Rural Call Completion, 34911-34922 [2017-15826]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 82, Number 143 (Thursday, July 27, 2017)]
[Proposed Rules]
[Pages 34911-34922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15826]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 13-39; FCC 17-92]


Rural Call Completion

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, a Second Further Notice of Proposed 
Rulemaking (Second FNPRM) seeks comment on new proposed rural call 
completion requirements for covered providers and on proposals to 
either modify or eliminate the Commission's existing data recording, 
retention, and reporting requirements. The Second FNPRM also seeks 
comment on any additional measures the Commission should take to 
address rural call completion problems.

DATES: Comments are due on or before August 28, 2017, and reply 
comments are due on or before September 25, 2017. Written comments on 
the Paperwork Reduction Act proposed information collection 
requirements must be submitted by the public, Office of Management and 
Budget (OMB), and other interested parties on or before September 25, 
2017.

ADDRESSES: You may submit comments, identified by WC Docket No. 13-39, 
by any of the following methods:
    [ssquf] Federal Communications Commission's Web site: https://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.
    [ssquf] Mail: Parties who choose to file by paper must file an 
original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. 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. 
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. 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. Commercial overnight mail (other than

[[Page 34912]]

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 must be addressed to 445 12th 
Street SW., Washington DC 20554.
    [ssquf] 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).
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document. In addition to filing comments 
with the Secretary, a copy of any comments on the Paperwork Reduction 
Act information collection requirements contained herein should be 
submitted to the Federal Communications Commission via email to 
PRA@fcc.gov and to Nicole Ongele, Federal Communications Commission, 
via email to Nicole.Ongele@fcc.gov.

FOR FURTHER INFORMATION CONTACT: Wireline Competition Bureau, 
Competition Policy Division, Alex Espinoza, at (202) 418-0849, 
alex.espinoza@fcc.gov. For additional information concerning the 
Paperwork Reduction Act information collection requirements contained 
in this document, send an email to PRA@fcc.gov or contact Nicole Ongele 
at (202) 418-2991.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Further Notice of Proposed Rulemaking (Second FNPRM) in WC Docket No. 
13-39, adopted July 13, 2017, and released July 14, 2017. The full text 
of this document is available for public inspection during regular 
business hours in the FCC Reference Information Center, Portals II, 445 
12th Street SW., Room CY-A257, Washington, DC 20554. It is available on 
the Commission's Web site at https://www.fcc.gov/document/fcc-takes-next-steps-combat-rural-call-completion-problems.
    Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates 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 (1998), https://www.fcc.gov/Bureaus/OGC/Orders/1998/fcc98056.pdf.
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail.
    [ssquf] 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. 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.
    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).

Synopsis

I. Introduction

    1. We are committed to ensuring that long-distance calls to all 
Americans--including rural Americans--are completed. In this Second 
Further Notice of Proposed Rulemaking, we propose to revise our rules 
to better address ongoing problems in the completion of long-distance 
telephone calls to rural areas. Although the reduced number of rural 
call completion complaints that we now receive suggests some progress, 
we can and must do better. Today, we begin to consider steps that we 
believe will be more effective and less burdensome than our existing 
recording, retention, and reporting rules. We propose to hold covered 
providers responsible for monitoring rural call completion performance 
and taking action to address poor performance. We also seek comment on 
proposals to either modify or eliminate our existing recording, 
retention, and reporting rules. We seek comment on these proposals and 
possible alternatives or additional measures to address rural call 
completion problems.

II. Background

    2. Rural call completion problems manifest themselves in a number 
of ways. For example, a call may be significantly delayed, the called 
party's phone may never ring, or the caller may hear false ring tone or 
busy signals. These failures have significant public interest 
ramifications, causing rural businesses to lose customers, cutting 
families off from their relatives in rural areas, and potentially 
creating dangerous delays in public safety communications. While there 
appear to be multiple factors that cause rural call completion 
problems, one key factor is that a call to a rural area is often 
handled by numerous different providers in the call's path. Given the 
relatively high rates long-distance providers incur to terminate long-
distance calls to rural carriers, long-distance providers have an 
incentive to reduce the per-minute cost of calls. As a result, there is 
greater incentive for the long-distance provider to hand off a call to 
an intermediate provider that is offering to deliver it cheaply--and 
potentially less incentive to ensure that calls to rural areas are 
actually completed properly.
    3. Prior Commission Actions. The Commission has taken a series of 
actions in recent years to address rural call completion problems. In 
the 2011 USF/ICC Transformation Order, the Commission adopted a 
transition plan to gradually reduce most termination charges, including 
those of rate-of-return carriers, to a bill-and-keep methodology--a 
transition which, when completed, should eliminate a significant amount 
of the financial incentive structure that contributes to rural call 
completion problems. In the USF/ICC Transformation Order, the 
Commission also reaffirmed the Commission's call blocking policy; made 
clear that carriers' blocking of VoIP-PSTN traffic is prohibited; and 
clarified that interconnected and one-way VoIP providers are prohibited 
from blocking voice traffic to or from the PSTN. Similarly, in 2007 and 
2012, the Wireline Competition Bureau clarified that carriers are 
prohibited from

[[Page 34913]]

