an ILEC plan, do DS1 and/
or DS3 purchases your company makes
from the ILEC in areas where the
Commission has granted either Phase I
or Phase II Pricing Flexibility count
towards meeting any Volume
Commitment to receive a discount or
Non-Rate Benefit under this plan?
b Yes
b No
b N/A (no Volume Commitment, not
an ILEC plan)
i. If you answered yes, in what
geographic areas subject to pricing
flexibility do you purchase DS1s and/or
DS3s that count towards meeting any
Volume Commitment to receive a
discount or Non-Rate Benefit under this
plan?
ii. Of the geographic areas identified,
in which of those areas would your
company have purchased from a
different Provider, if at all, had it not
been for the requirements of the Tariff
Plan? In your response, indicate
whether the Provider that you would
have purchased from has Connections
serving that geographic area.
n. If this is an ILEC plan, do nontariffed PBDS purchases you make from
this ILEC count towards meeting any
Volume Commitment to receive a
discount or Non-Rate Benefit under this
plan?
b Yes
b No
b N/A (no Volume Commitment, not
an ILEC plan)
i. If you answered yes, in what
geographic areas do you purchase nontariffed PBDS that counts towards
meeting any Volume Commitment to
receive a discount or Non-Rate Benefit
under this plan.
ii. Of the geographic areas identified,
in which of those areas would your
company have purchased PBDS from a
different Provider, if at all, had it not
been for the requirements of the plan?
In your response, indicate whether the
Provider that you would have purchased
from has Connections serving that
geographic area.
o. If this is an ILEC plan, do purchases
you make for services other than DS1s,
DS3s, and PBDS from this ILEC count
towards meeting any Volume
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18:21 Jan 10, 2013
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Commitment to receive a discount or
Non-Rate Benefit under this plan?
b Yes
b No
b N/A (no Volume Commitment, not
an ILEC plan)
i. If you answered yes, identify the
other services purchased and the
geographic areas where you purchase
these services that count towards
meeting any Volume Commitment to
receive a discount or Non-Rate Benefit
under this plan.
ii. Of the geographic areas identified,
in which of those areas would your
company have purchased those other
services from a different Provider, had it
not been for the requirements of the
plan? In your response, indicate
whether the Provider that you would
have purchased from has Connections
serving that geographic area.
p. Is the discount or Non-Rate Benefit
available under this plan conditioned
on the customer limiting its purchase of
UNEs, e.g., the customer must keep its
purchase of UNEs below a certain
percentage of the customer’s total
spend? If yes, then provide additional
details about the condition.
14. Do you have any non-tariffed
agreement with an ILEC that, directly or
indirectly, provides a discount or a NonRate Benefit on the purchase of tariffed
DS1, DS3, and/or PBDS services,
restricts your ability to obtain UNEs, or
negatively affects your ability to
purchase Dedicated Services?
b Yes
b No
a. If so, identify each agreement
below, including the parties to the
agreement, the effective date, and a
summary of the relevant provisions.
G. Non-Providers and Non-Purchasers
instructed to respond to this data
collection must respond to the
following:
1. If you must respond to this data
collection because you filed the FCC
Form 477 in 2012 to report the
provision of ‘‘broadband connections to
end user locations’’ but are not (a) a
Provider or a Purchaser as defined in
this data collection or (b) an entity that
provides Best Efforts Business
Broadband Internet Access Services,
then indicate as such below and
complete the certification
accompanying this data collection.
b I am not a Provider.
b I am not a Purchaser.
b I do not provide Best Efforts
Business Broadband Internet Access
Services.
(select all that apply)
Certification
I have examined the response and
certify that, to the best of my
PO 00000
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knowledge, all statements of fact, data,
and information contained therein are
true and correct.
Signature: lllllllllllll
Printed Name: lllllllllll
Title:
lllllllllllllll
Date: llllllllllllllll
* Respondents are reminded that
failure to comply with these data
reporting requirements may subject
them to monetary forfeitures of up to
$150,000 for each violation or each day
of a continuing violation, up to a
maximum of $1,500,000 for any single
act or failure to act that is a continuing
violation. False statements or
misrepresentations to the Commission
may be punishable by fine or
imprisonment under Title 18 of the U.S.
Code.
VI. Ordering Clauses
136. Accordingly, it is ordered that
pursuant to sections 1, 4(i), 4(j), 5, 201–
205, 211, 215, 218, 219, 303(r), 332, 403,
and 503 of the Communications Act of
1934, as amended, 47 U.S.C. 151, 154(i),
154(j), 155, 201, 202, 203, 204, 205, 211,
215, 218, 219, 303(r), 332, 403, 503, and
section 706 of the Telecommunications
Act of 1996, 47 U.S.C. 1302, the Report
and Order, with all attachments, is
adopted March 12, 2013, except for
those rules and requirements involving
Paperwork Reduction Act burdens,
which shall become effective upon
announcement in the Federal Register
of OMB approval and an effective date
of the rule(s), and except as specified in
paragraph 137.
137. It is further ordered that we
delegate authority to the Wireline
Competition Bureau to implement a
data collection in accordance with the
terms of this Report and Order, and that
this delegation of authority is effective
upon adoption, see 47 U.S.C. 155(c).
138. It is further ordered that the data
collection shall become effective upon
announcement in the Federal Register
of Office of Management and Budget
approval and an effective date of the
requirements.
139. It is further ordered that the
Commission SHALL SEND a copy of
this Report and Order to Congress and
the Government Accountability Office
pursuant to the Congressional Review
Act, see 5 U.S.C. 801(a)(1)(A).
140. 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.
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Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2013–00278 Filed 1–10–13; 8:45 am]
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Agencies
[Federal Register Volume 78, Number 8 (Friday, January 11, 2013)]
[Rules and Regulations]
[Pages 2571-2599]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00278]
[[Page 2571]]
Vol. 78
Friday,
No. 8
January 11, 2013
Part IV
Federal Communications Commission
-----------------------------------------------------------------------
47 CFR Part 69
Special Access for Price Cap Local Exchange Carriers; AT&T Corporation
Petition for Rulemaking To Reform Regulation of Incumbent Local
Exchange Carrier Rates for Interstate Special Access Services; Final
Rule and Proposed Rule
Federal Register / Vol. 78, No. 8 / Friday, January 11, 2013 / Rules
and Regulations
[[Page 2572]]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 69
[WC Docket No. 05-25; RM-10593; FCC 12-153]
Special Access for Price Cap Local Exchange Carriers; AT&T
Corporation Petition for Rulemaking To Reform Regulation of Incumbent
Local Exchange Carrier Rates for Interstate Special Access Services
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Commission continues the process of
reviewing its special access rules to ensure that they reflect the
state of competition today and promote competition, investment, and
access to dedicated communications services businesses across the
country rely on every day to deliver their products and services to
American consumers. The Report and Order initiates a comprehensive data
collection and specifies the nature of the data to be collected and the
scope of respondents. An initial version of the data collection is
attached to the Report and Order as an appendix; the Report and Order
delegates authority to the Commission's Wireline Competition Bureau to
review and modify the collection to implement the requirements of the
Report and Order.
DATES: Effective March 12, 2013. The information collection and
recordkeeping requirements contained in section III and appendix A of
the document are not effective until they are approved by the Office of
Management and Budget.
FOR FURTHER INFORMATION CONTACT: Jamie Susskind, Wireline Competition
Bureau, Pricing Policy Division, (202) 418-1520 or (202) 418-0484
(TTY), or via email at Jamie.Susskind@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order in WC Docket No. 05-25, RM-10593, FCC 12-153, adopted on
December 11, 2012, and released on December 18, 2012. This summary
should be read with its companion document, the Further Notice of
Proposed Rulemaking (FNPRM) summary published elsewhere in this issue
of the Federal Register. The summary is based on the public redacted
version of the document, the full text of which is available
electronically via the Electronic Comment Filing System at https://fjallfoss.fcc.gov/ecfs/ or may be downloaded at https://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-12-153A1.pdf. The full
text of this document is also available for public inspection during
regular business hours in the Commission's Reference Center, 445 12th
Street SW., Room CY-A257, Washington, DC 20554. The complete text may
be purchased from Best Copy and Printing, Inc., 445 12th Street SW.,
Room CY-B402, Washington, DC 20554. To request alternate formats for
persons with disabilities (e.g. Braille, large print, electronic files,
audio format, etc.) or reasonable accommodations for filing comments
(e.g. accessible format documents, sign language interpreters, CARTS,
etc.), send an email to fcc504@fcc.gov or call the Commission's
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice) or
(202) 418-0432 (TTY).
I. Introduction
1. In the Report and Order and Further Notice of Proposed
Rulemaking, we continue the process of reviewing our special access
rules to ensure that they reflect the state of competition today and
promote competition, investment, and access to dedicated communications
services businesses across the country rely on every day to deliver
their products and services to American consumers. Specifically, we
initiate a comprehensive data collection and seek comment on a proposal
to use the data to evaluate competition in the market for special
access services.
II. Background
A. Price Cap Regulation
2. In 1991, the Commission implemented a system of price cap
regulation by which the largest incumbent LECs (often referred to today
as price cap LECs) establish their interstate access charges. Price cap
regulation is a form of incentive regulation that seeks to ``harness
the profit-making incentives common to all businesses to produce a set
of outcomes that advance the public interest goals of just, reasonable,
and nondiscriminatory rates, as well as a communications system that
offers innovative, high quality services.'' In contrast to rate-of-
return regulation, which preceded price cap regulation and focuses on
an incumbent LEC's costs and fixes the profits an incumbent LEC may
earn based on those costs, price cap regulation focuses primarily on
the prices that an incumbent LEC may charge. The access charges of
price cap LECs originally were set at levels based on the rates that
existed at the time the LECs entered the price cap regime. Increases in
their rates have, however, been limited over the course of price cap
regulation by the Price Cap Index (PCI) that is adjusted annually
pursuant to formulae set forth in Part 61 of our rules.
3. The PCI is designed to limit the prices LECs charge for service.
The PCI has three basic components: (1) A measure of inflation, i.e.,
the Gross Domestic Product (chain weighted) Price Index (GDP-PI); (2) a
productivity factor or ``X-Factor,'' which represents the amount by
which LECs can be expected to outperform economy-wide productivity
gains; and (3) adjustments to account for ``exogenous'' cost changes
that are outside the LEC's control and not otherwise reflected in the
PCI. The Commission's price cap formula permitted special access PCIs
to increase by a measure of inflation, minus a productivity offset (the
X-factor). The X-factor represented the amount by which LECs were
expected to outperform economy-wide productivity gains.
B. Pricing Flexibility
4. Pursuant to the pro-competitive, deregulatory mandates of the
1996 Act, the Commission adopted the Pricing Flexibility Order in 1999
to ensure that the Commission's regulations did not unduly interfere
with the operation of interstate access markets as competition
developed. In that Order, the Commission developed competitive showing
rules (also referred to as ``triggers'') intended to measure whether
market conditions in a given Metropolitan Statistical Area would
warrant various levels of regulatory relief. To make a competitive
showing, the Commission held that price cap LECs would need to
demonstrate
either that (1) competitors unaffiliated with the incumbent LEC have
established operational collocation arrangements in a certain
percentage of the incumbent LEC's wire centers in an MSA, or (2)
unaffiliated competitors have established operational collocation
arrangements in wire centers accounting for a certain percentage of
the incumbent LEC's revenues from the services in question in that
MSA. In both cases, the incumbent also must show, with respect to
each wire center, that at least one collocator is relying on
transport facilities provided by a transport provider other than the
incumbent LEC.
5. Under the rules, the Commission granted relief in two phases.
Phase I relief, which required lower levels of collocation, gave price
cap LECs the ability to lower their rates through contract tariffs and
volume and term
[[Page 2573]]
discounts, but required that they maintain their generally available
price cap-constrained tariff rates to ``protect[ ] those customers that
lack competitive alternatives.'' Phase II relief, which required higher
levels of collocation, permitted price cap LECs to raise or lower their
rates throughout an area, unconstrained by price cap regulations
included in the Commission's part 61 and part 69 rules.
C. The CALLS Order
6. In 2000, the Commission adopted the CALLS plan, a five-year
interim, industry-proposed regime designed to move towards a more
market-based approach to rate setting. The CALLS plan separated special
access services into their own basket and applied a separate X-factor
to that basket. The X-factor under the CALLS plan, unlike under prior
price cap regimes, is not a productivity factor but ``a transitional
mechanism * * * to lower rates for a specified time period for special
access.'' The CALLS X-factor for special access was 3.0 percent in
2000, and increased to 6.5 percent for 2001, 2002, and 2003. For the
final year of the CALLS plan (July 1, 2004-June 30, 2005), the special
access X-factor was set equal to inflation. As the Commission has yet
to replace the interim CALLS plan X-factor, price cap LECs' special
access rates have remained frozen at 2003 levels (excluding any
necessary exogenous cost adjustments).
D. AT&T's Petition for Rulemaking and 2005 Special Access NPRM
7. On October 15, 2002, AT&T Corp. filed a petition for rulemaking
requesting that the Commission revoke the pricing flexibility rules and
revisit the CALLS plan as it applies to special access services. AT&T
contended both that the predictive judgment at the core of the Pricing
Flexibility Order had not been confirmed by marketplace developments,
and that BOC special access rates exceeded competitive levels and hence
were unjust and unreasonable in violation of Sec. 201 of the
Communications Act. Because the predictive judgment had proven wrong,
AT&T asserted, the Commission was compelled to revisit its pricing
flexibility rules in a rulemaking proceeding. Price cap LECs countered
that, among other things, their special access rates were reasonable
and therefore lawful, that there was robust competition for special
access services, that the collocation-based competitive showings were
an accurate metric for competition, and that data relied upon by AT&T
were unreliable in the context used by AT&T.
8. On January 31, 2005, the Commission released the Special Access
NPRM, which initiated a broad examination of what regulatory framework
to apply to price cap LECs' interstate special access services
following the expiration of the CALLS plan, including whether to
maintain or modify the Commission's pricing flexibility rules.
Moreover, the NPRM sought to examine whether the available marketplace
data supported maintaining, modifying, or repealing these rules. It
also responded to AT&T's request for interim relief.
E. Recent Actions in the Proceeding
1. Competitive and Regulatory Developments
9. Numerous regulatory and competitive developments affected the
special access market in the years following the release of the Special
Access NPRM. In July 2007, the Commission sought comment in the record
in light of subsequent industry consolidation, a Government
Accountability Office (GAO) report on special access competition, and
other competitive developments. Moreover, as a result of a series of
forbearance proceedings, the scope of services affected by the Special
Access NPRM narrowed considerably.
2. Analytical Framework
10. In November 2009, the Commission's Wireline Competition Bureau
(Bureau) sought comment on the appropriate analytical framework for
examining the issues that the Special Access NPRM raised. In July 2010,
the Bureau held a staff workshop on the economics of special access to
gather further input on the analytical framework issue.
3. Voluntary Data Requests
11. In October 2010, the Bureau issued a public notice inviting the
public to submit data on the presence of competitive special access
facilities to assist the Commission in evaluating the issues that the
Special Access NPRM raised. In September 2011, the Bureau issued a
second public notice requesting the submission of competition and
pricing data.
4. Pricing Flexibility Suspension Order
12. On August 22, 2012, the Commission adopted an order that
concluded that the special access pricing flexibility rules discussed
above were not working as predicted and suspended the 90-day deadline
for granting a petition for pricing flexibility based on those flawed
rules.
III. Report and Order
13. In the Report and Order, we require providers and purchasers of
special access service and certain other services to submit data,
information and documents to allow the Commission to conduct a
comprehensive evaluation of competition in the special access market.
A. Scope
14. In this section, we identify the scope of the data collection,
the entities that must respond to the data collection, and the
geographic areas and time periods for which they must respond.
15. A preliminary note on terminology: For purposes of the Report
and Order and consistent with Commission precedent, we do not include
mass market Internet access services (e.g., DSL or cable modem service)
in our definition of special access. We use the term ``location'' to
mean a building, other man-made structure, a cell site on a building, a
free-standing cell site, or a cell site on some other man-made
structure where the end user is connected, but is not a ``node.'' We
use the term ``node'' to mean an aggregation point, a branch point, or
a point of interconnection on a provider's network, including a point
of interconnection to other provider networks. ``End user'' means a
business, institutional, or government entity that purchases dedicated
service for its own purposes and does not resell such service. We use
the term ``connection'' to mean a wired ``line'' or wireless
``channel'' that provides a dedicated communication path between an end
user's location and the first node on a provider's network. Examples
include LEC central offices, remote terminal locations, splice points
(including, for example, at manholes), controlled environmental vaults,
cable system headends, cable modem termination system (CMTS) locations,
and facility hubs. We use the terms ``bandwidth'' and ``capacity''
interchangeably.
16. Services Covered. Traditionally, federal antitrust agencies
have begun competitive analyses in a variety of contexts by defining
relevant product and geographic markets. As noted in the Further
Notice, however, these agencies have more recently noted that
``analysis need not start with market definition * * * although
evaluation of competitive alternatives available to customers is always
necessary at some point in the analysis.'' In particular, ``[e]vidence
of competitive effects can inform market definition, just as market
[[Page 2574]]
definition can be informative regarding competitive effects.''
17. Taking these considerations into account, we collect
information on the full array of traditional special access services,
including DS1s and DS3s, and packet-based dedicated services such as
Ethernet. Further, although there is little disagreement in the record
as to the definition of special access services, and that as
traditionally defined they do not include mass market Internet access
services, there is some question as to whether the relevant product
market should encompass not only special access services but other
high-capacity data services targeted at enterprise customers. Some
commenters have argued that best efforts broadband Internet access
services--even when marketed to small- to medium-sized business
customers--are not part of the relevant product market. These
commenters note, among other things, that prices for best efforts
services differ substantially from special access services for
comparable bandwidth. Others have argued that best efforts services are
often marketed with express comparisons to special access services, and
therefore the Commission should collect data on both.
