Rural Call Completion, 21723-21738 [2018-09969]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 83, Number 91 (Thursday, May 10, 2018)]
[Rules and Regulations]
[Pages 21723-21738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09969]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 13-39; FCC 18-45]


Rural Call Completion

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission reorients its existing rural 
call completion rules to better reflect strategies that have worked to 
reduce rural call completion problems while at the same time reducing 
the overall burden of its rules on providers. This Second Report and 
Order (Order) adopts a new rule requiring ``covered providers''--
entities that select the initial long-distance route for a large number 
of lines--to monitor the performance of the ``intermediate providers'' 
to which they hand off calls. The Order also eliminates the call 
completion reporting requirement for covered providers that was 
established by the Commission in 2013.

DATES: Effective June 11, 2018, except for the rule contained in 47 CFR 
64.2113, which requires approval by the Office of Management and Budget 
(OMB). The Commission will publish a document in the Federal Register 
announcing approval of this requirement and the date the rule will 
become effective.

FOR FURTHER INFORMATION CONTACT: Wireline Competition Bureau, 
Competition Policy Division, Zach Ross, at (202) 418-1033, or 
[email protected]. For further information concerning the Paperwork 
Reduction Act information collection requirements contained in this 
document, send an email to [email protected] or contact Nicole Ongele at 
(202) 418-2991.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Report and Order in WC Docket No. 13-39, adopted and released on April 
17, 2017. The full text of this document, including all Appendices, 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 also available on the Commission's 
website at https://www.fcc.gov/document/fcc-takes-new-steps-improve-rural-call-completion-0.

I. Synopsis

A. Covered Provider Monitoring of Performance

1. Monitoring Requirement
    1. The record in this proceeding and our complaint data establish 
that rural call completion issues persist. Covered providers have 
incentives both to serve customers well and minimize routing costs; but 
these incentives are in tension because least-cost routing can lead to 
poor call completion performance. While intercarrier compensation 
reform has the potential to greatly improve rural call completion, it 
is unlikely to eliminate all incentives that may lead to call 
completion issues in the foreseeable future. We are committed to 
refining our approach to better target these important issues.
    2. Building on our proposal in the RCC 2nd FNPRM, 82 FR 34911, we 
specifically require that 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 
telephone companies 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, take steps that are reasonably 
calculated to correct any identified performance problem with the 
intermediate provider, including removing the intermediate provider 
from a particular route after sustained inadequate performance. We 
revise subsection (b) of the rule from our proposal in the RCC 2nd 
FNPRM to direct covered providers to correct performance problems, 
rather than hold intermediate providers accountable. To be clear, 
taking steps that are reasonably calculated to correct any identified 
performance problem with the intermediate provider often will involve 
holding the intermediate provider accountable for its performance. 
Nevertheless, we find this change to the rule text warranted to focus 
subsection (b) directly on resolving rural call completion problems, 
rather than a particular means for doing so. Additionally, the RCC Act 
gives us authority to hold intermediate providers accountable for 
meeting service quality standards, so specifically directing covered 
providers to hold intermediate providers accountable is less beneficial 
than prior to the RCC Act's enactment. We include the phrase ``take 
steps that

[[Page 21724]]

are reasonably calculated to'' and the word ``identified'' consistent 
with our conclusion that we do not impose strict liability on covered 
providers. As explained in detail below, the monitoring requirement we 
adopt entails both prospective evaluation to prevent problems and 
retrospective investigation of any problems that arise. We also require 
covered providers to take steps that are reasonably calculated to 
correct any identified performance problem with the intermediate 
provider.
    3. The monitoring requirement we adopt has significant support in 
the record. It encourages covered providers to ensure that calls are 
completed, assigns clear responsibility for call completion issues, and 
enhances our ability to take enforcement action. We therefore reject 
arguments that Commission action is unnecessary. We anticipate that the 
monitoring rule we adopt will ensure better call completion to rural 
areas by covered providers. We recognize that as a hypothetical 
alternative means to increase the incentive for good rural call 
completion performance, we could instead increase the size of penalties 
for violations of the Act and our rules stemming from rural call 
completion failures. We nonetheless find the monitoring rule we adopt 
necessary for several reasons. Today's Order details appropriate action 
required of covered providers to serve this goal and adopts improved 
substantive measures, such as requiring prospective monitoring and 
disclosure of contact information. As these new measures will serve our 
goal to improve rural call completion, they should reduce the necessity 
for enforcement action, and aid our enforcement efforts when needed. 
Although the existence of statutory penalties may encourage compliance 
with the law, they should not supplant our efforts to facilitate 
compliance in the first instance. While sections 201 and 202 of the Act 
provide important support for our rural call completion efforts, 
establishing a new rule with more detailed guidelines will enhance our 
ability to take enforcement action and provide additional certainty to 
covered providers regarding the actions they must take. Call completion 
problems persist as to both traditional telephony and VoIP. Therefore, 
we reject VON's argument that we should continue to allow VoIP 
providers to self-regulate. The passage of the RCC Act does not obviate 
the need for covered provider regulation, contrary to ITTA's 
contention. In the Further Notice accompanying this Order, we seek 
comment on whether to change the monitoring requirements in light of 
the service quality standards for intermediate providers under 
consideration, for instance by creating a safe harbor for covered 
providers who work with intermediate providers that meet our quality 
standards. While we expect that implementing the RCC Act will lead to 
improved intermediate provider performance, we nonetheless agree with 
commenters who assert that covered providers have a responsibility to 
monitor intermediate provider performance. The record makes clear that 
it is important to hold a central party responsible for call completion 
issues. Given that covered providers select the initial long-distance 
path and therefore can choose how to route a call, we find it 
appropriate that they should have responsibility for monitoring rural 
call completion performance. Further, a covered provider that 
originates a call is easier to identify than an intermediate provider 
in a potentially lengthy and complicated call path, facilitating 
enforcement where needed.
    4. Prospective Monitoring. As part of fulfilling the monitoring 
requirement, covered providers have a duty to prospectively evaluate 
intermediate providers to prevent reasonably foreseeable problems. We 
agree with NASUCA that after-the-fact remediation without other 
preventative actions is insufficient to prevent call completion 
problems from occurring. Required prospective monitoring includes 
regular observation of intermediate provider performance and call 
routing decision-making; periodic evaluation to determine whether to 
make changes to improve rural call completion performance; and actions 
to promote improved call completion performance where warranted. To 
ensure consistent prospective monitoring and facilitate Commission 
oversight, we expect covered providers to document their processes for 
prospective monitoring and identify staff responsible for such 
monitoring functions in the written documentation, and we expect 
covered providers to comply with that written documentation in 
conducting the required prospective monitoring.
    5. We agree with numerous commenters that covered providers must 
have flexibility in determining and conducting prospective monitoring 
that is appropriate for their respective networks and mixes of traffic. 
Covered providers have unique ``network-specific demands and customer 
expectations'' and we agree that ``a one-size-fits-all implementation'' 
could unduly limit their ability to meet those demands and 
expectations. We therefore provide covered providers the flexibility to 
determine the standards and methods best suited to their individual 
networks. We agree with Comcast that regardless of how a covered 
provider engages in monitoring, its approach must involve comparing 
rural and non-rural areas to ensure that Americans living in rural 
areas are receiving adequate service. Covered providers may make this 
comparison based on any measures reasonably calculated to evaluate call 
completion efficacy. Such measures may include metrics such as call 
answer rate, call completion rate, or network effectiveness ratio; or 
evaluating the implementation of specific measures to ensure adequate 
performance that build on those we propose to require intermediate 
providers to meet to comply with the service quality standards required 
under the RCC Act. Verizon's consent decree provides negative traffic 
spikes as one internal investigation trigger. The Verizon rural call 
completion study, commissioned pursuant to this consent decree, 
explains that a negative spike is a ``sharp decrease from prior 
measurements over a short time.'' We encourage covered providers to 
consider this and other possible metrics for use in fulfilling the 
monitoring requirement. Although we do not believe that it should be 
unduly difficult for covered providers to evaluate and compare how 
their intermediate providers perform in delivering traffic to 
individual rural OCNs, we also note that the Bureau's RCC Data Report 
illustrates some challenges of metrics-based evaluations. Accordingly, 
we encourage providers to explore and test a wide range of approaches 
and, where successful, share those solutions with industry peers and 
the Commission.
    6. Conversely, we reject the argument that we should mandate the 
standards and best practices contained in the ATIS RCC Handbook. The 
ATIS RCC Handbook intermediate provider best practices include, inter 
alia: Managing the number of intermediate providers (i.e. number of 
``hops''); installation and use of test lines; contractual agreements 
with intermediate providers to govern intermediate provider conduct; 
management of direct and indirect looping; maintenance of sufficient 
direct termination capacity; non-manipulation of signaling information; 
inheritance of restrictions; intercarrier process requirements; and 
acceptance testing. As to the manipulation of signaling information, 
section 64.1601(a)(2) of the Commission's rules already requires 
intermediate providers within an interstate or intrastate call path 
that originate and/or terminate on the PSTN to pass unaltered to 
subsequent