blocking, choking, reducing, or restricting calls, including to avoid 
termination charges. The 2012 RCC Declaratory Ruling in particular 
clarified that: (1) ``it is an unjust and unreasonable practice in 
violation of [S]ection 201 of the Act for a carrier that knows or 
should know that it is providing degraded service to certain areas to 
fail to correct the problem or to fail to ensure that intermediate 
providers, least-cost routers, or other entities acting for or employed 
by the carrier are performing adequately''; and (2) adopting or 
perpetuating routing practices that result in lower quality service to 
rural or high-cost localities than like service to urban or lower cost 
areas may constitute unjust or unreasonable discrimination in 
practices, facilities, or services in violation of Section 202 of the 
Act. The 2012 RCC Declaratory Ruling also reiterated that carriers are 
liable for the acts, omissions, or failures of their agents, including 
underlying providers used to deliver traffic, pursuant to Section 217 
of the Act.
    4. 2013 RCC Order. In 2013, the Commission initiated this 
proceeding and adopted rules to address rural call completion problems, 
including recording, retention, and reporting rules and rules codifying 
the long-standing industry practice of prohibiting false ring 
signaling. False ring signaling occurs when an originating or 
intermediate provider prematurely triggers audible ring tones to the 
caller before the call setup request has actually reached the 
terminating rural provider (i.e., the calling party believes the phone 
is ringing at the called party's premises when it is not). The 
Commission adopted the recordkeeping, retention, and reporting rules in 
an effort to improve its ability to monitor the delivery of long-
distance calls to rural areas and take appropriate enforcement action 
as necessary. These rules apply to providers of long-distance voice 
service that make the initial long-distance call path choice for more 
than 100,000 domestic retail subscriber lines (including ``the total of 
all of a provider's business and residential fixed subscriber lines and 
mobile phones, aggregated over all of the provider's affiliates''). 
These ``covered providers'' include local exchange carriers (LECs), 
interexchange carriers (IXCs), commercial mobile radio service (CMRS) 
providers, and VoIP service providers. Covered providers must record 
and retain, for six months, specific information about each call 
attempt to a rural operating company number (OCN) from subscriber lines 
for which the providers make the initial long-distance call path 
choice. The term ``OCN'' means a four-place alphanumeric code that 
uniquely identifies a local exchange carrier. The term ``rural OCN'' 
means an operating company number that uniquely identifies an incumbent 
LEC that is a rural telephone company as that term is defined in 
Section 51.5 of the Commission's rules. Covered providers must also 
electronically file quarterly certified reports (via FCC Form 480) with 
the Commission. These reports must include specific information, 
separately for each month in the quarter, about call attempts to each 
rural OCN and to nonrural OCNs in the aggregate, including whether call 
attempts are ``answered,'' or signaled as ``busy,'' ``ring no answer,'' 
or ``unassigned number.'' The term ``nonrural OCN'' means an operating 
company number that uniquely identifies an incumbent LEC that is not a 
rural telephone company. For purposes of the Commission's recording, 
retention, and reporting requirements, the National Exchange Carrier 
Association (NECA) provides the definitive lists of rural OCNs and 
nonrural OCNs. Covered providers began recording the required data on 
April 1, 2015, and began submitting their Form 480 reports on August 1, 
2015. Approximately 55 covered providers file such reports each 
quarter.
    5. Safe Harbor. The Commission also adopted the Managing 
Intermediate Provider Safe Harbor (``Safe Harbor'') to encourage 
providers to reduce the number of intermediate providers in a call path 
before the call reaches the terminating provider or terminating tandem 
to no more than two. Qualifying providers that employ two or fewer 
intermediate providers in the call path, though required to report and 
retain data in the same manner as any non-qualifying provider, are 
limited to one year of reporting and are required to retain the 
information for only the three most recent complete calendar months. 
Two covered providers, AT&T and CenturyLink, have certified that they 
qualify for the Safe Harbor.
    6. Duration of Recording, Retention, and Reporting Rules. The 2013 
Rural Call Completion Order anticipated that the need for the 
recording, retention, and reporting rules would decrease, particularly 
as the transition to a bill-and-keep regime continued. Therefore, the 
Commission directed the Wireline Competition Bureau to ``analyze the 
eight sets of reports submitted during the first two years of the data 
collection's effectiveness (as well as any other information the 
Commission receives during that period regarding the causes of and 
solution to rural call completion) and to publish for public comment a 
report on the effectiveness of the rules,'' among other issues. The 
Commission instructed the Bureau to publish the report no more than 90 
days after the last reports are due for that two-year period (i.e., by 
July 31, 2017). Further, to ensure that the recording, retention, and 
reporting rules ``do not last without review in perpetuity,'' the 
Commission committed to complete a proceeding to ``reevaluate whether 
to keep, eliminate, or amend the data collection and reporting rules 
three years after they become effective'' (i.e., by April 2, 2018).
    7. 2017 RCC Data Report. Consistent with the Commission's directive 
in the 2013 RCC Order, the Wireline Competition Bureau has released the 
2017 RCC Data Report. In the Data Report, the Bureau seeks to analyze 
the data collected in the first eight sets of quarterly reports 
(covering the period from April 2015 to March 2017) as directed by the 
Commission. The report shows, among other things: (1) A difference of 
approximately two percent between covered providers' median call answer 
rates for rural and nonrural OCNs in the aggregate; and (2) no 
improvement in covered providers' call answer rates to rural OCNs in 
the aggregate during that period. At the same time, the Bureau cautions 
that its confidence in the reliability of the data collected is fairly 
low due to several issues. These include, among others: (1) Potential 
inaccuracies in covered providers' categorization of call attempts (as 
answered, busy, ring no answer, or unassigned number) and the resulting 
call answer rates; (2) the inclusion of autodialer traffic--which 
generally has lower call answer rates--in most covered providers' 
reports; and (3) the inclusion of intermediate provider traffic and 
wholesale traffic in some covered providers' reports, which limits the 
utility and effectiveness of the data collection. The Data Report finds 
that as a result of these data quality issues, the Commission is 
generally unable to utilize the data to reliably identify rural OCNs 
experiencing potential rural call completion problems. These data 
quality issues have also hindered the Commission's ability to use the 
data as the sole basis for initiating enforcement actions against 
covered providers.
    8. Enforcement Activity and Complaints. Before the recording, 
retention, and reporting rules took effect in the spring of 2015, the 
Enforcement Bureau completed investigations of the rural call routing 
practices and

[[Page 34914]]

performance of several long-distance voice service providers and 
entered into four consent decrees addressing rural call completion 
problems. The Bureau entered into another such consent decree in May 
2016. These consent decrees included significant commitments by these 
providers to improve their call completion practices going forward by 
among other things, monitoring the performance of intermediate 
providers and developing internal procedures and policies to ensure the 
timely investigation of evidence of potential rural call completion 
problems. Notably, in its 2015 Consent Decree, Verizon agreed to use a 
form of safe harbor routing to rural incumbent LEC destinations during 
a three-year compliance period, which is scheduled to expire in January 
2018. The Commission has also established dedicated avenues for rural 
consumers and carriers to report rural call completion problems and has 
reminded long-distance providers of their obligations when served with 
an informal complaint about rural call completion. While the Commission 
continues to receive rural call completion complaints, from 2015 to 
2016, consumer complaints decreased by 57 percent and rural carrier 
complaints decreased by 45 percent.
    9. Pending Rural Call Completion Legislation. Congress is currently 
considering legislation addressing rural call completion. On January 
23, 2017, the House of Representatives passed H.R. 460, the Improving 
Rural Call Quality and Reliability Act of 2017 (hereinafter, the 2017 
RCC Act). A companion bill, S. 96, has also been introduced in the 
Senate. If enacted, the 2017 RCC Act would instruct the Commission to 
establish a registry of and service quality standards for intermediate 
providers.