18. We need not resolve the market-definition issue here--for
purposes of this data collection, we conclude it is best to simply take
a broad approach. To ensure that we collect data on services that
enterprise customers may view as substitutable, we define the scope of
our data collection to include best efforts business broadband Internet
access services, which we define as best efforts Internet access data
services with a capacity equal to or greater than a DS1 connection that
are marketed to enterprise customers (including small, medium, and
large businesses, as well as existing special access customers). As
described below, we structure the collection somewhat differently for
best efforts and special access services to minimize the burden on
submitters consistent with our data requirements and taking into
consideration data that the Commission already has available to it.
19. We also note that we intend to collect data on intrastate
special access services and special access services offered via a
state-level tariff or state-approved contract. Doing so is necessary to
ensure that we have a clear picture of all competition in the
marketplace.
20. Providers and purchasers that must respond. In order to conduct
a comprehensive analysis of the special access market, we will collect
data from all providers and purchasers of special access services as
well as some entities that provide best efforts business broadband
Internet access services. By ``providers,'' we mean any entity subject
to the Commission's jurisdiction under the Communications Act, as
amended, that provides special access services or provides a connection
that is capable of providing special access services. By
``purchasers,'' we mean any entity subject to the Commission's
jurisdiction under the Communications Act, as amended, that purchases
special access services.
21. To clarify our terminology, we note that some providers are
``competitive providers,'' by which we mean a competitive local
exchange carrier (CLEC), interexchange carrier, cable operator,
wireless provider or any other provider that is not an incumbent LEC
operating within its incumbent service territory. We also note that a
rate-of-return carrier, which is not subject to our pricing flexibility
rules, shall not be considered a ``provider'' to the extent it provides
special access within its rate-of-return service area. This exemption
does not apply to services not regulated on a rate-of-return basis or
provided outside a rate-of-return carrier's service area by itself or
an affiliate.
22. We note concerns regarding the burden that this data collection
will impose on small companies, and are mindful of the importance of
seeking to reduce information collection burdens for small business
concerns, and in particular those ``with fewer than 25 employees.'' Any
effort to lessen the burdens of this information collection on small
companies must be balanced against our goal of obtaining the most
accurate and useful data possible. Competition in the provision of
special access appears to occur at a very granular level--perhaps as
low as the building/tower. A provider that owns 50 of its own channel
terminations to end users may not be competitively significant within
an area as large as an MSA, but could be a significant competitor
within smaller areas, such as zip code areas. Therefore, we believe it
necessary to obtain data from special access providers and purchasers
of all sizes, but we shall not require entities with fewer than 15,000
customers and fewer than 1,500 business broadband customers to provide
data regarding their best efforts business broadband Internet access
services. As some commenters have urged us to do, this approach will
incorporate data and information from nascent technologies, such as
WISPs.
23. Geographic scope. With some exceptions, we will collect data on
a nationwide basis to ensure the most comprehensive and accurate
assessment of competition in markets for special access services
subject to our pricing flexibility rules. Because the focus of this
proceeding is on the regulation of special access services in price-cap
territories, we will not require data from any provider with regard to
its operations in any geographic area in which a rate-of-return carrier
is the incumbent, as such carriers are not subject to the pricing
flexibility rules. Moreover, we will not require a purchaser to produce
data based on purchases it makes in those areas in which a rate-of-
return carrier is the incumbent. If, however, a provider or purchaser
prefers to provide data for all areas without distinguishing between
areas served by price cap LECs and rate-of-return LECs, it may do so.
24. We considered whether we could reduce the burden of this data
collection by collecting all of our data from a sample of locations
(e.g., business locations and wireless towers) and/or larger geographic
areas. However, we decline to adopt a sampling approach because we
believe that the process of identifying and collecting a representative
sample would be unlikely to substantially reduce provider burdens, and
could significantly lengthen the data collection process. With respect
to a sample of geographic regions, it is very difficult to design a
representative sample without coming close to covering the entire
country--a fact that minimizes the likelihood that a geographic sample
would actually reduce the burden on respondents. Further, respondents
likely would be required to search multiple databases and compare the
results of those searches to determine which of their customer
locations were in the selected geographies, resulting in substantial
setup costs. Finally, even where a respondent need only consult a
single database, it typically would have to engage in essentially the
same, or greater (to account for the geographic sample), amount of
coding to ``pull'' a sample of records as it would if it pulled all
records.
25. A methodology based on sampling specific locations suffers from
the same database and coding issues as geographic sampling, and further
would likely lengthen the data collection process by a significant
margin. Although the most recent data we have are several years old,
they suggest that competitive providers may serve a relatively small
proportion of all locations that have special access. As a result, a
random sample from all locations would need to be very large--
[[Page 2575]]
perhaps approaching a census--to obtain sufficient data on competitive
providers. Alternatively, we could require all respondents to identify
all the relevant locations so that a smaller sample could be drawn from
that census in a scientific way. That approach likely would lengthen
the data collection process because it would require two collections to
be conducted sequentially: First a census of served locations from
which a sample could be drawn, and then a subsequent issuing of
questions about locations in the sample. It would also fail to
significantly reduce the overall burden for several reasons. First, the
burden of producing the census would be similar to, though perhaps
lower than, the burden of producing the information identified above.
Second, because of the need to tie sampled locations to the relevant
databases, the effort to respond to questions about a sample of
locations would, for many respondents, raise, or at least not reduce,
their burden. Third, while the costs in burden saved through sampling
are likely to be relatively small, the statistical error of any
conclusions based on a sample could be significantly higher than
conclusions based on a census.
26. We do choose to sample for the narrower purpose of seeking to
understand the evolution of competitive provider buildout of a
connection to a specific end user's location. Such an analysis requires
facilities deployment data over a long period of time, which would be
burdensome for many providers to produce for their entire networks. By
collecting this data in a representative sample of geographic areas, it
is possible to minimize the burden on providers while providing
accurate and useful data on this narrow aspect of providers' behavior.
The decision to sample for this narrow purpose does not suffer from the
same issues discussed above. First, the sample can be significantly
smaller than would be necessary for a more general analysis. Second,
the sample will be drawn from the universe of locations identified in
the course of the larger data collection; this sequential collection is
unlikely to materially impact our ability to undertake the proposed
analysis. Finally, the information to be produced from the sample is
limited to facilities deployment data.
27. Temporal scope. We will collect the majority of the data for
calendar years 2010 and 2012. We find that collecting data on these
issues for two calendar years appropriately balances the need for time
series data with the burden of producing data for multiple years. We
choose calendar year 2012 because it is the most recent calendar year
for which data will be available once Paperwork Reduction Act approval
is obtained for the information collection adopted in this order. And
by collecting 2012 data, the Commission will obtain the most up-to-date
data available while still providing respondents a reasonable time to
gather and submit their data. We choose calendar year 2010 because,
while we recognize that it likely is more burdensome to produce 2010
data than 2011 data, a two year period between observations is more
likely to include changes in the relevant variables than a one year
period. We also recognize that our second voluntary data request sought
data for 2010, which will mean those providers who responded to that
request will be able to rely on their past efforts in responding to
some elements of this collection.
28. We will collect two years' worth of data for market structure,
price, and demand (i.e., observed sales and purchases). This allows for
an analysis that controls for factors that may vary widely across
geographic areas, but not within a given geographic area (e.g., entry
factors such as building codes or soil quality). For example, if we
observe differences in deployment between different geographies, these
may be due to differences in factors such as building codes, climate,
or soil quality. Controlling for these can be challenging. However,
these kinds of variables do not typically change significantly over a
few years. In contrast, observing differences in deployment that emerge
over a few years within the same geographic region permits an analysis
that controls for such factors. Conversely, if we have only one year's
worth of data, we will be less able to associate particular factors
with levels of deployment.
29. Most importantly, collecting a time series of data will help us
assess potential competition. One way to assess potential competition
is by obtaining structural, pricing, and demand data over a two-year
period to observe and better understand how and why competition has
evolved over time and, therefore, where potential competition exists.
Our proposal to collect historical data, which could be used to predict
potential competition, is consistent with Commission precedent, as well
as that of the U.S. antitrust agencies.
B. Nature of Data To Be Collected
30. The data, information, and documents required to conduct a
robust analysis of special access competition fall into five general
categories: Market structure, pricing, demand (i.e., observed sales and
purchases), terms and conditions, and competition and pricing
decisions. In this section, we describe the nature of the data to be
collected. Further, we include in Appendix C an initial version of the
data collection that incorporates the data, information, and documents
we describe below. We direct the Bureau to review and modify this
collection, consistent with the authority delegated in section III.D
below, to implement the requirements of this Report and Order.
31. Market structure data. We intend to assess the market structure
for special access market(s). By this, we mean that we intend to
examine comprehensive data on the situs and type of facilities capable
of providing special access, by sold and potential capacity and
ownership, and the proximity of such facilities to sources of demand.
Specifically, we require each provider to submit data and information
for connections that are owned by the provider, leased under an
indefeasible right of use (IRU), or, for competitive providers,
obtained from an incumbent LEC as an unbundled network element (UNE) to
provide a dedicated service, including, but not limited to:
Locations to which the provider has sold a connection to
an end user or a provider;
Information on the nature of the location and the nature
of the connection serving that location, including:
[cir] The situs of the location and whether the location is a
building, other free-standing site, cell site on a building, or free-
standing cell site;
[cir] Whether the connection is fiber, wireless (and if wireless,
the provisioned bandwidth of the channel), or some other medium; and
[cir] The provisioned bandwidth of each type of connection.
32. We require incumbent LEC providers to submit data concerning
the number, nature, and situs of UNEs sold.
33. We require competitive providers to submit detailed information
related to non-price factors that may impact where special access
providers build facilities or expand their network via UNEs. For
example, providers may choose to expand their facilities in areas where
they have already made significant facilities investments, like near
their headquarters or a point of interconnection, to take advantage of
cost efficiencies. We therefore require respondents to provide detailed
information about such non-price factors. In addition, we require
competitive providers to provide us with any business rules they use to
[[Page 2576]]
determine whether to build a connection to a location.
34. In addition, we require competitive providers to submit the
history of their facilities deployment in a sample of locations served
by a competitive provider. Each competitive provider will report the
date on which it provided a connection to each of its locations within
the sample and locations proximate to the locations in the sample,
including when and where it relied upon UNEs to establish a connection.
The locations selected will include areas in which no pricing
flexibility has been granted, as well as Phase I and/or Phase II
pricing flexibility areas. These detailed data on the evolution of
competitive provider networks will help us understand how competitive
facilities are deployed over time and whether the presence of
competitive facilities in fact provides a threat of competitive entry
in nearby or adjacent areas.
35. We require competitive providers to provide detailed
collocation situs information. We also require competitive providers to
submit maps of the routes followed by fiber that they own or lease
subject to an IRU, of nodes that interconnect with third party
networks, and of connections from their networks to locations. These
maps will indicate where competitive providers can provide, or could
potentially provide, special access services. Among other things, such
maps will identify points of interconnection between competitive
providers of special access services and incumbent LEC facilities.
36. Price data. We require price data to characterize competition
in the market for special access services. Such data will allow
comparisons of different providers' prices, after controlling, where
necessary, for differences in cost-causing factors, and can allow the
consideration of the effect of market structure on price. Price data
include, but are not limited to:
The quantities sold and prices charged for special access
services, by circuit element;
[cir] As reflected in billing data;
[cir] Including, where applicable and necessary, but not limited
to, identifiers for the nature of the service, such as:
[ssquf] Universal Service Order Code (USOC) or comparable code;
[ssquf] Circuit and/or mileage end-points;
[ssquf] Quantities relevant for billing (such as bandwidth and
mileage);
[ssquf] Term, volume, or revenue commitments relevant to billing;
and
[ssquf] Adjustments, rebates, or true-ups provided or received over
time.
The Bureau collected similar data on a voluntary basis in the Special
Access Facilities Data Public Notice.
37. To understand this pricing information, we must also take into
account the regulatory environment. For competitive providers, we
already know the regulatory environment--they are unregulated with
respect to price at the federal level. In contrast, the Commission
regulates the prices incumbent LECs charge through a variety of
methods: rate-of-return regulation, price-cap regulation, and Phases I
and II of pricing flexibility. We therefore require incumbent LECs to
list the form of price regulation that applies to their interstate
special access services on a wire-center-by-wire-center basis.
38. Demand data (i.e., observed sales and purchases). Demand data
are a key input into any statistical analysis of how price varies with
competition. Competitors generally are attracted to areas of high
demand density because such areas provide opportunities to enjoy
economies of scale and scope. Consequently, an understanding of the
relationship between prices for observed sales and purchases and
competitive entry will facilitate an assessment of market power. In
addition, the record indicates that competition in the provision of
special access appears to occur at a very granular level--perhaps as
low as the building/tower or a floor of a building. We therefore need
to understand observed sales or purchases of special access at the most
granular level possible, because, among other things, sold or purchased
volumes and volume density are a key driver of special access costs and
an important determinant of the likelihood of potential entry. We
therefore will collect, including but not limited to, data that
identify:
The bandwidth of the special access services sold or
purchased;
The location(s) being served;
The nature of the demand (e.g., provider, end user,
other);
The locations of mobile wireless providers' cell sites and
connections to those cell sites;
Total expenditures on special access services by
purchasers; and
Revenues earned from the sales of special access.
39. Terms and conditions data and information. The record reflects
questions about whether the terms and conditions associated with the
sale of special access services may inhibit a buyer's ability to switch
to other providers, which in turn may inhibit facilities-based entry
into special access markets. We therefore will collect, from providers
and purchasers of special access services, data and information that
includes but is not limited to:
Generally available plans for tariffed special access
services that offer discounts, circuit portability, or other
competitively relevant benefits;
The business rationale for those plans;
The extent of special access sales and purchases made that
are and are not subject to discounts, circuit portability, or other
benefits;
How such plans work with each other, and in conjunction
with contract-based tariffs and other forms of contracts that govern
the sale and pricing of special access services;
Customer information associated with such plans and
contract-based tariffs (e.g., the number of customers subscribed to an
individual plan or contract-based tariff);
How discounts, circuit portability, and other
competitively relevant benefits for sales of special access services by
competitive providers differ from those of the incumbent LEC providers;
Contract-based tariffs;
Provider policies and internal procedures governing
deployment, disconnection, upgrades, and switching providers;
The impact certain terms and conditions may have on a
purchaser's ability to reduce purchases from its existing provider,
switch providers, or purchase unregulated services;
Generally available tariffs, contract-based tariffs, and
other forms of contracts that govern the sale and pricing of special
access services and services that are sold (or priced) in connection
with special access services; and
A description of the customers targeted by providers
(e.g., size, geographic scope, type) and the promotional and
advertising strategies for winning or retaining such customers.
40. Competition and pricing decision data, information and
documents. We require providers of special access to submit data,
information and/or documents related to competition and pricing
decisions for special access services, including selected competitive
provider responses to Requests for Proposals (RFPs).
41. Specifically, we require each competitive provider to identify
the five most recent RFPs for which it was selected as the winning
bidder to provide each of the following: (i) Best effort business
broadband Internet access services, (ii) special access services, and,
to the extent different from (i) or (ii), and (iii) some other form of
high-capacity data services to
[[Page 2577]]
business customers. We also require each competitive provider to
identify the five largest (by number of connections) RFPs for which it
submitted an unsuccessful competitive bid between 2010 and 2012 for
each of (i) best effort business broadband Internet access services,
(ii) special access services, and, to the extent different from (i) or
(ii), and (iii) some other form of high-capacity data services to
business customers. For each RFP identified, the competitive provider
shall provide a description of the RFP, the area covered, the price
offered, as well as other competitively relevant information regarding
RFPs specified by the Bureau.
42. Parties contend that advertising and marketing relating to
special access, regardless of whether a competitive provider has
actually built out facilities to a particular location, may impact
pricing and deployment decisions. Accordingly, we require competitive
providers of special access to submit data, maps, information,
marketing materials, and/or documents identifying those geographic
areas where they advertised or marketed special access services over
existing facilities, via leased facilities, or by building out new
facilities as of December 31, 2010 and December 31, 2012, or planned to
advertise or market such services within twenty four months following
those dates.
43. Another useful category of information may be documents showing
the internal analyses undertaken by providers in 2010 or thereafter to
evaluate, inter alia, competitive market shares, changes in
competition, changes in the costs of supplying services, whether to
respond to RFPs, and identified rate increases and decreases. We
decline at this time to require all providers to submit that
information given the burden of identifying and producing such
documents. Instead, we shall take a two-stage approach with these
internal documents. Specifically, we delegate authority to the Bureau
to require a provider to submit such documents if the Bureau finds in
an order that (a) a provider's responses to the business-rules
questions are incomplete or insufficient for analysis, (b) a
competitive provider's responses to the history-of-deployment questions
are incomplete or insufficient for analysis, or (c) the data collected
for a particular geographic area are incomplete or insufficient for
analysis.
44. Best Efforts Business Broadband Internet Access Services. As
noted above, we define the scope of our data collection to include best
efforts business broadband Internet access services. Because the record
indicates that entities that provide best efforts business broadband
Internet access services generally deliver those services throughout
their footprint over the same network facilities they use to deliver
mass market broadband Internet access, we need not collect this data at
the same level of granularity as location and facilities data for
special access. Data showing whether an entity is providing best
efforts business broadband Internet access service at, for example, the
census block level would not diminish the rigor of our analysis, but
would significantly reduce the burden of producing the necessary data.
Indeed, many entities already submit data in connection with the State
Broadband Initiative (SBI) Grant Program as to where they offer best
efforts broadband Internet access services at the census block level.
45. Further, we already have information on enterprise
subscriptions to broadband Internet access services through our Form
477 collection. In their biannual Form 477 filings, facilities-based
providers of fixed-location Internet access connections (which include
providers equipping UNEs, special access lines, or other leased
facilities) submit information, by census tract (areas roughly the size
of zip codes), on all Internet access connections (greater than 200
kbps) to end users, including businesses. They also identify the
percentage of connections within each census tract that is residential.