[[Page 21725]]

providers in the call path signaling information identifying the 
telephone number, or billing number, if different, of the calling party 
that is received with a call. In addition, section 64.2201(b) already 
requires intermediate providers to return unaltered to providers in the 
call path any signaling information that indicates that the terminating 
provider is alerting the called party, such as by ringing. The highly 
regarded ATIS RCC Handbook is a voluntary, industry collaborative 
approach to help ``ensur[e] call completion'' for rural telephone 
company customers. We agree with commenters that mandating the ATIS RCC 
Handbook best practices ``could have a chilling effect on future 
industry cooperation to develop solutions to industry problems.''
    7. However, we also agree with commenters that we should encourage 
adherence to the ATIS RCC Handbook best practices. As such, while we 
decline to mandate compliance with the ATIS RCC Handbook best 
practices, we will treat covered provider adherence to all the ATIS RCC 
Handbook best practices as a safe harbor that establishes compliance 
with the monitoring rule. Thus, a covered provider that adheres to all 
of the ATIS RCC Handbook best practices will be deemed to be compliant 
with the monitoring rule. This safe harbor applies only to the best 
practices set forth in the 2015 version of the ATIS RCC Handbook, 
identified above. We will also take the ATIS RCC Handbook best 
practices into account in evaluating whether a covered provider has 
developed sufficiently robust and compliant monitoring processes. We 
find that this approach will encourage adherence to the best practices 
while giving covered providers flexibility to tailor their practices to 
their particular networks and business arrangements. Where a rural 
telephone company has a test line, we encourage a covered provider to 
make use of that test line as a part of its regular observation of 
intermediate provider performance.
    8. We strongly encourage covered providers to limit the number of 
intermediate providers in the call chain. We specifically encourage 
covered providers to take advantage of the Managing Intermediate 
Providers Safe Harbor. Managing the number of intermediate providers in 
the call chain is an ATIS RCC Handbook best practice, and the record 
shows that limiting the number of intermediate providers can help 
ensure call completion to rural areas. By requiring covered providers 
to monitor and take responsibility for the performance of their 
intermediate providers, we anticipate that the rules we adopt will 
encourage covered providers to limit the number of intermediate 
providers in the call chain. Nevertheless, consistent with our decision 
to give covered providers flexibility, we decline to mandate a specific 
limit on the number of intermediate providers in the call chain. Such a 
mandate would be unduly rigid, as even those who advocate such a 
mandate acknowledge that exceptions would be needed. We specifically 
reject HD Tandem's proposal to allow additional intermediate providers 
only upon a waiver request as unduly burdensome and too slow to be 
compatible with the dynamic routing needs of covered providers. We are 
concerned that a specific limit mandate conflates the number of 
``hops'' with good hops; for example, it assumes that a small number of 
badly performing intermediate providers are better than multiple well-
performing intermediate providers. Although proponents of a strict 
limit argue that it would impose ``virtually no burden on originating 
providers beyond the inclusion of effective clauses in their contracts 
with their intermediate providers,'' the record indicates that covered 
providers would face additional burdens if they lacked flexibility to 
efficiently route calls during periods of high call volume such as 
natural disasters and national security related events. We note that 
only two covered providers have stated that they meet the Managing 
Intermediate Provider Safe Harbor, notwithstanding the reduced burdens 
under the RCC Order that result. This fact suggests that the vast 
majority of covered providers have concluded that the benefits 
associated with always limiting to two the number of intermediate 
providers in the call path do not outweigh the associated costs.
    9. While we decline to impose a strict limit on the number of 
intermediate providers in the call chain, we recognize that an 
animating concern of those who advocate for such a limit is avoiding an 
attenuated call path in which responsibility for problems is difficult 
or impossible to trace and in which no one party ``owns'' ensuring 
successful call completion. As discussed below, we require covered 
providers to exercise oversight regarding their entire intermediate 
provider call path to rural destinations. The RCC Act further requires 
that intermediate providers register with the Commission, and precludes 
covered providers from using intermediate providers who are not 
registered. These requirements will help to ensure that covered 
providers only use responsible intermediate providers and can identify 
intermediate providers in the call path. We therefore are able to 
address the underlying problem of diffuse responsibility without 
imposing a rigid mandate capping the number of intermediate providers.
    10. Retrospective Monitoring. We also require covered providers to 
retrospectively investigate any rural call completion problems that 
arise. This requirement is consistent with our proposal in the RCC 2nd 
FNPRM, which several commenters support. Evidence of poor performance 
warranting investigation includes but is not limited to: Persistent low 
answer or completion rates; unexplained anomalies in performance 
reflected in the metrics used by the covered provider; repeated 
complaints to the Commission, state regulatory agencies, or covered 
providers by customers, rural incumbent LECs and their customers, 
competitive LECs, and others; or as determined by evolving industry 
best practices, including the ATIS RCC Handbook.
    11. We interpret the retrospective monitoring requirement as 
encompassing, at minimum, the duties under sections 201, 202, and 217 
of the Act set forth in the 2012 Declaratory Ruling. In that decision, 
the Bureau clarified that ``it is an unjust and unreasonable practice 
in violation of section 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.'' The Bureau further 
clarified that ``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 localities (including other lower cost 
rural areas) may, in the absence of a persuasive explanation, 
constitute unjust or unreasonable discrimination in practices, 
facilities, or services and violate section 202 of the Act.'' In the 
2012 Declaratory Ruling, the Bureau also stated: ``Service problems 
could be particularly problematic for TTY and amplified telephones used 
by persons with hearing disabilities. Carriers that fail to ensure that 
services are usable by and accessible to individuals with disabilities 
may be in violation of section 255 of the Act. Accordingly, practices 
that result in disparate quality of service delivered to rural areas 
could be found unlawful under sections 202 and 255 of the Act.'' 
Finally, the Bureau, relying on section 217 of the Act, stated that 
``if an underlying provider is

[[Page 21726]]

blocking, choking, or otherwise restricting traffic, employing other 
unjust or unreasonable practices in violation of section 201, engaging 
in unjust or unreasonable discrimination in violation of section 202, 
or otherwise not complying with the Act or Commission rules, the 
carrier using that underlying provider to deliver traffic is liable for 
those actions if the underlying provider is an agent or other person 
acting for or employed by the carrier.'' We both affirm the 2012 
Declaratory Ruling as a clarification of the statutory provisions 
discussed by the Bureau and clarify that under the rule we adopt, the 
2012 Declaratory Ruling sets forth the minimum retrospective monitoring 
duty of covered providers. The statutory interpretations set forth in 
the 2012 Declaratory Ruling (and clarified here) apply to carriers. The 
duties in the 2012 Declaratory Ruling (and clarified here) apply to 
covered providers, and constitute the minimum bounds of the 
retrospective monitoring requirement. Based on these determinations, we 
find it unnecessary to codify separately the prohibition on blocking, 
choking, reducing, or restricting traffic explicated it in the 2012 
Declaratory Ruling.
    12. We specifically highlight that under the 2012 Declaratory 
Ruling, ``a carrier that knows or should know that calls are not being 
completed to certain areas, and that engages in acts (or omissions) 
that allow or effectively allow these conditions to persist'' may be 
liable for a violation of section 201 of the Act. Thus, willful 
ignorance will not excuse a failure by a covered provider or carrier to 
investigate evidence of poor performance to a rural area, such as 
repeated complaints, persistent low answer rates, or other indicia 
identified above. When this evidence of persistent poor performance 
exists with respect to a rural area, the provider should know that 
there may be a problem with calls being completed to that area and it 
has a duty to investigate. We further clarify that a covered provider 
or carrier may only deem the duty set forth in the 2012 Declaratory 
Ruling satisfied if it: (a) Promptly resolves any anomalies or problems 
and takes action to ensure they do not recur; or (b) determines that 
responsibility lies with a party other than the provider itself or any 
of its downstream providers and uses commercially reasonable efforts to 
alert that party to the anomaly or problem. Below, we provide 
additional direction under the monitoring rule we establish regarding 
how covered providers must fulfill prong (a) above with respect to 
intermediate providers with which they contract.
    13. Remedying Problems Detected During Retrospective Monitoring. We 
require that, based on the results of the required monitoring, covered 
providers must take steps that are reasonably calculated to correct any 
identified performance problem with the intermediate provider, 
including removing the intermediate provider from a particular route 
after sustained inadequate performance. We agree with NCTA that 
``isolated call failures . . . have always been inherent in the 
exchange of voice traffic,'' and clarify that our monitoring rule does 
not require covered providers to take remedial action solely to address 
isolated downstream call failures. As USTelecom observed, ``carriers 
have found that the most effective means of identifying and resolving 
call completion issues has been through their own monitoring which 
includes investigating specific complaints and ensuring that 
intermediate providers are held accountable.'' Correcting identified 
performance problems is an important part of ensuring that monitoring 
leads to real improvements in the call completion process.
    14. Where a covered provider detects a persistent problem based on 
retrospective monitoring, we require the covered provider to select a 
solution that is reasonably calculated to be effective. A temporary and 
quickly abandoned solution is not acceptable. Covered providers that do 
not effectively correct problems with call completion to specific areas 
have ``allow[ed] the conditions to persist'' and are subject to 
enforcement action for violation of the monitoring rule as well as the 
Act and our call blocking prohibition thereunder. We agree with NCTA 
that requiring a ``permanent'' solution is too rigid and may not 
account for a rapidly changing marketplace. At the same time, a covered 
provider's or carrier's responsibility under the monitoring rule and 
2012 Declaratory Ruling is not met by a temporary route correction and 
nothing more; providers and carriers are also responsible for ensuring 
that the problems do not recur.
    15. Although we give covered providers flexibility in the remedial 
steps they choose so long as they pursue a solution that is reasonably 
calculated to be effective, we specifically require removing 
intermediate providers from routes where warranted. The ATIS RCC 
Handbook identifies ``temporarily or permanently removing the 
intermediate provider from the routing path'' as a best practice when 
an intermediate provider fails to perform at an acceptable service 
level, and we agree that this must be among the remedial steps that 
covered providers must take where appropriate. The California Public 
Utilities Commission (CPUC) endorses route removal as a remedy and 
suggests that the only exception for removal of sufficiently badly 
performing intermediates ``should be for call paths for which there are 
no alternative routes, so long as the lack of an alternative route can 
be reasonably documented.'' We agree with the CPUC and conclude that 
where an intermediate provider has sustained inadequate performance, 
removal from a particular route is necessary except where a covered 
provider can reasonably document that no alternative routes exist. 
Sustained inadequate performance is manifest when, even if a provider 
alters routing to a rural area, call completion problems with that 
provider persist or recur within days, weeks, or months after the 
routing change.
    16. We reject arguments that fulfilling this obligation is unduly 
difficult or infeasible. Both the record and information gathered in 
enforcement investigations indicates that some providers have removed 
intermediate providers from call paths for poor performance. We 
disagree with Sprint that identifying ``sustained inadequate 
performance'' is ``extraordinarily difficult''--if a covered provider 
fulfills its monitoring duty, it will be able to identify persistent 
outliers and sources of repeated anomalies or problems. Further, the 
monitoring requirement we establish forecloses the argument that 
fulfilling the duty to correct identified performance problems is not 
feasible because a covered provider hands off traffic without 
exercising further oversight. The covered provider has the obligation 
to prevent poor rural call completion performance, and business models 
that foreclose performing this duty are unacceptable.
    17. Scope of Monitoring Requirement--Call Attempts to Rural 
Competitive LECs. Although our recording, retention, and reporting 
requirements are limited to calls to incumbent LECs, we require covered 
providers to monitor rural call completion performance to both rural 
incumbent and rural competitive LECs. We recognize that rural 
competitive LEC subscribers also encounter rural call completion 
issues. Indeed, a significant percentage of the rural call completion 
complaints received by the Commission are from rural competitive LECs 
and their customers. In 2013, the Commission declined to extend the

