Wireline Competition Bureau Seeks Comment on Connect America Phase II Support for Price Cap Areas Outside of the Contiguous United States, 12006-12010 [2013-04034]

Download as PDF 12006 Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Proposed Rules FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 54 [WC Docket No. 10–90; DA 13–162] Wireline Competition Bureau Seeks Comment on Connect America Phase II Support for Price Cap Areas Outside of the Contiguous United States Federal Communications Commission. ACTION: Proposed rule. AGENCY: In this document, the Federal Communications Commission seeks to further develop the record on issues relating to Connect America Phase II support for price cap carriers serving areas outside of the contiguous United States. DATES: Comments are due on or before March 11, 2013 and reply comments are due on or before March 25, 2013. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible. ADDRESSES: You may submit comments, identified by WC Docket No. 10–90, by any of the following methods: • Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. • Federal Communications Commission’s Web Site: https:// fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting comments. • People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: (202) 418–0530 or TTY: (202) 418–0432. For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document. FOR FURTHER INFORMATION CONTACT: Dania Ayoubi, Wireline Competition Bureau, (202) 418–7400 or TTY: (202) 418–0484. SUPPLEMENTARY INFORMATION: This is a synopsis of the Wireline Competition Bureau’s Public Notice in WC Docket No. 10–90, and DA 13–162, released February 8, 2013. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY–A257, Washington, DC 20554. These documents may also be purchased from erowe on DSK2VPTVN1PROD with PROPOSALS-1 SUMMARY: VerDate Mar<15>2010 14:43 Feb 20, 2013 Jkt 229001 the Commission’s duplicating contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street SW., Room CY– B402, Washington, DC 20554, telephone (800) 378–3160 or (202) 863–2893, facsimile (202) 863–2898, or via the Internet at https://www.bcpiweb.com. It is also available on the Commission’s Web site at https://www.fcc.gov. I. Introduction 1. In this Public Notice, the Wireline Competition Bureau (Bureau) seeks to further develop the record on issues relating to Connect America Phase II support for price cap carriers serving areas outside of the contiguous United States. In particular, we seek comment on various options for providing Connect America Phase II support to price cap carriers serving such areas and the associated obligations that come with the receipt of such support. II. Discussion 2. Application of Cost Model to Areas Outside the Contiguous United States. Several parties have argued that the Connect America Cost Model (CACM) would provide insufficient support to areas outside the contiguous United States. We seek comment on what objective criteria or factors the Bureau should consider in determining whether support determined by the cost model is sufficient. 3. The Bureau seeks to further develop the record on two alternative options for areas outside the contiguous United States: (1) Modifying the design of and/or specific inputs used in the CACM, including incorporating aspects of the Alaska-specific and Puerto Ricospecific model submissions; or (2) maintaining existing support levels. 4. What specific changes would need to be made or data would need to be incorporated, if the Bureau were to modify the current version of the CACM? Some providers have expressed concern over particular features of the CACM as related to the areas outside the contiguous United States that they serve. Puerto Rico Telephone Company, Inc. (PRTC) argues, for instance, that its standalone Puerto Rico-specific cost model is more accurate because, among other things, it incorporates actual customer locations and the cost of undersea cable transport to Florida. Likewise, Alaska Communications Systems Group, Inc. (ACS) argues that a model that does not include, among other things, the cost of satellite backhaul where terrestrial options are unavailable, would not accurately predict the costs of serving Alaska. Should the Bureau incorporate those modifications into the CACM to better PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 model the forward-looking cost of serving customers in areas outside of the contiguous United States? How should the Bureau proceed if a party has not submitted any information into the record regarding the circumstances in a particular non-contiguous area at the time the Bureau adopts the cost model? 5. If the Bureau were to incorporate aspects of the models offered by interested parties into CACM, how can it ensure that the inputs utilized reflect the costs of an efficient provider rather than current, embedded costs? The mere fact that current support levels may be higher now than they would be under CACM is not necessarily dispositive in determining whether support in such areas is ‘‘sufficient.’’ Existing costs may not reflect the forward-looking costs of an efficient provider. What specific metrics or objective data would the Bureau need to be able to distinguish between legitimate differences in operating costs in non-contiguous areas and those that may not reflect the forward-looking costs of an efficient provider? 6. How should the Bureau take into account the additional time it would take to modify CACM to address the unique circumstances of each area outside of the contiguous United States at this stage in the process, and the extent to which a later adoption of CACM would delay the deployment of broadband in areas within the contiguous United States? In order to move forward more quickly, is there an administratively feasible way to pursue implementation of CACM in those areas where further refinement of the model is not necessary while developing an adequate approach in non-contiguous areas? If so, how would the Bureau ensure that total support levels remain within the overall $1.8 billion budget? 7. The Virgin Islands Telephone Corporation (Vitelco) has argued in the alternative that we should maintain support at existing levels. And if we decline to use its ‘‘Broadband Cost Model: Puerto Rico’’ (BCMPR), PRTC recommends that we, ‘‘at a minimum, maintain legacy high cost universal service support.’’ In directing the Bureau to consider the circumstances facing carriers providing service in areas outside the contiguous United States, the Commission required that if existing support levels are maintained, total support could not exceed the overall budget of $1.8 billion per year. We note that 2011 disbursements for price cap carriers outside of the contiguous United States totaled approximately $76 million, which would leave $1.724 billion remaining for price cap carriers in the contiguous United States. How E:\FR\FM\21FEP1.SGM 21FEP1 erowe on DSK2VPTVN1PROD with PROPOSALS-1 Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Proposed Rules would freezing support for certain carriers impact the Commission’s progress in extending broadbandcapable infrastructure in the United States? 8. We note that the Commission recently sought comment on several options for utilizing funds remaining from Connect America Phase I, with one possibility being to use some or all of those funds to enlarge the budget for Phase II. Should some of the unused Phase I monies be made available to maintain existing support levels for carriers in non-contiguous areas if the Commission were to adopt such a rule increasing the $1.8 billion budget? 9. State-Level Commitment Process. The state-level commitment process set forth in the USF/ICC Transformation Order and FNPRM, 76 FR 73830, November 29, 2011 and 76 FR 78384, December 16, 2011, assumes that carriers would make commitments based on the model-determined support amount and the service obligations that would attach to that support. In the event the Bureau determines that support in some or all of the noncontiguous areas should instead be maintained at existing levels, should carriers receiving frozen support to serve those areas make a statewide commitment to accept or reject the frozen support? Should there be any changes in the statewide commitment process for carriers receiving frozen support instead of model-based support? 10. Service Obligations. Some have suggested that service obligations should be adjusted if support is frozen in non-contiguous areas. The Bureau seeks to further develop the record on what obligations, if any, should be adjusted if the Bureau maintains support at existing levels for some or all of the price cap carriers operating outside the contiguous United States. How many supported locations should be required to have broadband-capable infrastructure that can provide speeds of at least 4 Mbps/1 Mbps, and how should that figure be determined? Should recipients of frozen support be required to deploy infrastructure that can deliver speeds of at least 6 Mbps/1.5 Mbps to some number of supported locations, and how should that number be set? Recognizing that the Bureau has not yet specified metrics for latency or usage capacity for carriers making a state-level commitment, should those requirements be modified for carriers receiving frozen support? What measures would need to be in place to ensure that we have the ability to monitor compliance with adjusted service obligations? Commenters suggesting modified VerDate Mar<15>2010 14:43 Feb 20, 2013 Jkt 229001 obligations for these carriers should specifically identify which obligations should be modified and specify objective metrics that would need to be met, so that the Commission has the ability to ensure accountability and oversight. III. Procedural Matters A. Initial Regulatory Flexibility Act Analysis 11. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Bureau has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in this Notice. Written comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the Public Notice. The Commission will send a copy of the Public Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Public Notice and IRFA (or summaries thereof) will be published in the Federal Register. B. Need for, and Objectives of, the Proposed Rules 12. The Notice seeks comment on a variety of issues relating to Connect America Phase II support for price cap carriers serving areas outside the contiguous United States. The Commission directed the Bureau to design a model to estimate the forwardlooking economic costs of providing broadband to high-cost areas. In adopting the cost model, the Bureau was also to consider the unique circumstances facing areas outside the contiguous United States and determine whether the model adequately accounts for costs carriers face in serving those areas. C. Legal Basis 13. The legal basis for any action that may be taken pursuant to the Notice is contained in sections 1, 2, 4(i), 214, 254, 303(r), 403, and 706 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 214, 254, 303(r), 403, and 706, and §§ 1.1 and 1.1421 of the Commission’s rules, 47 CFR 1.1, 1.421. D. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply 14. 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 PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 12007 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. 15. Small Businesses. Nationwide, there are a total of approximately 27.9 million small businesses, according to the SBA. 16. 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, 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. 17. 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 Public Notice. 18. 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 E:\FR\FM\21FEP1.SGM 21FEP1 erowe on DSK2VPTVN1PROD with PROPOSALS-1 12008 Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Proposed Rules 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 Public Notice. 19. 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 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. 20. 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 Public Notice. 21. Wireless Telecommunications Carriers (except Satellite). Since 2007, the SBA has recognized wireless firms within this new, broad, economic VerDate Mar<15>2010 14:43 Feb 20, 2013 Jkt 229001 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 1000 employees or more. Similarly, according 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. 22. 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 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. 23. 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 PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 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. 24. 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 majority of Satellite Telecommunications firms are small entities that might be affected by rules adopted pursuant to the Public Notice. 25. 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. 26. 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 E:\FR\FM\21FEP1.SGM 21FEP1 erowe on DSK2VPTVN1PROD with PROPOSALS-1 Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Proposed Rules 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 Public Notice. 27. 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 under 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 Public Notice. 28. 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 fewer 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 VerDate Mar<15>2010 14:43 Feb 20, 2013 Jkt 229001 more accurately the number of cable system operators that would qualify as small under this size standard. 29. 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 Notice. 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. 30. 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 PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 12009 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 Public Notice. E. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities 31. In this Notice, the Commission seeks public comment on issues relating to Connect America Phase II support for price cap carriers serving areas outside the contiguous United States. The Notice seeks comment on whether the Connect America Cost Model can be modified to account for the unique circumstances providers serving those areas face, of whether existing support levels should be maintained. The Notice also seeks comment on the associated obligations that come with the receipt of such support. F. Steps Taken To Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered 32. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): ‘‘(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rules for such 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 such small entities.’’ 