III. Discussion

    10. We believe that rural call completion is a continuing problem 
and that continued Commission focus on the issue is warranted. We 
continue to receive rural call completion complaints from consumers as 
well as rural carriers. At the same time, the declining rate of rural 
call completion complaints to the Commission suggests that problems may 
be partially abating, and the ongoing transition to bill-and-keep will 
continue to reduce the incentive structure that contributes to rural 
call completion problems. We seek comment on this view, including on 
the prevalence and scope of rural call completion problems today. 
Regardless of commenters' views, we strongly encourage them to submit 
specific examples and data. Additionally, we continue to believe that a 
key reason for rural call completion problems is that calls to rural 
areas are often handled by multiple intermediate providers in the call 
path. We seek comment on this view. Further, we seek comment on how the 
transition to bill-and-keep affects the need for Commission action in 
this area.

A. New Rural Call Completion Requirements for Covered Providers

    11. We propose to hold covered providers responsible for monitoring 
rural call completion performance, and particularly maintaining the 
accountability of their intermediate providers in the event of poor 
performance. We seek detailed comment below on this proposal and how 
best to implement it.
    12. We believe that our proposal is an improvement upon our 
existing recording, retention, and reporting rules, and we seek comment 
on this view. Based on the 2017 RCC Data Report, we question the 
ongoing utility of the current data collection requirements. We also 
recognize that any data collection imposes meaningful ongoing costs. We 
anticipate that our new proposed rules, when compared to the existing 
data collection, will be more effective and less burdensome. In 
particular, we believe that requiring covered providers to actively 
monitor and address unacceptable performance by their intermediate 
providers on routes to individual rural destinations--rather than 
requiring covered providers to submit data to the Commission that may 
mask call routing failures weeks or months after those failures occur--
will help address potential rural call completion issues more directly 
and more quickly than our existing rules. At the same time, we believe 
that our proposal, which is consistent with existing industry best 
practices, will impose limited burdens on covered providers. We seek 
comment on these views and the need to establish new rural call 
completion rules for covered providers generally.
    13. For purposes of any new rules, we propose to retain our 
existing definition of ``covered provider'' in Section 64.2101 of our 
rules, and we seek comment on this proposal. We also seek comment 
generally on the form that any new covered provider requirements should 
take as well as on the proposal discussed below. In addition, we seek 
comment on any possible alternative approaches to new rules for covered 
providers. For the proposal below and any potential alternative, we 
seek comment on its effectiveness in ensuring call completion to rural 
areas, its costs and benefits, and its impact on smaller providers.
1. Covered Provider Monitoring of Performance
    14. Based on industry best practices as developed by ATIS as well 
as on our experience in enforcing rural call completion practices, we 
propose to require covered providers to monitor the rural call 
completion performance of their intermediate providers and to hold them 
accountable for such performance. We seek comment generally on this 
approach and other additional or alternative approaches to achieving 
our objectives. We further seek comment on whether our proposal will 
facilitate the Commission's ability to enforce Sections 201, 202, and 
217 of the Act.
    15. We recognize that there are multiple different ways to 
implement our proposal to require covered providers to monitor the 
rural call completion performance of their intermediate providers and 
to hold them accountable for such performance. We seek comment on how 
best to do so. One possible approach, which is reflected in Appendix A, 
is a rule that, for each intermediate provider with which it contracts 
as of the effective date of the rule, a covered provider must (1) 
monitor the intermediate provider's performance in the completion of 
call attempts to rural incumbent LECs from subscriber lines for which 
the covered provider makes the initial long-distance call path choice; 
and (2) based on the results of such monitoring, hold the intermediate 
provider accountable for such performance, including by removing an 
intermediate provider from a particular route after sustained 
inadequate performance. We seek comment on this specific formulation 
and on potential alternatives. Additionally, we seek comment on whether 
we should clarify that we would not impose liability on covered 
providers that make a good-faith effort to comply with any new 
monitoring requirements and that hold intermediate providers 
accountable for problems identified through such monitoring.
    16. In implementing this proposal, we seek to ensure that covered 
providers are adequately monitoring the performance of their 
intermediate providers in the delivery of calls to rural areas while 
also giving covered providers flexibility in how they do so. Our 
preference would be to define meaningful, clear outcomes or actions for 
a covered provider and then allow covered providers flexibility in how 
they operate their businesses to meet these objectives. Therefore, we 
seek comment on the necessity and value of

[[Page 34915]]