[[Page 21727]]

recordkeeping requirements for call attempts to rural competitive LECs 
because ``rural CLEC calling areas generally overlap with nonrural ILEC 
calling areas, calling patterns to rural CLECs differ from those to 
rural ILECs, and rural CLECs generally employ different network 
architectures.'' Although these factors illustrate recordkeeping 
challenges, they do not explain why covered providers have any less 
responsibility to complete calls to customers of rural competitive LECs 
or to monitor the performance of intermediate providers that deliver 
traffic to these providers. In our proposed rule, we used the phrase 
``rural incumbent LEC,'' which we proposed defining as an incumbent LEC 
that is a rural telephone company, as each of those terms are in 47 CFR 
51.5. In our final rule, we replace the phrase ``rural incumbent LEC'' 
with ``rural telephone company,'' which encompasses both incumbent and 
competitive LECs. To ensure that covered providers have adequate 
information to monitor intermediate provider performance, we direct 
NECA to prepare on an annual basis and make publicly available a list 
of rural competitive LEC OCNs in addition to continuing its annual 
listing of rural and non-rural incumbent LEC OCNs. We recognize that 
because competitive LECs are not defined by incumbent service 
territories like incumbent LECs, identifying rural competitive LECs may 
be difficult in some cases, and NECA's rural competitive LEC OCN list 
may not be comprehensive. We direct NECA to use best efforts to 
identify rural competitive LECs and their OCNs for inclusion in the 
list. We do not require covered providers to monitor calls to rural 
competitive LECs or their OCNs that do not appear on NECA's list. We 
nevertheless view requiring monitoring to rural competitive LECs and 
NECA's preparation of the list as valuable to promote greater call 
completion to the customers of rural competitive LECs that do appear on 
the list. We encourage rural competitive LECs to identify their rural 
OCNs to NECA for use in preparation of this list.
2. Covered Provider Accountability
    18. Under the monitoring rule we adopt today, covered providers 
must exercise responsibility for the performance of the entire 
intermediate provider call path to help ensure that calls to rural 
areas are completed. We will hold covered providers accountable for 
exercising oversight regarding the performance of all intermediate 
providers in the path of calls for which the covered provider makes the 
initial long-distance call path choice. We expect covered providers to 
take remedial measures where necessary and covered providers who fail 
to remediate problems are subject to enforcement action. As explained 
below, covered providers may fulfill their monitoring obligation 
through direct monitoring or a combination of direct monitoring and 
contractual restrictions.
    19. We find that allocating this responsibility to covered 
providers is appropriate because, as the entity that makes the initial 
long-distance call path choice, covered providers are in a position to 
exercise responsibility over the downstream call path to the 
terminating LEC. As to covered provider carriers, Verizon correctly 
notes that our authority under sections 201 and 202, ``combined with 
[the Commission's] . . . longstanding policy,'' makes carriers 
``responsible for the provision of service to their customers even when 
they contract with intermediate providers to carry calls to their 
destinations.'' Because the definition of ``covered provider'' excludes 
entities with low call volumes, we expect that covered providers are of 
sufficient size to put resources into monitoring and negotiate 
appropriate provisions with any intermediate providers with which they 
contract. In stating this, we do not suggest that smaller carriers are 
free from call completion obligations. We believe that placing 
responsibility on a single, readily identifiable party that ultimately 
controls the call path will be an effective measure in addressing rural 
call completion issues going forward. Further, covered providers are in 
a position to promptly remedy rural call completion issues when they 
arise by virtue of their contractual relationships with intermediate 
providers and their ability to modify call routing paths, enabling 
rural call completion issues to be resolved without waiting for 
Commission enforcement action, thereby benefiting rural consumers.
    20. For common carriers, the duty to monitor the entire 
intermediate provider call path also flows from section 217, which 
states that ``the act, omission, or failure of any officer, agent, or 
other person acting for or employed by any common carrier or user, 
acting within the scope of his employment, shall in every case be also 
deemed to be the act, omission, or failure of such carrier or user as 
well as that of the person.'' As the 2012 Declaratory Ruling explained, 
based on section 217, ``a carrier remains responsible for the provision 
of service to its customers even when it contracts with another 
provider to carry the call to its destination.'' The Commission has 
applied a similar policy to carriers in the slamming context, as well 
as to broadcast and wireless licensees. We find it appropriate to apply 
this same principle to all covered providers for the reasons set forth 
above. Thus, a covered provider is responsible when, for example, a 
downstream provider unlawfully injects ring tone on a call, in 
violation of 47 CFR 64.2201.
    21. We give covered providers flexibility in how they fulfill this 
responsibility to determine the standards and methods best suited to 
their individual networks. Under the rule we adopt today, a covered 
provider is accountable for monitoring the performance of any 
intermediate provider with which it contracts, including that 
intermediate provider's decision as to whether calls may be handed off 
to additional downstream intermediate providers--and if so, how many--
and whether it has taken sufficient steps to ensure that calls will be 
completed post-handoff. We require covered providers to directly 
monitor the performance of intermediate providers with which they have 
a contractual relationship, and we decline to impose an unnecessarily 
burdensome mandate requiring direct covered provider monitoring of the 
entire call chain. We use the term ``direct'' monitoring to distinguish 
active monitoring from reliance solely on contractual protections. With 
respect to ``direct'' monitoring, we permit covered providers to 
perform the monitoring themselves or rely on a third-party vendor, 
acting on behalf of the covered provider, that directly monitors the 
intermediate provider and reports back to the covered provider. We 
underscore that covered providers will remain ultimately responsible 
for monitoring even where they use a third-party vendor. Rather, a 
covered provider may manage the call path through (i) direct monitoring 
of all intermediate providers or (ii) a combination of direct 
monitoring of contracted intermediate providers and contractual 
restrictions on directly monitored intermediate providers that are 
reasonably calculated to ensure rural call completion through the 
responsible use of any further intermediate providers. The ATIS RCC 
Handbook provides that as a best practice, contractual agreements can 
be used to ensure that intermediate providers meet performance 
expectations and hold intermediates accountable for performance. 
Contractual measures that meet this standard include limiting the use 
of further intermediate providers and provisions that ensure quality 
call completion.

