Rural Call Completion, 76257-76265 [2013-29864]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 78, Number 242 (Tuesday, December 17, 2013)]
[Proposed Rules]
[Pages 76257-76265]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29864]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 13-39; FCC 13-135]


Rural Call Completion

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document the FCC seeks comments on additional measures 
that may help the Commission ensure a reasonable and nondiscriminatory 
level of service for completing long-distance calls to rural areas. 
This document also; seeks to improve the Commission's ability to 
monitor problems with completing calls to rural areas, and

[[Page 76258]]

enhance our ability to enforce restrictions against blocking, choking, 
reducing, or restricting calls. The Further Notice of Proposed 
Rulemaking seeks public comment on additional measures intended to 
further ensure reasonable and nondiscriminatory service to rural areas, 
including additional reforms pertaining to autodialer traffic, 
intermediate providers, and on other Safe Harbor options and reporting 
requirements.

DATES: Comments are due on or before January 16, 2014, and reply 
comments on or before February 18, 2014.

ADDRESSES: You may submit comments, identified by WC Docket No. 13-39, 
by any of the following methods:
    Electronic Filers: Comments may be filed electronically using the 
Internet by accessing the Commission's Electronic Comment Filing System 
(ECFS), through the Commission's Web site https://fjallfoss.fcc.gov/ecfs2/. Filers should follow the instructions provided on the Web site 
for submitting comments. For ECFS filers, in completing the transmittal 
screen, filers should include their full name, U.S. Postal service 
mailing address, and WC Docket No. 13-39.
     Paper filers: Parties who choose to file by paper must 
file an original and four copies 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 (although the 
Commission continues to experience delays in receiving U.S. Postal 
Service mail). All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St. SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
     Commercial Mail sent by 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.
     U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street SW., Washington, DC 20554.
    [ssquf] In addition, parties must serve one copy of each pleading 
with the Commission's duplicating contractor, Best Copy and Printing, 
Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554, or via 
email to fcc@bcpiweb.com.
    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: Gregory D. Kwan, Competition Policy 
Division, Wireline Competition Bureau, at (202) 418-1191.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking (FNPRM) in WC Docket No. 13-39, 
FCC 13-135, released on November 8, 2013. The complete text of this 
document is available for public inspection during regular business 
hours in the FCC Reference Information Center, Room CY-A257, 445 12th 
Street SW., Washington, DC 20554. It is also available on the 
Commission's Web site at https://www.fcc.gov. This summarizes only the 
FPRM in WC Docket No. 13-39; A summary of the Commission's Report and 
Order in WC Docket No. 13-39 is published elsewhere in this issue of 
the Federal Register.

Synopsis of Further Notice of Proposed Rulemaking

I. Introduction

    1. In the Report and Order in WC Docket No. 13-39 (published 
elsewhere in this issue of the Federal Register), we adopt rules to 
address significant concerns about completion of long-distance calls to 
rural areas. Doing so will help ensure that long-distance calls to all 
Americans, including rural Americans, are completed. The record in this 
proceeding leaves no doubt that completion rates for long-distance 
calls to rural areas are frequently poor--whether the call is 
significantly delayed, the called party's phone never rings, the caller 
hears false busy signals, or there are other problems. These failures 
have significant and immediate public interest ramifications, causing 
rural businesses to lose customers, cutting families off from their 
relatives in rural areas, and creating potential for dangerous delays 
in public safety communications in rural areas.
    2. The rules adopted in the Report and Order are a critical step to 
eliminating this significant problem by improving the Commission's 
ability to monitor the delivery of long-distance calls to rural areas, 
aiding enforcement action in connection with providers' call completion 
practices as necessary, as well as aiding consumers and industry by 
adopting a rule prohibiting false ring signaling. In the Further Notice 
of Proposed Rulemaking (FNPRM), we seek comment on additional measures 
that may help the Commission ensure a reasonable and nondiscriminatory 
level of service to rural areas.