46. We therefore require, subject to the exception set forth in
paragraph 22 above, entities that submitted data in connection with the
SBI Grant Program and offer best efforts business broadband Internet
access services to identify, on a granular but not location-by-location
basis (ideally, at the census block level), the geographic areas in
which they offer those services. The Bureau may accept such entities'
certification that the data they have submitted in connection with the
SBI Grant Program accurately and completely identify the areas in which
they offer best efforts business broadband Internet access services and
exclude those areas where they do not offer such services. We further
require such entities to submit a price list for the best efforts
business broadband Internet access services that they offered within
their footprint. Such price list should identify the list prices for
the best efforts business broadband Internet access services they
offered, whether there was any price variation within their service
footprint, and, if so, the nature of such variation. This information,
taken together with the Form 477 data and the data we will collect on
UNEs that could be used to provide these services, will allow us to
analyze of the availability of, demand for, and pricing of best efforts
business broadband Internet access services.
47. Additional Data Not Collected. We recognize that the collection
we adopt today does not include every type of data that is available.
Commenters suggest we ask for a broad array of competition data and
information. Others have recommended obtaining information about
providers' past lateral construction projects, future upgrade or
expansion plans and additional information on competitive bidding. We
agree that some such information may be qualitatively useful, and, for
example, have required the production of data on competitive provider
RFP responses and future plans to inform our analysis. We must,
however, balance the administrative burdens with the potential benefits
of a broader collection, and believe that this Report and Order will
allow us to collect data and information sufficient for our purposes
while minimizing, to the extent possible, the burden we impose on
industry.
48. Further, we agree with commenters who argue that to understand
the impact of competition in special access, it is important to grasp
the effects of potential, as well as actual, competition. To this end
we are requiring the production of information that will illuminate
those factors that affect providers' decisions to expand existing
networks, e.g., the non-price factors that may impact where special
access providers build new facilities, business rules for deployment, a
sample of historical deployment, points of collocation, fiber network
maps, availability and use of UNEs, internal analysis of pricing
decisions, a selected set of responses to RFPs, and internal
competitive analysis.
C. Statutory Authority
49. Several provisions of the Communications Act and the
Telecommunications Act give the Commission authority to adopt this data
collection. Under section 218 of the Communications Act, we may
``obtain from [common] carriers and from persons directly or indirectly
controlling or controlled by, or under direct or indirect common
control with, such carriers full and complete information necessary to
enable the Commission to perform the duties and carry out the objects
for which it was created.'' As such, section 218 empowers us to collect
data from
[[Page 2578]]
incumbent LECs, competitive LECs, CMRS providers, and other common
carriers whether they provide or purchase special access service or
other relevant services.
50. Section 201 requires that interstate special access service
rates, terms, and conditions be just and reasonable, section 202
prohibits unjust or unreasonable discrimination in the provision of
interstate special access services, and section 706 of the
Telecommunications Act requires that we ``encourage the deployment of
advanced telecommunications capability * * * by utilizing, in a manner
consistent with the public interest, convenience, and necessity, price
cap regulation, regulatory forbearance, measures that promote
competition in the local telecommunications market, or other regulating
methods that remove barriers to infrastructure investment.'' The
Communications Act in turn provides us authority to carry out these
duties--all of which will be aided by today's data collection--in
section 4(i), which empowers the Commission to ``perform any and all
acts * * * and issue such orders * * * as may be necessary in the
execution of [our] functions,'' and section 201(b), which authorizes
the Commission to ``prescribe such rules and regulations as may be
necessary in the public interest to carry out the provisions'' of the
Communications Act. These authorities, along with our subject matter
jurisdiction over ``interstate and foreign commerce in communication by
wire and radio,'' allow us to extend the data collection beyond common
carriers to include other market participants that provide interstate
communication by wire or radio. We note that there is widespread accord
in the record on the Commission's authority to require the collection
of the data and information it needs to inform our future actions.
51. We note that parties have had extensive notice and opportunity
to comment on the need for and scope of this data collection. In the
2005 Special Access NPRM, the Commission sought comment regarding
evidence of marketplace competitiveness and pricing for special access
services, including the data and information to perform those analyses.
In a subsequent Public Notice, the Commission sought additional data
and to otherwise refresh the record of the Special Access NPRM in light
of subsequent developments, including the release of a GAO report that,
among other things, contended that the Commission needed additional
data to evaluate the special access marketplace. In the resulting
record of the proceeding, various parties advocated that the Commission
undertake a data collection to obtain the data necessary to
appropriately perform these analyses. Citing such filings, the Bureau
sought comment on an analytical framework necessary to resolve the
issues raised in the Special Access NPRM, including whether the record
contained sufficient information to perform such analyses and, if not,
what additional data the Commission should collect, and from whom. Most
recently, in the Special Access Pricing Flexibility Suspension Order,
the Commission stated that a data collection order would be
forthcoming. In short, we have provided notice regarding this
comprehensive data collection that has given ample opportunity for
public participation and met any requirements of the Administrative
Procedure Act.
D. Role of the Wireline Competition Bureau
52. The data collection we adopt today is set forth in Appendix A
of the Report and Order. Given the complexities associated with
ensuring that the specific questions asked meet the Commission's needs
as expressed in this Report and Order, navigating the Paperwork
Reduction Act process, and actually collecting, cleaning, and analyzing
the data, we delegate limited authority to the Bureau to: (a) Draft
instructions to the data collection and modify the data collection
based on public feedback; (b) amend the data collection based on
feedback received through the PRA process; (c) make corrections to the
data collection to ensure it reflects the Commission's needs as
expressed in this Report and Order; and (d) issue Bureau-level orders
and Public Notices specifying the production of specific types of data,
specifying a collection mechanism (including necessary forms or
formats), and setting deadlines for response to ensure that data
collections are complied with in a timely manner, and (e) take other
such actions as are necessary to implement this Report and Order. All
such actions must be consistent with the terms of the Report and Order.
53. Our goal is to ensure a comprehensive and detailed data
collection. Accordingly, we direct the Bureau to engage in outreach
with the provider and purchaser communities to ensure that all
providers and purchasers are aware of this comprehensive data
collection and the penalties for non-response. We encourage the Bureau
to reach out to trade associations that represent small providers to
inform them of their obligations to participate in the data collection
effort and to ensure that we have maximum participation. In addition,
to reduce the burden of this data collection, we direct the Bureau to
facilitate whenever possible the conversion of street addresses to
geocoded coordinates for small providers and purchasers.
E. Data Retention
54. Respondents are required to retain any data, documents,
documentation, or other information prepared for, or in connection
with, their responses to these data reporting requirements for a period
of three years or until the Commission issues a notice relieving
respondents of this retention requirement upon the exhaustion of any
appeals of a final order adopted in this proceeding.
F. Penalties for False Statements and Non-Response
55. Respondents are required to certify that all statements of
fact, data and information submitted to the Commission are true and
correct to the best of their knowledge. False statements or
misrepresentations to the Commission may be punishable by fine or
imprisonment under Title 18 of the U.S. Code. Respondents are reminded
that failure to comply with these data reporting requirements may
subject them to monetary forfeitures of up to $150,000 for each
violation or each day of a continuing violation, up to a maximum of
$1,500,000 for any single act or failure to act that is a continuing
violation.
IV. Procedural Matters
A. Paperwork Reduction Act Analysis
56. This document contains a new information collection requirement
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. It will be submitted to the Office of Management and Budget (OMB)
for review under section 3507 of the PRA, 44 U.S.C. 3507. Prior to
submission to OMB, the Commission will publish a notice in the Federal
Register seeking public comment on the information collection
requirement. In addition, that notice will also seek comment on how the
Commission might ``further reduce the information collection burden for
small business concerns with fewer than 25 employees'' pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4). The information collection contained in this Report
and Order will not go into effect until OMB approves the collection and
the Commission has published a notice in the Federal
[[Page 2579]]
Register announcing the effective date of the information collection.
B. Congressional Review Act
57. The Commission will send a copy of this Report and Order and
Further Notice of Proposed Rulemaking to Congress and the Government
Accountability Office pursuant to the Congressional Review Act. See 5
U.S.C. 801(a)(1)(A).
C. Final Regulatory Flexibility Analysis
58. The Regulatory Flexibility Act (RFA) requires that an agency
prepare a regulatory flexibility analysis for notice and comment
rulemakings, unless the agency certifies that ``the rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities.'' Accordingly, we have prepared a Final Regulatory
Flexibility Analysis concerning the possible impact of the Report and
Order on small entities.
59. As required by the Regulatory Flexibility Act of 1980 (RFA), as
amended, Initial Regulatory Flexibility analyses (IRFAs) were
incorporated in the Special Access NPRM for this proceeding. The
Commission sought written public comment on the proposals in the
Special Access NPRM, including comment on the IRFA. Comments received
are discussed below. This present Final Regulatory Flexibility Analysis
(FRFA) conforms to the RFA.
1. Need for, and Objectives of, the Order
60. In 2005, the Commission initiated this proceeding as a broad
examination of what regulatory framework to apply to price cap local
exchange carriers' (LECs) interstate special access services following
the expiration of the CALLS plan, including whether to maintain or
modify the Commission's pricing flexibility rules. Moreover, the NPRM
sought to examine whether the available marketplace data supported
maintaining, modifying, or repealing these rules. In the Report and
Order, the Commission continues the process of reviewing our special
access rules to ensure that they reflect the state of competition today
and promote competition, investment, and access to dedicated
communications services businesses across the country rely on every day
to deliver their products and services to American consumers.
Specifically, the Commission initiates a comprehensive data collection
and seek comment on a proposal to use the data to evaluate competition
in the market for special access services.
61. In the Report and Order, we require providers and purchasers of
special access service and certain other services--including best
efforts business broadband Internet access services-- as well as
entities that provide certain other services, to submit data,
information and documents to allow the Commission to conduct a
comprehensive evaluation of competition in the special access market.
The data, information, and documents required fall into five general
categories: market structure; pricing; demand (i.e., observed sales and
purchases), terms and conditions; and competition and pricing
decisions. We will collect the majority of the data for calendar years
2010 and 2012.
2. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
62. The Office of Advocacy of the U.S. Small Business
Administration (SBA) filed reply comments to the Notice of Proposed
Rulemaking and the Initial Regulatory Flexibility Act Analysis (IRFA).
The SBA asserts that the Commission's IRFA did not consider the effect
of new special access rules on small competitive carriers and urged the
Commission to do so. SBA contended that because the Commission's 2005
Triennial Review Remand Order (TRRO) required both large and small
competitive carriers to purchase special access services instead of
UNEs in many metropolitan markets, the Commission should consider the
impact that changes in special access prices would have on small
competitive carriers. SBA suggested a number of potential alternatives
to special access pricing regulation that it asserted might minimize
the impact on small competitive carriers. No other comments were filed
in response to the IRFA.
3. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
63. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small-business concern'' under the Small Business
Act. A ``small-business concern'' is one 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.
64. Small Businesses. Nationwide, there are a total of
approximately 27.5 million small businesses, according to the SBA.
65. Wired Telecommunications Carriers. The SBA has developed a
small business size standard for Wired Telecommunications Carriers,
which consists of all such companies having 1,500 or fewer employees.
According to Census Bureau data for 2007, there were 3,188 firms in
this category, total, that operated for the entire year. Of this total,
3,144 firms had employment of 999 or fewer employees, and 44 firms had
employment of 1,000 employees or more. Thus, under this size standard,
the majority of firms can be considered small.
66. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to local exchange services. The closest applicable size
standard under SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees. According to Commission data, 1,307 carriers reported
that they were incumbent local exchange service providers. Of these
1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and
301 have more than 1,500 employees. Consequently, the Commission
estimates that most providers of local exchange service are small
entities that may be affected by the rules and policies proposed in the
Order.
67. Incumbent Local Exchange Carriers (incumbent LECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to incumbent local exchange
services. The closest applicable size standard under SBA rules is for
Wired Telecommunications Carriers. Under that size standard, such a
business is small if it has 1,500 or fewer employees. According to
Commission data, 1,307 carriers reported that they were incumbent local
exchange service providers. Of these 1,307 carriers, an estimated 1,006
have 1,500 or fewer employees and 301 have more than 1,500 employees.
Consequently, the Commission estimates that most providers of incumbent
local exchange service are small businesses that may be affected by
rules adopted pursuant to the Order.
68. We have included small incumbent LECs in this present RFA
analysis. As noted above, a ``small business'' under the RFA is one
that, inter alia, meets the pertinent small business size standard
(e.g., a telephone communications business having 1,500
[[Page 2580]]
or fewer employees), and ``is not dominant in its field of operation.''
The SBA's Office of Advocacy contends that, for RFA purposes, small
incumbent LECs are not dominant in their field of operation because any
such dominance is not ``national'' in scope. We have therefore included
small incumbent LECs in this RFA analysis, although we emphasize that
this RFA action has no effect on Commission analyses and determinations
in other, non-RFA contexts.
69. Competitive Local Exchange Carriers (competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate size standard under SBA rules is for
the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 1,442 carriers reported that they were
engaged in the provision of either competitive local exchange services
or competitive access provider services. Of these 1,442 carriers, an
estimated 1,256 have 1,500 or fewer employees and 186 have more than
1,500 employees. In addition, 17 carriers have reported that they are
Shared-Tenant Service Providers, and all 17 are estimated to have 1,500
or fewer employees. In addition, 72 carriers have reported that they
are Other Local Service Providers. Of the 72, seventy have 1,500 or
fewer employees and two have more than 1,500 employees. Consequently,
the Commission estimates that most providers of competitive local
exchange service, competitive access providers, Shared-Tenant Service
Providers, and Other Local Service Providers are small entities that
may be affected by rules adopted pursuant to the Order.
70. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to interexchange services. The closest applicable size
standard under SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees. According to Commission data, 359 companies reported
that their primary telecommunications service activity was the
provision of interexchange services. Of these 359 companies, an
estimated 317 have 1,500 or fewer employees and 42 have more than 1,500
employees. Consequently, the Commission estimates that the majority of
interexchange service providers are small entities that may be affected
by rules adopted pursuant to the Order.
71. Prepaid Calling Card Providers. Neither the Commission nor the
SBA has developed a small business size standard specifically for
prepaid calling card providers. The appropriate size standard under SBA
rules is for the category Telecommunications Resellers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 193 carriers have reported that they are
engaged in the provision of prepaid calling cards. Of these, an
estimated all 193 have 1,500 or fewer employees and none have more than
1,500 employees. Consequently, the Commission estimates that the
majority of prepaid calling card providers are small entities that may
be affected by rules adopted pursuant to the Order.
72. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 213 carriers have reported
that they are engaged in the provision of local resale services. Of
these, an estimated 211 have 1,500 or fewer employees and two have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of local resellers are small entities that may be affected by
rules adopted pursuant to the Order.
73. Toll Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 881 carriers have reported
that they are engaged in the provision of toll resale services. Of
these, an estimated 857 have 1,500 or fewer employees and 24 have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of toll resellers are small entities that may be affected by
rules adopted pursuant to the Order.
74. Other Toll Carriers. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to Other Toll Carriers. This category includes toll carriers that do
not fall within the categories of interexchange carriers, operator
service providers, prepaid calling card providers, satellite service
carriers, or toll resellers. The closest applicable size standard under
SBA rules is for Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 284 companies reported that their primary
telecommunications service activity was the provision of other toll
carriage. Of these, an estimated 279 have 1,500 or fewer employees and
five have more than 1,500 employees. Consequently, the Commission
estimates that most Other Toll Carriers are small entities that may be
affected by the rules and policies adopted pursuant to the Order.
75. 800 and 800-Like Service Subscribers. Neither the Commission
nor the SBA has developed a small business size standard specifically
for 800 and 800-like service (toll free) subscribers. The appropriate
size standard under SBA rules is for the category Telecommunications
Resellers. Under that size standard, such a business is small if it has
1,500 or fewer employees. The most reliable source of information
regarding the number of these service subscribers appears to be data
the Commission collects on the 800, 888, 877, and 866 numbers in use.
According to our data, as of September 2009, the number of 800 numbers
assigned was 7,860,000; the number of 888 numbers assigned was
5,588,687; the number of 877 numbers assigned was 4,721,866; and the
number of 866 numbers assigned was 7,867,736. We do not have data
specifying the number of these subscribers that are not independently
owned and operated or have more than 1,500 employees, and thus are
unable at this time to estimate with greater precision the number of
toll free subscribers that would qualify as small businesses under the
SBA size standard. Consequently, we estimate that there are 7,860,000
or fewer small entity 800 subscribers; 5,588,687 or fewer small entity
888 subscribers; 4,721,866 or fewer small entity 877 subscribers; and
7,867,736 or fewer small entity 866 subscribers.
76. Wireless Telecommunications Carriers (except Satellite). Since
2007, the SBA has recognized 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. For this category, census data for 2007 show that there were
1,383 firms that operated for the entire year. Of this total, 1,368
firms had employment of 999 or fewer employees and 15 had employment of
1,000 employees or more. Similarly, according
[[Page 2581]]
to Commission data, 413 carriers reported that they were engaged in the
provision of wireless telephony, including cellular service, Personal
Communications Service (PCS), and Specialized Mobile Radio (SMR)
Telephony services. Of these, an estimated 261 have 1,500 or fewer
employees and 152 have more than 1,500 employees. 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.
77. Broadband Personal Communications Service. The broadband
personal communications service (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission defined ``small entity'' for
Blocks C and F as an entity that has average gross revenues of $40
million or less in the three previous calendar years. For Block F, an
additional classification for ``very small business'' was added and is
defined as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years. These standards defining ``small entity'' in the
context of broadband PCS auctions have been approved by the SBA. No
small businesses, within the SBA-approved small business size standards
bid successfully for licenses in Blocks A and B. There were 90 winning
bidders that qualified as small entities in the Block C auctions. A
total of 93 small and very small business bidders won approximately 40
percent of the 1,479 licenses for Blocks D, E, and F. In 1999, the
Commission re-auctioned 347 C, E, and F Block licenses. There were 48
small business winning bidders. 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 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.