33. The Notice seeks comment on CAF Phase II support to price cap carriers serving areas outside the contiguous United States. These CAF Phase II issues are not anticipated to have a significant economic impact on small entities insofar as the results impact high-cost support amounts for price cap carriers. This is primarily because most (and perhaps all) of the affected carriers are not small entities. Moreover, the choice of alternatives discussed is not anticipated to systematically increase or decrease E:\FR\FM\21FEP1.SGM 21FEP1 12010 Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Proposed Rules support for any particular group of entities and therefore any significant economic impact cannot necessarily be minimized through alternatives. G. Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rules 34. None. H. Paperwork Reduction Act 35. This document seeks comment on a potential new or revised information collection requirement. If the Commission adopts any new or revised information collection requirement, the Commission will publish a separate notice in the Federal Register inviting the public to comment on the requirement, as required by the Paperwork Reduction Act of 1995, Public Law 104–13 (44 U.S.C. 3501– 3520). In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107–198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might ‘‘further reduce the information collection burden for small business concerns with fewer than 25 employees.’’ erowe on DSK2VPTVN1PROD with PROPOSALS-1 I. Filing Requirements 36. Comments and Replies. Pursuant to §§ 1.415 and 1.419 of the Commission’s rules, 47 CFR 1.415 and 1.419, interested parties may file comments on or before the date indicated on the first page of this document. Comments may be filed using the Commission’s Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 1998. D Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: https:// fjallfoss.fcc.gov/ecfs2/. D Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Office of the Secretary, Federal Communications Commission. D All hand-delivered or messengerdelivered paper filings for the Commission’s Secretary must be delivered to FCC Headquarters at 445 12th Street SW., Room TW–A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any VerDate Mar<15>2010 14:43 Feb 20, 2013 Jkt 229001 envelopes and boxes must be disposed of before entering the building. D Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. D U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW., Washington DC 20554. 37. People with Disabilities. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202–418–0530 (voice), 202–418–0432 (tty). In addition, we request that one copy of each pleading be sent to each of the following: (1) Dania Ayoubi, Telecommunications Access Policy Division, Wireline Competition Bureau, 445 12th Street SW., Room 6–A322, Washington, DC 20554; email: Dania.Ayoubi@fcc.gov; (2) Charles Tyler, Telecommunications Access Policy Division, Wireline Competition Bureau, 445 12th Street SW., Room 5–A452, Washington, DC 20554; email: Charles.Tyler@fcc.gov. 38. The proceeding this Notice initiates shall be treated as a ‘‘permitbut-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 PO 00000 Frm 00015 Fmt 4702 Sfmt 4702 be written ex parte presentations and must be filed consistent with rule § 1.1206(b). In proceedings governed by rule § 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. Federal Communications Commission. Kimberly A. Scardino, Acting Division Chief, Telecommunications Access Policy Division, Wireline Competition Bureau. [FR Doc. 2013–04034 Filed 2–20–13; 8:45 am] BILLING CODE 6712–01–P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 73 [MB Docket No. 13–23; RM–11690; DA 13–95] Radio Broadcasting Services; Pearsall, Texas Federal Communications Commission. ACTION: Proposed rule. AGENCY: In this document the Commission requests comment on a petition filed by Wendolyn Tellez (‘‘Petitioner’’), licensee of FM Station KSAG, Channel 277A, Pearsall, Texas. Petitioner proposes to amend the FM Table of Allotments by substituting Channel 277A for vacant Channel 227A, at Pearsall. The proposal is part of a contingently filed ‘‘hybrid’’ application and rule making petition. Channel 277A can be allotted at Pearsall, Texas, in compliance with the Commission’s minimum distance separation requirements 28–56–40 NL and 99–11– 44 WL, at a site 11.4 km (7.1 miles) northwest of Pearsall. Concurrence by the Government of Mexico is required because Pearsall, Texas, is located within 320 kilometers (199 miles) of the U.S.-Mexican border. See SUPPLEMENTARY INFORMATION infra. DATES: Comments must be filed on or before March 18, 2013 and reply comments must be filed on or before April 2, 2013. ADDRESSES: You may submit comments, identified by MB Docket No 13–33, by any of the following methods: SUMMARY: E:\FR\FM\21FEP1.SGM 21FEP1