II. Background

    3. The Commission initiated this rulemaking in February 2013 to 
help address problems in the completion of long-distance telephone 
calls to rural customers. This followed a series of Commission actions 
to address rural call completion concerns over the past several years. 
As discussed in greater detail below, since 2007 the Commission has:
     Adopted the USF/ICC Transformation Order, which, among 
other things, reaffirmed the prohibition on call blocking; made clear 
that carriers' blocking of VoIP-PSTN traffic is prohibited; clarified 
that interconnected and one-way VoIP providers are prohibited from 
blocking voice traffic to or from the PSTN; and adjusted over a period 
of time many terminating switched access charges as part of transition 
to a bill-and-keep regime;
     Issued two Declaratory Rulings clarifying that carriers 
are prohibited from blocking, choking, reducing, or restricting traffic 
in any way, including to avoid termination charges, and clarifying the 
scope of the Commission's prohibition on blocking, choking, reducing, 
or restricting telephone traffic which may violate section 201 or 202 
of the Communications Act of 1934, as amended (the Act);
     Established a Rural Call Completion Task Force to 
investigate the growing problems associated with calls to rural 
customers;
     Held a workshop to identify specific causes of rural call 
completion problems and discuss potential solutions with key 
stakeholders;
     Established dedicated avenues for rural consumers and 
carriers to inform the Commission about call completion problems; and
     Investigated and pursued enforcement of providers not 
complying with the statute and/or our rules, including a consent decree 
as well as an enforcement advisory regarding rural call completion 
problems.
    We describe in greater detail the Commission's most significant 
actions, which inform the legal and policy actions that we take in this 
Order.
    4. USF/ICC Transformation Order. On November 18, 2011, the 
Commission released the USF/ICC Transformation Order, which, among 
other things, established a number of new rules requiring carriers to 
adjust, over a

[[Page 76259]]

period of years, many of their terminating switched access charges 
effective every July 1, as part of a transition to a bill-and-keep 
regime. The Commission capped the vast majority of interstate and 
intrastate switched access rates as of December 29, 2011. Price cap and 
rate-of-return carriers were required to make comparable reductions to 
certain intrastate switched access rates in 2012 and 2013 if specified 
criteria were met. Beginning in 2014, price cap and rate-of-return 
carriers begin a series of rate reductions to transition certain 
terminating interstate and intrastate switched access rates to bill-
and-keep. The price cap transition occurs over six years and the rate-
of-return transition over nine years.
    5. The USF/ICC Transformation Order also re-emphasized the 
Commission's longstanding prohibition on call blocking. The Commission 
reiterated that call blocking has the potential to degrade the 
reliability of the nation's communications network and that call 
blocking harms consumers. The Commission also made clear that the 
general prohibition on call blocking by carriers applies to VoIP-to-
PSTN traffic. Finally, the Commission prohibited call blocking by 
providers of interconnected VoIP services as well as providers of 
``one-way'' VoIP services. The Communications Act defines ``non-
interconnected VoIP service'' as a service that enables real-time voice 
communications that originate from or terminate to the user's location 
using Internet protocol or any successor protocol, requires Internet 
protocol compatible customer premises equipment, and does not include 
any service that is an interconnected VoIP service. 47 U.S.C. 153(36). 
Our use of the term ``one-way VoIP'' in this Order is consistent with 
the definition of ``non-interconnected VoIP service'' in the 
Communications Act, to the extent such service offers the capability to 
place calls to or receive calls from the PSTN.
    6. In addition, the Commission adopted rules to address so-called 
``phantom traffic,'' that is, traffic that terminating networks receive 
that lacks certain identifying information for calls. The lack of such 
basic information to accompany calls has also resulted in calls being 
delivered without the correct caller identification, which is a common 
call quality complaint in rural areas. In the USF/ICC Transformation 
Order, the Commission found that service providers in the call path 
were intentionally removing or altering identifying information to 
avoid paying the terminating rates that would apply if the call were 
accurately signaled and billed. The Commission adopted rules requiring 
telecommunications carriers and providers of interconnected VoIP 
service to include the calling party's telephone number in all call 