78. Advanced Wireless Services. In 2008, the Commission conducted
the auction of Advanced Wireless Services (``AWS'') licenses. This
auction, which as 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.
79. Narrowband Personal Communications Services. In 1994, the
Commission conducted an auction for Narrowband PCS licenses. A second
auction was also conducted later in 1994. For purposes of the first two
Narrowband PCS auctions, ``small businesses'' were entities with
average gross revenues for the prior three calendar years of $40
million or less. Through these auctions, the Commission awarded a total
of 41 licenses, 11 of which were obtained by four small businesses. To
ensure meaningful participation by small business entities in future
auctions, the Commission adopted a two-tiered small business size
standard in the Narrowband PCS Second Report and Order. A ``small
business'' is an entity that, together with affiliates and controlling
interests, has average gross revenues for the three preceding years of
not more than $40 million. A ``very small business'' is an entity that,
together with affiliates and controlling interests, has average gross
revenues for the three preceding years of not more than $15 million.
The SBA has approved these small business size standards. A third
auction was conducted in 2001. Here, five bidders won 317 (Metropolitan
Trading Areas and nationwide) licenses. Three of these claimed status
as a small or very small entity and won 311 licenses.
80. Paging (Private and Common Carrier). In the Paging Third Report
and Order, we developed a small business size standard for ``small
businesses'' and ``very small businesses'' for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. A ``small business'' is an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $15 million for the preceding three years.
Additionally, a ``very small business'' is an entity that, together
with its affiliates and controlling principals, has average gross
revenues that are not more than $3 million for the preceding three
years. The SBA has approved these small business size standards.
According to Commission data, 291 carriers have reported that they are
engaged in Paging or Messaging Service. Of these, an estimated 289 have
1,500 or fewer employees, and two have more than 1,500 employees.
Consequently, the Commission estimates that the majority of paging
providers are small entities that may be affected by our action. An
auction of Metropolitan Economic Area licenses commenced on February
24, 2000, and closed on March 2, 2000. Of the 2,499 licenses auctioned,
985 were sold. Fifty-seven companies claiming small business status won
440 licenses. A subsequent auction of MEA and Economic Area (``EA'')
licenses was held in the year 2001. Of the 15,514 licenses auctioned,
5,323 were sold. One hundred thirty-two companies claiming small
business status purchased 3,724 licenses. A third auction, consisting
of 8,874 licenses in each of 175 EAs and 1,328 licenses in all but
three of the 51 MEAs, was held in 2003. Seventy-seven bidders claiming
small or very small business status won 2,093 licenses. A fourth
auction, consisting of 9,603 lower and upper paging band licenses was
held in the year 2010. Twenty-nine bidders claiming small or very small
business status won 3,016 licenses.
81. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
small business size
[[Page 2582]]
standard for small entities specifically applicable to such incumbent
220 MHz Phase I licensees. To estimate the number of such licensees
that are small businesses, we apply the small business size standard
under the SBA rules applicable to Wireless Telecommunications Carriers
(except Satellite). Under this category, the SBA deems a wireless
business to be small if it has 1,500 or fewer employees. The Commission
estimates that nearly all such licensees are small businesses under the
SBA's small business size standard that may be affected by rules
adopted pursuant to the Order.
82. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service
has both Phase I and Phase II licenses. The Phase II 220 MHz service is
subject to spectrum auctions. In the 220 MHz Third Report and Order, we
adopted a small business size standard for ``small'' and ``very small''
businesses for purposes of determining their eligibility for special
provisions such as bidding credits and installment payments. This small
business size standard indicates that a ``small business'' is an entity
that, together with its affiliates and controlling principals, has
average gross revenues not exceeding $15 million for the preceding
three years. A ``very small business'' is an entity that, together with
its affiliates and controlling principals, has average gross revenues
that do not exceed $3 million for the preceding three years. The SBA
has approved these small business size standards. Auctions of Phase II
licenses commenced on September 15, 1998, and closed on October 22,
1998. In the first auction, 908 licenses were auctioned in three
different-sized geographic areas: Three nationwide licenses, 30
Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA)
Licenses. Of the 908 licenses auctioned, 693 were sold. Thirty-nine
small businesses won licenses in the first 220 MHz auction. The second
auction included 225 licenses: 216 EA licenses and 9 EAG licenses.
Fourteen companies claiming small business status won 158 licenses.
83. Specialized Mobile Radio. The Commission awards small business
bidding credits in auctions for Specialized Mobile Radio (``SMR'')
geographic area licenses in the 800 MHz and 900 MHz bands to entities
that had revenues of no more than $15 million in each of the three
previous calendar years. The Commission awards very small business
bidding credits to entities 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 800 MHz and 900
MHz SMR Services. 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 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.
84. 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.
85. 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.
86. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as Multipoint
Distribution Service (``MDS'') and Multichannel Multipoint Distribution
Service (``MMDS'') systems, and ``wireless cable,'' transmit video
programming to subscribers and provide two-way high speed data
operations using the microwave frequencies of the Broadband Radio
Service (``BRS'') and Educational Broadband Service (``EBS'')
(previously referred to as the Instructional Television Fixed Service
(``ITFS'')). In connection with the 1996 BRS auction, the Commission
established a small business size standard as an entity that had annual
average gross revenues of no more than $40 million in the previous
three calendar years. The BRS auctions resulted in 67 successful
bidders obtaining licensing opportunities for 493 Basic Trading Areas
(``BTAs''). Of the 67 auction winners, 61 met the definition of a small
business. BRS also includes licensees of stations authorized prior to
the auction. At this time, we estimate that of the 61 small business
BRS auction winners, 48 remain small business licensees. In addition to
the 48 small businesses that hold BTA authorizations, there are
approximately 392 incumbent BRS licensees that are considered small
entities. After adding the number of small business auction licensees
to the number of incumbent licensees not already counted, we find that
there are currently approximately 440 BRS licensees that are defined as
small businesses under either the SBA or the Commission's rules. The
Commission has adopted three levels of bidding credits for BRS: (i) A
bidder with attributed average annual gross revenues that exceed $15
million and do not exceed $40 million for the preceding three years
(small business) is eligible to receive a 15 percent discount on its
winning bid; (ii) a bidder with attributed average annual gross
revenues that exceed $3 million and do not exceed $15 million for the
preceding three years (very small business) is eligible to receive a 25
percent discount on its winning bid; and (iii) a bidder with attributed
average annual gross revenues that do not exceed $3 million for the
preceding three years (entrepreneur) is eligible to receive a 35
percent discount on its winning bid. In 2009, the Commission conducted
Auction 86, which offered 78 BRS licenses. Auction 86 concluded with
ten bidders winning 61 licenses. Of the ten, two bidders claimed small
business status and won 4 licenses; one bidder claimed very small
business status and won three licenses; and two bidders claimed
entrepreneur status and won six licenses.
87. In addition, the SBA's Cable Television Distribution Services
small business size standard is applicable to EBS. There are presently
2,032 EBS licensees. All but 100 of these licenses are held by
educational institutions.
[[Page 2583]]
Educational institutions are included in this analysis as small
entities. Thus, we estimate that at least 1,932 licensees are small
businesses. Since 2007, Cable Television Distribution Services have
been defined within the broad economic census category of Wired
Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' The SBA defines a small business size standard for this
category as any such firms having 1,500 or fewer employees. The SBA has
developed a small business size standard for this category, which is:
all such firms having 1,500 or fewer employees. According to Census
Bureau data for 2007, there were a total of 955 firms in this previous
category that operated for the entire year. Of this total, 939 firms
had employment of 999 or fewer employees, and 16 firms had employment
of 1000 employees or more. Thus, under this size standard, the majority
of firms can be considered small and may be affected by rules adopted
pursuant to the Order.
88. Lower 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 Band had a third category of small
business status for Metropolitan/Rural Service Area (``MSA/RSA'')
licenses, identified as ``entrepreneur'' and 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 Lower 700 MHz Band
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 Lower 700 MHz Band 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,
designated Auction 60. There were three winning bidders for five
licenses. All three winning bidders claimed small business status.
89. In 2007, the Commission reexamined its rules governing the 700
MHz band in the 700 MHz Second Report and Order. The 700 MHz Second
Report and 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. An auction of A, B and E block
licenses in the Lower 700 MHz band was held in 2008. Twenty winning
bidders claimed small business status (those with attributable average
annual gross revenues that exceed $15 million and do not exceed $40
million for the preceding three years). Thirty three winning bidders
claimed very small business status (those with attributable average
annual gross revenues that do not exceed $15 million for the preceding
three years). In 2011, the Commission conducted Auction 92, which
offered 16 Lower 700 MHz band licenses that had been made available in
Auction 73 but either remained unsold or were licenses on which a
winning bidder defaulted. Two of the seven winning bidders in Auction
92 claimed very small business status, winning a total of four
licenses.
90. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and
Order, the Commission revised its rules regarding Upper 700 MHz band
licenses. In 2008, the Commission conducted Auction 73 in which C and D
block licenses in the Upper 700 MHz band were available. Three winning
bidders claimed very small business status (those with attributable
average annual gross revenues that do not exceed $15 million for the
preceding three years).
91. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order,
we adopted a small business size standard for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments. A ``small business'' 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. An auction of 52
Major Economic Area (MEA) licenses commenced on September 6, 2000, and
closed on September 21, 2000. Of the 104 licenses auctioned, 96
licenses were sold to nine bidders. Five of these bidders were small
businesses that won a total of 26 licenses. A second auction of 700 MHz
Guard Band licenses commenced on February 13, 2001 and closed on
February 21, 2001. All eight of the licenses auctioned were sold to
three bidders. One of these bidders was a small business that won a
total of two licenses.
92. 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.
93. 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
[[Page 2584]]
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.
94. 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.
95. 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.
96. Air-Ground Radiotelephone Service. The Commission has not
adopted a small business size standard specific to the Air-Ground
Radiotelephone Service. We will use 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 100 licensees in the Air-Ground Radiotelephone Service,
and we estimate that almost all of them qualify as small under the SBA
small business size standard and may be affected by rules adopted
pursuant to the Order.
97. Aviation and Marine Radio Services. Small businesses in the
aviation and marine radio services use a very high frequency (VHF)
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator
transmitter. The Commission has not developed a small business size
standard specifically applicable to these small businesses. For
purposes of this analysis, the Commission uses the SBA small business
size standard for the category Wireless Telecommunications Carriers
(except Satellite), which is 1,500 or fewer employees. Census data for
2007, which supersede data contained in the 2002 Census, show that
there were 1,383 firms that operated that year. Of those 1,383, 1,368
had fewer than 100 employees, and 15 firms had more than 100 employees.
Most applicants for recreational licenses are individuals.
Approximately 581,000 ship station licensees and 131,000 aircraft
station licensees operate domestically and are not subject to the radio
carriage requirements of any statute or treaty. For purposes of our
evaluations in this analysis, we estimate that there are up to
approximately 712,000 licensees that are small businesses (or
individuals) under the SBA standard. In addition, between December 3,
1998 and December 14, 1998, the Commission held an auction of 42 VHF
Public Coast licenses in the 157.1875-157.4500 MHz (ship transmit) and
161.775-162.0125 MHz (coast transmit) bands. For purposes of the
auction, the Commission defined a ``small'' business as an entity that,
together with controlling interests and affiliates, has average gross
revenues for the preceding three years not to exceed $15 million
dollars. In addition, a ``very small'' business is one that, together
with controlling interests and affiliates, has average gross revenues
for the preceding three years not to exceed $3 million dollars. There
are approximately 10,672 licensees in the Marine Coast Service, and the
Commission estimates that almost all of them qualify as ``small''
businesses under the above special small business size standards and
may be affected by rules adopted pursuant to the Order.
98. Fixed Microwave Services. Fixed microwave services include
common carrier, private operational-fixed, and broadcast auxiliary
radio services. At present, there are approximately 22,015 common
carrier fixed licensees and 61,670 private operational-fixed licensees
and broadcast auxiliary radio licensees in the microwave services. The
Commission has not created a size standard for a small business
specifically with respect to fixed microwave services. For purposes of
this analysis, the Commission uses the SBA small business size standard
for Wireless Telecommunications Carriers (except Satellite), which is
1,500 or fewer employees. The Commission does not have data specifying
the number of these licensees that have more than 1,500 employees, and
thus is unable at this time to estimate with greater precision the
number of fixed microwave service licensees that would qualify as small
business concerns under the SBA's small business size standard.
Consequently, the Commission estimates that there are up to 22,015
common carrier fixed licensees and up to 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in the
microwave services that may be small and may be affected by the rules
and policies adopted herein. We note, however, that the common carrier
microwave fixed licensee category includes some large entities.
99. Offshore Radiotelephone Service. This service operates on
several UHF television broadcast channels that are not used for
television broadcasting in the coastal areas of states bordering the
Gulf of Mexico. There are presently approximately 55 licensees in this
service. The Commission is unable to estimate at this time the number
of licensees that would qualify as small under the SBA's small business
size standard for the category of Wireless Telecommunications Carriers
(except Satellite). Under that SBA small business size standard, a
business is small if it has 1,500 or fewer employees. Census data for
2007, which supersede data contained in the 2002 Census, show that
there were 1,383 firms that operated that year. 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.
100. 39 GHz Service. The Commission created a special small
business size standard for 39 GHz licenses--an entity that has average
gross revenues of $40 million or less in the three previous calendar
years. An additional size standard for ``very small business'' is: An
entity that, together with affiliates, has average gross revenues of
not more than $15 million for the preceding three calendar years. The
SBA has approved these small business size standards. The auction of
the 2,173 39 GHz licenses began on April 12, 2000 and closed on May 8,
2000. The 18 bidders who claimed small business status won 849
licenses. Consequently, the Commission estimates that 18 or fewer 39
GHz licensees are small entities that may be affected by rules adopted
pursuant to the Report and Order.
101. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (``LMDS'') is a fixed broadband point-to-
multipoint microwave service that provides for two-way video
telecommunications. The auction of the 986 LMDS licenses began and
closed in 1998. The Commission established a
[[Page 2585]]
small business size standard for LMDS licenses as an entity that has
average gross revenues of less than $40 million in the three previous
calendar years. An additional small business size standard for ``very
small business'' was added as an entity that, together with its
affiliates, has average gross revenues of not more than $15 million for
the preceding three calendar years. The SBA has approved these small
business size standards in the context of LMDS auctions. There were 93
winning bidders that qualified as small entities in the LMDS auctions.
A total of 93 small and very small business bidders won approximately
277 A Block licenses and 387 B Block licenses. In 1999, the Commission
re-auctioned 161 licenses; there were 32 small and very small
businesses winning that won 119 licenses.
102. 218-219 MHz Service. The first auction of 218-219 MHz spectrum
resulted in 170 entities winning licenses for 594 Metropolitan
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by
entities qualifying as a small business. For that auction, the small
business size standard was an entity that, together with its
affiliates, has no more than a $6 million net worth and, after federal
income taxes (excluding any carry over losses), has no more than $2
million in annual profits each year for the previous two years. In the
218-219 MHz Report and Order and Memorandum Opinion and Order, we
established a small business size standard for a ``small business'' as
an entity that, together with its affiliates and persons or entities
that hold interests in such an entity and their affiliates, has average
annual gross revenues not to exceed $15 million for the preceding three
years. A ``very small business'' is defined as an entity that, together
with its affiliates and persons or entities, that hold interests in
such an entity and its affiliates, has average annual gross revenues
not to exceed $3 million for the preceding three years. These size
standards will be used in future auctions of 218-219 MHz spectrum.
103. 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.
104. 1670-1675 MHz Band. An auction for one license in the 1670-
1675 MHz band was conducted in 2003. The Commission defined a ``small
business'' as an entity with attributable average annual gross revenues
of not more than $40 million for the preceding three years and thus
would be eligible for a 15 percent discount on its winning bid for the
1670-1675 MHz band license. Further, the Commission defined a ``very
small business'' as an entity with attributable average annual gross
revenues of not more than $15 million for the preceding three years and
thus would be eligible to receive a 25 percent discount on its winning
bid for the 1670-1675 MHz band license. One license was awarded. The
winning bidder was not a small entity.
105. 3650-3700 MHz band. In March 2005, the Commission released a
Report and Order and Memorandum Opinion and Order that provides for
nationwide, non-exclusive licensing of terrestrial operations,
utilizing contention-based technologies, in the 3650 MHz band (i.e.,
3650-3700 MHz). As of April 2010, more than 1270 licenses have been
granted and more than 7433 sites have been registered. The Commission
has not developed a definition of small entities applicable to 3650-
3700 MHz band nationwide, non-exclusive licensees. However, we estimate
that the majority of these licensees are Internet Access Service
Providers (ISPs) and that most of those licensees are small businesses.
106. 24 GHz--Incumbent Licensees. This analysis may affect
incumbent licensees who were relocated to the 24 GHz band from the 18
GHz band, and applicants who wish to provide services in the 24 GHz
band. For this service, the Commission uses the SBA small business size
standard for the category ``Wireless Telecommunications Carriers
(except satellite),'' which is 1,500 or fewer employees. To gauge small
business prevalence for these cable services we must, however, use the
most current census data. Census data for 2007, which supersede data
contained in the 2002 Census, show that there were 1,383 firms that
operated that year. 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. The Commission notes that the Census' use of the
classifications ``firms'' does not track the number of ``licenses.''
The Commission believes that there are only two licensees in the 24 GHz
band that were relocated from the 18 GHz band, Teligent and TRW, Inc.
It is our understanding that Teligent and its related companies have
less than 1,500 employees, though this may change in the future. TRW is
not a small entity. Thus, only one incumbent licensee in the 24 GHz
band is a small business entity.
107. 24 GHz--Future Licensees. With respect to new applicants in
the 24 GHz band, the size standard for ``small business'' is an entity
that, together with controlling interests and affiliates, has average
annual gross revenues for the three preceding years not in excess of
$15 million. ``Very small business'' in the 24 GHz band is an entity
that, together with controlling interests and affiliates, has average
gross revenues not exceeding $3 million for the preceding three years.