a number of possible approaches to implementation. Specifically, we 
seek comment on the following issues:
     Should we specify performance metrics or other factors 
that covered providers must meet and/or performance metrics they must 
use to monitor and assess the call completion performance of their 
intermediate providers or should we leave this to the discretion of 
covered providers?
     Should we specify the form and frequency of the required 
monitoring, and if so how? For example, is ongoing automated monitoring 
sufficient, or should we also require periodic analysis of the 
resulting data (and if we require the latter, should we specify the 
frequency of review, such as on a monthly or quarterly basis)?
     Should we, and if so how, clarify the scope of the 
required monitoring of intermediate providers? For example, if we were 
to adopt the specific formulation discussed above, should we clarify 
(1) whether it must be conducted on a rural OCN-by-OCN basis; (2) 
whether it must be conducted for all call attempts covered by our 
existing rules or whether sampling should be permitted; (3) whether it 
should include call attempts to not only rural incumbent LECs but also 
rural competitive LECs; and (4) whether it should also include call 
attempts to nonrural incumbent LECs in the aggregate?
     Should we tie the performance monitoring requirement to 
industry best practices, and if so which best practices? In particular, 
we note that some covered providers contractually bind their 
intermediate providers to follow certain industry best practices, which 
are documented in the ATIS Call Completion Handbook. These practices 
include (1) prohibiting ``call looping,'' a practice in which the 
intermediate provider hands off a call for completion to a provider 
that has previously handed off the call); (2) requiring intermediate 
providers to ``crank back'' or release a call back to the originating 
carrier, rather than simply dropping the call, upon failure to find a 
route; and (3) prohibiting intermediate providers from processing calls 
so as to ``terminate and re-originate'' them (e.g., fraudulently using 
``SIM boxes'' or unlimited VoIP plans to re-originate large amounts of 
traffic in an attempt to shift the cost of terminating these calls from 
the originating provider to the wireless or wireline provider). These 
best practices have previously been supported by covered providers and 
rural carriers alike. Should we require covered providers to mandate 
that the intermediate providers with which they contract follow these 
or any other industry best practices? Would such a requirement be 
overly burdensome for those covered providers that do not already 
contractually bind their intermediate providers to follow these best 
practices? We also seek comment on the benefits and burdens of such a 
requirement on smaller providers.
     We seek comment on whether and how we should clarify the 
circumstances in which a covered provider must hold one of its 
intermediate providers accountable for its rural call completion 
performance. For example, if we adopted the specific formulation 
discussed above, how should we define what constitutes ``sustained 
inadequate performance'' by an intermediate provider?
    We seek comment on any other potential implementation issues 
associated with our proposal, including whether we should establish any 
exceptions to the proposed requirements. For example, are there 
instances where an exception would be needed for cases in which covered 
providers cannot remove an underperforming intermediate provider from a 
particular route because no other intermediate provider is available? 
In addition, we seek specific comment on the benefits and burdens of 
our proposal on smaller providers.
    17. In addition, we seek comment on any contractual issues raised 
by our proposed monitoring requirement. Specifically, we propose to 
require covered providers to monitor the performance of the 
intermediate providers with which they contract as of the effective 
date of the requirement. How would existing contracts be affected by 
this proposal? For example, would removal of an intermediate provider 
from a particular route for sustained inadequate performance entail a 
breach of contract or would contractual change of law provisions cover 
such action? Additionally, is there a subset of intermediate carriers 
for which our proposal would not require monitoring because that subset 
contracts only with other intermediate carriers and not covered 
providers, and if so how does this impact the effectiveness of our 
proposal?
    18. Further, we seek comment on how we can best ensure compliance 
with our proposed performance monitoring requirements. For example, is 
a certification or audit requirement needed to ensure compliance? Why 
or why not? If so, how should such a requirement be implemented (e.g., 
what should the certification include and how and when should it be 
filed)?
2. Additional or Alternative Proposals
    19. We seek comment on any additional or alternative proposals for 
new rural call completion requirements for covered providers. For 
instance, should we require covered providers to follow some or all of 
the ATIS Call Completion Handbook best practices discussed above or any 
other industry best practices? Additionally, as an alternative to our 
proposal above, should we require covered providers to meet or exceed 
one or more numeric rural call completion performance targets or 
thresholds while giving them flexibility in how they do so? If so, what 
metric(s) should we use and what target(s) or threshold(s) should we 
establish? Should we require covered providers to monitor their own 
rural call completion performance and proactively investigate rural 
OCNs associated with poor performance (as evidenced by, for example, 
low call answer or completion rates, or repeated complaints by 
customers, rural LECs, or others)? Should covered providers be required 
to retain data on their rural call completion performance monitoring 
for a specified period of time? Should we require covered providers to 
certify that they conduct testing of new intermediate providers with 
whom they contract, and if so, how should that requirement be 
structured? Should we require covered providers to limit the number of 
intermediate providers that they utilize in the call path before the 
call reaches the terminating provider or terminating tandem, and if so, 
what should that number be? What are the implications of such a 
requirement on covered providers, intermediate providers, and 
consumers? Should we require covered providers to establish reasonable 
processes to timely investigate rural call completion complaints or 
other evidence of potential rural call completion problems? If such a 
requirement is necessary, what would be the elements of such processes? 
Should we require covered providers to provide and maintain updated 
information with the Commission on a point-of-contact within the 
company that is responsible for addressing rural call completion 
complaints (regardless of whether the complaint is from a customer of 
the covered provider), and should we make that contact information 
publicly available? For each of these potential requirements and any 
alternative, we seek comment on its effectiveness in addressing rural 
call completion problems, its costs and benefits, and its impact on 
smaller providers.

[[Page 34916]]

3. Definitions
    20. For purposes of any new requirements we adopt for covered 
providers, we seek comment on how to define relevant terms. As with the 
definition of ``covered provider,'' we propose to retain the existing 
definitions ``intermediate provider,'' ``call attempt,'' ``long-
distance voice service,'' ``initial long-distance call path choice,'' 
and ``affiliate'' in Section 64.2101 of the Commission's rules to the 
extent that these terms are used in our final rules. We seek comment on 
this proposal as well as on whether and how we should define any other 
relevant terms.
    21. We seek comment in particular on how we should define ``rural'' 
areas for purposes of any new covered provider requirements. Our 
existing definition of ``rural OCN'' is based on the statutory 
definition of ``rural telephone company.'' Does this definition 
accurately capture potential call completion problems to areas that 
should be viewed as ``rural''? We seek comment on this issue and any 
potential alternatives for ensuring that our rules address call 
completion problems in ``rural'' areas. Further, if we decide to 
eliminate our existing recording, retention, and reporting 
requirements, should we ask NECA to continue publishing a list of rural 
and nonrural OCNs? Could and should this list be expanded to include 
rural competitive LECs? We seek comment on this issue and any 
alternative ways to ensure that covered providers can identify 
``rural'' areas.
4. Exemption for Smaller Providers
    22. We seek comment on whether smaller providers should be exempted 
from any new requirements applicable to covered providers. In the 2013 
Rural Call Completion Order, the Commission exempted providers that 
made the initial long-distance call path choice for 100,000 or fewer 
domestic retail subscriber lines, counting the total of all business 
and residential fixed subscriber lines and mobile phones and aggregated 
over all of the provider's affiliates, from the recording, retention, 
and reporting requirements. If we adopt new requirements for covered 
providers, is an exemption for smaller providers necessary? Why or why 
not? If such an exemption is necessary, should we retain the same 
exemption contained in our existing rules? If we retain the exemption, 
we propose to retain the requirement that the 100,000-subscriber-line 
figure include the total of all of a provider's business and 
residential fixed subscriber lines and mobile phones, aggregated over 
all of the provider's affiliates. We seek comment on this proposal.
5. Legal Authority
    23. We believe that Sections 201(b) and 202(a) of the Act provide 
sufficient legal authority for our proposed requirements for covered 
providers. Practices that lead to rural call completion problems may 
violate the prohibition against unjust and unreasonable practices in 
Sections 201(b), or may violate carriers' duty under Section 202(a) to 
refrain from unjust or unreasonable discrimination in practices, 
facilities, or services. In addition, we believe that with respect to 
carriers, Sections 218, 220(a), and 403 of the Act grant the Commission 
ample authority to (1) inquire into and keep itself apprised of 
carriers' business management practices; (2) obtain from carriers full 
and complete information necessary to enable the Commission to perform 
the duties for which it was created; and (3) prescribe the form for 
these records and reports. Furthermore, we believe that Section 217 of 
the Act gives us authority to hold originating providers responsible 
for the acts, omissions, or failures of the intermediate providers with 
which they contract. We seek comment on these views and on any other 
sources of authority to address rural call completion issues. We seek 
comment on whether and the extent to which we have authority under 
Section 217 to hold originating providers responsible for the acts, 
omissions, or failures of intermediate providers in the call path other 
than those in a direct contracting relationship with the originating 
provider.
    24. We believe the proposed requirements will help facilitate rural 
call completion and thereby ensure that all Americans in rural and 
nonrural areas receive the benefits of interconnection under Section 
251(a) of the Act. As the Commission explained in the 2013 RCC Order, 
Section 201(b) ```explicitly gives the FCC jurisdiction to make rules 
governing matters to which the 1996 Act applies,''' including matters 
covered by Section 251(a). As was the case with our recording, 
retention, and reporting rules, we believe we have authority to adopt 
covered provider requirements that would apply to not only interstate 
but also intrastate long-distance call attempts. As was the case with 
our recording, retention, and reporting rules, we also believe we have 
ancillary authority to apply the proposed requirements to covered 
providers that are VoIP service providers and that are not otherwise 
subject to our direct authority under the Act. In particular, we 
believe that requiring providers of VoIP service to comply with the 
proposed rules is ``reasonably ancillary to the effective performance 
of the Commission's various responsibilities'' under Sections 201(b), 
202(a), and 251(a)(1). We seek comment on this analysis and any 
additional sources of possible legal authority for our proposed covered 
provider requirements.