[[Page 21728]]

    22. We encourage covered providers to incorporate the following 
provisions, suggested by NASUCA: (1) ``[r]equir[ing] each downstream 
carrier on an ongoing basis to provide specific information regarding 
its system and the limitations of its system, including information 
regarding any difficulties its system may have interoperating with 
other systems using different technologies''; (2) ``[r]equir[ig] each 
downstream carrier on an ongoing basis to provide specific information 
regarding any bandwidth or other capacity constraints that would 
prevent its system from completing calls to particular destinations at 
busy times''; (3) ``[r]equir[ing] each downstream carrier to use 
properly designed and properly functioning alarms in its system that 
ensure immediate notice of any outages on its system''; (4) 
``[r]equir[ing] each downstream carrier to use properly designed and 
properly functioning mechanisms to ensure that the downstream carrier, 
if unable to complete a call, timely releases the call back to the 
upstream carrier''; (5) ``[r]equir[ing] each downstream carrier to use 
properly designed and properly functioning mechanisms to ensure that 
the downstream carrier, if making successive attempts to route the call 
through different lower-tiered downstream carriers, timely passes the 
call to a second (or third or fourth) lower-tiered downstream carrier 
if a first (or second or third) lower-tiered downstream carrier cannot 
complete it''; (6) ``[r]equir[ing] each downstream carrier to use 
properly designed and properly functioning mechanisms to detect and 
control looping, including the use of hop counters or other equivalent 
mechanisms that alert a carrier to the presence of a loop''; (7) 
``[e]stablish[ing] direct measures of quality and requir[ing] 
downstream carriers to meet them''; (8) ``[e]stablish[ing] and 
implement[ing] appropriate sanctions for intermediate carriers that 
fail to meet standards''; (9) ``[r]equir[ing] downstream carriers to 
manage lower-tiered downstream carriers and to hold lower-tiered 
downstream carriers to the same standards that they themselves are 
held''; and (10) ``[d]efin[ing] the responsibilities of downstream 
carriers in a written agreement.'' Based on these suggestions, 
including ``[e]stablish[ing] direct measures of quality and requir[ing] 
downstream carriers to meet them,'' we do not agree with NCTA that 
```direct monitoring' is only feasible with the first intermediate 
provider in the call path and not with subsequent intermediate 
providers.'' Additionally, we do not see any benefit to foreclosing the 
option to rely entirely on direct monitoring. Insofar as a covered 
provider relies on contractual restrictions rather than direct 
monitoring for downstream intermediate providers, the covered provider 
must ensure these restrictions flow down the entire intermediate 
provider call path. For example, suppose calls travel from covered 
provider X to intermediate providers A, B, and C in turn, and X 
contracts only with A. X must directly monitor A. X must ensure that A 
imposes contractual restrictions on B reasonably calculated to ensure 
rural call completion, and X must ensure that A or B imposes such 
restrictions on C. Thus, a covered provider may not avoid liability for 
poor performance by asserting that a rural call went awry at an unknown 
point down a lengthy chain of intermediate providers or by claiming 
solely that its contracts with initial downstream vendors prohibited 
unlawful conduct. Conversely, covered providers that engage in 
reasonable monitoring efforts will not be held responsible for 
intermediate provider conduct that is not, or could not be, identified 
through such reasonable monitoring efforts. This conclusion is 
consistent with our decision not to impose strict liability under the 
monitoring rule.
    23. Our balanced approach ensures that covered providers exercise 
responsibility for rural call completion without imposing an unduly 
rigid or burdensome mandate. We therefore reject various ``all-or-
nothing'' approaches. We reject the argument that covered providers 
should not bear any responsibility for the performance of non-
contracted intermediate carriers. This argument mistakenly assumes that 
the covered provider is unable to reach the behavior of downstream 
intermediate providers through directly contracted intermediate 
providers, and the record indicates otherwise. Conversely, because we 
are able to require covered providers to exercise responsibility for 
the performance of the entire intermediate provider call path while 
providing significant flexibility in how they do so, we find mandating 
direct covered provider monitoring of the entire call chain 
unnecessarily burdensome. Similarly, we do not mandate that covered 
providers must directly contract with all intermediate providers in the 
call path. Such a requirement would be superfluous given covered 
provider responsibility for the overall call path, and we agree with 
CTIA that such a requirement would unduly prescribe provider conduct. 
Nonetheless, we encourage covered providers to directly contract with 
all intermediate providers in the call path consistent with the ATIS 
RCC Handbook best practices.
3. Covered Provider Point of Contact
    24. Communication is key to addressing rural call completion 
issues. Of particular importance is communication between covered 
providers, which make the initial long-distance call path choice, and 
terminating rural LECs. Together, these entities account for the 
beginning and end of the long-distance call path. While ATIS maintains 
a contact list of service provider rural call completion points of 
contact, participation is voluntary, and accordingly the list only 
contains contact information for a ``limited number of covered 
providers.'' To participate in the ATIS NGIIF Service Provider Contact 
Directory for rural call completion, ATIS asks providers to submit the 
following information: Toll free number; contact; contact number; 
email; fax; website; and other information. As NTCA and WTA explain, 
``[r]ural providers often report that they have no way to contact the 
responsible originating carrier or if they do, the person they contact 
has little to no understanding of the issue.'' Conversely, when 
participants in the call chain communicate, they are more likely to 
resolve issues that arise.
    25. We agree with NTCA and WTA that we should require covered 
providers to provide and maintain contact information as a low-cost 
measure to facilitate industry collaboration to address call completion 
issues. We therefore will require covered providers to make available 
on their websites a telephone number and email address for the express 
purpose of receiving and responding promptly to any rural call 
completion issues. We note that ATIS requests similar information for 
its voluntary rural call completion service provider contact directory. 
We require covered providers to ensure that the contact information 
available on their website is easy to find and use. Further, covered 
providers must ensure that any staff reachable through this contact 
information has the technical capability to promptly respond to and 
address call completion concerns. As the operators and experts of their 
individual call networks, covered provider technical staff are best 
positioned to expeditiously solve issues as they arise and as such 
should be the first point of contact in identifying and resolving rural 
call completion issues. We expect that covered providers will ensure 
that there is a means by which

[[Page 21729]]

persons with disabilities can contact them and that the contact 
information is available on a covered provider's website in a manner 
accessible by persons with disabilities.
    26. Covered providers must keep the contact information current on 
their websites, updating with any changes within ten business days. The 
same timeline for updates applies to contact information placed on 
websites for responding to closed captioning concerns under our 
television closed captioning rules. Furthermore, because call 
completion problems may jeopardize public health and safety, we require 
covered providers to respond to communications regarding rural call 
completion issues via the contact information required under the rule 
we adopt as soon as reasonably practicable and within no more than a 
single business day under ordinary circumstances. We recognize, 
however, that complex call completion issues may take longer than a 
single day to resolve, and clarify that this requirement refers to an 
initial response in such circumstances and does not indicate that all 
such issues must be resolved within a single business day.
    27. We expect NECA to use the disclosures we require to establish 
and maintain a central, public list of covered provider contact 
information that can be easily accessed by rural providers on NECA's 
website. To facilitate creation of this list, we encourage covered 
providers to provide directly to NECA the same contact information that 
they make available on their websites pursuant to our requirement 
above, and we encourage covered providers to update NECA if they update 
the contact information on their websites. We would expect NECA to 
update its contact information directory regularly so that it remains 
current. We recognize that ATIS already maintains a voluntary contact 
directory. We expect NECA, given its role in compiling the list of 
rural carriers, would work with ATIS to develop a repository of covered 
provider contact information, ensuring a comprehensive list of covered 
provider contact information is available for reference by rural 
providers. We treat the contact information that NECA makes available 
in the same manner as the contact information that the covered provider 
makes available on its website in terms of the covered provider's duty 
to respond in a timely fashion. In other words, we require covered 
providers to respond to communications regarding rural call completion 
issues via the contact information that NECA makes available as soon as 
reasonably practicable, and within no more than a single business day 
under ordinary circumstances. An additional repository for contact 
information that is specific to covered providers will further 
encourage inter-and intra-industry cooperation to address call 
completion issues by offering carriers a centralized resource that 
facilitates communication if and when problems occur. We also encourage 
all providers, including rural providers, to submit their own contact 
information for inclusion in the ATIS Service Provider Contact 
Directory, which continues to be a helpful single source of contact 
information.
4. Other Issues
    28. Rural Incumbent LEC Lists. Windstream and NCTA note that there 
``is no reliable method for covered providers to identify calls to 
rural incumbent LECs, other than by using the list of rural operating 
company numbers (OCNs) currently generated by NECA.'' We therefore 
direct NECA to continue updating its rural and non-rural OCN lists on a 
yearly basis; this list will also facilitate continued compliance with 
the recording and retention rules. We continue to include non-rural 
OCNs both to facilitate comparisons of rural and non-rural call 
completion by covered providers and for use in continuing to comply 
with the recording and retention rules. As noted above, we also direct 
NECA to prepare a list of rural competitive LEC OCNs on a yearly basis.
    29. Performance Targets. We decline to set specific performance 
targets or benchmarks for call answer rates, call completion rates, or 
any other performance metric. We agree with commenters who assert that 
``the Commission should refrain from mandating specific performance 
metrics for covered carriers or for their intermediate carriers.'' In 
connection with this, we observe that what constitutes poor rural call 