signaling, and required intermediate providers to pass this signaling 
information, unaltered, to the next provider in a call path.
    7. 2012 Declaratory Ruling. In 2012, the Wireline Competition 
Bureau issued a declaratory ruling to clarify the scope of the 
Commission's prohibition on blocking, choking, reducing, or restricting 
telephone traffic in response to continued complaints about rural call 
completion issues from rural associations, state utility commissions, 
and consumers. The 2012 Declaratory Ruling made clear that practices 
used for routing calls to rural areas that lead to call termination and 
quality problems may violate the prohibition against unjust and 
unreasonable practices in Section 201 of the Act or may violate the 
carriers' section 202 duty to refrain from unjust or unreasonable 
discrimination in practices, facilities, or services. The 2012 
Declaratory Ruling also noted that carriers may be subject to liability 
under section 217 of the Act for the actions of their agents or other 
persons acting for or employed by the carriers. The Bureau stated that 
the practices causing rural call completion problems ``adversely affect 
the ubiquity and reliability of the nation's communications network and 
threaten commerce, public safety, and the ability of consumers, 
businesses, and public health and safety officials in rural America to 
access and use a reliable network.''
    8. The NPRM. In February 2013, the Commission adopted a Notice of 
Proposed Rulemaking (NPRM) seeking comment on proposed reporting and 
data retention requirements. The NPRM proposed rules requiring 
facilities-based originating long-distance voice service providers to 
collect, retain, and report to the Commission data on call answer 
rates. The NPRM also proposed rules requiring facilities-based 
originating long-distance voice service providers to collect and retain 
information on call attempts and to periodically analyze call 
completion data and report the results to the Commission. The NPRM 
proposed rules requiring facilities-based originating long-distance 
providers with more than 100,000 retail long-distance subscribers 
(business or residential) to file quarterly reports that measure the 
call answer rate for each rural operating company number (OCN) to which 
100 or more calls were attempted during a calendar month, and to report 
on specific categories of call attempts. The NPRM also proposed 
requiring originating long-distance providers to measure the overall 
call answer rate for nonrural call attempts to permit comparisons 
between long-distance calls in rural versus nonrural local exchanges.
    9. Public Notice Seeking Comment on List of Rural OCNs. On April 
18, 2013, the Wireline Competition Bureau released a Public Notice 
seeking comment on which rural OCNs covered providers should include in 
the proposed quarterly reports on call completion performance. The 
Public Notice invited comment on the completeness and suitability of a 
list of rural OCNs compiled by the National Exchange Carrier 
Association (NECA) and posted on NECA's Web site.
    10. Enforcement Activity. The Commission's Enforcement Bureau is 
also actively responding to rural call completion problems. In March 
2013, Level 3 Communications, LLC (Level 3) entered into a consent 
decree terminating the Enforcement Bureau's investigations into 
possible violations of sections 201(b) and 202(a) of the Act with 
respect to Level 3's call completion practices to rural areas, 
including its use and monitoring of intermediate providers. On July 19, 
2013, the Enforcement Bureau issued an advisory to long-distance 
providers to take consumer complaints about rural call completion 
seriously. The advisory gave examples of plainly insufficient provider 
responses and warned that ``[g]oing forward, the FCC may take 
enforcement action against providers that submit such patently 
deficient responses to informal complaints.''
    11. In addition to conducting ongoing investigations of several 
long-distance providers, the Commission has been addressing daily 
operational problems reported by rural customers and carriers so that 
incoming long-distance calling to customers of rural incumbent local 
exchange carriers (LECs) is promptly restored. We have established 
dedicated avenues for rural customers and carriers to inform the 
Commission about these call completion problems. A Web-based complaint 
intake focuses on the rural call completion problems of residential and 
business customers, instructs such customers how to file complaints 
with the Commission, and links to the Commission's standard 2000B 
complaint form. Separately, a dedicated email intake provides a ``hot 
email line'' for rural telephone companies to alert the Commission of 
systemic problems receiving calls from a particular originating long-
distance provider and facilitates provider-to-provider resolution.