B. Recording, Retention, and Reporting Requirements for Covered 
Providers

    25. Consistent with the Wireline Competition Bureau's 
recommendations in the 2017 RCC Data Report, we seek comment on 
proposals to either modify or eliminate our existing recording, 
retention, and reporting requirements. In adopting those rules in the 
2013 RCC Order, the Commission sought to eliminate the problem of rural 
call completion by (1) improving our ability to monitor rural call 
completion problems, and (2) aiding enforcement action in connection 
with providers' call completion practices as necessary. However, as 
discussed in the 2017 RCC Data Report, given the data quality issues 
associated with the Form 480 data collection, we cannot consistently 
rely on the data to accurately identify rural areas with potential 
rural call completion problems. In addition, these data quality issues 
have hindered our ability to initiate enforcement action against 
covered providers based solely on the data collected. Therefore, we 
seek comment on three alternative approaches with regard to our 
existing rules. We believe that we have authority to adopt each of 
these or similar approaches, and we seek comment on this view.
    26. One potential approach is to retain but modify the recording, 
retention, and reporting rules. We seek comment on this alternative. If 
we should adopt this approach, how should we modify the existing 
requirements in light of the lessons learned in the 2017 RCC Data 
Report? Would modifying these requirements be preferable to the 
alternatives discussed below, and if so, why? For example, would a 
modified data collection assist covered providers in detecting rural 
call completion problems and addressing them before they grow? 
Consistent with the 2017 RCC Data Report, we seek comment on the 
following potential modifications: (1) Whether and how to revise the 
call resolution categories specified in our rules (i.e., answered, 
busy, ring no answer, and unassigned number) to reduce or eliminate the 
problem of uncategorized calls; (2) whether and how to account for 
inaccuracies in

[[Page 34917]]

signaling, which affect call categorization and the resulting call 
answer rates; (3) whether and how to require covered providers to 
exclude autodialer traffic, intermediate provider traffic, and/or 
wholesale traffic from their Form 480 reports; and (4) how to revise 
the Form 480 filing system to ensure consistency in the form and 
content of covered providers' filings. In addition, we seek comment on 
whether our recording, retention, and reporting requirements should 
cover call attempts to rural competitive LECs in addition to rural 
incumbent LECs. We also seek comment on other possible modifications to 
our recording, retention, and reporting requirements. For each of these 
potential modifications as well as any others that commenters 
recommend, we seek comment on the extent to which the potential 
modification would yield high-quality data that would help the 
Commission and/or covered providers in addressing rural call completion 
problems as well as the feasibility, costs, and benefits of such 
modifications and their impact on small providers.
    27. A second possible approach is to retain the recording and 
retention requirement but eliminate the reporting requirement. We seek 
comment on this alternative and its benefits and drawbacks. If we 
retain the recording and retention requirement, how, if at all, should 
we modify those requirements?
    28. A third potential approach is to eliminate the recording, 
retention, and reporting requirements. Would this alternative, which is 
reflected in Appendix A, be preferable to the other approaches 
discussed above? For example, in the 2017 RCC Data Report, the Wireline 
Competition Bureau found that (1) even if we were to retain and modify 
our recording, retention, and reporting rules to address the data 
quality issues discussed in the Data Report, it is not clear that the 
benefits of such modifications would outweigh the costs; and (2) the 
necessary modifications would, at best, enable the Commission to 
reliably identify areas with potential rural call completion problems 
weeks or months after those problems have occurred. Do commenters agree 
with these views? We also seek comment on whether retaining the 
retention or reporting requirements, individually or together, would 
result in improved rural call completion performance. We seek comment 
on these and any other considerations we should take into account in 
determining whether to eliminate these rules.

C. Safe Harbor

    29. We seek comment generally on how we should proceed with our 
existing Safe Harbor rule and how any Safe Harbor regime should be 
structured going forward. Given that problems with routing calls to 
rural areas often arise when multiple intermediate providers are 
involved in transmitting a call, we recognize the benefits of creating 
strong incentives for covered providers to use fewer intermediate 
providers in the call path and seek comment on the best means to create 
such incentives. If we were to retain any recording, retention, and 
reporting rules, should we retain or modify our existing Safe Harbor 
rule? In asking this question, we note that while the Safe Harbor 
incentivizes covered providers to adopt positive rural call completion 
practices, it also effectively prevents the Commission from collecting 
data from some of the largest covered providers.
    30. If we adopt any version of the performance monitoring 
requirements proposed in Section III.A above, should we reduce the 
monitoring and certification or other obligations of covered providers 
that meet certain qualifications? If so, how should we reduce these 
obligations?
    31. In any Safe Harbor regime, should we retain the three 
qualification requirements of our existing Safe Harbor rule? Those are 
that (1) the covered provider must restrict by contract any 
intermediate provider to which a call is directed from permitting more 
than one additional intermediate provider in the call path before the 
call reaches the terminating provider or terminating tandem; (2) any 
nondisclosure agreement with an intermediate provider must permit the 
covered provider to reveal the identity of the intermediate provider 
and any additional intermediate provider to the Commission and to the 
rural incumbent LEC(s) whose incoming long-distance calls are affected 
by the intermediate provider's performance; and (3) the covered 
provider must have a process in place to monitor the performance of its 
intermediate providers.
    32. If we retain the qualification requirements in our existing 
Safe Harbor rule, should they be modified or clarified and if so, how? 
For example, Verizon seeks clarifications that (1) incidental or de 
minimis use of a third intermediate provider during network congestion 
or outages is not in conflict with the Safe Harbor; and (2) that the 
Safe Harbor certification applies only to traffic destined for rural 
incumbent LECs. We seek comment on whether we should make these or any 
other clarifications or modifications to the Safe Harbor if it is 
retained.