completion performance varies according to context. For example, 
carriers with a high autodialer or robocall volume may experience low 
answer or completion rates, possibly leading to the conclusion that a 
low number answer rate percentage is an appropriate benchmark (and thus 
not poor performance) for such covered providers. Throughout this 
proceeding, both the Commission and industry have noted that it is 
uncertain whether covered providers can segregate autodialer and other 
telemarketing traffic from other types of traffic. In other contexts, 
that same percentage would be considered poor performance for covered 
providers originating only residential traffic. Similarly, the RCC Data 
Report identified a number of challenges in establishing metrics as a 
result of inaccurate signaling and misalignment in the mapping of ISUP 
cause codes to SIP response messages. We therefore opt to give 
individual covered providers flexibility to establish their own 
methodologies that are appropriate to their networks and systems in 
monitoring call performance.
    30. Good Faith. We reject arguments that we should establish a 
``good faith'' threshold for compliance whereby we would not impose 
liability on covered providers making ``a good faith effort to comply 
with the rules.'' The approach we adopt captures the desire for 
flexibility underlying some of these requests, and gives covered 
providers discretion to monitor as they see fit in a manner best suited 
to their individual networks and business arrangements. We do not 
impose strict liability on covered providers for a call completion 
failure; rather, we may impose a penalty where a covered provider fails 
to take actions to prevent reasonably foreseeable problems or, if it 
knows or should know that a problem has arisen, where it fails to 
investigate or take appropriate remedial action. Further, our 
monitoring rule focuses on persistent problems, and we will not impose 
liability under the monitoring rule for an isolated call failure. That 
said, a ``good faith'' threshold on top of the flexible approach we 
adopt would add a layer of unhelpful uncertainty as to what constitutes 
compliance. We are committed to ensuring call completion to all 
Americans, and we find a ``good faith'' threshold unduly lenient. We 
also agree with NASUCA that ``[i]njecting subjective questions of 
motivation into enforcement actions will compromise their effectiveness 
and compromise the reliability of the network.'' We agree with NASUCA 
that adopting a good faith limitation does not provide greater clarity 
to our rule.
    31. Exempt Class of Service. CenturyLink suggests we allow covered 
providers to offer a second class of service that would be ``exempt 
from any new call completion rules.'' We decline to implement this 
approach. CenturyLink posits that call completion is ``less important'' 
to customers placing marketing calls--as opposed to those originating 
from residential customers--and therefore these calls should be exempt 
from any rural call completion monitoring requirements. This second 
class would presumably include autodialer traffic.
    32. We reject allowing an exempt class of service for several 
reasons. First, we believe all Americans deserve all lawful calls to be 
completed, regardless

[[Page 21730]]

of their purpose. In particular, calling parties should not be able to 
decide unilaterally which calls rural Americans deserve to receive 
reliably. We also prefer an approach that is potentially over-inclusive 
in ensuring call completion compared to a system that is potentially 
under-inclusive. Next, the present call signaling system does not 
distinguish between residential calls and any other call made to a 
residential area. Because it therefore is not possible to evaluate a 
covered provider's class categorization decision, a covered provider 
could categorize traffic inaccurately to suggest superior call 
completion performance (and thus imply superior monitoring) without the 
possibility of detection. Finally, a two-class practice could lead to 
violations of section 201 of the Act insofar as it entails a carrier 
that knows or should know that calls are not being completed to certain 
areas engaging in acts or omissions that allow or effectively allow 
these conditions to persist.
    33. Certification, Audit, or Disclosure Requirement. We decline to 
impose a certification or audit requirement in conjunction with the 
monitoring rule. The CPUC asserts that ``[a] certification or audit 
requirement would make clear to covered providers and intermediate 
providers the importance that the FCC attaches to rural call 
completion,'' but, recognizing that ``[s]uch a requirement could be 
burdensome and costly,'' suggests a one-year reporting interval. We 
expect all entities subject to our rules to comply at all times, and 
our actions today demonstrate the importance to us of ensuring that 
calls are completed to all Americans. Additionally, numerous covered 
providers attest that they are committed to ensuring that rural calls 
are completed, and we expect them to live up to this commitment. We 
decline to impose what we agree would be a costly requirement absent a 
clear and sufficiently tangible (as opposed to rhetorical) benefit.
    34. We further decline to require covered providers to file their 
documented monitoring procedures publicly with the Commission, as NTCA 
suggests. NTCA contends that because we expect covered providers to 
document their processes for prospective monitoring, a filing 
requirement ``imposes no meaningful burden.'' But such documentation in 
many cases is likely to reveal important technical, personnel, and 
commercial details about the covered provider's network and business 
operations--so public disclosure would impose meaningful burdens. To 
the extent that a covered provider would be able to successfully obtain 
confidential treatment for part or all of its disclosure, it would 
mitigate the harm of disclosure but also would undercut any purported 
benefits. There is no countervailing benefit sufficient to warrant 
imposing this burden. We are able to obtain information on covered 
providers' monitoring practices in an investigation, so we do not need 
to impose a public disclosure requirement to effectively carry out our 
responsibilities. We therefore do not agree that a disclosure 
requirement would give covered providers ``greater incentives to comply 
with procedures on file with the Commission.'' We reiterate that we 
expect covered providers--and all regulated entities--to comply with 
our rules, and we are able to take enforcement action where they do 
not. Given the variance among covered providers' networks and 
operations and the flexibility our monitoring rule provides, we see 
little value to covered providers ``know[ing] what individual carriers' 
procedures are and hav[ing] benchmarks against which subsequent 
performance can be measured''--each covered provider is able to adopt 
its own approach.
    35. Test Lines. We decline to mandate that terminating rural 
carriers activate an automated test line. Recommended as an ATIS best 
practice to help resolve call completion issues, test lines ``can 
expedite trouble resolution, avoid Customer Propriety Network 
Information-related issues and exclude problems that may be specific to 
the called party's access and customer premises equipment 
arrangements.'' However, the record is silent as to what added costs 
and logistical burdens this mandate would impose on rural carriers. 
Further, NTCA and WTA assert that test lines may generate false 
positives and have the ability to handle a limited number of test calls 
at any given time--sometimes only one. Verizon also contends that 
``[i]n [its] experience, there is no correlation between test-line 
results and rural call completion performance.'' Because it is not 
clear whether the benefits of greater availability of test lines will 
outweigh any burden to rural LECs and subscribers, we decline to 
mandate activation of test lines at this time. However, we encourage, 
but do not require, covered providers to make use of test lines where 
available in monitoring intermediate provider performance, and we 
encourage rural carriers to make test lines available to covered 
providers.
    36. Trunk Augmentation. We decline to adopt HD Tandem's proposal to 
require carriers to augment trunks used for RCC paths when they reach a 
monthly utilization rate of 80%. We agree with Verizon that mandating 
``when and how carriers must purchase trunking capacity . . . 
contravene[s] the Commission's goal of ensuring covered providers have 
the flexibility they need.'' Although HD Tandem asserts that ``[w]hen 
trunk utilization exceeds 80%, the risk of dropped calls and poor 
quality calls dramatically increases'' and that ``[m]any tariffs 
require augmentation of trunks when they reach a utilization of 80% or 
more,'' it does not substantiate these claims. We decline to impose a 
precise mandate absent more details justifying the threshold HD Tandem 
suggests. The record does not contain enough detail confirming the 
costs or benefits of such a requirement to allow us to weigh any added 
benefits against the burden upon network flexibility and potential 
monetary compliance cost.
    37. At the same time, we agree that maintaining adequate capacity 
is an important part of monitoring rural call completion performance. 
The ATIS RCC Handbook recommends that ``it is important for the 
original IXC to maintain sufficient termination facilities that it can 
complete its own traffic when an intermediate provider cannot complete 
the call'' because ``[g]iven the cost challenges'' intermediate 
providers have ``to maintain a lean network and the aggregation of 
loads from multiple IXCs they must handle, there is a greater chance 
that, on a moment-to-moment basis, [intermediate providers] will not 
have capacity to complete a call'' and ``[m]aintaining its own 
termination capacity gives an IXC flexibility to quickly stop using an 
intermediate provider should performance problems develop.'' Thus, 
while we do not mandate trunk augmentation at a specific utilization 
threshold, maintaining adequate capacity is an important part of being 
able to monitor the performance of intermediate providers and meet the 
rural call completion monitoring rule we adopt today.
    38. Phase-In of the Monitoring Requirement. We adopt NCTA's 
recommendation that we allow a transition period before implementing 
the monitoring rule. We are persuaded that covered providers will need 
some time to evaluate and renegotiate contracts with intermediate 
providers in order to comply with the monitoring requirement. We reject 
NCTA's argument that such a transition period should last twelve 
months, however; the monitoring requirement addresses the ongoing call 
completion problems faced by rural Americans, and delay only

[[Page 21731]]

postpones when rural Americans will see the fruit of this solution. A 
six-month transition period will suffice to address NCTA's concerns 
while not unduly delaying the effective date of the monitoring rule. 
The monitoring rule therefore will go into effect six months from the 
date that this Order is released by the Commission, or 30 days after 
publication of a summary of this Order in the Federal Register, 
whichever is later. NCTA suggests that the monitoring requirement will 
be subject to approval by the Office of Management and Budget (OMB), 
and that its effective date should be tied to ``notice that the rule[ 
has] been approved by [OMB].'' Because the monitoring requirement does 
not require approval under the Paperwork Reduction Act, we do not tie 
the effective date to OMB approval.
    39. Review of Rules Adopted in this Report and Order. It is 
important for us to continue to periodically reexamine the 
effectiveness of our rural call completion rules. We therefore direct 
the Bureau, in conjunction with the Enforcement Bureau and the Consumer 