Agencies

[Federal Register Volume 78, Number 35 (Thursday, February 21, 2013)]
[Proposed Rules]
[Pages 12006-12010]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-04034]



[[Page 12006]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 10-90; DA 13-162]


Wireline Competition Bureau Seeks Comment on Connect America 
Phase II Support for Price Cap Areas Outside of the Contiguous United 
States

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission seeks 
to further develop the record on issues relating to Connect America 
Phase II support for price cap carriers serving areas outside of the 
contiguous United States.

DATES: Comments are due on or before March 11, 2013 and reply comments 
are due on or before March 25, 2013. If you anticipate that you will be 
submitting comments, but find it difficult to do so within the period 
of time allowed by this notice, you should advise the contact listed 
below as soon as possible.

ADDRESSES: You may submit comments, identified by WC Docket No. 10-90, 
by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web Site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: (202) 418-
0530 or TTY: (202) 418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Dania Ayoubi, Wireline Competition 
Bureau, (202) 418-7400 or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Wireline 
Competition Bureau's Public Notice in WC Docket No. 10-90, and DA 13-
162, released February 8, 2013. The complete text of this document is 
available for inspection and copying during normal business hours in 
the FCC Reference Information Center, Portals II, 445 12th Street SW., 
Room CY-A257, Washington, DC 20554. These documents may also be 
purchased from the Commission's duplicating contractor, Best Copy and 
Printing, Inc. (BCPI), 445 12th Street SW., Room CY-B402, Washington, 
DC 20554, telephone (800) 378-3160 or (202) 863-2893, facsimile (202) 
863-2898, or via the Internet at https://www.bcpiweb.com. It is also 
available on the Commission's Web site at https://www.fcc.gov.

I. Introduction

    1. In this Public Notice, the Wireline Competition Bureau (Bureau) 
seeks to further develop the record on issues relating to Connect 
America Phase II support for price cap carriers serving areas outside 
of the contiguous United States. In particular, we seek comment on 
various options for providing Connect America Phase II support to price 
cap carriers serving such areas and the associated obligations that 
come with the receipt of such support.

II. Discussion

    2. Application of Cost Model to Areas Outside the Contiguous United 
States. Several parties have argued that the Connect America Cost Model 
(CACM) would provide insufficient support to areas outside the 
contiguous United States. We seek comment on what objective criteria or 
factors the Bureau should consider in determining whether support 
determined by the cost model is sufficient.
    3. The Bureau seeks to further develop the record on two 
alternative options for areas outside the contiguous United States: (1) 
Modifying the design of and/or specific inputs used in the CACM, 
including incorporating aspects of the Alaska-specific and Puerto Rico-
specific model submissions; or (2) maintaining existing support levels.
    4. What specific changes would need to be made or data would need 
to be incorporated, if the Bureau were to modify the current version of 
the CACM? Some providers have expressed concern over particular 
features of the CACM as related to the areas outside the contiguous 
United States that they serve. Puerto Rico Telephone Company, Inc. 
(PRTC) argues, for instance, that its standalone Puerto Rico-specific 
cost model is more accurate because, among other things, it 
incorporates actual customer locations and the cost of undersea cable 
transport to Florida. Likewise, Alaska Communications Systems Group, 
Inc. (ACS) argues that a model that does not include, among other 
things, the cost of satellite backhaul where terrestrial options are 
unavailable, would not accurately predict the costs of serving Alaska. 
Should the Bureau incorporate those modifications into the CACM to 
better model the forward-looking cost of serving customers in areas 
outside of the contiguous United States? How should the Bureau proceed 
if a party has not submitted any information into the record regarding 
the circumstances in a particular non-contiguous area at the time the 
Bureau adopts the cost model?
    5. If the Bureau were to incorporate aspects of the models offered 
by interested parties into CACM, how can it ensure that the inputs 
utilized reflect the costs of an efficient provider rather than 
current, embedded costs? The mere fact that current support levels may 
be higher now than they would be under CACM is not necessarily 
dispositive in determining whether support in such areas is 
``sufficient.'' Existing costs may not reflect the forward-looking 
costs of an efficient provider. What specific metrics or objective data 
would the Bureau need to be able to distinguish between legitimate 
differences in operating costs in non-contiguous areas and those that 
may not reflect the forward-looking costs of an efficient provider?
    6. How should the Bureau take into account the additional time it 
would take to modify CACM to address the unique circumstances of each 
area outside of the contiguous United States at this stage in the 
process, and the extent to which a later adoption of CACM would delay 
the deployment of broadband in areas within the contiguous United 
States? In order to move forward more quickly, is there an 
administratively feasible way to pursue implementation of CACM in those 
areas where further refinement of the model is not necessary while 
developing an adequate approach in non-contiguous areas? If so, how 
would the Bureau ensure that total support levels remain within the 
overall $1.8 billion budget?
    7. The Virgin Islands Telephone Corporation (Vitelco) has argued in 
the alternative that we should maintain support at existing levels. And 
if we decline to use its ``Broadband Cost Model: Puerto Rico'' (BCMPR), 
PRTC recommends that we, ``at a minimum, maintain legacy high cost 
universal service support.'' In directing the Bureau to consider the 
circumstances facing carriers providing service in areas outside the 
contiguous United States, the Commission required that if existing 
support levels are maintained, total support could not exceed the 
overall budget of $1.8 billion per year. We note that 2011 
disbursements for price cap carriers outside of the contiguous United 
States totaled approximately $76 million, which would leave $1.724 
billion remaining for price cap carriers in the contiguous United 
States. How