D. Other Potential Rules To Address Rural Call Completion

    33. We seek comment on any additional measures we should take to 
address rural call completion problems. For example, should we adopt 
rules formally codifying our existing prohibitions on blocking, 
choking, reducing, or restricting traffic? We seek comment on our legal 
authority to adopt such rules, including whether there is any basis to 
adopt such rules for intrastate traffic. We also seek comment on what, 
if any, exceptions to such rules would need to be established.
    34. We also seek comment on whether we should impose any 
requirements designed to address rural call completion issues on 
terminating providers or a subset thereof (e.g., rural incumbent LECs). 
For example, Comcast previously recommended that all rural incumbent 
LECs be required to activate a test line in each of their end offices 
that originating and intermediate providers can use to conduct fully 
automated testing. We seek comment on the benefits and burdens of such 
a requirement and any other requirements for rural incumbent LECs that 
we should consider.

IV. Initial Regulatory Flexibility Analysis

    35. 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 Second Further Notice of Proposed Rulemaking (Second 
FNPRM or Second Further Notice). The Commission requests written public 
comments on this IRFA. Comments must be identified as responses to the 
IRFA and must be filed by the deadlines for comments provided on the 
first page of the Second FNPRM. The Commission will send a copy of the 
Second FNPRM, including this IRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration (SBA). In addition, the Second FNPRM 
and IRFA (or summaries thereof) will be published in the Federal 
Register.

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

    36. In this Second FNPRM, we propose changes to, and seek comment 
on, our rules to address ongoing problems in the completion of long-
distance telephone calls to rural areas.

[[Page 34918]]

We are committed to ensuring that long-distance calls to all 
Americans--including rural Americans--are completed. Although we have 
made progress reflected by the reduced number of call completion 
complaints that we now receive, we can and must do better. Rural call 
completion problems manifest themselves in a number of ways. For 
example, a call may be significantly delayed, the called party's phone 
may never ring, or the caller may hear false ring tone or busy signals. 
These failures have significant public interest ramifications, causing 
rural businesses to lose customers, cutting families off from their 
relatives in rural areas, and potentially creating dangerous delays in 
public safety communications in such areas. While there appear to be 
multiple factors that cause rural call completion problems, one key 
factor is that a call to a rural area is often handled by numerous 
different providers in the call's path. In light of the complaints we 
continue to receive from consumers and rural carriers, we believe that 
rural call completion problems persist and that continued Commission 
action is necessary to address such problems. Additionally, we continue 
to believe that a key reason for rural call completion problems is that 
calls to rural areas are often handled by multiple intermediate 
providers in the call path.
    37. Although we believe that we should continue to take action to 
address rural call completion problems, we also question the ongoing 
utility of our existing recording, retention, and reporting rules. In 
adopting those rules in the 2013 RCC Order, the Commission sought to 
eliminate the problem of rural call completion by (1) improving our 
ability to monitor rural call completion problems, and (2) aiding 
enforcement action in connection with providers' call completion 
practices as necessary. However, as discussed in the 2017 RCC Data 
Report, given the data quality issues associated with the Form 480 data 
collection, we cannot consistently rely on the data to accurately 
identify rural areas with potential rural call completion problems. In 
addition, these data quality issues have hindered our ability to 
initiate enforcement action against covered providers based solely on 
the data collected. Therefore, the Second Further Notice proposes three 
alternatives for proceeding with the Commission's existing recording, 
retention, and reporting rules. In addition, we propose to require 
covered providers to monitor the rural call completion performance of 
their intermediate providers, and to hold those intermediate providers 
accountable for such performance.

B. Legal Basis

    38. The legal basis for any action that may be taken pursuant to 
the Second FNPRM is contained in sections 1, 2, 4(i), 201(b), 202(a), 
217, 218, 220(a), 251(a), and 403 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 152, 154(i), 201(b), 202(a), 217, 218, 220(a), 
251(a), and 403.

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

    39. 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 rule revisions, 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.
    40. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three comprehensive small entity size standards that could 
be directly affected herein. First, while there are industry specific 
size standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the SBA's Office of 
Advocacy, in general a small business is an independent business having 
fewer than 500 employees. These types of small businesses represent 
99.9% of all businesses in the United States which translates to 28.8 
million businesses. Next, the type of small entity described as a 
``small organization'' is generally ``any not-for-profit enterprise 
which is independently owned and operated and is not dominant in its 
field.'' Nationwide, as of 2007, there were approximately 1,621,215 
small organizations. Finally, the small entity described as a ``small 
governmental jurisdiction'' is defined generally as ``governments of 
cities, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data published in 2012 indicate that there were 89,476 local 
governmental jurisdictions in the United States. We estimate that, of 
this total, as many as 88,761 entities may qualify as ``small 
governmental jurisdictions.'' Thus, we estimate that most governmental 
jurisdictions are small.
    41. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``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 communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' 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 2012 show 
that there were 3,117 firms that operated that year. Of this total, 
3,083 operated with fewer than 1,000 employees. Thus, under this size 
standard, the majority of firms in this industry can be considered 
small.
    42. 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 NAICS 
Code category is Wired Telecommunications Carriers as defined above. 
Under the applicable SBA size standard, such a business is small if it 
has 1,500 or fewer employees. According to Commission data, census data 
for 2012 shows that there were 3,117 firms that operated that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. The 
Commission therefore estimates that most providers of local exchange 
carrier service are small entities that may be affected by the rules 
adopted.
    43. Incumbent LECs. Neither the Commission nor the SBA has 
developed a small business size standard specifically for incumbent 
local exchange services. The closest applicable NAICS Code category is

[[Page 34919]]