The SBA has approved these small business size standards. These size
standards will apply to a future 24 GHz license auction, if held.
108. Satellite Telecommunications. Since 2007, the SBA has
recognized satellite firms within this revised category, with a small
business size standard of $15 million. The most current Census Bureau
data are from the economic census of 2007, and we will use those
figures to gauge the prevalence of small businesses in this category.
Those size standards are for the two census categories of ``Satellite
Telecommunications'' and ``Other Telecommunications.'' Under the
``Satellite Telecommunications'' category, a business is considered
small if it had $15 million or less in average annual receipts. Under
the ``Other Telecommunications'' category, a business is considered
small if it had $25 million or less in average annual receipts.
109. The first category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing point-to-point
telecommunications services to other establishments in the
telecommunications and broadcasting industries by forwarding and
receiving communications signals via a system of satellites or
reselling satellite telecommunications.'' For this category, Census
Bureau data for 2007 show that there were a total of 512 firms that
operated for the entire year. Of this total, 464 firms had annual
receipts of under $10 million, and 18 firms had receipts of $10 million
to $24,999,999. Consequently, we estimate that the
[[Page 2586]]
majority of Satellite Telecommunications firms are small entities that
might be affected by rules adopted pursuant to the Order.
110. The second category of Other Telecommunications ``primarily
engaged in providing specialized telecommunications services, such as
satellite tracking, communications telemetry, and radar station
operation. This industry also includes establishments primarily engaged
in providing satellite terminal stations and associated facilities
connected with one or more terrestrial systems and capable of
transmitting telecommunications to, and receiving telecommunications
from, satellite systems. Establishments providing Internet services or
voice over Internet protocol (VoIP) services via client-supplied
telecommunications connections are also included in this industry.''
For this category, Census Bureau data for 2007 show that there were a
total of 2,383 firms that operated for the entire year. Of this total,
2,346 firms had annual receipts of under $25 million. Consequently, we
estimate that the majority of Other Telecommunications firms are small
entities that might be affected by our action.
111. Cable and Other Program Distribution. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' The SBA has developed a small business size standard
for this category, which is: All such firms having 1,500 or fewer
employees. According to Census Bureau data for 2007, there were a total
of 955 firms in this previous category that operated for the entire
year. Of this total, 939 firms had employment of 999 or fewer
employees, and 16 firms had employment of 1000 employees or more. Thus,
under this size standard, the majority of firms can be considered small
and may be affected by rules adopted pursuant to the Order.
112. Cable Companies and Systems. The Commission has developed its
own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide. Industry data
indicate that, of 1,076 cable operators nationwide, all but eleven are
small under this size standard. In addition, under the Commission's
rules, a ``small system'' is a cable system serving 15,000 or fewer
subscribers. Industry data indicate that, of 7,208 systems nationwide,
6,139 systems have fewer than 10,000 subscribers, and an additional 379
systems have 10,000-19,999 subscribers. Thus, under this second size
standard, most cable systems are small and may be affected by rules
adopted pursuant to the Order.
113. Cable System Operators. The Act also contains a size standard
for small cable system operators, which is ``a cable operator that,
directly or through an affiliate, serves in the aggregate less than 1
percent of all subscribers in the United States and is not affiliated
with any entity or entities whose gross annual revenues in the
aggregate exceed $250,000,000.'' The Commission has determined that an
operator serving fewer than 677,000 subscribers shall be deemed a small
operator, if its annual revenues, when combined with the total annual
revenues of all its affiliates, do not exceed $250 million in the
aggregate. Industry data indicate that, of 1,076 cable operators
nationwide, all but ten are small under this size standard. We note
that the Commission neither requests nor collects information on
whether cable system operators are affiliated with entities whose gross
annual revenues exceed $250 million, and therefore we are unable to
estimate more accurately the number of cable system operators that
would qualify as small under this size standard.
114. Open Video Services. The open video system (``OVS'') framework
was established in 1996, and is one of four statutorily recognized
options for the provision of video programming services by local
exchange carriers. The OVS framework provides opportunities for the
distribution of video programming other than through cable systems.
Because OVS operators provide subscription services, OVS falls within
the SBA small business size standard covering cable services, which is
``Wired Telecommunications Carriers.'' The SBA has developed a small
business size standard for this category, which is: All such firms
having 1,500 or fewer employees. According to Census Bureau data for
2007, there were a total of 955 firms in this previous category that
operated for the entire year. Of this total, 939 firms had employment
of 999 or fewer employees, and 16 firms had employment of 1000
employees or more. Thus, under this second size standard, most cable
systems are small and may be affected by rules adopted pursuant to the
Order. In addition, we note that the Commission has certified some OVS
operators, with some now providing service. Broadband service providers
(``BSPs'') are currently the only significant holders of OVS
certifications or local OVS franchises. The Commission does not have
financial or employment information regarding the entities authorized
to provide OVS, some of which may not yet be operational. Thus, again,
at least some of the OVS operators may qualify as small entities.
115. Internet Service Providers. Since 2007, these services have
been defined within the broad economic census category of Wired
Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' The SBA has developed a small business size standard
for this category, which is: All such firms having 1,500 or fewer
employees. According to Census Bureau data for 2007, there were 3,188
firms in this category, total, that operated for the entire year. Of
this total, 3144 firms had employment of 999 or fewer employees, and 44
firms had employment of 1000 employees or more. Thus, under this size
standard, the majority of firms can be considered small. In addition,
according to Census Bureau data for 2007, there were a total of 396
firms in the category Internet Service Providers (broadband) that
operated for the entire year. Of this total, 394 firms had employment
of 999 or fewer employees, and two firms had employment of 1000
employees or more. Consequently, we estimate that the majority of these
firms are small entities that may be affected by rules adopted pursuant
to the Order.
116. Internet Publishing and Broadcasting and Web Search Portals.
Our action may pertain to interconnected VoIP services, which could be
provided by entities that provide other services such as email, online
gaming, web browsing, video conferencing, instant messaging, and other,
similar IP-enabled services. The Commission has not adopted a size
standard for entities that create or provide these types of services or
applications. However, the Census Bureau has identified firms that
``primarily engaged in (1) publishing and/or broadcasting content on
the
[[Page 2587]]
Internet exclusively or (2) operating Web sites that use a search
engine to generate and maintain extensive databases of Internet
addresses and content in an easily searchable format (and known as Web
search portals).'' The SBA has developed a small business size standard
for this category, which is: All such firms having 500 or fewer
employees. According to Census Bureau data for 2007, there were 2,705
firms in this category that operated for the entire year. Of this
total, 2,682 firms had employment of 499 or fewer employees, and 23
firms had employment of 500 employees or more. Consequently, we
estimate that the majority of these firms are small entities that may
be affected by rules adopted pursuant to the Order.
117. Data Processing, Hosting, and Related Services. Entities in
this category ``primarily * * * provid[e] infrastructure for hosting or
data processing services.'' The SBA has developed a small business size
standard for this category; that size standard is $25 million or less
in average annual receipts. According to Census Bureau data for 2007,
there were 8,060 firms in this category that operated for the entire
year. Of these, 7,744 had annual receipts of under $24,999,999.
Consequently, we estimate that the majority of these firms are small
entities that may be affected by rules adopted pursuant to the Order.
118. All Other Information Services. The Census Bureau defines this
industry as including ``establishments primarily engaged in providing
other information services (except news syndicates, libraries,
archives, Internet publishing and broadcasting, and Web search
portals).'' Our action pertains to interconnected VoIP services, which
could be provided by entities that provide other services such as
email, online gaming, web browsing, video conferencing, instant
messaging, and other, similar IP-enabled services. The SBA has
developed a small business size standard for this category; that size
standard is $7.0 million or less in average annual receipts. According
to Census Bureau data for 2007, there were 367 firms in this category
that operated for the entire year. Of these, 334 had annual receipts of
under $5.0 million, and an additional 11 firms had receipts of between
$5 million and $9,999,999. Consequently, we estimate that the majority
of these firms are small entities that may be affected by our action.
4. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
119. The data, information and document collection required by this
Report and Order falls into five general categories: market structure,
pricing, demand (i.e., observed sales and purchases), terms and
conditions, and competition and pricing decisions.
120. Market structure data consists of, among other things, the
situs and type of facilities owned by a provider (or leased subject to
an indefeasible right of use) capable of providing special access, by
sold and potential capacity and ownership, and the proximity of such
facilities to sources of demand. We also require incumbent LEC
providers to submit data concerning the number, nature, and situs of
UNEs sold. In addition, we also require additional market structure
data from competitive providers, such as detailed information related
to non-price factors that may impact where special access providers
build facilities or expand their network via UNEs and the history of
their facility deployments in a sample of locations they serve.
121. Pricing data includes the quantities sold and prices charged
for special access services, by circuit element, and information
regarding the regulatory environment for incumbent LECs.
122. Demand data includes, among other things, data that identify
the bandwidth of the special access services sold or purchased, the
locations being served, and other material facts, such as where those
purchases occur (e.g., buildings, cell towers) and the nature of the
purchaser (e.g., provider or end user).
123. Terms and conditions data and information include, but are not
limited to, information regarding contracts or generally available
plans for special access services that offer discounts, circuit
portability, or other competitively relevant benefits, and whether the
terms and conditions associated with those offerings may inhibit a
buyer's ability to switch to other providers, which in turn may inhibit
facilities-based entry into special access markets.
124. Competition and pricing data, information and documents
include, but are not limited to, those materials related to requests
for proposals, advertising and marketing materials, and in very limited
circumstances, pricing decision documents.
125. Best efforts business broadband Internet access services
include, but are not limited to, data showing where a provider or
entity provides such services, as well as price lists.
126. Questions related to terms and conditions, competition and
pricing decisions will span a variety of timeframes specific to the
issue addressed. The majority of the market structure, pricing and
demand data will be collected for a two-year period. This period of
time allows the analysis to control for factors that may vary
substantially across geographic areas, but not within a given
geographic area.
5. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
127. 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.
128. Entities required to respond to this data request include all
providers and purchasers of special access services as well as some
entities that provide best efforts business broadband Internet access
services. By ``providers,'' we mean any entity subject to the
Commission's jurisdiction under the Communications Act, as amended,
that provides special access services or provides a connection that is
capable of providing special access services. By ``purchasers,'' we
mean any entity subject to the Commission's jurisdiction under the
Communications Act, as amended, that purchases special access services.
Providers and purchasers may include price cap regulated incumbent
LECs, competitive LECs, interexchange carriers, cable operators, and
companies that provide fixed wireless communications services. Some
entities that fall under the Commission's jurisdiction and provide best
efforts broadband Internet access services, but fall outside our
definitions of ``provider'' and ``purchaser,'' are also required to
respond.
129. Because the focus of this proceeding is on the regulation of
special access services in price-cap territories, a rate-of-return
carrier, which is not subject to our pricing flexibility rules, shall
not be considered a ``provider'' to the extent it provides
[[Page 2588]]
special access within its rate-of-return service area. Likewise, we
will not require data from any provider with regard to its operations
in any geographic area in which a rate-of-return carrier is the
incumbent. Moreover, we will not require a purchaser to produce data
based on purchases it makes in those areas in which a rate-of-return
carrier is the incumbent. If, however, a provider or purchaser prefers
to provide data for all areas without distinguishing between areas
served by price cap LECs and rate-of-return LECs, it may do so.
130. Small business concerns were considered when determining the
nature of the data to be collected, and identified data, information,
and document requirements were modified to reduce burdens on small
businesses where possible. The Wireline Competition Bureau previously
issued two voluntary data requests in this proceeding. These voluntary
requests allowed each potential respondent to make its own
determination concerning participation. The responses to the voluntary
data requests provided the Commission the means and opportunity to
assess which data elements are most important to its ability to assess
the special access market, and to eliminate or revise those questions
that otherwise yield less valuable information. The voluntary data
requests also allowed the Commission to carefully assess the need to
obtain data from all providers and purchasers of special access
services and certain other services--including small businesses--to
conduct a comprehensive analysis of the special access market.
131. In order to conduct a comprehensive analysis of the special
access market, the Commission will collect data from all providers and
purchasers of special access services as well as some entities that
provide best efforts business broadband Internet access services. The
Commission notes concerns regarding the burden that this data
collection will impose on small companies, and is mindful of the
importance of seeking to reduce information collection burdens for
small business concerns, and in particular those ``with fewer than 25
employees.'' Competition in the provision of special access, however,
appears to occur at a very granular level--perhaps as low as the
building/tower. Accordingly, the Commission finds it necessary to
obtain data from special access providers and purchasers of all sizes.
132. We structured the collection somewhat differently for best
efforts and special access services to minimize the burden on
submitters consistent with our data requirements and taking into
consideration data that the Commission already has available to it.
Because the record indicates that entities that provide best efforts
business broadband Internet access services generally deliver those
services throughout their footprint over the same network facilities
they use to deliver mass market broadband Internet access, we need not
collect this data at the same level of granularity as location and
facilities data for special access. We also do not require entities
with fewer than 15,000 customers and fewer than 1,500 business
broadband customers to provide data regarding their best efforts
business broadband Internet access services. Commenters assert that
those entities incur the greatest burden when producing data for the
State Broadband Initiative broadband mapping effort.
133. Other modifications made by the Commission include: allowing a
provider or purchaser to provide data for all areas without
distinguishing between areas served by price cap LECs and rate-of-
return LECs; applying sampling methods where possible; limiting the
market structure, pricing and demand data collection to a two-year
period; and tailoring the timeframes for the terms and conditions,
competition and pricing questions to the specific issue addressed. In
addition, the Commission chose to limit the production of documents
showing the internal analyses undertaken by providers in 2010 or
thereafter to evaluate, inter alia, competitive market shares, changes
in competition, changes in the costs of supplying services, whether to
respond to RFPs, and identified rate increases and decreases to
circumstances where the Wireline Competition Bureau determines the
initial data collection was incomplete or insufficient for analysis.
134. We note that this Report and Order does not change special
access pricing regulation. We therefore do not consider the potential
alternatives to special access pricing regulation that SBA asserted
might minimize the impact on small competitive carriers.
6. Report to Congress
The Commission will send a copy of the Report and Order, including
this FRFA, in a report to be sent to Congress and the Government
Accountability Office pursuant to the Small Business Regulatory
Enforcement Fairness Act of 1996. In addition, the Commission will send
a copy of the Order, including the FRFA, to the Chief Counsel for
Advocacy of the Small Business Administration. A copy of the Report and
Order and FRFA (or summaries thereof) will also be published in the
Federal Register.
D. Ex Parte Presentations
135. The proceeding shall be treated as a ``permit-but-disclose''
proceeding in accordance with the Commission's ex parte rules. Persons
making ex parte presentations must file a copy of any written
presentation or a memorandum summarizing any oral presentation within
two business days after the presentation (unless a different deadline
applicable to the Sunshine period applies). Persons making oral ex
parte presentations are reminded that memoranda summarizing the
presentation must (1) list all persons attending or otherwise
participating in the meeting at which the ex parte presentation was
made, and (2) summarize all data presented and arguments made during
the presentation. If the presentation consisted in whole or in part of
the presentation of data or arguments already reflected in the
presenter's written comments, memoranda or other filings in the
proceeding, the presenter may provide citations to such data or
arguments in his or her prior comments, memoranda, or other filings
(specifying the relevant page and/or paragraph numbers where such data
or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with Sec. 1.1206(b). In proceedings governed by
Sec. 1.49(f) or for which the Commission has made available a method
of electronic filing, written ex parte presentations and memoranda
summarizing oral ex parte presentations, and all attachments thereto,
must be filed through the electronic comment filing system available
for that proceeding, and must be filed in their native format (e.g.,
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding
should familiarize themselves with the Commission's ex parte rules.
V. Mandatory Data Collection
I. Definitions
The following definitions apply for purposes of this collection
only. They are not intended to set or modify precedent outside the
context of this collection.
Affiliated Company means a company, partnership, corporation,
limited liability company, or other business entity that is affiliated
with a Provider. An entity and a Provider are
[[Page 2589]]
affiliated if one of them, or an entity that controls one of them,
directly or indirectly holds a greater than 25 percent ownership
interest in, or controls, the other one.
Best Efforts Business Broadband Internet Access Service means a
best efforts Internet access data service with a capacity equal to or
greater than a DS1 connection that is marketed to enterprise customers
(including small, medium, and large businesses). For purposes of this
data collection, Best Efforts Business Broadband Internet Access
Services do not include mobile wireless services, as that term is used
in the 15th Annual Mobile Wireless Competition Report.
Circuit-Based Dedicated Service (CBDS) means a Dedicated Service
that is circuit-based. Examples of CBDS include DS1 and DS3 services
and Synchronous Optical Networking (SONET)/Optical Carrier N (OCN)
services, including point-to-point and ring services.
Collocation is an offering by an ILEC whereby a requesting
Competitive Provider's transmission equipment is located, for a
tariffed charge, at the ILEC's central office. It refers to the term as
used pursuant to 47 CFR 69.701 et seq. of the Commission's rules for
purposes of applying for a grant of Phase I or Phase II Pricing
Flexibility from the Commission. The definition of Collocation excludes
Competitive Providers that collocate in carrier hotels.
Competitive Provider means a competitive local exchange carrier
(CLEC), interexchange carrier, cable operator, wireless provider or any
other entity that is subject to the Commission's jurisdiction under the
Communications Act of 1934, as amended, and either provides a Dedicated
Service or provides a Connection over which a Dedicated Service could
be provided. A Competitive Provider does not include an ILEC operating
within its incumbent service territory.
Connection means a wired ``line'' or wireless ``channel'' that
provides a dedicated communication path between an End User's Location
and the first Node on a Provider's network. Multiple dedicated
communication paths serving one or more End Users at the same Location
should be counted as a single Connection. A Connection may be a UNE,
including an Unbundled Copper Loop. A Connection must have the
capability of being used to provide one or more Dedicated Services;
however, a Connection can be used to provide other services as well.
For example, a dedicated communication path that is currently being
used to provide a mass market broadband service but has the capability
to provide a Dedicated Service is considered a Connection for the
purpose of this data collection.