[[Page 76260]]

    12. Many key stakeholders acknowledge that call termination issues 
to rural service areas are serious and widespread and have collaborated 
to propose industry solutions. For example, in October 2011, 
stakeholders attended the Commission's Rural Call Completion Task 
Force's workshop to identify and discuss potential solutions. In 2012, 
the Alliance for Telecommunications Industry Solutions (ATIS) released 
the Intercarrier Call Completion/Call Termination Handbook outlining 
standards and practices of the industry relevant to ensuring call 
completion. In August 2013, ATIS and NECA announced a voluntary Joint 
National Call Testing Project offering providers the opportunity to 
test call completion issues identified on calls destined to many areas 
served by rural local exchange carriers. The testing project will 
facilitate cooperative trouble resolution efforts with originating, 
intermediate and terminating carriers. Finally, we note that some 
providers have devoted substantial time and resources to analyzing 
rural call completion performance. We applaud these and other efforts 
by stakeholders and encourage the continued support of the industry to 
undertake further efforts to diagnose problems in call routing, 
cooperate on finding solutions, and adopt best practices aimed at 
solving the rural call completion problem.

III. Further Notice of Proposed Rulemaking

A. Autodialer Traffic

    13. We seek additional comment on the ability of a covered provider 
to identify and segregate autodialer calls. It is unclear from the 
existing record whether autodialer, or mass-dialer, traffic can be 
reliably distinguished from regular traffic by covered providers. Two 
providers indicate that they can reasonably identify retail autodialer 
traffic because it is delivered on dedicated connections, whereas other 
commenters state that it is not possible to distinguish autodialer 
traffic. We seek comment on whether providers are able to isolate 
autodialer calls because of the way such traffic is delivered or 
otherwise. We also seek comment on the burdens of and benefits of 
distinguishing autodialer traffic.
    14. We note that to the extent that terminating rural incumbent 
LECs report their own call answer rates, as we have encouraged them to 
do, those call answer rates will include autodialer traffic. In order 
for a terminating rural incumbent LEC's call answer rate to be a 
meaningful benchmark, the call data reported by covered providers must 
also include autodialer traffic. At the same time, as we have 
discussed, we recognize that autodialer traffic may skew call 
completion performance results, and that reports that segregate 
autodialer traffic may therefore be useful if such traffic can be 
reliably excluded. In the Order we permit covered providers to file a 
separate report that segregates autodialer traffic from other traffic, 
accompanied by an explanation of the method the provider used to 
identify the autodialer traffic. We seek comment on the proposal that 
all covered providers be required to file a separate report that 
segregates autodialer traffic from other traffic, accompanied by an 
explanation of the method the provider used to identify the autodialer 
traffic, and on the relative benefits and burdens of doing so.

B. Intermediate Providers

    15. In the Order, we decline at this time to impose the rules on 
intermediate providers. We seek comment on whether we should extend 
these rules to intermediate providers, or a subset thereof, and on the 
Commission's authority to do so. If we extended these rules to 
intermediate providers, could we reduce or eliminate the burden on 
originating providers?
    16. We seek comment on whether we should impose certifications or 
other obligations on intermediate providers. For example, one commenter 
proposes intra-industry compliance certification as a supplement to the 
data collection, retention and reporting adopted in the Order. Should 
the Commission require each intermediate provider offering to deliver 
traffic for termination for another provider, or offering to deliver 
traffic for termination that is originated by an entity other than the 
end users it serves, to certify that it is terminating such traffic in 
compliance with all applicable intercarrier compensation orders, 
tariffs and agreements? Should each intermediate provider be required 
to obtain and file similar certifications from companies to which it is 
directing traffic for the purpose of terminating to the PSTN and to 
rural incumbent LECs in particular? Should we require intermediate 
providers to include in their rate decks a statement of the maximum 
number of intermediate providers they will use to deliver a call to a 
particular area? We seek comment on the proposal that it would be 
unlawful for any intermediate provider that refused to provide such a 
certification to carry traffic for termination on the PSTN, and it 
would be unlawful for any provider to direct such traffic to such a 
non-complying company.

C. Modifications to the Safe Harbor

    17. In the Order, we adopt a safe harbor for qualifying providers, 
as noted above, whose contracts with directly connected intermediate 
providers allow those intermediate providers to pass a call to no more 
than one additional intermediate provider before the call reaches the 
terminating provider. We seek comment on whether we should revise these 
requirements in the future.
    18. For example, ATIS supports the safe harbor, but recommends that 
the Commission also consider whether there may be other measures 
carriers can take that should constitute safe harbors. Are there 
particular industry practices to manage call termination that should 
make providers eligible for a safe harbor from reporting and/or 
retention of records? Should the existing safe harbor be modified to 
include additional requirements in contracting with intermediate 
providers or other measures? If so, what should these triggers be and 
why? What should the obligations be? And, if the Commission revises or 
adopts different safe harbors, should the Commission relieve any of the 
data retention obligations?
    19. We also seek comment on adopting a separate safe harbor related 
to a provider's call completion performance in specific OCNs. 
Specifically, we seek comment on whether a covered provider's record of 
matching or exceeding a rural incumbent LEC's reported terminating call 
answer rate in specific OCNs, or another threshold tied to the rural 
incumbent LEC's terminating call answer rate, could establish the 
foundation for a separate safe harbor for those OCNs? What would be an 
appropriate record of matching or exceeding a rural incumbent LEC's 
terminating call answer rate, and what would be an appropriate 
threshold in relation to that call answer rate?
    20. In the Order that we adopt today, we decline to adopt a 
performance-based safe harbor (i.e., a safe harbor based on successful 
performance in completing rural calls as demonstrated by a provider's 
data). As we note above, some commenters have suggested that the 
Commission should review data reported by the providers and then adopt 
some type of a performance-based safe harbor. What should the 
Commission take into consideration if it were to adopt standards for 
rural call performance? What other uses of the reported data would be 
useful and appropriate to eliminate the rural call completion problem?