and Governmental Affairs Bureau, to review the progress that has been 
made in addressing rural call completion issues, and the effectiveness 
of our rules, within two years of the effective date of the rules. We 
direct the Bureau to publish its findings in a report that will be made 
available for public comment. We expect this report to benefit the 
Commission in its ongoing work to address rural call completion issues.
    40. We decline to adopt NTCA's recommendation that ``the rules 
adopted in this order sunset after three years and revert to the rules 
[previously] in effect, absent a finding based on evidence and analysis 
that the new framework as adopted addresses rural call completion 
problems.'' NTCA does not provide any examples of the Commission making 
use of this kind of `sunset and reversion' approach to rulemaking. The 
rules we adopt today are tailored to provide a more efficient and 
effective means to address persistent rural call completion issues than 
our prior rules. And, as outlined in the Further Notice, we propose and 
seek comment on further modifications to our rural call completion 
rules, including those we adopt today, as we work to implement the RCC 
Act. Imposing an arbitrary expiration date on these rules is therefore 
unnecessary and counterproductive, as it could undermine their overall 
effectiveness.
5. Definitions
    41. We retain the Commission's current definition of ``covered 
provider,'' adopted in the RCC Order. We agree with the CPUC that this 
scope is ``a reasonable trade-off between covering an adequate number 
of calls without placing a burden on those smaller carriers that would 
be least able to bear it.'' We note that, regardless of size, all 
carriers are subject to the statutory requirements of the Act, 
including sections 201, 202, and 217, 47 U.S.C. 201, 202, 217, and that 
VoIP providers are prohibited from blocking calls to or from the PSTN. 
No commenter to the RCC 2nd FNPRM opposes this definition.
    42. Because we require each covered provider to monitor calls to 
rural incumbent LECs and competitive LECs, the definition of ``rural 
incumbent LECs'' we proposed in the RCC 2nd FNPRM is no longer 
relevant. We proposed defining a ``rural incumbent LEC'' as an 
incumbent LEC that is a rural telephone company, as those terms are 
defined in 47 CFR 51.5. We instead employ the term ``rural telephone 
company,'' as that term is defined in 47 CFR 51.5. This term reaches 
the same scope of rural incumbent LECs captured by our proposed 
definition, and it also includes rural competitive LECs. We clarify 
that a determination that a competitive LEC meets the definition of a 
``rural telephone company'' for purposes of our rural call completion 
rules has no bearing on whether a competitive LEC meets the definition 
of a ``rural CLEC'' for purposes of section 61.26 of the Commission's 
rules. We decline to exclude LECs engaged in access stimulation, as 
defined in 47 CFR 61.3(bbb), from the definition of rural telephone 
company for purposes of our rural call completion rules. AT&T does not 
adequately explain how the monitoring rule we adopt today ``benefit[s] 
access stimulation LECs'' or how including all rural telephone 
companies within the scope of the rule ``does not service consumers' 
best interests.'' AT&T's filing (submitted just before the proceeding 
closed for filings) did not attempt to quantify or otherwise specify 
the benefits that would accrue to access stimulation LECs or the extent 
to which those purported benefits would outweigh the benefits of 
broadly defining ``rural telephone company'' for purposes of this 
proceeding. Based on this incomplete record, we do not have enough 
information to decide the issue raised by AT&T at this time.
    43. While we retain the definition of ``intermediate provider'' in 
our rules at present, the RCC Act definition of ``intermediate 
provider'' differs from the definition in our rules. Accordingly, in 
the Third Further Notice of Proposed Rulemaking, we propose to adopt 
that revised definition.
6. Legal Authority
    44. The Commission has previously articulated its direct and 
ancillary authority to adopt rules addressing rural call completion 
issues, and we rely on that same authority here. In addition to the 
authority previously articulated, section 217 of the Act provides 
additional authority to mandate that covered provider carriers monitor 
the overall intermediate provider call path and correct any identified 
intermediate provider performance problems. Intermediate providers in 
the call path ``act for'' the covered provider; therefore, without 
holding covered providers responsible for the acts or omissions they 
initiate to and through intermediate providers, we cannot ensure that 
covered provider carriers are fulfilling their statutory duties.

B. Reporting Requirement

1. Removal of the Reporting Requirement
    45. Discussion. We eliminate the reporting requirement for covered 
providers. We conclude that the existing reporting rules are burdensome 
on covered providers, while the resulting Form 480 reports are of 
limited utility to us in discovering the source of rural call 
completion problems. We agree with CTIA that the rules ``impose[ ] 
significant costs on covered providers,'' and that compliance costs can 
``divert `funds that covered providers could otherwise use to deploy 
broadband service, improve network quality, or offer richer service 
plans.''' We agree with the Bureau's negative evaluation of the 
reporting requirement and, based on the shortcomings it identified, 
reject the view that we should retain the reporting requirements as-is.
    46. We find that the burdens associated with supplementing or 
replacing the existing reporting requirements are likely to outweigh 
any benefits to the data collection. We therefore decline to amend our 
reporting rule. We agree with the Bureau's conclusion in the RCC Data 
Report and commenters who suggest that addressing the ongoing data 
quality issues associated with Form 480 by supplementing or replacing 
the data collection rules with new requirements is likely to be 
prohibitively burdensome on covered providers, while potentially 
providing little value over the current regime. The record supports the

[[Page 21732]]

conclusion that standardization of the data collection is likely to be 
prohibitively costly while yielding an uncertain benefit. As Verizon 
explains, the ``significant resources providers expended to develop and 
build data systems to comply with the 2013 RCC Order are now sunk 
costs'' and we ``should not force providers to incur a second round of 
burdens and costs to comply with modified or new recording, retention, 
and reporting obligations that likely would be as ineffective as their 
predecessors.'' For these reasons, we also decline to supplement or 
replace our existing recording and retention rules with any new data 
collection requirements.
    47. The monitoring rule we adopt will be more effective in 
promoting covered provider compliance and facilitating enforcement 
where needed than the reporting rules because the monitoring rule 
imposes a direct, substantive obligation and because the reporting 
rules have proven to be not as effective as originally hoped. 
Furthermore, as the Commission has found previously, rural call 
completion problems are likely to be addressed especially effectively 
by ongoing intercarrier compensation reform, a conclusion that is 
supported by the record. Removal of the reporting requirement will 
provide covered providers with prompt relief by obviating the need to 
spend time and resources compiling and filing reports that would 
otherwise be due to the Commission on May 1, 2018. Because we eliminate 
the reporting requirement, we eliminate section 64.2109, which provided 
that ``[p]roviders subject to the reporting requirements in Sec.  
64.2105 of this chapter may make requests for Commission nondisclosure 
of the data submitted under Sec.  0.459 of this chapter by so 
indicating on the report at the time that the data are submitted'' and 
that ``[t]he Chief of the Wireline Competition Bureau will release 
information to states upon request, if the states are able to maintain 
the confidentiality of this information.'' We will continue to treat 
reports already submitted to the Commission in accordance with the 
prior rule, i.e., we will honor confidentiality requests to the same 
extent as previously and will release information previously provided 
to the Commission to states that have requested access and are able to 
maintain the confidentiality of the information.
    48. Recording and Retention. We choose to proceed incrementally and 
do not at this time eliminate the recording and retention rules. As we 
implement the rules we adopt today and as we continue to pursue more 
effective solutions to rural call completion problems through further 
intercarrier compensation reform and RCC Act implementation, we 
anticipate that the value of the recording and retention rules will 
diminish. These reforms include both the reductions in terminating 
switched access rates established by the USF/ICC Transformation Order 
and further intercarrier compensation reform that we anticipate 
undertaking. We seek comment in today's Third Further Notice of 
Proposed Rulemaking on whether to eliminate those requirements upon 
implementation of the RCC Act. Although we retain the recording and 
retention requirements at present, we emphatically reject the view that 
eliminating some or all of the data collection ``send[s] a signal'' 
that rural call completion problems are ``a low priority for the 
Commission.'' The rules we adopt today, our efforts to implement the 
RCC Act, and our intercarrier compensation reform efforts show that 
ensuring calls are completed to all Americans is a top priority for us.
2. Safe Harbor
    49. In the RCC Order, the Commission instituted a safe harbor 
provision reducing the recording, retention, and reporting 
requirements. Specifically, the safe harbor qualifications require that 
a covered provider have: (1) No more than one additional intermediate 
provider in call path before termination; (2) a non-disclosure 
agreement with intermediate providers allowing the covered provider to 
identify its intermediates to the Commission and to rural LECs affected 
by intermediate provider performance; and (3) a process in place to 
monitor intermediate provider performance. Additionally, the RCC Act 
contains an exemption from its quality of service requirements for 
covered providers that meet our safe harbor requirements.
    50. Following adoption of this Order, covered providers qualifying 
for the safe harbor will continue to be subject to reduced recording 
and retention requirements. And, upon our adoption of rules 
implementing the RCC Act, covered providers who qualify for the safe 
harbor provisions of section 64.2107(a) will also be exempt from the 
quality of service requirements of the RCC Act, per new section 262(h) 
of the Act. Retaining these safe harbor provisions will maintain the 
incentive for covered providers' to engage in call routing to rural 
areas that minimizes the use of multiple intermediate providers, a 
practice that contributes to rural call completion issues. We remind 
covered providers that safe harbor status can be revoked at any time by 
the Commission for covered providers that violate Commission rules, or 
are found to no longer be in compliance with the safe harbor 
provisions.
    51. We decline to institute the amendments to the safe harbor 
qualifications suggested by Verizon, including allowing the ``de 
minimis'' use of a third intermediate provider during network 
congestion or outages, and clarifying that the safe harbor applies only 
to rural LEC destined traffic. We find Verizon's suggestion that we 
limit the safe-harbor certification to traffic destined to rural LECs 