Contract-Based Tariff means a Tariff, other than a Tariff Plan,
that is based on a service contract entered into between a customer and
an ILEC which has obtained permission to offer contract-based tariff
services pursuant to 47 CFR 69.701 et seq. of the Commission's pricing
flexibility rules or a comparable tariffed intrastate service contract
between a customer and an ILEC.
Dedicated Service transports data between two or more designated
points, e.g., between an End User's premises and a point-of-presence,
between the central office of a local exchange carrier (LEC) and a
point-of-presence, or between two End User premises, at a rate of at
least 1.5 megabytes per second (Mbps) with prescribed performance
requirements that include bandwidth-, latency-, or error-rate
guarantees or other parameters that define delivery under a Tariff or
in a service-level agreement. Dedicated Service includes, but is not
limited to, CBDS and PBDS. For the purpose of this data collection,
Dedicated Service does not include ``best effort'' services, e.g., mass
market broadband services such as DSL and cable modem broadband access.
Disconnection means the process by which a Provider, per a customer
request, terminates billing on one or more of a customer's Dedicated
Service circuits.
DS1 and DS3, except where specified, refer to DS1s and DS3s that
are not UNEs. DS1s and DS3s are Dedicated Services.
End User means a business, institutional, or government entity that
purchases Dedicated Service for its own purposes and does not resell
such service. A mobile wireless service provider is considered an End
User when it purchases Dedicated Service to make connections within its
own network, e.g., backhaul to a cell site.
End User Channel Termination means, as defined in 47 CFR
69.703(a)(2), a dedicated channel connecting a LEC end office and a
customer premises, offered for purposes of carrying special access
traffic.
Incumbent Local Exchange Carrier (ILEC) means, for the purpose of
this data collection, a LEC that provides a Dedicated Service in study
areas where it is subject to price cap regulation under sections 61.41-
61.49 of the Commission's rules, 47 CFR 64.41-61.49.
Indefeasible Right of Use (IRU) means an indefeasible long-term
leasehold interest that gives the grantee the right to exclusively use
specified strands of fiber or allocated bandwidth to provide a service
as determined by the grantee. An IRU confers on the grantee
substantially all of the risks and rewards of ownership for the
estimated economic life of the asset. IRUs typically include the
following elements: (i) Payment of a substantial fee up front to enter
into the IRU contract; (ii) a minimum total duration of 10 years; (iii)
conveyance of tax obligations commensurate with the risks and rewards
of ownership to the grantee (e.g. as opposed to the lesser tax burdens
associated with other forms of leases); (iv) terms for payment to the
grantor for ancillary services, such as maintenance fees; (v) all
additional rights and interests necessary to enable the IRU to be used
by the grantee in the manner agreed to; and (vi) no unreasonable limit
on the right of the grantee to use the asset as it wishes (e.g., the
grantee shall be permitted to splice into the IRU fiber, though such
splice points must be mutually agreed upon by grantor and the grantee
of the IRU).
Location means a building, other man-made structure, a cell site on
a building, a free-standing cell site, or a cell site on some other
man-made structure where the End User is connected. A Node is not a
Location. For the purposes of this data collection, cell sites are to
be treated as Locations and not as Nodes.
Metropolitan Statistical Area (MSA) is a geographic area as defined
by 47 CFR 22.909(a), 69.703(b).
Node is an aggregation point, a branch point, or a point of
interconnection on a Provider's network, including a point of
interconnection to other Provider networks. Examples include LEC
central offices, remote terminal locations, splice points (including,
for example, at manholes), controlled environmental vaults, cable
system headends, cable modem termination system (CMTS) locations, and
facility hubs.
Non-MSA is the portion of an ILEC's study area that falls outside
the boundaries of an MSA.
Non-Rate Benefit means a benefit to the customer other than a
discount on the One Month Term Only Rate, e.g., a credit towards
penalties or non-recurring charges or the ability to move circuits
without incurring a penalty.
One Month Term Only Rate means, for purposes of this data
collection, the non-discounted monthly recurring tariffed rate for DS1,
DS3 and/or PBDS services.
Packet-Based Dedicated Service (PBDS) means a Dedicated Service
that is packet-based. Examples of PBDS include Multi-Protocol Label
Switched
[[Page 2590]]
(MPLS) services; permanent virtual circuits, virtual private lines and
similar services provided using ATM, Frame Relay and other packet
technologies; (Gigabit) Ethernet Services and Metro Ethernet Virtual
Connections; and Virtual Private Networks (VPN).
Phase I Pricing Flexibility means regulatory relief for the pricing
of End User Channel Terminations pursuant to 47 CFR 69.711(b),
69.727(a) of the Commission's rules.
Phase II Pricing Flexibility means regulatory relief for the
pricing of End User Channel Terminations pursuant to 47 CFR 69.711(c),
69.727(b) of the Commission's rules.
Prior Purchase-Based Commitment means a type of Volume Commitment
where the commitment is based on either:
(i) a certain percentage or number of the customer's purchased in-
service circuits or lines as measured at the time of making the Volume
Commitment or measured during a period of time prior to making the
Volume Commitment, e.g., based on the customer's billing records for
the current month or prior month(s); or
(ii) a certain percentage of Revenues generated by the customer's
purchases as measured at the time of making the Volume Commitment or
during a period of time prior to making the Volume Commitment.
Providers collectively refers to both ILECs and Competitive
Providers.
Purchasers means Competitive Providers and End Users that are
subject to the Commission's jurisdiction under the Communications Act
of 1934, as amended, and purchase Dedicated Service.
Revenues means intrastate and interstate billed amounts without any
allowance for uncollectibles, commissions or settlements. Revenues do
not include billed amounts that are subsequently discounted by the
Provider, e.g., customer rebates.
Tariff means an intrastate or interstate schedule of rates and
regulations filed by common carriers.
Tariff Plan means a Tariff, other than a Contract-Based Tariff,
that provides a customer with either a discount from any One Month Term
Only Rate for the purchase of DS1 and/or DS3 services or a Non-Rate
Benefit that could be applied to these services.
Term Commitment means a commitment to purchase a Dedicated Service
for a period of time, greater than a month, in exchange for a circuit-
specific discount and/or a Non-Rate Benefit.
Transport Service means dedicated transport and includes the
services set forth in 47 CFR 69.709(a)(1)-(3).
Transport Provider means a Provider that supplies Transport
Service.
Unbundled Copper Loop means a copper wire local loop provided by
ILECs to requesting telecommunications carriers on a non-discriminatory
basis pursuant to 47 CFR 51.319(a)(1) that can be used by a Competitive
Provider to provide a Dedicated Service, e.g., Ethernet over Copper. An
Unbundled Copper Loop is typically a 2- or 4-wire loop that the ILEC
has conditioned to remove intervening equipment such as bridge taps,
load coils, repeaters, low pass filters, range extenders, etc. between
the End User's Location and the serving wire center to allow for the
provision of advanced digital services by a Competitive Provider. These
loops are commonly referred to as dry copper, bare copper, or xDSL-
compatible loops. An Unbundled Copper Loop is a type of UNE.
Unbundled Network Element (UNE) means a local loop provided by an
ILEC to a requesting telecommunications carrier on a non-discriminatory
basis pursuant to 47 CFR 51.319(a).
Upgrade means that a customer transitions one or more circuits to a
higher capacity circuit.
Volume Commitment means a commitment to purchase a specified
volume, e.g., a certain number of circuits or Revenues, to receive a
discount on Dedicated Services and/or a Non-Rate Benefit.
II. Mandatory Data Collection Questions
A. Competitive Providers must respond to the following questions:
1. Are you an Affiliated Company?
[ballot] Yes
[ballot] No
a. If so, identify the Provider(s) with whom you have an
affiliation (name/FRN).
2. Do you (i) own a Connection; (ii) lease a Connection from
another entity under an IRU agreement; or (iii) obtain a Connection as
a UNE from an ILEC to provide a Dedicated Service?
[ballot] Yes
[ballot] No
a. If yes, are any of these Connections to a Location within an
area subject to price cap regulation or within an area where the
Commission has granted Phase I or Phase II Pricing Flexibility?
[ballot] Yes
[ballot] No
If you answered ``no'' to question II.A.2 or II.A.2.a, then you are
not required to respond to the remaining questions in II.A or the
questions in II.D.
Facilities Information
3. Provide the number of Locations to which you provided a
Connection as of December 31, 2010 and as of December 31, 2012 where
your company:
a. Owns the Connection;
b. Leases the Connection from another entity under an IRU
agreement; or
c. Obtains the Connection as a UNE from an ILEC to provide a
Dedicated Service:
i. In total;
ii. In the form of DS1s;
iii. As a DS3; or
iv. As an Unbundled Copper Loop.
4. Provide the information requested below for each Location as of
December 31, 2010 and as of December 31, 2012 to which your company
provided a Connection that you: (i) own; (ii) lease from another entity
under an IRU agreement; or (iii) obtained as a UNE from an ILEC to
provide a Dedicated Service.
a. A unique ID for the Location;
b. The actual situs address for the Location (i.e., land where the
building or cell site is located);
c. The geocode for the Location (i.e., latitude and longitude);
d. The Location type (e.g., building, other man-made structure,
cell site in or on a building, free-standing cell site, or a cell site
on some other man-made structure like a water tower, billboard, etc.);
e. Whether the Connection provided to the location uses facilities
leased from another entity under an IRU or obtained as a DS1/DS3 UNE or
Unbundled Copper Loop, and in each case, the name of the lessor of the
majority of the fiber strands and/or copper loop;
f. Whether any of the Connections to the location are provided
using fiber;
g. The total sold bandwidth of all Connections provided by you to
the Location in Mbps;
h. The total bandwidth to the Location sold directly by you to an
End User;
i. The total sold fixed wireless bandwidth provided by you to the
Location; and
j. The total bandwidth sold by you to any cell sites at the
Location.
5. Provide a map of the routes that constitute your network that
are followed by fiber that you (a) own or (b) lease pursuant to an IRU
agreement, excluding routes followed by fiber that you own or lease
pursuant to an IRU agreement connecting your network to End User
Locations. The map must include the locations of all Nodes on your
network used to interconnect with third party networks, and the year
that
[[Page 2591]]
each Node went live. Also, provide a separate map of the routes
followed by fiber that you (a) own or (b) lease pursuant to an IRU
agreement that connect your network to End User Locations.
6. We will provide you with a selected list of the Locations you
reported in response to question II.A.4. For each identified Location,
state the month and year that you first provided a Connection to that
Location, whether you originally supplied the Location over a UNE, and
if so, when (if at all) you switched to using a Connection that you own
or lease as an IRU. If the Location was first served by your Connection
on or before January 2008, and the date the Location was first served
is unknown, then enter 00/0000.
7. For each ILEC wire center where your company is collocated,
provide the actual situs address, the geocode, and the CLLI code.
8. Explain your business rule(s) used to determine whether to build
a Connection to a particular Location. Provide underlying assumptions.
a. List those geographic areas in which you have built the most
Connections to End Users and explain why, in your view, your business
rule has been most successful in those areas.
b. Explain how, if at all, business density is incorporated into
your business rule, and if so, how you measure business density.
9. Provide the following information:
a. The current situs address of your U.S. headquarters (i.e., the
address of the land where the headquarters is located);
b. The year that this site became your headquarters;
c. Year established and situs address for any prior U.S.
headquarters' location for your company, going as far back as 1995, if
different from the headquarters' location listed in response to
question II.A.9.a;
d. The name of any Affiliated Company that owned, or leased under
an IRU agreement, Connections to five or more Locations in any MSA at
the time you became affiliated with the Affiliated Company, going as
far back as 1995.
e. For each Affiliated Company listed in response to question
II.A.9.d, provide:
i. The situs address for each Affiliated Company's U.S.
headquarters at the time of affiliation;
ii. The year that the Affiliated Company established the situs
address listed in response to question II.A.9.e.i for its U.S.
headquarters; and
iii. The year established and situs address for any prior U.S.
headquarters' location designated by the Affiliated Company, going as
far back as 1995, if different from the headquarters' location listed
in response to question II.A.9.e.i.
10. Provide data, maps, information, marketing materials, and/or
documents identifying those geographic areas where you, or an
Affiliated Company, advertised or marketed Dedicated Service over
existing facilities, via leased facilities, or by building out new
facilities as of December 31, 2010 and as of December 31, 2012, or
planned to advertise or market such services within twenty-four months
of those dates.
11. Identify the five most recent Requests for Proposals (RFPs) for
which you were selected as the winning bidder to provide each of the
following: (a) Dedicated Services; (b) Best Efforts Business Broadband
Internet Access Services; and, to the extent different from (a) or (b),
(c) some other form of high-capacity data services to business
customers. In addition, identify the five largest RFPs (by number of
connections) for which you submitted an unsuccessful competitive bid
between 2010 and 2012 for each of (a) Dedicated Services; (b) Best
Efforts Business Broadband Internet Access Services; and, to the extent
different from (a) or (b), (c) some other form of high-capacity data
services to business customers. For each RFP identified, provide a
description of the RFP, the area covered, the price offered, and other
competitively relevant information. Lastly, identify the business rules
you rely upon to determine whether to submit a bid in response to an
RFP.
Billing Information
12. For all Dedicated Services provided using transmission paths
that you (i) own; (ii) lease from another entity under an IRU
agreement; or (iii) obtain as a UNE from an ILEC to provide a Dedicated
Service, submit the following information by rate element by circuit
billed for each month from January 1 to December 31 for the years 2010
and 2012.
a. The closing date of the monthly billing cycle in dd/mm/yyyy
format;
b. The six-digit 499-A Filer ID of the customer, where applicable,
or other unique ID if customer does not have a 499-A Filer ID;
c. The Location ID from question II.A.4.a that can be used to link
the circuit rate elements to the terminating Location of the circuit
(where applicable);
d. The circuit ID common to all elements purchased in common for a
particular circuit;
e. The type of circuit (PBDS, or DS1 or DS3, etc.) and its
bandwidth;
f. A unique billing code for the rate element (see question
II.A.14);
g. The number of units billed for this rate element (note that the
bandwidth of the circuit must not be entered here);
h. The dollar amount of non-recurring charges billed for the first
unit of this rate element;
i. The dollar amount of non-recurring charges billed for additional
units of this rate element (if different from the amount billed for the
initial unit);
j. The monthly recurring dollar charge for the first unit of the
rate element billed;
k. The monthly recurring dollar charge for additional units (if
different from the amount billed for the initial unit);
l. The total monthly dollar amount billed for the rate element
billed in the month;
m. The Term Commitment associated with this circuit in months;
n. Indicate whether this rate element is associated with a circuit
that contributes to a Volume Commitment;
o. Indicate whether the circuit element is owned by you or leased
by you as an IRU but not as a UNE; and
p. The adjustment ID (or multiple adjustment IDs) linking this rate
element to the unique out-of-cycle billing adjustments in question
II.A.13.a (below) if applicable.
13. For each adjustment, rebate, or true-up for billed Dedicated
Services, provide the information requested below.
a. A unique ID number for the billing adjustment, rebate, or true-
up (see question II.A.12.p above);
b. The beginning date of the time period covered by the adjustment
or true-up;
c. The ending date of the time period covered by the adjustment or
true-up;
d. The scope of the billing adjustment, i.e., whether the
adjustment applies to a single rate element on a single circuit, more
than one rate element on a single circuit, more than one rate element
across multiple circuits, or an overall adjustment that applies to
every rate element on every circuit purchased by the customer;
e. The dollar amount of the adjustment or true-up; and
f. A brief description of the billing adjustment, rebate or true-
up, e.g., term discount, revenue target rebate, etc.
14. For each unique billing code, please provide the following
information below.
a. The billing code for the rate element;
b. Select the phrase that best describes the rate element from the
list. Names of some common rate elements are shown
[[Page 2592]]
on the generalized circuit diagram below:
[GRAPHIC] [TIFF OMITTED] TR11JA13.010
i. Channel mileage facility, channel mileage, interoffice channel
mileage, special transport (a transmission path between two serving
wire centers associated with customer designated locations; a serving
wire center and an international or service area boundary point; a
serving wire center and a hub, or similar type of connection);
ii. Channel mileage termination, special transport termination (the
termination of channel mileage facility or similar transmission path);
iii. Channel termination, local distribution channel, special
access line, customer port connection (Ethernet) (a transmission path
between a customer designated location and the associated wire center);
iv. Clear channel capability (not shown) (an arrangement which
allows a customer to transport, for example, 1.536 Mbps of information
on a 1.544 Mbps line rate with no constraint on the quantity or
sequence of one and zero bits);
v. Cross-connection (not shown) (semi-permanent switching between
facilities, sometimes combined with multiplexing/demultiplexing);
vi. Multiplexing (not shown) (channelizing a facility into
individual services requiring a Lower capacity or bandwidth); and
vii. Class of service and/or committed information rate (not shown)
(for Ethernet, the performance characteristics of the network and
bandwidth available for a customer port connection).
c. If none of the possible entries describes the rate element,
enter a short description.
Revenues, Terms and Conditions
15. What were your Revenues from the sale of CBDS in 2010 and 2012?
For each year, report Revenues in total, separately by DS1, DS3, and
other CBDS sales, and separately by customer category, i.e., sales to
Providers and End Users.
16. What were your Revenues from the sale of PBDS in 2010 and 2012?
For each year, report Revenues in total, separately by customer
category, i.e., sales to Providers and End Users, and separately by
bandwidth for the following categories:
a. less than or equal to 1.5 Mbps;
b. greater than 1.5, but less than or equal to 50 Mbps;
c. greater than 50, but less than or equal to 100 Mbps;
d. greater than 100, but less than or equal to 1 Gbps; and
e. greater than 1 Gbps.
17. What percentage of your Revenues from the sale of DS1, DS3, and
PBDS services in 2012 were generated from an agreement or Tariff that
contains a Prior Purchase-Based Commitment?