[[Page 76261]]

D. Rural Incumbent Local Exchange Carriers

    21. In the Order we encourage, but do not require, each rural ILEC 
to report quarterly on the number of incoming long-distance call 
attempts received, the number answered on its network, and the 
resultant call answer rate calculation. We noted that this information 
would be an important benchmark against which to evaluate the number of 
call attempts that originating providers report as having reached a 
rural ILEC's terminating switch or tandem, and the number that 
originating providers report as having been answered. Here we seek 
comment on whether the Commission should adopt or encourage a reporting 
methodology beyond what is described in the Order.
    22. Should rural ILECs above a certain size be required to report 
their terminating call answer rate data, while those below the size 
threshold could continue to report on a voluntary basis? If reporting 
this information by rural ILECs were mandated, what would be the 
appropriate threshold, in terms of subscriber lines, revenues, or other 
measures? Would it be more efficient for a single report on rural ILEC 
call answer rates to be assembled by a third party organization (e.g., 
industry association), and how would that process function? For 
example, how would we select the organization, how would they obtain 
the data, and how we ensure the reliability of the report? Should we 
retain the same reporting timing and frequency as set for voluntary 
reporting in the Order? If not, what should the reporting timing and 
frequency be? We also seek comment on the burdens and benefits 
associated with the type of rural ILEC reporting described above.

E. Additional Rule Changes

    23. The Commission and the Wireline Competition Bureau have stated 
that no carriers, including interexchange carriers, or VoIP service 
providers may block, choke, reduce, or restrict traffic, including 
VoIP-PSTN traffic. The Order accompanying this FNPRM and the Wireline 
Competition Bureau's 2012 Declaratory Ruling make clear that carriers' 
and VoIP service providers' call routing practices that lead to call 
termination and call quality problems may violate this prohibition. 
Practices resulting in rural call completion problems adversely affect 
the ubiquity and reliability of the nation's telecommunications network 
and threaten the ability of consumers, businesses, and public health 
and safety officials to access and use a reliable network. For these 
reasons, we seek comment on whether we should adopt rules formally 
codifying existing prohibitions on blocking, choking, reducing, or 
restricting traffic. We also seek comment on whether there are any 
additional requirements that should apply to some or all of these 
providers or to any other entity, whether with respect to that entity's 
acts or omission that directly block, choke, reduce, or restrict 
traffic, governing its acts or omissions with respect to its 
intermediate providers, or that otherwise lead to rural call completion 
problems. To the extent that commenters advocate for additional 
requirements, commenters should explain why any such new requirements 
are needed; identify the specific categories of conduct that would be 
prohibited under the new requirements; and identify the specific 
sources of legal authority that would permit the Commission to adopt 
the new requirements. We also seek comment on whether we should provide 
additional guidance as to how existing or any new requirements should 
apply to specific scenarios.

IV. Procedural Matters

A. Paperwork Reduction Act Analysis

    24. This document contains proposed new information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), we seek specific comment on how we might further 
reduce the information collection burden for small business concerns 
with fewer than 25 employees.

B. Congressional Review Act

    25. 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).

V. Initial Regulatory Flexibility Analysis

    26. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission 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 Further Notice of Proposed Rulemaking (FNPRM). 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 NPRM. The Commission will send a copy of the FNPRM, including 
this IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA). In addition, the FNPRM and IRFA (or summaries 
thereof) will be published in the Federal Register.

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

    27. The FNPRM seeks comment on a variety of issues relating to 
possible remedies for the problem of low call completion rates and poor 
overall call quality to rural America. As discussed in the FNPRM, the 
proposed rules will provide the Commission and providers with more data 
to identify and address problems of long-distance call completion to 
rural areas. The ubiquity and reliability of the nation's 
telecommunications network are of paramount importance to the 
Communications Act of 1934, as amended, and problems adversely 
affecting that ubiquity and reliability threaten commerce, public 
safety, and the ability of consumers, businesses, and public health and 
safety officials in rural America to access and use a reliable network. 
In order to confront these challenges, the FNPRM asks for comment in a 
number of specific areas.
1. Autodialer Traffic
    28. The FNPRM first seeks comment on the ability of a covered 
provider to identify and segregate autodialer calls in order to further 
clarify whether autodialer, or mass-dialer, traffic can be reliably 
distinguished from regular traffic by covered providers. The FNPRM also 
seeks comment on whether providers are able to isolate autodialer calls 
because of the way such traffic is delivered or otherwise, and on the 
burdens of and benefits of distinguishing autodialer traffic. In 
addition, the FNPRM seeks comment on the proposal that all covered 
providers be required to file a separate report that segregates 
autodialer traffic from other traffic, accompanied by an explanation of 
the method the provider used to identify the autodialer traffic, and on 
the relative benefits and burdens of doing so.