[[Page 12007]]

would freezing support for certain carriers impact the Commission's 
progress in extending broadband-capable infrastructure in the United 
States?
    8. We note that the Commission recently sought comment on several 
options for utilizing funds remaining from Connect America Phase I, 
with one possibility being to use some or all of those funds to enlarge 
the budget for Phase II. Should some of the unused Phase I monies be 
made available to maintain existing support levels for carriers in non-
contiguous areas if the Commission were to adopt such a rule increasing 
the $1.8 billion budget?
    9. State-Level Commitment Process. The state-level commitment 
process set forth in the USF/ICC Transformation Order and FNPRM, 76 FR 
73830, November 29, 2011 and 76 FR 78384, December 16, 2011, assumes 
that carriers would make commitments based on the model-determined 
support amount and the service obligations that would attach to that 
support. In the event the Bureau determines that support in some or all 
of the non-contiguous areas should instead be maintained at existing 
levels, should carriers receiving frozen support to serve those areas 
make a statewide commitment to accept or reject the frozen support? 
Should there be any changes in the statewide commitment process for 
carriers receiving frozen support instead of model-based support?
    10. Service Obligations. Some have suggested that service 
obligations should be adjusted if support is frozen in non-contiguous 
areas. The Bureau seeks to further develop the record on what 
obligations, if any, should be adjusted if the Bureau maintains support 
at existing levels for some or all of the price cap carriers operating 
outside the contiguous United States. How many supported locations 
should be required to have broadband-capable infrastructure that can 
provide speeds of at least 4 Mbps/1 Mbps, and how should that figure be 
determined? Should recipients of frozen support be required to deploy 
infrastructure that can deliver speeds of at least 6 Mbps/1.5 Mbps to 
some number of supported locations, and how should that number be set? 
Recognizing that the Bureau has not yet specified metrics for latency 
or usage capacity for carriers making a state-level commitment, should 
those requirements be modified for carriers receiving frozen support? 
What measures would need to be in place to ensure that we have the 
ability to monitor compliance with adjusted service obligations? 
Commenters suggesting modified obligations for these carriers should 
specifically identify which obligations should be modified and specify 
objective metrics that would need to be met, so that the Commission has 
the ability to ensure accountability and oversight.

III. Procedural Matters

A. Initial Regulatory Flexibility Act Analysis

    11. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Bureau has prepared this Initial Regulatory 
Flexibility Analysis (IRFA) of the possible significant economic impact 
on a substantial number of small entities by the policies and rules 
proposed in this Notice. Written comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the Public Notice. The Commission will 
send a copy of the Public Notice, including this IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration (SBA). In 
addition, the Public Notice and IRFA (or summaries thereof) will be 
published in the Federal Register.

B. Need for, and Objectives of, the Proposed Rules

    12. The Notice seeks comment on a variety of issues relating to 
Connect America Phase II support for price cap carriers serving areas 
outside the contiguous United States. The Commission directed the 
Bureau to design a model to estimate the forward-looking economic costs 
of providing broadband to high-cost areas. In adopting the cost model, 
the Bureau was also to consider the unique circumstances facing areas 
outside the contiguous United States and determine whether the model 
adequately accounts for costs carriers face in serving those areas.

C. Legal Basis

    13. The legal basis for any action that may be taken pursuant to 
the Notice is contained in sections 1, 2, 4(i), 214, 254, 303(r), 403, 
and 706 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
152, 154(i), 214, 254, 303(r), 403, and 706, and Sec. Sec.  1.1 and 
1.1421 of the Commission's rules, 47 CFR 1.1, 1.421.