18. If you offer Dedicated Services pursuant to an agreement or
Tariff that contains either a Prior Purchase-Based Commitment or a Non-
Rate Benefit, then explain how, if at all, those sales are
distinguishable from similarly structured ILEC sales of DS1s, DS3s,
and/or PBDS.
19. Provide the business justification for the Term or Volume
Commitments associated with any Tariff or agreement you offer for the
sale of Dedicated Services.
B. ILECs must respond to the following questions:
1. Are you an Affiliated Company?
[ballot] Yes
[ballot] No
a. If so, identify the Provider(s) with whom you have an
affiliation (name/FRN).
Facilities Information
2. Provide the number of Locations to which you provided a
Connection in your company study areas as of December 31, 2010 and as
of December 31, 2012 where your company:
a. owns the Connection;
b. leases the Connection from another entity under an IRU
agreement; or
c. sells the Connection as a UNE:
i. in total;
ii. in the form of DS1s;
iii. as a DS3; or
iv. as an Unbundled Copper Loop.
3. Provide the information requested below for each Location to
which your company provided, as of December 31, 2010 and as of December
31, 2012, a Connection that you (i) own or (ii) you lease from another
entity under an IRU agreement:
a. A unique ID for the Location;
b. The actual situs address for the Location (i.e., land where the
building or cell site is located);
c. The geocode for the Location (i.e., latitude and longitude);
d. The Location type (e.g., building, other man-made structure,
cell site in or on a building, free-standing cell site, or a cell site
on some other man-made structure like a water tower, billboard, etc.);
e. Whether any of the Connections to the Location are provided
using fiber;
f. The total sold bandwidth of all Connections provided by you to
the Location in Mbps (exclude connections sold without a specified
bandwidth, e.g., Unbundled Copper Loops);
g. The total number of Unbundled Copper Loops sold by you to the
Location;
h. The total bandwidth to the Location sold by you as UNEs in the
form of DS1s and/or DS3s;
i. The total bandwidth to the Location sold directly by you to an
End User;
j. The total sold fixed wireless bandwidth provided by you to the
Location; and
k. The total bandwidth sold by you to any cell sites at the
Location.
Billing Information
4. For all Dedicated Services provided using transmission paths
that you (i) own or (ii) lease from another entity under an IRU
agreement and for Unbundled Copper Loops that you own and provision,
submit the following information by rate element by circuit
[[Page 2593]]
billed for each month from January 1 to December 31 for the years 2010
and 2012.
a. The closing date of the monthly billing cycle in dd/mm/yyyy
format;
b. The six-digit 499A Filer ID of the customer, where applicable,
or other unique ID if customer does not have a 499A Filer ID;
c. The Location ID from question II.B.3.a that can be used to link
the circuit rate elements to the terminating Location of the circuit
(where applicable);
d. The circuit ID common to all elements purchased in common for a
particular circuit;
e. The type of circuit, (DS1 sold as a UNE, DS3 sold as a UNE,
Unbundled Copper Loop, PBDS, non-UNE DS1s or DS3s, etc.) and the
bandwidth of the circuit;
f. The serving wire center/mileage rating point Common Language
Location Identification (CLLI) of one end of the circuit (MRP1);
g. The serving wire center/mileage rating point CLLI of the other
end of the circuit (MRP2);
h. The latitude of MRP1 to 5 decimal places;
i. The longitude of MRP1 to 5 decimal places;
j. The latitude of MRP2 to 5 decimal places;
k. The longitude of MRP2 to 5 decimal places;
l. End of the circuit (1-MRP1 or 2-MRP2) associated with this rate
element;
m. The billing code for the rate element (see question II.B.6);
n. The density pricing zone for the rate element;
o. The number of units billed for this rate element (note that the
bandwidth of the circuit must not be entered here);
p. The dollar amount of non-recurring charges billed for the first
unit of this rate element;
q. The dollar amount of non-recurring charges billed for additional
units of this rate element (if different from the amount billed for the
initial unit);
r. The monthly recurring dollar charge for the first unit of the
rate element billed;
s. The monthly recurring dollar charge for additional units (if
different from the amount billed for the initial unit);
t. The total monthly dollar amount billed for the rate element;
u. The Term Commitment associated with this circuit in months;
v. Indicate whether this rate element is associated with a circuit
that contributes to a Volume Commitment;
w. Indicate whether this rate element is associated with a circuit
that contributes to a revenue commitment in a Tariff Plan;
x. Indicate whether this rate element was purchased pursuant to a
Contract-Based Tariff;
y. Indicate whether the circuit element is owned by you or leased
by you as an IRU;
z. The adjustment ID (or multiple adjustment IDs) linking this rate
element to the unique out-of-cycle billing adjustments in question
II.B.5.a (below) if applicable; and
aa. If the rate element is sold under a Tariff, list the Tariff
name.
5. For each adjustment, rebate, or true-up for billed Dedicated
Services, provide the information requested below.
a. A unique ID for the billing adjustment or true-up (see question
II.B.4.z above);
b. A unique ID number for the contract or Tariff from which the
adjustment originates;
c. The beginning date of the time period covered by the adjustment
or true-up;
d. The ending date of the time period covered by the adjustment or
true-up;
e. The scope of the billing adjustment, i.e., whether the
adjustment applies to a single rate element on a single circuit, more
than one rate element on a single circuit, more than one rate element
across multiple circuits, or an overall adjustment that applies to
every rate element on every circuit purchased by the customer;
f. The dollar amount of the adjustment or true-up;
g. Whether the adjustment is associated with a Term Commitment, and
if so, the length of the term specified in the contract necessary to
achieve the rebate;
h. Whether the adjustment is associated with a Volume Commitment,
and if so, the number of circuits and/or dollar amount specified in the
contract necessary to achieve the rebate; and
i. If the adjustment is for some other reason, a brief description
of the reason for the adjustment.
6. For each unique billing code, please provide the following
information below.
a. The billing code for the rate element;
b. The phrase that best describes the rate element from the list.
Names of some common rate elements are shown on the generalized circuit
diagram below:
[GRAPHIC] [TIFF OMITTED] TR11JA13.011
i. Channel mileage facility, channel mileage, interoffice channel
mileage, special transport (a transmission path between two serving
wire centers associated with customer designated locations; a serving
wire center and an international or service area boundary point; a
serving wire center and a hub, or similar type of connection);
ii. Channel mileage termination, special transport termination (the
termination of channel mileage facility or similar transmission path);
iii. Channel termination, local distribution channel, special
access line, customer port connection (Ethernet) (a transmission path
between a customer designated location and the associated wire center);
iv. Clear channel capability (not shown) (an arrangement which
allows a customer to transport, for example, 1.536 Mbps of information
on a 1.544
[[Page 2594]]
Mbps line rate with no constraint on the quantity or sequence of one
and zero bits);
v. Cross-connection (not shown) (semi-permanent switching between
facilities, sometimes combined with multiplexing/demultiplexing);
vi. Multiplexing (not shown) (channelizing a facility into
individual services requiring a Lower capacity or bandwidth); and
vii. Class of service and/or committed information rate (not shown)
(for Ethernet, the performance characteristics of the network and
bandwidth available for a customer port connection).
c. If none of the possible entries describes the rate element,
enter a short description.
7. List the CLLI code for each one of your wire centers that was
subject to price cap regulation as of December 31, 2010 and as of
December 31, 2012, i.e., those wire centers in your incumbent territory
where the Commission had not granted you pricing flexibility. For those
MSAs and Non-MSAs where the Commission granted you Phase I or Phase II
Pricing Flexibility as of December 31, 2010 and as of December 31,
2012, list the CLLI codes for the wire centers associated with each MSA
and Non-MSA for each year, the name of the relevant MSA and Non-MSA for
each year, and the level of pricing flexibility granted for the MSA and
Non-MSA, i.e., Phase I and/or Phase II Pricing Flexibility.
Revenues, Terms and Conditions Information
8. What were your Revenues from the sale of CBDS services in 2010
and 2012? For each year, report Revenues in total, separately by DS1,
DS3, and other CBDS sales, and separately by customer category, i.e.,
sales to Competitive Providers and End Users.
9. What were your Revenues from the sale of PBDS services in 2010
and 2012? For each year, report Revenues in total, separately by
customer category, i.e., sales to Competitive Providers and End Users,
and separately by bandwidth for the following categories:
a. Less than or equal to 1.5 Mbps;
b. Greater than 1.5, but less than or equal to 50 Mbps;
c. Greater than 50, but less than or equal to 100 Mbps;
d. Greater than 100, but less than or equal to 1 gigabyte per
second (Gbps); and
e. Greater than 1 Gbps.
10. What were your Revenues from the One Month Term Only Rate
charged for DS1, DS3, and/or PBDS services in 2010 and 2012? For each
year, report Revenues in total, separately by DS1, DS3, and PBDS sales
as applicable, and separately by customer category, i.e., sales to
Competitive Providers and End Users.
11. How many customers were purchasing DS1, DS3, and/or PBDS
services pursuant to your One Month Term Only Rates as of December 31,
2012? Report customer numbers in total, separately for DS1, DS3, and
PBDS services as applicable, and separately by customer category, i.e.,
the number of DS1, DS3, and PBDS service customers that were
Competitive Providers and End Users.
12. Separately list all available Tariff Plans and Contract-Based
Tariffs that can be applied to the purchase of DS1, DS3 and/or PBDS
services and provide the information requested below for each plan.
a. This plan is a:
[ballot] Tariff Plan
[ballot] Contract-Based Tariff (select one)
b. Plan name:
c. Tariff and Section Number(s):
d. This plan contains:
[ballot] Term Commitment(s)
[ballot] Volume Commitment(s)
[ballot] Non-Rate Benefit option(s) (select all that apply)
e. If the plan contains options for Non-Rate Benefits, explain of
the available Non-Rate Benefits.
f. This plan can be applied to the purchase of:
[ballot] DS1 services
[ballot] DS3 services
[ballot] PBDS
[ballot] Other (select all that apply)
g. In what geographic areas is this plan available, e.g.,
nationwide, a particular region of the country, certain states, certain
MSAs, a particular study area?
h. To receive a discount or Non-Rate Benefit under this plan, must
the customer make a Prior Purchase-Based Commitment?
[ballot] Yes
[ballot] No
i. Do purchases of DS1 or DS3 services in areas outside of your
price cap study area(s) (e.g., purchases from an Affiliated Company
that is a CLEC) count towards meeting any Volume Commitment to receive
a discount or Non-Rate Benefit under this plan?
[ballot] Yes
[ballot] No
[ballot] N/A (no Volume Commitment)
j. Do DS1 or DS3 purchases in areas where you are subject to price
cap regulation and where pricing flexibility has not been granted count
towards meeting any Volume Commitment to receive a discount or Non-Rate
Benefit under this plan?
[ballot] Yes
[ballot] No
[ballot] N/A (no Volume Commitment)
k. Do non-tariffed PBDS purchases by the customer count towards
meeting any Volume Commitment to receive a discount or Non-Rate Benefit
under this plan?
[ballot] Yes
[ballot]
No [ballot] N/A (no Volume Commitment)
l. Do purchases by the customer for services other than DS1s, DS3s,
and PBDS count towards meeting any Volume Commitment to receive a
discount or Non-Rate Benefit under this plan?
[ballot] Yes
[ballot] No
[ballot] N/A (no Volume Commitment)
m. Is the discount or Non-Rate Benefit available under this plan
conditioned on the customer limiting its purchase of UNEs, e.g.,
customer must keep its purchase of UNEs below a certain percentage of
the customer's total spend?
[ballot] Yes
[ballot] No
n. What were your Revenues from the provision of DS1, DS3, and/or
PBDS services under this plan in 2010 and in 2012? For each year,
report Revenues in total, separately by DS1, DS3, and PBDS sales as
applicable, and separately by customer category, i.e., sales to
Competitive Providers and End Users.
o. What percentage of the Revenues reported above in response to
question II.B.12.n for 2010 and 2012 were generated and also reported
as Revenues under a separately identified Tariff Plan or Contract-Based
Tariff?
p. What percentage of the Revenues generated by this plan in 2012
resulted from a Term Commitment of five or more years?
q. What is the business justification for any Term or Volume
Commitments associated with this plan?
r. How many customers were subscribed to this plan as of December
31, 2012? Report customer numbers in total, separately for DS1, DS3,
and PBDS services as applicable, and separately by customer category,
i.e., the number of DS1, DS3, and/or PBDS customers that were
Competitive Providers and End Users.
s. Of those customers subscribed as of December 31, 2012, how many
in 2012 failed to meet any Volume Commitment or Term Commitment
required to retain a discount or Non-Rate Benefit they originally
agreed to when entering into this plan?
13. Do you have any non-tariffed agreement with an End User or
Competitive Provider that, directly or
[[Page 2595]]
indirectly, provides a discount or a Non-Rate Benefit on the purchase
of tariffed DS1s, DS3s, and/or PBDS, restricts the ability of the End
User or Competitive Provider to obtain UNEs, or negatively affects the
ability of the End User or Competitive Provider to purchase Dedicated
Services?
[ballot] Yes
[ballot] No
a. If so, identify each agreement below, including the parties to
the agreements, the effective date, and a summary of the relevant
provisions.
C. Entities that provide Best Efforts Business Broadband Internet
Access Services must respond to the following questions:
1. Do you have fewer than 15,000 customers and fewer than 1,500
business broadband customers?
[ballot] Yes
[ballot] No
2. If you answered ``no'' to question II.C.1, then answer the
following questions:
a. Did you submit data in connection with the State Broadband
Initiative (SBI) Grant Program for 2010?
[ballot] Yes
[ballot] No
b. Did you submit data in connection with the SBI Grant Program for
2012?
[ballot] Yes
[ballot] No
If you answered ``no'' to questions II.C.1.a and II.C.1.b, then you
do not need to answer any further questions in this section.
c. Did the data you submitted in connection with the SBI Grant
Program in 2010 accurately and completely identify the areas in which
you offered Best Efforts Business Broadband Internet Access Services
and exclude those areas where you did not offer such services as of
December 31, 2010?
[ballot] Yes
[ballot] No
i. If yes, then provide the list of prices for those Best Efforts
Business Broadband Internet Access Services that you were marketing in
each census block submitted in connection with the SBI Grant Program as
of December 31, 2010. If there is a price variation within your service
footprint, indicate which prices are associated with which census
blocks.
ii. If no, then provide a list of all the census blocks in which
you were providing Best Efforts Business Broadband Internet Access
Services as of December 31, 2010, and a list of the prices for those
Best Efforts Business Broadband Internet Access Services that you were
marketing in each census block as of December 31, 2010. If there is a
price variation within your service footprint, indicate which prices
are associated with which census blocks.
d. Did the data you submitted in connection with the SBI Grant
Program in 2012 accurately and completely identify the areas in which
you offered Best Efforts Business Broadband Internet Access Services
and exclude those areas where you did not offer such services as of
December 31, 2012?
[ballot] Yes
[ballot] No
i. If yes, then provide the list of prices for those Best Efforts
Business Broadband Internet Access Services that you were marketing in
each census block submitted in connection with the SBI Grant Program as
of December 31, 2012. If there is a price variation within your service
footprint, indicate which prices are associated with which census
blocks.
ii. If no, then provide a list of all the census blocks in which
you were providing Best Efforts Business Broadband Internet Access
Services as of December 31, 2012, and a list of the prices for those
Best Efforts Business Broadband Internet Access Services that you were
marketing in each census block as of December 31, 2012. If there is a
price variation within your service footprint, indicate which prices
are associated with which census blocks.
D. All Providers must respond to the following questions:
1. Describe your company's short term and long-range promotional
and advertising strategies and objectives for winning new--or retaining
current--customers for Dedicated Services. In your description, please
describe the size (e.g., companies with 500 employees or less, etc.),
geographic scope (e.g., national, southeast, Chicago, etc.), and type
of customers your company targets or plans to target through these
strategies.
2. Identify where your company's policies are recorded on the
following Dedicated Service-related processes: (a) Initiation of
service; (b) service Upgrades; and (c) service Disconnections. For
instance, identify where your company records recurring and non-
recurring charges associated with the processes listed above. If
recorded in a Tariff, provide the specific Tariff section(s). If these
policies are recorded in documents other than Tariffs, list those
documents and state whether they are publicly available. If they are
publicly available, explain how to find them. For documents that are
not publicly available, state whether they are conveyed to customers
orally or in writing.
3. Explain the procedures your company follows when a customer
continues to purchase End-user Channel Terminations from your company
but requests to change Transport Providers from your company to another
Provider. In addition, answer the following questions regarding your
process:
a. Where are your procedures that govern these changes recorded?
Provide the relevant Tariff number and section(s), if applicable, or
identify which documents other than Tariffs contain these procedures.
For documents that are not publicly available, state whether they are
conveyed to customers orally or in writing.
b. In 2012, what was the average length of time that it took your
company to complete the process of connecting End User Channel
Terminations to a new Transport Provider?
c. Can purchasers negotiate timelines on a case-by-case basis?
d. Do any of your company's policies, whether contained in Tariffs
or other documents, limit the maximum number of circuits that can be
connected to a new Transport Provider per day, per week, or per month?
If yes, what is that number and what is the business rationale for this
requirement?
e. How does connecting to a new Transport Provider impact the rate
a customer pays for the End User Channel Terminations the customer
continues to purchase from your company?
f. While the change in Transport Providers is pending completion
and before there is a Disconnection in the Transport Service provided
by your company, are there instances where the customer must pay a
higher rate for the Transport Service provided by your company? If so,
then detail those circumstances and what rates would apply before and
after the request is made. For example, if the customer's contract
expires or is terminated while a request to connect to a new Transport
Provider is pending, would the customer pay a One Month Term Only Rate
until there is a Disconnection in the Transport Service provided by
your company?