[[Page 76262]]

2. Intermediate Providers
    29. The FNPRM seeks comment on whether the Commission should extend 
the recording, retention, and reporting requirements adopted in the 
Order to intermediate providers, or a subset thereof, the Commission's 
authority to do so, and the benefits and burdens of doing so. The FNPRM 
also seeks comment on whether the Commission should impose 
certifications or other obligations on intermediate providers. The 
FNPRM asks whether each intermediate provider offering to deliver 
traffic for termination for another provider, or offering to deliver 
traffic for termination that is originated by an entity other than the 
end users it serves, should be required to certify that it is 
terminating such traffic in compliance with all applicable intercarrier 
compensation orders, tariffs and agreements. The FNPRM further asks 
whether each intermediate provider should be required to obtain and 
file similar certifications from companies to which it is directing 
traffic for the purpose of terminating to the PSTN and to rural 
telephone companies in particular. The FNPRM also asks whether the 
Commission should require intermediate providers to include in their 
rate decks a statement of the maximum number of intermediate providers 
they will use to deliver a call to a particular area. Finally, the 
FNPRM seeks comment on the proposals that it would be unlawful for any 
intermediate provider that refused to provide such a certification to 
carry traffic for termination on the PSTN, and that it would be 
unlawful for any provider to direct such traffic to such a non-
complying company.
3. Modifications to the Safe Harbor
    30. The FNPRM seeks comment on whether the Commission should 
revise, in the future, the requirements for the safe harbor for 
qualifying providers whose contracts with directly connected 
intermediate providers allow those intermediate providers to pass a 
call to no more than one additional intermediate provider before the 
call reaches the terminating provider. The FNPRM seeks comment on 
whether there are particular industry practices to manage call 
termination that should make providers eligible for a safe harbor from 
reporting and/or retention of records. The FNPRM also asks whether the 
existing safe harbor should be modified to include additional 
requirements in contracting with intermediate providers or other 
measures and, if so, what these triggers should be and why, and what 
those obligations should be. In addition, the FNPRM asks whether, if 
the Commission revises or adopts different safe harbors, providers 
qualifying for the new or revised safe harbors should be relieved of 
any data retention obligations.
    31. The FNPRM also seeks comment on adopting a separate safe harbor 
related to a provider's call completion performance in specific OCNs. 
Specifically, it seeks comment on whether a covered provider's record 
of matching or exceeding a rural incumbent LEC's reported terminating 
call answer rate in specific OCNs, or another threshold tied to the 
rural incumbent LEC's terminating call answer rate, could establish the 
foundation for a separate safe harbor for those OCNs. The FNPRM also 
asks what would be an appropriate record of matching or exceeding a 
rural incumbent LEC's terminating call answer rate and what would be an 
appropriate threshold in relation to that answer rate.
    32. The FNPRM seeks comment on what the Commission should consider 
should it elect to adopt a performance-based safe harbor (i.e., a safe 
harbor based on successful performance in completing rural calls as 
demonstrated by a provider's data). Finally, the FNPRM seeks comment on 
what the Commission should take into consideration if it were to adopt 
standards for rural call performance and on what other uses of the 
reported data would be useful and appropriate to eliminate the rural 
call completion problem.
4. Rural Incumbent Local Exchange Carriers
    33. The FNPRM seeks comment on whether rural ILECs should be 
required to report their terminating call answer rate and whether the 
Commission should adopt or encourage a reporting methodology beyond 
what is described in the Order. The FNPRM asks whether, if the 
Commission adopts such a reporting scheme, rural ILECs above a certain 
size should be required to report their local call answer rate data 
while those below the size threshold could continue to report on a 
voluntary basis. The FNPRM seeks comment on what would be the 
appropriate threshold, in terms of subscriber lines, revenues, or other 
measures, whether it would be more efficient for a single report on 
rural ILEC call answer rates to be assembled by a third party 
organization, and how that process would function. The FNPRM asks how 
the Commission would select such a third-party organization, how that 
organization would obtain the data, and how the Commission could ensure 
the reliability of the reports. The FNPRM also asks whether rural ILECs 
should report with the same timing and frequency as set out for 
voluntary reporting in the Order and, if not, what the reporting timing 
and frequency should be. Finally, the FNPRM seeks comment on the 
burdens and benefits of rural ILEC reporting.
5. Additional Rule Changes
    34. The FNPRM seeks comment on whether the Commission should adopt 
rules formally codifying existing prohibitions on blocking, choking, 
reducing, or restricting traffic. The FNPRM also seeks comment on 
whether there are any additional requirements that should apply to some 
or all of these providers or to any other entity, whether with respect 
to that entity's acts or omission that directly block, choke, reduce, 
or restrict traffic, governing its acts or omissions with respect to 
its intermediate providers, or that otherwise lead to rural call 
completion problems. The FNPRM seeks comment on a number of related 
issues, including: Why such new requirements are needed; identify the 
specific categories of conduct that would be prohibited under the new 
requirements; and identify the specific sources of legal authority that 
would permit the Commission to adopt the new requirements. The FNPRM 
also seeks comment on whether the Commission should provide additional 
guidance as to how existing or any new requirements should apply to 
specific scenarios.