Wired Telecommunications Carriers as defined above. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 3,117 firms operated in that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. 
Consequently, the Commission estimates that most providers of incumbent 
local exchange service are small businesses that may be affected by the 
rules and policies adopted. Three hundred and seven (307) Incumbent 
Local Exchange Carriers reported that they were incumbent local 
exchange service providers. Of this total, an estimated 1,006 have 
1,500 or fewer employees.
    44. 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 NAICS Code category is Wired 
Telecommunications Carriers, as defined above. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
U.S. Census data for 2012 indicate that 3,117 firms operated during 
that year. Of that number, 3,083 operated with fewer than 1,000 
employees. Based on this data, the Commission concludes that the 
majority of Competitive LECS, CAPs, Shared-Tenant Service Providers, 
and Other Local Service Providers, are small entities. 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. 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. Also, 72 carriers have reported that 
they are Other Local Service Providers. Of this total, 70 have 1,500 or 
fewer employees. Consequently, based on internally researched FCC data, 
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.
    45. 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.
    46. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a definition for Interexchange Carriers. The closest 
NAICS Code category is Wired Telecommunications Carriers as defined 
above. The applicable size standard under SBA rules is that such a 
business is small if it has 1,500 or fewer employees. U.S. Census data 
for 2012 indicates that 3,117 firms operated during that year. Of that 
number, 3,083 operated with fewer than 1,000 employees. According to 
internally developed Commission data, 359 companies reported that their 
primary telecommunications service activity was the provision of 
interexchange services. Of this total, an estimated 317 have 1,500 or 
fewer employees. Consequently, the Commission estimates that the 
majority of IXCs are small entities that may be affected by our 
proposed rules.
    47. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. The 
Telecommunications Resellers industry comprises establishments engaged 
in purchasing access and network capacity from owners and operators of 
telecommunications networks and reselling wired and wireless 
telecommunications services (except satellite) to businesses and 
households. Establishments in this industry resell telecommunications; 
they do not operate transmission facilities and infrastructure. Mobile 
virtual network operators (MVNOs) are included in this industry. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees. Census data for 2012 show that 1,341 firms provided resale 
services during that year. Of that number, all operated with fewer than 
1,000 employees. Thus, under this category and the associated small 
business size standard, the majority of these prepaid calling card 
providers can be considered small entities.
    48. Toll Resellers. The Commission has not developed a definition 
for Toll Resellers. The closest NAICS Code Category is 
Telecommunications Resellers. The Telecommunications Resellers industry 
comprises establishments engaged in purchasing access and network 
capacity from owners and operators of telecommunications networks and 
reselling wired and wireless telecommunications services (except 
satellite) to businesses and households. Establishments in this 
industry resell telecommunications; they do not operate transmission 
facilities and infrastructure. Mobile virtual network operators (MVNOs) 
are included in this industry. 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 2012 show that 1,341 firms provided resale 
services during that year. Of that number, 1,341 operated with fewer 
than 1,000 employees. Thus, under this category and the associated 
small business size standard, the majority of these resellers 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 this total, an estimated 857 have 1,500 or fewer 
employees. Consequently, the Commission estimates that the majority of 
toll resellers are small entities.
    49. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a definition 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 NAICS Code category is for 
Wired Telecommunications Carriers as defined above. Under the 
applicable SBA size standard, such a business is small if it has 1,500 
or fewer employees. Census data for 2012 shows that there were 3,117 
firms that operated that year. Of this total, 3,083 operated with fewer 
than 1,000 employees. Thus, under this category and the associated 
small business size standard, the majority of Other Toll Carriers can 
be considered small. According to internally developed 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. Consequently, the 
Commission estimates that most Other Toll Carriers are small entities 
that may be affected by rules adopted pursuant to the Second Further 
Notice.
    50. Prepaid Calling Card Providers. The SBA has developed a 
definition for

[[Page 34920]]

small businesses within the category of Telecommunications Resellers. 
Under that SBA definition, such a business is small if it has 1,500 or 
fewer employees. According to the Commission's Form 499 Filer Database, 
500 companies reported that they were engaged in the provision of 
prepaid calling cards. The Commission does not have data regarding how 
many of these 500 companies have 1,500 or fewer employees. 
Consequently, the Commission estimates that there are 500 or fewer 
prepaid calling card providers that may be affected by the rules.
    51. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census data for 2012 show that there were 967 firms that operated for 
the entire year. Of this total, 955 firms had employment of 999 or 
fewer employees and 12 had employment of 1000 employees or more. Thus 
under this category and the associated size standard, the Commission 
estimates that the majority of wireless telecommunications carriers 
(except satellite) are small entities.
    52. The Commission's own data--available in its Universal Licensing 
System--indicate that, as of October 25, 2016, there are 280 Cellular 
licensees that will be affected by our actions today. The Commission 
does not know how many of these licensees are small, as the Commission 
does not collect that information for these types of entities. 
Similarly, according to internally developed Commission data, 413 
carriers reported that they were engaged in the provision of wireless 
telephony, including cellular service, Personal Communications Service, 
and Specialized Mobile Radio Telephony services. Of this total, an 
estimated 261 have 1,500 or fewer employees, and 152 have more than 
1,500 employees. Thus, using available data, we estimate that the 
majority of wireless firms can be considered small.
    53. Wireless Communications Services. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these definitions.
    54. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite). Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Commission data, 
413 carriers reported that they were engaged in wireless telephony. Of 
these, an estimated 261 have 1,500 or fewer employees and 152 have more 
than 1,500 employees. Therefore, a little less than one third of these 
entities can be considered small.
    55. Cable and Other Subscription Programming. This industry 
comprises establishments primarily engaged in operating studios and 
facilities for the broadcasting of programs on a subscription or fee 
basis. The broadcast programming is typically narrowcast in nature 
(e.g. limited format, such as news, sports, education, or youth-
oriented). These establishments produce programming in their own 
facilities or acquire programming from external sources. The 
programming material is usually delivered to a third party, such as 
cable systems or direct-to-home satellite systems, for transmission to 
viewers. The SBA has established a size standard for this industry 
stating that a business in this industry is small if it has 1,500 or 
fewer employees. The 2012 Economic Census indicates that 367 firms were 
operational for that entire year. Of this total, 357 operated with less 
than 1,000 employees. Accordingly we conclude that a substantial 
majority of firms in this industry are small under the applicable SBA 
size standard.
    56. Cable Companies and Systems (Rate Regulation). 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 there are currently 4,600 active cable 
systems in the United States. Of this total, all but eleven cable 
operators nationwide are small under the 400,000-subscriber size 
standard. In addition, under the Commission's rate regulation rules, a 
``small system'' is a cable system serving 15,000 or fewer subscribers. 
Current Commission records show 4,600 cable systems nationwide. Of this 
total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 
systems have 15,000 or more subscribers, based on the same records. 
Thus, under this standard as well, we estimate that most cable systems 
are small entities.
    57. Cable System Operators (Telecom Act Standard). The 
Communications 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.'' There are approximately 52,403,705 cable video 
subscribers in the United States today. Accordingly, an operator 
serving fewer than 524,037 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. Based 
on available data, we find that all but nine incumbent cable operators 
are small entities 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. Although it seems certain that some of 
these cable system operators are affiliated with entities whose gross 
annual revenues exceed $250 million, we are unable at this time to 
estimate with greater precision the number of cable system operators 
that would qualify as small cable operators under the definition in the 
Communications Act.
    58. All Other Telecommunications. The ``All Other 
Telecommunications'' industry is comprised of establishments that are 
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 ``All Other 
Telecommunications,'' which

[[Page 34921]]

consists of all such firms with gross annual receipts of $32.5 million 
or less. For this category, U.S. Census data for 2012 show that there 
were 1,442 firms that operated for the entire year. Of these firms, a 
total of 1,400 had gross annual receipts of less than $25 million. Thus 
a majority of ``All Other Telecommunications'' firms potentially 
affected by our action can be considered small.