contrary to the objective of the safe harbor, which is intended to 
discourage the use of multiple different intermediate providers. 
Verizon suggests that we create a presumption that use of an additional 
intermediate provider for a small percentage (e.g., not more than 3%) 
of all calls is part of a ``bona fide network overflow arrangement'' 
and would not invalidate a covered provider's safe-harbor status. 
Verizon's proposed threshold is based on internal review of its 
overflow traffic on a single day in December 2013, on which it observed 
that ``only 0.1% of its traffic on that day went to its overflow 
provider for termination.'' However, Verizon does not explain how the 
findings of its single-day study support a 3% de minimis threshold for 
overflow routing applicable to all covered providers, and it 
acknowledges that other providers ``may have different arrangements for 
overflow.'' We therefore reject this proposal. Furthermore, codifying 
these changes to our rules would require the Commission to either set a 
threshold for congestion, or allow providers to set it themselves, 
which could undermine the purpose of the safe harbor regime we have 
established. Allowing covered providers to set their own thresholds 
could result in a wide range of varying standards that would 
effectively render the safe harbor meaningless. Alternatively, the 
Commission setting a congestion threshold would raise the same problems 
as setting performance thresholds with respect to the monitoring 
requirement we adopt.

II. Final Regulatory Flexibility Analysis

    52. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated into the Second Further Notice of Proposed Rulemaking (RCC 
2nd FNRPM) for the Rural Call Completion proceeding. The Commission 
sought written public comment on the proposals in the RCC 2nd FNRPM, 
including comment on the IRFA. The Commission received no

[[Page 21733]]

comments on the IRFA. Because the Commission amends its rules in this 
Order, the Commission has included this Final Regulatory Flexibility 
Analysis (FRFA). This present FRFA conforms to the RFA.

A. Need for, and Objectives of, the Rules

    53. In this Order, we revise our rules to better address ongoing 
problems in the completion of long-distance telephone calls to rural 
areas. Specifically, we require covered providers to monitor 
intermediate provider performance, and eliminate the data reporting 
requirements created by the Commission in 2013. The requirements we 
adopt today will be more effective and less burdensome than the prior 
reporting regime established in the RCC Order.
    54. All Americans should have confidence that when a call is made 
to them, they will receive it. But for Americans living in rural or 
remote areas of the country, too often that is not the case. Call 
completion problems manifest in a variety of ways--for example, callers 
may experience false ring tones or busy signals while the called 
party's phone may never ring at all; or when a call goes through, one 
or both parties to a call may be unable to hear the other; or the 
caller ID may show an inaccurate number; or calls to rural numbers may 
be significantly delayed. Regardless of how the caller and/or called 
party experiences a call completion problem, the failures have serious 
repercussions, imposing needless economic and personal costs, and 
potentially threatening public safety in local communities. We continue 
to conclude that a key reason for rural call completion issues is that 
calls to rural areas are often handled by numerous different providers, 
and that providers' incentives to minimize their intercarrier 
compensation payments contributes to problems involving carriers 
blocking or degrading traffic to rural areas.
    55. The actions that we take today demonstrate and reflect our 
continued commitment to solve the ongoing problems in the completion of 
long-distance telephone calls to rural areas using a multi-faceted 
approach requiring diverse solutions and aggressive action by all 
participants in the call completion process. Given our experience 
collecting and analyzing rural call completion data and addressing 
rural call completion problems identified by rural consumers, we 
reorient our existing rural call completion rules to better reflect 
strategies that have worked to reduce rural call completion problems 
while at the same time reducing the overall burden of our rules on 
providers. Our new measures are informed by the record in this 
proceeding and our investigations of entities that have failed to 
ensure that calls are appropriately routed and delivered to rural 
areas.
    56. First, we adopt a new rule requiring ``covered providers''--
entities that select the initial long-distance route for a large number 
of lines--to monitor the performance of the ``intermediate providers'' 
to which they hand off calls. By holding a central party responsible 
for call completion issues, it will be less likely for calls to ``fall 
through the cracks'' along a lengthy chain of intermediate providers. 
The monitoring rule encourages covered providers to ensure that calls 
are completed, assigns clear responsibility for call completion issues, 
and enhances our ability to take enforcement action where needed. To 
facilitate communication about problems that arise, we also require 
covered providers to make available a point of contact to address rural 
call completion issues. Our balanced approach ensures that covered 
providers exercise responsibility for rural call completion without 
imposing an unduly rigid or burdensome mandate; in addition, it seeks 
to expedite both the identification and resolution of call completion 
issues if and when they arise.
    57. Next, we eliminate the reporting requirement for covered 
providers established in 2013 in the RCC Order. We conclude that the 
existing reporting rules are burdensome on covered providers, while the 
resulting Form 480 reports are of limited utility to us in discovering 
the source of rural call completion problems and a pathway to their 
resolution. We further conclude that the monitoring rule we adopt will 
be more effective than the less-effective-than-hoped reporting 
obligation because it imposes a direct, substantive obligation.

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

    58. The Commission did not receive comments specifically addressing 
the rules and policies proposed in the IRFA.

C. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    59. The Chief Counsel did not file any comments in response to this 
proceeding.

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

    60. The RFA directs agencies to provide a description and, where 
feasible, an estimate of the number of small entities that may be 
affected by the final rules adopted pursuant to the RCC 2nd FNPRM. 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.
    61. 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.
    62. 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 Aug 2016, there were approximately 356,494 small 
organizations based on registration and tax data filed by nonprofits 
with the Internal Revenue Service (IRS).
    63. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2012 Census of Governments indicates that there 
were 90,056 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 37,132 General purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and

[[Page 21734]]

12,184 Special purpose governments (independent school districts and 
special districts) with populations of less than 50,000. The 2012 U.S. 
Census Bureau data for most types of governments in the local 
government category shows that the majority of these governments have 
populations of less than 50,000. Based on this data we estimate that at 
least 49,316 local government jurisdictions fall in the category of 
``small governmental jurisdictions.''
    64. 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 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 size 
standard, the majority of firms in this industry can be considered 
small.
    65. 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 for Wired Telecommunications Carriers, as defined in 
paragraph 11 of this FRFA. Under that size standard, such a business is 
small if it has 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. The Commission 
therefore estimates that most providers of local exchange carrier 
service are small entities that may be affected by the rules adopted.
    66. Incumbent Local Exchange Carriers (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 Wired Telecommunications Carriers as 
defined in paragraph 11 of this FRFA. 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. One thousand three hundred and seven (1,307) 
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.
    67. 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 in paragraph 11 of this FRFA. 
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. In addition, 72 
carriers have reported that they are Other Local Service Providers. Of 
this total, 70 have 1,500 or fewer 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 the adopted rules.
    68. 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 in 
paragraph 11 of this FRFA. The applicable size standard under SBA rules 
is that 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 this total, 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.
    69. 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.
    70. 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

[[Page 21735]]

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.
    71. 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 RCC 2nd FNRPM.
    72. Prepaid Calling Card Providers. The SBA has developed a 
definition for 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.
    73. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves, 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, Census data for 2012 show that 
there were 967 firms that operated for the entire year. Of this total, 
955 firms had fewer than 1,000 employees. Thus under this category and 
the associated size standard, the Commission estimates that the 
majority of wireless telecommunications carriers (except satellite) are 
small 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 (PCS), and Specialized Mobile Radio (SMR) services. Of this 
total, an estimated 261 have 1,500 or fewer employees. Consequently, 
the Commission estimates that approximately half of these firms can be 
considered small. Thus, using available data, we estimate that the 
majority of wireless firms can be considered small.
    74. 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.
    75. 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.
    76. 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.
    77. 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 nine 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.
    78. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, 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 
one 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 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

[[Page 21736]]

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 $250,000,000, 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.
    79. All Other Telecommunications. ``All Other Telecommunications'' 
is defined as follows: ``This U.S. 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 consists of all such firms with gross annual receipts of $32.5 
million or less. For this category, Census Bureau data for 2012 show 
that there were 1,442 firms that operated for the entire year. Of those 
firms, a total of 1,400 had annual receipts less than $25 million. 
Consequently, we conclude that the majority of All Other 
Telecommunications firms can be considered small.

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

    80. In this Order, we revise our rules to better address ongoing 