B. Legal Basis

    35. The legal basis for any action that may be taken pursuant to 
the FNPRM is contained in sections 1, 4(i), 201(b), 202(a), 218, 
220(a), 251(a), and 403 of the Communications Act of 1934, as amended, 
47 U.S.C. 151, 154(i), 201(b), 202(a), 218, 220(a), 251(a), and 403.

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

    36. 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

[[Page 76263]]

independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    37. Small Businesses. Nationwide, there are a total of 
approximately 27.9 million small businesses, according to the SBA.
    38. 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. 
Census data for 2007 shows that there were 31,996 establishments that 
operated that year. Of those 31,996, 1,818 operated with more than 100 
employees, and 30,178 operated with fewer than 100 employees. Thus, 
under this size standard, the majority of firms can be considered 
small.
    39. 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, Census data for 2007 
shows that there were 31,996 establishments that operated that year. Of 
those 31,996, 1,818 operated with more than 100 employees, and 30,178 
operated with fewer than 100 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 
NPRM.
    40. 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 NPRM.
    41. 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.
    42. 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 NPRM.
    43. 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 NPRM.
    44. 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. 
Census data for 2007 show that 1,523 firms provided resale services 
during that year. Of that number, 1,522 operated with fewer than 1000 
employees and one operated with more than 1,000.\1\ Thus, under this 
category and the associated small business size standard, the majority 
of these prepaid calling card providers can be considered small 
entities. 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 NPRM.
---------------------------------------------------------------------------

    \1\ See id.
---------------------------------------------------------------------------

    45. 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. Census data for 2007 show that 1,523 firms provided resale 
services during that year. Of that number, 1,522 operated with fewer 
than 1000 employees and one operated with more than 1,000. Thus, under 
this category and the associated small business size standard, the 
majority of these prepaid calling card providers can be considered 
small entities. 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 NPRM.
    46. 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

[[Page 76264]]

small if it has 1,500 or fewer employees. Census data for 2007 show 
that 1,523 firms provided resale services during that year. Of that 
number, 1,522 operated with fewer than 1000 employees and one operated 
with more than 1,000. Thus, under this category and the associated 
small business size standard, the majority of these prepaid calling 
card providers can be considered small entities. 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 NPRM.
    47. 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. 
Census data for 2007 shows that there were 31,996 establishments that 
operated that year. Of those 31,996, 1,818 operated with more than 100 
employees, and 30,178 operated with fewer than 100 employees. Thus, 
under this category and the associated small business size standard, 
the majority of Other Toll Carriers can be considered small. 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 NPRM.
    48. 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 
11,163 establishments that operated for the entire year. Of this total, 
10,791 establishments had employment of 999 or fewer employees and 372 
had employment of 1000 employees or more. Thus, under this category and 
the associated small business size standard, the Commission estimates 
that the majority of wireless telecommunications carriers (except 
satellite) are small entities that may be affected by our proposed 
action.
    49. 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.
    50. 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. Census data for 2007 shows that there were 31,996 
establishments that operated that year. Of those 31,996, 1,818 operated 
with more than 100 employees, and 30,178 operated with fewer than 100 
employees. Thus, under this size standard, the majority of firms 
offering cable and other program distribution services can be 
considered small and may be affected by rules adopted pursuant to the 
NPRM.
    51. 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 6,635 systems nationwide, 
5,802 systems have under 10,000 subscribers, and an additional 302 
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 NPRM.
    52. All Other Telecommunications. The Census Bureau defines this 
industry as including ``establishments 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.'' The SBA has developed 
a small business size standard for this category; that size standard is 
$30.0 million or less in average annual receipts. According to Census 
Bureau data for 2007, there were 2,623 firms in this category that 
operated for the entire year. Of these, 2,478 establishments had annual 
receipts of under $10 million and 145 establishments had annual 
receipts of $10 million or more. Consequently, we estimate that the 
majority of these firms are small entities that may be affected by our 
action.