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

    59. The Second Further Notice proposes and seeks comment on rule 
changes that will affect reporting, recordkeeping, and other compliance 
requirements. In particular, the Second Further Notice proposes three 
alternatives for proceeding with the Commission's existing rural call 
completion recording, retention, and reporting rules for covered 
providers. One proposal would modify the recording, retention, and 
reporting requirements. Should the Commission adopt this proposal, such 
action could result in increased, reduced, or otherwise altered 
reporting, recordkeeping, or other compliance requirements for covered 
providers. Another proposal would retain the recording and retention 
requirements but eliminate the reporting requirement. A third proposal 
would eliminate the recording, retention, and reporting rules. Should 
the Commission adopt either of these proposals, we expect such action 
to reduce reporting, recordkeeping, and other compliance requirements. 
Specifically, the proposals should have a beneficial reporting, 
recordkeeping, or compliance impact on small entities because many 
providers will be subject to fewer such burdens. The Second Further 
Notice also proposes to require covered providers to monitor the rural 
call completion performance of their intermediate providers, and hold 
those intermediate providers accountable for such performance.

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

    60. 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.
    61. The Second Further Notice seeks comment on three alternative 
proposals for proceeding with the Commission's recording, retention, 
and reporting requirements for covered providers. With respect to one 
of the alternatives (i.e., modifying the recording, retention, and 
reporting requirements), the Second Further Notice expressly seeks 
comment on the impact of such modifications on small providers. We 
anticipate that two of the alternatives (i.e., retaining the recording 
and retention requirements but eliminating the reporting requirement, 
or eliminating the recording, retention, and reporting requirements) 
would reduce compliance burdens for covered providers, and we seek 
comment on these alternative proposals. Additionally, the Second 
Further Notice seeks comment on whether smaller providers should be 
exempt from any new requirements applicable to covered providers and 
seeks comment on how to proceed with the existing Safe Harbor rule to 
further help reduce burdens on covered providers. The Second Further 
Notice also seeks comment on how to structure the proposal that covered 
providers monitor the performance of their intermediate providers so as 
to minimize burdens for small providers.
    62. The Second Further Notice seeks comment on all of our 
proposals, as well as alternatives that could also address rural call 
completion problems while reducing burdens on small providers. In the 
Second Further Notice, we explicitly seek comment on the impact of our 
proposals on small providers. The Commission expects to consider the 
economic impact on small entities, as identified in comments filed in 
response to the Second Further Notice, in reaching its final 
conclusions and taking action in this proceeding.

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

    63. None.

V. Procedural Matters

A. Ex Parte Rules

    64. This proceeding shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making ex parte presentations must file a copy of any written 
presentation or a memorandum summarizing any oral presentation within 
two business days after the presentation (unless a different deadline 
applicable to the Sunshine period applies). Persons making oral ex 
parte presentations are reminded that memoranda summarizing the 
presentation must (1) list all persons attending or otherwise 
participating in the meeting at which the ex parte presentation was 
made, and (2) summarize all data presented and arguments made during 
the presentation. If the presentation consisted in whole or in part of 
the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with 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.

B. Initial Regulatory Flexibility Analysis

    65. Pursuant to the Regulatory Flexibility Act (RFA), the 
Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities of 
the policies and actions considered in this Second Further Notice of 
Proposed Rulemaking. The text of the IRFA is set forth above. Written 
public comments are requested on this IRFA. Comments must be identified 
as responses to the IRFA and must be filed by the deadlines for comment 
on the Second Further Notice of Proposed Rulemaking. The Commission's 
Consumer and Governmental Affairs Bureau, Reference Information Center, 
will send a copy of this Second Further Notice of Proposed Rulemaking, 
including the IRFA, to the

[[Page 34922]]

Chief Counsel for Advocacy of the Small Business Administration (SBA).

C. Paperwork Reduction Act

    66. This document contains proposed new and modified 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, we seek specific comment on how we might further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees.

D. Contact Person

    67. For further information about this proceeding, please contact 
Alex Espinoza, FCC Wireline Competition Bureau, Competition Policy 
Division, Room 5-C211, 445 12th Street SW., Washington, DC 20554, at 
(202) 418-0849 or Alex.Espinoza@fcc.gov.

VI. Ordering Clauses

    68. Accordingly, it is ordered, pursuant to sections 1, 2, 4(i), 
201(b), 202(a), 217, 218, 220(a), 251(a), and 403 of the Communications 
Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 201(b), 202(a), 
217, 218, 220(a), 251(a), and 403, that this Second Further Notice of 
Proposed Rulemaking is adopted.
    69. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Second Further Notice of Proposed Rulemaking, including 
the IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 64

    Miscellaneous rules relating to common carriers.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 64 as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. Amend part 64 by revising the heading of Subpart V to read as 
follows:

Subpart V--Rural Call Completion

0
2. Amend Sec.  64.2101 by removing the definitions of ``Operating 
company number (OCN)'' and ``Rural OCN,'' and adding a definition of 
``Rural incumbent LEC'' to read as follows:


Sec.  64.2101   Definitions.

* * * * *
    Rural incumbent LEC. The term ``rural incumbent LEC'' means an 
incumbent LEC that is a rural telephone company, as those terms are 
defined in Sec.  51.5 of this chapter.
0
3. Revise Sec.  64.2103 to read as follows:


Sec.  64.2103  Covered Provider Rural Call Completion Practices.

    For each intermediate provider with which it contracts, a covered 
provider shall:
    (a) Monitor the intermediate provider's performance in the 
completion of call attempts to rural incumbent LECs from subscriber 
lines for which the covered provider makes the initial long-distance 
call path choice; and
    (b) Based on the results of such monitoring, hold the intermediate 
provider accountable for such performance, including by removing the 
intermediate provider from a particular route after sustained 
inadequate performance.


Sec.  64.2105   [Removed and Reserved].

0
4. Remove and reserve Sec.  64.2105.


Sec.  64.2107   [Removed and Reserved].

0
5. Remove and reserve Sec.  64.2107.


Sec.  64.2109   [Removed and Reserved].

0
6. Remove and reserve section 64.2109.

[FR Doc. 2017-15826 Filed 7-26-17; 8:45 am]
 BILLING CODE 6712-01-P