problems in the completion of long-distance telephone calls to rural 
areas. Specifically, we require covered providers to actively monitor 
intermediate provider performance, and eliminate the data reporting 
requirements created by the Commission in 2013.
    81. Regarding our monitoring requirements, we require covered 
providers to monitor the performance of each intermediate provider with 
which they contract. Required monitoring entails both prospective 
evaluation to prevent problems and retrospective investigation of any 
problems that arise. We also require covered providers take steps that 
are reasonably calculated to correct any identified performance problem 
with the intermediate provider. Additionally, we specify that covered 
providers must publish point of contact information for rural call 
completion issues.
    82. Regarding our rural call completion recording, retention, and 
reporting rules, we eliminate the data reporting requirement. The safe 
harbor provisions established in the RCC Order will remain in effect; 
covered providers qualifying for the safe harbor will continue to be 
exempt from the remaining recording and retention requirements.

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

    83. 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.
    84. The Order adopts reforms that are likely to reduce burdens on 
covered providers, including small entities. As described in the Order, 
in adopting these reforms, we have sought comment on the impact of our 
rule changes on smaller providers, and considered significant 
alternatives. Regarding our intermediate provider monitoring 
requirement for covered providers, we considered, but declined to 
adopt, a mandate that covered providers adhere to the standards and 
best practices outlined in the ATIS Intercarrier Call Completion/Call 
Termination Handbook (ATIS RCC Handbook), finding that mandating the 
ATIS RCC Handbook best practices could have a chilling effect on future 
industry cooperation to develop solutions to industry problems, and 
that covered providers should have the flexibility to determine the 
standards and methods best suited to their individual networks.
    85. Under the monitoring requirement, covered providers must 
exercise responsibility for the entire intermediate provider call path 
to help ensure that calls to rural areas are completed. Because 
``covered providers'' excludes entities with low call volumes, we 
expect that covered providers are of sufficient size to negotiate 
appropriate provisions with any intermediate providers with which they 
contract. As stated above, although we encourage limiting the use of 
intermediate providers, we do not impose a rigid cap on the number of 
intermediate providers. Similarly, we do not mandate that covered 
providers must contract with all intermediate providers in the call 
path. In adopting this approach, we considered, but declined to adopt, 
a requirement that covered providers directly monitor the performance 
of intermediate providers with which they lack a contractual 
relationship. Because covered providers must monitor the performance of 
intermediate providers with which they contract and must ensure that 
those covered providers take appropriate measures to ensure calls are 
completed, we find mandating direct covered provider monitoring of the 
entire call chain unnecessarily burdensome. Regarding our requirement 
that covered providers provide and maintain point of contact 
information for rural call completion issues, we find that this is a 
low-cost measure to facilitate industry collaboration to address call 
completion issues.
    86. Further, we considered, but declined to adopt, specific 
performance targets or benchmarks for call answer rates, call 
completion rates, or any other performance metric, or certification or 
audit requirements in conjunction with the monitoring rule, finding the 
burdens associated with these approaches to outweigh their likely 
benefits. For the same reason, after consideration, we declined to 
adopt a mandate that terminating rural carriers activate an automated 
test line, or augment trunks used for RCC paths when they reach a 
monthly utilization rate of 80%.
    87. Regarding our recording, retention, and reporting requirements, 
we find that eliminating the data reporting requirements created by the 
RCC Order is likely to offer a better and more efficient balance 
between our need for information pertaining to rural call completion 
problems and the burdens such data collection efforts place on service 
providers, including any affected small entities. In adopting this 
approach, we considered, but declined

[[Page 21737]]

to adopt, a modified or supplementary data collection requirement, 
finding that the burdens of such an approach on covered providers would 
outweigh the likely benefits.

G. Report to Congress

    88. The Commission will send a copy of the Report and Order, 
including this FRFA, in a report to be sent to Congress pursuant to the 
Congressional Review Act. In addition, the Commission will send a copy 
of the Report and Order, including this FRFA, to the Chief Counsel for 
Advocacy of the SBA. A copy of the Order and FRFA (or summaries 
thereof) will also be published in the Federal Register.

III. Procedural Matters

A. Final Regulatory Flexibility Analysis

    89. As required by the Regulatory Flexibility Act of 1980, see 5 
U.S.C. 604, the Commission has prepared a Final Regulatory Flexibility 
Analysis (FRFA) of the possible significant economic impact on small 
entities of the policies and rules, as proposed, addressed in this 
Second Report and Order. The FRFA is set forth above. The Commission 
will send a copy of this Second Report and Order, including the FRFA, 
to the Chief Counsel for Advocacy of the Small Business Administration 
(SBA).

B. Paperwork Reduction Act

    90. This Second Report and Order contains new or modified 
information collection requirements subject to the Paperwork Reduction 
Act of 1995 (PRA), Public Law 104-13. It will be submitted to the 
Office of Management and Budget (OMB) for review under section 3507(d) 
of the PRA, 44 U.S.C. 3507. OMB, the general public, and other Federal 
agencies will be invited to comment on the revised information 
collection requirements contained in this proceeding. In addition, we 
note that pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought 
specific comment on how the Commission might further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees.
    91. In this present document, we require covered providers to 
provide and maintain contact information on their websites a telephone 
number and email address for the express purpose of receiving and 
responding promptly to any rural call completion issues. We have 
assessed the effects of this rule, and find that any burden on small 
businesses will be minimal because this is a low-cost measure to 
facilitate industry collaboration to address call completion issues.
    92. Congressional Review Act (CRA). The Commission will send a copy 
of this Report and Order to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A).

C. Contact Person

    93. For further information about this proceeding, please contact 
Zach Ross, FCC Wireline Competition Bureau, Competition Policy 
Division, Room 5-C211, 445 12th Street SW, Washington, DC 20554, at 
(202) 418-1033 or [email protected]

IV. Ordering Clauses

    94. Accordingly, it is ordered that, pursuant to sections 1, 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, 154(i), 201(b), 202(a), 217, 
218, 220(a), 251(a), and 403, this Second Report and Order is adopted.
    95. It is further ordered that Part 64 of the Commission's rules 
are amended as set forth in Appendix B.
    96. 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), this 
Second Report and Order shall be effective 30 days after publication of 
a summary in the Federal Register, except for the addition of section 
64.2113 to the Commission's rules, which will become effective upon 
announcement in the Federal Register of Office of Management and Budget 
(OMB) approval and an effective date of the rules.
    97. It is further ordered that the Commission shall send a copy of 
this Second Report and Order to Congress and to the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).
    98. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Second Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

List of Subjects in 47 CFR Part 64

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

Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

    For the reasons set forth above, the Federal Communications 
Commission amends 47 CFR part 64 as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. Revise the authority citation for part 64 to read as follows:

    Authority:  47 U.S.C. 154, 202, 225, 251(e), 254(k), 
403(b)(2)(B), (c), 616, 620, Public Law 104-104, 110 Stat. 56. 
Interpret or apply 47 U.S.C. 201, 202, 217, 218, 220, 222, 225, 226, 
227, 228, 251(a), 251(e), 254(k), 616, 620, and the Middle Class Tax 
Relief and Job Creation Act of 2012, Public Law 112-96, unless 
otherwise noted.

0
2. Revise the heading of Subpart V to read as follows:

Subpart V--Rural Call Completion

0
3. Amend Sec.  64.2101 by adding a definition of ``Rural telephone 
company'' in alphabetical order to read as follows:


Sec.  64.2101   Definitions.

* * * * *
    Rural telephone company. The term ``rural telephone company'' shall 
have the same meaning as in Sec.  51.5 of this chapter.


 Sec.  64.2105   [Removed and Reserved]

0
4. Remove and reserve Sec.  64.2105.

0
5. Amend Sec.  64.2107 as follows:
0
a. Revise the section heading;
0
b. Revise the first sentence of paragraph (a)(1);
0
c. Remove paragraph (c);
0
d. Redesignate paragraph (d) as new paragraph (c), to
    The revision reads as follows:


Sec.  64.2107   Reduced recording and retention requirements for 
qualifying providers under the Safe Harbor.

    (a)(1) A covered provider may reduce its recording and retention 
requirements under Sec.  64.2103 if it files one of the following 
certifications, signed by an officer or director of the covered 
provider regarding the accuracy and completeness of the information 
provided, in WC Docket No. 13-39.
* * * * *


 Sec.  64.2109   [Removed and Reserved]

0
6. Remove and reserve Sec.  64.2109.

0
7. Add Sec.  64.2111 to subpart V to read as follows:

[[Page 21738]]

Sec.  64.2111   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 telephone companies 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, take steps that are 
reasonably calculated to correct any identified performance problem 
with the intermediate provider, including removing the intermediate 
provider from a particular route after sustained inadequate 
performance.

0
8. Add Sec.  64.2113 to subpart V to read as follows:


Sec.  64.2113   Covered provider point of contact.

    Covered providers shall make publicly available contact information 
for the receipt and handling of rural call completion issues. Covered 
providers must designate a telephone number and email address for the 
express purpose of receiving and responding to any rural call 
completion issues. Covered providers shall include this information on 
their websites, and the required contact information must be easy to 
find and use. Covered providers shall keep this information current and 
update it to reflect any changes within ten (10) business days. Covered 
providers shall ensure that any staff reachable through this contact 
information has the technical capability to promptly respond to and 
address rural call completion issues. Covered providers must respond to 
communications regarding rural call completion issues via the contact 
information required under this rule as soon as reasonably practicable 
and, under ordinary circumstances, within a single business day.

[FR Doc. 2018-09969 Filed 5-9-18; 8:45 am]
 BILLING CODE 6712-01-P