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

    14. 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.
    15. Small Businesses. Nationwide, there are a total of 
approximately 27.9 million small businesses, according to the SBA.
    16. 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, 
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.
    17. 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 
Public Notice.
    18. 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

[[Page 12008]]

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 Public Notice.
    19. 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 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.
    20. 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 Public Notice.
    21. 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 
1000 employees or more. Similarly, according 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.
    22. 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 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.
    23. 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.
    24. 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 majority of 
Satellite Telecommunications firms are small entities that might be 
affected by rules adopted pursuant to the Public Notice.
    25. 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.
    26. 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

[[Page 12009]]

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 Public Notice.
    27. 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 under 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 Public Notice.
    28. 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 fewer 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.
    29. 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 
Notice. 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.
    30. 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 Public Notice.

E. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    31. In this Notice, the Commission seeks public comment on issues 
relating to Connect America Phase II support for price cap carriers 
serving areas outside the contiguous United States. The Notice seeks 
comment on whether the Connect America Cost Model can be modified to 
account for the unique circumstances providers serving those areas 
face, of whether existing support levels should be maintained. The 
Notice also seeks comment on the associated obligations that come with 
the receipt of such support.

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

    32. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): ``(1) the establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rules for such 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 such small 
entities.''
    33. The Notice seeks comment on CAF Phase II support to price cap 
carriers serving areas outside the contiguous United States. These CAF 
Phase II issues are not anticipated to have a significant economic 
impact on small entities insofar as the results impact high-cost 
support amounts for price cap carriers. This is primarily because most 
(and perhaps all) of the affected carriers are not small entities. 
Moreover, the choice of alternatives discussed is not anticipated to 
systematically increase or decrease

[[Page 12010]]

support for any particular group of entities and therefore any 
significant economic impact cannot necessarily be minimized through 
alternatives.

G. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    34. None.

H. Paperwork Reduction Act

    35. This document seeks comment on a potential new or revised 
information collection requirement. If the Commission adopts any new or 
revised information collection requirement, the Commission will publish 
a separate notice in the Federal Register inviting the public to 
comment on the requirement, as required by the Paperwork Reduction Act 
of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how 
it might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.''

I. Filing Requirements

    36. Comments and Replies. Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415 and 1.419, interested parties may 
file comments on or before the date indicated on the first page of this 
document. Comments may be filed using the Commission's Electronic 
Comment Filing System (ECFS). See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121, May 1, 1998.
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. Filings can be sent by hand or 
messenger delivery, by commercial overnight courier, or by first-class 
or overnight U.S. Postal Service mail. All filings must be addressed to 
the Commission's Secretary, Office of the Secretary, Federal 
Communications Commission.
    [ssquf] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th Street SW., Room TW-A325, Washington, DC 20554. The filing hours 
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes must be 
disposed of before entering the building.
    [ssquf] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [ssquf] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street, SW., Washington DC 20554.
    37. People with Disabilities. To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to fcc504@fcc.gov or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
    In addition, we request that one copy of each pleading be sent to 
each of the following:
    (1) Dania Ayoubi, Telecommunications Access Policy Division, 
Wireline Competition Bureau, 445 12th Street SW., Room 6-A322, 
Washington, DC 20554; email: Dania.Ayoubi@fcc.gov;
    (2) Charles Tyler, Telecommunications Access Policy Division, 
Wireline Competition Bureau, 445 12th Street SW., Room 5-A452, 
Washington, DC 20554; email: Charles.Tyler@fcc.gov.
    38. The proceeding this Notice initiates 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 rule Sec.  1.1206(b). In proceedings governed 
by rule 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.

Federal Communications Commission.
Kimberly A. Scardino,
Acting Division Chief, Telecommunications Access Policy Division, 
Wireline Competition Bureau.
[FR Doc. 2013-04034 Filed 2-20-13; 8:45 am]
BILLING CODE 6712-01-P
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