E. Purchasers that are mobile wireless service providers must
respond to the following questions:
1. How many cell sites do you have on your network?
2. Provide the information requested below for each cell site on
your network as of December 31, 2010 and as of December 31, 2012.
a. A unique ID for the cell site;
b. The actual situs address of the cell site (i.e., land where the
cell site is located) if the cell site is located in or on a building;
[[Page 2596]]
c. The geocode for the cell site (i.e., latitude and longitude);
d. The CLLI code of the incumbent LEC wire center that serves the
cell site, where applicable;
e. Whether the cell site is in or on a building, is a free-standing
cell site, or is on some other type of man-made structure, e.g., a
water tower, billboard, etc.;
f. If the cell site is served by a CBDS, indicate the equivalent
number of DS1s used;
g. If the cell site is served by a PBDS, indicate the bandwidth of
the circuit in Mbps;
h. If the cell site is served by a wireless Connection, indicate
the bandwidth of the circuit in Mbps;
i. The name of the Provider(s) that supplies your Connection to the
cell site; and
j. If you self-provide a Connection to the cell site, the
provisioned bandwidth of that self-provided Connection.
F. All Purchasers must respond to the following questions:
Expenditures Information
1. What is the principal nature of your business, e.g., are you a
CLEC, cable system operator, fixed wireless service provider, wireless
Internet service provider, terrestrial or satellite mobile wireless
service provider, interconnected VoIP service provider, etc.?
2. What were your expenditures, i.e., dollar volume of purchases,
on Dedicated Services for 2010 and 2012? For each year, report
expenditures in total, separately for CBDS and PBDS purchases, and
separately for purchases from ILECs and Competitive Providers.
3. Provide your company's expenditures, i.e., dollar volume of
purchases, for DS1s, DS3s, and/or PBDS purchased from ILECs pursuant to
a Tariff in 2010 and in 2012. For each of the following categories,
report expenditures for each year in total and separately for DS1s,
DS3s and PBDS:
a. All DS1s, DS3s, and PBDS;
b. DS1s, DS3s, and PBDS purchased at One Month Term Only Rates;
c. DS1s, DS3s, and PBDS purchased under Tariff Plans;
d. DS1s, DS3s, and PBDS purchased under Contract-Based Tariffs;
e. DS1s, DS3s, and PBDS purchased under Tariff Plans that contained
a Term Commitment but not a Volume Commitment;
f. DS1s, DS3s, and PBDS purchased under Tariff Plans that contained
a Prior Purchase-Based Commitment;
i. Of the total (and for the separate DS1, DS3, and PBDS totals
where applicable), indicate the average discount from the One Month
Term Only Rate incorporated in the expenditures.
For purposes of calculating the percentages described above, an
example would be a Tariff Plan that requires a purchase of 20 DS1s and
10 DS3 and generates expenditures of $2,000 for calendar-year 2012. If
those same circuits were purchased at One Month Term Only Rates of $100
per DS1 and $200 per DS3, then total expenditures would instead be
$4,000. Since the Tariff Plan under this scenario generated 50% of the
expenditures that would be generated from One Month Term Only Rates,
the discount would be 50%.
g. DS1s, DS3s, and PBDS purchased under Contract-Based Tariffs that
contained a Term Commitment but not a Volume Commitment; and
h. DS1s, DS3s, and PBDS purchased under Contract-Based Tariffs that
contained a Prior Purchased-Based Commitment;
i. Of the total (and for the separate DS1 and DS3 totals if
available), indicate the average discount from the One Month Term Only
Rate incorporated in the expenditures.
An example of how to calculate this percentage can be found at
question II.F.3.f.i.
4. What were your expenditures, i.e., dollar volume of purchases,
on DS1s, DS3, and/or PBDS purchased from Competitive Providers pursuant
to a Tariff in 2010 and in 2012? Report expenditures in total and
separately for DS1s, DS3s and PBDS, as applicable, for the following
categories for each year:
a. All DS1s, DS3s, and PBDS;
b. DS1s, DS3s, and PBDS purchased at One Month Term Only Rates;
c. DS1s, DS3s, and PBDS purchased under Tariffs that contained a
Term Commitment but not a Volume Commitment;
d. DS1s, DS3s, and PBDS purchased under Tariffs that contained a
Prior Purchase-Based Commitment;
i. Of the total (and for the separate DS1, DS3, and PBDS totals
where applicable), indicate the average discount from the One Month
Term Only Rate incorporated in the expenditures.
An example of how to calculate this percentage can be found at
questionII.F.3.f.i.
5. What were your expenditures, i.e., dollar volume of purchases,
on DS1s, DS3s, and/or PBDS purchased from ILECs and Competitive
Providers pursuant to an agreement (not a Tariff) in 2010 and in 2012?
Report expenditures in total, separately for purchases from ILECs
andCompetitive Providers, and separately for DS1s, DS3s and PBDS, as
applicable, for the followingcategories for each year:
a. All DS1s, DS3s, and PBDS;
b. DS1s, DS3s, and PBDS purchased at a non-discounted rate;
c. DS1s, DS3s, and PBDS purchased under a non-tariffed agreement
that contained a Term Commitment but not a Volume Commitment;
d. DS1s, DS3s, and PBDS purchased under a non-tariffed agreement
that contained a Prior Purchase-Based Commitment;
i. Of the total (and for the separate DS1, DS3, and PBDS totals
where applicable), indicate the average discount from the non-
discounted rate incorporated in the expenditures.
An example of how to calculate this percentage can be found at
question II.F.3.f.i.
6. What were your expenditures, i.e., dollar volume of purchases,
on PBDS purchased under a Tariff in 2010 and in 2012?
a. Separately for purchases from ILECs and Competitive Providers
for the following service bandwidth categories:
i. less than or equal to 1.5 Mbps;
ii. greater than 1.5, but less than or equal to 50 Mbps;
iii. greater than 50, but less than or equal to 100 Mbps;
iv. greater than 100, but less than or equal to 1 Gbps; or
v. greater than 1 Gbps.
7. What were your expenditures, i.e., dollar volume of purchases,
on non-tariffed PBDS in 2010 and in 2012?
a. Separately for purchases from ILECs and Competitive Providers
for the following service bandwidth categories:
i. less than or equal to 1.5 Mbps;
ii. greater than 1.5, but less than or equal to 50 Mbps;
iii. greater than 50, but less than or equal to 100 Mbps;
iv. greater than 100, but less than or equal to 1 Gbps; or
v. greater than 1 Gbps.
Terms and Conditions Information
8. Explain whether the terms and conditions of any contract to
which you are a party for the purchase of Dedicated Services or the
policies of any of your Providers constrain your ability to:
a. Decrease your purchases from your current Provider(s);
b. Purchase services from another Provider currently operating in
the geographic areas in which you purchase services;
c. Purchase non-tariffed services, such as Ethernet services, from
your current
[[Page 2597]]
Provider of tariffed DS1, DS3, and/or PBDS services or from other
Providers operating in the geographic areas in which you purchase
tariffed services;
d. Contract with companies that are considering entering the
geographic areas in which you purchase tariffed services;
e. Move circuits, for example, moving your DS1 and/or DS3 End-User
Channel Terminations to connect to another Transport Provider; or
f. Obtain Dedicated Services.
Relevant terms and conditions, among others, may include: (a) Early
termination penalties; (b) shortfall provisions; (c) overlapping/
supplemental discounts plans with different termination dates; (d)
requirements to include all services, including new facilities, under a
Tariff Plan or Contract-Based Tariff; or (e) requiring purchases in
multiple geographic areas to obtain maximum discounts.
In your answer, highlight contracts with particularly onerous
constraints by comparison with more typical contract provisions. Also,
at a minimum, list: (a) The Provider and indicate whether the Provider
is an ILEC or a Competitive Provider; (b) a description of the term or
condition; (c) the geographic area in which the tariffed services are
provided; (d) the name of the vendor providing the tariffed service;
and (e) the specific Tariff number(s) and section(s), or if the policy
at issue is recorded in documents other than Tariffs, list those
documents and how you obtained them.
If you allege that a term, condition, or Provider's policy
negatively affects your ability to obtain Dedicated Services, state
whether you have brought a complaint to the Commission, a state
commission or court about this issue and the outcome. If you have not
brought a complaint, explain why not.
9. Explain your experience with changing Transport Providers
between January 1, 2010 and December 31, 2012, describing whether and
how it has impacted your ability to purchase Dedicated Services. Where
appropriate, identify the Provider(s) in your responses below.
a. How many times did you change Transport Providers while keeping
your End User Channel Terminations with an ILEC or Competitive
Provider? An estimate of the number of circuits moved to a new
Transport Provider, or the number of such changes requested for each
year, is sufficient.
b. What was the length of time, on average, it took for the ILEC or
Competitive Provider to complete the process of connecting your last-
mile End-user Channel Terminations to another Transport Provider? An
estimate is sufficient.
c. Were you given the opportunity to negotiate time lines on a
case-by-case basis?
d. How did connecting to a new Transport Provider impact the rate
you paid for the End User Channel Terminations you continued to
purchase from the ILEC or Competitive Provider?
e. Did connecting to a new Transport Provider typically impact the
rate you continued to pay for Transport Service from the incumbent
Provider while the change in Transport Providers remained pending? If
so, what was the average percentage change in rates? Did you ever pay a
One Month Term Only Rate during that time?
10. Describe any circumstances since January 1, 2010, in which you
have purchased circuits pursuant to a Tariff, solely for the purpose of
meeting a Volume Commitment required for a discount or Non-Rate Benefit
from your Provider (i.e., you did not utilize the circuits). In your
description, provide at least one example, which at a minimum, lists:
a. The geographic area (e.g., MSA or Non-MSA) in which you
purchased the unnecessary circuits;
b. The name of the Provider providing the circuits at issue;
c. A description of the Volume Commitment;
d. The Tariff and section number(s), if applicable, of the specific
terms and conditions described;
e. A comparison of the dollar amount of the unnecessary circuit(s)
purchased versus the dollar amount of penalties your company would have
had to pay had it not purchased and/or maintained the circuit(s), and a
description of how that comparison was calculated.
11. For each year for the past five years, state the number of
times and in what geographic area(s) you have switched from one
Provider of Dedicated Services to another.
12. Explain the circumstances since January 1, 2010 under which you
have paid One Month Term Only Rates for DS1, DS3, and/or PBDS services
and the impact, if any, it had on your business and your customers. In
your response, indicate any general rules you follow, if any,
concerning the maximum number of circuits and maximum amount of time
you will pay at One Month Term Only Rates, and your business rationale
for any such rules.
13. Separately list all available Tariffs under which your company
purchases DS1s, DS3s, and/or PBDS and provide the information requested
below for each plan.
a. This plan is a:
[ballot] Tariff Plan
[ballot] Contract-Based Tariff (select one)
b. Plan name:
c. Provider name:
d. Tariff and Section Number(s):
e. Tariff type:
[ballot] Interstate
[ballot] Intrastate
f. This plan contains:
[ballot] Term Commitment(s)
[ballot] Volume Commitment(s)
[ballot] Non-Rate Benefit option(s) (select all that apply)
g. If the plan contains Non-Rate Benefits, identify the Non-Rate
Benefits that were relevant to your decision to purchase services under
this plan.
h. This plan can be applied to the purchase of:
[ballot] DS1 services
[ballot] DS3 services
[ballot] PBDS
[ballot] Other (select all that apply)
i. In what geographic areas do you purchase DS1s, DS3s, and/or PBDS
under this plan, e.g., nationwide, a particular region of the country,
certain states, certain MSAs, a particular study area?
j. To receive a discount or Non-Rate Benefit under this plan, does
your company make a Prior Purchase-Based Commitment?
[ballot] Yes
[ballot] No
k. If this is an ILEC plan, do DS1 or DS3 purchases your company
makes outside the study area(s) of the ILEC (e.g., purchases from an
Affiliated Company of the ILEC that is providing out-of-region service
as a CLEC) count towards meeting any Volume Commitment to receive a
discount or Non-Rate Benefit under this plan?
[ballot] Yes
[ballot] No
[ballot] N/A (no Volume Commitment, not an ILEC plan)
i. If you answered yes, in what geographic areas outside the study
area(s) of the ILEC, do you purchase these DS1s and/or DS3s?
ii. Of the geographic areas identified, in which of those areas
would your company have purchased from a different Provider, if at all,
had it not been for the discounts or Non-Rate Benefits received under
this plan? In your response, indicate whether the Provider that you
would have purchased from has Connections serving that geographic area.
l. If this is an ILEC plan, do DS1 and/or DS3 purchases your
company makes from the ILEC in price cap areas where the Commission has
not granted the ILEC pricing flexibility count towards meeting any
Volume Commitment to
[[Page 2598]]
receive a discount or Non-Rate Benefit under this plan?
[ballot] Yes
[ballot] No
[ballot] N/A (no Volume Commitment, not an ILEC plan)
i. If you answered yes, then identify the price cap areas where you
purchase DS1s and/or DS3s that count towards meeting any Volume
Commitment to receive a discount or Non-Rate Benefit under this plan?
m. If this is an ILEC plan, do DS1 and/or DS3 purchases your
company makes from the ILEC in areas where the Commission has granted
either Phase I or Phase II Pricing Flexibility count towards meeting
any Volume Commitment to receive a discount or Non-Rate Benefit under
this plan?
[ballot] Yes
[ballot] No
[ballot] N/A (no Volume Commitment, not an ILEC plan)
i. If you answered yes, in what geographic areas subject to pricing
flexibility do you purchase DS1s and/or DS3s that count towards meeting
any Volume Commitment to receive a discount or Non-Rate Benefit under
this plan?
ii. Of the geographic areas identified, in which of those areas
would your company have purchased from a different Provider, if at all,
had it not been for the requirements of the Tariff Plan? In your
response, indicate whether the Provider that you would have purchased
from has Connections serving that geographic area.
n. If this is an ILEC plan, do non-tariffed PBDS purchases you make
from this ILEC count towards meeting any Volume Commitment to receive a
discount or Non-Rate Benefit under this plan?
[ballot] Yes
[ballot] No
[ballot] N/A (no Volume Commitment, not an ILEC plan)
i. If you answered yes, in what geographic areas do you purchase
non-tariffed PBDS that counts towards meeting any Volume Commitment to
receive a discount or Non-Rate Benefit under this plan.
ii. Of the geographic areas identified, in which of those areas
would your company have purchased PBDS from a different Provider, if at
all, had it not been for the requirements of the plan? In your
response, indicate whether the Provider that you would have purchased
from has Connections serving that geographic area.
o. If this is an ILEC plan, do purchases you make for services
other than DS1s, DS3s, and PBDS from this ILEC count towards meeting
any Volume Commitment to receive a discount or Non-Rate Benefit under
this plan?
[ballot] Yes
[ballot] No
[ballot] N/A (no Volume Commitment, not an ILEC plan)
i. If you answered yes, identify the other services purchased and
the geographic areas where you purchase these services that count
towards meeting any Volume Commitment to receive a discount or Non-Rate
Benefit under this plan.
ii. Of the geographic areas identified, in which of those areas
would your company have purchased those other services from a different
Provider, had it not been for the requirements of the plan? In your
response, indicate whether the Provider that you would have purchased
from has Connections serving that geographic area.
p. Is the discount or Non-Rate Benefit available under this plan
conditioned on the customer limiting its purchase of UNEs, e.g., the
customer must keep its purchase of UNEs below a certain percentage of
the customer's total spend? If yes, then provide additional details
about the condition.
14. Do you have any non-tariffed agreement with an ILEC that,
directly or indirectly, provides a discount or a Non-Rate Benefit on
the purchase of tariffed DS1, DS3, and/or PBDS services, restricts your
ability to obtain UNEs, or negatively affects your ability to purchase
Dedicated Services?
[ballot] Yes
[ballot] No
a. If so, identify each agreement below, including the parties to
the agreement, the effective date, and a summary of the relevant
provisions.
G. Non-Providers and Non-Purchasers instructed to respond to this
data collection must respond to the following:
1. If you must respond to this data collection because you filed
the FCC Form 477 in 2012 to report the provision of ``broadband
connections to end user locations'' but are not (a) a Provider or a
Purchaser as defined in this data collection or (b) an entity that
provides Best Efforts Business Broadband Internet Access Services, then
indicate as such below and complete the certification accompanying this
data collection.
[ballot] I am not a Provider.
[ballot] I am not a Purchaser.
[ballot] I do not provide Best Efforts Business Broadband Internet
Access Services.
(select all that apply)
Certification
I have examined the response and certify that, to the best of my
knowledge, all statements of fact, data, and information contained
therein are true and correct.
Signature:-------------------------------------------------------------
Printed Name:----------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
* Respondents are reminded that failure to comply with these data
reporting requirements may subject them to monetary forfeitures of up
to $150,000 for each violation or each day of a continuing violation,
up to a maximum of $1,500,000 for any single act or failure to act that
is a continuing violation. False statements or misrepresentations to
the Commission may be punishable by fine or imprisonment under Title 18
of the U.S. Code.
VI. Ordering Clauses
136. Accordingly, it is ordered that pursuant to sections 1, 4(i),
4(j), 5, 201-205, 211, 215, 218, 219, 303(r), 332, 403, and 503 of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j),
155, 201, 202, 203, 204, 205, 211, 215, 218, 219, 303(r), 332, 403,
503, and section 706 of the Telecommunications Act of 1996, 47 U.S.C.
1302, the Report and Order, with all attachments, is adopted March 12,
2013, except for those rules and requirements involving Paperwork
Reduction Act burdens, which shall become effective upon announcement
in the Federal Register of OMB approval and an effective date of the
rule(s), and except as specified in paragraph 137.
137. It is further ordered that we delegate authority to the
Wireline Competition Bureau to implement a data collection in
accordance with the terms of this Report and Order, and that this
delegation of authority is effective upon adoption, see 47 U.S.C.
155(c).
138. It is further ordered that the data collection shall become
effective upon announcement in the Federal Register of Office of
Management and Budget approval and an effective date of the
requirements.
139. It is further ordered that the Commission SHALL SEND a copy of
this Report and Order to Congress and the Government Accountability
Office pursuant to the Congressional Review Act, see 5 U.S.C.
801(a)(1)(A).
140. 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.
[[Page 2599]]
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2013-00278 Filed 1-10-13; 8:45 am]
BILLING CODE 6712-01-P