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

    53. In the FNPRM, the Commission proposes to require covered 
providers to file a separate report that segregates autodialer traffic 
from other traffic, accompanied by an explanation of the method the 
provider used to identify the autodialer traffic. Compliance with these 
reporting obligations may affect small entities, and may include new 
administrative processes.
    54. In the FNPRM, the Commission proposes to extend the 
recordkeeping, retention, and reporting requirements to intermediate 
providers, or some subset thereof. Compliance with these reporting 
obligations may affect small entities, and may include new 
administrative processes.
    55. In the FNRPM, the Commission proposes to require intermediate 
providers to certify that they terminate long-distance traffic in 
accordance with

[[Page 76265]]

all intercarrier compensation orders, tariffs, and agreements, and to 
prohibit intermediate carriers that fail to submit such certifications 
from carrying long-distance traffic. In addition, the proposal would 
prohibit other providers from handing off traffic to an intermediate 
provider that has failed to submit such certifications. Compliance with 
these reporting obligations may affect small entities, and may include 
new administrative processes.
    56. In the FNPRM, the Commission also proposes to require rural 
ILECs to periodically report data for all long-distance calls 
terminating to their OCNs. Compliance with these reporting obligations 
may affect small entities, and may include new administrative 
processes.
    57. We note parenthetically that, in the FNPRM, the Commission 
seeks comment on the benefits and burdens of these proposals.

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

    58. 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.''
    59. The Commission is aware that some of the proposals under 
consideration will impact small entities by imposing costs and 
administrative burdens. For this reason, the FNPRM proposes a number of 
measures to minimize or eliminate the costs and burdens generated by 
compliance with the proposed rules.
    60. First, with regard to the proposal that covered providers file 
a separate report that segregates autodialer traffic from other 
traffic, accompanied by an explanation of the method the provider used 
to identify the autodialer traffic, only those covered providers with 
more than 100,000 retail long-distance subscriber lines (business or 
residential) would be required to retain the basic information on call 
attempts and to periodically report the summary analysis of that 
information to the Commission.
    61. Second, the FNPRM seeks comment on the proposal that the 
recordkeeping, retention, and reporting requirements adopted in the 
Order be extended to intermediate providers, and on whether doing so 
would allow the Commission to reduce or eliminate the burden on covered 
providers.
    62. Third, the FNPRM seeks comment on standards the Commission 
might use to adopt additional safe harbors in the future in order to 
reduce or eliminate any burdens associated with compliance with the 
recordkeeping, retention, and reporting obligations. The FNPRM proposes 
to adopt a safe harbor based on a provider's performance in completing 
long-distance calls to particular rural OCNs, measured against each 
rural OCNs local call answer rate.
    63. Fourth, the FNPRM proposes to exempt smaller rural ILECs from 
the requirement that rural ILECs periodically report their local call 
answer rates to the Commission. Each of these proposals could reduce 
the economic impact on small entities.
    64. The Commission expects to consider the economic impact on small 
entities, as identified in comments filed in response to the FNPRM, in 
reaching its final conclusions and taking action in this proceeding. 
The proposed recordkeeping, retention, and reporting requirements in 
the FNPRM could have an economic impact on both small and large 
entities. However, the Commission believes that any impact of such 
requirements is outweighed by the accompanying benefits to the public 
and to the operation and efficiency of the long distance industry.

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

    65. None.

VI. Ordering Clauses

    Accordingly, it is ordered that, pursuant to sections 1, 4(i), 
201(b), 202(a), 218, 220(a), 251(a), and 403 of the Communications Act 
of 1934, as amended, 47 U.S.C. 151, 154(i), 201(b), 202(a), 218, 
220(a), 251(a), and 403, the Further Notice of Proposed Rulemaking is 
adopted.
    It is further ordered that, pursuant to sections 1.4(b)(1) and 
1.103(a) of the Commission's rules, 47 CFR 1.4(b)(1), 1.103(a), the 
Further Notice of Proposed Rulemaking comments are due on or before 
January 16, 2014, and reply comments on or before February 18, 2014.
    It is further ordered that the Commission shall send a copy of this 
Further Notice of Proposed Rulemaking to Congress and to the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).
    It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Further Notice of Proposed Rulemaking, including the 
Initial Final Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2013-29864 Filed 12-16-13; 8:45 am]
BILLING CODE 6712-01-P